Latest update January 1st, 2025 1:00 AM
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Slowdown in bank lending signals investments at standstill
– Berbice chambers tell Finance Ministry
A slowdown in loans and advances from the commercial banks is a worrying sign
Central Bank figures are indicating that the private sector is not too keen in investing, Berbice businesses say.
that investments are at a standstill.
This came out of a meeting late last month between Berbice businesses and Minister of Finance, Winston Jordan and his team.
The meeting was initiated by the Central Corentyne Chamber of Commerce and included executives of all the chambers in Berbice, according to the body in a statement.
Among other things raised by the group, were a number of government policies which the chambers believed were not encouraging business. These included decisions this year by the administration to introduced VAT on water, electricity and education. The latter, which has sparked protests, was described as “mean spirited and should be urgently reviewed”.
Government has already said that VAT on education will remain for this year but several taxes will be reviewed for next year’s budget.
According to the chambers, the taxes have a negative effect on the psyche of the ordinary man and will only service to discourage and de-motivate people.
The issue of the SARA bill and the state of the Guyana Sugar Corporation as well as more services of GRA in Berbice were also raised.
Leading the delegation from the Berbice businesses were Mohamed Raffik, President of the Central Corentyne Chamber of Commcerce. Also present were its Vice President, Imran Hamid, and Secretary, Poonai Bhigroog.
Representing the Upper Corentyne Chamber of Commerce and Industry was K. Jaichand while R. Ramroop represented the Berbice Chamber of Commerce and Development Association. Others in attendance were the CEO of Nand Persaud Company Limited, Mr R Persaud, and Pradeep Bachan representing the West Berbice Chamber of Commerce, together with other members.
On the government side, in addition to Jordan, were Junior Minister, Jaipaul Sharma; Governor of the Bank of Guyana, Dr. Gobind Ganga, and the Commissioner-General of the Guyana Revenue Authority, Godfrey Statia.
With regards to the country’s economy, the chambers said they expressed serious reservations about the current state and it was “felt that the Government’s rhetoric and policies have not engendered confidence in the sector.”
Government, the chambers said, was told that it was the perception that it is not supportive of the private sector and seems to label all businesses as tax evaders and saying “we are coming after you”.
“Many businesses in Berbice have experienced significant reduction in sales and some businesses have had to send home employees or reduce working hours.”
The chambers said that they gave statistics from the Bank of Guyana’s report to show that the private sector is not investing or expanding.
For example, in January 2015, ‘Total Loans and Advances’ to the private sector for business enterprises was at $99.16B. Last year January, this went down to $98.75B. This year it was up slightly – to $99.32B
The chambers said that Berbice businesses are not impressed and deeply worried.
“This clearly shows that the private sector investment is at a standstill,” the statement from the Berbice chambers said.
Indeed, businesses have been complaining of a slowdown with quite a number of them cutting staffers.
There are signs that Guyana is headed for some tough times, with businesses complaining of difficulties to get foreign currencies and exports not doing so well.
As a matter of fact, last year, export proceeds fell by US$30M.
Central Bank says it has been frequently releasing foreign exchange to the commercial banks with applications facing closer scrutiny.
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