The cash-strapped Guyana Sugar Corporation (GuySuCo) was given a lifeline on Wednesday when the National Industrial and Commercial Investments Limited (NICIL) credited its account with a bailout of $250 million.
This comes weeks after GuySuCo announced that it did not have money to meet its basic expenditure and the Guyana Agricultural and General Workers Union (GAWU) expressing fear that the lack of funds may bring operations to a halt.
GuySuCo’s Board Chairman, John Dow relayed the company’s woes to caretaker President David Granger via a letter in May. He indicated that the Corporation had only received just about $9.7 billion of the promised $30 billion that was secured for the industry by the Government-run NICIL-Special Purpose Unit (SPU).
The letter also outlined that GuySuCo did not have the necessary cash to meet basic expenditure such as salaries, maintenance, and bare essentials. It further revealed that it was also $2.1 billion in debt without any sign of funding in the near future.
Compounding the situation, according to Dow, is the backlog of some $21 billion owed to GuySuCo’s creditors.
Elaborating on the sugar industry’s predicament, Dow notified Granger that it was unlikely that the company’s creditors would extend the facility further and “our inability to pay creditors in time has resulted in many of our most experienced contractors being unwilling to tender for GuySuCo projects”.
However, one day later, Finance Minister Winston Jordan informed that the Treasury was too broke to provide any immediate assistance.
According to Jordan, “the prevailing national circumstances, coupled with the challenges of COVID-19 and a reduced national income, render the Treasury incapable of providing a bailout to GuySuCo”.
However, Jordan’s comments were highly criticised by GAWU and the Guyanese populace at large, who all questioned the financial status of the Treasury. The bankrupted state of the treasury caused massive backlash to Granger and Jordan on their strategy of managing the country’s finances. To compound the issue, the Bank of Guyana, as part of its statutory requirements, published in the Official Gazette, a Statement of Assets and Liabilities for the country. This showed that the country’s general reserves had been depleted to $0, but the account is also now running an overdraft to the tune of hundreds of billions of dollars.
After much public outcry and criticism over the state of affairs, Granger on June 14 announced that GuySuCo would be given a bailout that week. That was almost two weeks ago.
Meanwhile, on Wednesday, NICIL also said that it would, in the very near future, make available a further $750 million to GuySuCo.
On Wednesday also, GAWU, in a statement to the media, said that the apparent deliberate delay of the funds “undoubtedly has pushed the Corporation to the precipice”.
Since taking office in 2015, the A Partnership for National Unity/Alliance For Change (APNU/AFC) has fired thousands of sugar workers. The Skeldon, Rose Hall and East Coast Demerara (Enmore) Estates were closed in December 2017, leaving thousands of workers jobless. The Wales Sugar Estate was the first to shut down in 2016. Only three estates are currently in operation – Albion, Blairmont and Uitvlugt.