The Georgetown Chamber of Commerce and Industry (GCCI) is calling for the Government to take a more proactive approach to revive the manufacturing sector, in light of that sector’s dismal contribution to the Gross Domestic Product (GDP).
Hosting his first press conference as President of GCCI, Deodat Indar made this call on Thursday at the chamber’s headquarters. According to Indar, there is little to no incentive for manufacturers to contribute to the Guyana economy.
“There is little to nothing in terms of incentive (that) manufacturers get,” Indar said. “Look at the value of the GDP that manufacturers carry; it’s miniscule. We don’t even make a hammer in this country. So for us to really seriously think about manufacturing, we cannot have a seminar (for) a half-day (and expect we) would (be able to) look at all the top-of-the-line problems manufacturers have. We need to dig down in those issues.
“There are legal, incentive, cost (and) energy impediments. Energy represents a high part of cost — 10 to 15 (or) maybe 17 per cent; it ranges for different companies,” Indar explained.
He said that if energy cost is reduced, the profit line for businesses would increase, and the investment would make a return. But referring to public companies in Guyana, he noted that there is a prevailing downturn.
“Manufacturers need assistance,” Indar stressed. “And it must be done in a way that it is not bleeding the Government but at the same time that money is translated to cheaper goods for the consumers, so it carries down the cost of living.”
When Government had released its end-of-year Outcome Report earlier this year, it showed even bleaker statistics on the nation’s manufacturing sector than Finance Minister Winston Jordan’s 2017 budget had projected. The report, which covers the year 2016, contains revised projections from those presented in budget 2017. It stated that the manufacturing sector contracted by 9.5 per cent, and not the 7.1 per cent Jordan had announced in November.
The decline in the manufacturing sector was linked to the shrinking production in agriculture. The manufacturing sector is heavily dependent on sugar and rice production, a fact that Jordan had acknowledged last month at a press conference.
“Very little manufacturing activity takes place in Guyana… The last (time) I looked at manufacturing without sugar and rice milling, (it contributed) a mere five per cent to GDP (Gross Domestic Product), which is very low,” Jordan had told journalists at the press conference.
The Finance Ministry has revealed that, overall, the agriculture and fishing and forestry sectors had contracted by 10.4 per cent in 2016. According to the report, this is 0.9 per cent more than the rate projected at the time the 2017 Budget was presented.
“Sugar production contracted even further than projected in November 2016, as the industry underestimated the negative impacts of late planting of the second crop on production.
In addition, the late arrival of spare parts for factories negatively affected the processing stage of production,” the report revealed.
At his 2016 end-of-year press conference, Agriculture Minister Noel Holder had explained that sugar production for the year had been plagued by poor labour turnout; lack of spares; equipment shortages, in particular cane punts; and factory breakdowns in the sector.
He had also revealed that the shortage of skills and experience, in addition to underinvestment in the industry, was taking its toll.