PRESIDENT, Dr Irfaan Ali says Guyana moved early and aggressively to cushion households and farmers from soaring global prices, reversing hefty fees, cutting taxes and investing billions of dollars in food production and infrastructure, while keeping inflation near four per cent.
Speaking at a press conference on Monday, the Head of State said Guyana has been “one of the leading nations” in adopting innovative measures to tame rapid global price increases, while preserving and even boosting productivity.
These measures, he pointed out, were taken against the backdrop of shocks stemming from the lingering impact of COVID-19 and the Russia-Ukraine war, as well as climate-related disasters and instability in the Middle East.
Dr Ali told reporters that since 2020, the world has been grappling with a combination of supply-chain disruptions, trade sanctions, currency depreciation and rising global demand, all of which have driven up the cost of food, fuel, fertiliser and other essentials.
He pointed to droughts, floods and extreme weather events that have disrupted agricultural production worldwide, saying leaders everywhere are struggling with the fallout.
“The Russia-Ukraine war is still ongoing, with major geopolitical shocks that affect wheat, corn, sunflower oil, urea. There are sanctions and trade restrictions arising from those wars. We have global climate shocks that have really destroyed many economies across the world — droughts, floods, extreme weather events, disrupting our agricultural supply production system,” he said, adding:
“You have the ongoing Middle East crisis, global depreciation of currencies, rising global population and growing household income, increased demand, sustained upward pressure on food prices. This is all supported by studies. Key inputs such as fertiliser and fuel have seen enormous increases.”
Guyana, he reminded reporters, has reversed the 220 per cent increase in drainage and irrigation fees and the 600 per cent increase in land-rental fees, saving farmers approximately $1.4 billion annually.
“Just by this one measure, [the removal of] VAT on machinery, equipment, fertilisers, agrochemicals, pesticides and key foods [has] freed industry inputs. Removal of [the] excise tax on fuel, saving farmers and consumers billions of dollars over the years, hundreds of billions of dollars. Restore the zero-rated VAT status on basic food items, flour, bread, oats, crackers, biscuits, cooking oil.”
Complementing these fiscal measures, the president pointed to large-scale public investment designed to drive down structural costs in food production and distribution.
Following the last press conference, Dr Ali reported, chicken prices were “slashed by half almost in all of the markets”, while egg prices also fell “substantially”.
The goal, he explained, is to allow farmers to bring their produce directly to consumers and to address, “in a structured way”, the wide gap or “elasticity” between wholesale and retail prices that has contributed to high mark-ups.
President Ali had previously pointed to changing consumer behaviour as another factor influencing household expenditure, noting that more Guyanese are shopping in supermarkets and eating outside the home than they did four years ago.
He noted that while households globally face higher prices, Guyanese families have been shielded from these adverse impacts, as government policies have led to reductions in taxes, expanded social support and cost-of-living relief measures, including lower utility and fuel prices.
He said the shift from traditional markets to supermarkets has implications for prices, as supermarkets operate with higher overheads and therefore have different profit margins.
However, he acknowledged that rising cost-of-living pressures must be tackled through a holistic, structural approach that goes beyond grants and financial assistance, with Government examining changing consumer habits, food prices, market margins and the country’s exposure to global shocks.
The President said grants remain important for supporting vulnerable households and supplementing family incomes, but cannot, by themselves, resolve the underlying factors driving the cost of living.
