Guyana has emerged as the fastest growing economy in Latin America thanks to new investment in the country’s recently-confirmed oil reserves. The World Bank calculates that Guyana’s economy grew by more than 72 percent between 2019 and 2021, the fastest growth rate in the Latin America and Caribbean region. An even more stunning projection by the bank is that Guyana may grow by close to 48% this year.

With a population of merely 787,000 residents, Guyana holds oil reserves estimated at 10 billion barrels of oil, which have a potential income value of $130 billion over the next 20 years. Similarly, massive gas reserves, now being delineated by ExxonMobil, are enough to foster an industrial and manufacturing boom in the country.

Investment Rises Dramatically

In April, ExxonMobil announced plans to spend $10 billion to develop its recently approved Yellowtail project in the Stabroek offshore block in Guyana. This investment, the largest investment in Guyana to date, along with other company blocks already in operation, are expected to produce 800,000 barrels of oil per day by 2025. The Department of Energy within Guyana’s Ministry of Natural Resources is responsible for energy development in the country.

This new flow of petroleum and associated gas will be used for the downstream development of Guyana’s onshore energy infrastructure. The Inter-American Development Bank (IDB), which has been studying Guyana oil and gas since 2016 and 2017 says that new generation plants and the proposed gas-fired Arco Norte Electrical Interconnection would result in lower-cost electricity generation and potentially lowered electricity prices for consumers in Guyana and Suriname.

Strategic Geographic Position

Guyana has a common land border with ex-oil giant Venezuela to the east, a southern border with oil giant Brazil, and a western border with Suriname. Both Guyana and Suriname have long been considered to be part of the Caribbean, because of their geographic proximity and the size of their economies, similar to other Caribbean
island nations.

While the gross domestic product of Guyana is only about $5.4 billion, the average GDP per capita is about $7,000, on par with the Latin America region as a whole, according to the World Bank. That figure is poised to rise with greater oil production and trade.

Not surprisingly, the new gas and oil boom is expected to help lift neighbor Suriname’s fortunes, while it cements stronger bonds with industrial giant Brazil.

“The energy corridor of Guyana, Suriname and northern Brazil, will see countries teaming up to share power based on a collective understanding of their needs and their ability to supply,” said Vickram Bharrat, the minister of natural resources, said in a February statement.

“Guyana and Suriname are looking to establish a common gas strategy, which will also facilitate development in sectors such as infrastructure, industries and manufacturing and natural resources,” said Bharrat. “Hence, both of the CARICOM (Caribbean Community) nations will foster a local content platform that will create and support opportunities in not just the oil and gas sector, but other areas of the countries’ economies,” he suggested.

In April, Guyana president Irfaan Ali said that regional integration will be a fundamental pillar of Guyana’s economic development, during a speech before the Global Business Leadership Forum, in a session chaired by an official from the Caribbean Export Development Agency,

Trade Partners Expand

U.S. trade with Guyana is expected to increase substantially. During the first three quarters of 2021, trade between two countries was $1.6 billion, according to a statement by Sarah-Ann Lynch, U.S. ambassador to Guyana, speaking before the Guyana Manufacturing and Services Association.

Among the countries now more interested in trade with Guyana is Canada, which recently signed a memorandum of understanding for greater trade with the country. The Canadian Commercial Cooperation will facilitate discussions and exchange of information related to the procurement of Canadian goods and services. Two-way trade between Canada and Guyana was almost $240 million in 2021.

According to World Bank statistics, the countries that represent Guyana’s major import suppliers are the United States, Singapore, Trinidad and Tobago, Liberia and the United Kingdom. Guyana’s major export trading partner countries are Trinidad and Tobago, Canada, Portugal, Ghana and Norway.

Housing and Infrastructure Plans

Guyana now has plans to use its oil revenues to build gas-fired electricity generating plants, refurbish its road network, and to foster greater civil construction across various sectors.

Apart from the expansion of the country’s basic infrastructure, there are plans afoot for major housing developments, including one entirely new city, dubbed Silica City, a development of nearly 4,000 acres, outside of Georgetown, the capital.

“The ‘smart city’ approach is proposed for creating a new city that is compact, pedestrian-oriented, energy-efficient, interconnected and sustainable, comfortable, attractive and secure. A key area of focus is the preservation and enhancement of the valuable, natural and cultural resources of the area,” said Collin Croal, minister of housing and water, in a February announcement.

Overall, the government has allocated some $57 million for new housing in the country this year, according to a statement by Ashni Singh, the senior minister within the office of the president, with responsibility for finance. The housing program, Dreams Realized, plans to transfer 50,000 house lots to low-income families by 2025, for which construction grants and loans are expanding rapidly.

One regional building materials company that is working with the government in Guyana to develop housing is Dover Waterproofing Technologies, based in Trinidad and Tobago. Among multinational DIY companies in Guyana is Home Depot, present in the market for over a decade.

Building Materials Demand

Among the many other regionally-active companies that will seek to supply Guyana’s new construction boom is Harris Paints Guyana, which has three retail locations in Georgetown. Harris markets brands including Glidden, Dulux, Flood, International Paint, Rust-Oleum, Feb Building Products, Devoe Coatings and LG Harris.

Similarly, Berger Paints, based in Jamaica, will serve the coming housing boom from its locations in Georgetown, which the company has served for over a decade.

One local manufacturer in Georgetown is Torginal Paints, which produces architectural, wood and industrial paints and coatings. The company has three company store outlets and eight distributors across the country.