US$721M projected to be earned from local content in 2023

The Local Content Secretariat has projected increased earnings this year, with a US$721 million expected to be raked in from the 40 carved out areas.
This revelation was made recently by Director of the Secretariat, Martin Pertab. However, with 20 to 25 areas added, it could push this number to US$1 billion. Last year, US$700 million was earned by Local Content.
The first schedule to the Local Content Act sets out the minimum threshold and level for local content levels in relation to the procurement of goods and services. There are 40 areas, with local participation up to 100.
“Hypothetically speaking, if we do decide to consider the 20 to 25 areas, we will be looking at almost US$1 billion in business,” he contended.
In job creation, some 818 new opportunities will manifest for plant and machine operators, engineers, accountants, chemists, inspectors, doctors, and associate professionals – field technicians, laboratory technicians, and tax analysts.
“Key on our agenda would be building local capacity. We have heard many cases where especially small and medium sized businesses tend to have a deficit in capacity to provide certain services. That would have stemmed from the position of them being small and in order to provide the services, you need to have the necessary experience. And the law is pretty clear on how do we build local capacity,” Pertab identified.
One of the most difficult challenges, the Director positioned, was getting small and medium enterprises to provide services since larger companies possess greater capital and experience to deliver.
“The small always seem to slip through the cracks. We intend this year to have open dialogue with the private sector and various stakeholders on how do we ensure that the small and medium sized companies get a share of the pie. That will be captured in the regulation we intend to strategise on the way forward.”
An example is in logistic services, wherein despite many small companies operating in the market, larger enterprises with experience are generally favoured.
The Director explained, “Though we have small custom brokerage companies providing those services, it is kind of almost impossible for them to get in. once you issue to both the large and small companies, you’re basically putting them on the same playing field. It’s kind of unfair for the small ones to get in.”
Nevertheless, it was highlighted that while over 700 companies have been included in the Local Content Register, a lot of work has to be done now to sort them accordingly. Employment and procurement opportunities are also available on the portal.
Contract bundling, an issue that was rampant in 2022, was also addressed by the Director. Bundling has restricted opportunities to stakeholders who provide multiple services.
“Our position on that is if it continues, we simply wouldn’t recognise that in our measurement of local content, which companies do have an obligation to ensure that at the end of the year, they reach the respective targets and if those expenditure aren’t considered for local content, then by virtue of that, they wouldn’t be able to meet most of those targets,” he emphasised.
Just a few days ago, former President of the Georgetown Chamber of Commerce and Industry, Timothy Tucker applauded the rate at which Guyanese have expanded the services they can provide to oil and gas companies, stepping out from the previous 40 areas of opportunities for local content and building capacity along the way. As a matter of fact, Tucker noted that this expansion would not have been possible without local content – which itself would not have been possible without the Local Content Act of 2021. (G12)