Massive labour shortage in Guyana now hinders growth of other industries

Apr 22, 2024 News

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…also limits the country’s overall economic potential – GMSA President

Kaieteur News – Despite a 25 percent increase in business last year in the Manufacturing and Services Industry, there is a reported massive skill and labour shortage in Guyana that hinders the growth of industries and limits the country’s overall economic potential.

This is according to President of the Guyana Manufacturing and Services Association (GMSA), Ramsay Ali, who in his annual report presented this past week reiterated, “in an effort to remedy this challenge, we met with representatives of the University of the West Indies, Cave Hill School of Business and Management to discuss training needs in the manufacturing sector.”

To this end he noted that “we agreed that research is first needed to identify the specific skills and knowledge gaps within industries. By conducting this research, targeted training programmes will be developed to equip individuals with the necessary skills to fill the labour shortage.”

According to Ramsay, “This will not only benefit the manufacturing sector but also other industries in Guyana. He posited additionally, the collaboration with the University of the West Indies will ensure that the training programmes are of high quality and align with international standards. After the meeting, a Memorandum of Understanding was signed by the University of the West Indies Cave Hill School and GMSA, solidifying our commitment to addressing these gaps.

He did note however, that “this past year can be described as making significant engagements, collaborations, and strides towards fostering a more robust manufacturing sector in Guyana. As the national budget for 2024 indicated, the growth in non-oil GDP in 2023 by 11.7 percent resulted in the expansion of the manufacturing industry by 25 percent and services by 10.3 percent.

In his remarks, Head of State, President Irfaan Ali, credited the 25 percent increase in business in part to an increase in fabricated metal and non-metallic products, which he said, “played a pivotal role in driving this unprecedented success, underscoring how the oil and gas sector is fueling local expansion.”

According to President Ali, the services sector also demonstrated commendable growth, with output increasing by an estimated 10.3 percent across various industries adding that “this broad-based expansion highlights that our economy is growing on numerous fronts, thus increasing economic resilience and diversification.”

He was adamant the expansion of manufacturing and services remains a key pillar of our plans for economic diversification and that “government is committed to retooling and rebooting the traditional primary commodity-producing sectors such as sugar, rice, bauxite, gold, timber, and fisheries. But it is also keen on enhancing value addition to propel these sectors up the value chain.”

Expressing optimism however, President Ali, observed the emergence of the oil and gas sector “as a transformative force in the economy creates an urgent need to invest in manufacturing and support services to capitalize on the opportunities presented by this burgeoning industry.”
Speaking directly to the employment regime and opportunities, the President in referencing the local content legislation “aimed at facilitating greater participation of local manufacturers and service providers in the oil and gas sector.”

He was adamant, “this legislation not only creates opportunities for local businesses to thrive but also ensures that our nation benefits fully from the development of our natural resources.”

To this end, the President posits “the successes we enjoyed over the past year were by no means accidental; They were carefully crafted in consultation and collaboration with the main representative body of manufacturers and service providers in Guyana, the GMSA.

Meanwhile, Minister of Industry and Commerce, Oneidge Walrond, in her remarks noted that “this year’s report comes at a time when Guyana is beginning to see tangible results of strategic initiatives launched by the government a little over three years ago as we set out to build a sustainable and resilient economy in the context of the game-changing oil and gas discoveries.”

According to Minister Walrond, “Guyana’s remarkable economic growth has garnered international recognition, solidifying our position as one of the fastest-growing economies in the world. In 2023, Guyana achieved a phenomenal real GDP growth of 33.1 percent, with oil production reaching 142.9 million barrels, a nearly 50 percent increase from 2022.

It would be poignant to note, Government recently signed off on a sixth project for the ExxonMobil-led consortium operating in the Stabroek Block, but its expanded production poses a risk not only to the availability of skills for the domestic labour force, but potentially an increase in cost of living for citizens. This much is documented in the Environmental Impact Assessment (EIA) that was submitted to the Environmental Protection Agency (EPA), as part of the approval process.

In that document, it outlines that with the US$12.7B Whiptail Development Project, there will in fact be no direct impact on the country’s administrative divisions, population distribution, or education systems, socioeconomic conditions, employment, and livelihoods. Further it said that “area for work will be small and thus will not result in any change in the overall population distribution.” What in fact is projected, is a potential increase in the prices for goods and services on the domestic market, meaning an even steeper increase in cost of living.

Expounding on its rationale for its conclusion, the EIA notes “The Project’s potential for adverse impacts on socioeconomic conditions, employment, and livelihood include a potential increased cost of living and competition among local businesses for qualified workers due to local hiring and spending associated with the Project.” Meaning the domestic sector will lose more of its skilled employees to the oil sector with the expanding of ExxonMobil’s operations offshore Guyana.

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• GMSA President, Guyana, labour shortage, Manufacturing and Services Industry

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