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Depositing semi-autonomous agencies’ revenue in Consolidated Fund will help narrow deficit

Last Updated on Friday, 7 August 2015, 16:48 by GxMedia

Finance Minister Winston Jordan

Finance Minister Winston Jordan on Friday said government plans to withdraw an estimated GUY$30 billion in deposits being held by semi-autonomous state entities in commercial banks, saying that it would help to narrow the deficit.

Jordan, who is a former Budget Director at the Finance Ministry, said he told executives of the Guyana Association of Bankers that the monies to be withdrawn are not from the public sector deposits but are from entities that fall under the Public Corporations Act. They include the Guyana National Newspapers Limited, National Frequency Management Unit, Guyana Geology and Mines Commission and the Guyana Forestry Commission (GFC).

“The entities being targeted are semi autonomous agencies that are non commercial and not in the business of making a profit,” he told a news conference.

He said the GGMC alone has accumulated GUY$22 billion in deposits in the commercial banking sector.

The Finance Minister said the withdrawal of the estimated GUY$30 billion in deposits by the semi-autonomous agencies and putting them into the Consolidated Fund would help reduce the deficit to about GUY$2 billion. “If you want to bring back probity accountability and transparency we must follow the law,” he said.

Latest figures show that government is running a deficit of GUY$27 billion in 2013 and GUY$34 billion in 2014.

Quelling fears that the withdrawal could affect lending by commercial banks, the Finance Minister said the banks could tap into an estimated GUY$62.2 billion in treasury bills that help to mop up excess liquidity, stabilize inflation and the exchange rate. He noted that the banking regulations also allow the commercial banks to borrow from the Bank of Guyana.