Georgetown: A Bilateral Debt Settlement Agreement was signed by Minister of Finance, Winston Jordan, on March 18, 2019, with the State of Kuwait, through the Kuwait Investment Authority, to cancel US$50,739,255.67 of Guyana’s debt to that country.
This debt cancellation will reduce Guyana’s external debt and allow the country to expand its development agenda, as funds saved under this agreement would be allocated to social projects within the context of the National Budget.
The agreement, which came after an ardent negotiation process, paves the way for greater co-operation and the strengthening of cordial ties between the two countries.
Commenting on the agreement, Minister Jordan said that it is the result of renewed efforts by his Ministry to engage Guyana’s non-Paris club bilateral creditors in negotiating debt relief that is acceptable and sustainable.
The remaining amount of US$26,853,585.23 will be settled through a combination of cash payments, to be made over nine (9) years, and a debt swap arrangement, which will be worked out in due course.
Guyana’s debt to Kuwait originated from a Loan Deposit, contracted in 1975, from the Central Bank of Kuwait for Kuwaiti Dinars 3.0 million (US$10.3 million at that time), for balance of payments support to the Bank of Guyana. The debt accumulated massive arrears over the past four (4) decades, at high market interest rates. As at December 31, 2017, the debt to Kuwait had grown to US$77,592,840.90, comprising principal arrears of US$9,940,500 and interest arrears of US$67,652,340.90.
Since assuming office in 2015, the Finance Minister has pursued debt relief from other bilateral non-Paris club creditors with whom Guyana’s debts are in arrears.