Guyana's Election: Potential Outcomes and Their Implications

(PATRICK FORT/AFP via Getty Images)

A picture of the National Assembly building in Georgetown, Guyana, taken on Sept. 23, 2022.

Editor's Note: For significant elections, RANE publishes a series of scenario analyses focused on different outcomes of major elections, describing how an election outcome might unfold with implications for each potential outcome. In 2025 so far, we have profiled Germany, Canada, Australia, Poland, South Korea and Japan. We now profile Guyana.

Guyana's Sept. 1 general election will likely be a tight vote, given the country's polarized political environment and structural ethnic divisions between its Indo-Guyanese and Afro-Guyanese communities. Regardless of the outcome, the next administration will heavily rely on oil reserves to boost infrastructure and social spending and have the opportunity to build a long-lasting patronage network. Guyanese voters will pick legislators for all 65 seats of the country's National Assembly in a closed-list proportional representation model, with the candidate heading the list receiving a plurality of votes automatically becoming president for a five-year term. Incumbent President Irfaan Ali, from the People's Progressive Party/Civic (PPP/C), will rely on the popularity boost that followed abundant oil reserves in recent years to seek reelection. Meanwhile, challenger Aubrey Norton, the leader of the opposition in the National Assembly and of the People's National Congress Reform party (PNCR), has campaigned on corruption allegations against the government and promises to improve living standards. Running as an outsider, businessman Azruddin Mohamed will tap into voters' grievances with the political establishment to gain momentum, and while his newly founded We Invest in Nationhood (WIN) party could secure some seats, it is highly unlikely to be the most popular among the six parties running. Local polling is sparse, but disgruntled swing voters, especially from Amerindian backgrounds and the youth, could decide the close election.

If Ali and PPP/C remain in power, they would use growing oil revenues and the ongoing economic boom to improve the country's infrastructure; increase investment in other economic sectors, such as mining, sugar and agro-processing; and implement more social policies to increase education and productivity levels in the long term. A second Ali presidency would result in no major changes to existing oil and gas investment frameworks in place, though new agreements signed with oil companies may include ''ring-fencing'' and other provisions designed to increase state revenue. Nevertheless, Ali will maintain a mostly pro-business approach to policymaking, appeasing private-sector demands and using economic growth to remain popular.

If Norton and the PNCR-led A Partnership for National Unity (APNU) win, they will adopt a more populist government model, with increased social spending and reduced consumer taxes. To fund enlarged cash transfer programs and subsidies, Norton will engage with ExxonMobil to modify the company's 2016 production-sharing agreement (PSA), which included a 2% royalty, allowed cost recovery to reach 75% and exempted corporate income tax. While Norton will use these negotiations to demonstrate that he is being tough on the oil industry and defending Guyanese interests, the negotiations will likely result in no or very minimal changes, with negligible impacts for current oil and gas operations. Still, the government will implement a new PSA framework for future contracts, aiming to boost oil revenues. Norton's administration will likely lead to uncertainty among businesses in his first year in office and increase financial costs for companies operating in Guyana over the coming years as he reviews previous business deals signed by the previous Ali administration.

In a highly unlikely third election outcome, the newly-created WIN party and its presidential candidate win a plurality, making Mohamed the next president but almost certainly failing to secure WIN a legislative majority. A coalition government that includes members of the two more established parties is unlikely because of strong political divergences and limited incentives to support a controversial figure with little chances of success in government. Mohamed, a prominent Guyanese businessman whom the United States sanctioned in 2024 for alleged evasion of $50 million in taxes on the export of 10,000 kilograms of gold, will focus on strongly expanding welfare, building railroads and renewable energy plants, and increasing oil revenues by renegotiating existing contracts and ring-fencing all oil blocks. Nevertheless, his political inexperience will likely disadvantage his administration's agenda in the National Assembly, leading to legislative gridlock. Additionally, recurring threats of no-confidence motions and corruption scandals will fuel political instability, preventing an increase in business interest in Guyana over the coming years.

Ali and a PPP/C-Led Government

Ali and the PPP/C leverage the popularity large oil revenues have provided over the past five years to secure voter support and win most seats in the National Assembly. The second Ali administration continues implementing its pro-business economic agenda, which includes expanding infrastructure, reducing electricity costs and preventing increased social spending from resulting in a significant fiscal deterioration. The political stability and policy predictability, combined with comprehensive seismic studies of unlicensed blocks and data depositories, allow the government to carry out another oil and gas auction, helping increase Guyana's production and economic growth in the long run. The Ali administration concludes PSAs under the new terms agreed with the 2022 auction bidders, which increase the country's take from oil exploration compared with the 2016 framework. Aiming to diversify and boost the country's economy, the second Ali administration seeks to expand the gas-to-energy project by building a second power plant, laying the foundation for Guyana to start exporting natural gas liquids to neighboring countries over the coming decade. Separately, the government seeks to boost investment in other sectors, including the agricultural, agri-processing and mining sectors, by making more land available and streamlining licensing procedures for small farmers and miners; providing tax incentives; building infrastructure, from roads to airstrips near production hubs; and providing equipment and material to incentivize these activities. The increased presence of multinationals, especially on Guyanese waters, leads to further support for the country in the territorial dispute with Venezuela, reducing Caracas' incentives to pursue an invasion of the disputed Essequibo region. Moreover, Ali leverages booming oil revenues to expand welfare programs, from stipends and pensions to public workers' wages and cash handouts. These programs consolidate his popularity and increase the likelihood that the PPP/C will remain in power in the long term as voters become less inclined to risk change, weakening the opposition indefinitely.

Implications

Even with a slim majority in the National Assembly, PPP/C legislators remain supportive of the Ali administration due to the government's popularity and strong likelihood of remaining in power in the long term. This unity limits the risk of an early election.
The PPP/C-led government ensures policy continuity, which increases the country's investment attractiveness and drives economic growth. In particular, there will be few to no changes to how oil and gas companies operate in the country, leading to investment growth in the oil and gas sector.
Although the Ali administration expands its influence over Guyana's democratic institutions and the media, and uses social programs to consolidate popular support, civil society and some independent oversight bodies still act as effective checks on the government in key occasions, preventing a significant deterioration of the country's democracy and providing businesses with a mostly fair but ineffective judiciary and dispute settling system.
Limited political instability, policy continuity and the passage of new laws to incentivize non-oil economic activities further drive Guyana's economy and local business growth, even as the rapid economic expansion of 20-60% seen annually from 2020-2024 slows down.
Ali's re-election only minimally impacts financial markets' outlook for Guyana due to the country's substantial economic growth and increasing oil revenues, which will help keep the debt-to-GDP ratio low; this is aided by the government's likely continued avoidance of corporate tax hikes and maintenance of mostly pro-business policies.
The government implements new social spending programs that include universal health vouchers, new house lots, free higher education tuition and minimum wage increases. It also disburses one or two rounds of cash transfers, ranging from $200,000 and $300,000 Guyanese dollars (about $960 to $1430) per household, and maintains Guyana's 14% value-added tax. Together, these measures help strengthen the domestic consumer market and appease popular discontent, limiting long-term risks of unrest.
The government creates an oil data repository, adopts increased national content requirements and implements the new production-sharing agreement terms agreed with the winners of the 2022 auction. This will ultimately boost government revenue in the long term, but ExxonMobil-led projects in the Stabroek block will still generate the bulk of Guyana's oil revenue in the short term. The government also carries out a second oil and gas auction by 2026 as a stable political and regulatory outlook draws significant interest from major oil and gas companies.
The government prioritizes the expansion of the gas-to-energy project and finishes the construction of a second power plant. This further reduces electricity costs and helps develop Guyana's non-oil sectors, such as agroprocessing and manufacturing, while also creating the conditions for the country to start exporting natural gas liquids in the long term.
The government completes the upgrade of major highways across the country's populated coastal plain, expanding the number of lanes and building new bridges. This helps connect urban and production centers to road and maritime logistics hubs, such as ports, airports and distribution centers, which improves the country's operational environment and helps companies reduce logistics costs and timeframes. But the focus on transport infrastructure comes at the expense of urban infrastructure initiatives, with the construction of hospitals and schools often being delayed or taking longer to be finished.
Domestic political stability and stronger ties with foreign governments improve Guyana's standing in the region and make it less likely that Venezuela escalates military threats against Guyanese territory. Even though Caracas continues to make rhetorical threats of annexing the disputed Essequibo region, support from allied governments, especially the United States, prevents Venezuelan military action. But skirmishes at the border and the harassment of oil and gas operations by Venezuelan vessels remain possible, posing limited risks to private sector assets.
The tight election and the government's slim legislative majority sustain an ethnic divide in Guyanese politics. While the vast majority of the Indo-Guyanese people (who comprise 40% of the population) support the government, most of the Afro-Guyanese community backs the opposition, while Amerindians and younger voters grow increasingly discontent with the political establishment, triggering rare protests.
Although the Ali administration adopts some measures to improve transparency and accountability, occasional corruption scandals and allegations of government contracts benefiting PPP/C allies continue to emerge, fueling social discontent and triggering occasional anti-government protests. Companies operating in Guyana also continue to face corruption risks, especially when doing business with the government.
Guyana gains geopolitical prominence on the back of its booming oil sector, as Ali successfully leverages the increasing presence of major foreign oil companies and other countries' larger diplomatic footprint in Georgetown to attract new investments and partnerships, particularly with the United States, France, Malaysia and Saudi Arabia.
Guyana's economic prosperity and improved socioeconomic indicators enable the Ali administration to further expand the country's influence in the Caribbean, resulting in bilateral or multilateral cooperation agreements that help improve Guyana's standing in regional organizations and receive support and legitimacy, especially regarding the dispute with Venezuela.
In South America, Guyana welcomes diplomatic support from countries like Brazil, but geographic and language barriers limit its regional integration. Guyana primarily develops trade and institutional ties with neighboring Suriname, which is experiencing a similar oil boom.

Norton and PNCR-led Government

A government led by President Norton and the PNCR-led A Partnership for National Unity (APNU) has many similarities with a PPP/C administration, focusing on expanding infrastructure and diversifying the economy, with the main difference being the adoption of more populist policies and the ambition to invoke Article 32.1 of the 2016 PSA to renegotiate terms with ExxonMobil seeking to increase government revenues. As president, Norton likely uses increased scrutiny and oversight over oil and gas operations to pressure ExxonMobil into agreeing to new terms and use these tactics to boost support among the population by allegedly defending Guyanese interests. But while this may enable Norton to boost domestic support by showing his commitment to defending Guyanese interests, the negotiations are unlikely to result in any meaningful changes to existing terms. Still, the government implements the new PSA framework for future contracts to fund a strong expansion of social spending, which would likely occur on the back of higher cash handouts, student stipends, public workers' salary increases and a reduction of the current 14% VAT for consumers to either 12% or 10%. To compensate, the government also increases corporate taxes. Norton's populist and less business-friendly approach marginally undermines business confidence in Guyana and reduces interest in upcoming oil and gas bidding rounds. But limited political instability risks, combined with the country's vast reserves, still secure enough bidders for the development of new oil and gas projects over his five-year term (even if from a smaller number of Chinese companies rather than Western firms). For businesses operating in non-oil activities, the PNCR-led government likely facilitates credit to local companies and provides subsidies and other regulatory incentives for sectors like agriculture and mining. The government also pursues measures aimed at improving Guyana's transport and electricity infrastructure to reduce operational costs, further helping secure private sector interest in the coming years, though it prioritizes urban infrastructure projects, such as hospitals and schools, to appease voters' demands.

Implications

While the PNCR-led government's likely reliance on a coalition with other small parties increases the risks of defection and the approval of no-confidence motions, such risks are only likely to emerge during crises stemming from high-profile corruption scandals or highly controversial government decisions. This is because coalition members will seek to avoid triggering an early election that could result in the PPP/C's return to power, which will keep overall political instability and business uncertainty relatively low.
To fund expanded social spending, the government increases corporate taxes, which raises financial costs for oil and gas companies but does not prevent new investments and the expansion of production as the administration avoids unilaterally altering existing contracts.
Despite its pledges to strengthen oversight bodies, the Norton administration's increased social spending gives it greater control over civil society and media, leading to increased political interference within Guyana's bureaucracy, along with weaker checks and balances. This erodes business confidence in the country's judiciary and complicates dispute resolution.
The government implements policies to support the expansion of agricultural and mining activities, but the significant expansion of social spending and occasional political crises limit economic growth potential.
The government adopts a lax fiscal policy and raises taxes on companies to fund expanded social programs, raising doubts over the long-term sustainability of its policies. But rapid oil revenue growth mitigates significant financial risks, protecting businesses from drastic currency fluctuations or high interest rates that would raise credit costs domestically.
The government significantly expands existing social policies, including housing programs, child allowances and student stipends, along with subsidies on rent, mortgages and utilities bills. It also reduces Guyana's 14% value-added tax to 12% or 10% and disburses yearly cash transfers between $200,000 and $300,000 Guyanese dollars (about $960 to $1430) per household. These measures increase available income and favor real estate and consumer-oriented companies in the country.
The government seeks to engage ExxonMobil in a revision of the 2016 PSA and steps up oversight, occasionally using audits, inspections and its newly established Petroleum Commission to pressure the company. However, the negotiations do not lead to any major contract changes. The Norton administration also carries out a second oil and gas auction by 2027 with new terms that increase royalties and other payments, which still draws significant interest from bidders due to Guyana's vast resources and limited political instability outlook.
The government works with the private sector to finish the initial gas-to-energy project, but its plans do not include a second phase with an additional power plant. This limits the project's impact on further reducing electricity costs, slowing the expansion of non-oil activities over the next five years while constraining Guyana's gas export potential over the coming decade.
Although the Norton administration builds some transport infrastructure and improves highways, it prioritizes the construction of hospitals and schools and other urban infrastructure in Georgetown and Linden to boost its popularity. This focus leads to delays or sidelining of key business logistics projects, resulting in ongoing operational challenges and increased financial costs for companies in Guyana.
The PNCR-led government's somewhat tense relations with the private sector undermine its diplomatic relations with other countries, including the United States, which Venezuela exploits to make occasional rhetorical threats of annexing the Essequibo region. This raises the risk of occasional border clashes, but the U.S. military presence in the Caribbean helps deter Venezuela from harassing oil and gas assets or launching territorial incursions.
The election of an ethnically diverse administration — with President Norton being Afro-Guyanese and Vice President Ganesh Mahipaul being Indo-Guyanese — fails to ease social tensions and polarization, thus preserving the country's structural ethnic divide. This sets the stage for limited anti-government protests and enables the opposition PPP/C, with support from most of the Indo-Guyanese population (nearly half the country), to remain competitive.
The Norton administration adopts strong anti-corruption rhetoric and launches investigations into the decisions of the previous administration. But it fails to implement robust anti-graft measures or structurally improve oversight institutions, leaving companies exposed to bribery and other compliance risks when dealing with the government.
The oil boom improves Guyana's international standing, which Norton tries to leverage to foster cooperation with developing countries in Asia and Africa. However, his policies are less business-friendly than those of his predecessor, occasionally creating diplomatic hurdles with the United States, France, Malaysia and Saudi Arabia — the countries of origin for the major oil companies planning long-term operations in Guyana.
The Norton administration will reinstate the position of High Commissioner to the Eastern Caribbean, in an effort to consolidate Guyana's regional leadership and garner support amid its territorial dispute with Venezuela.
Norton actively seeks to position Guyana as a bridge between the Caribbean and South America, but despite rhetorical efforts and occasional high-profile meetings, geographic and language barriers mean the country continues to have stronger ties to Caribbean islands than its continental neighbors.

Mohamed and a Minority Government

In this scenario, Mohamed is elected president, but his new WIN party fails to secure a legislative majority, ushering in a politically chaotic period with a high risk of early elections. Although Mohamed was previously a close ally of former President Ali, U.S. sanctions against Mohamed and his alleged involvement with Ali in a separate corruption scandal have since soured their ties, significantly reducing the likelihood of a governing alliance with the PPP/C. The PNCR also refrains from backing Mohamed in the hopes that it can return to power in early elections instead. As he faces these challenges, Mohamed tries to significantly expand Guyana's welfare system, focusing both on low-income families and the middle class, in an effort to forge a new social coalition that would enable his minority government to retain power despite the fragility of its political alliances. Mohamed also works to modify the 2016 PSA, establish a new framework that would generate more oil revenue for Guyana, and enforce strict ring-fencing rules for all oil blocks. Furthermore, his government focuses on developing wind and solar power to reduce electricity costs and enhance the reliability of Guyana's energy grid, while also seeking to expand the country's rail network for passenger and cargo transportation. But Mohamed's government faces significant challenges in implementing its ambitious policy agenda due to a weak coalition and limited legislative support. This increases the likelihood of no-confidence motions, potentially leading to policy instability or early elections. Furthermore, Mohamed's transactional leadership approach and disregard for institutional norms raise the risk of recurring scandals and political crises.

The fragile and unstable coalition that maintains the Mohamed-led government results in recurring impasses among allied legislators and occasional threats of defection to support no-confidence motions, fueling persistent political instability risks and deterring long-term investment.
Mohammed's personalistic leadership style and disregard for institutions lead to an increase in corruption, exposing companies to significant risks when doing business with the government. And while the government manages to increase control over the media and oversight institutions, occasional protests still occur.
Without a strong majority in the National Assembly, the government's efforts to deregulate the economy and encourage investment likely fail, reducing the likelihood of significant improvements to Guyana's business environment. Persisting political instability, policy uncertainty and legislative gridlock also impede the Mohamed administration's efforts to diversify the economy away from sugar and mining.
Mohamed appoints loyalists to key institutions and seeks to curb checks on the executive branch, while attempting to leverage government bureaucracy against political opponents as he relies on his personalistic style to remain in power at the expense of the country's institutions. This exposes companies — especially those doing business with the government or with Mohamed's private firms — to a biased judicial system, leaving them with very limited domestic resources to settle disputes.
While the expansion of social programs is one of the few topics with cross-party support, opposition lawmakers in the National Assembly still seek to water down any proposed subsidies, vouchers and cash transfers to prevent the Mohamed administration from gaining popularity This results in annual cash handouts being limited to $200,000 Guyanese dollars (approximately $960) per household, which sparks protests and risks of unrest due to the government's failure to fulfill its campaign promises.
The Mohamed administration tries to renegotiate Guyana's 2016 PSA with ExxonMobil to secure increased royalty payments and additional revenue, but the company resists changes to the current agreement (which includes a 2% royalty, permits cost recovery up to 75% and exempts corporate income tax). To increase pressure on ExxonMobil, Mohamed potentially resorts to threatening fines, license alterations or other bureaucratic measures. This increased contractual risk — combined with ongoing political instability, pervasive corruption and the Mohamed administration's lack of governing experience — deters interest from some major Western companies in future Guyanese oil and gas auctions, though this also creates room for oil companies from countries like China to significantly expand their presence in the country.
Without a majority in the National Assembly, the government struggles to even pass legislation related to oil and gas exploration, which results in work related to the gas-to-energy project being postponed indefinitely. The government also only makes limited progress on its plans to boost renewable energy, leaving companies in Guyana exposed to intermittent power outages and high electricity costs.
Major infrastructure projects face significant delays and cost overruns due to widespread corruption and the governing inexperience of Mohamed and his WIN party, hindering Guyana's operating environment.
Efforts to improve the country's digital infrastructure and digitalize government services make some headway, but it is a slow process, leading to persistent bureaucratic hurdles for businesses.
Venezuela leverages the weak Guyanese government to take action on its claims over the Essequibo region by increasing its military presence near the border and carrying out recurring maritime activities on Guyana's exclusive economic zone (EEZ). While occasional territorial incursions fuel diplomatic rifts, disruption to oil and gas production and shipment remains limited due to U.S. support for Guyana.
Although Mohammed campaigned on people's discontent with Guyana's structural ethnic divide, he received most support from the Indo-Guyanese population in the election. As president, he struggles to significantly reduce social and cultural barriers between the country's main social groups, sustaining Guyana's political divide along ethnic lines. This emboldens the opposition and leads to demonstrations against his controversial administration.
U.S. sanctions targeting Mohammed significantly undermine his administration's relations with the United States. Other Western governments and companies also exercise greater caution in their dealings with the Guyanese government due to increased compliance concerns, hindering transnational partnerships and major investment announcements outside of the oil and gas sector.
Although Mohamed seeks to strengthen Guyana's international standing, especially within the Caribbean, recurring scandals involving his administration and his often unorthodox approach to institutional and diplomatic practices deter most regional leaders from engaging in partnerships with Guyana, further curbing cooperation and investment opportunities beyond oil and gas.
Mohamed develops closer ties with Latin American leaders who have similar leadership styles, including El Salvador's Nayib Bukele and Ecuador's Daniel Noboa. This results in isolated partnerships focused on security and fighting drug trafficking, with limited economic cooperation.