Analysis of expenditure
Introduction
Based on the priorities of the Government as set out in its Policies and Targets, the Cabinet, which recommends the Estimates, seeks the approval of the National Assembly for the allocation of the funds. As the pie chart above shows, spending is done by Budget Agencies including Ministries and Departments, Constitutional Bodies, Regions and via subventions and subsidies made through various Ministries. Certain spending is automatic and does not require parliamentary approval: as the Constitution states, these are direct charges although in many cases, the actual amount is often a matter of some negotiation. In this section, we look at the allocations to the principal Budget Agencies largely by examining the details contained in Volume 1 of the National Estimates.
In order of spending, the top five Budget Agencies are the Ministry of Health, the Ministry of Finance, the Ministry of Home Affairs, the Ministry of Education, the Guyana Defence Force followed by the Ministry of Agriculture.
Ministry of Health
The Ministry of Health has eight programmes for which expenditure of $33,797 million is allocated. The single largest Programme is Regional and Clinical Services expected to spend $21,030 million. The two largest items of expenditure are wages and salaries of $5,604 billion and subsidies and contributions to local organisations amounting to $11,810 million, principally to the Georgetown Public Hospital Corporation. This Ministry will employ 4,257 persons of which less than 20% are contract employees.
Ministry of Human Services and Social Security
The Ministry has three Programmes for which is budgeted to cost $26,218 million. Of the three Programmes, Programme 392 Social Services is apportioned $25,067 million of the total budgeted. Under this Programme, Old Age Pensions and Social Assistance makes up the single largest item of expenditure of $23,590 million or 94% of the amount apportioned.
Ministry of Finance
The two Programmes under the Ministry of Finance are Policy and Administration and Public Financial Management Policies and Services for $21,061 million and $12,203 million respectively. The two largest items of expenditure of policy and Administration are Other Employment Costs and Subsidies and Contributions to Local Organisation. The principal subvention recipient of the Ministry of Finance remains the Guyana Revenue Authority which is slated to receive 84.4% of the Ministry’s subvention budget. Under Program 32, the major expenditure are statutory pension and gratuities of $5,774 million and provision for pension increases of $4,362 million.
Ministry of Home Affairs
The Ministry of Home Affairs has six Programmes, budgeted to cost $20,321million. Of this sum, the Guyana Police Force accounts for 71% or $14.385 million, of which wages and salaries account 52%. Of the balance, Overhead Expenses account for $2,923 million and Transport, Travel and Postage account for $1,983 million.
Ministry of Education
The allocation for the Ministry of Education is $19,789 million across six programmes including one each for Nursery, Primary, Secondary and Post-secondary education. Secondary Education is allocated $5,347 million while Post-secondary education and Primary are allocated $4,834 and $4,592 million respectively.
Ministry of Agriculture
The Ministry of Agriculture is allocated a total of $11,313 million across four programmes, the largest of which is Agriculture and Development and Support Services which is allocated $9,677 million or 86% of the total allocation. Out of this, the National Drainage & Irrigation Authority (NDIA) receives $6,615 million and the National Agriculture Research Institute receives $1,218 million.
Ram & McRae Comments
On our understanding of the law, is that it provides that the payment of the Old Age Pension be means tested. If this payment was targeted, genuine recipients could see their payment increased substantially.
Capital Expenditure
Central Government’s capital expenditure for the year is budgeted at $103.2 billion or 27% of the total budget expenditure. The allocation is 35.6% above the latest estimate 2020 and 55.8% above 2019 capital expenditure.
The top five allocations from the Capital Budget are discussed below.
Ministry of Public Works
Under Public Works there are six major road projects. A sum of $1.06 Billion is budgeted for the design and construction of road link between East Coast and East Bank. For the completion, construction and rehabilitation of roads and drains in Regions 1, 2, 4, and 6-10 an amount of $1.1 Billion is budgeted. Completion, construction and rehabilitation of sea and river defences and payment of retention has a budget of $3 Billion. For the construction of a ferry vessel and rehabilitation of stellings at Kumaka, Morawhanna and Port Kaituma an amount of $1.2Billion is allocated. The CJIA Modernisation Project is allowed a budget of $2.5 Billion for two boarding bridges, two fixed links and completion of facilities.
Ministry of Finance
The Ministry of Finance is budgeted to receive $11,677 million across two Programmes, under Programme 31 Policy and Administration, $11,586 million or 99% of the total is allocated. The two largest allocations under this Programme are $8,085 million or 70% towards the Project – Low Carbon Development Programme. The project also entails renewable energy interventions and $1,300 million to the Guyana Revenue Authority (GRA) for revenue management system, buildings, software, vehicles, furniture and equipment.
Ministry of Housing and Water
The Ministry of Housing and Water is allocated a total of $8,918 million.
Ministry of Agriculture
A budget of $8,177 million is being allocated. Under which 7,374 million or 90% Is being apportioned to Programme 212 Agriculture Development and Support Within this Programme, $3,250 million is being allocated for completion, construction and rehabilitation of drainage and irrigation structures and pump stations. Also falling under the agricultural development and support services is a provision of $432 million for rural agricultural infrastructure development. There is a contribution to GUYSUCO of $2 Billion which is $5 Billion lower than the latest estimate for 2020 of $7 Billion. In addition, a sum of $832 Million to the Integrated Agriculture Development Programme for enterprise and agriculture development initiatives.
Office of the Prime Minister
The Office of the Prime Minister is allocated a sum of $5,690 million of which $4,934 million or 87% is apportioned to Programme 23 Power Generation. Under this programme, $1,800 million is being spent on institutional strengthening and upgrading of electrification systems.
Ministry of Education
The Ministry of Education is budgeted to receive $5,456 million. Policy Development and Administration, Secondary Education and Post-Secondary/Tertiary Education are the three largest programmes apportioned $1,650, 1,293 and $1,285 million respectively or 77%.
Ministry of Health
The Ministry of Health has eight programmes for which expenditure of 5,291 million is allocated. The two largest Programmes are Disease Control – Communicable Diseases of $2,128 million and Regional and Clinical Services of $1,878 million. Under the programme ‘Disease Control – Communicable Diseases – $1,750 million is apportioned towards the project titled ‘COVID-19 Response Programme’, for the reduction of transmission of the disease and adverse effects on citizens. Major project allocations under the Programme ‘Regional and Clinical Services’ would include Ministry of Health – Buildings, GPHC, Equipment – Medical and Modernisation of Primary Health Care System of $370, $600, $450 and $350 million respectively.
Other Capital Expenditure worthy of note include:
– Ministry of Local Government and Regional Development of $2,680 million,of which $2,519 million or 93% is allocated to Local Government Development;
– Ministry of Amerindian Affairs of $1,577 million, of which $1,543 million or 97% is allocated to Community Development and Empowerment;
– Ministry of Tourism, Industry and Commerce of $920 million, of which $883 million or 96% is allocated to Business Development, Support and Promotion;
– Ministry of Human Services and Social Security of $3,307 million, of which$3,171 million or 95% is allocated to Policy Development and Administration;
– Ministry of Home Affairs of $4,093, of which $2,273 56% is allocated to the Guyana Prison Service.
An analysis of expenditure per person using the 2012 Census as the basis is as follows:
Source: Budget Estimates, Volume 1, Table 5 and Census, Bureau of Statistics.
The region with the highest capital expenditure is understandably Region 4 which accounts for approximately 42% of the population.
Although Region No. 4 appears to receive the lowest direct allocation per person, agencies such as the Georgetown Public Hospital Corporation (GPHC) are located in this region and receive allocations outside of the regional administration. The GPHC is slated to receive $11.8 billion, an increase of 10% over the revise figure for 2020 of $10.7 billion.
