Category: Press Releases

29 Jan
By: Tanika Jones 0

Minister Jordan tours E-Networks’ subsea cable landing station

Applauds investment by local consortium to advance Guyana’s digital economy

(Georgetown, January 29, 2020): Finance Minister, Winston Jordan, on Wednesday was given a tour of E-Networks subsea cable landing station at Kingston, Georgetown. The landing station houses E-Networks’ Xlink cable, a newly constructed submarine fiber optic cable that links Guyana to Barbados.

Commenting on the project, Minister Jordan said that he was particularly impressed that it was organised and successfully executed by a consortium of local investors. He added that he was encouraged by the evident confidence of the investors in assuming such a massive and capital-intensive undertaking, that will provide considerable benefits for the development and modernising of the sector. This, he noted, aligned with the Coalition Government’s encouragement of the private sector in advancing Guyana’s economic expansion beyond agriculture and mining.

The Finance Minister further said that the Xlink project exemplified the ideal investment model for Guyana, one in which local benefits, local content and indigenous ownership are guaranteed through the collaboration of Guyanese companies, Guyanese investors and local financial institutions, especially now that the economy is poised for transformation.

Minister Jordan congratulated the Managing Director of E-Networks, Mr. Persaud for the boldness of the investment, and expressed full support for the Xlink venture. He said that he was excited about the possibilities it had for universal connectivity and the realization of the digital economy promised during the Decade of Development, 2020 -2029.

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21 Jan
By: Tanika Jones 0

Guyana’s Natural Resource Fund attains associate membership at IFSWF

(Georgetown, 21-01-2020) – Guyana’s Natural Resource Fund (NRF) has attained associate membership of the International Forum of Sovereign Wealth Funds (IFSWF); a global network of sovereign wealth funds of more than 30 countries including Singapore, Botswana and Australia. 

The IFSWF works to foster good governance, transparency, accountability and prudent investment practices within its members through the application of the Santiago Principles, helps them navigate the complex investment environment through knowledge sharing, and represents the ‘views of members to the wider financial community.’ 

The NRF was established in 2019 under the Natural Resource Fund Act 2019 and is designed to manage the revenues garnered from Guyana’s petroleum resources for the present and future benefit of the people, and for the sustainable development of the country. The Ministry of Finance has entered into an operational agreement with the Bank of Guyana to manage the Fund. 

The achievement of associate membership demonstrates Government’s commitment to transparently manage Guyana’s petroleum revenues.  

Read more about the NRF at finance.gov.gy. and at https://www.ifswf.org/members/natural-resource-fund.

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16 Jan
By: Tanika Jones 0

No increase to President’s salary as claimed by Citizens Report

Order signed before Parliament dissolved

(Georgetown, January 14, 2020) – The Ministry of Finance’s attention has been drawn to a report in the online media outfit Citizens Report, which claims that the President awarded himself a salary increase. This is patently false and the purveyor of this lie knows it to be so.

Had there been an increase in the President’s salary, there would have been a corresponding increase in the pensions received by the three ex-Presidents – Bharat Jagdeo, Samuel Hinds and Donald Ramotar. If Citizen’s Report was not so bent on causing public mischief, a quick check of the pensions of any of the three ex-Presidents would have shown that they have remained the same since 2015.

The Ministry wishes to remind readers that it is Mr. Jagdeo who caused the law governing Presidential pensions to be changed to 7/8 of the salary of the current President, instead of 7/8 of the salary of the President at the time he demits office.

It is unfortunate, as we enter the elections season, that the issue of a well-deserved increase in wages and salaries for public servants, who, under the PPP/C administration, were financially impoverished and subjected to poor working conditions, should be twisted into a blatantly false claim.

It is worth recapping that this latest increase in the minimum wage represents an overall increase of 77 per cent since the A Partnership for National Unity/Alliance for Change (APNU+AFC) coalition took office in 2015. This is a tangible demonstration of the government’s commitment to building a Good Life For All Guyanese, as we enter the Decade of Development. 

It is also unfortunate that attempts were made to impugn the Constitutional Order, which was signed by Minister of Finance Winston Jordan, on December 2 2019, well within the life of the Parliament, which was dissolved on December 29, 2019. 

The Ministry wishes to exhort the reporters of Citizens Report to become more acquainted with the tenets of good reporting, rather than pander to their handlers and do a disservice to their readers. 

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16 Jan
By: Tanika Jones 0

MoF debunks claims by former President of GCCI

(Georgetown, January 15, 2020) The Ministry of Finance notes with alarm the comments of former President of the Georgetown Chamber of Commerce and Industry, Deodat Indar, at a roadside meeting, recently. We are quite appalled at his interpretations of economic issues, and are, equally, flummoxed at his wild allegations and fear mongering on critical aspects of the economy. To the less informed, his ramblings would have been sure to cause anxiety.

It appears that we are indeed, in the ‘silly season’, but this does not give any person the licence to make unfounded pronouncements and believe that those pronouncements will go uncontested. It is for this reason that the Ministry of Finance would like to add context to, or refute outright, the allegations made by him.

Mr. Indar claims the following:

1. That the government has spent all the monies and sold all of the gold held in reserves at the Central Bank. FACT: A cursory check with the Bank of Guyana will confirm that our reserves have always been positive. Additionally, reserves of the Bank are held distinctly and separately from the Consolidated Fund, the latter of which is used by Government for expenditure.

2. That Guyana is unable to pay its import bill because the government has spent it all. FACT: The reserves of the Bank of Guyana are used, principally, to pay for the imports of fuel and the servicing of Guyana’s external debts. All other imports are financed through the commercial banks, foreign currency accounts retained by approved persons and/or foreign direct investment. The Central Bank’s reserves are adequate enough to meet the identified imports. All of the reports from the international financial institutions on Guyana’s economy including the most recent IMF Article IV Country Report never commented negatively on the state of Guyana’s reserves. In fact, these reports have lauded government’s efforts to avoid the presource curse and its management of the economy.

3. That the introduction of VAT on forestry products caused imported pinewood to be sold cheaper than local woods. FACT: Indar neglected to mention that it is the Minister of Finance who initiated the establishment of the Inter-Ministerial Roundtable with the Guyana Manufacturing and Services Association (GMSA) as a means of addressing challenges within the sector; that this Roundtable included the Ministers of Natural Resources and Business; that it is the government through the Ministry of Finance that sought an increase in the Common External Tariff from 5% to 40% on imported pinewood and pinewood products as a means of ensuring that local wood and wood products become more competitive; that it is the government through the Minister of Natural Resources that stipulated import permits for importers of pine wood as another means of managing its importation and ensuring that it cannot be sold cheaper than local wood products; that $120 million was set aside to begin a forest inventory; that logs and rough lumber for the saw milling industry became VAT exempt from January 1, 2018; that $50 million was allocated for the establishment of a dimension stockyard. Though sadly, the stockyard was never realised as an agreement could not be reached on a preferred model.

4. That the government has increased taxes. FACT: Indar has fallen into the mantra peddled by his political party that the government instituted 200 taxes since coming to office. However, neither he nor his fellow peddlers have been able to list these taxes simply because it is a lie. The truth is, this government has implemented tax reform that is unrivalled by any previous government at a similar stage. Among the progressive measures were substantial movement in the income tax threshold, from $600,000 to $780,000 or 1/3 of gross income, whichever is higher; lowering of personal income tax to 28% on the first $180,000 of chargeable income per month; removal of income tax on employees’ NIS contributions; lowering of company income tax to 25%; lowering of VAT to 14%; increase in VAT threshold to $15 million; and increase in the number of zero rated and VAT exempt items. Indeed, more than 100 reform measures were instituted that benefitted businesses and individuals. In addition, the Guyana Revenue Authority, which now enjoys real autonomy, has strengthened its monitoring and enforcement which has resulted in substantial expansion of the revenue base and facilitated the massive increase in workers’ wages and development across the country. More persons and businesses are now paying their true and correct taxes as a result. Mr. Indar may have also missed the news that the economy is growing and therefore, it naturally follows that the tax base will grow and, by extension, so will the amount of tax revenues collected.

5. That the government has spent 1.2 trillion dollars and cannot account for it. FACT: This unmitigated lie is really not worth a response; however, the Ministry of Finance has made public all of government’s spending through the publication of the annual budget, the Mid-year report and similar reports and publications from the National Tender Board and Administration. In addition to infrastructural, social, educational and other projects, government has had to repay billions of dollars in judgements won against the former government by local and overseas investors and businesses, bail out Guysuco to the tune of nearly $50 billion, and subsidise the tolls for citizens using the Berbice Bridge.

6. That investors in the oil and gas sector are the only beneficiaries of concessions; that local investors do not receive the same benefits. FACT: This is palpably false; it has been debunked on several occasions by the Minister of Finance and the Commissioner General. The investment agreement signed between the government and operators in the oil and gas sector states very clearly that the operators and their subcontractors will benefit from the same concessions, no matter their nationality. It is common knowledge that the oil and gas industry requires significant technical expertise and it would be naïve, unreasonable and downright callous to suggest that Guyanese were deprived of the opportunity for concessions as there are no Guyanese-born oil and gas companies of significant experience. However, again, subcontractors will benefit, regardless of their origin.

7. That the government has said it will give five thousand United States dollars to each citizen. FACT: It is Professor Clive Thomas who has been championing what he refers to as the ‘Buxton Proposal – Cash transfers to households’ and the Peoples Progressive Party that endorsed it soon after (See Demerara Waves report of October 3rd, 2019). There is no record of the government saying that it will be handing out unconditional cash transfers to citizens. In fact, the government is on record that while it will consider avenues to provide incentives to citizens through the revenues gained from the energy sector, those incentives must be sustainable. 

8. That the government has no plans for the oil and gas revenues that it will earn and that there is no local content policy. FACT: The Ministry of Finance successfully presented a Green Paper on Guyana’s sovereign wealth fund – the Natural Resource Fund (NRF) – which was fully legislated. As a result, the NRF is a solid piece of legislation that provides for the mechanism that will govern how revenues earned from our natural resources will be saved, spent or invested with full Parliamentary and public oversight. Further, the government remains committed to managing these revenues according to best practices, including the Santiago Principles, as demonstrated by Guyana’s recent acceptance as an associate member of the International Forum of Sovereign Wealth Funds (ISFWF). Additionally, the Green State Development Strategy sets out the priorities of the country, and revenues from oil will be utilised within the context of this national development plan. It should be noted that the GCCI, which Mr. Indar served, was invited to participate as part of the GSDS Expert Groups to ensure that the vision being elaborated was inclusive and representative of all facets of Guyanese society. Additionally, we wish to remind Mr. Indar that he is on record endorsing the draft local content policy spearheaded by the Department of Energy, which makes his criticisms about the local content policy disingenuous.

In closing, we would like to remind Mr. Indar that he has a duty to be honest with the people of this country whose votes he seeks. We hope he takes the time to remedy his uneven understanding of the economy and how it functions so as to ensure that when he speaks at events, the public is consuming factual and accurate information so that they may make informed and unbiased decisions. Voter persuasion through the peddling of distorted  information is tantamount to abuse of public trust and calls into question one’s suitability for public office.

The Ministry urges the public to conduct its own due diligence and research, and to reject misinformation.

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12 Dec
By: Tanika Jones 0

Ministry of Finance and Bank of Guyana Sign Operational Agreement for the Operational Management of the Natural Resource Fund

As part of Government’s preparations towards becoming a petroleum producing country and in anticipation of first oil in 2020, work commenced in earnest in 2017 on the drafting and consultations regarding the development of a Sovereign Wealth Fund (SWF) legislation for Guyana. Different countries who are fortunate enough to have such funds, determine the scope and objectives based on national development priorities and the Santiago Principles. The better managed of these funds have benefited from a core of competent professionals, effective and robust institutional mechanisms and transparent management and reporting mechanisms.

In Guyana’s case after several rounds of internal consultations, international expert consultations, examination of other country experiences and drafting support, particularly from the Commonwealth Secretariat an initial draft legislation was developed. In an effort to ensure awareness and secure public feedback on the content of a potential SWF, His Excellency requested the development of a Green Paper to be laid in Parliament. A Green Paper titled Managing Future Petroleum Revenues and Establishment of a Fiscal Rule and a Sovereign Wealth Fund was developed and published in August 2018. This supported wider stakeholder consultations with the private sector and civil society as well as international agencies and experts. Based on the feedback and comments received for our private sector groups and civil society engagements the Natural Resource Fund (NRF) Bill No. 14 of 2018 was tabled in Parliament on November 15, 2018 and assented to on January 23rd, 2019 – making the Cooperative Republic of Guyana one of the few countries in the world to have developed this type of legislation ahead of first oil!

Notable features of this landmark legislation – the Natural Resource Fund Act – include (i) a withdrawal rule that permits a flow of funds from the NRF into the national budget that is formula based; and, (ii) a design to achieve multiple objectives of – a) reducing the transfer of the volatility of oil prices and production into the economy, b) meeting the immediate and urgent development expenditure needs of our country and in turn benefits to our people, and c) intergenerational savings to ensure that the benefits of the extraction of this resource are shared across both current and future generations, recognising that oil is finite.

In order to ensure those savings are wisely and safely held and invested, the NRF Act of 2019 stipulates the mechanisms under which revenues will be deposited and how investments are to be conducted, including the eligible investments allowable. The Bank of Guyana has been mandated by the NRF Act to ensure that the NRF is managed prudently. Other countries that have similar funds managed by their Central Banks include Norway, Chile and Botswana. The inflows to the NRF will be in United States of America Dollars which will be deposited in US bank accounts held by the Bank of Guyana. It is important to note that most central banks and SWFs manage reserves by holding them in foreign denominated currencies outside of their jurisdiction. In preparation for its role as operational manager of the NRF, the Bank of Guyana has begun building additional capacity, supported by the World Bank’s Reserves Advisory and Management Programme (RAMP), with whom an agreement was signed on October 1, 2019.

On December 11, 2019, the NRF was one step closer to being operationalised after the Minister of Finance, Hon. Winston Jordan, and the Governor of the Bank of Guyana, Dr. Gobind Ganga entered into an Operational Agreement for the operational management of the NRF, in accordance with sections 11 and 12 of the NRF Act 2019.

This Agreement sets forth the obligations of the Bank of Guyana as the operational manager of the NRF, which include: 1) receiving and accounting for all deposits into the NRF; 2) investing the NRF In eligible asset classes; 3) appointing private managers and custodians; 4) reporting on the performance of the NRF on a monthly, quarterly and annual basis; 5) implementing management systems, procedures and risk management arrangements in accordance with international standards; and, 6) providing the public with information on the NRF as required by law; among others.

The Agreement, which will be published on the Ministry’s website in accordance with section 42 of the NRF Act, also includes the obligations of the Minister of Finance as the overall manager of the NRF that will allow for the effective operational management of the NRF by the Bank of Guyana. Additionally, the Agreement identifies certain principles for the operational management of the NRF to ensure transparency and accountability. Other important aspects of the Agreement include the fees to be charged by the Bank of Guyana, procedures for the appointment of private managers and custodians, and the liability for losses that may occur.

Signing today is a significant next step in establishing strong institutional arrangements to support the effective management of our petroleum revenues.

 

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25 Sep
By: Tanika Jones 0

Minister of Finance’ Remarks at the Unveiling of NIS Commemorative Stamp for 50th Anniversary

Mr. Chairman

Board of Directors of the National Insurance Scheme

Management and Staff of the National Insurance Scheme

Representatives of the Media

Distinguished Ladies and Gentlemen:

 

Good evening!

I am very pleased to join you for the unveiling of this Commemorative Stamp. This commemorative stamp is a postage stamp, which is being issued to honor the 50th Anniversary of the National Insurance Scheme (NIS). Fifty years of service to the Guyanese citizens is indeed a significant milestone that is worth observing and remembering in a symbolic way. And what better reminder than this stamp! Congratulations are extended to the Board of Directors, Management and Staff of the National Insurance Scheme.

Distinguished ladies and gentlemen, your golden anniversary is worth celebrating. as the organization, over the years, has metamorphosed from the provision of basic benefits at a central location in Georgetown, to an expanded coverage for employed and self-employed contributors at locations across Guyana. Modern technology has also transformed the way you have been doing business, as compliance and reporting can be done via the internet and within a much shorter timeframe.

Mr. Chairman, last year, during my address to the staff on the Scheme’s 49th Anniversary, I briefly traced the origin of the NIS. As I recalled, the idea of establishing the National Insurance Scheme was conceived by the late Linden Forbes Sampson Burnham, who, at that time, was Prime Minister of Guyana and Founder-Leader of the People’s National Congress. He would later go on to become the first Executive President of the country. Back in 1969, that political party held a majority government and the Peoples Progressive Party was in opposition. Mr. Chairman, I recall this tiny, but important, bit of our history because the establishment of the National Insurance Scheme was done against the backdrop of strong opposition by the PPP.

Today, I shudder to think how the absence of a National Insurance Scheme would have impacted the standard of living of our retirees and senior citizens, who are now recipients of old age pensions and other benefits; and the employed and self- employed individuals who are still in the work force but who access various benefits of the Scheme, such as sickness, maternity and spectacles. The National Insurance Scheme, having evolved and in spite of its challenges, is a living testimony of the foresight and wisdom of the PNC and the ability of the Government that it led to make wise policy decisions that are beneficial to Guyanese citizens. It is apposite to note that 50 years later, the PNC is the major partner in the Coalition Government that is transforming the country, from coastland to hinterland, improving equity in the allocation and distribution of the country’s resources, and calmly guiding the shape of state in this tense period leading up to the General and Regional Elections. We shall overcome.

Distinguished ladies and gentlemen, our Government is acutely aware that access to social security is pivotal to the economic and social well-being of Guyanese; it is a fundamental human right enshrined in the United Nations Universal Declaration of Human Rights. The establishment of the National Insurance Scheme a mere three years after Guyana gained political independence from the Britain, in May 1966, was a landmark achievement. I want to assure you that our Government will continue to make every effort to keep the National Insurance Scheme relevant and viable, so that Guyanese can continue to enjoy bigger and better benefits.

As the Minister of Finance, with responsibility for general oversight and policy guidance to the National Insurance Scheme, I am aware of some of the challenges that the organization faces, in its efforts to maintain financial sustainability. Some of these challenges are similar to those faced by other National Insurance Schemes in the region. This fact was well documented in a 2016 IMF study that was conducted on Social Security Schemes in the Caribbean. Among the findings were that an aging population, slow economic growth and high unemployment were major contributors to the high actuarial deficit that social security schemes in the Caribbean faced. The report recommended a range of reform measures to urgently reverse the trend.

But let me hasten to say that I am not suggesting that all the reform measures proposed by the IMF are suitable for our country. Clearly, some of them can have a negative impact on the economic and financial position of eligible contributors and beneficiaries. Be that as it may, I enjoin the Board of Directors and Management to urgently review the Scheme’s sustainability plan and come up with country-specific solutions to address these challenges. I can assure you of our Government’s continued support, so tangibly exemplified by the issuance of debentures to offset the loss that emanated from the reckless CLICO investment.

Your 50th anniversary comes at an historic period in Guyana. The arrival of the Floating Production Storage and Offloading Facility (FPSO), of which I had the pleasure of visiting in the company of the First Lady, has brought us closer to that reality. We are all anxiously awaiting the arrival of first oil. The developments in the oil sector have made Guyana prominent on the world map, and the recent discoveries of Exxon+14 and Tullow+2, just a few days ago, has catapulted our country among the world’s top oil producing nations per capita.

These developments will have implications for the performance of the National Insurance Scheme. Oil production will propel significant economic growth in Guyana. Preliminary estimates for real growth in 2020 and 2021 are 33.5 percent and 22.9 percent, respectively. These lofty growth rates would leave behind the single digit rates achieved in the post-Independence period. There is no doubt that these impressive growth rates will translate into more contributions remitted to the NIS.

Oil production will also create employment opportunities at all levels of the supply chain. It is for you, Board of Directors, Management and Staff, to the seize the moment (carpe diem) to expand the Scheme’s revenue base and enhance your financial position. You must continue to build capacity and put the necessary institutional measures in place to ensure that all employers, employees and self-employed individuals are registered with the Scheme and their contributions remitted in a timely manner.

You have come a far way; you reached another milepost. There is more work to be done.

Thank you!

And now it is my distinct pleasure to unveil this commemorative stamp.

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