As the oil and gas sector in Guyana expands and more businesses become involved in the sector, President Irfaan Ali is urging commercial banks and local companies to adopt new model of doing business, and expand their reach to regional and international markets.

The President made the statement while addressing the opening of the second Local Content Summit at the Pegasus Suites this morning.

He said the local Banking Sector must change its way of doing business, and design products that could propel growth and development within the country. 

“Banks can no longer be a counter that you deposit money and you get some, but you don’t get much interest anyhow, and you get a business model around that. And then you are very risk averse, so, you look at the best opportunity for lending, and you lend to that, and your returns are very high as can be seen in your balance sheet. That is not banking, that is a traditional approach to money management. Banking and finance is an art, is an art of utilizing liquidity in the system through structured mechanism to grow wealth and create wealth. And, we need to move up the value scale in the Banking Sector to have more investment type bankers,” the President reasoned. 

According to President Ali, the banking sector must use more analytical tools to assess the market, and present opportunities for investment to their clients. 

“The bank has to see itself as a facilitating role in the development and expansion of the economy and make investment to facilitate the deployment of capital to make use of those opportunities. And to do this, the Bank must not only have a local look of things, but a regional look,” he said. 

Further, the President said while the Local Content Act sets the foundation for local companies to capitalize on the rapidly growing oil and gas industry and other emerging sectors, companies must not only seek to meet the demands of the local market, but those in the region and the rest of the world.

“If we believe Local Content is about achieving local things or participating only in the local economy then we would be limiting our selves and our growth. Local Content is to build local capacity to compete anywhere else in the world, and to position our local companies to be number one companies in the region. That should be the goal. How do we position every sector that we are building in this country to be number one in this region, and to be competitive in this region, and to make use of every opportunity in the region. That is what Local Content allows us to do,” President Ali said. 

The President reasoned that by expanding their reach, companies would accelerate growth and development within the country, while meeting the needs of global markets. 

Chief Executive Officer of MBW Energy Support Services and organiser of the Local Content Summit, Abbigale Loncke-Watson said local companies continue to reap the benefits of participating in the inaugural Local Content Summit held in 2023, and this year’s edition will provide even more opportunities in keeping with the theme “Creating Value: Driving Economic Expansion.”

“We have witnessed remarkable growth earnings among local companies here in Guyana. As reported by the Local Content Secretariat, in 2022, these companies collectively earn approximately US$440M, and by the end of 2023, there was a notable surge in earning, totaling US$524M in profit. So tangible benefit for Guyanese entrepreneurs, are evident,” Loncke-Watson said. 

She said the summit provides an opportunity to discuss developments within the sector, as well as challenges facing the sector.

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