A. Real Output Growth

3.0 Mr Speaker, in spite of encouraging performances in a number of sub sectors, real Gross Domestic Product (GDP) contracted by 0.8 percent in 2000. This rate compares unfavourably with the target of 3 percent and the 3 percent realised in 1999.

B. Sector Performance

3.1 Mr Speaker, sugar production of 273,317 tonnes, which was achieved in 2000, was 15 percent less than the 321,438 tonnes produced in 1999. All estates fell short of their projected yields, especially during the second crop. Severe weather conditions at the beginning and middle of the year precipitated water-logging in the fields and this affected cane cultivation. Also, the industry suffered from impaired drainage and irrigation facilities and an attack of smut in the East Berbice area.

3.2 Rice production fell by 20.1 percent. The output of rice was 291,841 tonnes compared to 365,469 tonnes in 1999. Once again, heavy rains led to flooding at sowing time for the first crop. This had an effect on the second crop, when only 112,000 acres were cultivated compared to 190,000 acres in 1999. Rain also affected harvesting of the second crop.

3.3 Performance by the other sub-sectors in agriculture was mixed. Egg production improved by 17.1 percent to 30.1 million units. This was also the case of fresh milk, which increased by 7.8 percent to 31.4 million litres. However, there was a decrease in poultry meat production by 5.3 percent to 11,769 tonnes. The fish sub-sector grew by 14.1 percent, on account of significant growth in catches of prawns, 9 percent; shrimp, 10.9 percent; and fish, 16.9 percent. In forestry, output declined by 16 percent to 418,948 cubic metres.

3.4 Mr Speaker, increased production of gold, diamonds and bauxite contributed to the overall growth rate of 5.9 percent in the mining and quarrying sector. Gold output increased by 4.8 percent to 476,150 ounces. This represented a recovery over 1999, when the mining of a poorer quality of ore and the fall in international prices contributed to the decline in output. Gold prices increased slightly in 2000. Total diamonds declared was 83,912 carats compared to 46,668 carats in 1999. In bauxite, production increased by 14 percent to 2,689,451 tonnes. There were noticeable increases in all grades, in spite of the problems encountered with flooding of the mines, obsolete machinery and equipment, and an unstable power supply.

3.5 The manufacturing sector declined by 13.9 percent. Of the four sub-sectors within the sector, beverages and other manufacturing fell by 12 percent and 16 percent, respectively. Shortfalls in output were experienced in ointments, 19.5 percent; footwear, 12 percent; soap, 54.5 percent; garments, 24.3 percent; and rum, 33 percent.  However, increased production was recorded for pharmaceuticals, 45.1 percent and food, 3 percent. The commodities that experienced growth included electricity, 7.6 percent; stockfeed, 7.5 percent; margarine, 5.5 percent; corrugated cartons, 32 percent; and stout, 68 percent.

3.6 All of the sub sectors of the services sector showed positive growth rates. Engineering and construction grew by 6.5 percent, due largely to the expanded public sector investment programme that encompassed the construction of schools, roads and other facilities. Distribution increased by 5.2 percent, reflecting a recovery in the imports of consumption goods during the year. Transport and communication grew by 5.5 percent, on account of substantial growth in inbound and outbound telephone traffic, and increased movement of passengers, parcels and mail. Financial services increased by 5.5 percent, while government grew by 10 percent, principally as a result of the large increase in wages and salaries paid in 2000.

C. Balance of Payments

3.7 Mr Speaker, in spite of the adverse international developments that affected Guyana’s trade deficit, the overall balance of payments experienced a turnaround from a deficit of US$4.4 million in 1999 to a surplus of US$17.1 million in 2000. This achievement was attributed to the improvement in the capital account, which registered substantial inflows of official development assistance and private capital. This was more than sufficient to cover the deterioration in the current account deficit.

3.8 Merchandise exports amounted to US$505.2 million, or 3.8 percent less than in 1999. This decrease was due to lower receipts from sugar, rice and bauxite, even though earnings from gold, timber and other non-traditional exports increased. In spite of an increase in the volume exported, sugar earnings of US$118.8 million were 12.8 percent less than the previous year. This performance was mainly a reflection of a 15 percent depreciation of the euro against the US dollar. This caused the average export price of sugar to fall by 14 percent, or from US$495 per tonne in 1999 to US$426 per tonne in 2000.

3.9 The volume of rice exported fell sharply by 17.5 percent. In addition, the average export price fell from US$283 per tonne in 1999 to US$250 per tonne in 2000. As a consequence of these two factors, earnings from rice declined by 27.2 percent to US$51.8 million. There was a small improvement in the volume of bauxite exported. However, lower export prices resulted in a small decline in earnings to US$76.5 million. On the positive side, as a result of increased prices and higher volumes exported, gold earned 10.9 percent more than in 1999, or US$120.5 million, while timber earnings receipts rose by 10.5 percent to US$40.9 million. Other exports increased marginally from US$94.8 million to US$96.7 million.

3.10 Merchandise imports increased by 6.3 percent to US$585.4 million. Intermediate goods rose by 20.7 percent, reflecting the substantial increase in the acquisition cost of fuel and lubricants, spare parts and accessories. Both consumption and capital goods fell by 6.1 percent and 3.0 percent, respectively. Net services declined from US$89 million to US$78.2 million, largely as a result of a decline in interest payments on the external debt, while transfers improved by US$6 million to US$45 million. However, the gains made in net services and transfers (US$17 million) could not offset the large deterioration in the merchandise trade deficit (US$55 million). As a result, the current account deficit of the balance of payments increased to US$113.4 million. The capital account recorded an 81.9 percent increase, to US$126.6 million, and this facilitated the favourable movement in the overall balance of payments.

D. Monetary Development and Prices

1. Monetary Development

3.11 Mr Speaker, the Government’s monetary policy stance was informed by the need for price and exchange rate stability. This led to moderate growth in broad money of 10.9 percent in 2000. Narrow money grew by 15 percent to $24.4 billion while currency in circulation and demand deposits expanded by 8.0 percent and 26.7 percent, respectively.

3.12 Commercial bank deposits grew by 16.4 percent, compared to 3.9 percent in 1999. This was due mainly to the higher levels of deposits by the private sector, which grew by 12.5 percent to $69.9 billion. Deposits of the public sector were 25.8 percent higher than the $7.3 billion recorded in 1999, and facilitated the expansion in commercial banks’ investment. Net domestic credit rose by 6.4 percent to $25.4 billion, with the public sector maintaining its net depositor position.

3.13 In spite of the very cautious approach that has been adopted by the commercial banking system, credit to the private sector expanded by 5.2 percent. Real estate mortgages recorded a phenomenal growth of 35.6 percent, on account of the upsurge in housing construction and repairs. Credit to the agricultural sector rose by 7.3 percent, reversing the decline of 9.9 percent in 1999. Similarly, credit to the services sector increased by 7.1 percent, reflecting higher lending for transportation and communication as well as entertainment and catering. Credit to the manufacturing sector increased by 3.7 percent while credit to the distribution sector grew by 3.5 percent.

3.14 The overall expansion in the monetary base was a reflection of growth in the foreign reserves. Gross international reserves rose by US$29 million to US$295.8 million. This was equivalent to 4.8 months of coverage of imports, up from 4.2 months in 1999.

2. Prices

  a. Inflation
3.15 Mr Speaker, inflation slowed to 5.9 percent in 2000. This result compares favourably to the target of 9.5 percent and the 8.6 percent recorded in 1999. This achievement is a tribute to the Government’s determination to keep the cost of living down, especially in light of the huge increases in the international prices of fuel and lubricants. Given the importance of fuel to the economy and the likely impact the increases would have had on economic activity, the Government intervened on three occasions in 2000 to reduce, temporarily, the applicable rate of consumption tax. Currently, the tax on gasolene stands at 35 percent, down from 50 percent, while that for dieselene is 20 percent, also down from 50 percent. The Government had previously removed the consumption tax on kerosene for domestic use, and had lowered the tax on Av gas and Av jet that are used in aircraft plying the coastal and hinterland areas.

3.16 Mr Speaker, the price of fuel is expected to remain high for the foreseeable future. In recognition of this, the Government has been exploring short-term solutions that involve the acquisition of fuel at a cheaper price. In this regard, it is exploring importation under the Caracas Energy Accord. Other initiatives being pursued include an examination of options for use of alternative fuels and an energy conservation programme by the Guyana Energy Agency (GEA). 

  b. Interest Rates
3.17 Mr Speaker, after peaking in March 2000 the 91-day Treasury Bill rate declined continuously to its lowest point in November, before settling at 9.2 percent at the end of the year. This trend precipitated the downward movement in the savings and lending rates. The ‘small savings’ rate declined by 69 basis points to 7.28 percent, the annual average savings rate declined by 10 basis points to 7.65 percent, and the weighted average time deposit rate declined by 194 basis points to 7.51 percent. The weighted average lending rate decreased by a mere 19 basis points to 17.68 percent, thus widening the spreads between the savings and lending rates. Mr Speaker, we have commented, ad nauseam, on the relatively high interest rate spreads and we will continue to maintain an activist role in our quest to have them reduced.

 c. Foreign Exchange Rate and Volume
3.18 The Guyana dollar depreciated by a negligible 2 percent against the United States dollar in 2000, compared to 7.7 percent in the previous year. Recorded transactions in the foreign currency market amounted to US$1.7 billion, 5.8 percent higher than in 1999. Transactions in the cambio market declined by 4 percent to US$822.4 million. At the close of the year, the US$/Guyana dollar mid exchange rate was G$185.54.

 d. Wage Rate
3.19 The wages and salaries of all categories of workers in the public service, as well as pension and social security assistance, were increased by 26.66 percent. As a result, the minimum wage in the public service increased from $15,000 to $19,000 per month. 

E. Review of the Non-Financial Public Sector

1. Central Government

3.20 Mr Speaker, in spite of the contraction in the economy, the operations of the Central Government improved significantly during 2000. Through a combination of higher oil prices, the introduction of a flexible customs valuation rate, and improved tax collection by the Guyana Revenue Authority, current revenue rose sharply by 12.2 percent to $41.3 billion. The Internal Revenue Department garnered $18.9 billion, compared to $16 billion in 1999. The main contributors to this effort were collections of personal income tax of $7.8 billion ($6.2 billion in 1999); and company taxes of $7.1 billion ($6.3 billion in 1999). Similarly, collections by the Customs and Trade Administration Department reached $19.1 billion or 21 percent more than the previous year. Consumption tax on goods and services accounted for 78 percent of the amount collected. In terms of the ‘other current revenue’, profits from Bank of Guyana amounted to $386 million, while the telephone company paid a dividend of $288 million, the first time that such transfers were made to the Government.

3.21 On the expenditure side, non-interest current expenditure amounted to $30.6 billion in 2000, about 25 percent more than in the previous year. Personal emoluments grew by 19.1 percent to $14.3 billion, and consumed 34.6 percent of the revenue collected. This significant growth in workers’ income was a reflection of the large wage increase and the severance payment to security guards towards the end of the year. Expenditure on ‘other goods and services’ increased by 17.1 percent to $8.2 billion, while that for ‘transfer payments’ grew by 48.2 percent to $8 billion.

3.22 Mr Speaker, when compared to the budget, these results made possible a 30.2 percent improvement in the primary current balance to $10.8 billion. Interest payments were $12.4 billion, an increase of about $2.4 billion. External interest (on an accrual basis) amounted to $7.3 billion, 13.1 percent higher than the previous year, while domestic interest of $5.1 billion was 45.7 percent more than in 1999.

3.23 Capital expenditure and net lending increased to $17 billion, $2.4 billion more than the target and $4.7 billion more than in 1999. This performance was attributed to an improvement in the disbursement of external loans and the removal of some of the bottlenecks that affect the rate of project implementation. Included in net lending is an amount of $1.2 billion that was transferred to Linmine. This is a reflection of the Government’s commitment to support the company until its privatisation.

3.24 Mr Speaker, total expenditure (net of principal repayment and rice levy) was $59.9 billion compared to $46.7 billion in 1999. The overall deficit before grants was $18.6 billion, which, though slightly less than the $19.1 billion that was budgeted, was almost twice the $9.9 billion recorded in the previous year. Grants, comprising HIPC relief ($5.6 billion); project grants ($1.3 billion); and non-project grants ($3.1 billion), increased by 36.5 percent. The overall deficit after grants amounted to $8.5 billion. This deficit was financed largely through net external borrowing of $7.8 billion. The large disbursement of project and balance of payments loans and the HIPC debt relief enabled the Government to lower its liabilities with and make repayments to the banking system.

 2. Public Enterprises

3.25 Mr Speaker, owing to a combination of adverse circumstances, the operations of the public enterprises deteriorated in 2000. Total receipts of $45.5 billion fell short of the budget by 7.8 percent. This performance was attributed to problems encountered in the key enterprises. Production in the bauxite industry was hampered by irregular power supply and a lack of suitable barges; sugar suffered from the effects of bad weather and an adverse euro/US exchange rate; and contributions to the National Insurance Scheme were less than targeted. However, both the state oil and shipping companies returned commendable performances, but these were insufficient to cover the shortfall.

3.26 Non-interest expenditure amounted to $42.3 billion, about the same as was budgeted. This was due mainly to the increased acquisition cost of fuels and materials and supplies. The net result of the lower receipts and higher expenditure was a decline in the current surplus to $3.1 billion, from about $4 billion in 1999. Capital expenditure amounted to $2.1 billion while taxes and dividends paid were $767.7 million. The overall cash balance of the corporations improved by 245 percent to $975.2 million.

3. Non-Financial Public Sector

3.27 Arising from the developments in the operations of the Central Government and the Public Enterprises, the current surplus of the non-financial public sector fell to $1.5 billion, from $6.6 billion in 1999. At the same time, the overall deficit after grants increased to $6.3 billion, from $957.3 million in the previous year.

F. Public Sector Investment Programme

3.28 Mr Speaker, we were able to achieve a 91 percent implementation rate for the Public Sector Investment Programme (PSIP).  This helped to transform the social and physical landscape of our country. I shall now review some of the achievements in the priority areas as identified in last year’s budget.

3.29 In the health sector, approximately $139 million was spent on rehabilitation works at the Ministry of Health. In addition, a new elevator was procured for the Maternity Ward of the Georgetown Hospital. The Agricola Health Centre, the Tuberculosis Ward, the Nursing School and the Pharmacy Bond buildings were renovated, while more than sixty percent of the work on the Liliendaal Training Centre building was completed. Health facilities in New Amsterdam and West Demerara were renovated and a sanitary block was constructed at the facility in Suddie. Health posts at locations such as Hotoquai, Aruka, Hosororo, Capoey, Aurora, Richmond in Leguan, Kamana, Itabac, Kopinang, Yakarinta, Katoka, Tupunau, Great Falls and Malali were either constructed or refurbished. Medex and nurses’ quarters were constructed at Baramita, Mora Point, Enachu and Sand Creek, and an X-ray room was built at Port Mourant. 

3.30 In the education sector, the expansion of technical and tertiary education was further enhanced with the construction of a new Technical Institute in Essequibo and the completion and opening of the Berbice Campus of the University of Guyana.  The third phase of the National Library was completed and the new wing was formally inaugurated. Several nursery, primary and secondary schools were refurbished and some new ones, for example, at Beterverwagting and Plaisance, were constructed.  The St. Margaret’s Primary School and the Queenstown Primary School in Regions 4 and 2, respectively, were also completed. Another seven schools were completed in Regions 3 and 4 while the construction of twelve schools was started in Regions 4, 5, 6, and 10. The rehabilitation of an additional thirteen schools under the Primary Education Improvement Project commenced.

3.31 In addition, twelve schools were refurbished under Phase 2 of the Secondary School Reform Project.  These were Cotton Field Secondary, L’Adventure Secondary, Fort Wellington Secondary, Vryman’s Erven Secondary, Belladrum Secondary, Uitvlugt Secondary, New Campbellville Secondary, Dolphin Secondary, Tucville Secondary, Manchester Secondary, Mc Kenzie High and Annandale Secondary.  Also, it was during this period that the Stewartville Secondary School was completed. 

3.32 Mr. Speaker, we did not invest only in the physical infrastructure in education.  In fact, much of the investment in this sector was focused on improving the quality of education. To this end, teacher training and learning strategies, testing and assessment, textbook development, library and laboratory facilities, and curriculum reform facilitated an improved learning experience.  Most important, for the first time in Guyana, the teaching of Information Technology was introduced into the primary and secondary school system.

3.33 In the third priority area, water and sanitation, the Georgetown Sewerage and Water Commissioners supplied and installed water metres in Lamaha Gardens, Prashad Nagar, Alberttown, Queenstown, Kingston, Bourda, Bel Air Park, and the eastern sections of North and South Ruimveldt.  One well was drilled in Tucville, bringing relief to the residents of Tucville, La Penitence, Lamaha Park, and Meadow Brook Gardens.  Some residents of North and South Ruimveldt also benefitted from a water distribution system that was installed during this period. The drive to provide potable water to every home and to every Guyanese, whether on the coastland, riverain communities or the hinterland region, continued with the installation of integrated water systems at Pouderoyen, New Amsterdam and Rose Hall. Numerous stand-alone hand-pumps, windmills and other generation facilities throughout the riverain and hinterland areas were provided.

3.34 Mr. Speaker, nearly 22,500 house lots were distributed and 22 new housing schemes were established last year. Further, 5,472 land titles were granted and 62 squatter settlements were regularised in the more densely populated areas of Regions 3, 4 and 6.  In Region 3, fourteen squatter settlements in Tuschen, Zeelugt Scheme, Meten-Meer-Zorg and Crane, were reorganised and upgraded. In Region 4, twenty-eight areas, including Martyrsville, Sophia, Block 2 Enterprise, and Enmore/Hope. In Region 6, twenty settlement schemes were completed. In addition, about 76 miles of road were either built or upgraded and 75 miles of pipelines were laid in these areas.  Housing schemes were also developed in a number of areas.

3.35 In agriculture, investment focused on upgrading farm to market roads in several areas, including Nos. 70 and 71 Villages, Mahaicony River, De Hoop Branch Road, Charity/Supenaam, Coglan Dam, Windsor Forest and Parika Back Dam. In addition to massive improvements in the drainage and irrigation infrastructure, especially along the coastal belt, works were also undertaken in Regions 3, 4, 5, and 6. Specifically, 200 miles of canals were maintained in Cane Grove, Ann’s Grove, Clonbrook, Two Friends, Beehive, Nabacalis, Plaisance, Belfield, Mon Repos, Buxton/Friendship, Beterverwagting, Triumph, Garden of Eden, Craig, Canals Nos. 1 and 2, Windsor Forest, Den Amstel,  Parika, Liverpool, Nos. 52 – 74 Villages, and Black Bush Polder. Thirty-four miles of conservancy embankment from Nancy to Madewini were constructed. Three sluices were constructed – one at Georgia and two at Canals No. 1 and 2 Polder.  Additionally, 12 sluices were rehabilitated in areas such as La Retraite, Hope, Essex, Nos. 65, 67, and 73, and Unity. 

3.36 At the same time, numerous feeder and community access roads either were upgraded, constructed and/or re-constructed.  Our roads rehabilitation programme has positively affected residents in communities such as Nurney, Mara and Whim in Region 6; Champagne, Bath and Bush Lot in Region 5; Buxton, Enmore and Peter’s Hall in Region 4; and Harlem, Windsor Forest and Pouderoyen in Region 3. More than $2 billion was spent on road rehabilitation and construction works in Regions 2, 4, and 10.  The stretch of road from Anna Regina to Hampton Court was completed. The Main Road Rehabilitation Programme, Lot 2 - from Georgetown to Mahaica - was completed in 2000. Work on the Linden/Soesdyke Highway was completed. The project was extended to include Burnham Drive, the road to Christianburg cemetery, and the One Mile/Wisroc Road in Linden.  Maintenance work was carried out on the West Berbice, East Bank Demerara and West Coast Demerara main Roads. In the City, work was completed on streets in Kingston, Cummingsburg, Campbellville, West Ruimveldt and Tucville.

G. Review of the 2000 Policy Agenda

3.37 Mr Speaker, in spite of the difficulties encountered on the domestic and international fronts, the Government continued the task of moving the economy forward in 2000, and, in this regard, was able to realise success in the implementation of policies and programmes.  

1. Commitments from the Government/Private Sector Engagement

3.38 Progress was made in the implementation of the commitments made at the conclusion of the historic business summit between the Government and the private sector, in October 1999:

  • In the case of the establishment of a development bank, a concept paper was developed by the Guyana Manufacturers’ Association (GMA) and submitted to the Government. Subsequently, in September, a memorandum of understanding was signed between the GMA and Development Finance Limited of Trinidad and Tobago to establish a development bank in Guyana. Once operational, this bank would be an important source of financing for small and medium-sized enterprises in manufacturing, commercial and industrial services, agro-industry, private health care facilities, and tourism. The Government has already signaled its intention to provide the necessary incentives to the bank.

  • With respect to housing and funding the Tourism Authority, a building was identified and approaches made to obtain financing for its rehabilitation. A subvention of $20 million was provided in the Budget, in anticipation of the start-up of the Authority. However, the legislation establishing the Authority was delayed because of the heavy legislative agenda, in particular those related to Constitutional Reform.

  • On the subject of the decentralisation of land administration, the Act establishing the Guyana Surveys and Lands Commission, as an autonomous body, was passed and technical assistance was provided by the United Kingdom to help operationalise the agency. The new entity, which will be responsible for land management, land use planning and information systems, came into effect on June 1, 2001.

  • With respect to tax administration and reform, the Guyana Revenue Authority started operations in January 2000, while the study on value added tax (VAT) was circulated to the private sector. A seminar to expose the public to the VAT and its application was held two days ago.

  • A Small Business Development Act has been drafted and after consultations, it will be tabled in the National Assembly.


2. Debt Reduction and Management

3.39 Mr Speaker, after intense negotiations, the Boards of the International Monetary Fund (IMF) and the World Bank approved the Interim Poverty Reduction Strategy Paper (IPRSP) and the second year annual arrangement under the Poverty Reduction and Growth Facility (PRGF), in November 2000.

3.40 The approval of the second year programme resulted in the immediate release of US$9 million in balance of payments assistance. Also, it served as an important benchmark for the consideration of Guyana for the Enhanced Highly Indebted Poor Countries’ (E-HIPC) initiative. In this regard, Guyana reached the decision point of the E-HIPC initiative, becoming only the second country in Latin America and the Caribbean to be so considered. This means that Guyana stands to benefit from debt relief of US$590 million over the next 20 years. This is in addition to the US$440 million that was secured under the Original HIPC initiative. The Government is working with the international donor community and a wide cross section of Guyanese, through broad-based consultations, to fulfill all the conditions necessary to reach the completion point. 

3.41 Mr Speaker, mindful of the increased access to, and utilisation of, foreign sources of financing by the private sector, the Government hosted the first Sensitisation and Private Sector External Debt Workshop, in February 2000. This workshop formed part of a capacity-building programme for the efficient management of the country’s debt. It sought to build on previous initiatives, such as the National Debt Strategy Consultations, in September 1999, to strengthen cooperation between the public and private sectors in monitoring private capital flows and private sector external borrowing.

3. Privatisation and Public Sector Reform

3.42 The Government completed the sale of 70 percent of Guyana Stores Limited. In October, a contract was executed with a Chinese company for the leasing of the dyeing and printing sections of Sanata Textiles Limited. The company will be investing about US$10 million in the new entity. Also, the point of sale for 90 percent of the shares of GNCB Trust was achieved. Further, the valuation of GNCB prior to its eventual sale was completed. In addition, several properties were advertised and sold during the year, in the process netting over $370 million. Work has started on the creation of a national assets register.

3.43 In the area of public sector reform, the Government completed a major exercise in its on-going efforts to outsource those services that can be competitively provided by the private sector. In this context, the services of nearly 1500 security guards were severed. They received severance payment that was in excess of the legal requirement and all superannuation benefits due to them. The unions representing the guards formed a new security and domestic services company that was contracted by the Government.

3.44 Also, Mr Speaker, the second phase of the computerisation of the Government Payroll and Pension Systems was completed. So far, 75 percent or 35,000 monthly-paid employees have been captured on the new Payroll System. The Government intends to expand this project to include all weekly and fortnightly-paid workers.
3.45 Mr Speaker, the modernised Pension System now facilitates the speedy processing of over 7000 Government pensioners. Other reforms in financial management that were pursued included the initiation of the second phase of the CIDA-financed Guyana Economic Management Project (GEMP); and the implementation of a data warehouse to facilitate macroeconomic forecasting and human resource analysis for public service management.
 

4. Institutional Developments in the Financial Sector

3.46 The Government continued with its plans to build institutional capacity in the financial sector. Among the actions taken in 2000 were the enactment of the Money Laundering Prevention Bill No. 10 of 1998, whose intention is the prevention of money laundering and related activities; and the passage of the New Building Society Amendment Bill, which is intended to provide easier access to mortgage financing. Together with the Income Tax (Amendment) Act 2000, which provides for lower tax rates to financial institutions that grant mortgages, these measures would have a positive effect on the housing drive. An agreement to establish the first Merchant Bank was signed in June.