President of the Guyana Manufacturing and Services Association (GMSA), Shyam Nokta, says every effort must be made to ensure the economic and governance risks associated with oil and gas is mitigated, as the South American country moves closer to first oil.
“There is much talk on how the imminent emergence of an oil and gas sector will change everything for our country. That is precisely why we need to ensure we build all the institutional defences against the well-known economic and governance risks that oil and gas could bring,” he said, speaking at a Business Luncheon held by the manufacturing body on Thursday in Georgetown.
Nokta added that, “Our economy could falter if we don’t remain focused on the broader imperatives of supporting investments and job creation across all our economic sectors. That means, we need to prepare for oil and gas, but we also need to stay the course by ensuring the other sectors of our economy continue to grow to fulfil our country’s potential.”
The GMSA President said the manufacturing and services sectors remain committed to playing its part in tapping into this potential, “but we cannot do this without meaningful progress on challenges such as the reliability and cost of electricity; access to finance on reasonable terms; high freight costs and challenging market access.”
He believes that in order to take full advantage of the oil and gas sector, the Government must take a holistic look at its tax measures, taking into consideration all sectors that will be impacted by the emerging industry.
“At the GMSA mid-year dinner, I spoke specifically to tax measures in the 2017 budget which are frustrating our members’ goals to add value to the productive sectors of our economy. Measures such as the re-categorization of zero and standard rated items to exempt; VAT on electricity; VAT on forest products; among others have affected the competitiveness of our members and therefore our economy. We raised these issues again with Minister Jordan last week and proposed several measures for consideration,” he said, referring to the country’s finance minister.
In other words, Nokta said while businesses are eager to learn and build capacity in order to capitalize on opportunities in the sector, it is the role of the Government to create an enabling environment.