Announcements

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’.

Georgetown, Ministry of Finance, December 1, 2020: With Government moving full speed ahead in terms of its reinvigoration of the agricultural sector to assist in boosting Guyana’s economy, the country’s Senior Minister of Finance within the Office of the President, Dr. Ashni Singh today participated in a virtual meeting with International Fund for Agricultural Development’s (IFAD) Country Manager, Ms. Maija Peltola and her team. The purpose of the meeting was to discuss financing for areas relating to Guyana’s agricultural sector which is a key pillar of the country’s economy and accounts for more than 20 percent of its Gross Domestic Product (GDP). Within the last years, less emphasis was placed on agriculture despite this sector contributing much in the past to the economy and employing large numbers of Guyanese. However, the new Government has been fervently mobilizing financing to inject more into the sector to ensure that it returns to its relevant mainstay position as a major contributor to the economy.

During the meeting, Minister Singh reiterated the high level of priority being placed by this Government on agriculture and food production, not only as a source of economic growth, but also as a means of generating income and improving the livelihood of Guyanese. He emphasized too that with continued focus on these areas, Guyana can also finally realize its potential of being the main source of agriculture and food production for the entire Caribbean region. IFAD began operations in Guyana over 20 years ago with the aim of expanding market opportunities for small scale rural producers to strengthen their capacity as small-scale enterprises. During the previous cycle, Guyana benefitted from US$6.9M for the Rural Enterprise and Agricultural Development project implemented during 2007-2015. Through this project, poor rural households in Regions 2,3,4,5,6 and 10 benefitted from better access to financial services and training in marketing and enterprise development. The initiative sought to improve the social and economic conditions of these households, particularly small-scale producers and vulnerable groups such as women and indigenous persons. Currently, Guyana’s active portfolio of operations with IFAD includes the Hinterland  Environmentally Sustainable Agricultural Development (HESAD) Loan with approved funds totaling US $7.952 M.