Guyana is located on South America’s North Atlantic coast, bordering Venezuela, Suriname, and Brazil. Guyana is an upper middle-income country according to the World Bank. In 2019, estimated inflation was below 2.5 percent with a 4.4 percent growth Gross Domestic Product (GDP). With the advent of first oil, the Guyanese economy is poised to become one of the best performing economies in the Western Hemisphere with an optimistic projected GDP growth rate in 2020 exceeding 50 percent. In response to COVID-19, the Bank of Guyana anticipated a 10 percent contraction in non-oil sectors for 2020. Guyana’s economy is driven primarily by commodities such as gold, bauxite, rice, and sugar. The United States was Guyana’s largest trading partner in 2019.
Guyana’s medium-term prospects remain positive with the discovery of vast oil reserves in Guyana’s waters that will provide decades of substantial oil revenues. The Government of Guyana (GoG) created a sovereign wealth fund for the oil revenues and plans to spend most of the near-term revenue on education, health, and infrastructure.
Outside the oil industry, Guyana’s economy has been hampered by political uncertainty that started in December of 2018 when the ruling administration fell to a no-confidence vote. Elections were finally held on March 2, but due to various legal and political delays, results were delayed, leaving many foreign investors in a holding pattern. In addition to the political uncertainty, the COVID-19 pandemic resulted in the government closing the airport to international flights, closing non-essential businesses, and implementing a curfew from 6 a.m. until 6 p.m. that resulted in a further contraction of the economy. Despite these challenges, Guyana is still projected to lead the Caribbean in GDP growth for 2020.
The Government of Guyana (GoG) actively encourages foreign direct investment (FDI) and offers tax concessions for priority projects through its Guyana Office for Investment (GO-INVEST). According to the Bank of Guyana’s Half -Year Report for 2019, Guyana’s FDI increased from $514.8M to $826.4M, an increase of 60.5 percent. This growth in FDI was fuelled mainly by developments within the oil and gas sector and all the industries that support it. Guyana recently developed a local content policy to help local companies take advantage of this business sector. Legislation to enforce the preliminary local content policy is still forthcoming, so the impact on oil and gas companies investing in Guyana is unknown.
Guyana offers both foreign and domestic potential investors a broad spectrum of investment choices, including agriculture, petroleum, construction, wholesale and retail, health, transportation, and agro-processing. Furthermore, opportunities exist within the services sector such as renewable energy, business process outsourcing (BPO), call centers, information technology services, hospitality, and tourism. Guyana is the only English-speaking country in South America and has a sizeable labor market, creating unique potential for call centers and other industries. The construction, wholesale and retail, transportation, and storage sectors experienced notable growth in 2019.
In 2015, ExxonMobil began exploratory drilling off Guyana’s coast, investing nearly $4 billion into the project thus far. ExxonMobil found recoverable oil in 16 out of 18 attempts and increased its estimate of recoverable oil to 8 billion barrels of -equivalent, with ongoing exploration from several international oil companies.
Guyana’s Green State Development Strategy, which was finalized in May 2019, serves as the guiding document for government priorities under the administration of President David Granger. These priorities include a focus on agriculture, supporting emerging and value-added industries, improving business climate, investing in sea defence, and transitioning to nearly 100 percent renewable energy.
Perceptions of corruption persist in Guyana. Transparency International’s 2019 report scored Guyana at 85 out of 180 ranked economies. One key concern was the insufficient response to a high crime rate. Guyana also ranked 134 out of 190 countries in the World Bank’s 2019 report on Ease of Doing Business. The major shortcomings included a weak judicial system, lack of intellectual property protection, corruption, and bureaucracy.
Guyana continues to benefit from official development assistance from multiple donors with projects focused on health care, education, economic development, climate change adaptation, disaster mitigation, and citizen security.
|TI Corruption Perceptions Index||2019||85 of 180||https://www.transparency.org/cpi2019|
|World Bank’s Doing Business Report||2019||134 of 190||http://www.doingbusiness.org/en/rankings|
|Global Innovation Index||N/A||N/A||https://www.globalinnovationindex.org/
|U.S. FDI in partner country ($M USD, stock positions)||N/A||N/A||http://apps.bea.gov/
|World Bank GNI per capita||2018||USD 4,770||https://data.worldbank.org/
The law provides criminal penalties for corruption by officials, but the government generally does not enforce the law effectively or uniformly. The relevant laws enacted include: the Integrity Commission Act, State Assets Recovery Act, and the Audit Act. Officials appear to engage in corrupt practices at times with impunity. Several media outlets reported on government corruption in recent years and it remains a significant public concern. Media and civil society organizations continued to criticize the government for being slow to prosecute corruption cases. Although the government passed legislation in 1997 that requires public officials to disclose their assets to an Integrity Commission prior to assuming office, media reports suggest that a significant section of public officials did not honor this requirement in 2019.
Widespread concerns remain about inefficiencies and corruption regarding the awarding of contracts, particularly with respect to concerns of collusion and non-transparency. In his annual report, the Auditor General noted continuous disregard for the procedures, rules, and the laws that govern public procurement system. There were reports on overpayments of contracts and procurement breaches. Nevertheless, the country has made some improvements. According to Transparency International’s 2019 Corruption Perceptions Index (CPI), Guyana is ranked 85 out of 180 countries for perceptions of corruption, advancing 8 spots in comparison to 2018.