–Finance Ministry assures nation

THE government on Saturday reiterated that any expenditure of revenues garnered from Guyana’s forest carbon-credits sale is underpinned by the existing legal framework, where there is full scrutiny by the National Assembly.

“Forest-carbon revenues and the approach being applied represent every facet of a transparent and legally underpinned process for the allocation and utilization of carbon-credits revenues, using Guyana’s national system for doing so – the National Budgetary Process,” the Ministry of Finance (MoF) clarified in a statement issued on Saturday.

The MoF was at the time addressing attempts by a recently published article that sought to negatively paint the government’s utilisation of money from the carbon-credit sale in the 2023 Budget, which is scheduled to be unveiled on Monday.

“Views that seeks [sic] to distort or falsely represent the facts surrounding the structures that have been publicly communicated, legally grounded and anchored by transparency and accountability provisions of our Fiscal Management and Accountability Act, including the work of our Public Accounts Committee, with the deliberate intent to mislead the public,” the MoF statement noted.

“These views seek to diminish what our government stands for, which is for all revenues to be used for the national good of all our people, using national processes, in a fully transparent manner.”

Earlier this month, Guyana received its first payment of $75 million for carbon credits under the agreement with the Hess Corporation. The payment was the first in a multi-year agreement that will be worth a minimum of US$750 million up to 2030.

In announcing the receipt, the government noted that two further payments of US$37.5 million each will be made during 2023 – one in January and one in July – bringing the total amount available for appropriation in this year’s National Budget to US$150 million.

With the National Budget being the vehicle whereby the government expends money to serve the people of Guyana, the MoF noted that the use of any other process for expenditure of the money should be strongly resisted.

“These processes represent everything that is required from best practice for strong financial management, transparency, and fiduciary arrangements, through parliamentary processes and subject to both ex post and ex ante scrutiny, as is fundamental to the national budgetary process,” the Finance Ministry noted.

It is in Chapter Two of the Low Carbon Development Strategy (LCDS) that the government outlines the proposal for the use of national legislative and regulatory structures for the administration of all revenues to be earned from forest-carbon financing. This was supported by all stakeholders through the seven months of consultations on the draft LCDS 2030, which was launched in October 2021 for consultations.

“The National Assembly, including through its committees, will have oversight of the investment of all national revenues received from forest-climate markets and managed via the Consolidated Fund through the budgetary process,” the LCDS noted.

Chapter Two of the publicly available LCDS 2030, page 42, outlines in clear detail that: “All revenues will be transparently administered via the Consolidated Fund, enabling them to be scrutinised and approved by the National Assembly via the National Budget process.”

Aside from being stated in the LCDS, the PPP/C government has further publicly stated that every payment and payment source will be communicated publicly at the point of payment, and at the point of transfer into the Consolidated Fund, when the payment value in Guyana dollars will also be communicated.

For the revenues to be expended, the Minister of Finance has to request the National Assembly to approve withdrawals from the Consolidated Fund, which shall be included in the Annual Budget Proposals, in keeping with established budgetary process enshrined in law.

All transactions will be appropriately tagged with a unique identifier on the Integrated Financial Management Information System (IFMIS) within the Ministry of Finance to enable the execution of annual audits.

To prepare for these new revenue flows, the first draft of the LCDS 2030 proposed that all revenues would be invested through a combination of: national programmes outlined in the draft LCDS 2030 (e.g. renewable energy as described in Chapter 3; land titling as described in Chapter 4; repairing canals and protecting against climate change as outlined in Chapter 5), and community/village-led programmes for indigenous peoples and local communities (IPLC) as set out in Village Sustainability Plans or equivalent, put together by communities themselves.

“The transparency with which the current PPP/C government is currently handling receipts and expenditure of the carbon-credit revenues presents a stark contrast to practices of the previous APNU administration where a US$18 million signing bonus received on the oil contract was not declared, and was hidden away. The hidden money was not subject to any scrutiny or financial structure, was understood to be a gift by some, and is devoid of any recognition of legal requirements, such as the national budgetary process and parliamentary oversight.”