Highlights

– Bill strengthens transparency and oversight

December 17, 2021– The Ministry of Finance has taken note of recent pronouncements made, particularly in a page 1 comment as well as an article carried in the 17 December 2021 edition of Stabroek News, both of which can only be described misguided, hypocritical, and disingenuous.

The comment and article astonishingly express concern about the fact that the Government will be able to choose all of the members of the Board of Directors of the Natural Resource Fund. In doing so, the article conveniently chooses to ignore the fact that the previous NRF Act, which was rammed down the throats of the Guyanese people by the APNU/AFC dictatorship after they had already lost the no- confidence motion, did not even make provision for a Board of Directors. Instead, in the absence of any provision for a Board of Directors, the APNU/AFC model for the NRF was a one-man autocratic show comprising the Minister of Finance as the sole and all-powerful authority, exercising full and absolute control over the Fund.

Under the APNU/AFC model, the omnipotent Minister had exclusive power for the overall management of the Fund, including preparation and approval of its Investment Mandate, preparation of the operational agreement with the Bank of Guyana, as well as determination of the economically sustainable amount and the fiscally sustainable amount that can be withdrawn from the Fund. Bizarrely, the authors of the SN page 1 comment and article do not appear to have any difficulties with this ministerial autocracy that was established by the APNU/AFC under their NRF model, but they astonishingly have a difficulty with the PPP/C model that removes the Minister of Finance from that one-man show and introduces a Board that includes private sector representation as well as a nominee of the National Assembly.

In like manner, the comment also insinuates negativity around the withdrawal rule proposed by the PPP/C’s Bill, without taking account of the ironic fact that, at least under the PPP/C withdrawal rule the author of the SN article is able to calculate how much will be transferred, whereas under the APNU/AFC withdrawal rule the world is in the dark as to exactly how much will be withdrawn. Indeed, until the omnipotent APNU/AFC Minister decides in his sole judgement what the economically and fiscally sustainable amount will be, the entire world will be kept guessing as to what the amount to be withdrawn in any year will be.

The Ministry hereby emphasise that one of the major differences between the NRF Act 2019 and NRF Bill 2021 is that government, by removing the excessive powers of the Minister in the new Bill presented, allows for management of the Fund by the Board of Directors, a Board which will be responsible for reviewing and approving the policies of the Fund and monitoring its performance, thereby completely separating the management of the Fund from the Minister responsible for Finance. In the NRF Act 2019 these functions were the responsibility of the Finance Minister. The Ministry therefore fails to see how Stabroek News could presumptuously conclude that the key policy matters would be exclusively in the purview of the PPP/C administration.

In addition, the Directors of the Board as stipulated under Part III of the proposed Bill (Governance and Management of the Fund) “shall be selected from among persons who have wide experience and ability in legal, financial business or administrative matters, one of whom shall be nominated by the National Assembly and one of whom shall be a representative of the private sector.” The Ministry of Finance is baffled as to why the newspaper would conclude once more that the government chooses all members of the NRF Board and worse yet, how does the media house conclude that matters would be ‘exclusively in the purview of the PPP/C administration and its allies in the private sector and elsewhere.”

Another erroneous statement made by the Stabroek News in its report is that “The Board of Directors would replace the 22-member Committee in the APNU/AFC version of the NRF which was assented to by former President David Granger”.

In actuality, the 22-member Public Accountability and Oversight Committee has been replaced by a 9-member Committee which will include as stipulated in the NRF Bill 2021, and which will include a nominee of the National Assembly; three representatives of the religious community; two representatives of the private sector; two representatives of organized labour; and one representative of the professions. The proposed 9-member composition of this committee is more practical, realistic, administratively more efficient, and would provide non-governmental oversight of the fund. In comparison, the APNU/AFC 22 member committee was designed to be cumbersome and non-functional.

The NRF Bill 2021 will allow for greater accountability and transparency in the management of Guyana’s oil resources, as amendments in the proposed legislation state that the Minister could face up to ten years imprisonment if he fails to disclose the receipt of any petroleum revenue received by Government in the Official Gazette within three months of receipt of such monies. This would avoid situations like in the past where an US$18 million Signing Bonus was illegally diverted out of the consolidated fund.

The spirit and letter of NRF Bill 2021 promotes prudent management of our natural resource wealth for the benefit of both present and future generations. The proposed bill sets ceilings on withdrawals from the fund in every year except the first, specifically to secure savings for the future. However, the immediate need for sound and transformative investments in order to advantageously position our economy to ensure that the benefits from the oil and gas sector redounds towards the wider economy and all Guyanese. The solitary exception of the first year of the life of the fund takes into account the pressing development needs which must be financed, and instead of turning to the more costly option of borrowing from creditors, we can utilize our own resources for the betterment of our people.

Additionally, the mechanism to withdraw funds outlined in the NRF Bill 2021 removes the complexities and hinderances to achieving the Fund’s objectives by providing a simpler, more transparent formula for calculating the ceiling on annual withdrawals. Recall that the NRF Act 2019 was the subject of criticism from many subject matter experts, including the Inter-American Development Bank (IDB) in its publication entitled “Economic Institutions for a Resilient Caribbean” which includes a detailed assessment of Guyana’s NRF (pages 271). Amongst the observations made by that assessment were that “The formula for the maximum permissible withdrawal is among the most complex operational rules for a resource fund in the world. Its design departs from good practices”. (p. 271)

10 December, 2021 – The Government of Guyana and the United Nations (UN) System today signed the new regional Multi-Country Sustainable Development Co-operation Framework (MSDCF) for the English and Dutch-speaking Caribbean covering the period 2022-2026. The agreement was officially inked by Senior Finance Minister Dr. Ashni K. Singh and the UN Resident Coordinator, Ms. Yeşim Oruç.

The MSDCF is the primary instrument for planning and implementation of the UN development activities delivered by over 20 UN agencies, funds, and programs towards the fulfilment of the 2030 Agenda in the participating countries, including Guyana. It was developed in consultation with governments, regional organizations, the private sector, development partners, civil society organizations, and other stakeholders.

At the signing, Hon. Dr. Ashni Singh, Senior Minister in the Office of the President with responsibility for Finance, reaffirmed government’s commitment to the advancement of Agenda 2030 and the attainment of the Sustainable Development Goals (SDGs). He then highlighted that the UN MSDCF Agreement’s pillars are in alignment with government’s principles and added that this was an indication of its strong commitment to the established global principles.

On referring to Pillar 2 that speaks to the issue of “building resilience to climate-induced and natural hazards”, Minister Singh said that Guyana is part of a tiny minority of countries where the majority wake up every morning below sea-level. He explained that this situation causes the country to expend extraordinary amounts of fiscal resources to construct a physical defence against rising sea levels. Meanwhile, Dr. Singh said that successive generations of Guyanese have recognized the perils associated with cutting down their forest and kept it intact. He cautioned that domestic action alone will not suffice to contain the scourge of continued rising sea levels and added that the fight against climate change is a good illustration of the importance of multilateralism and global action.

The Minister further stated that government remains strongly committed to the sustainable management of natural resources while at the same time, intends to address the very pressing development imperative that the country faces. He stated that on the regional agenda, a subject that is closely related was that of agriculture and food security and noted that on this government’s return to office in 2020, the administration set about renewing its advocacy on the importance of agriculture and food security, not only globally, but in the region and in Guyana. Minister Singh mentioned that President Ali was asked to resume the portfolio responsibility for agriculture, a position previously held by Guyana. He emphasized that agriculture is an extremely important part of Guyana’s economic diversification strategy in which the country has already started to promote an aggressive agenda, with large scale food production, and has also begun to advance its agro processing and business agenda to unlock some of the persistent barriers to intraregional trade in agricultural output.

Minister Singh reaffirmed that Guyana continues to value partnerships and relations with the UN and looks forward to the translation of the development co-operation framework into national action plans for the process of implementation.

Also present at the signing ceremony was Minister of Parliamentary Affairs and Governance, Honourable Gail Teixeira, who recalled that this government struggled to achieve democracy in 1992 and 2020. She further explained that with the help of global partnerships this administration was able to overcome the obstacles. For this reason, she therefore emphasized the role of global partnerships in the preservation of democracy and its important link to development.

Meanwhile, the Honourable, Hugh Todd, Minister of Foreign Affairs and International Cooperation endorsed Guyana’s commitment to multilateralism and its support for global governance. He noted that inking of the agreement is a demonstration of our collective efforts towards the attainment of a better global environment.

The UN Resident Coordinator, Ms. Yeşim Oruç stated that “this important partnership agreement between the UN and the Government of Guyana reinforces our shared commitment to the achievement of the Global Goals and to mobilize the UN to accompany Guyana’s remarkable development trajectory.”

“Across all the areas of sustainable development, ‘People’, ‘Prosperity’, ‘Planet’ and ‘Peace’, there is great momentum in Guyana. We also know that there is much to be done for Guyana to reach its own national development ambitions. This framework agreement will guide the UN in our efforts to be an ever more responsive partner to Guyana. I am delighted to be signing this cooperation framework today on Human Rights Day and on behalf of the UN agencies, funds, and programs operating in Guyana. My UN Country Team colleagues and I look forward to working with you and the people of Guyana in delivering on this partnership through a range of country programs starting in 2022,” added Ms. Oruç.

The MSDCF is a development cooperation agreement that aims to accelerate progress on the Sustainable Development Goals and the 2030 Agenda for Sustainable Development. It promotes diversity, inclusion, and universal rights in national development efforts to ensure that no one is left behind. The agreement identifies common challenges faced by countries in the Caribbean region and positions the UN to complement national development efforts.

-Funding sought for critical interventions of national importance

Georgetown, Ministry of Finance, December 13, 2021: Government today presented financial papers to address a number of urgent interventions across several key sectors including Agriculture, Housing and Water, Health, Education, Public Works and Security, with Senior Minister in the Office of the President with Responsibility for Finance, Dr. Ashni Singh today making the presentation to the National Assembly as it resumed for its 32 nd Sitting.

The Financial Papers, amounting to over $26 billion, include Financial Paper No 3 of 2021 totalling $5.1 billion which caters for Contingency Fund advances covering the period July 22-December 9, 2021 and provides for a number of interventions, including payment for one off cash-grants to severed sugar workers, Out of Crop support to the Guyana Sugar Corporation (GUYSUCO), cash- grants to private school students, provisions for eight containerized offices and construction of two bridges for the Brickdam Police Station which was recently ravaged by fire.

On Saturday and Sunday last, the Government commenced disbursement of the one-off cash grants of $250,000 each to severed sugar workers with Dr. Singh and Minister of Agriculture Hon. Zulfikar Mustapha spearheading the distribution.

The grant was handed over to sugar workers at four estates- Enmore, Skeldon, Rose Hall and Wales. The grant was first announced by Vice President Dr. Bharrat Jagdeo during a meeting with severed workers earlier this year and forms part of Government's commitment to rebuilding and restructuring of the sugar industry and providing direct relief to the people of Guyana.

The closure of the estates under the previous Government had left thousands of workers on the breadline, resulting in the sudden death of village economies where the estates were located. As a result of the disbursements, over $1.3 billion will be injected into the estates’ surrounding communities.

Meanwhile, in relation to cash grants to children attending private schools, it would be the first time that this initiative was implemented. President Irfaan Ali, in September last granted approval for the Because We Care cash grant to be extended to parents of children attending private schools.

With respect to Financial Paper No 4 of 2021, $21.47 billion is being sought, including supplementary funding of $755 million for countrywide drainage and irrigation interventions as Government continue to address the impact of flooding across the country. President Ali recently activated a Cabinet-level Task force to respond to the current rainy season, so as ensure that there is a proactive and coordinated response and mitigative systems are in place and functional.

The Supplementary paper also seeks $7.7 billion to support the acceleration of the National Housing Drive. Notably, Government has surpassed the targeted allocations of 10,000 house lots by end of 2021 and is on the path to achieving the Manifesto promise of 50,000 house lots allocated by the end of the first term in office. Relatedly, $1.1 billion is provided for the upgrade and expansion of Coastal and Hinterland Water supply.

As Government continues with its aggressive infrastructure agenda, funding is sought for the Sheriff to Mandela Road Project, critical sea and river defense works in several areas and reconstruction of bridges at Issano and Bamia. Funds for the Baggage Handling System at the Cheddi Jagan International Airport (CJIA) are being sought in Financial Paper No. 4 as well.

Other allocations that are being sought include medical supplies to continuously address the ongoing COVID-19 pandemic, resources to support Amerindian Development projects and programmes, as well as funding for the rehabilitation of the Office of the Director of Public Prosecutions (DPP) in the aftermath of fire in November last. Additionally, Financial Paper No. 4 is seeking funding to help clear arrears to the Guyana Power and Light (GPL) Incorporated and payment on the mobilization advance on the City Hall Restoration Project.

These Financial Papers, which are seeking funding for a number of urgent interventions of national importance, will be debated during the next Sitting of the National Assembly slated for December 16, 2021.

Amaila Falls Hydropower Project (AFHP)

Cabinet, at its most recent meeting, has granted its ‘no objection’ for the Office of the Prime Minister to engage China Railway Group Limited to construct the Amaila Falls Hydropower Project (AFHP) based on a Build-Own-Operate-Transfer (BOOT) model where the company will supply electricity to the Guyana Power and Light (GPL) Inc. at a cost not exceeding US$0.07737 per KWH and where the company will provide the entire equity required by the project and undertake all the risks associated with the project.

This follows the publication of a request for proposals by Government in various national newspapers during the period July 25 to August 15, 2021. A total of four companies submitted proposals, and China Railway Group Limited was identified as the most ‘capable partner’ by the Evaluation Committee after a rigorous evaluation process, following which the National Procurement and Tender Administration Board (NPTAB) submitted the relevant recommendation to Cabinet for ‘no objection’.

The AFHP was first identified in 1976 by the Canadian company “Monenco’ during an extensive survey of hydroelectric power potential in Guyana. Various studies have since justified and strongly supported the construction of the AFHP. Recognizing the suitability and attractiveness of the project, the pre-2015 PPP/C Government had advanced preparation of AFHP by conducting extensive technical and financial studies of the project, including an environmental and social impact assessment (ESIA). The then PPP/C Government had also mobilized international investor interest in the project, and a major private international investor (the Blackstone Group) had expressed serious interest in undertaking the project. Additionally, the then Government had earmarked US$80 million earned by Guyana under the Guyana-Norway partnership within the Low Carbon Development Strategy (LCDS) to help finance equity in the project.

These efforts to advance the project were blocked and derailed by the then APNU/AFC Opposition, who voted against the project in the National Assembly. The APNU/AFC later maintained their opposition to the project when they assumed office in 2015 and failed to offer any alternative to the project. This was despite the fact that the APNU/AFC Government in 2016, with support from Norway, hired an independent consultant (Norconsult) to review the project. The report, published in December 2016, recommended the development of AFHP as the best option for Guyana to achieve affordable, low-carbon electricity.

Consistent with a commitment given by the PPP/C to resume work to advance this project in the Party’s 2020 manifesto, on the basis of which the Party was elected to office in 2020, this Government has resumed efforts to realize this flagship project under the new and expanded LCDS. In its current formulation, it is expected that the project will require no equity contribution from Government, in comparison with the previous project structure which was based on a Government contribution of US$100 million. Additionally, the current structure anticipates a cost of power that will be lower than the initial cost of 11 cents per KWH contemplated by the previous project structure.

The AFHP will lower the cost of electricity needed to power Guyana’s economic diversification and transformation into a low carbon economy, as well as reduce the cost of power to the businesses and households. The project will also support initiatives such as the electrification of transport and e-mobility and accelerate the development of a robust ICT sector needed for an interconnected world as well as a competitive manufacturing sector.

The New Demerara Harbour Bridge (NDHB)

At the same meeting, Cabinet also granted its no-objection for the Ministry of Public Works (MoPW) to engage China State Construction Engineering Corporation Ltd. to construct the New Demerara Harbour Bridge (NDHB) based on a Design-Build-Finance (DBF) model with financial terms and conditions which would be no less favorable than those submitted in the preferred bidder’s price proposals. The proposal by China State Construction Engineering Corporation Ltd under the DBF model contemplates a construction cost of US$256.6 million, the lowest amongst all bidders.

Initially, the Government of Guyana, through the MoPW, pre-qualified nine (9) firms to submit bids for the construction of a two-lane dual carriageway (4 lanes) hybrid Cable-Stayed center span bridge with Concrete Box/T Beam Girder approach bridge structure with the following inclusions:

• Bridge collision protection.
  • Navigation span to accommodate Handymax vessel Navigation aids.
  • Lighting, signage, and all other ancillary works.
  • Access road with a minimum of 50 meters up to abutments.
  • Toll collection buildings and ancillary buildings on the West Bank of the Demerara River.

The pre-qualified firms were invited to submit bids to construct the bridge using a Design-Build-Finance (D- B-F) contract and Design-Build-Finance-Operate-Maintain (D-B-F-O-M) contract. At the pre-bid meeting, held on June 28, 2021, it was agreed that the closing date for submission of bids would be October 5, 2021. Only five of the pre-qualified bidders submitted bids, of which four (4) obtained the required minimum score for the technical proposal. The Evaluation Committee recommended that the Procuring Entity engage China State Construction Engineering Corporation Ltd. using the Design-Build-Finance (DBF) model on financing terms and conditions no less favourable than those proposed by the highest ranked bidder. The NPTAB subsequently submitted the recommendation to Cabinet, and Cabinet granted its ‘no objection’.

The NDHB comprises a critical component of the Government’s drive to expand and modernize Guyana’s transport infrastructure. It aims to replace the aging Demerara Harbour Bridge with a modern four-lane structure that will facilitate greater traffic capacity and dramatically improve commuter convenience. The new bridge will offer easy connectivity to both the existing East Bank Demerara road as well as the new Diamond to Ogle bypass on the eastern side of the River and to the existing West Bank Demerara Road and the new Parika to Schoonord Road on the western side of the River. The new bridge will also offer critical connectivity to the new Wales Development Authority which will be a major centre of productive activity when it comes on stream.

Georgetown, Ministry of Finance, October 20, 2021: Senior Finance Minister Dr. Ashni Singh and a group of Guyanese private sector representatives met earlier today with Mubadala, the sovereign wealth investment company within the United Arab Emirates. The Mubadala delegation was led by Mr. Musabbeh Al Kaabi, Chief Executive Officer of UAE Investments. The meeting took place at Mubadala’s headquarters in Abu Dhabi, on the margins of Guyana’s participation in World Expo 2020 currently being held in Dubai, at which Guyana’s delegation is led by His Excellency the President Dr. Mohamed Irfaan Ali.

During the meeting with Mubadala, Minister Singh and the Guyanese delegation reiterated the rapid economic transformation that is currently underway in Guyana, and highlighted a number of sectors that are poised for immediate growth and that are therefore ripe with investment opportunities. These include: the oil and gas sector which is poised to exceed one million barrels a day before the end of the decade; non-oil extractives such as gold, bauxite, manganese, and other minerals, with a number of international large scale operations already set to ramp up their production plans in the near term; tourism and hospitality including new and emerging sub-sectors such as the development of cruise ship facilities as well as yachting marinas; world class medical and educational facilities, including to provide medical care and education as services for export; as well as information and communications technology and others. Minister Singh also alluded to the several characteristics that make Guyana one of the most rapidly growing economies of the world and one of the most attractive destinations for investment globally under the leadership of President Irfaan Ali.

The Mubadala team welcomed the information shared by Minister Singh and the delegation on the Guyanese economy and associated investment opportunities in Guyana, sought various clarifications which were addressed by the Guyanese team, and signaled interest in advancing discussions in a number of specific areas. The two sides committed to advance these discussions as appropriate.

Mubadala is a $243 billion (UAE Dirhams 894 billion) business that spans six continents with interests across multiple sectors and asset classes. Headquartered in Abu Dhabi, Mubadala also has offices in London, Rio de Janeiro, Moscow, New York, San Francisco and Beijing. The UAE Investments platform within Mubadala contributes to the acceleration of the UAE’s economic transformation, and investing in national world class champions, fostering vibrant industrial and commercial clusters, and partnering with world-class global entities.

The Guyanese delegation’s participation in Dubai Expo continued during today and will continue tomorrow with a number of engagements set between the Guyanese representatives and representatives of both UAE Government agencies as well as private sector entities all with the aim of fostering closer economic ties and promoting accelerated economic growth.