Oil funds to help finance Budget 2022 – Vice President

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Former Member

Oil funds to help finance Budget 2022 – Vice President

─ says will ensure Guyana borrows less

January 22, 2022 -- Source -- https://www.inewsguyana.com/oi...2022-vice-president/

Vice President Dr Bharrat Jagdeo

Vice President Dr. Bharrat Jagdeo said Budget 2022 will be financed partly by Guyana’s oil revenues.

This will be Guyana’s first withdrawal from the Natural Resource Fund (NRF) since Guyana started collecting oil revenues in early 2020.

In a virtual interview with National Communications Network (NCN), Dr. Jagdeo said the oil revenues will reduce Guyana’s reliance on borrowing.

“The fiscal deficit this year, in this budget, would be lower than the fiscal deficit in last year, because from a financing perspective, that means we’d have to borrow less because some of the oil and gas revenue will go to replace the high level of borrowing that we have had.”

He reminded that Guyana is spending more now on big capital projects, and as they come on stream, the fiscal deficit may widen. However, because oil revenues will help to address the deficit, financing needs will be reduced.

As some have criticised the government’s decision to make early withdrawals from the Fund, the government has emphasised that it is better to use Guyana’s own resources, instead of continuing to build up debt unsustainably.

A significant part of the borrowing, Dr. Jagdeo said, started with the previous government – “$90 billion a year was coming from the domestic market!”

As this will not happen to such a degree, Dr. Jagdeo said that more funds will be left in the domestic market for private sector lending.

Fortunately for locals, the government expects this to have a favourable effect on interest rates. He said banks will have to be a bit more aggressive to seek out people to lend to, because they do not have so much ease of lending to the government.

This, the Vice President said, is part of the government’s strategy to deliver an element of sustainability in finances.

More positive impacts are to be expected from the use of Guyana’s oil revenues, as government has said it will spend from the Fund to make people’s live easier.

Currently, US$607 million sits in the Fund. While the withdrawal rule restricts withdrawals from the Fund to deposits made in the previous fiscal year, the first schedule of the Natural Resource Fund Act 2021 allows an exception in the first year, giving the government the latitude to withdraw the total balance in the Fund at once.

The Ministry of Finance has said that such a withdrawal is pertinent to address Guyana’s pressing development needs.

Budget 2022 will be read on Wednesday, January 26. [DPI Article]

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Former Member

Budget 2022 to be presented on Wednesday

January 21, 2022 -- https://www.inewsguyana.com/bu...sented-on-wednesday/

Dr Ashni Singh

Senior Finance Minister Dr. Ashni Singh has announced that Budget Day for this year will be Wednesday January 26, 2022.

The Minister had been over the last several months meeting and consulting with various stakeholders including Government Ministries, private sector and other agencies as preparations continued for the new Budget.

This Budget is expected to comprise a number of critical developmental programmes and projects which will catapult Government’s agenda and take the country forward. It will also be a continuation of the fast-paced development path which served to be of benefit to citizens all across the country since the People’s Progressive Party/Civic (PPP/C) entered office on August 2, 2020.

The 2022 Budget is the third Budget presented by the PPP/C administration and the second for Dr. Singh who has been serving as Senior Minister in the Office of the President with responsibility for Finance from November 2020 to present.

The first Budget was an Emergency Budget presented in August 2020. This saw the immediate reversal of a number of punitive taxes instituted by the former A Partnership for National Unity/Alliance for Change (APNU/AFC) Government among other significant measures while last year’s Budget comprised several developmental projects in a number of sectors.

The 2021 Budget presented in February 2021 under the theme ‘A Path to Recovery, Economic Dynamism, and Resilience’ included funding for the construction of various housing schemes and expansion of existing ones, investment in the revitalization of the country’s sugar industry, programmes in partnership with the private sector and other stakeholders for investment in the tourism and hospitality sector, the construction of a number of new roads and other infrastructure as well as a number of cash grants to citizens that assisted them after the destruction of crops and livestock during the devastating flood of June 2021, a seven percent increase to the public sector and cash grants throughout the year which allowed for the stimulation of the economy.

Additionally, the 2021 Budget provided for large injections into the health sector and assistance to frontline health sector workers (vaccines and other health supplies) as the country continued to battle the COVID-19 pandemic. The developmental programmes included in the Budgets all in all represent the fulfillment of promises made by the PPP/C administration in its 2020 Manifesto.

Government has indicated its intention to ensure that it fulfills every promise made to the citizens of Guyana and for which it was elected to office. [Press Release]

1/22/221:41 PM