Dear Editor,
I write with reference to an article in the online version of Kaieteur Newspaper dated December 6th, 2024 titled ‘Showing how oil money being spent would be difficult’ (https://www.kaieteurnewsonline.com/2024/12/06/showing-how-oil-money-being-spent-would-be-difficult/).
The NRF Act was revised by the PPP government in December, 2021 and praised for its transparency. VP Jagdeo was 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.
The VP has a genetic predisposition to eating his cake and having it. As 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.
A little over a month ago, I began pressing internally for the Board of the Fund to demand a justification for withdrawals from the Fund in accordance with Section 16 (2) subsections (a) and (b). 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.
Editor, please permit me to digress for a moment to address the Investment Committee on which I sit as a member. The Act states that the funds shall be invested in safe investments if the Fund does not exceed US$500M. 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” (https://oilnow.gy/featured/2024-withdrawals-from-oil-fund-now-at-us1-150-billion-guyanas-finance-ministry/#:~:text=To%20date%2C%20a%20total%20of,the%20Consolidated%20Fund%20on%20Oct). This means the Fund’s balance would need to exceed US$4.758B before the Investment Committee can explore other options for investment. As of mid-October, 2024 the Fund was hovering around the US$3B 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.
It bothers me greatly that no consideration is being given to sequestering Fund resources for economic stabilization or intergenerational transfer. Virtually all of the resources are being diverted to infrastructure spend. Without adequate oversight, and balkanization excuses, it is likely that some resources will be diverted for political purposes. With a rubber stamp Board and white elephant Committees our national patrimony is at severe risk.
Personally, I will donate to charity, all of the remuneration I have received as a member of the Investment Committee. And all of the members of the Investment Committee and the PAOC should do likewise. The matter of the NRF, its procedures for withdrawal and the rate of depletion demand urgent national attention.
Sincerely,
Terrence Campbell
Member, Investment Committee
Natural Resource Fund
