US Ambassador pays courtesy call on Finance Minister-discussions centre on strengthening cooperation in key development areas


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.

Contingency Fund abused by Caretaker Government – $4.2 billion of advances left uncleared – new Finance Minister notes

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.

New Finance Minister assures: Notwithstanding inherited gloomy state, Guyana will see a turnaround – ‘PPP/C has a track record of sound economic management’

Georgetown, Ministry of Finance, December 4, 2020:

Reflecting on the terrible state of the country’s economy in 1992 when the People’s Progressive Party/Civic (PPP/C) administration entered office and its track record of sound and responsible economic management, Senior Finance Minister Dr. Ashni Singh has assured that his Government will once again do a repeat of the same this time around.

In some sense, I feel as though we are almost in deja vu …because those of us who are old enough would recall we also inherited a country in which the economy was in disarray with unsustainable levels of debt which then had to be restructured and the public finances had to be literally rebuilt from scratch.

He expressed the belief that it is beyond dispute that the PPP/C has a well-established track record for sound and responsible economic management and for policies that create an environment that is conducive and attractive to investment. The Senior Finance Minister noted that one simply has to look at what was achieved during the period 1992-2015 to remember when the country was returned from the brink of bankruptcy to a state where it was clearly on a path to prosperity. This assurance was given even as Guyana has only completed its fourth month of stewardship by the current administration after a previous five month hiatus of gloom when its citizens experienced a ‘nightmare’ election saga as well as continuous abuse of the Court system during which time its economy continued to spiral downward as there was less and less investor confidence and the political environment was extremely unstable.

Notwithstanding the gloomy state of affairs that has been inherited, we have set about in earnest immediately, to turn the situation around on a number of fronts: First of all, a non- negotiable pre requisite for an attractive investment environment is democracy and respect for the rule of Law. No international investor will come to a country that does not respect democracy, Minister Singh emphasized.

He recalled that ‘the world watched on in disbelief at the events of March-August and the world expressed collectively a sigh of relief when on August 2 President Irfaan Ali was finally sworn in as President-an event that really should have happened two or three days after March 2’.

Government inherited economy in disastrous state – Minister Singh

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’.

As reinvigoration of agriculture sector moves ahead -Finance Ministry advances partnership with IFAD

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.