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Norton: Govt. needs to borrow money to fund profitable projects
Kaieteur News – Opposition Leader Aubrey Norton on Thursday said that the government needs to borrow money to fund profitable projects. Norton was asked by Kaieteur News to comment on whether Guyana, with all its resources, should continue borrowing money.
Leader of the Opposition, Aubrey Norton
In response, he said, “I don’t want to say that the Government should not be borrowing but I can say I am opposed to borrowing in the fashion it is being done currently, because a lot of the money is misused and mismanaged. And oft times there is too much corruption involved.”
Norton explained that while the government ought to borrow money, he believes that the government is using the loans to fund non-profitable projects.
“If these loans were funding projects that would generate income to service the loans they are borrowing I wouldn’t have a problem with them but if you are borrowing anticipating the money coming from oil, then I would have a problem,” he explained.
The Opposition Leader further said, “Sometimes people want us to say no to borrowing but running a country is more complex than that. It is because of the behavior, approach of the Government and because of the absence of a proper plan. I don’t believe that they should be borrowing at the rate they are borrowing.”
He is adamant that the government needs to borrow money sensibly.
“They must borrow where they can pay back and advance the society. We should not arrive at a point in our society where people just say no to borrowing. The approach should be one where we do proper analysis and we decide what is in the best interest of the country because we don’t want the loans to become a burden on future generations,” he said.
Further, Norton opined that the Government has shown that a lot of the funds it borrow can end up in corruption.
“For example, they left us with the likes of the failed Sheldon Sugar Factory and Fibre Optic Cable project all of which were serviced by loans that the Guyanese people are left to pay back,” the Opposition Leader added.
Norton’s comments follow the National Assembly’s approval of a new debt ceiling to allow for increased borrowing. During the debate in the National Assembly, Opposition Member of Parliament (MP) and Shadow Finance Minister, Juretha Fernandes said that the new ceiling cemented a $7.9M debt for each Guyanese household.
Fernandes during her presentation argued that Guyana has numerous examples of what not to do in an oil-dependent economy, yet the administration is doing exactly that.
Fernandes in her debate presentation pointed to the recent report issued by the United Nations, titled ‘A World of Debt’ which cautioned developing countries about increasing debt, citing the major underlying implication of being forced to choose between servicing debt and serving its people.
In fact, she said, “The PPP [People’s Progressive Party] is operating as though there is no tomorrow, or more so, as if they are expecting to be out of office come 2025. They are spending all that we have, and now spending even more of what we don’t have. They are putting the country in a position that future governments will be faced with debt to service regardless of the economic viability.”
Fernandes described the government’s borrowing as “reckless” since she believes the administration is piling on more debt based on projected earnings from the oil and gas sector. As such, she urged that it should be condemned by all Guyanese.
According to the Bank of Guyana (BoG) in its 2022 Annual Report, the country’s total public debt when compared to December 2021 had increased by 16 percent to just over US$3.6 billion.
When the government’s borrowing was reassessed by Central Bank in the first quarter of 2023, it was revealed that the debt had further increased by 2.3 percent, taking the country’s total loans to US$3.7 billion.
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