Tiona fund mooted for private sector's capital investment needs
by Andrew Richards
The private sector in Guyana is streamlining a framework to foster increased investment here but still finds there is dire need for capital investment to spur meaningful growth of the national economy. This was the view expressed by director of the Private Sector Commission (PSC), David Yankana, at a seminar hosted by the PSC in collaboration with the Commonwealth Development Corporation (CDC) on Monday at Le Meridien Pegasus. The seminar was held to sensitise the business community on how they could benefit from the Tiona, an equity financing fund managed by CDC. Yankana said the PSC had, from time to time, indicated the need for capital investment in Guyana. Out of the business summit with President Bharrat Jagdeo in October, a 19-point plan had been developed for follow-up action to be taken, he said. The head of the Guyana Manufacturers Association was tasked with pursuing the suggestions, in which many of the contributors at the summit had supported the calls for institutional strengthening in the business sector and the establishment of legislation to support capital investment in Guyana, Yankana stated. He noted there had been some headway in getting the Money Laundering Bill passed as it had already been presented in Parliament. Also, some time ago the Securities Industries Act had come into being, where provision had been made for the establishment of a stock exchange. The private sector had consultants working along with the Privatisation Unit to set up a commission to oversee the work being done to establish an exchange. Yankana said it was hoped that by the end of the year most of the work would be done or that trading would be taking place, even if on a small scale. "We need to have this [stock exchange] in place as early as we can," Yankana stated. These developments were an indication that the private sector was getting things moving but what was most needed was capital investment, he pointed out. The PSC director acknowledged that some persons might say political stability was more important in a country to attract investment but this view was not shared by all. After the setback in 1997 because of the unstable political climate, there was some growth in 1999 but Yankana asserted that it was not enough to make a meaningful contribution to the national economy. Yankana said he had perused an IMF document on the role of the CDC in southern Africa and, according to the report, there was need for a stable tax regime and the reduction of bureaucracy for investors--a proviso relevant to Guyana. Investment Manager of CDC, Terrence Clarke, explained to participants of the seminar that the Tiona fund had been launched in March last year after the need for capital funding in the Caribbean had been identified. He said that so far, the fund had been involved in about 225 projects in the region. Tiona is a private equity fund that invests in growing companies throughout the Commonwealth Caribbean. It is a Barbados-registered company with a capital of US$21.5 million, Clarke stated. He said the fund could invest between US$250,000 and US$2.5 million in any one business in the Caribbean and was able to take an equity stake of up to 49 per cent of the business. Through the Tiona fund, CDC advises on the strategic direction of the business through board representation. It provides the business with access to CDC's network of local, regional and international contacts. It also identifies and assesses management requirements.
|