GCCI bemoans impact of foreign currency shortage, trade barriers on local businesses

Foreign currency shortage and trade barriers are among some of the major challenges that the local private sector continues to grapple with and calls are being made for interventions to be made so as to avoid serious consequences, not only for businesses here but also the Guyana economy.
Speaking at the Georgetown Chamber of Commerce and Industry’s Annual Awards Dinner and Gala on Thursday evening, GCCI President, Kester Hutson, reiterated the private sector’s concerns about the apparent shortage of foreign currency in the local market.
“Whether or not officials fully acknowledge the severity of this problem, the reality remains that businesses are struggling due to difficulties in accessing foreign exchange promptly. Time is money and delays in payments to overseas suppliers caused by these shortages carries serious consequences for businesses and the wider economy by fueling inflation. I strongly urge the Government to address this issue at its core,” he stated.
According to the GCCI Head, operating under uncertainty about whether they can meet payment obligations to suppliers threatens the very survival of businesses here.
On this note, Hutson posited that the Chamber has been actively advocating for targeted interventions from the Bank of Guyana, the Government and the Guyana Association for Bankers Incorporated (GABI) – something which they will continue to do.
“We remain committed to pushing for a resolution to this critical issue until tangible progress is achieved,” the GCCI President stated.
Despite these cries from the private sector and other stakeholders about sourcing United States (US) dollars, the Guyana Government has been adamant that there is no shortage in foreign currency locally, blaming deliberate actions by some institutions that create such a situation.

Intervene
In fact, only last week, Vice President Dr Bharrat Jagdeo repeated this position when he addressed the Guyana Manufacturing and Services Association (GMSA) Annual Awards ceremony. He explained that Government would only intervene and inject foreign currency into the local market when the need is there.
“We don’t intervene often… When we saw a misalignment with aggregate demand and aggregate supply, then we intervened [earlier this year] – maybe sold US$100 million into the market or US$50 million like [we did] the last two times.”
“But what I want the business community to know is that a lot of the banks use foreign currency to poach on each other’s customers sometimes, and they have… When we look at the availability of resources, [the banks] can cover their needs. So, as a monetary function, we don’t intervene but we have a capability of intervening. So, there is no shortage of foreign currency at least [not] at the national level in terms of aggregate supply and demand,” the Vice President stated.
But while the Central Bank can inject as much as US$300 million into the market at any time now, Jagdeo pointed out that Government is wary of leakages; for example, Trinidadian companies using the Guyana market to make payments for goods and services back home given the Twin Island Republic’s restrictions on foreign exchanges, which can take as much as six months to be released there.
“So, we’re monitoring this carefully and we’re not gonna allow [the local foreign exchange market] to get to a stage where it will harm the wellbeing of our businesses. So, anytime there is a necessity to intervene, and we study the market carefully, we’ll do so,” the VP assured.
In its 2024 Mid-Year Report, the Bank of Guyana said the total foreign exchange transactions for the first half of this year increased by 39.0 per cent to US$9.89 billion, compared to the same period in 2023.
According to the report, this is mainly due to the 75.4 per cent or US$1.87 billion increase in transactions through foreign currency accounts. Bank and non-bank cambios and hard and soft currency turnover were also higher with the former recording a net purchase of US$19.2 million. Transactions through foreign currency accounts and cambios accounted for 84.2 per cent of the total volume.

Trade barriers
Another issue that the private sector says negatively impacts its ability to do business in Guyana is the regional trade barriers. Consequently, Hutson calls for this matter to be addressed frontally so that Guyanese companies can have equal opportunity as their regional trading partners.
“We have recognised time and time again that Guyanese manufacturers are operating on unequal footing in the region. We continue to allow the free flow of goods from other Caribbean States into the country while our products are being barred from entry into some countries for negligible reasons, stymying our progress and development. This cannot be allowed to continue,” the local private sector official contended.
On this note, the GCCI President echoed previous calls by the Chamber for the strong enforcement of common external tariffs and rules of origin.
“We, like our sister PSO (private sector organisations), the Guyana Manufacturing and Services Association (GMSA) and by extension the Private Sector Commission (PSC), need to ensure that our competitiveness improves by protecting and supporting domestic manufacturing. As a country, we cannot comfortably subscribe to the selective application of a free-trade framework in the region in a manner where our businesses do not benefit,” Hutson asserted.

Own restrictions
Already, VP Jagdeo told business stakeholders last week that Guyana may have to impose its own restrictions in response to the continued regional trade barriers.
“I’m not very popular in some circles or in these countries but I said it’s time for reciprocity in many areas. If you don’t take our stuff, we’re not gonna allow free access [for] your products,” he noted, adding that “They liberally used the CCJ (Caribbean Court of Justice) to interpret the Revised Treaty of Chaguaramas. Why can’t we do that? What can’t our business community say that they’re unfairly using phytosanitary restrictions and do the same.”
Moreover, the Vice President called on the private sector to ensure they raise these issues at regional forums so that more attention is brought to it.
“The GMSA has to elevate these issues into a public spat. Let’s fight it in the public domain, raise it there so then public pressure forces resolution of these matters… You gotta advocate the organisations… You can’t just be making speeches here and asking me to nudge the Government along to do some manufacturing processing facility – I can do that easily but this is where the service is to your membership. You have to raise it with other chambers in those countries… We have to work. We’re not going to take this nonsense. They do this a lot and so this is something that should happen routinely [because] they use phytosanitary restrictions as a trade barrier,” Jagdeo pointed out at the GMSA’s event last week.