Latest update August 20th, 2026 10:20 AM
Latest News
- OMAI targets average US$1.2B in annual gold production for 18 years
- Total power demand to jump five-fold under development plan
- U.S. debt crosses $40 trillion threshold after doubling under Trump and Biden
- Hamas condemns ‘new war crime’ as Israel kills 10 in crowded Gaza hubs
- Teacher killed after car ‘drifted’ into trench at Lima Sands
Debt can crush Guyana
Editorial…
Kaieteur News- Leading spokespeople in the PPPC Government constantly highlight Guyana’s low debt-to-GDP ratio. Senior Minister in the Office of the President with responsibility for Finance and Public Service, Dr. Ashni Singh, is usually proud to point out how the debt-to-GDP ratio fell from 47.4% at the close of 2020 to 24.3% at 2024 yearend.
By all accounts, that low ratio should represent a healthy state. In reality, it masks a shaky local condition relative to debt-to-GDP ratio. This is what can be gathered from the Bank of Guyana’s 2024 annual report.
At the end of 2024, Guyana’s total debt stood at US$5.993B. From the central bank’s 2024 annual report, the export value of major non-oil commodities, such as gold, bauxite, and timber totaled US$1.379B. When the US$420.2M from all other nonoil commodities exported are added, Guyana’s total nonoil export earnings for 2024 amounted to nearly US$1.8B (US$1799.2B). When segregated in this manner, Guyana’s US$5.993B total debt at the end of 2024, emphasizes the alarming. The total national debt is being carried primarily by oil, increasing daily output of oil, with the price per barrel of oil still in the encouraging US$75-80 range. Immediately, it could be seen that the low 24.3% debt-to-GDP ratio about which the government boasts isn’t so robust, as claimed.
We take the position that, notwithstanding the happy chatter about a diversified economy, Guyana is now a one commodity economy, with oil as the major contributor. The fact that oil prices have been where they are, that has helped immensely with debt service payments. But should oil prices take a sustained hit, Guyana could be in trouble, with much laboring to meet debt service schedules.
Take the radical step of removing oil out of the local economic equation, and there is that mountain of debt hanging over the head of Guyana. But we don’t go that far, we only focus on the always volatile oil market, and how its prices can seesaw madly, drop precipitously, and stay at low levels for a prolonged period. From a consumer’s point of view that could be helpful, with cheap gasoline and energy products at the top of the list.
From an oil producing country’s perspective, however, it can be the beginning of a long nightmare. For there is a load of debt to repay, and the oil revenues that made it so relatively easy to pay (when prices were high) are suddenly not coming in as they used to do.
This is what we have cautioned PPPC Government leaders to be conscious of, and careful about. They all take comfort currently in the low debt-to-GDP ratio and, in their haughty frame of mind, mock those Guyanese who say proceed more conservatively with new loans taken. Meanwhile, Guyanese should start worrying about how far nonoil export earnings of approximately US$1.8B could go to service almost US$6B in total debt. Using the metric of nonoil export earnings to the debt total, and the inspiring 24.3% debt-to-GDP ratio is replaced by one that is at the troubling level of 300%. In summary, less money coming into the national coffers translates to less money available to repay debt when due. We have urged the PPPC Government that rushes to take on more debt, to be less aggressive, be less reckless. The answer of the government’s leaders was to brandish one of its newest and trickiest sleights of hand, the 24.3% debt-to-GDP ratio.
Where is the harm in slowing down the borrowing? The PPPC Government itself has admitted that this country is desperately short of expert capacity. The new infrastructure projects that the new debt finances cannot be monitored and managed with the keenness that they should be. The result has been the people paying for the projects (and the debt) are left to deal with a raft of shoddy works, and little value for their money.
Guyana cannot properly oversee the projects in its hands, but the government delights in hanging more debt on the heads of citizens. Its leaders barrel merrily along like some young, out-of-control, speedster, through bingeing on more and more debt. Falling oil prices have wreaked havoc before in other countries. The same can happen again to Guyana’s mad government borrowers.
Share this:
Discover more from Kaieteur News
Subscribe to get the latest posts sent to your email.
Similar Articles
hits
Blunt of the day
Sports
Features/Columnists
Sir. Ronald Sanders
The GHK Lall Column
Weekend Cartoon
