President Irfaan Ali yesterday, chided the local private sector for not being in a state of readiness to take advantage of the opportunities presented to it.
Ali, who was delivering the keynote address at the opening of the Georgetown Chamber of Commerce and Industry (GCCI) Business Development Forum, discarded his prepared speech and fashioned his address in response to calls made by GCCI’s President Timothy Tucker.
During his address, Tucker said that the two-day Business Development Forum happening at the Pegasus Corporate Centre will explore five thematic areas – access to finance, opportunities for business, improving standards and quality, doing business in Guyana and marketing fundamentals – during its panel discussions.
He said that the GCCI selected the areas after careful analysis and explained that the body has been at the forefront of advocating for access to financing because it realizes that is the only way Guyanese businesses can adequately utilize the Local Content Act. He said that access to finance is critical so that businesses can play a significant role in the oil and gas sector and realise their true potential of being the engine of growth.
He recognised that the Ali government has been calling for better access to finance as well. Tucker said that GCCI conducted a survey in which some 450 businesses indicated that they will need at least US$112 million in financing over the next year.
“We have called on the hurdles for invoice factoring, for contract lending, for everything else [to be cleared]. Government has said they will clear all the hurdles once presented to them but yet we wait on the banks and it looks like we might die waiting on the banks. so I just want to say banks need to get up off of their ‘tush’ and get to work because we really need access to finance,” Tucker said causing a roar of applause from his membership.
In the area of capital markets, Tucker said that they are also fundamental in securing long-term security. He also said that businesses must remain cognisant that Guyana’s capital markets are directly linked to its economy, which can prove unstable.
“Taxation is also very important. Our tax system is quite primitive and we need a better taxation system to support business developments in Guyana. If we intend for our businesses to move into industries outside of the oil and gas industry, we must encourage it. If you want to build capital markets, we must be able to have a tax system that encourages entrepreneurship, innovation and businesses moving from that sole proprietor into the corporate space,” the GCCI President said.
He also said that quality and standards are equally important to the success of any business, highlighting that the internationalisation of Guyana’s market is forcing all businesses to adopt higher standards and raise the quality of goods and services they provide. Additionally, Tucker said that the implementation of increased professional development, as well as the certification in various industries, have become necessary to augment quality and standards in a competitive era for local businesses. He also noted that businesses are increasing their marketing presence, which is a good thing.
“Doing business in Guyana and it’s not for the faint of heart but I believe it is indeed getting better. We see government providing tremendous opportunities for Guyanese and local businesses. No longer can you take certain industries for granted. In fact, the private sector must work harder to commercialise the agriculture industry and many other industries that exist within our country,” Tucker noted.
Tough conversations
Foregoing the usual pleasantries at the commencement of his address, President Ali informed the gathering that he will have “tough conversations” with the GCCI and proceeded to call out the private sector for their failure to make good on the opportunities that are being made available.
Highlighting the strides made in the oil and gas sector, Ali said that some 350 businesses have been issued with Local Content Certification and that for the first half of 2022 ExxonMobil procured $25 billion in goods and services from local suppliers. He said Guyana is at the cusp of its developmental agenda and that while the private sector is talking the talk, it is failing to walk the walk.
Addressing the thematic areas of the Business Development Forum, Ali said that Guyana just wrapped up discussions with the United Kingdom Export Finance (UKEF) group that was in the country. He noted that the discussions involved the private sector and hundreds of millions of dollars in financing will be unlocked.
“UKEF financing does not come with 100% UK input, it comes with 20% UK input and they met with the private sector. They met with you [Tucker and GCCI] and you’re talking about supplies and building a new supply chain of goods. How much of us will approach UKEF [for financing]? I can tell you, none. You see the government does have a responsibility of unlocking opportunity. The government has a responsibility of opening up opportunities, but you have a responsibility [as well],” the President said.
“At pains, we brought the Saudi business investor group ready to form a partnership. We [the private sector] were not ready with one single feasibility study or business plan to present. The Korean group came, we were not ready with one business plan or feasibility to present,” Ali countered.
Continuing on the offensive, Ali said that $100 billion was made available by Republic Bank for the development of agriculture but only five proposals were received
“There’s not one single private sector entity came up with a feasibility study or proposal ready to present after the announcement of that special window. But unless we are ready for a tough conversation and hit ourselves on the shoulder and say we are not holding up our side [then things will remain the same],” he said.
The President reminded that two years ago he challenged the GCCI to put together a fund for small business development and that government will match the amount but to date that has not been done.
During his address, the President instructed Minister of Finance Dr Ashni Singh to set up a team that will work with the businesses that GCCI surveyed so that they can develop proposals and feasibility studies to access financing. He added that Minister Singh will lead the team to the banks so that they can negotiate favourable terms and conditions for financing.
Ali talked up the amount of investment coming from larger companies and urged the GCCI to be more active in its approach to securing investment. He noted that his government is doing everything to create a climate that facilitates growing businesses but added that it is up to the private sector to ensure that they benefit.
He related that more than 420 new small contractors have mobilized themselves and are receiving contracts from the government.
Striking a balance
Meanwhile, ExxonMobil Guyana’s President Alistair Routledge said that good government is essential in providing the platform for businesses to grow and thrive. He noted that striking a balance between controls and bureaucracy is an equally important function of government, so that conducting business can be efficient.
“…a very important part of government is supporting competition. Competition is healthy. Competition is what ensures that each of us as we run our business is doing so at the top of our game. And so another role of government is ensuring that that competition is maintained, that there’s a level playing field and that we ensure that companies operate in the right fashion,” he posited.
He said that growing small and medium enterprises is absolutely critical to developing an economy that is strong and ultimately supports wealth creation for the nation. He added that developing successful businesses are therefore critical to the sustainable and prosperous future of Guyana.
Routledge said that ExxonMobil has been building capacity in the country since it started out. He pointed out that the Centre for Local Business Development was created as part of that capacity-building initiative. He said that the Centre is playing a key part in boosting that capacity and since its inception, more than 5,000 people have participated in oil and gas seminars. Additionally, another 400 plus businesses have undergone health and safety programmes.
“Building local capacity and business is a collaborative effort. It’s one that requires not just the existing companies, but also business associations, the government and the education sector to play key roles in developing additional capacity and capability,” he noted.
Routledge called the Business Development Forum is an excellent initiative, before adding that effective collaboration between the private sector, the business associations, government and education is essential to building Guyana’s economy.
“The Forum is an excellent initiative and we hope it’s sending a signal of more to come in developing local business capacity here in Guyana. ExxonMobil Guyana is committed to its role in cooperating and working with all the stakeholders to ensure that the people of Guyana benefit from what is ultimately your resource, the oil and gas that lies on the scene offshore.
“In a highly technical new industry, we have already exceeded 60% of the workforce of Guyanese. That’s more than 4,400 Guyanese workers supporting ExxonMobil and our primary contractors here in the oil and gas sector. That represents a significant amount of training, whether that be formal training or on-the-job training and that is making a huge difference,” Routledge said.
The Business Development Forum is being held under the theme “Your Roadmap to Business Development”. GCCI said that the Forum is a way to give back to its members and the public.
