Minister has too much power over oil fund – US Analyst

Jan 23, 2021 News

US Analyst, Arthur Deakin

Kaieteur News – One red flag in the framework for ensuring the transparent management of Guyana’s natural resources revenue is the fact that the Minister of Finance holds too much power over the oil funds, says Arthur Deakin, an Analyst at Americas Market Intelligence (AMI).
AMI, a management consultant firm, has been providing insights that unlock opportunities in Latin America via market intelligence, research and analysis.

During his appearance last week on the Kaieteur Radio programme, Guyana’s Oil & You with Senior Journalist, Kiana Wilburg, Deakin commented on the Natural Resource Fund (NRF) legislation, which was established via a bill passed in January 2019 by the David Granger administration. Deakin said that the current structure of the NRF allows the Minister of Finance – a position that is currently being held by Dr. Ashni Singh – to have the final say on how the monies are spent from the fund. This is in spite of the fact that it has to receive parliamentary approval.
Deakin was keen to point out that this gives too much control to the current administration and not enough independent oversight. “I think what it comes down to is a proper regulatory and fiscal framework and oversight. That’s essential to avoid disastrous consequences,” he said while adding that to ensure transparency and to avoid any political coercion, it is vital for ministries to have a certain level of independence from the Cabinet.
When asked whether Guyana needs to change its current regulatory framework model to remove the strong oversight of the Minister of Finance, Deakin responded in the affirmative.

“I think that there is room for improvement,” he said. “I wouldn’t say that all of the laws are bad. There are definitely some parts that are positive and there’s definitely control that is in place to ensure the proper spending of that money. But right now, it’s too tied to the politics and right now that’s not a good sign for future development.”

The US Analyst had also weighed in that the Ministry of Finance (MoF) also appoints those members critical committees that are, according to the law, responsible for ensuring the moneys spent, receive proper oversight. One of these bodies includes the Public Accountability and Oversight Committee. The absence of these committees poses as a red flag and does not go hand in hand with transparency and accountability, Deakin said.
While in Opposition, Vice President Dr. Bharrat Jagdeo had contended that the Granger administration had delayed the passing of the Natural Resource Fund Act for so long that it was passed during a period when the People’s Progressive Party/ Civic (PPP/C) considered the Government to be illegal.
The Act was passed after the December 21, 2018 no confidence motion.
Jagdeo had said that the PPP/C would repeal and replace the act quickly upon assumption of office “with another model that reflects some of the principles that we’ll outline in our manifesto, [namely] Santiago Principles on Transparency, and Norwegian type management, which places the management of the fund a distance from the politicians.”
But almost five months since its swearing in, this is yet to be done.

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