Country Risk Rating

A high-risk political and economic situation and an often very difficult business environment can have a very significant impact on corporate payment behavior. Corporate default probability is very high. - Source: Coface

Business Climate Rating

The business environment is difficult. Corporate financial information is often unavailable and when available often unreliable. Debt collection is unpredictable. The institutional framework has many troublesome weaknesses. Intercompany transactions run major risks in the difficult environments rated C.


  • Significant investment in infrastructure and telecommunications
  • Attractive prospects for investors in mining, hydroelectric power and agriculture
  • Exploitation of oil reserves off the coast of Guyana from 2020
  • Member of CARICOM (Caribbean Community and Common Market)


  • Reliance on exploitation of gold, bauxite, sugar, rice and timber
  • Shortcomings in infrastructure, transport, education and health
  • Sensitive to weather events (region strongly affected by hurricanes)
  • Territorial dispute with Venezuela
  • Reliance on international creditors
  • Expansion of the informal economy
  • High crime rate linked to drug trafficking against a background of poverty and corruption

Current Trends

Activity Dependent on Gold and Agricultural Output While Waiting for Oil Development

In 2018, GDP growth will stabilize at a comfortable level, driven by public investment (almost 17% of GDP). The main sectors concerned are transport (48% of loans from the Inter-American Development Bank in Guyana) and energy. The Minister of Public Infrastructure completed his Public Sector Investment Program (PSIP) in late 2017, with a total investment of 10 million Guyanese dollars (EUR 41 million), which represents 2.5% of GDP. The project includes the building of roads, electrical installations, an international airport, and a prison. The private sector has not been left behind, benefiting from a huge operating contract with investments estimated at USD 4.4 million (130% of GDP), between the State and a large US oil company following the discovery of the Liza oilfield off the Guyanese coast. The country will become an oil exporter by 2020 (120,000 barrels a day). The search for, and exploratory drilling of, potential oil fields will continue in 2018 at Liza II, Payara and Snoek. With much of the economy devoted to agriculture (30% of GDP in 2016) and mining, economic momentum still depends on weather conditions. After recovering in 2017, rice production will climb modestly while sugar production will decline further in 2018. More favorable weather conditions will encourage the expansion of gold production, which is destined exclusively for export.

Inflation, which remains dependent on agricultural and oil commodity prices, is expected to stabilize at a moderate level.

Fiscal Reforms in the Government's Sights

The government is expected to introduce major fiscal reforms in 2018, consisting in the removal of exemptions for several industries, even if weak institutions and lobbying by businesses benefitting from these advantages could slow this process. Tax collection should increase thanks to oil drilling. Over 900 million Guyanese dollars generated by the oil industry were collected during the first half of 2017 and this income should continue to grow. On the other hand, spending will also rise with the weight of subsidies in the budget, especially those for the state-owned sugar producer, GuySuCo. Austerity will no longer be relevant to the government, as it wants to increase spending in anticipation of future oil income.

With regard to the external accounts, imports, mainly of oil, will fall in the medium term as the exploitation of offshore hydrocarbon fields materializes. Exports, mainly of gold (the country’s gold output reached a historic high during the first nine months of 2017), will continue to grow. Remittances from Guyanese workers abroad (9.6% of GDP in 2016), the main source of incoming foreign exchange, could be affected by the new 2% tax on money transfers introduced in 2017 in the United States (almost 300,000 people of Guyanese origin live there, representing 40% of Guyana’s population). The current account deficit, which is small, will help maintain foreign exchange reserves at a level equal to about four months of imports in 2017. The monetary authorities will continue with their generally flexible exchange rate policy, thus increasing the local currency’s resistance to external shocks.

Difficult Political Reforms Against a Background of Ethnic and Border Tensions

After over twenty years in power, the Indo-Guyanese People’s Progressive Party/Civic (PPP/C) gave way to the multi-ethnic coalition led by the Afro-Guyanese Party A Partnership for National Unity and Alliance for Change during the 2015 general elections. The coalition won 50% of the votes cast which gives them a very small majority of one seat in Parliament. The coalition candidate, David Granger, won the presidential elections. Ethnic tensions remain and the PPP/C is expected to continue its policy of blocking constitution and institutional reforms with the aim of winning the 2020 elections. Nonetheless, the outlook for positive change is to be noted, with the holding of the first local elections in 2016 and constitutional reforms planned aimed at ending a political system with proportional representation based on ethnic origins. Despite some progress, Guyana’s business climate remains difficult (126th out of 190 countries in the 2018 World Bank’s Doing Business rankings).

Despite an international ruling fixing the current borders, Nicolas Maduro, President of Venezuela decided unilaterally in 2015 to affirm Venezuela’s sovereignty over almost two-thirds of Guyana’s territory and maritime borders with the publication of an official decree. This came one week after the announcement of the discovery of an oilfield off the coast of Guyana, in the area disputed by Venezuela and rekindled a controversy that dates back over a century. The UN accordingly agreed to give the two countries time to negotiate (until end 2017). Following the failure of these negotiations, the dispute will return to the International Court of Justice (ICJ) in 2018.


Coface (01/2018)