The government on Wednesday met with a delegation of major US and Global Fund managers and discussed among other issues, the potential investment power of this country’s Natural Resource Fund (NRF) but said that it would not be ready until sometime between 2028 and 2030.
“We discussed the future growth of our markets for the management of the funds in the oil and gas sector but this is not for now; it’s [for] the coming years. Right now we are not receiving a lot of money. The Fund is not a big Fund. By 2027, 2028, 2029, 2030, that is when large sums will accumulate in the fund,” Jagdeo on Thursday told a press conference he hosted.
“So we need to strengthen the capability of the Board of Directors and the management system there; the ones under the NRF. So it was a broad ranging discussion about Guyana and greater financial sophistication in the future, which is necessary if we are going to grow,” he added. The Bank of Guyana says that the NRF’s closing balance at the end of May this year was US$1,566,262,190.03. Of this amount, US$257m was available as of January 1st this year for investment for future generations. It is this segment of the fund that the fund managers will be keen on.
The NRF Board has determined that the monies in the Fund will go towards “very safe investments” in the form of nightly deposits at the account of the US Federal Reserve Bank in New York.
On his Facebook Page on Wednesday, the Vice President noted that he had held a “Meeting with a team of investors from several of the major US and Global Fund managers group today”.
“The visitors represented the Bank of America, Hess Corp, Capital Group, MFS Investment Management, Aristotle and Black Rock among other corporations,” he informed.
Jagdeo made it clear that the group came on their own because of the nature of their work and that they wanted to see firsthand what the financial climate here was like.
Impressed with the financial wherewithal of combined group, Jagdeo said that it was heartening to know that these firms have an interest in this country and foresees more interest being triggered as Guyana’s economy grows.
“We met with an impressive group. They probably have maybe US$1 trillion in management. It was a very high powered group. We were pleased that these groups are coming to Guyana looking for financing opportunities and possibly later maybe equity opportunities in the country,” he explained.
He further added, “They didn’t come at our invitation, they came because they wanted to explore the climate here in Guyana. The reach that they have globally is a major one and so right now we are starting to emerge into those global circles where major things happen.”
And with oil being this country’s main revenue earner, Jagdeo said that industry along with others that government plans to use the monies to invest in were discussed.
“We explained a lot about the industry what our plans are for the oil and gas industry, what our plans are for infrastructure development, social services, new industries in agriculture, manufacturing… addressing issues of cross border trade, our international relations, financing options, [and] strengthening management capabilities . I spoke about the deepening of our financial systems here in Guyana that is to bring greater competition, not because they will participate in it but we have not given out a new commercial banking license since I was Minister of Finance which was a long time back,” he said.
“We are looking to deepen our financial system to make more investable capital available in Guyana, not for the government necessarily, but for the private sector too. We believe these companies are on the cutting edge of global finances and many of the tools that they use like the derivatives market etc., these are very complex but can be adapted to make the instruments in Guyana, the financial instruments, more attractive to lots of our companies. Right now it is just a very straight forward loan. So a lot of them could probably get involved in the equity side by understanding companies take an equity share. But also to make other forms of financing that are differently structured that will make long term investments [and] enable long term investments at a more competitive interest rate that would be needed here,” he added.
An Office of the President statement said that the large delegation spoke to the Head of State about potential investment opportunities, and highlighted their areas of expertise, while they enquired about the Government’s vision of the country and ways they can participate in the overall development.
