– funds to support emerging oil-and-gas sector and strengthen financial sector
GUYANA’S financial sector and emerging oil-and-gas sector are expected to be enhanced incrementally through financing from a US$35 million (GYD7.2B) loan which the government has received from the World Bank.
Minister of Finance Winston Jordan and the World Bank’s Senior Country Officer to Guyana Pierre Nadji, officially signed an agreement on Friday, paving the way for government to access the funds.
The loan, which is a development policy credit, will provide financing on the basis of action which Guyana has already undertaken with regard to financial and fiscal stability; and under the conditionality that Guyana maintains an adequate macroeconomic policy framework.
According to Minister Jordan, the US$35 million will also support the emerging oil-and- gas sector.
The loan is part of the US$90 million which the World Bank had recently made available to Guyana. The funds will be available over the next three years.
“The loan is part of that facility [US$90M] and we are developing another facility to look specifically at the oil-and-gas sector, since this one is generally for balance of payments support,” said the finance minister.
Jordan said although the money is welcomed, government’s aim is to put measures in place to ensure that the financial sector is efficient.
As an example of their aim of creating an efficient system, he made reference to the four financial bills that were recently passed by the National Assembly. Among the bills were the National Payment System bill, the Bank of Guyana bill and amendments to the Deposit Insurance Act.
“The four bills that we passed were complex pieces of legislation, but were very much needed to modernise the natural architecture in our country,” said Jordan.
The recent bills were complemented by recent legislation such as the insurance and credit reporting Acts. Those bills are also expected to be complemented by modern legislation for a stock exchange.
Nadji echoed the sentiments of the minister, noting that he was glad that the latest bills were passed in time for the agreement.
The World Bank’s representative said the loan will be used to build on what is already in place. He said it will help in stabilising the financial sector and in preparing the ground for sound fiscal management.
A US$20M loan was recently approved by the World Bank for capacity-building initiatives ahead of first-oil in 2020.
Those initiatives include finalising critical legislation and the establishment of critical units, such as a Petroleum Revenue Unit at the Guyana Revenue Authority, among others.
According to a Guyana Chronicle report, Jordan said: “We have a loan coming up from the World Bank, I think about US$20M for oil-and-gas development.”
The minister had said some of that money will be going towards preparing and finalising various pieces of legislative instruments pertaining to the sector.
