Announcements

Georgetown, Ministry of Finance, December 28, 2020:

Supplementary allocations for key sectors including Agriculture, Housing and Water, Amerindian Affairs and Human Services were today secured when Senior Minister in the Office of the President with responsibility for Finance, Dr. Ashni Singh successfully piloted two Supplementary Appropriation Acts in the National Assembly during the 15th Sitting of the 12th Parliament.

An amount of $18.2B for the year 2020 was approved and comprised of Financial Paper 1- No. 1 of 2020 totaling $792.3M drawn down from the Contingency Fund, while Financial Paper 2- No. 2 of 2020 amounted to $17.4 B of Supplementary Provision. The advances from the Contingency Fund with Paper 1 included expenditure on uniform allowance for students in Regions 1,7,8 and 9, urgent repairs to agriculture access dams within Regions 2, 3 and 5, the procurement of motorcycles to support anti-crime operations, overseas training of engineers of the Guyana Defence Force (GDF) to provide maintenance to the King Air 350 Beechcraft and an advance payment on the acquisition of a Bell 412 helicopter which will increase the aerial operations’ capacity of the GDF.

In relation to Financial Paper No. 2, funds were secured for several sectors including the Ministry of Finance for the provision of partial clearance of inherited stock of arrears to the Guyana Power and Light Company and for the Ministry of Amerindian Affairs for the procurement of tractors and trailers for hinterland communities. Additionally, under the Ministry of Agriculture $4B was approved as a capital contribution to GUYSUCO, while $407M was granted for additional drainage and irrigation works in Regions 2, 3, 4, 5, 6 and 10 to enhance food security in light of the Covid-19 pandemic.

Meanwhile, funding was also secured for other key sectors such as the Ministry of Public Works for additional resources to advance the country’s roads programme, $2. 5B for the Ministry of Human Services in relation to additional provision for the Covid-19 relief household initiative and a $2B allocation under the Ministry of Housing and Water for additional infrastructural works in new and existing areas. An amount of $4.2 B for 2019 with respect to illegal withdrawals from the contingency fund by the APNU/AFC Coalition Government was also cleared. It must be noted that these unauthorized withdrawals were done at a time when the then Government had lost a No-confidence Motion and was in caretaker mode.

Georgetown, Ministry of Finance, December 22, 2020:

Senior Minister in the Office of the President with responsibility for Finance, Dr. Ashni Singh has clarified that no fixed date has yet been set for the presentation of Budget 2021 and that a date reported by at least one media outlet today was simply an ‘indicative’ date on the Budget circular disseminated just about two weeks ago.

It was brought to my attention that at least one news outlet has reported that the date for the 2021 Budget has been set-that the Budget Date is February 5, 2021. The actual specific date for presentation of the 2021 Budget is yet to be finally determined. I suspect that the speculation about February 5 is probably derived from the Budget circular,” he said.

The Senior Finance Minister further noted that budget circular timelines are usually set out for the budget preparation process and stages are stipulated with deadlines set for each process. “So the Budget circular did include a date- an indicative date- for presentation of the Budget which we are targeting…..but that is and always has been interpreted as an indicative date …the actual determination of which date precisely we are going to be tabling the Budget…that decision is going to be made I would say much closer to the time, “ he added, reiterating that ‘no decision has been made that the Budget will be presented on February 5th or any other date’.

However, the Minister pointed out that Budget 2021 will be the first full year Budget of his Government’s five-year term and as such, as was done on previous occasions- the medium and long- term priorities of Government will be outlined including Government’s long-term vision for the country.

The manifesto outlines a lot of our major initiatives and big projects that will be our main departure points. In addition, we are hoping also to try to streamline the Budget so that the expenditure that we incur is more efficient as well. We’ve highlighted the fact that our predecessors in office were a lot more extravagant in spending in certain areas and we are hoping to streamline some of that spending, not necessarily eliminate it but to channel it into more productive areas… that will contribute in a more meaningful and direct way to both stimulating growth in the economy and improving people’s lives,” Minister Singh further elaborated.

Georgetown, Ministry of Finance, December 22, 2020:

1. Emphasizes need for timely processing of claims and payments of benefits.

2. Notes level of work needed for financial viability to return to Scheme.

The recently-announced new National Insurance Scheme (NIS) Board yesterday held its maiden meeting at the NIS complex, Carifesta Avenue where Senior Minister within the Office of the President with responsibility for Finance, Dr. Ashni Singh was in attendance advising the Scheme’s board of the level of work needed and the challenges ahead in relation to the various problems to be addressed at the Scheme.

The Minister first thanked the Chairman, Mr. Ramesh Persaud and Board members in attendance for accepting the appointments as he also outlined some of his Government’s expectations in terms of the work necessary to return NIS to financial viability.

Over the last several years, we have seen the progressive decline of the Scheme. The NIS faces a number of challenges at the macro level and has come under severe threat. It is therefore going to take a lot of work to return the Scheme to long term financial viability,” the Senior Minister reiterated.

He also emphasized the level of importance his Government has placed on NIS, reminding the Board that pensioners and retirees look forward to their pension in a timely manner while current contributors expect to receive their benefits promptly.

Minister Singh related the Government’s grave concern at the number of complaints received from contributors about delays in receiving their benefits and entitlements, sometimes as a result of incomplete records of their contributions to the Scheme. As such, he tasked the Board with addressing this problem immediately, with a view to ensuring that public satisfaction with the level of service provided by the NIS improves urgently. Just over a week ago the Minister announced the appointment of former Private Sector Commission (PSC) Chairman, Mr. Ramesh Persaud as new Chairman of the NIS Board. Mr. Persaud is also currently the Chief Executive Officer (CEO) of the Institute of Private Enterprise Development (IPED) and also serves as a member of the Guyana Sugar Corporation (GUYSUCO) Board. The other members of the Board are Ms. Holly Greaves (ExOfficio), Mr. Faizal Jaffarally, Ms. Yvonne Pearson, Mr. Maurice Solomon, Mr. Satanand Gopie, Ms. Kathleen Jason, Mr. Seepaul Narine and Ms. Jillian Burton-Persaud.

Georgetown, Ministry of Finance, December 11, 2020:

As Guyana continues to foster deeper cooperation ties with the United States of America in key development areas, Senior Minister with responsibility for Finance, Dr. Ashni Singh today met with United States Ambassador, Sarah Ann Lynch at his Ministry, Main & Urquhart Streets. The meeting provided an opportunity to discuss areas of mutual interest that would be strengthened through bilateral and multilateral channels, trade and financial measures. With Guyana now being an oil producer and exporter, the country has seen significant interest by international investors in oil and gas as well as in other productive sectors. This is pivotal to Government’s efforts in reinvigorating the non-oil economy. Moves have been made recently and continue to be made to foster investment in Guyana’s rich agricultural and tourism sectors. Minister Singh used the opportunity to thank Ambassador Lynch for her country’s unwavering support of democracy and the rule of law in Guyana. This assisted in paving the way for the strengthening of ties and continued successful bilateral relations.

The two officials discussed how US support can help strengthen institutional capacity and the business environment against the background of heightened investor interest in Guyana. These discussions took place against the backdrop of the Framework Agreement signed between the two countries to strengthen Energy and Infrastructure Finance and Market Building Cooperation, security among other key areas. The Agreement was signed in September 2020 between His Excellency, Dr. Mohamed Irfaan Ali and United States Secretary of State, Mr. Mike Pompeo when the latter and his team visited Guyana.

Notably, the majority of overseas-based Guyanese reside in the United States of America forming the largest bloc of its diaspora. As such, Government has also vowed to leverage the skills and investment potential of this bloc as it continues on its development path to prosperity.

Georgetown, Ministry of Finance, December 4, 2020:

Despite being a caretaker Government and ironically even after acknowledging that they were in caretaker mode, the A Partnership for National Unity/Alliance For Change (APNU/AFC) coalition abused the Contingency Fund, withdrawing large sums long after losing the new confidence motion, and leaving a total of $4.2 billion of uncleared Contingency Fund advances. This was noted today by Senior Minister in the Office of the President with responsibility for Finance who lamented the state of the economy during an interview.

Much to our astonishment and during the latter part of 2019….after the Caribbean Court of Justice’s (CCJ) ruling in June 2019….no less than G$4.2 billion dollars was drawn from the Contingency Fund to meet a variety of expenditure that had not been budgeted for, he explained.

The Senior Finance Minister reminded that considering that an election was impending and that even though then President Granger had acknowledged himself that his Government was in caretaker mode, the Government nevertheless dipped into the Contingency Fund to draw down on G$4.2 billion from July 2019 onwards until as late as December 2019.

Ironically, the Government had boasted the previous year that they had not used the Contingencies Fund in two years, 2017 and 2018, … and it appeared to have been a matter of great pride to them… yet in the second half of 2019 when they were clearly in caretaker mode, they appeared to have no reservations about turning to the Contingencies Fund and drawing down no less than G$4.2 billion, he stated.

Georgetown, Ministry of Finance, December 4, 2020:

The country’s financial situation when President Irfaan Ali was sworn into office on August 2, 2020 was found to be in a disastrous state, according to Senior Minister responsible for Finance in the Office of the President, Dr. Ashni Singh. The Minister today explained this during his first interview with the Department of Public Information as he addressed a number of matters pertaining to the state of Guyana’s economy and what Government has been doing to bring the country out of the state of depression it was under not so recently.

The economy went through an extremely challenging period over the last five years and this has manifested itself in a number of areas, including very modest, sluggish growth. At a time when oil production was imminent, we should have seen much more rapid growth given all of the investments that have been coming on stream in preparation for oil production, he noted.

The Minister pointed out that what instead happened was catastrophic, to put it mildly, in terms of economic performance especially in the last two years.

“A large part of this was due to the political environment…for the last 2 years the country was in a situation where a No-Confidence Motion (NCM) had been passed in December, 2018 but was not being respected with the constitutionally stipulated election that should have come within three months of an NCM and that effectively created a political environment that was severely harmful,” he said adding that there was limited economic activity with both investor and consumer confidence drying up. Minister Singh lamented that things got even worse during the period between March 2 to August when the political environment deteriorated even more dramatically bringing the economy to an effective stand-still.

Mismanagement of public finances

The Finance Minister then pointed to the state of public finances which according to him were ‘nothing short of disastrous’ as he specified the excessive taxation placed on the backs of the private sector and citizens, pointing out that government collected revenues totaling G$992 billion between the period 2015-2019. Despite this huge revenue collection, the then Government utilized these funds in an unproductive manner through wasteful and inefficient government expenditure with total government spending amounting to G$1.2 trillion Guyana dollars. After accounting for grants received, the aggregate fiscal deficit of the central government amounted to G$130 billion over the five year period. On the subject of external debt, the Minister pointed out that the previous government had contracted new external debt of US$400 million during their five years in office. On domestic financing, Minister Singh pointed out that when the PPP/C demitted office in 2015, Government had left a net deposit at the Central Bank of G$16 billion. After five years of economic mismanagement by the previous Government, the new Government is now burdened with a net overdraft of G$93 billion at the Central Bank. He added that if this overdraft is counted as domestic debt, this would result in an effective breach of the domestic debt ceiling.

In addition to this, Government is also currently saddled with the G$30 billion NICIL bond of which G$17 billion has been drawn down, and a staggering G$12 billion owed to the Guyana Power and Light (GPL) by government entities, including G$7 billion owed to the utility by the Guyana Water Incorporated (GWI).

Concluding the details of the disastrous situation which is now being attended to by the current administration, Minister Singh pointed out that the overdraft at the Central Bank was highlighted by the International Monetary Fund (IMF), “the IMF does annual reviews of our economy as they do with every other economy around the world and… on at least two occasions the IMF drew attention to the overdraft that was accumulating at the Central Bank, flagged it as an issue of concern, and called on the Government to take corrective action to resolve this matter. That action was not taken for whatever reason and now remains to be resolved’.