$900M revolving fund set up to boost forestry sector

Operators in the forestry sector at Friday’s stakeholder engagement

With assistance from Demerara Bank Limited, the Guyana Government has set up a $900 million revolving fund to increase the production of the forestry sector.

President Dr Irfaan Ali made this announcement while delivering brief remarks at a Guyana Forestry Commission (GFC) stakeholders’ engagement at the GFC Kingston office on Friday.

The President said that with the funds, the Government and the commission will place more emphasis on the development and expansion of small and medium-scale loggers and community loggers associations.

“We are now going to unleash $900m for the market to step up production, so that we can meet the demand, especially for the value-added product, and to push the sector, to give this sector a real boost because we are very concerned about the production level and where it should be to meet our national demand in the markets that we’re building.”

The partnership between the Government and Demerara Bank, once completed, will see the latter contributing $600m and the Government $300m.

These funds, the President added, will attract an “unbelievable” interest rate of 4%.

The Head of State explained that the Government will work along with the bank to prequalify persons based on recommendations from the GFC. After which, a system will be put in place to give access to “bridge financing” in order to increase cash flow toward production.

He emphasised that his Government is committed to supporting small, medium and community-based loggers but that there must be “clarity, good governance, transparency, accountability and a system that works”.

The Government would also continue to invest in infrastructure and encourage loggers to do their part in “accelerating the sector”. This, he said, is aimed at increasing production because he “is not happy with the production that we’re having now”.

During the meeting, President Ali also met with staff from the GFC, listened to their concerns and provided on-the-spot solutions.

One of the issues raised related to the late payment of salaries. To remedy this, the President said, a $100m advance will be given to the GFC to ensure that all of their staff are paid on time.

The Minister of Natural Resources, Vickram Bharrat and other government officials were also at the meeting.

Minister Bharrat along with the Board of Directors and Senior Management of the GFC met with small and large forest concession holders, sawmillers, small loggers and value-added forest producers to discuss opportunities within the forest sector and ways to increase production.

Stakeholders within the forest sector are being urged by the Minister of Natural Resources to increase production, while the Government will continue to enhance access to forest concessions through improved infrastructure and investment incentives.

When the People’s Progressive Party/Civic (PPP/C) Administration took office in August 2020, it inherited a “grossly mismanaged” forestry sector that was on the “verge of collapse. However, through various interventions and initiatives implemented by the Government, this industry has made a turnaround.

Strategies aimed at boosting the financial performance and management capabilities of the GFC were undertaken and in in 2021, the forestry sector was able to make a positive turnover and manage on its own.

In fact, the GFC’s monthly revenue collection was increased from $70 million in 2019 to over $90 million in 2021 while over 100 new concessions were issued to small loggers.