Latest update December 16th, 2024 9:00 AM
Jun 11, 2023 ExxonMobil, News, Oil & Gas
Kaieteur News – In a startling revelation, the People’s Progressive Party Civic (PPP/C) administration, led by President Dr. Mohamed Irfaan Ali, has amassed a significant debt of US$500M in just a few days. This amount surpasses the total oil revenues received by Guyana since the beginning of 2023.
Since the start of the year, Guyana has received US$360M in oil-related income. This figure comprises two royalty payments totalling US$111M and the sale of three profit oil lifts generating US$249M. However, recent reports from the Department of Public Information expose the government’s rapid accumulation of debt.
On May 29, the government announced securing a loan of US$350 million from Qatar. This loan is earmarked for the extension of the Schoonord to Crane four-lane highway to Parika in Region Three. President Ali made this announcement during an engagement with residents of the Malgre Tout/Meer-Zorgen area.
On June 6, in the presence of President Ali, the Minister of Finance, Dr. Ashni Singh, signed two loan agreements worth US$150 million with the Saudi Fund for Development (SFD). The loans are intended to fund the “Infrastructural Development Works for the Housing Sector Project” and the “Construction of Wismar Bridge Project.”
Threatening to add to the mounting debt, Guyana has applied for a loan of approximately US$660 million from the United States Export-Import Bank to finance the Gas-to-Energy project. If approved, this would bring the total debt with borrowings from just three countries to nearly US$1.16 billion, spanning four projects.
Despite the substantial increase in debt, Vice President Dr. Bharrat Jagdeo defends the PPP/C administration’s borrowing spree. He argues that given the oil boom’s impact on the economy, it is acceptable for Guyana to take on such debt. Jagdeo recently stated that Guyana’s debt-to-GDP ratio remains low by global standards, outperforming many developed countries in Europe and North America.
While the PPP/C administration and its supporters emphasize the positive effects of borrowing on economic expansion, the rate at which these loans have been acquired and their magnitudes necessitate careful scrutiny to ensure responsible financial management.
Finance Minister, Dr. Ashni Singh, has said Guyana continues to enjoy strong debt sustainability fundamentals “even as we expand investments in public infrastructure, social services, and other initiatives geared at ensuring improved standards of living for all Guyanese.”
In January, the Minister had said, “This delicate balancing act hinges on our time-honoured debt management strategy of contracting development financing and meeting debt service obligations at the lowest cost, within prudent risk parameters.”
Dec 16, 2024
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