President of Guyana, Dr. Mohamed Irfaan Ali, announced Monday, October 30, that a local content development fund will be established as a means of helping businesses to find start-up capital to compete in industries, such as the oil and gas sector.
The Head-of-State made this disclosure during his keynote address at the second AfriCaribbean Trade and Investment Forum being held at the Marriott Hotel in Georgetown, October 30-31, 2023.
The President said there had been several complaints from local suppliers to the main oil companies about the long period they would have to wait for payment. “This causes a lot of hardship when it comes to cash flow for local suppliers,” the Head-of-State said.
He also noted that there have been complaints about the difficulties in getting access to finance from commercial banks and other institutions.
“Like they did in Angola and Nigeria, they (authorities) established what is known as a local content facilitation fund that helps local companies with cash flow,” the President said, adding proudly that a similar facility will be set up in Guyana.
He also noted that such an initiative is similar to what is being mobilized independently by Guyanese businessman and owner of New Hayven Merchant Bank, Floyd Haynes. The Head of State revealed that Haynes is currently in talks with the African Export-Import Bank (Afreximbank) to secure a US$15 million loan facility to assist small and medium-scale enterprises.
“So, before the end of this conference, ladies and gentlemen, we will have agreements for the establishment of our local content facilitation fund here in Guyana. So, we are making meaningful progress, very strategic and very strong alliances and showing confidence in the Afreximbank and what you have to offer in this region,” the Head of State said.
While the President did not announce details regarding the fund’s structure and how deposits and withdrawals would be made, it would serve as a major complement to the progress made thus far in local content.
In 2021, Guyana passed the Local Content Act, which paved the way for local businesses and individuals to be given first preference across a schedule of 40 categories of work in the oil and gas sector.
The law has also paved the way for establishing a secretariat to regulate adherence to the local content law, which ensures Guyanese are receiving the benefits to which they are entitled.
Since the promulgation of the law, Guyana has secured more than US$700 million in contracts for locals from the subcontractors and affiliated companies of ExxonMobil, which operates the Stabroek Block offshore.