–President Ali says

SHOULD the government get its way, spending from the country’s oil revenues would be subject to both pre and post parliamentary scrutiny, President Dr. Irfaan Ali said on Tuesday.

In a virtual presentation, Dr. Ali said that the NRF 2021 Bill, which is before the National Assembly, requires that withdrawals from the fund, along with its intended use, be included as components of the national budget, which has to first be debated on and approved by the House.

Secondly, projects and programmes funded by oil revenues have to also be investigated by the Office of the Auditor General, after which, a comprehensive Audit Report has to be compiled and submitted to the National Assembly.

That report then has to face further scrutiny by the Parliamentary Public Accounts Committee (PAC), which is led by the Opposition.

“So, you have [the] post-approval debate [and] you have approval; you have an audit and then you have the PAC examining the Auditor General’s report. So, that covers again, added layer of accountability and transparency,” Dr. Ali noted.

Further, the proposed Bill specifies that the country’s oil earnings could only be used to finance developmental projects and/or respond to major natural disasters.

President Ali has said on multiple occasions that his government’s development agenda centres on utilising the country’s oil revenues to accelerate a number of critical non-oil industries such as infrastructure, education, health, tourism and a myriad of social services.

FATAL FLAWS
In order to deliver on these projects, President Ali said that the “fatal flaws” of the existing NRF legislation have to be remedied.

To begin with, Dr. Ali said that the 2019 law is “unconstitutional and illegitimate,” since it was passed even after a no-confidence motion had already toppled the then David Granger-led administration.

Added to that, the law was passed without any input or involvement from the then People’s Progressive Party/Civic (PPP/C) opposition.

“And we were not present because the National Assembly ceased to exist; the government ceased to exist because the no-confidence motion was passed,” President Ali argued.

In pinpointing the specific problem areas of the 2019 legislation, the Head of State lamented that the NRF lacked proper governance, while bestowing excessive powers, roles and responsibility in just one person, the Minister of Finance.

Under the 2021 legislation, the government is proposing that the powers of the Finance Minister be drastically reduced.

The Bill, which comes up for debate in the National Assembly today, also introduces a Board of Directors, which will include a number of stakeholders including members of the private sector and a person nominated by the National Assembly.

President Ali said that once the law is passed, the members of the Board of Directors will be carefully selected in keeping with the qualifications stipulated in the law.

“The membership of the board is required to be published in the Gazette, so the composition of the board will be publicly known. And I want to assure Guyanese that in keeping with the law, the Board of Directors will be something you will be proud of,” Dr. Ali posited, as he cautioned against criticising “a board that does not even exist as yet.”

Meanwhile, the 2021 Bill seeks to replace a complicated withdrawal formula, with one that “every single Guyanese will be able to understand.”

As it is, President Ali and the PPP/C are not the only ones with complaints about the inadequate NRF legislation, the Inter-American Development Bank (IDB), one of Guyana’s leading financial partners, said that the 2019 Act “departs from good practices” and that its complexity may “conspire against fiscal transparency and public understanding.”

To right that particular wrong, the 2021 Bill proposes that withdrawals be capped, so that money from the fund could be saved for future generations, and that a formula be introduced to allow for easy calculation by all Guyanese.

To this end, in the first instance, Guyana will be able to withdraw 100 per cent of the money contained in the fund, after which the cap will take effect at 75 per cent of the second US$500 million deposited into the NRF during the preceding fiscal year of its passage, followed by 50 per cent, then 25 per cent, five per cent, and finally, at three per cent of any amounts in excess of $2.5 billion.

“So, as things progress, you will know exactly how much should be saved, or how much will be saved, how much will be invested and how the fund will be utilised,” President Ali said.

He reminded too that the passage of the new legislation would see the person holding the position of Minister of Finance facing up to 10 years imprisonment for failing to disclose, within three months, receipts of all oil revenues.

This provision was specifically inserted to prevent the reoccurrence of a 2016 situation which saw the then coalition government denied receiving US$18 million signing bonus from ExxonMobil.
“Not only are we setting out the principles, enhancing transparency, but we are willing to put the harshest of penalties because we do not intend to keep any information in relation to the management of a Natural Resource Fund away from the public,” Dr. Ali said.

PROSPERITY
He went further to say that the country’s oil revenues would be better spent on improving the livelihood of all Guyanese, while enhancing and positioning Guyana as a global powerhouse.

“This is not the President and a government who would take the money to go and buy five Rolls-Royce in the presidential fleet. We have outlined very clearly the type of expenditure; people-centred, people-oriented, to add disposable income and people’s pocket to give them the best possible social services,” President Ali said.

He continued: “We have already laid out what those transformative projects are at a national level, at the regional level and at a community level.”

Further, to support the development of both the oil and non-oil sector, Dr. Ali said that the PPP/C government intends to invest heavily in the development of Guyana’s human capital.

“…to equip them to function at the highest level and to be able to participate in the new shift in our economy,” Dr. Ali posited.

Added to that, the government has plans to use the oil resources to drive its landmark energy mix, which will rely on the use of alternative sources such as hydro, solar, wind and gas, to cut the cost of energy by at least 50 per cent.

This, the President noted, will lead to an expansion of the manufacturing and services industry, including agro-processing and transportation and logistics.

“So, we are going to invest to support innovation and new areas of structural economic transformation, new areas, new sectors, creating the framework and incentive to drive private sector investment to create new areas of wealth, new areas of jobs. This is what is going to lead to the sustainable development of our country,” Dr. Ali said.

He also touched on the intended investments in the area of housing, especially as it relates to the government delivering on its promise to distribute 50,000 new house lots by the end of 2025.

“We are well on our course achieving that, but it requires investment and it is a promise I made from day one that must be fulfilled and will be fulfilled,” the former Housing Minister said.

He is also keen on ensuring that the government is also able to create, whether directly or indirectly, at least 50,000 jobs by 2025.
Come today, the repeal of the 2019 NRF Act will be up for debate in the National Assembly.