President Dr Irfaan Ali said the oil and gas sector remains the key to Guyana’s transformation. He made the statement during a curtain-raiser address to the nation on Tuesday evening, as government prepares for the presentation of this year’s budget on Wednesday.
President Ali discussed the use of natural gas to reduce the cost of power by 50 per cent. The government is already operationalising this plan, and expects construction to begin on the infrastructure for multiple energy projects this year, including from renewable energy sources and natural gas. The gas to energy project is expected to be commissioned before 2025.
“A reduction of 50 per cent, that is the target we’re going after. This will bring more disposable income in your pocket. This will create a more conducive environment for the manufacturing sector, the industrial sector. This will bring more jobs. It will bring more industries, more companies, and will expand the Guyanese economy.”
Recently, Dr. Ali assented to two critical pieces of legislation which concern Guyana’s oil industry- the Natural Resource Fund Act 2021 and the Local Content Bill 2021.
Of Local Content, the President said, “Budget 2022 will set aside resources for development and expansion of opportunities for locals through the implementation of the Local Content Act in order to create more job opportunities, investment opportunities, wealth creation, training and education and integrating our oil and gas strategy with our national development plan, which is sustainable in nature.”
The Local Content Act has been years overdue, since oil was discovered six years ago. It was only after the PPP/C Government assumed office in August 2020, that it began the mobilisation of the local content policy through countrywide consultations. It later transformed that policy into legislation, demonstrating its seriousness about securing opportunities for its people to build generational wealth.
About 40 areas are currently provided for in the Act, securing either 100 per cent of the tasks for Guyanese companies, or less, where local capability must still develop.
The President has also stressed the need to make sure all other sectors are equally strong.
“We have been able to put our agricultural sector, our mining sector, our forestry sector, on a forward-looking trajectory, one in which we have restored hope, one in which we have restored functionality and profitability.”
The President added that it is important if “we are to address issues that surround the various sectors. We have been able to make the point not only through narrative but through concrete measures that Guyana is not only about oil and gas, but that the sustainable development of our country and our economy requires investment in every single sector.”
Further to this, Dr. Ali said his government has been working on creating a conducive framework through policies, programmes and incentive mechanisms to ensure that a series of sectors project a profitable outlook in a manner that attracts investment.
The oil and gas industry will be leveraged to meet this goal of strengthening all sectors.
Dr. Ali said, “We have made it very clear that revenues from the oil and gas sector must be used to make the other sectors more competitive, must be able and must be utilised in a way to expand the economic framework of our country, to improve our competitiveness, to enhance our sustainability, to build an economy that is standing on many different legs, that can withstand global shocks, that can weather storms when they come.”
He said these are the issues Budget 2022 will address directly.
The government will be making its first withdrawal from the Natural Resource Fund to partly finance the Budget. The utilisation of oil funds will set a new precedent of sustainability in the management of Guyana’s finances, allowing the country to decrease its reliance on debt to take care of its people and execute developmental programmes.
Budget 2022 will be presented on Wednesday by Senior Minister in the Office of the President with responsibility for Finance, Dr. Ashni Singh.