A report completed by the Extractive Industries Transparency Initiative of Guyana has revealed that the extractive industry in Guyana, particularly gold mining, has contributed to 65.1 per cent of Guyana’s total exports for 2017.
It is EITI’s first report to the Government of Guyana on the extractive sectors, in keeping with an April 25, 2019, deadline for presenting the report. According to the report, total revenues from the sector in the 2017 fiscal year amounted to $20.8 billion.
The Guyana Gold Board, to which gold declarations are made, accounted for 33 per cent of this revenue. This is followed by the Guyana Revenue Authority, 32 per cent and the Ministry of Finance, 18 per cent.
Gold and other minerals contributed $17.4 billion or 84 per cent of revenue from the extractive industries. On the other hand, oil and gas contributed $2.8 billion or 14 per cent. Bauxite, one of Guyana’s oldest industries, contributed $479 million or 2 per cent.
The extractive industries’ contribution to exports has a dollar value of 193.2 billion. Besides the sector’s contribution to exports, it contributed 9.3 per cent to total Government revenues and 4.2 per cent to Guyana’s total employment. Its contribution to Guyana’s overall Gross Domestic Product (GDP) was 20 per cent.
The report was presented to Natural Resources Minister, Raphael Trotman and according to a statement from the Ministry, it will be presented to Cabinet this week. The Minister was quoted in the statement reaffirming Government’s commitment to the EITI process.
“For a country like Guyana where the bedrock of our economy is the extractive industries, this is very important… This has been a steady process. We trust that this is the part of the journey to full transparency. The Government is fully committed to this.” – Minister of Natural Resources Honourable Raphael Trotman
The EITI is a global standard to promote the open and accountable management of oil, gas, and mineral resources. Under the EITI standard, companies publish what they pay to Governments, and Governments publish what they receive in an annual EITI country report.
In many countries, most of the revenues from natural resources accrued at subnational levels are not derived from company payments to Local Government entities, but from transfers to the Central Government.
Depending on the revenue distribution frameworks in place, these transfers can be a considerably larger source of revenue for subnational entities than taxes and fees collected at local levels. The revised EITI standard requires that such transfers are reported where mandated by law and where material.
Where companies are legally or contractually required to make social contributions, these must be disclosed, under EITI standards. Where countries collect significant revenues from the transportation of oil, gas and minerals, such as pipelines, the Government will also be required to disclose the revenues received.
The requirement to publish annual activity reports is not limited to compliant countries, the EITI said. It is foreseen that countries will report on progress with meeting the EITI requirements as well as (on) efforts to achieve the objectives set out in their work plans.
Validation is procured and managed by the EITI’s International Secretariat rather than by implementing countries. Countries undertake validation more frequently, with compliant countries being revalidated every three years as opposed to every five years under the old rule.
Oil was discovered in commercial quantities in Guyana in 2015, after which Guyana applied and was approved to join EITI. This was done with the understanding that Guyana’s first EITI Report must be published within the next 18 months and the country will be required to commence validation within two and a half years.
Where validation verifies that Guyana has made satisfactory progress on all of the requirements, the EITI Board will designate the country as EITI-compliant.