Following a meeting with the business community on Friday, the Private Sector Commission (PSC) says it is concerned that the economic downturn can lead to a high level of non-performing loans and it urged the government to do more to battle crime.
In a statement yesterday, the PSC said that the meeting focused on matters of employee retrenchment, the “sudden increase” in crime, spending on Government projects and matters related to how the clearing of goods and the processing of investment agreements are affecting businesses.
The PSC reported that business representatives said that they have noticed a drop in consumer spending and expectations. Further, projects are being delayed/suspended due to the cessation of payments and foreign and local business partners have put a hold on some investments.
The PSC added that the business community is concerned about the persistent “bottlenecks” when doing business with the Guyana Revenue Authority (GRA). “It is the view of the business community that GRA needs to expand its taxpayer’s bracket and focus on those individuals who have been evading taxes for too long. To this end the Minister of finance was written to and meetings were held with the top brass of the GRA and the PSC”, the PSC said.
The private sector body declared that it is also concerned that the current situation can lead to a high level of non-performing loans and “is extremely concerned about the intended removal of over $60 billion in Government funds that are deposited at the commercial banks”. It did not elaborate on this and neither has the government said anything about a withdrawal of such funds.
The PSC said that there is an increased level of defaulting loans being recorded in some sectors of the economy and added that it was of the opinion that once there is a decline in consumer expectations and spending, sales and profits can drop. This it said would force businesses to freeze hiring and inevitably the retrenchment of employees would follow. It added that some businesses have already started laying-off.
“While the PSC commends the actions taken by the Government and the Guyana Police Force in some arrest(s) and the solving of recent crimes, it is the belief of the PSC that more should be done to prevent and detect crimes and restore the confidence in the law enforcement.
There has been a call for stronger police presence in and around the city; businesses are concerned about their employees and customers being robbed in the streets and at their homes”, the umbrella private sector group said.
The PSC says it has recognised that the economy has taken a downturn since 2014 but that the present administration has an opportunity to restore confidence by releasing a budget that would stimulate spending. The PSC said that it has conveyed this to the Government through the Minister of Finance with whom it met some time ago.
“We are of the opinion that this will cause businesses to re-invest in projects, which may allow Commercial Banks to increase their loan portfolio; thus injecting needed funds into the economy. Additionally, the Government needs to ensure the efficiency of GRA and to restart spending through issuance on contracts, etc”, the PSC said.
