Last Updated on Friday, 10 December 2021, 9:44 by Denis Chabrol
Vice President Bharrat Jagdeo on Thursday announced that a board would be part of a new system to manage Guyana’s oil revenues under a simplified Natural Resources Fund (NRF) Act, in an effort to strip the process of ministerial influence.
In announcing that proposed amendments to the Natural Resource Fund (NRF) Act would be laid in the National Assembly on December 16, he told the Georgetown Chamber of Commerce’s 2021 Awards Ceremony that a Board of Directors would be appointed. “We are going to insert in the management of the fund a Board of Directors that sits between the minister (of Finance) and the management of the fund,” he said. No mention was made about where the Board members would be drawn from.
Mr. Jagdeo said that the People’s Progressive Party Civic administration declined to spend any of the almost US$600 million of oil revenues that are in the Natural Resources Fund until the law was amended to provide for “greater transparency in the use of the resources.” Describing the existing law as “cumbersome” and “almost impossible to operationalise”, he said the 22-member oversight committee would be scrapped as it is almost impossible to get anything done with such a large body.
It was not immediately clear if the oversight committee would reduced.
On the issue of withdrawals from the fund, the Vice President said a complex macro-economic committee that reports to the minister and calculates an economically sustainable sum that could be withdrawn would be changed in the amendments that are going to the House. “We are replacing all of that with a clear formula, a formula base that every Guyanese will understand; it’s not going to be complex,” he said, adding that limits would be placed on how much would be spent and saved for the future based on earnings.
Mr. Jagdeo said that currently, there is no transparency on how the amount would be calculated. “The Minister appoints the macroeconomic committee so he controls the macroeconomic committee and then the minister on his own determines the fiscally sustainable amount that he could withdraw,” he said.
The Vice President said that the Natural Resource Fund Act would also be amended to provide for a 10-year jail term for the Finance Minister if he or she fails to publish in the Official Gazette and notify the National Assembly three months after receiving oil revenues.
After the law is amended, he restated that the money would be spent on health, education, infrastructure and other sectors before the oil and gas sector possibly becomes unprofitable and the price falls.