APNU floats ‘formula’ to address foreign exchange shortage

Last Updated on Saturday, 16 August 2025, 10:03 by Writer

A Partnership for National Unity (APNU) on Friday recommended that there be a “balance” between government expenditure and private sector demand for foreign exchange as a means of addressing the virtually chronic shortage of United States (US) dollars in the forex market.

“Clearly, there is a need for a balance between the needs of the private sector and that of the government,” APNU leader and presidential candidate, Aubrey Norton said at the launch of his party’s 2025 general and regional elections manifesto.

Well-placed sources said the Bank of Guyana has so far put US$900 million into the foreign exchange market for the year, in contrast to a “far less” amount for 2024.

Though the document titled “Putting People First” did not address the forex shortage, Mr Norton said his government would have to reduce its spending, stimulate the non-oil sector and ease the pressure on the business community for foreign exchange. “In our view, if the non-oil economy is to grow, it would be necessary for the government to adjust its spending to prevent the continued crowding out of the private sector from access to adequate amounts of foreign currency,” he said.

In its manifesto, APNU promised the electorate to ensure that micro‐ and small businesses can access foreign currency easily through, for example, a facility at the Small Business Bureau.

Government infrastructure projects such as roads, schools, housing, hospitals and bridges have been cited by the incumbent People’s Progressive Party Civic-led administration as major sources of employment and private sector growth through the importation and supply of materials.

Mr Norton said the supply of foreign currency from non-oil exports has grown by only 25% from 2020 to 2024 while, at the same time, the demand for foreign currency to meet the importation of goods and services grew by 296%. He said the only source of foreign currency to meet that disequilibrium in demand and supply is from the oil economy.

He reasoned that the money go into the government’s account and so access to adequate amounts of foreign currency is being influenced by the government’s own need for that money. “In effect, the investments with some are praising the government for its constraining access by the business community to foreign currency.”

Earlier this week, Vice President Bharrat Jagdeo said the Central Bank was continuing to inject foreign exchange into the local market. He said the major source of the shortage was the buying up of US dollars to satisfy a severe foreign currency shortage in Trinidad and Tobago.

Mr Norton acknowledged the need for the government to continue to invest in infrastructure and housing, but that Guyana’s production and non-oil diversification must target export markets. At the same time, he said Guyana must increase the production of consumer goods and provision of services. “We cannot afford to delay such a course of action as the demand of households keeps growing,” he said.

The APNU presidential candidate said several companies want to expand the production of local products such as furniture juices and other agro-processing items as well as expand the production of flour using local provisions, building materials, garment and footwear. Also, he said investors want to invest in livestock.