-Terrence Campbell says has been seeking justification for withdrawals without success
Opposition representative on the Natural Resource Fund (NRF) Investment Committee, Terrence Campbell, yesterday declared its board to be a rubber stamp and said that his efforts for justification for withdrawals from the Fund have been stymied.
Campbell also posited that the lack of transparency in the spending does not satisfy the provisions of the Natural Resource Fund Act and that Vice President Bharrat Jagdeo wanted to “cop out” of government providing to the nation a breakdown of how it spends the funds.
“The Act calls for the funds to be used in a specific way. The government goes for blanket approval of X billions per year. It then withdraws in parts. The withdrawals do not specify how the funds will be used,” Campbell told Stabroek News yesterday when contacted.
“It is a copout for Jagdeo to point to the commingling of funds in the Consolidated Fund. If it wishes to satisfy the provisions of the Act, the government would specify how the funds are to be used and set up some mechanism, perhaps a separate account at Bank of Guyana, to allow the PAOC [Public Account-ability and Oversight Com-mittee], Auditor General, et cetera, to monitor disbursements,” he added.
His statements followed a letter to Stabroek News, published in today’s edition where he also said that the matter of the NRF, its procedures for withdrawal and the rate of depletion “demand urgent national attention.”
In his letter, he referred to an article in the online version of yesterday’s Kaieteur News titled, ‘Showing how oil money being spent would be difficult’.
Campbell, a businessman, noted that the NRF Act was revised by the PPP/C government in December, 2021, and was praised for its transparency. He pointed out that VP Jagdeo has been quoted as saying the revised Act “is the most transparent model that will not only ensure public scrutiny but also parliamentary oversight on the spending of oil revenues” (https://guyanatimesgy.com/proposed-nrf-legislation-most-transparent-model-vp-jagdeo/).
“I was quite shocked to read that this same gentleman is now claiming, a mere three years later, that the ‘balkanization of revenues’ in the Consolidated Fund would make it difficult to show how NRF funds were being spent,” he wrote.
“The VP has a genetic predisposition to eating his cake and having it. As a former President he was ‘Champion’ of the Earth, today he is a ‘Champion’ of fossil fuels. As Opposition Leader, he was Champion of Renegotiation, today he is Champion of Contract Sanctity. Unfortunately for the VP, I sit as the Opposition representative on the Investment Committee of the NRF and I am not prepared to let him tout the transparency of the Act and simultaneously claim that balkanization makes tracing the funds difficult,” Campbell declared.
Flawed
Jagdeo yesterday told this newspaper that he would address the issue in detail and explain why Campbell’s position is flawed on Thursday when he holds his weekly press conference.
However, a government source explained that Campbell’s grouse with the administration of the NRF is skewed, and that the very Act he refers to says that the Board is there to manage the savings that goes into the fund and not define or oversee how the monies are spent. It is the Parliament, the source said, that oversees how the money, deposited in the Consolidated Fund, is spent.
Stabroek News reached out to the office of the Chairman of the NRF, Major General (retired) Joseph Singh for comment on Campbell’s letter. The response given from Singh’s office was that Campbell is a member of the NRF’s Investment Committee which is answerable according to the Act, to the Chairman of the Investment Committee, Shaleeza Shaw, and not the NRF Chairman.
This newspaper tried contacting Shaw by mobile phone but calls went unanswered.
Campbell said that that a little over a month ago, he began pressing internally for the Board of the NRF to demand justification for withdrawals from the Fund in accordance with Section 16 (2) subsections (a) and (b) of the NRF Act.
“These subsections specify that withdrawals must be for national development priorities and/or essential projects to ameliorate the effects of a natural disaster. My request was met with stout resistance even in the face of my threat to initiate litigation. In essence, the Board signs a blank cheque with each withdrawal. This effectively reduces the Board to a rubber stamp and the Public Accountability and Oversight Committee [PAOC], which is supposed to provide oversight, to a white elephant. The transparency touted by the VP in 2021, is transparency in form but not in substance,” Campbell declared.
The businessman also pointed out that the Act states that the NRF funds shall be invested in safe investments if the Fund does not exceed US$500 million.
“This same prescription for safe investments applies if the Fund does not exceed three times the amount approved, by the National Assembly, for withdrawal for ‘the next ensuing fiscal year’. I have been warned twice about the requirements for confidentiality under the Act. Consequently, I will reference OilNow which states that ‘Parliament approved US$1.586 billion (G$329.9 billion) to be withdrawn in 2024’,” he stated sourcing the hyperlink.
“This means the Fund’s balance would need to exceed US$4.758 billion before the Investment Committee can explore other options for investment. As of mid-October, 2024, the Fund was hovering around the US$3 billion mark (https://oilnow.gy/featured/guyana-oil-fund-about-to-hit-us3-billion-mark-for-the-first-time/). With the current rate of depletion, it will be years before the Investment Committee has any work to do,” Campbell lamented.
He said that it bothers him greatly that no consideration is being given to sequestering Fund resources for economic stabilisation or intergenerational transfer.
“Virtually all of the resources are being diverted to infrastructure spend. Without adequate oversight, and balkanization excuses, it is likely some resources will be diverted for political purposes. With a rubber stamp Board and white elephant Committees, our national patrimony is at severe risk,” he warned.
Campbell said that he will donate to charity, all of the remuneration he has received as a member of the Investment Committee and said that all of the members of the Investment Committee and the PAOC should do likewise,” he said.
The horse is hungry
One source said that while Campbell is right that saving for this country’s rainy days was important, it is even more important and realistic to note that looking at developed nations, since Guyana started production only five years now and those nations, Norway for example, took 25 years before it began saving.
Another government source reasoned that this country using a large portion of oil revenue now was not fair to citizens as it is tantamount to the adage, “While the grass is growing the horse is hungry”. The source said it is always government’s posture in “finding the right balance” and it believes it did so with the NRF Act it created. This is so because in that way, “there are provisions for development, holistic development, and there are provisions for savings and transparent savings.”
Campbell said that the analysis that developed nations took over two decades to start saving and that the people should feel the benefits of the fund is, “correct, but this does not mean you splurge all.”
Questioned on Campbell’s position that a separate Fund be created for the revenue from oil spending which gives a breakdown and if in the interest of transparency, that would not be better since the Opposition supports this, a source said no.
“Yes, I did read what Campbell said on saving. The Act stipulates how saving and investment would be done. That aside, you cannot please everyone and we will do what is in the best interest of this nation, because that is what we were voted in to do…,” the source said.
“The Opposition should be the last to talk about the NRF and transparency because look at the old Act and you will see who would have had the powers; one man! One man!.. It is not avoiding the question it is reminding you that some people forgot what nearly happened. The NRF fund does provide for the Opposition to see how the money is spent…,” the source added.
As for Campbell, he argues, “The matter of the NRF, its procedures for withdrawal and the rate of depletion demand urgent nation attention.”
When Campbell was nominated for the Investment Committee by the Opposition in June of this year, he had told this newspaper that he would make the most of his contributions so that this country benefits from its natural resource. He had also expressed his disappointment that the opposition did not have a representative on the Board of Directors of the NRF.
“A wealth fund is a mechanism for the citizens of a nation, or state, or even a city to invest assets to generate economic benefits. These funds are used to build up savings for future generations and to provide stability during economic downturns. It is, to my mind, unacceptable for the Opposition to be absent from the Board of such an important fund,” he expressed.
“Why do we make provision for Opposition representation on the boards of state-owned entities but not the fund which is far more important? Opposition representation will help to reduce the likelihood of the fund becoming politically captured where its actions are directed towards political objectives rather than economic goals,” he added.