The Ministry of Finance (MoF) has expressed its disagreement with the views and criticisms of the National Budget 2024 by accounting firm, Ram & McRae, in its publication, Budget Focus 2024.
A summary of the Budget Focus was published in last Saturday’s edition of Stabroek News.
In a release yesterday, the MoF rebutted the accounting firm’s claims, while accusing it of drawing “sweeping conclusions” which lacked rigorous analysis and ignored the “facts on the ground.” It also described the publication as an attempt to obscure the fact that the Budget builds on a strong foundation of responsible fiscal management by the PPP/C Government as it moves forward with its plan to “Stay the Course and Build Prosperity for All.”
The MoF began by addressing the introduction on Page 4 which states, “The Government is clearly on a spending extravaganza, building without thinking, executing without planning and acting without analysis.” In response, the Finance Ministry opined that this statement “exposes the deliberate, baseless and disingenuous foundations of the entire report,” as it flies in the face of government’s clear articulation of its Vision, Strategy and Plans for the broad-based and sustainable development of Guyana. It stressed that the priorities of government’s strategy have long been identified through extensive consultative processes going back as far as the National Development Strategy, Poverty Reduction Strategy Plan and the PPP/C’s Manifesto. It contended that “exhaustive” efforts have been made in identifying projects including the New Demerara Harbour Bridge, Linden-to-Mabura Road, and the Corentyne River Bridge, noting that these projects “will transform the lives of the citizens, and with the improved access to resources, are now being implemented.”
Concerning Ram & McRae’s assertion that “If only 10% of this Budget is consumed in inefficiencies, that would be more than one hundred billion dollars,” the release referred to it as a “sound bite” without any basis. It also pointed to the APNU+AFC, “whose pre-occupation was the preparation of plans and studies and not actually executing projects.
In its pushback against Ram & McRae, the release referenced the International Monetary Fund’s (IMF) 2023 Article IV Consultation report published in December 2023, which commended the Government of Guyana on the progress made on many fronts, including the implementation of policies and initiatives geared at transforming Guyana’s economy. It highlighted the section of the report which stated, “Staff assess the 2023 policy mix to be appropriate, with fiscal policy increasing public investment to address the large development needs, and broad money growing in line with non-oil GDP.”
Debt management
In the area of Public Debt on page 12, Ram & Mc Rae had remarked, “The debt profile of Guyana is fast changing. The Charts show a stable debt exposure under the APNU+AFC Coalition from 2015 – 2020 during which time the law setting a ceiling on borrowings was not amended once. The current Administration has already increased the ceiling twice since coming to power. The Minister has promised a further increase in 2024.”
The MoF countered that the PPP/C government has demonstrated its “sterling track record of transparent, accountable, and prudent debt management.” It added, “Over the years, Guyana has been able to sustainably manage its public debt. The government’s effective debt management practices have contributed to a large decline in the country’s debt ratios over a sustained period. Guyana’s debt-to-GDP ratio has declined from about 600 percent in 1991 to about 27 percent in 2023”.
It also alleged that the APNU+AFC, in its last term of office, illegally racked up on an overdraft of the Consolidated Fund, which they never reported as Public Debt and instead concealed in order to avoid reporting the breach in the debt ceiling, which Ram & McRae “conveniently failed to highlight.” It
further posited that it is a matter of public record that the government has regularised that overdraft, securitizing it with appropriate debt instruments, and putting in place arrangements to ensure that the fiscal operations of government are adequately financed without recourse to re-accumulation of the overdraft.
Natural Resource Fund
The MoF then turned its attention to accounting firm’s statement on the subject of the Natural Resource Fund (NRF), pointing out that “The Fund is already structured to allow substantial sums to be withdrawn before sums are retained as intergenerational savings.”
To this, the release declared that the government remains guided by the principles of transparency and accountability in the management of the NRF. It sought to assure that all withdrawals from the NRF will continue to be subject to the enhanced oversight enacted under this government and are transparently used for sound and impactful investments that will be to the direct benefit of present and future generations. It boasted that these actions have been commended by the IMF in its Article IV December 2023 report, which states, “The governance of the NRF was strengthened through the appointment of three critical entities in 2022: the NRF Board of Directors, the Public Accountability and Oversight Committee, and the Investment Committee. Furthermore, to ensure full transparency and accountability, notifications of receipts of petroleum revenues have been published in the Official Gazette…”
“Budget 2024 presented by Dr Ashni Singh, under the theme, “Staying the Course: Building Prosperity for All,” underscores and builds on this government’s commitment to maintaining a policy framework aimed at achieving the objectives outlined in the Budget, and at delivering the promises made in the PPP/C Manifesto, in the interest of ensuring that the country’s potential for lasting prosperity is realised and secured for the improved wellbeing of every single Guyanese,” the release stated.
