Jagdeo schools Opposition on Govt’s withdrawal of $41.6B from NRF

– provides clarity on falsehood peddled by Norton

Vice President Dr Bharrat Jagdeo has dismissed statements made by Leader of the Opposition, Aubrey Norton, which suggested that the People’s Progressive Party/Civic Government is withdrawing additional sums from the Natural Resources Fund (NRF).
During a recent press conference, the Opposition Leader was questioned on the Government’s withdrawal of additional funds from the NRF, to which he responded that the Government does not budget properly. However, Jagdeo provided clarity on the falsehoods being peddled by Norton. He schooled that at the end of the fiscal year, using a specified formula, it is determined how much money will come from the Fund.
With there being a specific sum to be withdrawn for each fiscal year, the Vice President explained, this money is taken out of the Fund in parts and added to the treasury, where it will be spent thereafter. Therefore, it is not an additional sum, but rather what was calculated initially.
VP Jagdeo indicated during a subsequent press conference, “Every time we withdraw from the Fund, we notify [the country]. It’s not changing the amount that will be withdrawn. That is determined at Budget and by formula already.
“We’re not increasing the total sum. It’s just that we passed a law so that people will know when this happens for transparency. Norton doesn’t know this. It’s unbelievable that a Leader of the Opposition will say ‘they have gone back to withdraw an additional $30 billion from the Natural Resources Fund’…It is his incompetence that is reflected here, his lack of knowledge,” the Vice President argued.
Another clarification Jagdeo sought to highlight is that the Investment Committee relates to sums of money remaining in the NRF, not what is withdrawn from the budget. The Investment Committee follows a makeup of seven members who will advise the NRF Board on matters that concern investing the oil funds in a way that maximises the benefits to Guyana.
“The Natural Resources Fund, we put a management team to manage that, and the Investment Committee will guide that. The money that will be saved for the long-term, the unallocated sum to the budget, will have to be invested,” the Vice President stated.
Jagdeo reminded that a key section of the NRF Act dictates that the Finance Minister could face up to 10 years’ imprisonment if he fails to disclose the receipt of any petroleum revenue received by the Government in the Official Gazette within three months of receipt of such monies. As such, every withdrawal is announced to the public.
This week, Government made its second withdrawal from the Natural Resource Fund (NRF) for 2023, intended to fund programmes under this year’s $781.9 billion budget.
On Monday, the Senior Minister in the Office of the President with responsibility for Finance, Dr Ashni Singh, announced the withdrawal of US$200 million ($41.6 billion) from the fund. In accordance with the law, this sum will be transferred to the Consolidated Fund.
“It would be recalled that in February of this year, Government made its first withdrawal for the year, amounting to US$200 million equivalent to G$41.6 billion. This brings the accumulated withdrawals to date in 2023 from the NRF to US$400 million, equivalent to G$83.2 billion. 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 the fiscal year 2023,” the Ministry further said.
Last year, some US$607.6 million was withdrawn to finance national development priorities for 2022. 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 funds from the NRF have their origins in the ExxonMobil-operated Stabroek Block – the only block currently producing oil offshore Guyana. The oil-rich block is 6.6 million acres (26,800 square kilometres).