The Guyana Manufacturing and Services Association (GMSA) held its annual general meeting (AGM) yesterday, at the Marriott Hotel, where the President, Shyam Nokta, told the gathering that the Association welcomed 35 new organisations to its membership, including the Demerara Distillers Limited.
The figure took the GMSA’s membership total to 135.
The association has taken several measures to strengthen the relationship between businesses involved in manufacturing, social and business services and the Government of Guyana. These include Ministerial Roundtable Discussions with a focus, in 2018, on Agro-processing. GMSA has put a joint technical committee in place between the company itself and the government. The two sides meet bi-monthly to address critical issues affecting the Agro-processing sector.
Specific also to its work for the Agro-processing is Uncapped, a programme of activities that has caused several small agro-processors to have their products recognised at the national level.
However, President Nokta noted several challenges to the manufacturing sector in 2018, worst of which was the high cost of energy, coupled with issues of stability and reliability. Many manufacturers, Nokta said, have been pushed off the grid by these limitations and have resorted to self-generation.
Further, Nokta said that tax measures introduced in Budget 2017, like VAT on electricity made this issue worse, affecting manufacturers negatively throughout last year.
Adjustments to the VAT regime in 2018 caused some manufacturers to not be able to reclaim VAT on inputs for exported items, and Nokta said that this disincentivised both manufacturing and exports, affecting key sub-sectors like wood-processing and rice.
Nokta said that the extended rainy season and lack of maintenance, caused access and infrastructure to become key challenges in the first half of 2018. Many roads to the interior were rendered impassable. To this day, accessibility remains a challenge, as there are severe challenges in getting goods to hinterland communities over land.
During consultations for Budget 2019, the GMSA President noted that several suggestions were made, covering areas such as taxation, access to finance, public procurement, energy standards and regulations. Sector-specific measures were proposed for the forest and wood products, agro-processing, construction and engineering sectors.
In the presence of Minister of Finance, Winston Jordan, Nokta urged that the measures be considered, since they would make room for the manufacturing and services sector to flourish, hence, the diversification of the economy.
While some submissions of GMSA were incorporated into Budget 2019, such as the reduction of the manufacturing and non-commercial rate to 25 percent, Nokta said that the changes are not significant enough to alter a business environment in which ease of doing business has not been enhanced in recent years.
Present at the head table of the AGM was Country Representative for the Inter-American Development Bank (IDB), Sophie Makonnen, who said that greater competitiveness and economic diversification are key indicators of a strong economy. In this context, she also mentioned that technology innovation is quite relevant, and must be heeded by this country.
Despite the challenges, Nokta said he believes the manufacturing sector will continue to hold its own, “while at the same time recognising that the sector should be able to catalyse a far greater contribution to the economy”.
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