This week, Guyana’s President Irfaan Ali gathered the heads of commercial banks to announce nine new foreign exchange measures. On the surface, these rules are designed to stop over-invoicing, capital flight, and the abuse of personal credit cards for business transactions. But step back for a moment: why are we here in the first place?
In 2024, the Bank of Guyana injected about US$332 million to meet dollar demand. By September of this year, that figure had ballooned to US$1.2 billion with millions in demand still unmet. Meanwhile, credit card spending abroad has exploded, from US$91 million in 2023 to almost US$252 million already this year, and Christmas hasn’t even come. These are not the symptoms of a healthy financial system. They are the signals of an economy leaking confidence.
The government’s response is a battery of bureaucratic hoops. Every import must now pass through layers of invoice verification, GRA stamping, and central bank “clearing house” reconciliation before a business can access the next tranche of foreign exchange. Personal credit cards will be policed. Cash leaving the country must be declared. Oil-and-gas service companies will be forced into new local accounts. And firms that fall foul of these rules risk being locked out of future access altogether.
This is not smart regulation. This is bureaucracy masquerading as policy. For small and medium enterprises already fighting to manage cash flow, these rules will mean delays, uncertainty, and higher costs. For investors, they send a chilling message; move your money in carefully, but don’t expect to move it out freely. For a country that insists it wants to be globally competitive, these measures cut the other way.
Capital flight and over-invoicing do not happen in a vacuum. They happen because businesses do not trust the system to give them predictable access to foreign exchange. They happen because firms expect tomorrow’s access to be worse than today’s, so they hedge by holding more abroad. They happen because our domestic market is shallow, information is scarce, and rules shift with the political wind. The President himself admitted the government can meet current dollar demand. If that is true, then why the rush to add more red tape?
Even more curious is the timing. The Minister of Finance, Dr. Ashni Singh, was conveniently absent, leaving the Minister of Public Service to stand in. This raises an uncomfortable question; does the Finance Minister endorse this approach? Or does he recognize, as many in the private sector do, that strangling the system with paperwork is no substitute for building a transparent, efficient, and rules-based foreign exchange market?
Guyana does not need blanket restrictions that punish every importer. It needs risk-based oversight. Target the bad actors through data matching, e-invoicing, and digital customs integration. Publish clear policies on dividend repatriation and foreign direct investment. Introduce transparent FX auctions so firms know what to expect instead of queuing in the dark. Build confidence, not compliance headaches.
Foreign exchange will always chase trust. When businesses trust the system, they keep their money in it. When they don’t, they find ways around it. The President’s nine measures may sound decisive, but they will not build trust. They will drive more activity off the books, delay trade, and weaken Guyana’s competitiveness.
Guyana is on the cusp of unprecedented wealth. We cannot afford to squander it by layering on bureaucracy while ignoring the deeper issue, a lack of predictability and transparency in economic governance.
The private sector deserves better than to be managed like schoolchildren with report cards. And the country deserves leadership that strengthens markets, not suffocates them.
