For the year 2014, and leading into the early part of last year, Guyana’s economy was marginally affected by some unstable, economic challenges which existed globally.
This was further compounded by the rigours of a game-changing General and Regional elections held in May last.
As such, it is understandable that imports and exports contracted at the time. There are however, plans in the pipeline that will see rapid increase in exports of Guyana’s non traditional agricultural products.
According to Guyana’s Finance Minister, Winston Jordan, the country is expected to see an increase in its exports of non-sugar and non-rice agricultural products by at least 25 percent, over the next five years.
He said that there will be an increase in the production of agro-processed goods by at least 50 percent, by 2020; and the reduction of imports of agro-processed goods.
Currently, the major non-sugar and non-rice commodities being exported are shrimp and fruits and vegetables. This, Jordan articulated, will place greater emphasis on large-scale private investment in farming, especially in the Intermediate Savannahs of the country. Some of the crops identified for diversification in the hinterland areas are corn, soybean, cassava and legumes. These will be combined with fish and poultry rearing in those communities.
The Finance Minister noted that research will be intensified on the development of new crops such as carrot, cauliflower, broccoli, turmeric, ginger and black pepper to achieve import reduction, while crop diversification for export will focus on commodities such as coconuts, cassavas, plantains, pineapples, pepper, corn and soybean, with a view to strengthening food security along the coast and within the hinterland.
He disclosed that the A Partnership for National Unity and Alliance For Change (APNU+AFC) coalition government will advance the development of the livestock sub-sector by ensuring quality breeding stock and rebuilding the herds of cattle and pigs and flocks of sheep and goats.
Jordan said that the government will seek to enforce existing regulations for the slaughter of animals, and will improve animal health and food safety. He asserted that the Government will place the hinterland livestock industry on a scientific footing, with the aim of expanding domestic consumption and meeting international demand for organic beef.
The Finance Minister reminded that the National Budget of 2014 projected a growth rate of 5.6 percent. At that time, he said that note was taken of potential adverse impacts on the domestic economy, due to the uncertainties prevailing in the global economy. Given the openness of Guyana’s economy, he said that the concern was with low global commodity prices and their immediate and direct effect on both the import and export sectors.
He said that the half-year economic report for 2014 provided the first opportunity for review of the economy and that the estimated half-year growth of 3.2 percent represented a slippage relative to the 3.9 percent achieved for the half-year of 2013. He said that this performance caused the growth rate for 2014 to be scaled down from 5.6 percent to 4.5 percent. Unfortunately, even that lower growth rate was not achieved, for the economy contracted to 3.8 percent.
The Minister said that this was the first sign that the economy was slowing down, with the rapidly deteriorating political climate being identified as a significant contributory factor at that time.
With that in mind, he disclosed that export earnings contracted by 15.1 percent, to US$1.2 billion, largely on account of gold, sugar and bauxite. Gold export receipts declined by 27.6 percent, to US$469.8 million, the result of a combination of a 20.1 percent contraction in export volume, to 385,683 ounces, and a 9.4 percent decline in average export prices, to US$1,218 per ounce.
Export earnings from bauxite contracted by 7.4 percent to US$124.7 million, due to a 5.7 percent decline in export volume to 1,583,343 tonnes, coupled with a 1.8 percent decrease in the export prices, to US$78.80 per tonne.
Sugar export receipts fell by 22.9 percent to US$88 million. An 18.3 percent increase in export volume, to 189,565 tonnes, was insufficient to compensate for the 34.8 percent decline in prices, to US$464.30 per tonne. Rice exports earned US$249.5 million, a 4 percent increase.
This was due to a 26.9 percent increase in export volume, to 501,209 tonnes. Timber exports earnings amounted to US$53.4 million, an increase of 38.8 percent.
An important development for the export industry for Guyana is the amendment to the country’s Income Tax Act by substitution of the word “shrimp” with the word “Prawns”.
This amendment is in keeping with representation by the fishing industry for shrimp to be made eligible for the export allowance granted to non-traditional exports.
As for Guyana’s merchandise imports, this contracted by 4.4 percent, to US$1,791.3 million, reflecting a contraction in all categories of imports. Imports of capital goods declined by 8.1 percent to US$387.5 million. This was mainly due to a decline in imports of industrial machinery. Non-fuel intermediate goods fell by 1.1 percent, to US$405.7 million. Fuel and lubricants decreased by some 3.8 percent, to US$573.4 million, while consumption goods declined by 5 percent, to US$415.7 million, reflecting lower imports of other non durables food for final consumption.