– President and vice-president say more transparency needed before funds are accessed
By Navendra Seoraj
GOVERNMENT plans to roll out a $330 billion emergency budget today, but Vice-President Bharrat Jagdeo said Guyana’s Natural Resource Fund (NRF) would not be used to finance any project within the budget.
The country has already received US$140 million from the sale of crude, which is being produced by ExxonMobil’s Liza phase 1 development. This money is being kept under the NRF account, in a US Federal Reserve Bank.
“None (money) will be used for the emergency budget,” said Vice-President Jagdeo during a press briefing on Monday.
The government had committed to addressing important issues of transparency and ensuring systems and institutions are in place before those funds are utilised. This promise was reiterated by both President Irfaan Ali and Vice-President Jagdeo.
“We need to repeal or amend it (NRF Act) to make changes and along with that, we will strengthen the transparency provisions,” said the vice-president.
When asked how Guyana will finance the budget, Jagdeo said government will have to continue borrowing, given the revenue shortfall. Central Government’s revenue has been reduced by $14 billion or 5.9 per cent since 2019.
“Apart from foreign financing, we have to continue accessing domestic markets for financing of the budget.
“We will continue borrowing from the domestic market, but we will be doing so carefully, so that it does not crowd out the private sector,” said Vice-President, Jagdeo.
He said government, however, hopes to “retire” all domestic debt that the former APNU+AFC administration took to finance previous budgets.
The new PPP/C government will be looking to initiate the rejuvenation of the economy through its $330 billion budget, which represents an increase of about $28 billion or 9.6 per cent compared to the 2019 budget presented by the former administration.
For capital expenditure, local expenditure totals $49 billion, but $27 billion has already been spent by the past administration.
“… $27B has already been spent based on roll over from 2019 when APNU+AFC went on a spending spree with money it did not have, when it gave out large contracts in 2019… that roll over plus releases of money on the capital side was illegal since there was no budget,” said Jagdeo, adding that the new government only had room in its budget to programme $22 billion for initiatives.
A similar picture is painted on the recurrent side of the budget, with a lot of money going to goods and services, among other things.
The spending by the previous administration stymied some potential initiatives, but Vice-President Jagdeo believes that the measures will do a lot for the economy.
It was reported that, after re-prioritising and re-programming fiscal measures, the new government has managed to add $20 billion in relief to the “pockets” of Guyanese, at a time when the nation is faced with the effects of the novel coronavirus (COVID-19) and the recently-concluded protracted electoral process.
The conduits of relief include revised tax measures and sweeping incentives, which were announced by President Ali, on Monday.
The broad objectives of those measures, which will feature in government’s emergency budget, are to stimulate economic activity; get persons back to work; increase Guyana’s productive capacity; reduce the cost of doing business; improve efficiency; and facilitate growth and development of businesses.
“These measures will have an immense impact on people’s welfare and well-being… as these measures would also address, directly, issues of cost of living and living standards,” said President Ali.
Guyanese, between now and December 31, 2020, stand to benefit from over $20 billion in relief through direct transfers and reduction in taxes.
