GBTI warns about sugar industry’s drain on Treasury

One of the country’s leading private commercial banks has urged Government to urgently find ways to revive the sugar industry to help reduce the drain on the treasury.

GBTI’s Chairman Robin Stoby

Chairman of the Guyana Bank For Trade and Industry Limited, Robin Stoby, SC, in his report for the bank’s first half at June 30,  said that the David Granger government has moved with commendable alacrity to pass the amendment to the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) Bill. Guyana had been warned to have the legislations passed or face harsher sanctions than the mere warnings issued by the regional oversight body charged with monitoring measures that countries have in place to fight dirty money. The country’s business bodies have been urging for its passage. The Bill was recently passed in the National Assembly and assented to by President Granger. According to Stoby in his Chairman’s Report published yesterday in Kaieteur News, the recent report of a significant oil find in Guyana’s waters gives hope that over the medium term Guyana should join the group of oil-producing countries. GBTI would be referring to the news by US-owned ExxonMobil that it has discovered significant quantities of oil offshore Guyana. “This has the potential for raising the level of GDP (Gross Domestic Product) and creating new industries that should bring benefits to all.” Turning his attention to the sugar industry, Stoby believed that the new government has huge challenges on its hands to resuscitate the sugar industry to reduce its drain on taxpayers. Since taking office, the new government has plugged around $3.8B into the Guyana Sugar Corporation. The industry is facing a huge cash crisis with production at a two decades low and costs mounting. GBTI also warned that close attention should be paid to the rice and mining sectors “which are both faced with high production cost and low world market prices at this time”. For the first half, gold declarations have reportedly plunged by 17 percent in face of low world prices, poor weather and high costs of fuel. In terms of rice, despite record breaking production levels in recent years, Guyana has been struggling with finding new markets. News that neighbouring Venezuela, which is at odds with Guyana over a territorial controversy, will not be renewing its rice and paddy purchasing contracts beyond November are deeply worrying farmers and millers. “Our bank is paying keen attention to these events and endeavors to anticipate directions so as to take advantage of opportunities as well as to avoid setbacks.” Stoby noted that global growth is picking up but the momentum has not been as strong as was expected as production has been weaker and investment has been fairly subdued. “With the turmoil in Greece as well as the slowdown of the Chinese economy, global economic recovery is expected to be further slowed. Regionally, signs of recovery are evident with progress in major economies of Jamaica and Barbados.” The Chairman noted that Guyana has just emerged from an election period which has resulted in a change of government after 23 years. “Prior to this, with the proroguing of Parliament no budget for 2015 could have been presented. This naturally has led to a period of reduced economic activity which has had its impact on the banking sector.” GBTI’s net profit after tax for the first six months amounted to $1.05B, about $50M less than the corresponding period last year.