“Now is the time to take more loans”-Sport Minister

Jan 29, 2025 News

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“And if there is any time to take on debt, now is the time because even when oil prices decline, and they will decline at some point in the future, the fact is you have more (oil) projects coming on stream by 2030- at least four more and it means that the increase level of production will offset the risk in the decline in oil prices.”- Minister Charles Ramson

– tells Parliament oil prices will decline but increased production will help Guyana

Kaieteur News- Minister of Culture, Youth and Sport, Charles Ramson Jr. believes that the time is ripe for Guyana to increase its debt portfolio to support the development of the country.

Despite the downward projection for oil prices, the lawyer, who holds a Master of Science (MSc) in Oil and Gas Enterprise Management from the University of Aberdeen, reasoned that the country’s increased production of the resource will offset any related risks.

During his 35-minute-long contribution on Day Three of the 2025 Budget Debate in the National Assembly, Ramson explained, “When we hear members of the other side speak about our debt, and we have spoken ad nauseam about the ratios, our ratios being the lowest in this hemisphere. The first question that you have to ask really because I don’t want to get into too much equations and analysis…are the schools, the roads, the bridges, the ports, the water wells, the community grounds, the gas to power project- are they needed?”

He is convinced that the answer to that question is yes. Secondly, the Minister noted that another pertinent question is “would it have been built had it not been for government expenditure? The answer is no because otherwise the market would have done it already.”

“The third question is if we had to make the decision to build it at some point and we had the money to do it or we had access to do it. If the answer is yes, why are we waiting to do it? We must do it now,” Ramson urged.

To this end, the Minister said, “And if there is any time to take on debt, now is the time because even when oil prices decline, and they will decline at some point in the future, the fact is you have more (oil) projects coming on stream by 2030- at least four more and it means that the increase level of production will offset the risk in the decline in oil prices.”

The Member of Parliament told the House that Guyana is competing with other nations, making it important for Guyanese to double down on infrastructure investment to improve the country for the future.

Since the People’s Progressive Party (PPP) took office in 2020, the administration has grown the country’s debt by a massive US$4.2B.

Kaieteur News reported that in 2019, the country’s debt was US$1.8B; according to Annual Reports from the Bank of Guyana (BoG), the nation’s debt grew by 46.7% in 2020 to US$2.6B.

In 2021, the debt surged to US$3.1B, and in 2022 this trend continued with the total stock of debt climbing to US$3.7B.

In 2023, debt increased further by 23.4% to US$4.5B while this grew to a massive US$6B at the end of 2024, as indicated by Finance Minister, Dr. Ashni Singh.

Meanwhile, the Opposition has constantly warned against incurring more debt on the projected revenues from oil, given the vulnerability in the commodity prices.

This year, oil price is expected to decline by 10.9%. Consequently, even though the country’s daily rate of oil production is scheduled to increase, Guyana is still anticipating less earnings from the sector, compared with that of 2024’s.

According to the finance minister, it is anticipated that there will be 246 lifts of profit oil from the Stabroek Block in 2025. Within this, Government is projected to have 31 lifts of profit oil from the three Floating Production Storage and Offloading vessels (FPSOs) producing currently, along with the One Guyana FPSO which is expected to be commissioned in the second half of the year.

Be that as it may, Dr. Singh pointed out, “With the average price of Brent crude expected to decline to an average of US$71.9 per barrel, Government’s petroleum revenue deposits are projected to be 2.6 percent lower than in 2024. Government is projected to earn an estimated US$2.2 billion in profit oil and US$340.6 million in royalties.”

In 2024, an average 225.4 million barrels of crude oil was produced, with the sector recording 57.7% growth that year. With the price of oil averaging, US$80.7 per barrel in 2024, Guyana earned US$2.6B from oil production.

(“Now is the time to take more loans”-Sport Minister)

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• Debt, loan, Now, oil, price, Ramson, time

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