–financial analyst says

FINANCIAL Analyst Joel Bhagwandin has rubbished claims made by Opposition Leader Aubrey Norton that Budget 2023 contains nothing for the manufacturing sector or the rising cost of living.

Bhagwandin during an interview with Prime Minister, Brigadier (ret’d), Mark Phillips, and several ministers, said that one of the major projects for the manufacturing sector is the Wales gas-to-energy project.

“In the budget, we have in excess of $40 billion allocated to get that project going, which we understand is scheduled to be completed within the timeframe and once the project is materialised, the people of Guyana, the manufacturing sector, at the household level as well, are expected to benefit from that 50 per cent reduction,” he said.

PM Phillips, an interviewee, said that the gas-to-energy project is by far one of the biggest in the history of Guyana and it is expected to reduce the cost of electricity for households and the commercial sector.

The timeline for the completion of the project is December 2024.

“By December 2024, we will have electricity from this gas-to-energy project; electricity that is far cheaper than what we are paying for today. We are paying …25 cents per kilowatt today and by our initial projection we will be able to supply and sell electricity for less than half of that to the business sector and to the households,” the Prime Minister explained.

He added: “It means that whatever manufacturing the businesses enter into today, in another two years after the completion of this project, they will be able to do so at a far cheaper cost.”
He noted that government is not waiting until the project comes on stream, as they are expecting growth continuation in the business sector. Additionally, 50 megawatts of electricity will be invested in the short term, to ensure that the needs of the growing electricity demand by citizens are satisfied.

The Prime Minister said that there are many unserved and underserved areas demanding electricity supply to households, new housing schemes, and squatting schemes that are being regularised, so, in the short term, they will provide electricity for the growing demand.

“That itself, will have a positive effect on economic growth in Guyana because more investors will come now, more Guyanese and foreign investors, because electricity will be cheap in Guyana,” he said.

Meanwhile, the Guyana Manufacturing and Services Association (GMSA), commended the Government of Guyana for Budget 2023.

“The proposed fiscal and other related measures aimed at striking a balance between Guyana’s current and future needs are lauded as progressive and visionary by the association in harnessing Guyana’s true potential to attain unprecedented growth,” the GMSA said in a press statement.

The GMSA said it is pleased with the government’s strategic measures that forecast diversified economic activities while grappling with concurrent challenges that continue to threaten global economic stability.

“A government that effectively harnesses the resources of the country to gain adequate revenues for sustainable growth and development must be commended. The utilisation of revenues from the first carbon credit sale in the amount of $31.3 billion, in conjunction with the transfer of Guyana’s oil profits in the amount of $208.9 billion from the Natural Resource Fund (NRF), without imposing new taxes, is evidence that Budget 2023 is people-centred and pro-developmental,” the GMSA said.

Measures that are key to advancing the growth within the manufacturing and services sector include $2 billion in agricultural development which includes the establishment of a regional food hub with cold storage, manufacturing, and processing capabilities, along with $300 million in rice development which includes the provision of two new drying floors in Regions Three (Essequibo Islands-West Demerara) and Five (Mahaica-Berbice).

The GMSA noted that there will also be a $150 million investment in soya bean cultivation which includes the construction of a wharf in the Tacama area to further push Guyana’s targets of food security within the region, as well as, new facilities in Crabwood Creek and Orealla and new cold storage in Bartica.

More measures to support the manufacturing sector is included in $584.2 million allocation for small business support, along with the removal of the 14 per cent VAT concerning the sale of residential properties, which will also further reduce the cost of home ownership.

Additionally, the GMSA recognises the allocation of $43.3 billion to facilitate the construction of the integrated natural gas liquids plant and the 300 MW combined cycle gas turbine power plant within the Wales Development Zone and associated facilities. This project will directly cut emissions by 70 per cent, as well as trigger a series of major economic development initiatives in Guyana as energy costs.

“The measures above represent the move towards Guyana building on the trajectory which the government is placing on the transformation of our economy. Though these efforts signal the thrust which is needed to drive our economy, the GMSA is still hopeful for other additional measures to be extended to benefit the manufacturing sector,” the statement said.

The GMSA added: “The direct reduction in the cost of electricity as well as a reduction and removal of taxes on support services to manufacturing will greatly impact the sector, drive production and increase the GDP of our economy.”

The GMSA related that it remains open and committed to working with the government to address and improve priority areas to aid Guyana’s development while strengthening and diversifying the non-oil industries.