–a country on the cusp of economic transformation fuelled by O&G, diversified sectors

GUYANA is at a turning point in its history, as the country, 52 years after becoming a Republic Nation completely free from the bondages of colonial times, is on course to becoming an economic powerhouse with its lucrative oil resources that are expected to be used to fuel the diversification of the local economy.

At a time when the global economy is plagued with myriad uncertainties, Guyana remains one of the fastest growing nations in the world, with projected growth of 49.7 per cent this year, according to the latest edition of the World Bank’s “Global Economic Prospects.”

Based on the World Bank report, Guyana is the only country in Latin America and the Caribbean which is expected to record double-digit growth this year.

Even further, the January 2022 report now estimates a 2023 growth of some 25 per cent for Guyana, as opposed to the previously predicted 23 per cent. And, even this projection could very well be revised in the coming months.

Growth in the local economy, according to the Government of Guyana, will be driven by increased production in the country’s burgeoning oil and gas sector and projected improvements in the performances of traditional mining and construction.

Based on Budget 2022, the government intends to enhance its approach to stimulating growth in various economic sectors.

Moving ahead, growth this year would be primarily driven by the operationalisation of ExxonMobil’s second floating production storage and offloading (FPSO) vessel, the Liza Unity. In 2021, a total of 42.7 million barrels of oil were produced compared with 27.2 million in 2020.

Outside of oil, non-oil growth, this year, is expected to be driven mainly by rebounds in rice growing and gold mining, and continued expansion in construction activity and wholesale and retail trade and repairs.

“Looking ahead, the future will be a period of strong economic growth which will moderate into the medium term. We will continue to be vigilant in our efforts to address supply side constraints in the near term, especially given the pre-existing presence of imported inflationary pressures,” Senior Minister in the Office of the President with responsibility for Finance, Dr. Ashni Singh had said, adding: “At the same time, we will remain focused on preserving and reinforcing fiscal and external sustainability for the long term, including prudent management of the resources earned from our oil and gas sector.”

Specifically, the year 2022 is set to go down in Guyana’s history as one of the most significant periods ever, with plans in place to inject some $552.9 billion into the economy through various initiatives that would rapidly transform and modernise the nation.

This sum, which constitutes the government’s fiscal plan for this year, is some 44.3 per cent larger than Budget 2021 and 36.6 per cent above total expenditure last year.

“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.

“In this regard, Budget 2022 has historic significance. Building on the foundation laid by the previous two budgets, Budget 2022 launches what will be the most rapid period of transformation and modernisation ever witnessed in our country’s entire history,” Dr. Singh affirmed.

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 wellbeing of the country is protected and safeguarded at all times.

In moving forward, there will also be deep consideration of Guyana’s unique position as a global champion of environmental preservation and at the forefront of oil and gas development.

Speaking at Guyana’s recently concluded flagship International Energy Conference and Expo, President Dr. Irfaan Ali said: “Our development trajectory attempts to strike a balance between economic development and preservation of the environment. Our development trajectory prioritises people-centred development.”

The Head of State said that the revenue garnered from the sector, coupled with bilateral partnerships and investments, will be used to diversify industries.

He singled out the agriculture, manufacturing and tourism sectors as being among those that stand to benefit.

One of the key areas in which the proceeds from oil and gas can contribute to bolstering the diversification of other industries is through investment in energy-generating initiatives. These can be used to drastically reduce the cost of energy in Guyana and the wider region.