GOVERNMENT is in the process of finalising a draft Public Debt Management Bill, which, when passed, will guide borrowing and investment and ensure debt is managed in a manner deemed fiscally sustainable.

This is according to Finance Minister, Winston Jordan, in his 2019 Mid-Year report released on Wednesday.

The report noted that despite Guyana’s stability with respect to its outstanding debt, which is rated as moderate risk of debt distress, the country faces new challenges due to the reduction in concessional financing and the lack of adequate capacity and institutional framework to facilitate domestic debt instruments.

According to the report, the credit market has improved considerably and the ratio of non-performing loans to total loans has declined compared to the last two years.
As such, the mid-year report stated that further efforts within the financial system are required in order to minimise this portfolio, especially given the recent increase in borrowing across all sectors.

The Bank of Guyana will continue to undertake stress tests of the financial system to ensure it takes appropriate actions to promote resilience.

Notwithstanding the projected growth for 2019, it was underscored that the attainment of revised targets could be undermined by domestic and external risks.
Further, the report noted that the pace of implementation of the Public Sector Investment Programmes (PSIP), the ratio of non-performing loans to total loans, political uncertainty, and the influx of immigrants, represent some critical internal threats.

However, at the same time, a slowing global economy amid weak investment, exports, and consumption are among the major risks coming from outside Guyana’s borders.

“Other risks include, but are not limited to, climate change, enforcement of key legislation, and data availability and quality. The implementation rate of the PSIP remains a concern for the government, despite the increase in capital expenditure in the first half of the year, as bottlenecks in project execution and implementation still exist,” the report underscored.

Notwithstanding the improvements to public investment management, the mid-year report stated that government is cognisant of the varying institutional capacities across the public sector.

In light of anticipated additional revenues, the report noted that the increased economic activity and wider regulatory and service delivery demands present a risk to ensuring effective growth.
Government, as a result, has mandated all budget agencies to accelerate institutional strengthening, going forward.