By Abena Rockcliffe-Campbell
The contraction of the forestry sector has had a notable impact on economic growth this year. The government has therefore found it imperative to strategise ways and means to aid the revival of the sector. Budget 2018 has catered for several measures that the government intends to implement for damage control.
When he delivered his Budget Speech last Monday, Minister of Finance, Winston Jordan said the forestry subsector is expected to grow by 8 percent to 320,760 cubic metres, “as the reallocation of concessions continue, new concessionaires establish operations, and stimulus measures are put in place in 2018.”
During a recent interview, Minister of Natural Resources, Raphael Trotman outlined a few of the “stimulus measures” that are to be put in place to rebuild the sector. He said that the aim is to rebuild the sector in a manner that is sustainable, decent and transparent.
But before going into detail about the measures Government intends to employ to treat the forestry sector, Trotman spoke a little about some of the ailments that affected the sector.
The Minister said that “the external depressions particularly in the Asian market, to where most of the logs are shipped, continue. The industry complained vigorously to Government about the 14 percent Value Added Tax (VAT) on logs and they complained about the rising importation pinewood and pinewood products.”
Trotman said that the government has removed the 14 percent VAT on logs. “We listened and we have accepted that this (measure) has in fact negatively impacted the industry.” The removal of the VAT will improve the cash flow of operators in the industry by at least $80M.
Minister Trotman noted that Government has also addressed the issue with the importation of pinewood. “At my level, I have put a permit on the importation of pine and the GRA (Guyana Revenue Authority) is going to raise the tariff to 40 percent.” The new tariff will be in effect from January 1, 2018 to December 31, 2019.
Further, Trotman said that the government has set aside $50M for a dimensional stockyard. This, he explained, would function as a central location where small loggers could take their produce and have them processed and graded. The project is to act as a stimulant for the forestry sector. The government is looking to have this project function as a public private partnership to make it easier for small loggers.
Also, Trotman said that $120M has been set aside for the execution of a forest inventory. He explained that sometimes loggers are given an area to operate but when they actually go to start work they may realise that species they were hoping for may not be present in the quantity or size they has expected.
“The inventory is going to help in this area so even before we release the concession they will have information about what is in that area.”
But the efforts do not stop there. Trotman also noted that the government is going to mandate that every construction project that utilises wood must benefit from local species.
Minister Trotman said that while the government is desperate to secure growth in the industry, it is keen not to encourage skullduggery.
A few years back, the forestry sector was contributing more to the economy, but there have been reports of one corrupt practice after the other. Trotman said that that would not be encouraged.
“I do not believe that there have been many complaints about corruption in the sector over the last two year. At least I have not been hearing them and we have been very keen in terms of showing good stewardship but that is not to say that we should be complacent.”
During his Budget 2018 Speech, Minister Winston Jordan noted that the government spearheaded the establishment of an Inter-Ministerial Roundtable, tasked with working collaboratively with the private sector, through the Guyana Manufacturers and Services Association, to meaningfully develop methods and initiatives to stimulate growth amongst the various industries of the manufacturing and services sectors.
He said that the forestry subsector was identified by the GMSA as the priority industry for the attention of the Roundtable, given the struggle of its players in progressing to value-added production, which would allow for the sector‘s true potential for growth and employment to be realized.
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