Govt. draws down another US$200M from oil fund

Jul 14, 2022 News

Kaieteur News – Senior Finance Minister Dr. Ashni Singh has announced that Government has made its second draw down from the Natural Resource Fund in accordance with the Natural Resource Fund (NRF) Act 2021.

Senior Finance Minister Dr. Ashni Singh

The Minister indicated that pursuant to Section 16 of theNRFAct2021, a further US$200 million equivalent to G$41.6 billion has been transferred from the Natural Resource Fund to the Consolidated Fund to finance national development priorities. In a statement the Ministry of Finance reminded that in May of this year, Government made its first withdrawal of$200 million equivalent to G$41.7 billion. This brings the accumulated withdrawals to date from the NRF to US$400 million, equivalent to G$83.3 billion. “This transfer was made in accordance with the strengthened legal architecture of the NRF Act 2021,’ the ministry’s statement added.

The NRF Act 2021 came into operation on 1st January 2022, and as part of the Budget 2022 process, Parliamentary approval was granted for a total of US$607.6 million to be transferred during fiscal year 2022. The ministry said the PPP/C Government will continue to work aggressively through sound and transformative investments of oil resources from the NRF, utilising these resources in a clear and transparent manner, to the benefit of present and future generations.

The NRF Act was hurriedly passed in the National Assembly on December 29, 2022 amid an in-house protest staged by the Opposition Members of Parliament, who were clamouring for the then proposed Bill be sent to the Special Select Committee for consultations to inform the key legislation. Other members of civil society had also echoed this call but the administration ignored these views and rushed to pass the Bill.

Despite the public debate, Head of State, President Irfaan Ali, had, mere hours after the raucous session, formally assented to the Bill, thereby bringing it into law— with the final step being its publication in the Official Gazette. Already, the Board of Directors to manage the fund has been appointed by President Ali, while the other management committees are to be set up. With regard to the use of the oil revenue, the NRF Act states that the natural resource wealth can be used to finance national development priorities, including any initiative aimed at realising an inclusive green economy.

To this end, financial analysts believe that the fund will be used to finance its Wales Gas-to-Energy project on the West Bank of Demerara. It must be noted that the administration has not clearly outlined how it intends to expend the oil revenue, despite receiving advice that the spending of the national wealth must be done in a transparent manner. Instead, it has said that the funds will be included into the national treasury, where it will be put to use after receiving Parliamentary approval.

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