President Ali says

PRESIDENT, Dr. Irfaan Ali has proposed the establishment of a local content-facilitation fund to support local businesses during the lengthy waiting period to receive payments from oil companies.

Addressing the opening of the second AfriCaribbean Trade and Investment Forum being held at the Marriott Hotel at Kingston, Georgetown, the Head of State acknowledged that “payment gaps” have been a challenge for local businesses operating within the oil and gas sector.
However, with bright partnerships brewing for the Caribbean and the African Export-Import (Afrexim) Bank, Dr. Ali believes a facilitation fund curated by the bank to support oil and gas suppliers can be used here in Guyana.

“We have talked a lot about the payment gap for the suppliers of services to the main oil companies, the time frame that it takes and that causes a lot of hardship on the cash flow for local suppliers,” Dr. Ali said.

A facilitation fund is a type of fund designed to assist individuals or organisations in the initiation, completion, or advancement of specific projects or activities. Simply put, local suppliers could access funding through this new avenue to support their operations while awaiting payments from oil companies.
“Before the end of this conference, ladies and gentlemen, we will have agreements for the establishment of a local content facilitation fund here in Guyana. So, we are making meaningful progress.

“We are making meaningful progress. Very strategic alliance, a very strong alliance, and showing confidence in the Afrexim Bank and what you have to offer for this Region,” the Guyanese Head of State added.

In 2022, contractors and sub-contractors operating in Guyana’s oil and gas sector were instructed by the Local Content Secretariat that their five-year local content master plan must be updated to include a payment period of between 30-45 days upon correct receipt of an invoice.
At that time, oil companies were accused of making payments some 90 days after the final provision of goods and services; this had seen suppliers having to incur the costs when executing works.

To support local suppliers, the government explained that the Local Content Act required that the contractors’ and sub-contractors Procurement Sub-Plan include a supply chain management strategy. This strategy should promote local suppliers’ competitive financing and growth with appropriate contracts and payment terms.
This provision was created to ensure that Guyanese citizens and Guyanese companies generate capital to expand, while becoming competitive and financially independent.