GMSA lauds Govt for $900M revolving fund for forestry sector

…says it has been calling for similar measures for decades

The Guyana Manufacturing and Services Association (GMSA) has lauded the Government for its landmark decision to establish a $900 million revolving fund to boost the forestry sector, in collaboration with Demerara Bank Limited (DBL).
In a statement on Monday, GMSA noted that it has been calling on a measure such as this for over a decade, to help various sectors transition to value-added production. The matter was further raised by GMSA President Rafeek Khan, at the Association’s mid-year dinner.

Khan made another request in the GMSA’s 2023 budget submission to the Government. The Association was still awaiting feedback when President Ali advanced the decision and announced the fund during an event last week.
Khan was quoted in the statement saying that the initiative of a revolving fund of 900 million “will undoubtedly significantly positively impact the manufacturing sector for more value-added products and for retooling companies to improve their extraction capabilities”.
Additionally, GMSA noted that the support the revolving fund will provide to persons in the forestry sector will significantly improve the production of raw materials for sawmillers and manufacturers in the value chain.
“This announcement came shortly after the President listened to the challenges faced by the sector, including small, medium, and large-scale producers across the country, during a week-long consultation meeting hosted by senior staff of the Guyana Forestry Commission (GFC) and the Minister of Natural Resources,” GMSA said.
According to the Association, GFC had highlighted during the stakeholder consultation that the growth of the forestry sector production for 2022 would be more than 50,000 cubic metres compared to this same period in 2021. However, current production is only approximately 1/3 of the annual allowable quota.
“While the improvement is commendable, both His Excellency and the Hon Minister Vickram Bharrat emphasised that many forest concession operators are currently underproducing. The President and the Minister also reiterated the importance of value addition in the sector. Hon Vickram Bharrat also encouraged loggers to collaborate and form consortiums to tackle the problem of poor secondary roads, especially when many concessions are located nearby each other.”
“He indicated that this consortium or partnership would also be able to supply the bigger markets and more access to finances reliably. Mr Khan contributed to discussions about opportunities to benefit the manufacturing companies in the forestry sector from the current exponential shift of the domestic and regional market growth for value-added products. But this production increase barely scratches the surface of meeting the current demand.”
GMSA noted that while the major development and rehabilitation of hinterland roads are ongoing, forest producers are still lagging and thus, unable to satisfy the current market demand. The Association revealed that during the recent consultation, stakeholders clearly identified that access to affordable finance is the key catalyst in driving any of our sectors.
“Access to financing will improve extraction capabilities, especially for small loggers in remote forest locations; and also enhance promotions and market development for lesser-known wood species. Further, stakeholders stated that traditional industries would continue to perish and not benefit from the golden opportunity of our new oil and gas economy without appropriate access to finance.”
“The construction sector has been expanding at lightning speed with demands for value-added products. Consumers are becoming more sophisticated in choosing higher-quality products that local manufacturers do not easily meet,” GMSA further said in the statement.
They warned that import substitution will have to fill the gap if local operators cannot meet the demand. And according to them, the current demand is for standard manufactured products such as doors, wall cladding, ceiling, flooring and basic furniture, which includes tables, chairs, benches, beds and cupboards.
“A further integrated value-added product is the demand for affordable housing across the Caribbean. For instance, there is a major shortage of pre-fabricated wooden homes in the Region which can satisfy the requirements towards Sustainable Development Goals for the housing market by utilising locally produced timber products which are environmentally friendly and contributes to less emissions of CO2 in the housing sector.”
It was announced just a few days ago by President Ali that with assistance from Demerara Bank Limited, the Guyana Government has set up a $900 million revolving fund that is aimed at boosting the forestry sector to meet market demands.
According to the President, $300 million from the State’s coffers has been set aside for this revolving fund. This sum will be further supplemented by $600 million more provided by Demerara Bank Limited.