The Guyana Government has drawn another $41.6 billion (US$200 million) from the Natural Resource Fund (NRF) to finance national development priorities.
In a statement on Thursday evening, Senior Finance Minister Dr Ashni Singh announced that this sum is an accumulation of the third and fourth withdrawals from the NRF in accordance with the Natural Resource Fund Act 2021.
Pursuant to Section 16 of the NRF Act 2021, in August and September US$100 million each, representing a further US$200 million – equivalent to $41.6 billion – had been transferred from the Natural Resource Fund to the Consolidated Fund, Dr Singh explained.
In February and May of this year, the Government made withdrawals totalling $83.2 billion (US$400 million) from the NRF, which is being held in an account at the New York Federal Reserve Bank in the United States.
These latest drawdowns now bring the accumulated withdrawals from the NRF for the year 2023 to $124.8 billion (US$600 million).
In keeping with the NRF Act 2021, as part of the Budget 2023 process, Parliamentary approval was granted for a total of US$1.002 billion to be transferred during fiscal year 2023.
When the NRF Act 2021 came into operation on January 1, 2022, this was a major step for Guyana in improving its transparency and accountability and overall management of the country’s natural resource wealth.
“The PPP/C (People’s Progressive Party/Civic) Government will continue to work aggressively through sound and transformative investments of oil resources from the NRF, utilising these resources in a clear and transparent manner, to the benefit of present and future generations,” the missive from Minister Singh detailed.
In 2022, the Guyana 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.
The funds from the NRF have their origins in the oil-rich Stabroek Block – the only block currently producing oil with US oil major ExxonMobil as the operator. The block is 6.6 million acres (26,800 square kilometres) and currently has two Floating, Production, Storage and Offloading (FPSO) vessels – Liza Destiny and Liza Unity – producing the ‘light sweet crude.’
Since the passage of the NRF Act in 2021, the government has gone on to establish the Natural Resource Fund Board.
In January of this year, the Bank of Guyana signed an agreement to officially hand over control of the Natural Resource Fund (NRF) to the Board of Directors appointed by the President.
According to Section 5 (6) (d) of the Act, the Board is required to enter into an operational agreement with the Bank, so that management of the Fund can change hands. This agreement was signed two days after the reading of the 2023 budget.
The NRF Board is chaired by Major General (Ret’d) Joe Singh. Other members of the Board are Guyana’s Permanent Representative to the United Nations, Carolyn Rodrigues-Birkett; Private Sector Executive Ramesh Dookhoo; former People’s National Congress (PNC) parliamentarian Dunstan Barrow; and former Chancellor of the University of Guyana, Professor Compton Bourne.
Last month, Singh submitted the first NRF Report for 2022 in which he indicated that the NRF Secretariat is slated to be established in the second half of this year. With the establishment of the secretariat, he noted that the operational needs of the Board will be met.
Despite the absence of the secretariat, however, Major Singh assured that the NRF has been functioning in an efficient manner and has maintained contact and a healthy exchange of information with all relevant parties.
“The Board, through the Chairman, has been maintaining contact and exchanging information on a regular basis with the investment committee and the Public Accountability and Oversight Committee through their respective Chairs and with the Hon. Minister of Finance,” the Chairman said in the report.
He added, “Monthly and Quarterly Reports on the performance of the fund received from the Bank of Guyana have been perused by the Board and shared with the two committees of the fund. These reports and the performance of the fund are publicised within the prescribed timelines on the Ministry of Finance’s website and in the public media in compliance with the Act.”
Under the Principal Act, the Natural Resource Fund (NRF) has an Investment and Public Accountability Committee as well as an Oversight Committee.
The NRF Fund Board consists of five members, while the Public Accountability and Oversight Committee (PAOC) is comprised of nine members, and the Investment Committee, has seven members.
This year’s $781.9 billion budget was financed for the first time by both oil and climate funds. Prior to the date for the budget even being announced, it had been revealed earlier this month that a total of US$1 billion (G$200 billion) would be made available from the NRF for use in the Budget.
Last year’s Budget was the first time Guyana had used oil funds to finance a national budget.
