Dear Editor,
There has been calls by the Opposition, and other sources, for the PPP/C government to delay the enactment of the NRF Bill to allow for more engagement with stakeholders. The government contends that any further delay would impede their development priorities that they had been set out in their manifesto, and which forms part of their covenant, with the Guyanese people. They need access to NRF finance to fund vital physical and social infrastructure projects, including those that address the green economy, and to incorporate such funding into the 2022 budget, that would be tabled soon in Parliament. Delaying further, the passage of the NRF Bill, would have frustrated the government’s development agenda, and violate their covenant with the people.
The PPP/C’s NRF Bill builds upon the APNU+AFC NRF Bill. It was not the case where the PPP/C government discarded the provisions of the APNU+AFC NRF Bill. Structurally, in terms of layout, there are more similarities than differences in the provisions of the APNU+AFC and the PPP/C NRF Bills. Both draw heavily from the Santiago Principles in formulating their legal, governance, institutional, investment, and financial framework to achieve transparency, accountability, and a fiscally sustainable NRF. Both Bills set out the Bank of Guyana as being responsible for the operational management of the NRF. And their reporting requirements on the disposition of Natural Resource funds are equally strong, (deposits to be made into the Consolidated Fund) while they share a similar view on the purpose and use (for development and natural disasters) of the NRF.
An analysis shows that over 70% of the APNU+AFC NRF Bill have been retained or incorporated into the PPP/C’s NRF Bill. And the APNU+AFC’s NRF Bill/Act was in the public domain for three years and it involved extensive consultations. Thus, Guyanese would have been acquainted with its provisions. What some stakeholders have been asking therefore, was for more time to focus on the other 30% of the PPP/C’s NRF provisions that cover broadly the following areas: governance model, institutional framework, and NRF withdrawal formula. How the NRF is managed, and its funds are withdrawn plus the amount, are what produce differences. The PPP/C does not want a government minister to manage the NRF. In the APNU+ARC model the Minister is vested with the power to manage the funds.
Under the PPP/C government, the NRF would be managed by a Board of Directors (BoD) comprising 3-5 members appointed by the President (with at least one member appointed from the National Assembly and one from the Private Sector). It is argued that this BoD would, theoretically, be more influenced by professionalism than by political considerations. President Irfaan Ali has assured that the BoD would be politically neutral. The BoD is responsible for managing the fund, including review and approval of policies, as well as, reviewing what is a fiscally sustainable amount that could be withdrawn for physical and social infrastructure projects, inclusive of other projects related to the green economy. Another area of concern is to determine an appropriate formula to tap into the Natural Resource Fund. The APNU+AFC developed a complex formula which is hard to decipher, and which is not amenable to any rational calculus. How the APNU+AFC Minister arrives at a fiscally sustainable amount is enigmatic.
The PPP/C has developed a simple model which, they say, anyone could understand. The government could draw down 100% on the first $(US) 500 million; 75% on the second $(US) 500 million; 50% on the third $(US) 500 million; 25% on the fourth $(US) 500 million; 5% on the fifth $(US) 500 million; and 3% of any amount in excess of the first $(US) 2.5 billion. How would further stakeholder engagement alter this funding configuration? With regards to the Governance and Institutional framework, The PPP/C NRF Bill caters for a 9-member “Public Accountability and Oversight Committee (PAOC),” to be drawn from among religious bodies, the private sector, organized labor, profession, and the National Assembly.
The APNU+AFC NRF Bill requires a 22-member PAOC, representing a broad cross section of the population, including geographic regions, to perform oversight functions. The PPP/C argues that a 22 member is too unwieldly. How further engagement could expand this level of representation? Who would have the final say in the size of membership? The 5-member APNU+AFC’s Macroeconomic Committee (MAC) has the responsibility for determining what ‘fiscally sustainable amount’ could be withdrawn from the NRF. The PPP/C removes this layer and assigns this task to the Board of Directors. The APNU+AFC Investment Committee (INVC) that would advise on the investment mandate comprises 6 members, compared with the PPPC’s INVC which comprises 7 persons. It is difficult to envisage what could change here by protracted consultations. The reporting protocols will help Guyanese to learn how efficient the working of the PPP/C NRF Act is. Any lapses and deviation from rules and protocols would have negative consequences at the next national and regional polls. Guyanese are watching! And so is the world!
Sincerely,
Dr. Tara Singh