Bank of Guyana, Finance Ministry ink MoU to govern Oil Fund

Dec 09, 2019 News

Guyana is closer to operationalising its Natural Resource Fund (NRF), meant to collect and act as a reservoir for the country’s oil patrimony, to be had when first oil comes on-stream.
Kaieteur News understands that the Bank of Guyana(BoG) and the Ministry of Finance will this week, sign a Memorandum of Understanding (MoU) that will spell out the protocols governing the relationship between the two agencies, as it relates to the fund.
This publication was told that while the fund has not yet been operationlised, this will be done in time for first oil.
It was explained that the MoU to be inked this week will deal with, among other things, the relationship between the bank and the functioning of units such as the Investment Committee and their roles.
While the fund has yet to be operationalized, a source close to the fund and its operation has confirmed that moves have been made to have the United States Federal Reserve Bank hold the account for the ‘oil fund.’

Bank of Guyana

The bank is currently in the process of undertaking its due diligence with regards the source of the income for the fund before its formal establishment.
Questioned over the overseas nature proposed for the fund, it was explained that this is nothing new when receiving payments from international sources.
Kaieteur News was told as example; projects being undertaken in Guyana by International Financial Institutions (IFIs) operate under the same principle where a US account is created for deposits before tranches are then paid into the Consolidated Fund for final disbursement.
The NRF was passed into law by the David Granger administration but without political support in the National Assembly.
Passed in January, the Natural Resource Fund Act lists two committees that are to ensure it is managed properly: the Public Accountability and Oversight Committee and the Investment Committee.
The political opposition Peoples Progressive Party Civic has opted to not be a part of the process having not recognized the Granger administration as legitimate, a result of the passage of a No Confidence motion in December last, a month before the Bill was debated and approved in the National Assembly.

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