Georgetown, Guyana, February 21, 2025 – The African Export-Import Bank (Afreximbank) will establish a $1 billion oil service financing facility in Guyana to strengthen local participation in the nation’s burgeoning oil industry, President Benedict Oramah announced on February 21 at the Guyana Energy Conference and Supply Chain Expo.
The facility, set to launch amid the country’s rapid oil sector growth, will provide direct funding to qualifying firms or channel support through local banks via a factoring line for contractor invoices. The move aligns with Guyana’s local content policies and aims to capitalize on its estimated 12 billion barrels of crude oil reserves.
Oramah emphasized the economic potential of proactive resource management, warning that without intervention, much of the $5-8 billion annual oil service market could flow abroad. He stated, “Given the level of oil production in Guyana and its offshore location, I estimate that the oil service sector would amount to 5 to 8 billion US dollars annually. But where will it go? Most of it would be paid to oil service companies abroad, if Guyana does nothing to avoid that. A 50% retention in Guyana would increase Guyana’s GDP by 29% to 47%.” He urged robust policies to empower Guyanese entrepreneurs within the oil value chain, projecting a potential GDP boost of up to 47% if half the sector’s value is retained locally.
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Drawing on Afreximbank’s decades of experience with commodity-driven economies, Oramah stressed diversification to mitigate risks. He cautioned, “The commodity market is prone to volatility and cyclicality; hence, the reliance on crude revenues as a primary source of government funding could expose the national economy to volatile commodity markets.” He recommended long-term off-take contracts with oil service firms to ensure market access and price stability, safeguarding Guyana against the pitfalls of over-reliance on oil.
The initiative also fosters Afri-Caribbean ties, with Oramah noting that skilled firms from Ghana, Egypt, and South Africa stand ready to collaborate. He said, “In the spirit of deepening Afri-Caribbean partnership… skilled oil service companies from Ghana, Egypt, and South Africa, are ‘ready and willing to support Guyanese… And of course, Afreximbank is there to underwrite the marriage.’” This cross-continental support aims to bolster local capacity while leveraging African expertise.
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Oramah underscored the stakes, warning of the “Dutch Disease”—where resource booms harm other sectors—if strategic steps are ignored. He added, “These measures are necessary if Guyana and other new entrants in the Caribbean and Africa are to avoid the painful ‘Dutch Disease.’ We make these suggestions based on the three long decades of financing oil and gas activities across Africa. We have witnessed oil-dependent economies transform for better or worse through these periods. In all these, the difference reflected the policy choices the leaders made.”
Afreximbank’s facility seeks to ensure Guyana’s oil wealth drives sustainable growth, not economic fragility, through deliberate policy and financing.
