IDB approves US$400,000 loan to aid Guyana’s trade, food security efforts

The Inter-American Development Bank (IDB) has approved a US$400,000 loan for the Ministry of Tourism, Industry and Commerce to bolster Guyana’s food security efforts.

This funding will be used to strengthen trade and logistics at the Guyana-Brazil border and the Guyana-Suriname border.

According to the IDB’s project documents, the government had expressed an interest in upgrading the Linden – Lethem transport corridor, a key artery for the socioeconomic development of communities in Guyana’s hinterland and the regional integration with the Roraima and Amazonas states of Brazil. The road is paved on the Brazilian side but stops at the border in Bomfim.

While a largely unpaved road connection currently exists between Georgetown and the border, it is often hazardous due to dust during the dry season and frequently impassable in some sections during the rainy season where passage relies on low embankments, timber bridges, and ferry crossings. The unpaved road length from Lethem to Linden is approximately 454 Km.

Road works are ongoing on the first 25 kilometres of the Linden-to-Lethem Roadway commencing from Linden. The project is being funded by the Caribbean Development Bank (CDB) via a US$112 million loan, a grant to the tune of £50 million (US$66 million) from the United Kingdom under the Caribbean Infrastructure Partnership Fund (CIPF), and an input of US$12 million from the Guyana Government.

While the current emphasis of the GOG so far has been on road construction, motivated by a desire to create a reliable and safe land link with its neighbour, increase cross-border trade and strengthen food security, the IDB said it is evident that the land connection must be considered within a wider framework to have a positive developmental impact. Towards this end, the IDB said the US$400,000 allotment is concerned with the broader economic and social development objectives related to strengthening trade.

In providing a breakdown of the US$400,000 allotment, the bank noted that US$25,000 will allow for the provision of technical inputs on preferential tariffs, investment provisions, and trade facilitation to the Government of Guyana for future trade negotiations, whether bilateral or regionally.

The sum of US$50,000 is expected to finance activities related to policy dialogue and knowledge dissemination in relation to bilateral or regional trade agreement negotiations, with particular emphasis on Brazil. These activities will consider the elaboration of communications materials and workshops which will support negotiations and consensus-building.

A total of US$275,000 will go towards conceptual designs for improvement of the Lethem-Bonfim border crossing and the Guyana-Suriname border crossing. This includes a market analysis of trade flows; a diagnosis of existing physical infrastructure, logistics and goods clearance processes; status of trade policy (e.g. transit agreement), trade facilitation and regulatory measures; policy and investment recommendations; and conceptual designs for the improved logistics flow of goods across both borders. Proposals undertaken in 2019 for the border at Lethem-Bomfim will be taken into consideration. Finally, the sum of US$50,000 will be used to provide resources for a consultancy to monitor activities regarding the foregoing elements. This project is expected to last 36 months.