Dear Editor,
The attention of the Ministry of Finance has been drawn to a number of pronouncements made by Ram & Mc Rae on January 15, 2024. In customary style it draws sweeping conclusions, that are unsupported by any rigorous analysis and the facts on the ground. It is only designed to excite sound bites and attempt to obscure what is pellucidly clear, that this Budget builds on a strong foundation of responsible fiscal management by the PPP/C Government as we Stay the Course and Build Prosperity for All.
Planning and appropriate policy mix
In the introduction on Page 4, Ram & McRae claims, “The Government is clearly on a spending extravaganza, building without thinking, executing without planning and acting without analysis” This statement exposes the deliberate, baseless and disingenuous foundations of the entire report, since this Government has clearly articulated its steadfast Vision, Strategy and Plans for the broad-based and sustainable development of Guyana. The overwhelming priorities of Government’s strategy have long been identified through extensive consultative processes going back as far as the National Development Strategy, Poverty Reduction Strategy Plan and PPP/C Manifesto. Exhaustive efforts have been made in identifying projects including the New Demerara Harbour Bridge, Linden to Mabura Road, the Corentyne River Bridge and the list goes on. These projects will transform the lives of the citizens, and with the improved access to resources, are now being implemented.
Further Ram and Mc Rae noted that “If only 10% of this Budget is consumed in inefficiencies, that would be more than one hundred billion dollars”. What is the basis on which this is arrived at, other than soliciting sound bites? If one were to contrast this with the APNU/AFC, whose pre-occupation was the preparation of plans and studies and not actually executing projects, it is clear that the PPP/C government is action driven and has been actively delivering benefits to the citizens in this and all of its Budgets.
The International Monetary Fund (IMF) in its 2023 Article IV Consultation report published in December 2023, commended the Government of Guyana on the progress made on many fronts, including the implementation of policies and initiatives geared at transforming Guyana’s economy. The IMF in its report stated:
“Staff assess the 2023 policy mix to be appropriate, with fiscal policy increasing public investment to address the large development needs, and broad money growing in line with non-oil GDP”
Debt Management
In the area of Public Debt on page 12, Ram & Mc Rae highlighted:
“The debt profile of Guyana is fast changing. The Charts show a stable debt exposure under the APNU+AFC Coalition from 2015 – 2020 during which time the law setting a ceiling on borrowings was not amended once. The current Administration has already increased the ceiling twice since coming to power. The Minister has promised a further increase in 2024.”
The PPP/C government has demonstrated its sterling track record of transparent, accountable, and prudent debt management. Over the years, Guyana has been able to sustainably manage its public debt. The government’s effective debt management practices have contributed to a large decline in the country’s debt ratios over a sustained period. Guyana’s debt-to-GDP ratio has declined from about 600 percent in 1991 to about 27 percent in 2023. Additionally, in 1992 about 90 cents of every dollar of revenue earned was used to make debt service payments and today this has been drastically reduced to about 6 cents of every dollar.
Further, Ram & Mc Rae have conveniently failed to highlight that the APNU/AFC, in its last term of office illegally racked up on an overdraft of the Consolidated Fund, which they never reported as Public Debt and instead concealed in order to avoid reporting the breach in the debt ceiling. It is also a matter of public record that it is this PPP/C government that has regularized that overdraft, securitizing it with appropriate debt instruments, and putting in place arrangements to ensure that the fiscal operations of government are adequately financed without recourse to re-accumulation of the overdraft.
Natural Resource Fund
Ram & Mc Rae, on the subject of the Natural Resource Fund (NRF), states that “The Fund is already structured to allow substantial sums to be withdrawn before sums are retained as intergenerational savings.” The PPP/C remains guided by the principles of transparency and accountability in the management of the NRF and importantly has distinguished itself from the APNU/AFC administration through prudent and sound financial management while making the necessary investment for the development the our country. All withdrawals from the NRF will continue to be subject to the enhanced oversight enacted under this Government and are transparently used for sound and impactful investments that will be to the direct benefit of present and future generations. These positive actions of the PPP/C government in management of the NRF are also recognised and commended by the IMF in its Article IV December 2023 report, which states:
“The governance of the NRF was strengthened through the appointment of three critical entities in 2022: the NRF Board of Directors, the Public Accountability and Oversight Committee, and the Investment Committee. Furthermore, to ensure full transparency and accountability, notifications of receipts of petroleum revenues have been published in the Official Gazette…”
Budget 2024 presented by Dr. Ashni Singh, under the theme “Staying the Course: Building Prosperity for All”, underscores and builds on this Government’s commitment to maintaining a policy framework aimed at achieving the objectives outlined in the Budget, and at delivering the promises made in the PPP/C Manifesto, in the interest of ensuring that the country’s potential for lasting prosperity is realised and secured for the improved wellbeing of every single Guyanese.
Sincerely,
Ministry of Finance
