Local Content Law has created tremendous value for Guyana; time for our companies to go regional- Pres. Ali

  • Kiana Wilburg
  • May 26, 2024
  • Trending

While the promulgation of the Local Content Law has generated nearly US$1 billion in revenues for Guyanese and has given rise to tremendous capacity building, locals must now address their minds to maximizing the value created therein.

This was one of the key messages shared by Guyana’s President, Dr Irfaan Ali on Tuesday.

The Head of State was the keynote speaker at the Local Content Summit held at the Pegasus Suites and Corporate Centre under the theme,’ Creating value. Driving Economic Expansion.’

President Ali noted that the law has been an instrumental tool in securing benefits for Guyanese, noting that it paved the way for 6000 jobs to be created. As a result of the law, he noted that it has generated nearly US$1 billion in revenue since 2021, and for 2024, US$550 million.

The President was keen to note that there have been advances in overcoming challenges, such as long payment periods. He noted that oil companies are required to pay locals within 30 to 45 days. Ali believes this timeline can be further improved in due course.

Some challenges remain a concern. In this regard, the President said fronting or rent-seeking remains a hindrance that has to be addressed. In the interim, he said the Local Content Secretariat has commenced a review of the law with the aim of not only making improvements to the categories of work ringfenced for Guyanese but also plugging any loophole that can be abused.

With critical gains made in local content, Ali said it is clear that tremendous value and capacity have been generated. The President noted, however, that given the sheer scale of investments and services that are needed for the oil sector, locals can no longer hold firm to being a proverbial one-man army.

“When we started on this (local content) journey, we realized that the scale was so large that you can’t have one company doing things. We need partnerships to take on the scale of operations…that is why events such as these are important for networking,” the President said.

To complement the changing business model, Ali said the banking sector must also play a role in being a facilitator of development and growth.

“Banking cannot just be traditional where you just invest in safe proposals and you’re getting interests and good returns as can be seen in your balance sheets and annual reports…This model needs to change where the banks can make investments after analyzing the value of business opportunities and deploy liquidity accordingly,” said Ali.

The President emphasized that commercial banks need to be an impetus for growth and development in the country, especially if local content is to take on new heights. In this regard, the President said local companies must look beyond operating within Guyana’s 83,000 square miles border and go regional.

“How many regional contractors and consultancies are operating here versus those Guyanese operating outside in different parts of the region? As you build your business and benefit from the opportunities that local content now exposes us to, we must push to tap regional markets…,” the Head of State said.

For example, the President said a massive opportunity exists within the region for investments in water distribution. Ali said he made this discovery following a rigorous review of the national budgets for each country in the region. He said in this case, three or four local companies could join forces to not just sell water in Guyana but own 30 to 40 per cent of the distribution line of another nation. Ali said this is the innovative thinking that is needed.

“You have a country that has a brand that is positioning all of us differently but we have to help the brand of being a major oil player. Guyana is our brand…We must celebrate the accomplishments of that brand…Don’t sit here and let the knock-on effect pass you by,” he said.

In conclusion, the President said, “…Let us not make this a complaint forum or just looking at opportunities here…The future is yours. You decide how you shape it.”