…corporation needs over $1B to stay afloat this year
Government will soon appoint a new Board of Directors to manage the cash-strapped Guyana Sugar Corporation and new Minister of Agriculture, Zulfikar Mustapha said the sugar company needs over $1B to stay afloat for the rest of the year.
Mustapha made the comments during a news conference hosted in the studios of NCN. Mustapha told the media that the press conference was intended to provide a brief overview of the state of affairs that the PPP/C government inherited from the APNU/AFC administration with regard to the Ministry of Agriculture and some its sectors.
He noted that all agriculture sectors and agencies are governed by Board of Directors and as far as he was aware all of these boards would have expired as at June, 2020. He said new appointments will be made as soon as possible. Additionally, Mustapha said the corporation will not be in a position to pay wages from the week ending 21st August. He said under the previous administration, a request was made to NICIL for an amount of $1Bn but only $550M was received to date. “The $1bn is required to cover operational expenditure until the Corporation commences receipt of sugar proceeds which will become available in the second week of September. Capital programme suffered from a lack of funding and will result in future crops being adversely affected. For this year from a budget of G$3.24Bn, the corporation could only expend $82M due to external funding not been made available,” the minister related.
He said there was a shortfall of 9,461 tonnes in production for the First Crop of 2020 from a target of 46,476 tonnes. Only 37,015 tonnes of sugar were produced. “Factories were found to be suffering from a lack of capital investment which is contributing to frequent downtime. One example being the Uitvlugt factory, which was affected by several mechanical issues. The first Crop for 2021 will continue to be weak due to low achievement of tillage and replanting thus far for this year. Achieving consistent and adequate cane supply is a problem across the Industry,” Mustapha told the media.
He said that there is a shortage of essential inputs like fertilizers and chemicals which are vital to canes in the second crop and unless they are procured, cane growth will be adversely affected directly impact future production. “The APNU/AFC government, through NICIL, undertook a loan of G$30B under the guise of assisting the corporation. To date, only G$10.2B was made available to GuySuCo. The Board received no answer as to how much was actually disbursed to NICIL and plans on repayment of the loan. To date, the Corporation has a total liability of approximately G$9.5B.”
The minister in painting a grim picture of the company said that current projections show that the Corporation would require an additional $1.6Bn between now and the end of the year from external funding for capital and ongoing operational expenditure as revenues from sugar and molasses sales will not be sufficient to cover expenses for that period. He reiterated that the PPP/C Administration will work to revamp the industry and return prosperity to those sugar workers who were sacked by the previous administration.
