Guyana gets US$130M IDB loan for economic recovery from COVID-19

Action will be geared at improving the efficiency and effectiveness of Guyana’s public policy and fiscal management response to the COVID-19 pandemic with a US$130 million loan from the Inter-American Development Bank (IDB).
The operation, the second of a two programmatic-based loan series, will support the Guyana Government’s efforts to promote macroeconomic stability and withdraw emergency tax measures as part of a strategy to adapt its public policy and fiscal response to the new phase of the COVID-19 pandemic.
The first phase of this operation previously approved in December 2020 was disbursed in January 2021.
A statement highlighted that this new phase of IDB financing will also support measures to increase the efficiency and transparency of Government procurement processes as well as measures to promote greater fiscal sustainability, address climate change and accelerate economic recovery with greater gender equality.
These include the approval of a medium-term fiscal framework, the implementation of recovery measures included in the Guyana COVID-19 National Action Plan and the approval of a new institutional framework for public investment management, among other measures.
The IDB loan has a maturity period of 20 years and a grace period of 5.5 years and an interest rate based on the Secured Overnight Financing Rate (SOFR).
Last year, IDB and its private sector arm, IDB Invest, closed the year with $19.5 billion in new financing for Latin America and the Caribbean, as they helped countries recover from the pandemic and usher in an era of sustainable and inclusive growth.
This financing was the second-highest annual total in the history of the IDB and IDB Invest and helped countries invest in priorities ranging from COVID-19-era healthcare and digitalisation to climate change action, supply chains and education. The funding also aided in reducing gender inequality, expanding entrepreneurial ecosystems, and empowering small and midsize companies, which accounted for over two-thirds of the region’s jobs.
In November 2020, the IDB approved a loan of US$22 million aimed at strengthening the country’s public health response to the deadly virus. Under the Contingent Credit Facility for Natural Disaster and Public Health Emergencies, it sought to finance public expenditure necessary to contain the transmission of the disease and mitigate further health and economic consequences.
Guyana is experiencing another wave of the coronavirus pandemic, which has resulted in a hike in positives and more deaths. Authorities have indicated that the BA.5 subvariant of Omicron could be circulating locally. This has been coupled with calls from authorities for persons to get themselves vaccinated and boosted against the novel virus.
Since 2020, Government has implemented a slew of measures and financial relief for those affected by the pandemic circumstances, with various sections of society and households benefitting from cash grants.
Every household has benefitted from $25,000 in direct cash transfers. Pensioners also received a one-off pension bonus of $25,000. Persons living with disabilities also benefitted.
As of the end of March 2021, over $28 billion in banking relief to businesses in various sectors has been provided, helping to cushion them from the fallout of the pandemic.