Latest update January 19th, 2025 1:51 AM
Govt. raises billions from private interests to finance ‘biggest budget ever’
…represents additional debt to be repaid in future
Kaieteur News – The Guyana Government this year presented its biggest budget ever- set initially at $553B but will increase, as already signalled by Head of State, President Irfaan Ali when he referenced a resort to supplementary spending by the state.
Bank of Guyana
The 2022 Estimates is the first year in which the country’s budget is being financed in part by monies accrued from the country’s oil earnings. According to the Bank of Guyana, in order to finance this budget however, government in addition to loans and grants, raised in excess of $50B from the sale of Treasury Bills. The state of affairs is documented in the Central Bank’s first quarterly report for the year, which noted that while the country’s total debt stock owed externally and domestically increased to more than US$3B, the domestic debt increased mainly on account of a growth in the stock of treasury bills at the end of the review period.
It was noted that the stock of treasury bills increased by 19.4 percent mainly as a result of higher issuances of treasury bills “for budgetary support.” According to the Bank of Guyana report, the stock of 364-day treasury bills accounted solely for this increase and grew by G$28B to G$173.7B. “On the other hand, the stock of 182-day treasury bills remained unchanged at G$352 million from the end-December 2021 level; There were no issuances of 91-day treasury bills during the review period.”
According to the report, during the period, there were seven Treasury bill auctions, totalling G$53.4B, during the first quarter of 2022, all of which were issued for fiscal purposes.
APNU+AFC spokesperson on finances, Juretha Fernandes
Additionally, it was noted that the stock of debentures decreased by G$244 million to G$205.3B from G$205.6B at end December 2021. “This reduction in stock was a result of a payment made towards the NIS debenture during the review period.”
As it relates to repayments made, the Bank of Guyana noted that domestic debt service payments decreased by 17.4 percent down G$5.2B to G$24.3B from G$29.5B in March 2021. Principal payments decreased by 17.2 percent or G$4,975 million while interest payments fell by 29.2 percent or G$134 million.
According to the Bank’s report, the former was primarily as a result of lower principal repayments for 182-day treasury bills by G$4,975 million during the first quarter of 2022.
Even with US$607 million on hand from its oil earnings, Budget 2020 is being financed also through loans from overseas and local partners for loans to fund its “transformational development agenda.”
“We are going to be striking the right balance. We are going to be striking an optimal balance between alternative sources of financing and so what you will see in Budget 2022 is a combination of financing from domestic revenue sources. This is of course the domestic revenue we collect in things like tax and non-tax revenue…the Natural Resources Fund will also be a source of financing for the 2022 Budget so that’s a second major source of financing. A third major source of financing will be external borrowing,” according to Senior Minister within the Office of the President, Dr. Ashni Singh,had had in January last indicated that, “…what that allows us to do, is to be able to implement this accelerated development agenda to meet these urgent development needs and to implement this accelerated development agenda while keeping borrowing at an absolute minimum.” Budget 2022 was following its presentation to the nation, dismissed as more debt by the political opposition.
A Partnership for National Unity, Alliance for Change (APNU+AFC) spokesperson on finances, Juretha Fernandes had contended during the debates that, “this abomination, which the PPP/C calls a budget, lays out a plan to add a further debt burden of $100 billion while emptying the Natural Resource Fund of $126 billion.” She expanded saying, “let me put that into context for the Guyanese people, the PPP/C has outlined a plan to place a debt burden of $476,000 on the shoulders of every Guyanese family while they also withdraw the $600,000 per family that was saved in the Natural Resource Fund (NRF).”
This, she said, represents $1,076,000 per Guyanese family or $90,000 per month for every Guyanese family. According to Fernandes, that money was more than enough to immediately end extreme poverty in Guyana and make hunger and homelessness a distant memory for the countless thousands of Guyanese who struggle in the depths of extreme poverty.
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