Natural Resources Fund… US Federal Reserve still to approve Guyana account after two years

Dec 12, 2019 News

By Gary Eleazar

Guyana has passed legislation for the establishment of a Natural Resource Fund (NRF) that will act as a repository for Guyana’s oil and other natural resource revenues but the United States Federal Reserve Bank is yet to approve the country’s foreign account, even after two years of talks.
This, according to Central Bank Governor, Dr. Gobin Ganga, is to govern the management of the account. Dr. Ganga yesterday inked a Memorandum of Understanding (MoU) with Minister of Finance, Dr Winston Jordan,
The Central Bank governor told reporters that the US Bank had been approached as far back as 2017 and that the process is an ongoing one with due diligence expected to be completed shortly.
“We have been having discussion with the federal reserve not only with respect to this Fund but with respect to other things that we are doing,” said Dr. Ganga.
He explained that the Bank of Guyana has shared a 50-year history with the US Federal Reserve but said with regards the NRF, advanced notice had to be given with regards Guyana’s expectations.
He said that the correspondence has been continuous over the years and that the due diligence is expected to be completed “very shortly.”
The officials expressed confidence that the process including the Bank’s due diligence on Guyana and the source of the revenues will be completed by the time the country is ready to receive its first tranche of revenues.
According to Jordan, despite the announcement that first oil from the Stabroek Bloc is due in a matter of days, there is still some time before the country actually begins to receive its first set of revenues.
He used the occasion to also emphasise to reporters that the fund will be operationalised before the first set of revenue from the country’s petroleum reserves.
“The important thing is that we said the fund would be operationalised before first oil…We’re not expecting to get any money next week, not even next month.”
He sought to explain too that when opening an account at a bank, following any due diligence and approval is had, then there needs to be money to put into the account,” reminding that oil revenue is not due for some time still.
The US Federal Reserve Bank was described as perhaps the safest place for Guyana’s oil revenues to be deposited with Dr. Ganga pointing out that there would be no interest earned had the deposits been made locally.

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