…Guyana on track to handle oil and gas profits – Minister Jordan

GUYANA will be one of the few countries to have a Sovereign Wealth Fund (SWF) in place before “First Oil,” so says Finance Minister Winston Jordan.
In an exclusive interview, the minister said that the Act governing the SWF was assented to on January 23, 2019 by President David Granger.

The next process is to implement the Act and set up the committees mandated by the legislation. These include the Macro-Investment Committee and the Public Oversight Committee (POC); the latter will examine proposals to manage the fund’s resources.

Minister Jordan explained that the POC is slated to be the largest body with 22 members, representing a wide cross-section of society, “We will be writing letters to the various people, mentioned in the committee, indicating their role and function and inviting them sometime soon to have sensitisation sessions.” The minister anticipates some challenges as a selection will have to be determined of the “groups most representative of women, civil society, trade unions and youths.”

The letters will be dispatched before the end of April.
There is a need for an expert, the minister indicated, to work with the Finance Ministry, “for at least a year or two” to help with identifying proposal requests which are in keeping with the core issues of managing a fund. Personnel will also be needed to do “due diligence” on proposals along with investment advisers. According to the minister, at least seven “well known” firms have indicated interest in getting on board with the government, to offer investment advice etc.

With the preparations on track, Minister Jordan indicated that, “The mere fact that we have an Act, virtually a year ahead of oil is a significant achievement, which has been praised by a number of international institutions. We have literally put our money where our mouth is! Now is the time to implement and have everything ready, so that when the first dollar goes into the fund, we know what to do.” He added that there will be sensitisation programmes to “get around all the hoopla by the opposition, about the management of the fund.”

According to Jordan, “The Act is very strict about the withdrawal for funds, accountability and so on, are very, very tight and praised by a number of experts in the field.” He emphasised that it was a national effort and the proof of the pudding will always be in the eating, “if a 22 member oversight committee cannot oversight. With a disparate number of bodies that are represented, then I don’t know who would.”

Minister Jordan said he was proud of the fact that the government was able to reach to current stage of preparations with the available financing. He further praised the Commonwealth Secretariat for its input and Finance Ministry staffers for their “constant dedication” towards the effort. The Sovereign Wealth Fund (SWF) is defined as pools of money derived from a country’s reserves, which are set aside for investment purposes that will benefit the country’s economy and citizens.

The funding for a Sovereign Wealth Fund comes from Central Bank reserves that accumulate because of budget and trade surpluses, and even from revenue generated from the export of natural resources.