$70B in oil monies financing grants, employment, pension increases – VP

…debunks false notion of Guyanese not directly benefiting

In addition to the Government’s investments in infrastructure and non-oil economic sectors, $70 billion from oil revenues is being spent by the People’s Progressive Party/Civic (PPP/C) Government directly on the citizens of Guyana.
In 2022, US$600 million in oil funds was used to help fund the $553 billion budget… the first time since Guyana started producing oil that the revenue had been spent in the budget. This year, that figure will rise to US$1 billion.
According to Vice President Bharrat Jagdeo at his recent press conference, the increased spending can be traced to the Government spending directly on the people… which debunks the claim in some sections of society that Guyanese are not directly benefitting from the oil sector.
“The school kids now have $8.4 billion more in this year’s budget, that they did not have in 2020. The pensioners increased by $13,000, from $20,000 to $33,000. When you calculate it, it’s over $14 billion. Two categories getting nearly $23 billion,” Jagdeo said.
He also referenced employment costs, including the 14,000 part-time workers under the Government’s initiative. This particular initiative amounts to approximately $10 billion, making the increases amount to $33 billion more. This does not include the money being spent on public servants.
According to Jagdeo, if all of this is added up, it would amount to $70 billion more that the Government is spending from this year’s budget in employment, hiring part-time workers, the school children grant and old age pension.
“If you look at the growth in employment costs for the Government. In the last budget passed by APNU, it was $68.6 billion. This budget, it is $105.7 billion. So that’s a $37 billion increase in employment costs in the public service.”
“Four initiatives alone is $70 billion of the $200 billion budgeted this year from oil and gas… $70 billion goes to those categories. And people are not getting back anything in this country. That’s their argument. Leaving out the $5 billion for cost-of-living adjustment, the foregone revenue from lowered taxes.”
Government’s spending from the Natural Resource Fund (NRF) is overseen by the NRF Fund Board – which consists of five members, as well as the Public Accountability and Oversight Committee (PAOC), which is comprised of nine members, and the Investment Committee, seven members.
Since passage of the NRF Act in 2021, Government has gone on to establish the Natural Resource Fund Board. Following parliamentary approval, the Government has made several withdrawals from the fund, amounting to tens of billions of dollars, which were transferred to the Consolidated Fund to finance national development priorities.
This year’s $781.9 billion budget was financed for the first time by both oil and climate funds. The Government meanwhile made three withdrawals from the fund last year to finance Guyana’s national development plans. These withdrawals amounted to US$607.6 million (GY$126 billion) overall.
The funds from the NRF have their origins in the Stabroek Block – Guyana’s only block currently producing oil. The block is 6.6 million acres (26,800 square kilometres). Exxon, through its local affiliate Esso Exploration and Production Guyana Ltd (EEPGL), is the operator and holds 45 per cent interest in the block. Hess Guyana Exploration Ltd holds 30 per cent interest and CNOOC Petroleum Guyana Limited, a wholly-owned subsidiary of CNOOC Limited, holds the remaining 25 per cent interest.
Section 3 (1) of the NRF Act 2021, Act No 19 of 2021, which was assented to by President Dr Irfaan Ali on December 30, 2021, establishes the NRF to manage the natural resource wealth of Guyana for the present and future benefit of the people in an effective and efficient manner and in accordance with the principles of good governance, transparency, accountability, and international best practices, including the Santiago Principles. (G3)