Home Letters Team Granger continues to ignore the IMF’s warning
On its face, the state of the nation’s public deposits might specifically and narrowly appear to be a central banking technical matter but it is not. But if you look at the direct impact it has on your personal pocket as Guyanese living in Guyana, you will see this plunder of the public deposits is taking place in a deeply worrying situation; the Granger Cabal is now unhinged when it comes to their squander-mania and the spending of your money without your permission.
But before I proceed, let us focus on some definitions so that we all can understand what is going on.
Public Deposits are Government deposits from the central Government – the place where the revenue raised from the Government by way of taxes, etc is hosted in order to back the payments made by the Central Government.
It is similar to the current account of any businessman. The businessman deposits his sales revenue in his checking account and it is from that account he writes his cheque against to make his payments.
Well similarly, the Public Deposit is the nation’s checking account – the controllers of the nation’s finance at the Ministry of Finance deposit all of its income there and then write Government cheques against it to meet its obligations and as approved by the Parliament.
When the PPP/C Government left office in May 2015, there was a positive cash balance in the Public Deposit of G$15.8 billion. That translates to the nation having G$15.8 billion in actual cash that we can touch, feel and spend; we had what my elders will call “the KAJA”, real cash.
Unfortunately, when I look at the Bank of Guyana’s balance sheet as of January 15, 2020, there is a NEGATIVE cash balance in the Public Deposit of G$74.5 billion. That translates to the Granger CABAL spending out all of that cash left by the PPP/C (some G$15.8 billion) and then went on to write cheques aggregating to some G$74.5 billion but this time none of those cheques are backed by real cash. The only thing those cheques have is a promise to pay from the Central Bank. But if this trend continues, confidence in the Central Bank to pay these cheques will deteriorate. It is has been 52 consistent months now since we have been having these negative balances, so this is not an anomaly, this is a hard-core overdraft.
This situation caused the IMF to warn in 2018 that to further prevent the weakening of the Asset Base of the Central Bank, these Government liability balances at the Bank of Guyana must be “settled” by issuing Treasury Bills to cover these imposed debts on the books of the Central Bank.
It has been 20 months now and team Granger continues to ignore the IMF’s warning.
Who would bring such harm to our nation’s bank account and refuse to act responsibly and fix it?