Leader of the Opposition, Aubrey Norton on Friday rapped the government for its plan to hike the withdrawal of oil money which he said would put Guyana’s economy at great risk and would likely rob the country’s future generations of their safety net and the possibility of creating opportunities.
The PPP/C government on Friday tabled a bill in the National Assembly for a huge increase in the annual extraction of oil revenues from the Natural Resource Fund (NRF), a move which was announced by Finance Minister Dr Ashni Singh in his budget presentation on January 15th.
The bill is titled the Fis-cal Enactments (Amendment) Bill 2024, and under the new proposed extraction formula, the government is proposing to draw down 100% of the first US$1b of deposits paid into the fund in the immediately preceding fiscal year.
According to the NRF legislation controversially passed on December 29, 2021, 100% of the first US$500m paid into the fund in the immediately preceding fiscal year can be withdrawn. For every additional tranche, the government will increase the take. For the second US$1b paid into the fund in the immediately preceding fiscal year, the government is proposing to extract 95%. The extant legislation, by contrast, allows the extraction of 75% of the second US$500m.
The new bill tabled proposes to take 90% of the third US$1b of deposits into the fund in the immediately preceding year. The current law extracts only 50% of the third US$500m. The bill envisages taking 85% of the fourth US$1b deposited compared to the current law which allows the taking of 25% of the fourth US$500m.
Norton on Friday during his presentation to the National Assembly for budget 2024 said that the government’s admission that they will have to change the withdrawal rules of the Natural Resource Fund to finance their “profligate spending demonstrates to the nation what we have been saying all along, there is no plan whatsoever or method to the PPP’s madness save enriching themselves, their friends, families, and favourites. This is especially clear given that it is only a short while ago that the PPP passed that law hurriedly, amidst widespread public condemnation at the lack of consultation.”
He said that it was important to bring to the nation’s attention that this “chaotic governance” with a willingness to change the NRF rules puts the nation’s finances and economy at great risk, “while also robbing future generations of the certainty that there will be resources saved to help them face their own challenges and opportunities.”
“The PPP is not accounting for any possibility of a prolonged oil price crisis, such as we saw during the 2014-2016 oil price crash, or even the Covid-19 pandemic. Rather, they have accelerated spending on infrastructure, which we all know to be a primary avenue used to place ill-gotten gains at the disposal of the PPP and its cronies masquerading as contractors. They are doing this, Mr. Speaker, because they know that if this is not their last budget, it is their second to last”, he stated.
According to the Opposition Leader, the government refuses to engage in any conversation about the interest payments received by the NRF, which the opposition has pointed out are a valuable source of revenue once a structure that facilitates sustainable spending is developed.
To the Guyanese populace, Norton said, “Your APNU+AFC government in waiting will be involved in sustainable spending while putting the improvement of the quality of life of the people at the centre of such spending.”
He added that the attitude of “unsustainable spending” carries over to the investment committee of the NRF, “where the PPP has still not appointed the Opposition’s choice for the Investment Committee despite repeatedly being reminded to do so.”
Norton then questioned whether they were hiding activities of the fund “which they know will be revealed once our representative is appointed.”
“The NRF, with its hundreds of billions of Guyana dollars in deposits, cannot continue to drift along in the wind, like a discarded $20 bill. We must see action on this issue immediately”, he stressed.
Norton stated that the Opposition is committed to the “good governance of Guyana” and will “dedicate resources to hiring experts, consultants and thousands of Guyana’s young people to conduct analysis and gather data.”
Stressing that the opposition wants to see a renewed focus on gathering data and conducting analysis, he said, “there is a saying that you cannot manage what you cannot measure, and that certainly is the case in Guyana today.”
“The PPP has refused to engage with IMF estimates that out of every dollar spent in the Public Sector Investment Programme 41 cents are lost, and the IMF consistently urged governance reform. Last year, ignoring these necessary reforms resulted in $172 billion dollars in waste and this year that total will climb to over a quarter of a trillion Guyana dollars. In fact, the PPP is borrowing approximately as much money as it is wasting. This squandering of our nation’s patrimony must not continue”, he railed.
He added that the government’s “casual approach” to enormous sums is also reflected in their handling of the audit of oil resources.
“The government must commit to funding auditor compensation, training auditors and hiring first class audit firms to examine offshore oil expenses. We saw Guyana nearly miss out on more than a US$100 million that could be recovered and the government has demonstrated little interest in furthering the arbitration process that will reclaim these funds””, he said, a reference to the findings of international audit firm IHS Markit.
