Business & economic commentary
The President’s recent announcement of a series of foreign-exchange measures has drawn wide attention, including a Stabroek News article quoting newly elected APNU MP and businessperson Terrence Campbell and the writer of this column. While some question why such an initiative came from the Head of State rather than the Minister of Finance or the Governor of the Bank of Guyana, the more rational interpretation is that it reflects how seriously the Government views the currency situation. In an economy buoyed by petroleum revenues yet facing persistent shortages of foreign exchange, the measures are clearly intended to restore order, discipline, and confidence.
This column shares those objectives. Foreign exchange leakages, under-invoicing, tax evasion, and parallel-sector markets are real concerns. The issue is whether the instruments chosen are a knee-jerk response or carefully designed to achieve results without reviving the inefficiencies of an earlier era. The law of unintended consequences often causes such measures, if poorly grounded or unevenly applied, to produce results opposite to those intended.
A question of balance
The actual operationalising of some of the measures will require amendments to existing law and, in some cases, may clash with current statutes. But for reasons neither apparent nor desirable, the President seems in no hurry to convene the Thirteenth Parliament. In other words, without statutory force, some measures are open to challenge, though it is doubtful that any businessperson would be so brave.
At the heart of the new regime are extensive reporting requirements. Importers must now provide invoices and Bills of Lading to their banks, which will share them with the Guyana Revenue Authority and the Bank of Guyana for verification. Travellers taking foreign currency abroad must declare the source of their funds, and credit cards are to be used strictly for personal purposes. Individually, these steps may appear reasonable and necessary; together they represent a shift from long-tolerated practice, to bureaucracy and control.
To the uninitiated, the reappearance of multiple layers of approval in an oil-rich economy may seem paradoxical. The intention is to tighten oversight, but it can just as easily invite delay, discretion, corruption, uncertainty, and – heaven forbid – currency flight.
The other side
To the experienced, danger lurks not only in the laissez-faire economic management of recent years but also in weak fiscal foundations. By failing to address the tax provisions of the 2016 Petroleum Agreement – under which the State pays the oil companies’ taxes from its own share – Guyana’s tax-to-GDP ratio has fallen sharply. This loss of capacity has forced greater dependence on borrowing and reduced the tools available to manage volatility.
Decades ago, planning was relegated to the back seat, and since 2020, the Ministry of Finance itself lost its status and independence, folded into the Office of the President, with a preference for populism over fiscal rectitude. Conflicting policy signals – such as uncertainty over further cash-grant schemes, including non-residents – add to the confusion between generosity and sustainability.
Some measures may also conflict with the Investment Act 2004, which guarantees investors non-discriminatory treatment and the right to repatriate capital and profits freely, and with the confidentiality provisions under the Revenue Authority Act and the banker–client relationship. Oversight must never come at the expense of legality; fairness is better served by clear law than by executive fiat.
Asymmetry
The new rules reveal a structural imbalance. Under Article 22 of the 2016 Petroleum Agreement, ExxonMobil, Hess, and CNOOC enjoy fiscal and exchange-control stability, protected from any new laws restricting transfers or profits. The nine measures therefore apply mainly to other importers, manufacturers, and traders. Many ask why they should play by the rules when the key players in the economy are treated with an annual bonanza.
After the announcement, the President was celebrating the opening of yet another fast-food outlet – Wendy’s – that will no doubt be a major user of foreign exchange, in royalties, raw material, packaging, etc. A government cannot credibly lament shortages while simultaneously expanding outlets for its export.
Echoes of the past
Older Guyanese will remember the External Trade Bureau of the 1970s, created by then Prime Minister Forbes Burnham, to allocate foreign exchange and “rationalise” imports. It soon displaced the market, approving the favoured, delaying the rest. What began as order ended in scarcity, corruption, and a thriving black market. See article on underground economy one.
The Bank of Guyana, pivotal then as now, spent resources stamping passports for fifty dollars while its wider role languished. At the same time, the wealthy and technologically adept have migrated to digital channels. For the sophisticated and the barons, cryptocurrency, electronic wallets, and offshore platforms have replaced the briefcases and cambios of the past. The underground economy has gone online.
Conclusion
The measures announced are well-intentioned and motivated by genuine concern for stability. Yet intent cannot replace legality or consistency. The Investment Act, the Bank of Guyana Act, and the Revenue Authority Act all require that policy be exercised through law, not discretion.
Guyana has here before. Not with oil, but with measures rooted in good intention, corrupted in practice, and resulting in catastrophe from which it took time and pain to recover. The challenge this time is to learn from that history. Stability will follow not from tightening control but from strengthening law, planning, and building trust.