…debunks claims that Guyana’s debt is not being managed effectively
Vice President Bharrat Jagdeo has assured that Guyana’s debt situation is not critical, contrary to reports in some sections of the media, noting that the revenue from the non-oil economic sector for 2024 exceeds the country’s total outstanding external debt.
During his most recent press conference, Jagdeo acknowledged that there was a time when Guyana was in a precarious position as a result of its debt. This was, however, because of economic mismanagement by the People’s National Congress (PNC) in the 1964-1992 period.
“At one stage, it (debt) was nine times more than our economy, in those early stages. Check (former Finance Minister) Carl Greenidge’s affidavit under the Green Mining Construction. So, we established that the debt was several times the size of our economy,” Jagdeo said.
Vice President Bharrat Jagdeo
At his press conference, Jagdeo referred to recent utterances in sections of the media, that Guyana’s reliance on oil revenues put the country at risk when paired with high levels of debt. Jagdeo debunked this, pointing out that even the revenue from Guyana’s non-oil economy dwarfs the country’s external debt today.
“Our non-oil revenue is greater than the total stock of outstanding debt. So, our non-oil revenue alone is greater than all of our external debts. Leaving out the fact that we have one of the lowest debt service ratios in the world. And our debt-to-GDP [Gross Domestic Product] ratio is low. And that’s how you look at capacity to repay.
“It’s a lie that the debt has grown, in absolute terms. Our economy is US$22 billion and our external debt, last year, was US$1.7 billion… less than the US$2.1 billion in the 90s. So, with our borrowing this year, it should get up say about US$2.1 billion. But our economy is US$22 billion. So even in absolute terms, it’s lower than in the 90s,” Jagdeo said.
According to Jagdeo, Guyana’s current economy is over 60 times bigger than the one the People’s Progressive Party/Civic (PPP/C) Government inherited in 1992. At present, Guyana’s per capita debt is over US$2000 per person, while the per capita GDP is over US$20,000. He further pointed out that this was against a per capita debt of US$2500 and GDP of US$300 in the 90s.
While presenting Guyana’s $1.146 trillion budget to the National Assembly, Senior Minister in the Office of the Presidency with responsibility for Finance and Public Service, Dr Ashni Singh had disclosed that at the end of 2023, total Public and Publicly Guaranteed (PPG) debt stood at US$4.5 billion, up 23.4 per cent from the position at the end of 2022.
Additionally, the country’s external debt amounted to US$1.7 billion at the end of 2023, up 13 per cent from the position at the end of 2022 on account of positive net flows from both bilateral and multilateral creditors.
Domestic debt totalled US$2.7 billion at the end of 2023, up from the US$2 billion at the end of 2022. This increase was attributed to the Government’s issuance of new Treasury Bills.
Further, last year, the total public debt service payments amounted to US$177.3 million, an increase from US$150.2 million in 2022 and this increase was driven by both domestic and external debt service payments.
The growth in Guyana’s non-oil economy has been a work in progress by the PPP/C Government. In fact, Guyana’s non-oil economic growth has been described as the second fastest in the world, making it clear that Guyana does not depend on just oil for its economic growth.
In the sugar sector, a 28 per cent growth was recorded last year. This was a result of the Guyana Sugar Corporation (GuySuCo) having produced 60,204 tonnes in 2023, compared with 47,049 tonnes in 2022. Similarly, the rice industry saw an expansion of seven per cent, with the Guyana Rice Development Board (GRDB) reporting a total production of 653,706 tonnes for 2023, above the 610,595 tonnes produced the previous year.
The performance in these two industries pushed the overall growth in the agricultural sector to 25 per cent in 2023. Additionally, the mining and quarrying sector grew by 42.6 per cent in 2023, mainly on account of the burgeoning oil and gas industry. (G3)
