The People’s Progressive Party (PPP) government is moving to establish a new state-backed development bank—more than three decades after dismantling the Guyana Agricultural and Industrial Development Bank (GAIBANK), the very institution created to provide the type of financing the new bank now promises to deliver.
In Budget 2026, the government allocated US$100 million to capitalise the proposed Guyana Development Bank, which officials say will provide zero-interest and low-collateral financing to small businesses, farmers, women and young entrepreneurs.
But the initiative has reopened old wounds and uncomfortable questions about the PPP’s long-standing practice of dismantling institutions and policies inherited from political opponents, only to later reconstruct them under a different name.
GAIBANK, established in 1973 under the administration of Forbes Burnham and the People’s National Congress government, was specifically designed as a development finance institution to support agriculture and industrial expansion through medium- and long-term credit.
Its mandate was clear: provide financing to productive sectors considered too risky, too seasonal, or too slow-yielding for commercial banks. It was created to support farmers, agro-processors and industrial operators whose investments—particularly in livestock, citrus, coconuts and other agricultural ventures—required patience and developmental capital.
Yet after assuming office in 1992, the PPP government under Cheddi Jagan moved to close the institution as part of its restructuring agenda.
The state-owned Guyana Co-operative Agricultural and Industrial Development Bank (GAIBANK) was formally dissolved with effect from May 31, 1995, ending more than two decades of specialised development financing for Guyana’s productive sectors.
Former General Manager Dr. Kenrick Hunte has repeatedly argued in published newspaper letters that the closure was neither a necessity nor the result of institutional failure, but rather the consequence of flawed policy judgment.
Hunte maintained that the PPP government ignored recommendations from then Auditor General S.A. Goolsarran regarding the treatment of foreign exchange losses—losses he argued were obligations of the State and not the bank itself. According to Hunte, had those accounting principles been properly applied under the law, GAIBANK would not have been deemed insolvent and could have continued its operations.
The closure represented the destruction of a viable institution at a time when Guyana’s agricultural sector needed it most.
Political observers and economic analysts argue that the GAIBANK closure fits a wider governance pattern in which the PPP has often moved swiftly to dismantle institutions, programmes and policies inherited from the PNC and later the A Partnership for National Unity + Alliance For Change (APNU+AFC) administrations, frequently without sufficient due diligence to assess their long-term national value.
They argue that such actions often appear driven less by sound public policy and more by political expediency, where inherited structures are viewed through partisan lenses rather than judged on their effectiveness.
And in that recurring cycle of dismantlement and reconstruction, it is often the ordinary citizen—the farmer seeking affordable capital, the small entrepreneur trying to expand, and the worker trying to survive—who bears the burden of policy disruption.
For more than 30 years after GAIBANK’s dissolution, Guyana’s agricultural and productive sectors operated without a dedicated development financing institution. Commercial banks, driven by short-term profitability and rigid collateral requirements, largely avoided the sectors GAIBANK was designed to serve.
Now, in a striking political irony, the PPP is advancing a new state bank to perform many of the same functions.
Though branded as the Guyana Development Bank, its proposed mandate—state-supported concessionary lending to productive sectors—closely resembles the very mission GAIBANK was created to fulfil.
The question now is no longer whether Guyana needs a development bank.
The question is why the PPP dismantled the one it inherited, only to return decades later to rebuild what it once declared expendable.
