Sunday, February 5, 2023

Guyana setting up framework to monitor local content compliance, says finance minister

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Guyana’s Finance Minister Dr. Ashni Singh said the government’s new local content bill, scheduled to be tabled in the national assembly today, makes provisions for the establishment of a local content secretariat, which will be responsible for managing compliance with its targets.

The draft first schedule of the bill, which was in circulation during the consultation stage, sets out timelines for which companies must meet minimum targets. The government describes the schedule as calling for a near takeover of oil operations.

In an interview published by the National Communications Network on Wednesday, the finance minister said that appropriate action is provided for in the Bill, if progress is not being met in compliance with its targets. He said there are relevant provisions if companies are found not to be making the best efforts to meet their targets. On the other hand, he said the government would remain cognizant that failure to meet a target could also speak to deficiencies on the supply side. If locals do not have the capacity to deliver at the required level of inputs, Dr. Singh said the government may need to reassess the country’s capacity to supply and reconsider the targets to fit the new dispensation.

The minister described the Bill as having struck a good balance between meeting two strikingly opposing viewpoints, of the industry and of the domestic private sector.

“In each of those extremities, there are constraints and issues that need to be considered,” he said.

“We can’t stipulate percentages that will put the oil companies where it will be impossible to comply, or where they will be buying things where there simply isn’t capacity to supply them…. “We have to take account of domestic capacity to produce the goods and services at a scale that is required, with the level of timeliness, at the level of quality…”

At the same time, he posited that the government is responsible for ensuring that Guyanese nationals get as much of the pie as they can.

In addition to the local content bill, the government intends to table an amendment to its Natural Resource Fund Act, which is meant to simplify its withdrawal rules and reduce political influence.

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