Category: Reports

01 Jul
By: MOF Communications Unit 0

End of Year Outcome 2019

The End of Year Outcome Statement for the year 2019 is being presented as an update to the Mid-Year Report of 2019, instead of the usual update to the end of year projections that would have been included in the 2020 National Budget to Parliament, in November 2019, as part of the established annual budget cycle. As is well-known, this did not happen because of the political situation that unfolded, which necessitated the holding of General and Regional Elections before the due date. In light of those developments, Parliament was dissolved on December 30, 2019, resulting in the postponement of the preparation and presentation of the 2020 National Budget to a date to be determined in 2020. Budget 2019 was presented under the theme “Transforming the Economy, Empowering People, Building Sustainable Communities for the Good Life,” and was the second earliest presentation in the post-Independence history of Guyana.

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28 Feb
By: MOF Communications Unit 0

CRG Public Debt Annual Report 2018

Message from the Minister of Finance

I am pleased to present Guyana’s Public Debt Annual Report for 2018. This fourth Annual Report provides a detailed assessment of the country’s public debt as well as debt management activities and operations during the review year. Dissemination of information on public debt operations signifies Government’s continued commitment to improving transparency, accountability and good governance, all of which are important in our quest for sustainable economic growth and development.

Guyana had a successful year in debt management operations, marked by the historic issuance of a $30 billion bond in May 2018. The bond was arranged by Republic Bank on a five-year term, at an interest rate of 4.45 percent per annum, for the purpose of financing investments in the Guyana Sugar Corporation (GUYSUCO). This instrument was the first of its kind to be issued in Guyana, signalling the country’s entry into the capital markets.

During 2018, Guyana maintained sustainable debt levels through prudent debt management activities, which ensured government operations were financed at minimum cost, within acceptable risk parameters. The stock of total public debt has remained manageable, increasing by 3.2 percent, from $345 billion, at end-2017 to $356 billion, at end-2018. This increase resulted primarily from a rapid rise in disbursements, relative to 2017; and the contracting of new loans to fund government’s development initiatives. External debt accounted for 77.4 percent of total public debt, at end-2018, while domestic debt accounted for the remaining 22.6 percent.

Notably, the total debt to GDP ratio declined by 1.9 percentage points, from 46.1 percent for 2017, to 44.2 percent for 2018, on account of faster growth in nominal GDP compared to total public debt. The total debt service to revenue ratio remained stable, increasing by 0.6 percentage points to 8.2 percent in 2018, mainly due to a 0.9 percentage-point increase in the external debt service to revenue ratio to 7.4 percent, in 2018. These marginal increases in the indicators have not diminished Guyana’s strong debt sustainability position.

The national economy continued to register strong growth, expanding by 4.1 percent in 2018. Contributory factors included significant increases construction, manufacturing and services, coupled with heightened production of bauxite, livestock and forestry. However, declines in rice, sugar and fish production had a dampening effect on the growth rate. Going forward, Guyana’s economic prospects are bright, with oil production set to come on stream in early 2020. This development is expected to catalyse economic growth and engender buoyant growth in government revenues.

The anticipated economic expansion would increase Guyana’s debt carrying capacity. However, government is mindful of the vulnerabilities associated with excessive accumulation of debt and is very committed to long-term debt sustainability. To this end, a Public Debt Management Bill (PDMB) is being finalised. Once enacted, this critical piece of legislation would support long-term debt sustainability, by enshrining key considerations such as the authority to borrow and debt ceilings. The Bill would also mandate the formulation and implementation of a Medium-term Debt Management Strategy (MTDS), thereby ensuring that financing decisions are underpinned by a rigorous, comprehensive and cutting-edge methodology.

Importantly, proceeds from impending crude oil production would be deposited into the Natural Resources Fund –which was passed and assented to in January 2019 – and injected into the economy through the budgetary process, based on a fiscal rule. These injections are likely to supplant much of the current external borrowing as well as enable the retirement of expensive debt, leading to a reduction of debt levels, and concomitant reduction of exposure to interest rate and exchange rate risks. In the near-to-medium-term, Government intends to design and commence issuance of more domestic borrowing instruments such as treasury notes, in order to further mitigate risks associated with external borrowing. An increase in public issuance of domestic debt instruments would also promote domestic financial market development, by serving as a benchmark for private security issuances, and by encouraging wider participation in the domestic non-bank financial market.

Recent events, especially the discovery of vast crude oil deposits, have positioned Guyana for rapid economic and social advancement. Through sound macroeconomic management, government intends to successfully usher Guyana into this new and exciting chapter. Effective public debt management would play a crucial role in government’s overall macroeconomic governance framework.

Hon. Winston D. Jordan, MP
Minister of Finance
Cooperative Republic of Guyana

 

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CRG Public Debt Annual Report 2018
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05 Nov
By: MOF Communications Unit 1

Public Debt Report: Quarterly Statistics, June 2019

Highlights of Guyana’s Public Debt for the Second Quarter Ended June 30, 2019:

  • Guyana continues to manage its public debt in a prudent and sustainable manner, maintaining a moderate exposure to risk of debt distress
  • At the end of June 2019, the total stock of public debt was US$1,657.80 million, a 1.5 percent increase compared to the end-June 2018 position of US$1,633.97 million. This increase was mainly attributable to higher net flows, which were driven by substantially higher disbursements relative to principal repayments between June 2018 and June 2019. However, the total stock of public debt decreased by less than 1 percent from the end of first quarter 2019 position of US$1,660.16 million.
  • External debt stock accounted for US$1,274.04 million or 76.9 percent of the total stock of public debt at end-June 2019, while domestic debt was about US$383.74 million or 23.1 percent.
  • As at end-June 2019, the three (3) largest creditors in the external debt portfolio, ranked in order of share, were: Inter-American Development Bank (IDB) – 41.1 percent; Exim Bank of China – 17.8 percent; and Caribbean Development Bank (CDB) – 11.9 percent.
  • Total public debt service payments for the second quarter of 2019 amounted US$23.74 million, bringing the total debt service payments for the first half of 2019 to US$51.98 million. This represents a 17.3 percent increase from US$44.31 million for the first half of 2018.
  • Total external debt service for second quarter of 2019 was US$17.27 million, leading to an accumulated US$42.23 million in external debt service payments for the first half of 2019, or 81.2 percent of total debt service. Domestic debt service payments amounted to US$6.48 million in the second quarter of 2019, and US$9.75 million or 18.8 percent of total debt service payments in the first half of 2019.
  • In May 2019, Guyana fully repaid its debt to Trinidad and Tobago, in keeping with the Paris Club Bilateral Rescheduling Agreement signed on October 6, 2005. Trinidad and Tobago, which was Guyana’s largest bilateral creditor about two decades ago, generously wrote off US$482.5 million or 90 percent of Guyana’s debt as part of the Paris Club arrangements.
  • For the first half of 2019, 7.6 percent of total government revenues went towards external debt payments, whereas 1.75 percent went towards domestic debt service payments, resulting in a total of 9.35 percent of revenues being utilised for debt service payments.
  • Guyana made its first principal repayment to Kuwait for an amount of US$2 million in May 2019, in keeping with the terms of the Bilateral Debt Settlement Agreement signed in March 2019.
  • Throughout the second quarter of 2019, Guyana continued to actively engage in debt relief negotiations with the remaining bilateral non-Paris Club creditors in arrears. Argentina, Libya, the United Arab Emirates (UAE) and Serbia have all been provided with proposals outlining various options to settle Guyana’s debt in a mutually acceptable manner.
  • One (1) external loan for US$20 million was contracted in Quarter 2, 2019 from the International Development Association (IDA) to finance the ‘Guyana Petroleum Resources Governance and Management Project’. The Loan Agreement was signed on April 11, 2019. (For further details, see Table 10: External New Loans Contracted by the Government of the Cooperative Republic of Guyana for the period January 1 to June 30, 2019).
  • Disbursements in Quarter 2 2019 amounted to US$23.8 million, a 70 percent increase from the same period in 2018. This substantial increase was mainly due to improved project implementation, especially for projects funded by external financiers such as the Exim Bank of China. Overall, disbursements for the first half of 2019 amounted to US$35.2 million, a 13.5 percent increase when compared to the same period in 2018.
  • As at end-June 2019, external disbursing loans which represented about 22 percent of the external debt portfolio, remained unchanged from the first quarter of 2019.
  • Net inflows increased by US$7.7 million, from US$3.1 million in quarter 2 2018 to US$10.8 million in quarter 2 2019, resulting mainly from an expansion in disbursements. Net transfers grew in quarter 2 2019 by about US$7.6 million compared to same period in 2018.
  • The US dollar remained the dominant currency within Guyana’s external debt portfolio, comprising 73.4 percent at end-June 2019, while the Renminbi Yuan accounted for the second largest share at 17.8 percent. The currency composition of Guyana’s external debt portfolio renders it susceptible to exchange rate risk. A depreciation of the Guyana dollar against certain foreign currencies, in particular the US dollar, would significantly increase debt service payments in Guyana dollar terms. Notably, from mid-2018 to mid-2019, the Guyana to US dollar exchange rate moved from $208.44 to $210.45. This means that Guyana has had to pay an additional $2 million for every million US dollars spent on debt service.
  • Guyana’s total public debt portfolio was not highly exposed to refinancing risk, given that total short-term debt accounted for only 20.8 percent of the portfolio at-June 30, 2019.
  • Notably, the domestic debt portfolio bore a high level of refinancing risk, since 89.6 percent of the portfolio consisted of Treasury Bills (T-Bills) which have a maturity period of one (1) year or less.
Public Debt Report, Quarterly Report June 2019

 

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14 Aug
By: MOF Communications Unit 0

Mid-Year Report 2019

This report is prepared pursuant to Section 67 of the Fiscal Management and Accountability Act (FMAA) 2003 that prescribes that a mid-year report shall be produced in a manner and format prescribed as follows: “A mid-year report shall include – (a) an update on the current macroeconomic and fiscal situation, a revised economic outlook for the remainder of the fiscal year, and a statement of the projected impact that these trends are likely to have on the annual budget for the current fiscal year; (b) a comparison report on the out-turned current and capital expenditures and revenues with the estimates originally approved by the National Assembly with explanations of any significant variances; and (c) a list of major fiscal risks for the remainder of the fiscal year, together with likely policy responses that the Government proposes to take to meet the expected circumstances.”

Mid-Year Report 2019
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18 Jul
By: MOF Communications Unit 2

Guyana First Voluntary National Review High-level

The undertaking of the First Voluntary National Review has been, as expected, a technical, data-intensive process. Guyana has been and remains committed to evidence-based reporting and results-oriented planning. The VNR process aligns with these commitments and further reinforces the importance of strong data systems and institutions. Notwithstanding the late confirmation of Guyana’s participation at the High Level
Political Forum 2019, the country undertook what should have been a nine to twelve month review process in just under six months. A key consideration in developing the VNR is the desire to comprehensively tell Guyana’s story, supported by as much as data as possible.

The review process began with the development of a data collection tool by the Ministry of Finance which was issued in January 2019, to all Budget Agencies. A high-level VNR workshop was also hosted, in March 2019, which sought to improve awareness, understanding and ownership of the SDG Targets, facilitated technical group discussions on indicators and, ultimately, attempted to accelerate the data collection process required to prepare the VNR. Over the subsequent months, the varying capacities across agencies demanded the Ministry of Finance work closely with the Budget Agencies in one-on-one sessions to assist in various capacities including:

1) understanding some of the SDG Targets

2) self-assessing the relevance of existing data and indicators to the SDG Targets

3) developing new indicators based on existing data sets and

4) advising on areas of future focus for planning.

The VNR process, including stakeholder engagement, was also supported by the Ministry of Foreign Affairs and the Ministry of the Presidency.

First Voluntary National Review High-level

The undertaking of the First Voluntary National Review has been, as expected, a technical, data-intensive process. Guyana has been and remains committed to evidence-based reporting and results-oriented planning. The VNR process aligns with these commitments and further reinforces the importance of strong data systems and institutions. Notwithstanding the late confirmation of Guyana’s participation at the High Level
Political Forum 2019, the country undertook what should have been a nine to twelve month review process in just under six months. A key consideration in developing the VNR is the desire to comprehensively tell Guyana’s story, supported by as much as data as possible.

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14 Jun
By: MOF Communications Unit 0

Public Debt Report Quarterly Statistics March 2019

Guyana’s Public Debt Report Quarterly Statistics for the First Quarter of 2019 (January 1 to March 31, 2019) provides information on both the external and domestic public debt.

The external public debt comprises borrowings of the following:
1) Central Government;
2) Bank of Guyana;
3) Public Corporations (State-Owned Enterprises)
4) Government Guarantees;
5) Non-Guaranteed Public Corporations

The domestic public debt comprises the following instrument categories:
1) Securities (Treasury Bills, Debentures and Bonds)
2) Loans

NOTE: The Statistical Abstract does not include information on the private sector external debt.

 

Public Debt Report Quarterly Statistics March 2019
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