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Guyana’s Services Sector remains a major contributor to economy
Central Bank Governor, Dr. Gobind Ganga
Little recognition is ever given to the services sector. This sector happens to be one of the largest in the Guyanese economy. It is even argued that it is perhaps the most loyal when it comes to delivering on tax payments.
But before delving into hardcore statistics, it is important to first understand that the services sector is an extremely large field. You would be surprised to learn that most forms of business you are familiar with are a part of this sector.
When you think of the clubs and hotels in Guyana, the laundry stores, the tax and minibus services, the insurance companies, the car dealerships, the shipping companies and recycling entities, the consultancy companies and even fashion, security and machinery subsectors; they all fall under the umbrella of the services sector.
The services sector in Guyana is also one of the largest employers of labour. Companies in this realm also have a noted pattern of seeking expansion. This is the case with enterprises such as Church’s Chicken and Pizza Hut. These companies have expanded by leaps and bounds in and around Georgetown, while providing employment for a wide cross section of Guyana’s labour force.
Various reports have also praised Guyana for its booming services sector. Take the Guyana Private Sector Assessment Report (PSAR), for example, which was conducted by the Inter-American Development Bank (IDB).
The report says that in Guyana, the manufacturing and the services sectors are significantly impacted by upturns and downturns in aggregate demand.
It said, “Guyana’s largest economic sector, as in other countries in the region, is services. About two-thirds of value-added GDP is accounted for by the delivery of the services that are necessary for the functioning of the economy.
“Wholesale and retail trade is the largest services subsector, and grew by 35.8% in real terms in 2008-12 (see Table 2). Transportation and storage is the second-largest services subsector.”
The report went on to state that this is consistent with the fact that Guyana’s small economy makes industrial production for domestic consumption very expensive; this means that, as the economy expands, demand is satisfied by increasing imports, which are delivered through retail and transportation services. Construction is the third largest services subsector.
The report noted that, “Construction growth, although modest in 2008-12, accelerated in 2013 as a result of the investment of profits from the mining sector. Financial services, although accounting for only a small share of total value added in the economy, has experienced significant growth (56% real growth in 2008-12), confirming that the sector is expanding as the economy grows.”
Furthermore, the report stated that information and communications technology and business-process outsourcing are also expanding. In the past few years, the report said that Guyana has begun to host call centres that take advantage of the country’s low labour costs and its educated workforce whose first language is English.
It also stated that the services sector has received the most credit from commercial banks in 2012, followed by manufacturing, agriculture and mining.
Monitoring the behaviour of the services sector in Guyana is a number of agencies, one of which includes Central Bank.
The Governor of the Bank, Dr. Gobind Ganga, has indicated that the sector is a large and important one. He emphasized that dips in this industry could signal from time to time, that economic challenges are ahead and that certain decisions are required to stimulate activity.
Ganga also pointed out that the Bank’s annual reports also keep a record of the services sector and the performance of its other subsectors.
According to the 2015 Bank of Guyana report, the services sector, which accounts for more than half of the Gross Domestic Product, recorded growth of 2.3 percent relative to 5.5 percent in 2014.
This outcome was largely due to an increase in activities of the transportation and storage, financial and insurance, information and communication, real estate and other services by 13.6 percent, 8.1 percent, 5.5 percent, 2.5 percent, and 1.7 percent respectively.
They were also increases in electricity and water, education, public administration and health and social services.
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