GUYANA is already eight months into 2020, but a protracted electoral process had restricted the country from having a budget and a clear plan for the year, something which the newly-elected government is working to fix in just 21 days.

Crafting a National Budget usually takes 179 days; however, extraordinary circumstances have forced government to condense this process and present a budget in 21 days, said Vice-President, Bharrat Jagdeo, during a press briefing, on Friday.

“It takes 179 days to prepare a budget from the date the circular goes out to the date of presentation in Parliament… but we want the budget prepared and we are working towards preparing a budget in 21 days,” said Jagdeo, adding that the budget needs to be crafted urgently.
Jagdeo said government is working overtime to get the budget ready within this short space of time, as a speedy completion is important because of the existing socio-economic challenges caused by the novel coronavirus (COVID-19) pandemic.

The vice-president said government will also have to account for expenditures made pre-July, as some $116 billion was dispersed from the Treasury, while $111 billion, in revenue, was spent by the past administration.

Jagdeo also said major public corporations such as the Guyana Power and Light Corporation (GPL), Guyana Water Inc (GWI), the Guyana Sugar Corporation (GuySuCo) and other agencies are in deficit.

Additionally, the previous administration had disbursed $10.7 billion as a loan to GPL, to pay for a Wartsila Plant. The vice-president said the sum was taken from the Consolidated Fund, so it was an illegal disbursement.

Other capital expenditures such as the $1.134 billion spent on COVID-19 activities, will also have to be considered in preparation of the budget. The government, he said, will be starting the budget with $135 billion spent already on the capital side.

Jagdeo said there are more transactions which need to be reconciled, but he is hopeful that the budget will be completed on time. The country’s last budget, Budget 2019, was passed in December 2018 to the tune of $300.7B.

SUBSTANTIVE FINANCE MINISTER SOON
The National Budget is presented in the National Assembly by the minister of finance, and while the Office of the President had announced that it has oversight for finance, Jagdeo said President Irfaan Ali will soon appoint a substantive minister.
The finance minister holds a key portfolio, as he/she has oversight for government’s spending and plays a critical role in the preparation of a National Budget. Prior to 2015, Dr. Ashni Singh had served as the minister of finance under the Donald Ramotar-led administration.
It was reported recently that the newly-elected PPP/C Government is still in “search mode,” when it comes to the appointment of someone to the post of Minister of Finance.

President Irfaan Ali had said his transition team has not yet identified an individual for the position, but hopes to do so soon, as all options are being reviewed.
“And, with the skillset that we have at the moment in the Office of the President, with the former president (Bharrat Jagdeo), we are hoping to move quickly on a number of issues at the financial level, but it is an area that we are still searching for potential candidates,” said the president.

PREPARATIONS BEING MADE
The work of government is, however, not hindered by the absence of a finance minister, as work is ongoing in relation to the preparation of a National Budget.
President Ali had said that government has been doing an assessment of the current economic situation and the availability of resources.
“That is ongoing, and what we have found is alarming in some of these areas,” said the President, noting that a lot has to do with the recent management of the novel coronavirus (COVID-19) situation.

To this end, President Ali assured that financing for initiatives to curb the spread of COVID-19, will be a top priority for government.
The urgent need for the passage of a budget was recently highlighted by Head of the Department of Economics at the University of Guyana, Sydney Armstrong, who believes that the swift passage of a national budget would create some traction and stability for the economy.

“There is the need for President Ali and his team to swiftly pass a budget for 2020 so as to create some traction for this economy in this difficult time, and at the same time think about Budget 2021,” the economist told the Guyana Chronicle, in a recent interview.
Armstrong strongly advised that the proposed budget be “people-focused”, and especially give priority to vulnerable groups.

He feels that essentially, it should focus on such key sectors as health, education, agriculture, infrastructure and industries, all of which should be inextricably linked to the new Oil-and-Gas Sector, which should be its central feature.

“As a nation, we are at a defining moment, given the development of our Oil-and-Gas Sector,” Armstrong said, “but it is also important to note that the road up ahead is still going to be challenging, given that we are still in a global pandemic.”

Considering the economic situation and the instability caused by COVID-19, the economist said there is need for a “stimulus package”, as this would ease the “economic hardship” faced by vulnerable groups in society.