EARNINGS from the exportation of locally produced commodities could reach US$7 billion this year, as Guyana looks to further overcome the pervasive challenges presented by COVID-19 and institute appropriate mechanisms and measures to guard against any eventualities that might arise as time progresses.

Using current basic prices as a benchmark, authorities determined that Guyana could earn roughly US$7,792,800,000 by the end of this year; this represents an increase of about 55 per cent, when compared with revenues totalling US$4,352,000,000 earned last year.

Guyana’s earnings in 2021 were fuelled mainly by returns from oil exports, which grew by 179.6 per cent to US$2,975.5 million [US$2.9 billion], owing to increases in both volume and price.

The petroleum sector is projected to make yet another significant contribution to total earnings this year, as statistics outlined in Budget 2022 show crude oil exports increasing by 107.7 per cent to US$6.1 billion.

This growth will be stimulated by the operations of ExxonMobil’s Liza Unity FPSO, which will be servicing the company’s Liza Phase Two development project.

The vessel will produce up to 220,000 barrels of oil per day, and will be supported by a total of six drill centres and approximately 30 wells. This includes 15 production wells, nine water- injection wells, and six gas-injection wells. The Liza Phase Two start-up is expected in early 2022 and will develop approximately 600 million barrels of oil.

Positive performances are also expected in the non-oil economy, which is projected to grow 7.7 per cent by the end of this year. Providing that output reaches the projected levels, export earnings would increase across all economic sectors.

According to a breakdown of the available statistics, rice is projected to rake in US$288.6 million; sugar, US$20.3 million; gold, US$962.5 million; bauxite, US$92.6 million; timber, US$28.9 million; “other,” US$177.3 million and unaltered imported items, US$42 million.

Although the prospects are positive, the country needs to be mindful that prices are expected to taper for most of the country’s exported commodities. For instance, the price of rice is expected to decline further by 12.7 per cent to US$400 per tonne, while the world price of sugar is expected to contract by five per cent to US$0.37 per kilogramme.

Further, while the price of gold is also projected to fall in 2022 by 2.8 per cent to US$1,750 per troy ounce, the prices of aluminium and logs are expected to rise to US$2,700 per tonne and US$280 per cubic metre, respectively.

Like aluminium, the average price of crude oil is expected to increase this year by five per cent to an average of US$74 per barrel in 2022.

STIMULATING GROWTH
Even with the projected volatility in prices, based on Budget 2022, the government intends to maintain and even enhance its approach to stimulating growth in various economic sectors.

Agriculture and its sub-sectors forestry and fishing, are expected to expand by 8.9 per cent this year, after contracting by 9.1 per cent in 2021.
In the extractive industries, mining and quarrying are projected to grow by 86 per cent, driven by expansion across all subsectors, namely petroleum, gold, other mining and quarrying, and bauxite.

Aside from oil and gas, the gold-mining sub-sector is projected to grow by 12.2 per cent in 2022, on account of higher expected declarations from one large operator, and the small and medium- scale miners.

Bauxite, like many other productive sub-sectors, which faced tremendous interruptions in 2021, is anticipated to recover in 2022 and grow by 25.4 per cent, with greater output expected from both large operators.

Additionally, the other mining and quarrying sub-sector – which includes sand, stone, and diamonds – is also projected to grow by 8.4 per cent.
Also in line for positive results this year is the construction sector, which will see heavy government investment in projects across all sectors, coupled with major projects coming from private-sector investment initiatives.

“As a result, we project 10.5 per cent growth in the construction sector in 2022, on top of the growth observed in the sector last year,” Dr Singh related.

The service sector, after facing significant challenges in 2020, began its recovery in 2021, on account of the phased reopening of Guyana’s economy and other measures put in place by the government to boost economic activity.

In 2022, all of the service industries are projected to expand by 3.8 per cent. Notably, significant increases are expected for wholesale and retail trade and repairs, transport and storage, financial and insurance activities, administrative and support services, and real estate activities, which could grow by 6.5 per cent, 7.8 per cent, 3.9 per cent, 2.5 per cent and 2.3 per cent, respectively.

To achieve those outcomes, there are plans in place to inject some $552.9 billion into the economy through various initiatives that would rapidly transform and modernise the nation.

“Even as we confront, head on, the formidable challenges before us, our government continues to work in earnest to advance the aggressive agenda for transformation that we had previously outlined. At this moment of unprecedented opportunity for our country, we seek now to convert the bright prospects before us into realised national and individual well-being for all Guyanese,” Senior Minister in the Office of the President with responsibility for Finance, Dr Ashni Singh, said during his presentation of Budget 2022 to the National Assembly, last Wednesday.

Supported by the robust institutional architecture that the government has established, Budget 2022 ensures that two complementary and critically important objectives are met: firstly, that the urgent development needs of the country are met in the shortest possible time, and that the long-term economic well-being of the country is protected and safeguarded at all times.

In his view, this fiscal plan, which follows the theme: “Steadfast against all challenges, resolute in building our one Guyana,” sets Guyana on the path to realising the “bright future” which the country has long awaited.

It launches some of the most transformative projects which are critical to resolving the bugbears and bottlenecks the nation has long faced, whether they be adequate and affordable electricity, a transport network that is responsive to both productive opportunities and changing patterns of urbanisation or improved medical services for Guyanese.