Proposals on sugar industry’s financial state for Cabinet discussion today

Prime Minister Moses Nagamootoo will chair today’s Cabinet discussion where an ‘urgent’ presentation on the financial state of the Guyana Sugar Corporation (GuySuCo) will be submitted for members to review.
This follows Monday’s high-level meeting where Nagamootoo met with Agriculture Minister Noel Holder; GuySuCo’s Chairman of the Board of Directors, Clive Thomas and Chief Executive Officer (CEO), Errol Hanoman to discuss what the Sugar Corporation said were “urgent cash flow relative to wages, salaries and other payments at GuySuCo”.

“It was agreed at the meeting that as a matter of urgency, a presentation will be made at the Cabinet meeting scheduled for Tuesday, 19 September, 2017,” GuySuCo noted through a release on Monday.
It also noted that at the meeting, steps were agreed to ensure that employees are paid for services provided to the Corporation for the past week. GuySuCo disclosed that the Chairman and the CEO were “given assurances that the matter is being given the utmost consideration by the Government and the Corporation”, which will await the response from Cabinet after today’s meeting.
Thomas was quoted as reassuring employees, their families, and communities that “every effort will be made to resolve this matter very shortly”.
The soon-to-be-determined financial proposals come against the backdrop of a downsized sugar industry, which has seen the shutdown of the Wales, West Bank Demerara sugar factory in December 2016 and planned closures of Enmore and Rose Hall Sugar Estates, and the privatising of the Skeldon sugar factory. At

present, GuySuCo employs close to 17,000 people, but it has been estimated that the planned downsizing could directly affect the livelihoods of some 10,000 sugar workers and thousands more indirectly including their family members and communities that depend on the sugar industry.
However, Government has long decried the state of the ‘cash-strapped’ industry, contending that the necessary measures to re-organise sugar must be implemented for it to be sustained. The Wales sugar factory was the first entity to be closed under the policy decision, which has met much criticism and protest. The Private Sector Commission (PSC) and several associate bodies had earlier this year encouraged Government to “hold its hand” regarding its approach towards closure of sugar estates. The PSC had further stressed that a 2015 audit of GuySuCo’s financial statements had disclosed that more than $10 billion would be removed from private employment income should Government proceed with the closure of estates.
“This, in turn, would have a direct negative effect on consumer spending in the communities, which, directly or indirectly, depend upon income from sugar. Such a decline in consumer spending would also have a diminishing impact upon all commerce with concomitant negative spin-off effects on the economy as a whole,” the PSC noted earlier this year.
A Commission of Inquiry (CoI) into GuySuCo had recommended that the Corporation be privatised within three years. It also recommended that a serious evaluation of all diversification options be conducted, to avoid total reliance on sugar for GuySuCo’s revenues. Sugar has remained one of the biggest foreign currency earners for Guyana, along with rice and gold.