THE International Monetary Fund (IMF), an independent financial agency of the United Nations that includes 190 countries, published their 2022 Article IV Consultation report on Guyana. While these reports offer detailed insights into a country’s economy, as discussed in last week’s column, they also explore the legal and regulatory situation within a country that could shape the economy for better or worse.

Beyond the economic transformation happening in Guyana, the additional findings from the report showcase a strong regulatory environment in Guyana. The recent report applauded Guyana for taking steps to demonstrate its commitment to transparency like criminalising the non-publication of oil receipts by the Finance Minister under the Natural Resource Fund (NRF) law. The report also emphasises the crucial importance of strong transparency and anti-corruption provisions to safeguard the broader economy and minimise the risks of the resource curse.

As Guyana creates policies that shape its landscape for the better, the findings challenge the narrative that not enough has been accomplished or that systems are not yet transparent. The report lauded Guyana’s progress on reducing debt and making long-overdue structural reforms to address development needs.

The 2019 version of the report prominently mentioned worrying structural weaknesses in the governance and anti-corruption frameworks of the country, but this year’s report shows that efforts have been made to strengthen the framework and transparency of the governance of oil receipts. With an oil sector that is rapidly growing, the progress being made positions Guyana on a growth trajectory.

The anti-corruption framework and fiscal transparency is being proactively improved and strengthened through including publication of audit reports of public expenditures and reestablishing the Integrity Commission. Through the Commission, all governmental officials are required to file a declaration every year regarding complete assets and liabilities, which is meant as an avenue to ensure proper conduct of public officials.

According to the IMF, the asset declarations of many public officials have been submitted annually and the public procurement tenders are finally public. Anti-corruption frameworks in Guyana are now better-aligned with international standards and are being improved through ensuring proper coordination of all public agencies involved.

The government has also prioritised reforms to the financial sector and the IMF praised efforts to bring the sector into alignment with international norms. By being more aligned with international standards, Guyana can directly impact and support the growth of its labour market and social sectors.

The report did highlight that Guyana “needs to lower unemployment, especially for youth in rural areas, and reduce inter-industry skills mismatches going forward.” It goes on to say that a responsive and efficient labour market requires investing in human capital development, including “technical and vocational education to ensure an adequate supply-side response to emergent demands in the market for skilled labor.”

The government and industry continue to work to improve this aspect. The industry-funded Centre for Local Business Development (CLBD) has been instrumental within the business community by prioritising capacity and providing guidance for companies that want to get involved.

Since 2017, the Centre has registered over 5,100 businesses on their Supplier Portal, conducted seminars for over 4,500 participants, cultivated over 750 oil and gas sector vendors, and delivered Health, Safety, Security and Environment (HSSE) programmes to over 310 businesses. The direct engagement the CLBD has with local businesses helps home-grown, 100 per cent Guyanese-owned businesses to build their capacity and operate in the growing oil and gas sector.

As a next step, the IMF recommended that the government further improve information sharing and digital publication of financial information to improve compliance with recommendations from the Extractive industries Transparency Initiative (EITI). Guyana still scores lower in these areas on EITI metrics, despite overall progress in meeting the initiative’s goals. But the country has until 2024 to follow-up on EITI recommendations and demonstrate additional progress towards the goals of transparency and accountability.

The report also made recommendations to strengthen long-term planning on the Natural Resources Fund (NRF), build additional buffers against market volatility, and ramp up public investment where possible to ensure that development remains inclusive.
Overall, the report is a strong indicator of just how far regulatory systems have come in just a few years. While there is still much to do, it is a promising sign that the country is on the right path.