APNU/AFC Govt defaults on $20B debt in 2015
October 17, 2016 By Editor
…a dangerous Burnham tactic that will burden
future generations – economist
Guyana last year defaulted on payments of in excess of $20 billion that was supposed to be utilised to pay off in part, sections of the nation’s Public Debt—a dangerous situation that has since grabbed the attention ofsase-singh economists.
The fact that $20 billion was not used by the coalition A Partnership for National Unity/Alliance for Change (APNU/AFC) Government is documented in the nation’s audited accounts for 2015 undertaken by the Auditor General’s Office−the first such for the coalition government since taking Office.
In that 2015 Report, it is highlighted that Central Government’s current (recurring) expenditure was under the 2015 budget allocation by $25.8 billion.
This shortfall, according to the Auditor General, was mainly due to $20.3 billion under Public Debt, for servicing of loans, which was not utilised.
The remaining amounts that were not utilised was $2 billion for the Guyana Elections Commissions (GECOM) hosting of Local Government Elections which was not held that year; $1.2 billion which was unspent by the Finance Ministry; $280 million not used by the Ministry of the Presidency; and another $658 million allocated to the Health Ministry for activities not fully executed.
On the matter of the Finance Ministry failing to honour or pay its public debt by in excess of $20 billion, the once AFC aligned economist Sasenarine Singh has since questioned whether President David Granger is even aware of this development.
“Does President Granger know that his Minister of Finance (Winston Jordan) under-paid the debt by G$20 billion… If not, who really is the Finance Minister accountable to?” Singh queries.
Dangerous Burnham tactic
According to the economist, “not paying the debt down as budgeted is a debased financial strategy especially when there is money to fund this promise.”
Calling the development dangerous and reminiscent of the practices of the Forbes Burnham Administration, Singh is adamant that “not paying one’s debt, as promised, is a bad thing since it translates to the future generation being saddled with these debts as a brought forward from the past.”
He posits, “This means more taxes for the primary and secondary school children of Guyana when they grow up… Is this the legacy of the Granger administration?”
According to economist Singh, “It is the children of Guyana who will have to bear this future burden because of this misstep under the Granger administration.”
According to the economist, “This is a dangerous development and it harks one back to what happened under the Burnham administration when that government refused to pay the debt leading to the debt burden climbing to 98 cents of every dollar earned by 1990.”
Singh has since laid the proverbial gauntlet at the feet of the Fourth Estate saying, “The local media should demand an explanation from the Minister of Finance as to why he did not liquidate the promised amount of the national debt, when there was enough cash to take care of business.”
Meanwhile, as was the case with the significant shortfall in expenditure with regards to government’s recurrent expenditure, Singh has observed too that 2015 Auditor General’s Report highlights that Central Government failed to achieve their anticipated levels of capital expenditure activities during 2015, resulting in a shortfall of G$8.5 billion.
This shortfall was attributed primarily to delays in the implementation of key infrastructure projects.
According to Singh, the appalling performance by Public Infrastructure Minister, David Patterson, comes as no surprise, “as I observed his performance as he struggled to compile a basic list of candidates in 2011.”
Singh also used the opportunity to take a swipe at the President’s address to Parliament on Thursday last calling it, “most uninspiring” and “illustrates he is definitely out to sea.”
Singh was also critical of the administration’s failure to garner its projected revenues for 2015 and points to the fact that even though revenue collection fell short, the administration was still on a spending spree.
Current revenue fell short in 2015 by $741 million and according to Singh, “when a nation cannot collect on its revenue but continues to spend on parades and marching parks like there is no tomorrow, then it means there will be less money for real Police services, real healthcare services, real services to the poor and the vulnerable and most importantly real educational services… Can you understand why President Granger cannot face the Teachers Union (GTU)?”
According to Singh, a government is as good as its first 100 days and “if this was President Granger’s 100 days, then God help Guyana.”
