Latest update April 17th, 2025 9:50 AM
Cautious GBTI says many miners leaving
– worried over rice dependence on Venezuelan market
One of the country’s biggest banks has expressed worry over the poor performance of a number of key industries, including gold.
The Guyana Bank for Trade and Industry Limited (GBTI), according to a published
GBTI says that the rice industry is too dependent on the Venezuelan market.
statement of its unaudited financial statements for the first half ending June 30, said that the global economic recovery has gradually improved over the past six months and with it, the strengthening of the US dollar.
“The impact of this for us, however, is the loss of gold as a hedge against economic uncertainty because the price of gold remains relatively low on the world market.”
According to GBTI, the current low price of gold comes at a time when the economy has been boosted by record production of gold in the last couple years.
Starting in the second half of 2013 and into 2014, “gold miners found their profits squeezed to the point where many miners exited the sector either permanently or temporarily,” said Chairman, Robin Stoby.
Last year, gold prices plunged from a US$1900 high to US$1200, leaving miners in the lurch. Many of them had taken loans or bought equipment on hire purchase.
But it is not gold alone that the bank is jittery about.
“Our sugar sector continues to underperform in the face of numerous challenges and our rice sector continues to be too heavily dependent on the Venezuelan market. The cost of energy remains high and this makes our light manufacturing sector uncompetitive vis-a-vis our Caribbean counterparts.”
GBTI was also critical of the country’s governance framework which consists of a minority government that has been unable to pass the much needed Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) Legislation.
“As no compromise seems to be forthcoming, this is causing apprehension among the business community,” the bank disclosed.
GBTI said that for the banking sector, the failure to resolve this issue is causing increased delays and difficulties in carrying out international payments on behalf of customers.
“We have continued with our plans for opening branches in unbanked or under-banked areas of our country albeit in a more cost effective way. Our Bartica Branch should be opened in September 2014 and we have completed the construction of our building in Port Kaituma and now offer our services from there.”
GBTI also said that it has taken a more conservative approach to lending this year. This has seen the rate of growth of its loan portfolio slow down.
The bank was, however able to record an after-tax-profit of $1.1B for the six months.
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