Guyana to borrow US$150M from Saudi Govt. for housing and infrastructure projects

Jun 05, 2023 News

Minister of Housing and Water, Colin Croal, along with other senior government officials engage with Chief Executive Officer of the Saudi Fund for Development, His Excellency Sultan Al-Marshad, and team, at the Arthur Chung Conference Centre on Sunday. (Ministry of Finance photo)

Kaieteur News – With the country’s total public debt surpassing US$3.6 billion at the end of 2022, the Government of Guyana (GoG) is still continuing to borrow more loans.
On Sunday, the Ministry of Finance announced that a team from the Saudi Fund for Development is in Guyana for a three-day visit and will be signing two “major loan agreements” to the tune of US$150 million for infrastructure development projects.

According to the government, senior representatives of the Ministry of Finance, in conjunction with the Ministries of Housing and Water, and Public Works, presented several developmental projects in housing and infrastructure, to the visiting Chief Executive Officer of the Saudi Fund for Development, His Excellency Sultan Al-Marshad, and team, at the Arthur Chung Conference Centre.

Present from the Ministry of Housing were Minister of Housing and Water, Hon. Collin Croal, Chief Executive Officer of the Central Housing and Planning Authority, Mr. Sherwyn Greaves, Permanent Secretary, Mr. Andre Ally, Director of Projects, Mr. Omar Narine and other technical staff, while the Ministry of Public Works team comprised Permanent Secretary, Mr. Vladim Persaud, Chief Transport Planning Officer, Mr. Patrick Thompson, Head-Procurement and Contracts, Mr. Andy Mahadeo, and Finance Controller, Ms. Kumarie John, along with other technical and support staff.

The Ministry of Finance was represented by Chief Planning Officer, Dr. Tarachand Balgobin, Finance Secretary, Mr. Sukrishnalall Pasha, Director of Budget, Ms. Sonya Roopnauth, Head-Bilateral Division, Ms. Donna Levi, and other technical and support staff.

By the end of last year, Guyana’s total stock of public debt increased by 16.9 percent compared to 2021. It was the Finance Minister, Dr. Ashni Singh who said during the Budget presentation that the nation was US$3.654 billion in debt.

Despite the new revenue stream from oil and gas, government has been borrowing to fund almost all of its major infrastructure development projects. For instance, the new Demerara River Crossing this year is being funded through a Chinese loan.

Guyana’s debt is also likely to almost double this year, as the Gas-to-Energy project too is expected to be funded through external partnerships.
It must be noted that during this year’s Energy Conference hosted in February, the Finance Minister announced to the international audience that Guyana is now in a better position to take more loans as the country’s Gross Domestic Product (GDP) has tripled in the last three years.

Dr. Singh said Guyana has been able to prudently manage and reduce the debt to GDP ratio over the past 30 years. He explained, “Those of you who have been following Guyana for long enough, would know that there was a period just about maybe 30 years ago when Guyana’s public debt to GDP exceeded six times the size of the economy. In 1991/ 1992 the public debt to GDP ratio exceeded 600%…we have been able over the years to bring public debt down and today Guyana’s public debt to GDP ratio stands at 24.6 percent.”

The Finance Minister paused his presentation as he received a resounding applause for the progress the country made in lowering its debt to GDP rate. He however went straight into his point that this means Guyana is now in a better position to take more loans. “I didn’t put a chart up with international comparators but if you, I mean many of you are familiar with these numbers around the World. You will no doubt recognise that the debt to GDP ratio of 24.6% in fact places Guyana ahead of almost every economy, certainly in this hemisphere and puts us in a position where we actually have fairly significant head room to borrow,” he shared.

Former Auditor General, Anand Goolsarran had warned that while Guyana’s medium-term economic prospects appear very favourable due to anticipated oil revenues, government should nevertheless exercise restraint in spending, given the volatility of oil prices. Goolsarran had made the comments in his Column, published in the Stabroek News.

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Debt, Government, loan, Projects, Saudi

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