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Guyanese companies benefitted from bulk of 2024 local content earnings – Jagdeo
Kaieteur News-Local companies have benefitted from the majority of the 2024 local content earnings, Vice President Bharrat Jagdeo has assured.
Vice President Bharrat Jagdeo
Speaking at his party’s weekly press conference on Thursday, Jagdeo told reporters that his government is committed to ensuring that local businesses in the oil and gas sector continue to benefit from the majority of earnings.
He said that every effort is being made to protect Guyanese in accordance with the Local Content Act.
Jagdeo was asked by Kaieteur News whether the US$743M spent on local content last year was verified by the government and whether the bulk of it is in the pockets of locals rather than foreigners who use locals as fronts for their businesses.
“…right now, there’s $700M odd that you speak of. It’s a substantial sum of money, nearly $150 billion of procurement opportunities going to Guyanese companies,” the Vice President said.
He explained that while by definition and documentation presented, all of the companies are Guyanese, some may be local in theory but foreign in practice.
Jagdeo reminded that there is an ongoing investigation to identify such companies. He said that the government has identified loopholes being used by foreigners to circumvent the local content legislation.
“…but the bulk of the money would be mainly to our local companies, the bulk of it, and we’re very pleased that it happened because it is great opportunities,” he assured.
On November 12, 2024, Kaieteur News reported that Jagdeo issued a stern warning to Guyanese firms enabling foreign companies to bypass Guyana’s Local Content Act, stating that violators will face penalties.
The Local Content Act currently features 40 areas for services carved out for Guyanese businesses including rentals, supply of goods, accounting, catering and welding. Foreign companies wanting to operate within those areas are required to partner with local firms. However, the law stipulates that the Guyanese partner must have 51% or more beneficial ownership, among other benefits. The Local Content Secretariat has observed foreign companies finding new ways to flout this law in order to gain access to the 40 areas of services set aside for Guyanese businesses.
At that press conference, Jagdeo made it clear that the government is committed to enforcing the law to ensure that benefits set aside for Guyanese go to locals, not foreign firms. “Let me just reiterate that all of those who are violating now the Local Content Act, they have a lot to worry about,” Jagdeo said.
“We intend to crack down on it. This Act was designed to give benefits to our people, Guyanese, and if there are a few people here who are using it to confer the benefits so that the foreign companies can get these benefits that are set aside for our people, and they are collaborating with the foreigners, then they run the risks of not just losing the certification but also facing the fines in accordance with the Act,” the Vice President added.
(Guyanese companies benefitted from bulk of 2024 local content earnings – Jagdeo)
(Guyanese companies benefitted)
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