Economic recovery key focus as Guyana gets US$130M IDB loan

Guyana’s economic recovery from the COVID-19 pandemic is a key focus as the country received a further US$130 million (or about GY $27.2 billion) loan from the Inter-American Development Bank (IDB).

This loan was announced via a press release issued by the IDB on Friday. It was noted that Guyana is expected to improve the “efficiency and effectiveness of its public policy and fiscal management response to the COVID-19 response.”

Based on project information provided by the Bank, it is expected that Guyana will use the loan to adequately respond to the effects of the COVID-19 health crisis; introduce measure that protect the income in vulnerable households while providing the necessary liquidity to businesses; continue providing essential goods and services; and, promote economic and fiscal recovery in the post-pandemic period.

This sum is the second of a two programmatic-based loan series. In the first instance, the country had received a US$34 million loan; that sum was approved in December and disbursed in January 2021.

The Bank further noted that the loan is expected to support the government’s efforts at promoting macroeconomic stability and the withdrawal of emergency tax measures, both of which are part of a strategy to respond to the new phase of the pandemic.

“This new phase of IDB financing will also support measures to increase the efficiency and transparency of government procurement processes as well as measures to promote greater fiscal sustainability, address climate change and accelerate economic recovery with greater gender equality,” the IDB release noted also.

Recovery measures included in Guyana’s COVID-19 National Action plan and new avenues for improving public investment management are part of the efforts that will be supported with the loan.

The IDB loan has a maturity period of 20 years and a grace period of 5.5 years and an interest rate based on the Secured Overnight Financing Rate (SOFR).