–following signing of MoU between gov’t, Demerara Bank for $900M revolving fund
–over 100 concessions granted to small loggers, Minister Bharrat says
THE Ministry of Finance on Thursday signed a Memorandum of Understanding (MoU) with Demerara Bank for the establishment of a $900 million revolving fund to boost production in Guyana’s forestry sector.

The agreement was signed in the Ministry of Finance’s boardroom by Senior Minister within the Office of the President with responsibility for Finance, Dr Ashni Singh and General Manager of the Demerara Bank Limited, Dowlat Parbhu.

In his address during the signing ceremony, Dr Singh said that the facility is $900 million, of which the government is providing $300 million while Demerara Bank is providing $600 million from its internal capital to provide affordable lending to the forestry sector.

“When I say affordable lending, an agreement has been reached with Demerara Bank that the interest rate to be charged for lending out of this fund will be capped at four per cent,” he said.

The signing of this agreement, Dr Singh related, should be viewed against the background of President, Dr Irfaan Ali’s commitment to maintain the resilience of Guyana’s economy by ensuring that the economy is one that is not solely dependent on an individual productive sector.

He added: “So, notwithstanding the incredibly exciting developments that are happening in oil and gas, we feel very strongly about ensuring a vibrant, competitive, dynamic and rapidly growing non-oil economy.”

As part of this, the senior minister added that the forestry sector remains an extremely important part of the country’s economy, noting that Guyana remains a country that is firmly committed to sustainable forest management.

Minister of Natural Resources, Vickram Bharrat, said too that the MoU is a commitment being fulfilled by the government to ensure that work continues to be done in the traditional productive sectors.

Bharrat related that after entering office, there were several issues with which the Guyana Forestry Commission was faced, including access to finance for small loggers.

He went on to say that the associations that exist in Region One and in Region 10, in particular, were crying out for finance to capitalise or recapitalise their operations in order to boost production.

To aid this, the Natural Resources Minister added that to date the commission has allocated over 100 concessions to small and local loggers and further, with the signing of the MoU, the issue of access to financing is being addressed.

“We have bargained of course with the intervention of President Ali bargain with Demerara Bank that we can now access finance for our small loggers and our saw millers, to ensure that the forestry sector is being restored and returned to its former glory days,” Minister Bharrat said.

He further related that significant development is taking place across the country that has significantly increased the demand for timber and timber products. As such, this initiative would aid in the sector being able to meet those demands.

Meanwhile, General Manager of the Demerara Bank Limited, Dowlat Parbhu, said that the bank was excited to be part of this initiative, noting that it is important for his organisation to ensure that credit is diversified for the development of all sectors.

Parbhu added that Guyanese can see the commitment of the government and also the private sector to ensure that the indigenous sectors are not left behind.

He said: “Today, we are also part of this monumental signing to ensure another important sector in Guyana that credit is available. We see it and it has always been the mission and vision of the bank to empower people and this will see that concessional credit is given to those who may not be able to negotiate a commercial line.”

In its mid-year report, the Ministry of Finance had reported that the country’s forestry sector had grown by an estimated 47.1 per cent in the first half of the year, largely on account of significant growth in log production.

According to the report, at the end of June, 203,220 cubic metres of timber products were produced, compared with 137,040 cubic metres at the end of June last year, driven by higher-than-anticipated production of logs.

Log production is up 59.8 per cent, when compared with the position at the end of the first six months of 2021, following a substantive increase in production from large concessions.

Additionally, the local demand for primary lumber has also increased year on year, driven by ramped-up construction activities countrywide. The report further stated that with log production slowing as concessionaires’ quotas are used up, the expected growth rate for the sector is holding steady at 13.5 per cent for 2022.