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Government to adjust Debt Ceilings

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  • Move would regularize inherited liabilities
  • Strengthens fiscal management and positions Guyana for economic take-off

Georgetown, Guyana, January 28, 2021:

In a bid to regularize several issues unearthed after assuming office in 2020, as well as to facilitate new financing for a transformative development agenda, government has moved to increase the ceilings for domestic and external debt. Earlier today, the Honourable Dr. Ashni Singh, Senior Minister in the Office of the President with Responsibility for Finance, tabled two orders in Parliament proposing adjustments to the two ceilings. It was proposed that the domestic debt ceiling be increased to $500 billion, almost 3 decades after the last upward revision to $150 billion, in 1994. Additionally, a new external borrowing ceiling of $650 billion was proposed, three decades after its last increase to $400 billion.

The move to increase the domestic debt ceiling was influenced by several factors, one of which is the existence of a large Consolidated Fund overdraft at the Bank of Guyana, accumulated over the last 5 years. Government is now seeking to remedy this situation through the issuance of appropriate instruments. However, if the overdraft were to be addressed under the existing ceiling for domestic debt, a breach would result. In addition, government would require the issuance of new domestic instruments, in future, to finance various policy initiatives, and to stimulate development of the domestic financial market. Meanwhile, the move to increase the external debt ceiling is to accommodate the existing level of external debt contracted, plus anticipated new borrowing to fund government’s development agenda.

Importantly, these revisions to the external and domestic debt ceilings do not threaten Guyana’s long-term debt sustainability, given the substantial economic progress made since the early to mid-1990s (when the ceilings were last revised) and the country’s robust economic outlook. At the time of the last revision in 1991, Guyana’s external debt ceiling was set at more than 1,000 percent of GDP. In contrast, the new proposed external debt ceiling would amount to less than 60 percent of GDP, using the latest 2020 GDP estimates. On the domestic side, when last revised in 1994, Guyana’s domestic debt ceiling was set at almost 200 percent of GDP. In stark contrast, the revised domestic debt ceiling would amount to less than 50 percent of GDP. The above- mentioned comparisons clearly depict that Guyana’s current debt carrying capacity could safely accommodate the proposed ceiling increases.

In sum, this landmark move serves to regularize and accurately reflect significant liabilities accumulated over the last five years and harness Guyana’s debt-carrying capacity to finance government’s transformative development agenda. This latest move is consistent with the incumbent administration’s sterling track record of prudent debt management in the course of safeguarding Guyana’s long-term fiscal and debt sustainability.

Post BREXIT: Finance Minister tables Order in Parliament to give legal effect to CARIFORUM-UK EPA

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Georgetown, Ministry of Finance, January 28, 2021:

As a result of Britain’s recent exit from the European Union (BREXIT), Senior Minister of Finance, Dr. Ashni Singh today tabled the Order to legally bring into effect the CARIFORUM- United Kingdom (UK) EPA and to ratify Guyana’s partnership with the UK.

Just prior to the conclusion of 2020 and immediately before BREXIT came intoforce, the Finance Minister had signed the Order while noting that access to the UK market would remain uninterrupted once the new CARIFORUM-UK pact was promulgated.

The Ministerial Order signed on December 30, 2020 sought to bring into effect as of January 1, 2021, the latter agreement to allow for continuity of the already existing preferential trading and investment relations for CARIFORUM states which trade with the UK.

Following the June 23, 2016 UK referendum to exit the EU and the concerns raised about the likely negative impact this would have on regional trade, CARIFORUM Ministers and the UK Government agreed to a roll over of the CARIFORUM-EU-EPA to take effect once the UK finally exited the EU. The roll over agreement resulted in the CARIFORUM-UK EPA and would allow for a seamless process to ensure uninterrupted market access and other EPA benefits for itself and for CARIFORUM in trade with the UK.

After he tabled the Order, Minister Singh reiterated that his government considers the United Kingdom a very highly valued trade and economic partner and for that reason places the highest importance on ensuring a seamless transition to the post-BREXIT dispensation in the interest of ensuring uninterrupted market access as well as continued and increasing levels of trade between the two countries. The Order is expected to come up for debate at the next sitting of the National Assembly.

Amendment to Fiscal Management and Accountability Act (FMAA) tabled by Finance Minister

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Allows for streamlining of budget process for Constitutional Agencies
Ensures Parliament has comprehensive view of Budget in approval process

Georgetown, Ministry of Finance, January 28, 2021

An Amendment to the Fiscal Management and Accountability Act (FMAA) to ensure the streamlining of the budget process in relation to constitutional agencies was today tabled in the National Assembly by Senior Minister in the Office of the President with responsibility for Finance, Dr. Ashni Singh.

The critical piece of legislation cited as the Fiscal Management and Accountability (Amendment) Act 2021 seeks to amend the FMAA Chapter 73:02 to allow for the correction of a number of anomalies relating to the budget process applicable to constitutional agencies. According to the Finance Minister the amendment is necessary as it ‘seeks to streamline the Budget process particularly in relation to constitutional agencies while simultaneously ensuring the preservation of the independence of the agencies’.

Arising from the 2015 amendment to the FMAA by the A Partnership for National Unity/Alliance for Change (APNU/AFC), constitutional agencies’ budgets were required to be sent to the National assembly in advance of the submission of the rest of the National Budget. This two-stage process resulted in a fragmented and inefficient process for consideration of the National Budget and denied the Parliament an opportunity to view and consider the budget in a comprehensive manner.

The proposed amendment is important as well especially with Budget 2021 in its preparation mode and slated for presentation to the National Assembly in February, 2021.

Finance Minister calls for more timely payment of tax refunds

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Georgetown, Ministry of Finance, January 3, 2021:

Senior Minister in the Office of the President with responsibility for finance, Dr. Ashni Singh, has called on the Guyana Revenue Authority (GRA) to ensure that taxpayers who are legitimately entitled to tax refunds receive these in a timely manner. The Minister observed that taxpayers often complain that they have to wait an inordinate length of time before they receive tax refunds to which they are entitled. He pointed out that extended delays in paying tax refunds can have severe adverse effects on the cash flow of businesses and households, which in turn could affect both consumption and investment, and ultimately be a drag on economic activity on the whole.

The Minister emphasized, however, that more timely refunds should not in any way compromise the rigour with which the GRA verifies the legitimacy of each refund payable. Instead, Minister Singh stated that the verification and payment processes should be made more efficient to ensure that refunds are both thoroughly verified and promptly paid. The Minister’s call for more timely processing of tax refunds comes against the backdrop of a broader drive for improved service quality across public sector agencies. At the GRA, the Minister recently addressed senior management of the Authority and directed them to work immediately to improve the quality of their interaction with taxpayers, emphasizing the importance of the highest standards of integrity and efficiency across all aspects of their operations.

Processing of one-off $25,000 public sector grant to commence immediately-Finance Minister

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Georgetown, Ministry of Finance, December 31, 2020:

Following the announcement earlier today by His Excellency President Irfaan Ali of a one-off grant of $25,000 for all public sector employees, Senior Minister in the Office of the President with responsibility for Finance, Dr. Ashni Singh has stated that he has already instructed his Ministry to commence processing of the grant immediately.

Following His Excellency’s announcement this afternoon, I have already issued instructions within the Ministry of Finance for steps to be taken immediately to process this grant and my staff within the Ministry have already started that work. Our intention is to ensure that public sector employees receive this grant immediately, so work is ongoing as we speak to ensure that processing is done as swiftly as possible,” the Senior Finance Minister assured.

The Minister added that the one-off payment is to be made to all public servants, teachers, members of the Disciplined Services, employees of statutory bodies, subvention agencies and employees of public corporations such as the Guyana Sugar Corporation (GUYSUCO). Additionally, public service and Disciplined Services pensioners will also receive the one-off grant.

This one-off grant will see in excess of $2B being paid to more than 60,000 public sector employees. This grant is being paid by Government in recognition of the hardships that have been faced and the very challenging circumstances that have faced the employees of the public sector and their families,” Minister Singh reiterated.

The Senior Finance Minister noted that the one-off grant not only forms part of Government’s many other initiatives designed to bring relief to frontline workers and to households across Guyana, but is also a mechanism to stimulate economic activity in the country as it will allow for $2B to be placed in the hands of employees in the public sector, who will in turn consume or spend the disposable income in markets, shops, or other businesses within the country. Alluding to other initiatives recently implemented by Government and still ongoing, Minister Singh reminded that the one-off grant is to be viewed alongside and in addition to other recent initiatives such as the 2-weeks tax free bonus announced earlier this month for members of the Disciplined Services as well as essential Health care workers and the Covid-19 emergency $25,000 payment currently being made to Heads of households countrywide.

Put together, the Covid Relief Programme…. the bonus paid to the Disciplined Services and frontline health sector workers and the one-off grant announced today….the sum total of those is more than $10 Billion dollars put in the hands of the people of Guyana,” the Minister concluded.

Finance Minister successfully pilots Supplementary Appropriation Acts in Parliament-funding secured for key allocations

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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.

Budget Day yet to be finally determined-Minister Singh -date on Budget circular only an indicative date, not definitive

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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.

New NIS Board conducts first meeting -Senior Finance Minister attends

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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.

GRA should aim to be world class tax administration

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Georgetown, Ministry of Finance, December 16, 2020: Finance Minister tours GRA Headquarters, wharves amid hectic year-end clearance process -reiterates Govt’s zero-tolerance for corruption

           

Senior Minister in the Office of the President with responsibility for Finance, Dr. Ashni Singh today made his first visit as Finance Minister during his current tenure to the Guyana Revenue Authority (GRA) Headquarters and the various GRA facilities at respective wharves in Georgetown. The visit occurred amidst the busy Christmas and year-end clearance process and enabled the Minister to inspect the operations at the respective facilities. It also allowed for the Minister to meet with GRA Department Heads to outline his Government’s key priorities including increased efficiency and a high level of integrity.

During his visit to the Headquarters on Camp Street, the Senior Finance Minister, who was accompanied by newly-appointed Chairman of the GRA Board, Mr. Saisnarine Kowlessar, met with Commissioner-General Mr. Godfrey Statia and toured the various offices in the compound. After congratulating the new board members on their appointment and wishing them well in the discharge of their responsibilities, the Minister said, “GRA should aim to be a world-class tax administration,” as he addressed Senior Management gathered in the Oil and Gas Unit. He added, “It is opportune that we are meeting in the room of the oil and gas unit, as particularly where we are as a country, we are at a critical juncture, a defining moment, the moment that our country is really going to turn the corner from a country where there were a number of fiscal challenges to one which is now an oil producer and exporter with different challenges including the need to manage our finances carefully and sustainably.” On this note the Minister reminded GRA that despite the importance of revenue from oil and gas, domestic revenue mobilization was still a priority.

The coming into existence of an oil and gas sector does not mean that revenue collection from other sectors will not matter. In fact, it will be quite the opposite, he said as he alluded to other non-oil sectors which his Government will be prioritizing as well.

Pointing to the modernization of infrastructure taking place in the country, the Finance Minister noted that this must be accompanied by rapid modernization in the manner in which Government services are delivered to taxpayers. He further emphasized on GRA’s role in trade facilitation and the need for the rapid deployment of electronic tax-payer services along with delivery of services in a client-friendly manner. Turning his attention to corruption, Minister Singh then reaffirmed his Government’s zero tolerance stance on this as he cautioned that anyone found to be part of corruption would be dealt with condignly.

We expect as a Government, the highest standards of integrity and professionalism in revenue administration. That is the charge that President Irfaan Ali has given to his entire Cabinet. That is the charge that we are not only mandated, but required to convey to all entities within our respective sectors, he reaffirmed.

Wrapping up his visits, the Minister inspected the GRA’s operations at the various wharves including those at the Guyana National Industrial Company’s (GNIC) wharf and the GRA’s Container Scanner Unit.

 

CDB approves US$190 M Linden to Mabura Road project- US $11.6M Hospitality and Tourism Training Project also approved

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Georgetown, Ministry of Finance, December 11, 2020:

Following fruitful negotiations with the Caribbean Development Bank (CDB), Government yesterday secured two loans to finance substantial catalytic transformational projects for the country-namely the construction of 121 kilometres of road between Linden and Mabura in Region Ten as well as a Hospitality and Tourism Training Institute to facilitate training of persons to equip them with the necessary skills and qualifications to supply some of the demand required in the country’s Tourism and Hospitality sector.

The US$ 190 M Linden to Mabura Road project comprises a US$112-million loan from the CDB, a grant of £50 million (US$66 million) from the Government of the United Kingdom via the CDB- administered United Kingdom Caribbean Infrastructure Fund, along with US$12 million provided by Government. It is also the largest single project ever financed by the CDB and marks its largest geographic ‘footprint’.

In an invited comment, the Senior Finance Minister expressed gratitude to the CDB as well as the UK Government, especially acknowledging the importance of the UK Government’s grant and the country’s support of Guyana’s development. With Guyana increasingly becoming a hub for international visitors in light of the country’s new status of being a major oil producer and exporter, the Irfaan Ali administration has been placing focus on other productive sectors to ensure they receive the necessary financial support to be able to build capacity in order to accommodate the large influx of visitors and foreign investors. Against this backdrop, assistance in the Tourism and Hospitality sector became critical, thus the focus on construction of the US $11.6 M Hospitality and Tourism Training Institute to allow for international training.

The Institute is slated to be constructed at Providence behind the Guyana National Stadium. Meanwhile, the Linden to Mabura Road forms part of the wider development of the Georgetown to Lethem corridor and is estimated to provide direct employment in both the short and long term as well as advance sustainable livelihoods of small and medium enterprises operating at critical communal points in the project area including the Great Falls Indigenous Village and the Mabura Hill community. It should also improve connectivity and contribute to enhanced trade as well as ground transportation between Guyana and Brazil. The road is expected to be upgraded from a fair-weather road to an all-weather asphalt concrete one and would include new drainage infrastructure with enhanced capacity to mitigate the effects of flooding. Both projects had been conceptualized under the PPP/C Government prior to 2015 and had been in the pipeline since.