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GUYANA | Govt. Tables $383.1 Billion National Budget

  • Written by wiredja.com news team
  • Published in CARICOM
Featured An image of down town Georgetown Guyana An image of down town Georgetown Guyana
GEORGETOWN,  Guyana, February 12, 2021 - Against the background of a 43.5% economic growth rate attributable to the oil sector, the Mohamed Irfaan Ali/Jagdeo Administration has  presented a historic $383.1 billion national budget, heavily focused on education and infrastructure development initiatives.

Dr. Ashni Singh 300Finance Minister Dr. Ashni Singh Themed “A Path to Recovery, Economic Dynamism and Resilience,” Senior Minister in the Office of the President with responsibility for Finance, Dr. Ashni Singh  told the National Assembly that the 2021 national budget has been financed without any new taxes.

He outlined a wide range of public investment projects and initiatives, in addition to several new measures to bring relief to households and businesses amid the difficulties brought on by the COVID-19 pandemic last year.

Among those measures are a reduction in the cost of basic food and other household items through zero-rated value-added tax (VAT).

The Government has also proposed a five per cent reduction in water tariffs across the board, targeting all levels of consumers.

With the construction sector boosting the country’s economy, Government has also announced the zero-rating of some construction materials. These include stone imported for construction and housing from CARICOM, locally produced pre-stressed concrete piles, locally fabricated, mild, steel beams for building construction, and locally manufactured roofing and PVC products for building construction. Industrial grade cement duty has also been reduced from 15 to 5 per cent.

The Government has also restored the zero-rated status to various food items and basic household necessities which the previous administration had removed from that list.

housing development 300The Finance Minister also announced an increase in the low-income mortgage loan ceiling from $10 to $12 million. Such loans can be obtained through commercial banks under the low-income housing loan programme.

The ceiling for housing loans at the New Building Society (NBS) has also been increased from $12 million to $15 million, enabling borrowers to access financing from the NBS within that range.

The cost of connectivity will also be reduced with the removal of VAT on data for residential and individual use.

Transportation cost in the hinterland will be reduced with the removal of duty on all-terrain vehicles for use in those areas.

In the education sector, the Government will introduce a cash grant of $15,000 per child to be given to the parents of children in the nursery, primary, and secondary schools in the public school system.

Old Age Pension has been increased from $20,500 to $25,000 effective January 1, 2021. This will benefit over 60,000 persons and put an additional $4 billion of disposable income in their hands.

Public Assistance, which benefits over 13,000 vulnerable Guyanese has been increased from $9,000 to $12,000 per month. This will provide an additional $500 million in disposable income to these individuals.

In the area of infrastructure, the Government has budgeted $25.6 billion for the construction and repair of roads and bridges across the country. 

$3.5 Billion has been allocated for the start of works on the Linden to Mabura Hill road.

And as the country continues to fight COVID-19,  the health sector will receive $53.5 Billion with over a billion of that money going to the purchase of medical equipment.

The Guyana Power and Light company will get a $2 billion in the budget with part of that money going to hydro power development.

Dr. Singh said the Government will reinstate the original position where the sale of assets owned for more than 25 years would not attract capital gains tax on their disposal. The Administration will also restore zero-rated status for VAT purposes which the Government had for the provision of imported goods and services purchased by Budget Agencies.

sugar 300Dr. Singh said Budget 2021 outlines policies, programmes and projects that will catalyse economic growth, which will see billions of US dollars of private investment realised across several sectors of the economy.

Dr. Singh said the Government will have to find a way to navigate through the pandemic while safely moving to fully open the economy. Once this is achieved, the Finance Minister said the major sectors of the economy will see exponential growth.

Declaring that 2021 will not be an easy year for Guyana due to the Covid-19 pandemic, Dr.Singh presented a grim picture of the performance in 2020 for the non-oil sectors of the Guyanese economy.

Overall economic growth was pegged at 43.5% but most of that growth was attributed to the oil sector, while the non-oil economy is estimated to have contracted in 2020 by 7.3%”.

“In 2020, the Agriculture sector estimated to have grown by 4.1%, this improved position is largely on account for growth in rice, other crops and livestock which offset the contractions recorded in sugar, forestry and fishing. The sugar industry contracted by 3.7% with production falling to an all-time low. The forestry sector contracted by 7.1%, while the fishing sector contracted by 17.1%.” Dr. Singh told the house.

bauxite 300“The mining and quarrying sector is estimated to have expanded by 303.7% in 2020, the overall growth above 2019 was driven by the oil, gas and support services industry which grew by 2603.3% over the previous year given that 2020 represented the first full year of the industry’s operation.” The Finance Minister said.

In contrast, Dr. Singh said a sharper than expected decline was observed in the gold sub-sector. “The sub-sector contracted by 7.8%. The contraction in production by large scale operators overshadowed the small and medium scale miners who declared 485, 552 ounces of gold in 2020 a staggering 8.5 % higher than 2019.”

Additionally, the Finance Minister said the Bauxite industry contracted by 42.8% in 2020 while diamond and sand mining as well as quarrying saw decline.

As it relates to the manufacturing, services, and construction sectors, Dr. Singh said due to the restrictions put in place to curb the spread of the Covid-19 pandemic in 2020, those sectors also saw a decline.

The manufacturing sector contracted by 8.6%, the construction sector contracted by 6.3% while the services sector contracted by 9.4%.

Dr. Singh said the Government will have to find a way to navigate through the pandemic while safely moving to fully open the economy. Once this is achieved, the Finance Minister said the major sectors of the economy will see exponential growth.

Last modified onSaturday, 13 February 2021 13:02
  • Countries: Guyana