The U.S. Department of State’s Investment Climate Statements provide information on the business climates of more than 170 economies and are prepared by economic officers stationed in embassies and posts around the world.  They analyze a variety of economies that are or could be markets for U.S. businesses.  The Investment Climate Statements are also references for working with partner governments to create enabling business environments that are not only economically sound, but address issues of labor, human rights, responsible business conduct, and steps taken to combat corruption.  The reports cover topics including Openness to Investment, Legal and Regulatory Systems, Protection of Real and Intellectual Property Rights, Financial Sector, State-Owned Enterprises, Responsible Business Conduct, and Corruption.

Executive Summary

Guyana is located on South America’s North Atlantic coast, bordering Venezuela, Suriname, and Brazil, and is the only English-speaking country on the continent.  Guyana became an oil producing nation in 2019 and, with a population of nearly 800,000 is poised to dramatically increase its per capita wealth.  While GDP per capita is skyrocketing thanks to oil production and 2021 GDP growth of 19.9 percent, inequality remains a concern and Guyana has a high poverty rate.   Guyana’s economy is projected to grow by 47.9 percent in 2022 according to the Ministry of Finance, making it one of the fastest growing economies in the world.

Guyana is poised for strong economic growth over the next decade as its offshore oil and gas production quickly ramps up to over 1 million barrels per day (bpd), an unprecedented development pace for a country that just discovered commercially viable hydrocarbon resources in 2015.  ExxonMobil, the majority shareholder in the consortium (which also includes Hess and the China National Offshore Oil Company) developing Guyana’s offshore oil and gas deposits, increased its estimate for commercially viable oil deposits in Guyana to over 10 billion barrels in October 2021.  Industry experts expect Guyana’s total recoverable oil deposits to increase as exploration activities expand to other offshore blocks, which remain unexplored.  To manage the windfall from oil and gas production, the (GoG) amended its sovereign wealth fund legislation in December 2021, thereby opening its coffers for the government to spend most of the fund’s initial balance on needed infrastructure and energy developments and invest in the country’s healthcare and education systems. 

Guyana is quickly transforming into a regional destination for international investment as it seeks to spend its oil revenues on transformational change and improved services for its people.  Foreign direct investment (FDI) into Guyana increased from $1.8 billion in 2020 to $4.3 billion in 2021, mainly due to investments in its oil and gas sector.  To diversify the economy away from oil and gas, the GoG is offering incentives for investment in the agriculture, business support services, health, information technology manufacturing and energy sectors, especially in outlying regions, through the GOINVEST.  At the same time, processes including the government tender process are slow and often opaque, with some tenders expiring and being re-issued after a year passes without decision and no pro-active communication to U.S. bidders.

The GoG lifted most of its COVID-19 domestic restrictions on February 14, 2022, thanks to a significant drop in COVID cases.  Proof of vaccination and a negative COVID-19 PCR, or approved antigen, test taken with 72 of travel are still required to enter Guyana.  The Ministry of Health (MoH) reports that more than 60 percent of Guyana’s adult population is fully vaccinated, as are 44 percent of children ages 12 – 17.  While the GoG remains wary of future variants, the government has indicated a strong resistance to resuming containment and mitigation efforts like mask mandates, nationwide curfews, and strict quarantine requirements.

Climate change presents a clear and present danger to Guyana, especially in its low-lying coastal regions where 90 percent of the population lives.  According to the United Nation’s Intergovernmental Panel on Climate Change (IPCC) 2021 report, Guyana’s capital, Georgetown, is forecasted to be under water by 2030 due to rising sea levels.  To assist the country’s transition to a more climate resilient economy, the GoG is revising its Low Carbon Development Strategy (LCDS), which seeks to create financial incentives for maintaining the country’s intact forests covering 87 percent of the landmass, watersheds, and unique biodiversity.  The strategy is expected to be tabled in parliament in mid-2022 for approval and adoption. 

The GoG’s 2022 priorities include significant infrastructure investments, energy developments, improving healthcare services, diversifying and expanding agriculture sector, boosting sea and flood defenses, supporting emerging and value-added industries, and improving the business climate.  Key challenges to Guyana’s development include high crime rates, some of the highest cost of electricity in the region, lengthy delays for permits, and access to land.  Despite commitments from the GoG to ease regulatory hurdles and improve the business climate, Guyana’s Ease of Doing Business ranking continues to hover at 134 out of 190 countries in the World Bank’s 2020 report.

Resource:

https://www.state.gov/reports/2022-investment-climate-statements/guyana/guyana/