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Three years later… Reporting for natural resource revenues still poor, inconsistent with int’l standards – IMF
Guyana is set to become an oil producer by mid-2020. In preparation for this, several international bodies such as the World Bank and the International Monetary Fund (IMF) have said that the government must improve its reporting framework so that there can be accountability for the oil moneys that will be used. But three years after this advice was given, the situation remains almost the same.
The IMF in particular, has once again, urged the government to strengthen its fiscal reporting on natural resource revenue flows. It also urged that efforts to improve existing systems must be consistent with international standards.
Further to this, the IMF wants the government to establish a process for regular public reporting on future natural resource revenues by source, that is to say, from the gold mining sector, the oil and gas industry and other mining sectors. It also called for the government to adopt its Fiscal Transparency Code, given the wave of revenue to hit Guyana’s economy in 2020.
The IMF’s Fiscal Transparency Code (the Code) is the international standard for disclosure of information about public finances.
The Code comprises a set of principles built around four pillars: (i) fiscal reporting; (ii) fiscal forecasting and budgeting; (iii) fiscal risk analysis and management; and (iv) resource revenue management. For each transparency principle, the Code differentiates between basic, good, and advanced practices to provide countries with clear milestones toward full compliance with the Code and ensures its applicability to the broad range of IMF member countries.
Pillar IV completes the Code by stating unique principles and practices applicable to resource-rich countries not covered under Pillars I-III. These principles and practices address transparency issues associated with the legal and fiscal regime governing the extraction of natural resources, the allocation of resource rights holdings, reporting by companies engaged in resource extraction activity, and the governance and operation of natural resource funds.
The Code underpins IMF Fiscal Transparency Evaluations (FTE), which identify strengths and weaknesses in fiscal disclosure, and make targeted recommendations for improvements in resource revenue transparency. The initial FTE pilots in Peru (2015), Tanzania (2015) and the United Kingdom (2016), which included an assessment of resource revenue transparency, have demonstrated that these principles of the Code are both useful and relevant to countries at varying degrees of resource development and resource revenue dependence.
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