VP debunks APNU’s claims that NRF interest could fund higher salary increases

Vice President Bharrat Jagdeo, a trained economist, has dismantled the assertions of Elson Low, the economic advisor to the Opposition Leader, wherein he posited that an A Partnership for National Unity-led Government could have afforded to grant public servants a salary increases greater than 6.5 per cent utilising purely the interest earned on the monies in the country’s Natural Resource Fund (NRF).
Speaking during a press conference on Thursday, Jagdeo explained that there was about US$270 million available in the NRF in 2022 for the fund managers to invest.
“The money now is invested in safe instruments…they get an average about five per cent interest per annum. So, if you invest that money…you will get about US$13 million per year in interest from the NRF. That is about G$2.7 billion. Guess how much the 6.5 per cent cost us? G$7.9 billion but the interest on the NRF will only give you $2.7 billion and Elson Low said to the media…they will fund a higher salary increase only from the interest alone on the NRF…this is the sort of policy we can expect from APNU/AFC. Just a wild rhetoric,” the Vice President outlined.
“So, he lied to the country, lied blatantly, but nobody would ever fact-check this,” Jagdeo expressed, further lamenting that fact that the policies of the People’s National Congress (PNC)-led APNU seem to be aimed at plunging Guyana into debt.
“So, when you earn interest on the sum of money you’ve set aside in the NRF to save for the future…the interest is then capitalised, you don’t take it out to fund recurrent expenditure again. Maybe at some point in time when NRF is of such a quantum and there is a need, because oil prices fluctuate, you may need to do that in the distant future, but we haven’t built up a NRF of that magnitude as yet,” Jagdeo explained.
“But he wants to start spending money that we don’t even have. That is the philosophical underpinning of the APNU. Why do you think this country ended up with paying every cent of tax dollar we collect to service debt, it’s because of the same philosophy of past PNC Governments, they spent what we didn’t have and a whole generation suffered because of that…”
In 2021, the Government amended the NRF Act to bring greater transparency and accountability in the management of Guyana’s oil resource, including the requirement of the Government to seek annual parliamentary approval for withdrawals from the NRF as stated in Section 19 of the NRF Act 2021.
Under that provision, as part of its consideration of the budget process, the Parliament approved US$1.002 billion (equivalent to G$208.9 billion) to be withdrawn from the NRF in 2023.
Per the NRF Act 2021 and the approved Budget 2023, the Government made its eighth and final transfer, totalling US$152.1 million (equivalent to G$31.6 billion) from the NRF on December 27, 2023, to the Consolidated Fund.
This transfer brought the accumulated withdrawals for 2023 to US$1.002 billion, as approved to be withdrawn in 2023.

Inflation
Meanwhile, the Vice President also debunked more inaccurate economic positions of APNU, this time, regarding inflation and the cost of living.
He revealed that Guyana’s inflation rate for 2023 was 1.9 per cent, when the global average was between four per cent and five per cent.
“In any part of the world, you have to assess how a Government has been able to address a phenomenon, which is natural, particularly in times of escalating prices, global uncertainties, etc.…there are real reasons for price movement,” Jagdeo explained.
“You have to assess the competence of a Government in terms of how they have been addressing this issue, comparatively with others. It is not in a vacuum,” he added, as he further fired back at criticisms from the Opposition camp regarding the cost of living.
“Norton can’t say…that there would be no inflation in the world, because then they would be creating new laws of economics,” Jagdeo added.
The Vice President also reminded that the Government has implemented a number of initiatives aimed at bringing relief to citizens.
These include the removal of VAT from water, electricity and data services along with its removal from some everyday commodities, fuel lubricants and construction materials; support for the construction of homes through the handout of steel and cement; one-off cash grants to sections of society, such as farmers, fishermen, persons with disabilities, hinterland and riverine households, and pensioners; and the distribution of free fertilisers to farmers.