Guyana has apt policies to ensure equitable share of oil wealth – Canadian MPs

– urge continued diversification of economy during recent visit to Guyana

A delegation of Members of Parliament (MPs) from Canada, who were recently in Guyana for a five-day visit, have backed Guyana’s approach to managing its oil wealth and the likelihood that it will ensure everyone benefits equitably from the oil and gas sector.
During their recent visit, the four-member delegation of Canadian MPs held talks with top Government officials aimed at strengthening bilateral ties. The delegation was led by Canada’s Assistant Deputy Speaker, Alexandra Mendès, who noted in a broadcast sit down with the State media afterwards that Guyana is on the right track when it comes to managing its oil resources equitably.

“Citizens will expect it, from their Government and from all the players that are here now, to develop the economy, that it won’t just benefit foreigners, it will benefit the people of Guyana. So absolutely, the economic development of this country relies now on that, but it also relies on the traditional both agriculture and mining industry that have been the mainstay of Guyana’s economy before,” Mendès said.
Canadian MP Robert Kitchen, meanwhile also weighed in on the subject of managing oil resources. In particular, he highlighted the importance of local content, something the Government itself has paid particular attention to.
“It’s very important to the country, what I like to call the trickle-down effect that happens with the industry when it expands, whether in oil and gas, whether in mining. The steps that are taken and the taxes that are brought in from that, are able to be dispersed down throughout the economy.”
“And the people that come in to work are staying, they’re renting places or trying to find places to rent or to buy. They’re now buying that, they’re purchasing food. And simple things like haircuts and clothing, which trickles down to the economy and spreads it out so that it enhances the country and the economy so greatly,” the MP further said.
In addition to Mendès and Kitchen, the team of parliamentarians who came to Guyana also included Senator Salma Ataullahjan and Senator Rhéal Éloi Fortin, both of whom are Canadian Branch Executive Committee Members and Canadian Branch Members respectively.
Local Content earnings for the first half of 2023 have already accounted for US$322 million, which has gone into the pockets of Guyanese service providers. The Government has meanwhile projected that Guyanese will earn US$720 million by the end of the year within the 40 carved-out areas under the local content framework.
Those positives coming out of the country’s Local Content Act were shared by the Head of the Local Content Secretariat, Martin Pertab, during a recent press conference. He also revealed that some US$518 million has been categorised as expenditure under procurement. These projections were made by utilising data from annual plans submitted by registered companies, as well as from data garnered from actual expenditure over the half-year period.
Pertab told the media, “As of June 2023, our actual expenditure related to the 40 carved-out areas was somewhere around US$322 million, representing 62 per cent of the annual target. We have also seen an increase in new hires…We have seen a 24 per cent increase in Guyanese hire.”
There are 840 local companies registered to provide services under the Local Content Secretariat. This translates to employment for 33,943 Guyanese directly and indirectly linked to supporting the sector.
The National Assembly passed the Local Content Act in December 2021. It outlines 40 different service areas that oil and gas companies and their subcontractors must procure from Guyanese and Guyanese-owned companies.
Those include 90 per cent of office space rental and accommodation services; 90 per cent of janitorial services, laundry and catering services; 95 per cent of pest control services; 100 per cent of local insurance services; 75 per cent of local supply of food; and 90 per cent of local accounting services. (Jarryl Bryan)