Dear Editor,
The November 8 online news editions of KWatch, KNews and Demwaves, featured the Bank of Baroda’s opening of a newly-constructed headquarters, with Demwaves’ caption playing up a change-of-heart angle, “Bank of Baroda records financial successes after mulling closure.”[1]
And then on Sunday, November 9, KWatch helped continue my thought process with another article, “BoG governor says funds available to ease foreign exchange shortage but legislative constraints limit use.”
Admittedly, I am no econ-geek to even try getting into the vagaries of the Guyana economy on the local banking sector going back as far as March 31, 1966, when Bank of Baroda first opened its doors in Guyana. But I have always been intrigued by whether the performance of local banks has been used as a gauge of how legitimate businesses are doing relative to customer spending and saving.
After reading KWatch’s Sunday article, I revisited its Saturday article to try and figure out what exactly is this sense of euphoria over Bank of Baroda’s financial performance by recording total business of GY$51.2b (US$256m) and a net income of GY$774m for 2025-2026.
If it is more about being discouraged by President Irfaan Ali in 2020 against pulling out of Guyana[2], and turning in a good 2025-2026 performance, then that might be commendable, but could the low the numbers still be an outlier of a broader real-time economic problem? And especially after reading what Bank of Guyana’s Governor Dr Gobind Ganga had to say in Sunday’s KWatch about funds being available to ease foreign exchange shortage. Why would he even need to say that or, worse, described the demand for foreign exchange as ‘unprecedented’? How does that not make the Bank of Baroda news article more enigmatic than euphoric?
My layman understanding is that the Bank of Guyana is intentionally keeping the exchange rate stabilized around GY$208-GY$210 to protect the local economy, but I don’t get the logic of a bank, like Baroda, which has been operating in Guyana for over six decades, making headline news on gross business of GY$51.2b (US$256m) and coming out with net earnings of GY$774m (US$3.870m) in the midst of ongoing foreign exchange shortages.
I would greatly appreciate an analyst of Guyanese Dr Ken Danns’ calibre, whether in or outside Guyana, who can break down for ordinary Joes and Janes what is wrong with Guyana’s economic picture where foreign sources (starting late 2018 or early 2019) can describe Guyana as the fastest growing economy in the world, yet 40% of its less than 1 million population lives below the poverty line, and local banks have been struggling in recent years for foreign exchange. Where exactly are Guyana’s foreign exchange earnings ending up, and especially in light of an influx of oil dollars?
Is there skullduggery afoot by political corruptocrats or is the underground or informal economy having an adverse impact on the formal economy by snatching up incoming foreign exchange and decreasing circulation? Are foreigners in Guyana exporting foreign exchange collected? If yes, who are the culprits? Bank of Baroda reporting a net income of GY$774m (US$3.87m) has to pale in comparison to the hundreds of millions the informal economy operators are hauling in each year, so something has to be radically wrong with the Bank of Baroda performance picture given the claim Guyana is the fastest growing economy.
My latest cursory checks show that while the U.S State Department estimates Guyana’s informal economy is between 30% and 50% of its GDP, while the World Economics GDP Data has it hovering over 25% or around US$23b. Does Bank of Guyana even have a department that monitors the underground or informal economy?
I eagerly looking forward to updated reportage by local or foreign, bona fide Guyanese analysts on the size and role of the informal economy within the formal economy, and the detectable impact of the informal economy on banks because if a buoyant banking sector is said to be a key indicator and driver of broader economic activity, Guyanese could be sailing unwittingly down the Potaro River, over the edge for a 741-foot drop, before emptying into the 20- to 32-mile-wide Essequibo River.
Emile Mervin
References
- Where exactly is Guyana’s foreign exchange earnings ending up? in Kiskadee Watch, November 9, 2026