Latest update January 17th, 2025 6:30 AM
Guyana raked in US$4.453B in direct foreign investment last year – UN Report
Kaieteur News – A recent report by the United Nations (UN) Economic Commission for Latin America and Caribbean (ECLAC) disclosed that majority of the Foreign Direct Investment (FDI) that came into the Caribbean in 2021 went to Guyana.
In the annual report titled ‘Foreign Direct Investment in Latin America and the Caribbean 2022’ it was stated that in the Caribbean, Guyana was the country that exhibited the greatest growth in investments last year and even surpassed the Dominican Republic, which in prior years had been the leading recipient of investments in that sub-region.
According to the report, the foreign investment in the Caribbean for last year was totaled at US$8.957 billion – this represents a 19.4 percent increase from 2020 – and is accounted for mainly by capital inflows in Guyana’s hydrocarbon sector and increased FDI in the Dominican Republic.
Guyana’s natural resources sector was listed as the ‘most dynamic’ racking up 63 percent of the total FDI the country received for the prior year. In fact, it was stated that Guyana’s FDI for 2021, was an inflow of US$4.453 billion which is 116 percent more than in 2020.
“Guyana has positioned itself for the first time as the leading FDI destination in the sub- region, accounting for 50% of inflows, followed by the Dominican Republic (35%),” the report stated.
According to the Bank of Guyana 2022 report, the country’s growth was mainly due to the hydrocarbon sector and the oil exploration project in the Liza field. It was added that the sector is expected to continue to attract FDI in the coming years.
One of the main players in oil production in the country is American oil giant, ExxonMobil (Guyana), who announced that it planned a US$10 billion increase in its oil investment in the country’s prolific Stabroek Block, which is to include six drilling centres and 26 production wells (Valle and Kumar, 2022).
According to the report, the dynamism of the hydrocarbon sector was also responsible for announcements in other related sectors. In 2021, new FDI projects worth US$180 million were announced, and this is an increase of 397 percent over 2020. The sector with the largest share was telecommunications, owing to an announcement by Digicel of a project to lay a submarine cable to provide the country with high-technology telephone and Internet services, with an estimated value of US$137 million. The project, however, is associated with oil and gas exploration in the area, as the intention is to connect oil platforms off the coast of Guyana with other territories and countries in the region, such as French Guiana, Suriname and Trinidad and Tobago, Digicel said in 2021.
According to the report, while Guyana’s oil and gas sector propped up its investment – the tourism-driven economies of the Caribbean were hit hard by the COVID-19 crisis. While investment in the tourism and hotel sector has started to pick up in the Dominican Republic, other countries such as Jamaica and Barbados have shown their potential in business process outsourcing, attracting investment from companies in the sector.
The ECLAC on Tuesday revealed that while the FDI the Region received in 2021, is an increase from what was recorded in 2020, it was highlighted that the growth was not enough to achieve the levels seen prior to the pandemic. As such, the ECLAC called on countries in the Region to use FDI strategically, owing to the weak economic recovery recorded last year.
Moreover, it was also revealed that the European Union (EU) and the United States (US) were the main investors in the region in 2021, representing 36 percent and 34 percent of the total, respectively.
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