Scrap metal exports earned $766 million last year – Ministry of Business

Jul 18, 2019 News

Scrap metal exports from Guyana contributed approximately $766 million to the economy last year.

Scrap metal exports earned $766 million last year

According to Cordell McClure, Ministry of Business’ Communication Officer the sum represents monies garnered for seven months–from May to December, 2018.
McClure said that the sum was accounted for after the Scrap Metal Unit, (SMU) commenced work under the Ministry of Business.
The Communication Officer explained that the unit is currently monitoring the work of 22 dealers and 23 exporters and 42 collectors.
The Scrap Metal Unit was created by Cabinet approval using the old Metal Dealers Act 1980 (amended twice). The trade is only open on a limited base to facilitate dealers who had a backlog of metal and contracts to remove old metal from large facilities.
McClure said that this limited resumption will continue to be in force until the new legislation comes into force.
“A draft legislation to effectively manage the scrap metal trade is currently with the Attorney General’s Chamber for review. The trade is being overseen by the Scrap Metal Unit within the Ministry of Business.
The unit utilizes standard operating procedures and a software system (which is being tested) to monitor the trade.”
The overall objective of the SMU is to strengthen the regulatory framework, taking into account international best practices and unique national circumstances, in order to adequately address the problems plaguing the Scrap Metal Trade Industry.
Information available on the Ministry of Business website outlined that over an era the Scrap Metal Trade has provided viable business opportunities for a number of small and micro enterprises in Guyana.
The Trade contributes to the accomplishment of some of the country’s socio-economic objectives as envisioned in the policy of the Government which includes employment creation and trade promotion.
Notwithstanding these benefits, there are many issues that have been raised by stakeholders relating to procurement, pricing, and the marketing and distribution of scrap metal that continue to impasse the development of this Trade in Guyana.
The Business Ministry said that the development of this new Scrap Metal Legislation is vital to the introduction of new regulatory measures to govern the Industry.
Specifically, the legislation seeks to provide the framework that will ensure greater compliance with trade requirements, registration and other issues to ensure maintainable development of this Trade.
In 2015, as part of efforts to regularize and monitor the industry, the government had temporarily banned all scrap metal trade.
Business Minister at the time, Dominic Gaskin, had announced that a new framework is being prepared for the eventual resumption of the trade. Gaskin had said that one of the important things to monitoring the trade is the establishment of a SMU.
Further, Gaskin said that the trade was proven in the past to be detrimental to a lot of businesses and private individuals. He had reported that people were stealing manhole covers and grill work to export as scrap metal thereby increasing the need for the trade to be regulated.
The trade was closed on June 15, 2015 to facilitate a forensic audit which was completed that December. The audit which was done by Chartered Accountants Ram and McRae had recommended that the legislation governing the local industry is in need of an update.
It was highlighted that in the old Metal Dealers Act 91:08 there was no provision for the collection of export fees. Despite this, the auditors found within financial statements records of the unit’s income described as Export fees.
The temporary reopening was granted since the Ministry of Business is in the process of putting together new guidelines and regulations and is now in a position to authorise a limited restart to the trade.
Inspections revealed that there is a build-up of scrap metals across Region Four in particular as a result of the trade being closed for so long. Exporters can now ship out the existing scrap for the limited period.