Hinterland businesses unable to tap Local Content benefits- PSC Chairman

Nov 14, 2022 News

…says hindered by connectivity, access to finance

Kaieteur News – Chairman of the Private Sector Commission, Paul Cheong has been on a drive to expand the membership of the organisation and during recent branch out meetings across the country he has found that businesses in the Hinterland are unable to benefit from the country’s flagship Local Content legislation-intended to enable Guyanese to directly benefit from the oil and gas sector through jobs and provision of services.

Chairman of the Private Sector Commission, Paul Cheong

In an exclusive interview with this publication at the sidelines of the recently concluded Guyana Supplier Forum hosted last week, Cheong explained that a number of small business owners in the Hinterland region have complained of being unable to participate in the oil boom. Some of the specific challenges that have been raised so far are internet access and access to finance to grow their businesses.

“They have connectivity issues and some, access to finance. Different areas have different issues,” the private sector Chairman explained, noting that the body is already working to address these wherever it can.

According to him, the organisation was accompanied by representative of the GTT on a number of their outreaches. On the other hand, he said he has advocated for training opportunities to be extended to those individuals. He said there were also other potential areas for collaboration with government on assisting Hinterland businesses.

For instance, Cheong explained that he has engaged government on improving access to finance for those far-flung businesses as well as financial institutions. At the same time, he explained that some businesses have internal issues which must be ironed out to tap the Local Content provisions.

The Chairman said, “It’s getting involved so they can understand what opportunities are there. If they are not involved in the conversation then it’s difficult to participate so us reaching out to them and getting them involved gives them a better understanding. It also helps us to understand what are affecting them so we can bring those things to the table and make proper representation on their behalf.”

Vice President Bharrat Jagdeo has said multiple times that the People’s Progressive Party (PPP) will not change the lopsided Production Sharing Agreement (PSA) with oil major ExxonMobil, but will seek to claw back value with key regulations such as the Local Content law. The Act was passed last December and is intended to regulate the way companies operate in Guyana’s oil and gas sector; employ persons, buy services and the way that they procure goods.

The First Schedule of the law ring-fences 40 categories of work for Guyanese participation, which include: food supply, rental of office space, accommodation, insurance, accounting, legal services, engineering and machining, aviation support, public relations, manpower and crewing services, dredging services, ventilation, environmental services and studies, and transportation. The foregoing categories carry varying percentages for participation that must be secured by companies in the oil sector by the end of 2022.

The Inter-American Development Bank (IADB) Chief of Operations and Guyana Country Representative, Lorena Salazar recently said that the revenue stream from the burgeoning oil and gas sector must not stagnate on the coasts, but must trickle down to Hinterland communities in Guyana to ensure equitable development in the country.

She was at the time addressing the Guyana Basins Summit in October when she explained that decisions must be taken to diversify the economy which means not only targeting efforts to the oil and gas industry. As such, the IDB Country Representative who hails from the oil producing state of Ecuador also gave specific advice to the government to ensure each citizen of Guyana benefits from the oil boom.

She said it is critical to leave no one behind. According to her, “that means not just focusing on the coastland but also checking the Hinterland. What are the opportunities of the people in the Hinterland?” The IDB Country representative argued that the opportunities should not only be extended to the education and health sectors, but also in the areas of communication and access among others. Salazar was keen to note that the future of the country is its people, hence measures should also be taken to explore the skills needed that may not have been taught in school.

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