Jan 30, 2016 News
By Kiana Wilburg
A $230 billion budget for 2016 was presented to the National Assembly yesterday by Finance Minister,
The budget which is 20 percent larger than last year’s provides the building blocks for transforming Guyana’s economy to one that it’s strong and adaptable, said the Finance Miniser.
Jordan noted that for last year, Guyana achieved a three percent growth rate as opposed to its target of 3.4 percent. He said that while the economy suffered last year, with Government’s cautious management, it is on the rebound.
“In 2015, perhaps for the first time in recent history, all of the country’s key industries – sugar, rice, bauxite, gold and forestry – found themselves in various states of distress. Even remittances upon which so many of our people depend, was a victim of the slowdown in the world economy.”
“However, this young Government’s prudent management of the economy, including timely policy interventions, saw the economy’s growth trajectory continued; that there were no reported job losses; and, as was evident in the last two months of 2015, the business community’s confidence had been restored.
“This must come as a bitter disappointment to those in the Opposition and elsewhere whose forecast of gloom and the ‘tanking’ of the economy did not eventuate.”
Minister Jordan is nevertheless hopeful that the economy will grow by some 3.4 percent for 2016.
The Finance Minister also noted that the total revenue collected was $161.7 billion, 11 percent more than in 2014. Notwithstanding the increased revenue, in 2015, Jordan said that the Guyana Revenue Authority remitted an estimated $47.1 billion.
While this figure is substantially lower than the $55.6 billion remitted in 2014, he said that strenuous effort will be exerted in 2016 to monitor concessions that are granted.
In keeping with the direction in which Government is seeking to steer the economy, Jordan said that he chose the theme for the 2016 budget to be, “Stimulating Growth, Restoring Confidence: The Good Life Beckons.”
Jordan said that this theme highlights the imperative of growing and ‘greening’ the economy in an atmosphere of renewed hope and expectation for an improved quality of life of the citizenry.
As has been the practice, Jordan said that the 2016 budget benefitted from widespread consultations with private sector organizations, trade union bodies and women groups, among others.
He said that for the first time, youth representatives from all 10 administrative regions were invited to participate in shaping a national budget.
He said that he was particularly encouraged by the discussions with the nation’s youth as they gave a first-hand understanding of many of the issues that are of immediate concern to them.
“They brought with them, refreshing perspectives and inspiring thoughts that resonated with the ‘fresh approach’ which the Coalition Government has been advocating. It is an approach we commend to the Opposition who, though invited to budget consultations, found it inconvenient to attend,” Jordan said.
Performance of the economy in 2015
The Finance Minister noted that the manufacturing sector achieved a growth rate of 5.3 percent. He said that this was driven by growth in the sugar and rice industries, as well as other manufacturing.
He said, too, that growth was returned in most sub-sectors, including Transport and Storage, Electricity and Water, Information and Communication, Financial and Insurance and Social Services.
He said that negative growth was recorded in Construction and Wholesale and Retail sub sectors.
With regards to inflation, the Finance Minister said that at the time of the mid-year review, last year, the economy had already recorded deflation, which is a reduction in the general level of prices, of 0.2 per cent.
He said that prices were expected to remain fairly stable to the end of the year, premised on continued low level of prices of fuel and a range of consumer items, as a result of the removal of the Value Added Tax (VAT). He said that deflation persisted throughout the year and by end December, it had been recorded at 1.8 percent.
Investments / New projects/ Sector allocations
The Finance Minister told the House yesterday that among the many projects planned for the development of the Hinterland region, the Government will be investing over $4 billion, in support of the Plan of Action for Hinterland Development.
He said that in excess of $280 million has been allocated to promote economic prosperity, tourism development and preserving cultural identity. This sum, he said, is inclusive of grants for 211 Indigenous communities that will build village economies and fund eco-tourism projects specifically for the nation’s 50th Independence celebration.
Notwithstanding the allocation for the specific events surrounding the imminent celebrations for Guyana’s 50th Anniversary, Budget 2016 caters a sum of $300 million in support activities in this regard.
Last year, Government invested $2.5 billion in the ICT sector. This year, Jordon said that Government proposes to invest through the Guyana REDD+ Investment Fund (GRIF), about $3.1 billion for the ICT Access and E-Services for Hinterland, Poor and Remote Communities Project.
He said that the project will provide infrastructure, equipment, hardware and software, so as to enable access to quality ICT, training and e-services, including distance learning, with particular focus on our vulnerable groups.
In the 2016 budget, Jordan said that Government is also putting forward $20.3 billion for the agricultural sector to create an economic environment in which farming and agro-processing operations can grow the economy and create employment.
Jordan said that in excess of $598 million is allocated to enhance diversified agriculture in the hinterland, riverain communities and the intermediate and Rupununi savannahs.
With regard to the infrastructure sector, Jordan said that the absence of well-developed infrastructure has impeded the country’s development in several ways. The Parliamentarian told the House that inadequate transport linkages across Guyana have increased production costs, making many of our products uncompetitive in world markets.
He said that limited road, water and air access across Guyana has obstructed Guyana’s ability to fully exploit the abundant opportunities in our tourism and natural resources sectors.
The Finance Minister noted that skewed transport road network development systems have thwarted the creation of employment opportunities in areas outside of the coastland.
He said that sub-optimal infrastructure in housing settlements has prevented the development of sustainable communities. As such, Jordan said that Government has allocated a total of $14.4 billion to continue the upgrade, expansion and rehabilitation of Guyana’s network of roads and bridges.
He said, too, that among other projects allocated for this sector, the government is finalizing negotiations with the Government of China for the construction of the East Coast Demerara Highway, from Better Hope to Belfield.
Jordan said that in collaboration with the Inter-American Development Bank, the government will, this year, conduct studies and designs for an improved East Coast Demerara Railway Embankment Road, entailing the construction of bridges between Sheriff Street and Mahaica; the upgrade of the current embankment road, from Sheriff Street to Enmore; and the extension of the embankment road, from Enmore to Mahaica.
“Additionally, we will be investing over $5 billion to reconstruct Sheriff Street to facilitate improved traffic safety features, including pedestrian overhead crossings at strategic locations,” he added.
With regard to the energy sector, Jordan said that Government will invest $2.5 billion in initiatives to improve the Guyana Power and Light (GPL)’s operational management capabilities.
He said that Government is currently examining a number of un-served areas with a view of providing electricity to residents in those excluded communities, so as to improve living conditions.
Last year, Government spent $1.6 billion to expand and rehabilitate the water supply and distribution systems across the country. For the first time it saw over 1,200 residents receiving potable water in Ann’s Grove, Angoy’s Avenue and Friendship.
Jordan revealed that another $4 billion has been allocated this year to improve and expand access to water across Guyana.
In Housing, Jordan noted that in 2015, Government expended $1.9 billion on infrastructural improvements in housing schemes. Additionally, 74 turn-key homes were built and over 4,000 land titles distributed. The high rate of possession of these turn-key homes and lots, he said, indicates that new home owners are eager to realize their dream of home ownership.
Government will continue with infrastructure works in existing housing schemes, including the installation of electricity and provision for potable water, he said.
The Finance Minister said that new housing developments will commence in areas such as Perseverance, Stewartville, Cummings Lodge, Prospect, Williamsburg and Amelia’s Ward.
“In the hinterland regions, we will spend over $644 million, to expand the Hinterland Housing Project, which will provide housing subsidy and the replacement of roofs in Regions One and Nine,” expressed the Finance Minister.
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