SUCCESSES and increased activities in Guyana’s oil and gas sector and other key productive sectors have served as an impetus for foreign investors, who have been injecting funds into the local economy through various projects.
A reflection of the country’s performance and increased inflows is its capital account, which, according to the Bank of Guyana, recorded a surplus of US$1.7 billion in 2021. The capital account shows the net flow of investment transactions into an economy.
The surplus in 2021, the Central Bank said, is on account of higher inflows to the private sector in the form of Foreign Direct Investments (FDIs) of US$4.4 billion as well as the Special Drawing Rights (SDRs) allocation of US$247.4 million from the International Monetary Fund (IMF).
The Government of Guyana is actively encouraging FDI and offering tax concessions for priority projects.
It was reported that there has been a notable increase in the number of opportunities for Guyanese, with the approval of 48 private projects in 2021 which, collectively, have the capacity to create over 2,300 jobs.
According to information shared with this newspaper, 17 of the 48 projects are in the services sector, 17 in the manufacturing sector, five in agriculture, four in mining, three in forestry, two in tourism, two in ICT, and one in energy.
Both Guyanese and foreigners are increasingly interested in and confident in the local economy, as seen by those project proposals.
The growing interest among locals is especially noticeable, with some 33 of the authorised projects coming from Guyanese.
Chief Executive Officer (CEO) of Go-Invest, Dr. Peter Ramsaroop, had said that 65 per cent of the private investments made last year were from locals.
Dr. Ramsaroop said, even as the economy continues to grow, President, Dr. Irfaan Ali and by extension the government is committed to having Guyanese benefit from the investment opportunities that are available locally.
As part of this commitment, the government, in December 2021, introduced the Local Content Act.
The new law identifies 40 sectors or services and requires oil firms and their subcontractors to purchase a minimum percentage of their total expenditure on those services from Guyanese vendors.
As a result, the Act creates an enabling environment for the growth and expansion of Guyanese businesses, as well as business and job opportunities for Guyanese nationals.
From 2017 to 2019, the unemployment rate in Guyana increased from 12.2 per cent to 13.4 per cent, but the government intends to reverse this over the next five years through the creation of 50,000 jobs and an environment that is conducive for growth and development, especially among locals.
“When we were considering the Local Content Act, one of the recurring issues that arose was the question of ensuring that Guyanese businesses are not in a disadvantageous position relative to their international counterparts in competing for contracts with the oil and gas sector.
“This could arise, for example, where the sector is procuring a service and the international companies tendering to supply that service enjoy a particular tax treatment on the importation of their capital equipment to provide that service that Guyanese companies might not enjoy,” 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 on January 26.
He went on to say that, in the interest of ensuring that Guyanese businesses could compete successfully under the new local content framework, the government will take steps, wherever practicable, to minimise disparities arising from the tax system that will disadvantage Guyanese businesses.
This will help improve the competitiveness of Guyanese companies, help secure business opportunities for them, and thereby create jobs for Guyanese nationals.