IMF praises government for spending out of oil money

Mar 09, 2025 News

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Kaieteur News-The International Monetary Fund (IMF) has praised the Government of Guyana for the rate at which it is spending the oil money calling it an enhanced management of the fund.

Early last year, the Government of Guyana moved to the National Assembly to amend the Natural Resource Fund (NRF) Act, to allow for more withdrawals. The decision was met with firm objections, which were widely ventilated in the media.

In spite of public criticisms, the IMF in its Staff Concluding Statement of the 2025 Article IV Mission for Guyana said that given the country’s development and investment needs the fiscal policy stance is appropriate at this stage, and the fiscal deficits should gradually close over the medium term.

The organization is of the view that the increase of the withdrawal ceiling early last year provided the room for substantial expansion of capital expenditure which had reached over 12½ percent of gross domestic product (GDP) for that year.

The IMF is recommending a gradual closing of the overall fiscal deficit by 2031, which should then be followed by a narrowing of the “non-oil primary deficit over the (conservatively) projected lifespan of oil reserves to the levels consistent with ensuring intergenerational equity and preserving fiscal and macroeconomic sustainability.”

Furthermore, “Implementing a comprehensive medium-term fiscal framework with an explicit anchor and an operational target, further modernizing public financial management systems, and conducting regular expenditure reviews to continually assess spending efficiency and effectiveness in reaching the SDGs will also help further strengthen fiscal discipline and transparency,” the organization said.

The IMF views the way the NRF is currently being handled as an advancement in enhanced governance and modernization to the operations of the public sector. This conclusion was drawn from the Public Accountability and Oversight Committee Annual Report and the NFR Report which were presented for the fiscal year 2023 to the National Assembly, as well as the “regular notifications of receipts of petroleum revenues, as mandated by law, (which) are published in the Official Gazette and presented to the National Assembly, and the Bank of Guyana publish monthly and quarterly reports of the NRF’s financial performance.”

Hence, the IMF believes that Guyanese authorities have been making good progress in giving their revenue administration capacity a more modern approach.

In September 2024, Kaieteur News reported that Opposition Member of Parliament and Chairman of the Public Accounts Committee (PAC) Jermaine Figueira called for transparency in the use of the country’s oil funds, citing the need for possible amendments to the NRF Act.

He was at the time commenting on the sidelines at an event held at the public buildings following an explanation given by Auditor General (AG) Deodat Sharma regarding the use of oil money in the Budget, in response to a question posed by this publication.

“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,” Figueira said.

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.

In January, during the Budget 2025 debates another Opposition Member of Parliament, Shadow Minister of Natural Resources, Shurwayne Holder, highlighted that while the Minister of Finance, Dr. Ashni Singh had a detailed account for every dollar spent that was received from Norway for the Low Carbon Development Strategy (LCDS), they government had blatantly refused to do the same for the hundreds of billions withdrawn from the NRF.

Through the speaker Holder told the House, “Mr. Speaker, they accounted to the Norwegians for their LCDS money but when it comes to our oil money, the PPP continues to violate their own law which they brought to this very House and approved by themselves in December 2021.”

He reminded the Parliament that the Act which governs the funds makes it clear that all withdrawals from the Fund shall be deposited into the Consolidated Fund and shall be used only to finance national development priorities and/or essential projects that are directly related to ameliorating the effects of a major natural disaster.

To this end, Holder reiterated calls from the Opposition for government to state projects and programmes being funded through oil revenue.

On February 21, 2025, Kaieteur News reported that Terrence Campbell, a Natural Resource Fund (NRF) Investment Committee member filed a judicial review application challenging the Government of Guyana’s management and transparency of the Natural Resource Fund.

The application names the Attorney General of Guyana and the Senior Minister in the Office of the President with Responsibility for Finance as respondents.

The legal action challenges the transparency and accountability of major withdrawals from the Fund, which have amounted to approximately US$2.61 billion or more than half a trillion Guyana Dollars over the past three years.

(IMF praises government for spending out of oil money)

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• ARF Act., Government, IMF, management, NRF

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