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‘Showing how oil money being spent would be difficult’
—Jagdeo says transparency exists in transfers to NRF and in Budget process
Kaieteur News- Although the Natural Resource Fund (NRF) Act of 2021, passed by the current administration, sets strict guidelines for the use of resources garnered from the oil and gas sector, the government has failed to identify and inform the population what the funds are being used for.
In fact, Vice President, Bharrat Jagdeo on Thursday made it clear that this may very well not be possible since itemizing oil revenue expenditure would be a difficult task. He reasoned, “How do you balkanize revenue coming into the budget? (It) becomes a very difficult thing to do; so where the transparency is done, transparency is that every cent spent from oil money, from non-oil revenue and from borrowing, has to be appropriated by the National Assembly through a Budgetary Appropriation Process, whether it is the original Budget or through Supplementary Budgets which then form an appropriation act or a supplementary appropriation act, which itemizes all of the expenditure of the state and how much is going to be spent…”
Vice President, Bharrat Jagdeo
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.”
Be that as it may, the government has not highlighted any national development priority or essential project funded through this source of income. In fact, major development priorities and essential projects such as roads, hospitals, and the new Demerara River Crossing are being funded through loan agreements. Government has also applied for a loan to support the Gas-to-Energy project.
In the meantime, the VP said that while the population is of the view that the oil money is not benefitting them, government is financing thousands of scholarships. Additionally, he said, “I didn’t even put in the $230B that we are spending now on housing development. To do the 40,000 house lots, now it’s $232B. We anticipate to get up to 50,000, we need another $50B next year. About $282B will go only to deliver on our promise of doing 50,000 house lots because it costs about $5M to develop a house lot…we only have $300B this year coming in from oil. Of course, the $282B is not for one year, it’s for the five years so why don’t we have that conversation rather than the sound bites?”
To this end, Jagdeo said that there is no greater clarity surrounding oil resources that he has seen compared to Guyana. He said, “You name a country that every three months every receipt of revenue from an oil and gas company that is paid in to the NRF has to, by law, be published in the Official Gazette and Parliament has to be notified within three months of that receipt; not annually, for every transaction.”
He was keen to note too that the Minister could be jailed for failing to issue these reports. Further, the VP pointed out that government has instituted a formula where a specific sum is withdrawn each year to fund the National Budget.
(‘Showing how oil money being spent would be difficult’)
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