Government will have access to US$607m to spend this year from this country’s Natural Resource Fund (NRF) as it recently received US$74M on its last 1 million barrels of oil for 2021.
The Bank of Guyana Report on the NRF for the month of December shows that the closing balance of the account was US$607,646,570.
This newspaper understands that Guyana received US$74 per barrel of oil equivalent on its last lift.
On December 30th 2021, President Irfaan Ali assented to the controversial Natural Resource Fund Bill, paving the way for the extraction of the entire amount to be deposited in the Consolidated Fund for budgetary use. On December 31st 2021 Senior Minister in the Office of the President with responsibility for finance Dr Ashni Singh promulgated an order setting the commencement date for the Act as January 1st 2022.
Questions have been raised about the implications of injecting this large sum into the economy.
The PPP/C government had ignored calls from civil society and an in-House protest from the Opposition to send the controversial Bill to a Special Select Committee for debate and consultations. The bill was passed on December 29th 2021.
Now, government can withdraw the entire amount attributable to the fund.
According to Clause 17 of the NRF Act, “In the fiscal year that this Act comes into operation, notwithstanding the provisions of subsection (1) and of the First Schedule, the ceiling on the amount that may be withdrawn shall be the total balance accumulated in the account …as at the date the Act comes into operation.”
The First Schedule sets out the ceiling on annual withdrawals.
Rules for withdrawing from the fund have changed significantly but are clear on specific amounts, as the bill says that the APNU+AFC Act that was repealed was flooded with technical accounting jargon which left the amounts that could have been spent subject to the Minister of Finance as he would have determined how much the “fiscally sustainable amount” would be. The current bill sets out withdrawal in tranches calculated on the total in the Fund at the time.
And while the money is available for withdrawal, there has been no update on how soon the governing Board of Directors will be set up.
Modalities
This newspaper understands that the Private Sector Commission (PSC) has formally received correspondence to select and submit their nominee and they will today meet to “discuss the modalities” for that process.
PSC Chairman Paul Cheong told Stabroek News that the body will act as quickly as possible given the serious nature of the process.
President Ali on Tuesday said the nation would be surprised at how soon the Board would be constituted although he skirted questions on how he would select its members.
The bill in Section 5(2) speaks about who the directors shall be explaining that they “…shall be elected from among persons who have wide experience and ability in legal, financial, business or administrative matters, one of whom shall be nominated by the National Assembly and one of whom shall be a representative of the private sector.”
It means that the President can select one director and possibly three in his own deliberate judgement.
Nowhere does it outline who determines the eligibility of the directors for selection. This has been a sore point of contention since the government published the bill and a point that it has consistently failed to address during its defence campaign.
When asked about whether he has commenced the process of selecting the directors, the President on Tuesday said that he has been looking at names and that the appointment of the Board is considered to be a matter of urgency.
Following his response on the examining of names for the board, Stabroek News pressed to get clarity as to where the members would be coming from.
President Ali responded “I am the President. I am entrusted with a responsibility. I was elected by the people of this country and if I was elected by the people of this country, I was elected based on a programme, on the manifesto that I have to implement because that is a social contract between myself and the people. I think that the people have entrusted me with responsibility and I intend to execute (that) responsibility with great honour, dignity and integrity and you would see that in the Board.”
