…as part of $329.8B parliamentary approved oil money withdrawal for 2024
The Government has withdrawn $51.9 billion from the Natural Resource Fund (NRF), marking the first tranche of the $329.8 billion in withdrawals approved by Parliament for the year.
The announcement was made by the Finance Ministry on Wednesday, with the Ministry announcing that the $51.9 billion (US$250 million) was withdrawn from the NRF on March 5, 2024.
According to the Ministry, this is in accordance with the NRF Act 2021, as amended by the Fiscal Enactments (Amendment) Act 2024. This Act had seen parliamentary approval being granted for the total withdrawal of $329.8 billion.
This sum, which is the equivalent of US$1.5 billion, marks the highest total of approved withdrawals since oil production started in 2019 and oil funds began to be used in the national budget in 2022.
“In accordance with this approval, the Government of Guyana has made its first transfer for 2024, totalling US$250 million (equivalent to G$51.994 billion) from the NRF on March 5, 2024, to the Consolidated Fund, within the total of US$1.586 billion (equivalent to G$329.8 billion) approved to be withdrawn in 2024,” the Ministry said in its statement.
In 2022, the use of oil funds had constituted 23 per cent of the national budget, while in 2023 oil funds had constituted 26 per cent. This year’s budget was $1.146 trillion, which means that oil money will constitute roughly 28 per cent of the 2024 budget.
Back in December 2021, Government amended the NRF Act to bring greater transparency and accountability in the management of Guyana’s oil resources, including the requirement of Government to seek annual parliamentary approval for withdrawals from the NRF as stated in Section 19 of the NRF Act 2021.
Pursuant to that provision, as part of its consideration of the budget process, the Parliament had approved a total of $208.9 billion (equivalent to US$1.002 billion) to be withdrawn from the NRF in 2023. But during his presentation of the $1.146 trillion 2024 Budget in January, Finance Minister, Dr Ashni Singh pointed to the need for an “optimal and dynamic financing mix”.
“Our Government will be proposing… a revision to the NRF withdrawal rule which, once approved, will result in an upward revision to the NRF withdrawal amount to take effect from this fiscal year.
“The revised withdrawal rule will retain the important feature that as production and revenue ramp up further, an increasing share of the inflows into the NRF will be saved relative to the share transferred to the Consolidated Fund to finance national development priorities,” he had explained, adding that this proposal would be placed before the National Assembly for consideration and approval.
The funds in the NRF have their origins in the oil-rich Stabroek Block offshore Guyana, where US oil major ExxonMobil and its partners – Hess Corporation and CNOOC – are producing light sweet crude using the Liza Destiny, Liza Unity, and more recently, the Prosperity Floating Production, Storage and Offloading (FPSO) vessels.
In 2022, for the first time, Guyana had used oil funds to finance a national budget. In fact, in 2022, the Government withdrew a total of $126 billion (US$607.6 million) in three tranches from the NRF which went towards financing Guyana’s national development plans.
In 2023, US$1.002 billion was withdrawn to finance national development priorities. The last of eight withdrawals for last year was made on December 27, 2023 from the NRF to the Consolidated Fund, to the tune of US$152.1 million (equivalent to $31.6 billion). (G3)
