IN the January 6, 2024 edition of the Kaieteur News, an anonymous author in the Peeping Tom column and adviser to the Opposition Leader, Elson Low, presented a perspective on the Natural Resource Fund (NRF) that has been sharply criticised by Financial Analyst, Joel Bhagwandin.

Bhagwandin takes issue with what he reveals as a fundamental misunderstanding of the NRF Act (2021), questioning the authors’ familiarity with its legal operations and their broader incompetence in the realm of public financial management.
The crux of the disagreement revolves around the perceived adequacy of the NRF’s interest earnings to fund a proposed 13 per cent increase in wages and salaries for public sector workers in 2023.

The author of the Peeping Tom column and Elson Low argue that the government’s earnings of over G$16 billion in interest for 2023 are more than sufficient for this purpose.
Bhagwandin, however, meticulously dissects this argument, emphasising Section 19 of the NRF Act, which dictates that the withdrawal from the fund for the next fiscal year is contingent on the closing balance of the preceding fiscal year. In simpler terms, the withdrawal for 2023 is based on the ending balance of 2022, not the cumulative interest earned over multiple years.

For further context, the interest earned for the fiscal year 2022 was G$2.4 billion, deemed insufficient to cover even the 6.5 per cent salary increase that was granted by the government, which amounted to approximately G$8 billion.
The year-to-date interest earned for 2023, based on the NRF balance, is G$12.5 billion, with a cumulative interest earned from the inception of the NRF in 2021 totalling G$16.1 billion.

Bhagwandin underscores the impracticality of using cumulative interest earnings over multiple years to finance an annual recurrent expenditure such as salary increases.
Even if one were to consider the cumulative interest earnings of G$16 billion as of September 2023, Bhagwandin argues that this would still fall short when compared to the cumulative increase in total employment cost for the same period, amounting to G$28 billion.

Further responding to the haste of the Peeping Tom column and Elson Low in attempting to disprove Vice-President Dr. Bharrat Jagdeo, Bhagwandin characterises their arguments not only as containing rudimentary errors, but also fundamental errors that highlight a deep lack of knowledge in public financial management.
In order for there to be constructive arguments or determinations, there needs to be a more nuanced understanding of the NRF Act and its implications for public financial management.