MP calls for changes to NRF Act

Sep 25, 2024 News

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…says citizens must know what Govt. projects being funded by oil money

Kaieteur News – Chairman of the Public Accounts Committee (PAC), Jermaine Figueira has called for transparency in the use of Guyana’s oil money, citing the need for possible amendments to the Natural Resource Fund (NRF) Act.

Figueira’s comments were made at the sidelines of an event on Monday at Public Buildings, following an explanation by the Auditor General (AG) Deodat Sharma regarding the use of oil money in the Budget.

The AG while responding to a question from Kaieteur News in the Parliamentary Chamber said, “As everyone is aware, the funds from the oil and gas money, it is a budget support, so it’s not for a specific item and we don’t audit the whole budget and therefore it is being covered in that audit.”

This publication had asked whether the Audit Office is able to ensure that monies from the Fund are expended in keeping with the Act, after being transferred to the Consolidated Fund.

Section 16.2 of the NRF Act states that, “All withdrawals from the Fund shall be deposited into the Consolidated Fund and shall be used only to finance: (a) national development priorities including any initiative aimed at realizing an inclusive green economy, and (b) essential projects that are directly related to ameliorating the effect of a major natural disaster.”

To date, government has budgeted approximately US$2.6B in oil money through 2022 to 2024. The revenues earned from oil are transferred to the Consolidated Fund, blurring tracks of expenditure.

Government has not identified the “national development priorities” being funded by the revenue from oil. This is particularly concerning as the legislation features no penalties for misuse of the funds.

Opposition Member of Parliament (MP), Jermaine Figueira has however pointed to the need for transparency in the use of resources from the sector, urging that the NRF Act is clear on how the funds should be spent.

Following the AG’s remarks, Figueira in an invited comment said, “I think the Auditor General’s response was more of a general nature but we require more specifics because the Act is very clear with regards to how those funds should be spent and if you just lump sum it into the consolidated fund we need to know definitely of those funds that were transferred into the consolidated fund that are they being used for the specific purposes with regards to what the Act speaks to.”

The Parliamentarian said the NRF Act may require amendments to justify transfers to the Consolidated Fund for spending across the board, rather than for specific purposes outlined in the Act. These amendments according to him are crucial to ensure there is absolute conformity with the legal requirements.

He said, “Given how it is being transferred and the unknown of how it is being utilized it therefore requires some additional amendments to give greater clarity on the direction of how these funds should be directed and used.”

Figueira was adamant that the public must be able to decipher what portion of the Fund was used for a specific project. This can be done, according to him, through the Budget documents, to certify that the funds are utilized according to the Act.

Furthermore, he also shared the view that the oil money should be subjected to a separate audit. Figueira explained, “This is the most important sector and therefore a lot of attention should be directed specifically to these funds. We want to ensure that the country doesn’t suffer from the Dutch disease and therefore, these funds should be dispersed in a manner that is very responsible and therefore special attention should be directed specifically to that sector to manage the fund.”

With little transparency regarding the use of Guyana’s oil wealth, International Financial Analysts worry that the revenue may not be used to develop the country and improve the lives of its poor citizens.

For instance, Director of Financial Analysis at the Institute for Energy Economics and Financial Analysis (IEEFA), Tom Sanzillo had pointed out that the government has not been prioritising saving the funds generated from the industry like Norway but has instead embarked on a massive infrastructural and energy development scheme which may very well benefit its partner, ExxonMobil more than the citizens in the country.

Meanwhile, the government previously said that money from the oil account is transferred directly to the Consolidated Fund which blends the various revenue streams. This means that the government is therefore unable to say what specific projects were funded by those earnings.

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• Amendment, Figueira, money, NRF, oil, use

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