Central Bank’s Governor cannot protect oil money – Opposition Leader

Dec 21, 2018 News

By Abena Rockcliffe-Campbell

Opposition Leader, Bharrat Jagdeo has dismissed assurances made by Bank of Guyana’s Governor, Dr. Gobind Ganga, that his team is aware of the worrying past of the United States Banking company, Merrill Lynch, and will proceed with caution.
Dr. Ganga’s comments were forthcoming after he was faced with questions concerning Merrill Lynch’s interest in managing Guyana’s Sovereign Wealth Fund, where the oil money will be placed.
But Jagdeo seems least impressed by Dr. Ganga’s statements. At his most recent press conference, Jagdeo said, “I see the Governor of Central Bank say, ‘we know and we will proceed with caution on Guyana’s oil money.’ I do not know what he knows, frankly speaking, but, the Central Bank is not autonomous. (Minister of Finance, Winston) Jordan will direct the Central Bank to do what he believes is right. And the governor will have absolutely no say in any of this.”
Jagdeo said that recent history can give Guyanese a better understanding of how the Governor is expected to act.

Opposition Leader, Bharrat Jagdeo

He said, “Why did he not tell us when he had the instruction from the Ministry of Finance in 2016 to open a bank account and deposit the US$18M and a year and a half later, this country still did not know that that money was there. And the Minister of Finance denied it; the governor of the Central Bank could not speak out against it, because he falls under the authority of the Minister. How could he in the future ever say anything about any money that is not properly accounted for or not managed correct?”
Jagdeo was keen to note that he regards Dr. Ganga as “a capable person, but he does not have the authority. The Minister will determine what has to be done.”
Further, Jagdeo noted that the green paper on the Sovereign Wealth Fund, dictates the local managers of the fund through the various committees that will be established. He said, “Almost all of the people who will deal with this fund are to be appointed by the Minister of Finance. I said it before, the macroeconomic committee, the investment committee and all the others, those people will all be appointed by Jordan, and that is a big problem we have, so I do not know what the Central Bank Governor is talking about.”
Last Sunday, Dr. Ganga said that Central Bank “will proceed with caution when it comes to any interests from the American Bank in managing Guyana’s oil money.” He noted that Merrill Lynch has made its interest known, but the parameters of the role that they want to play are still being discussed.
Dr. Ganga noted however, that Bank of Guyana will be cautious in all of its engagements with potential investors.
“Central Bank will be cautious and we will be looking into the background of everyone who is coming to us. We will not be rushing into anything with our eyes closed. Proper due diligence will be done on them (Merrill Lynch) and anyone else, so as to ensure we don’t expose ourselves to undue risk.”
The Central Bank head also stated that he and his team have taken careful note of last Sunday’s edition of this newspaper, which exposed aspects of Merrill Lynch’s troubling past.
This newspaper reported that the American firm has been at the heart of several bribery investigations and has been fined billions of dollars for fraud, misusing customer’s cash and exposing its clients to great financial risk.