Guyana has been granted a US$9 million Inter-American Development Bank (IDB) loan to help strengthen the economy and stimulate exports and investments.
A press release issued yesterday by the IDB said the loan is expected to help reduce market access costs for non-traditional exporters and increase their shipments.
Of the project’s total cost, the release said, US$4.5 million comes from the Bank’s ordinary capital and the remaining US$4.5 million from its Fund for Special Operations (FOE).
The ordinary capital tranche is for a 30-year term, with six years of grace, while the FOE’s component is for a 40-year period, with 40 years of grace and a 0.25% fixed interest rate, it added.
The IDB noted that in light of a small domestic market, Guyana depends on exports for economic growth. It said 82% of its shipments consist of fewer than 10 products, mostly from the mining and agricultural sectors. The limited size of its non-traditional exports, it added, provides an opportunity for diversification.
However, it said non-traditional exporters face “major challenges” concerning quality measurement and control, including difficulties with certification. “There are only two accredited laboratories in the country, none of which has non-traditional exports certification capabilities,” it said, while adding that the loan intervention proposes a series of moves to accredit labs and train their personnel.
The IDB said there is also a need to design and implement quality regulations to help access international markets. Consequently, it said, a trade and investment framework will be created and courses will be launched to train small- and mid-sized enterprises on quality and regulation issues.
It also said that exports diversification, as well as attaining competitiveness in new markets, require the adoption of adequate quality standards. With this goal in mind, it noted that the project will strengthen quality-related infrastructure and improve the system’s capabilities.
The Ministry of Business was identified as executing agency, which would be tasked with preparing an initial report that includes an updated multi-year implementing plan, the first annual operating plan, and financial and procurement plans.
The release noted that the project is in line with Guyana’s need to diversify its economy as laid out in the National Competitive-ness Strategy.
