Ram warns Govt. against excessive spending as oil prices likely to dip further 

Jan 12, 2026 News

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(Kaieteur News) – As Guyana joins other oil producing states in preparing for a steep dive in revenue flow from production, stemming largely from an illegal act by U.S President, Donald Trump to not only abduct President of Venezuela, Nicolas Maduro, but takeover the country’s resources, careful fiscal management is now more important than ever.

Flagging the implications for Guyana and the need for the country to implement credible medium-term fiscal rules, expenditure ceilings, and disciplined sequencing of major projects was chartered accountant and attorney, Christopher Ram.

In his Sunday column published by Stabroek News, the lawyer pointed out that oil prices are likely to drop to $50 per barrel, and while the startup of more Floating Production Storage and Offloading vessels (FPSOs) will partly offset the lower price per barrel, Guyana can easily find itself borrowing more to finance or continue its aggressive development agenda.

Ram explained, “A US$50 oil environment is not a crisis scenario, but if not properly addressed can become one. Even as the mid-year report acknowledges heightened global uncertainty and oil-price volatility, it also records, in boastful terms, accelerating expenditure, expanded commitments, and rising recurrent obligations. The implicit assumption is that today’s revenues will persist long enough to absorb tomorrow’s costs. History, including Guyana’s own, offers little support for that confidence.”

He pointed out that much of government’s spending, now being normalised, is structural rather than temporary and includes wages, transfers, subsidies, and large capital projects with high and continuing operating costs, with new and growing discretionary funds and vague line descriptions.

“Once embedded, they reduce fiscal room and force governments to respond to shocks through borrowing, drawdowns, or abrupt retrenchment. As governments face criticisms from their constituents, they spend more, not less, to appease them even if such spending is carried out without any regard for the law or concern for accounting and transparency,” Ram said.

The chartered accountant argued that the President Irfaan Ali administration treat annual increases in the national budget as an occasion to “crow”, as development, and as an article of faith.

Large, highly visible projects such as Silica City and the Palmyra stadium are embraced as symbols of progress, alongside talk of another bridge in Berbice, another gas-to-shore project, and yet another stadium, according to him.

The lawyer said that each project is presented rarely within a coherent medium-term fiscal framework, and seldom accompanied by a serious accounting or long-run burden. Notably, Ram warned, “In an economic downturn, these projects become white elephants even as they carry maintenance costs. What makes this posture especially troubling is, as noted above, the risks are not unrecognised.”

While the recent mid-year report cited the oil price volatility, Ram believes recognition is not enough but imposes a duty to act, which should be outlined in the budget.

In pointing to the importance of avoiding wasteful spending, the chartered accountant pointed out that a sustained fall in oil prices would also have wider consequences. He explained, “Fewer oil dollars mean less foreign exchange entering the economy, increasing pressure on imports and the exchange rate. Combined with constrained spending, this raises the risk of inflation even as growth slows, while delayed projects and tighter cash flows increase the risk of job losses, particularly in construction and services.

To this end, Ram urged government to wean itself off its reliance on spending steroids. The columnist said reasoned, “Years of aggressive fiscal stimulation may have produced attractive outcomes and headline growth, but they have also dulled discipline and restraint. Endless injections of expenditure are no substitute for planning, sequencing, or endurance. What Guyana’s public finances now require is the fiscal equivalent of Ozempic – a firm and sustained dose of appetite control to curb the compulsion to spend simply because there is no obvious restraint.”

Without that restraint, excess will continue to be sold as progress, until today’s choices harden into structural costs that are economically damaging and politically impossible to reverse, he added.

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• budget, FPSO, oil, Oil prices, Ram, spending, Trump

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