Glenn Lall has raised some important concerns

Apr 23, 2026 Features / Columnists, Peeping Tom

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(Kaieteur News) – There is something fundamentally incongruent about a country standing atop one of the most promising oil frontiers of the 21st century while simultaneously deepening its reliance on external debt. Guyana today embodies that contradiction.

It is hailed as the world’s fastest-growing economy, propelled by rapidly expanding oil production, yet its external debt has climbed sharply—from US$1.3 billion in 2020 to US$2.9 billion by the end of 2025. This trajectory raises a simple but unavoidable question: why should an oil-rich nation borrow more precisely when its revenues are surging?

The government’s answer is straightforward. It argues that Guyana’s debt remains sustainable. By conventional metrics, this is true. The debt-to-GDP ratio is below 25 percent, comfortably within international thresholds. Debt servicing, at just over US$175 million annually, appears manageable, especially in light of rising oil revenues. Borrowing, the government insists, is a rational strategy to finance infrastructure, social programs, and long-term development.

But sustainability is not the same as prudence. Nor is it the same as optimal economic management. A low debt ratio can obscure deeper structural issues, particularly in a resource-rich economy. The central concern is not whether Guyana can carry this debt today, but whether it should be accumulating it at all under present conditions.

This is where critics, including Glenn Lall, raise an important and often underappreciated point. Guyana is not a typical developing country constrained by limited fiscal space. It is a country experiencing an unprecedented inflow of oil revenues. In such a context, borrowing to finance nearly one-third of the national budget is not merely a technical choice; it is a signal of a deeper policy inconsistency.

Natural resource wealth, if properly managed, should reduce dependence on debt, not reinforce it. Oil revenues provide a unique opportunity to finance development directly, avoiding the costs and risks associated with external borrowing. When a country continues to borrow heavily despite this windfall, it suggests that the fiscal framework governing resource revenues is either inadequate or misaligned.

Part of the explanation lies in the structure of Guyana’s oil agreements. Low royalty rates and the absence of ring-fencing provisions mean that the state captures a smaller share of revenues than it might under more robust fiscal regimes. This effectively limits the government’s immediate fiscal space, even as production expands. The result is a paradox: rising oil output alongside continued fiscal pressure.

Yet this only reinforces the underlying concern. If the country were securing a greater share of its resource wealth, the need for borrowing would diminish significantly. The persistence of high borrowing, therefore, points not to necessity but to a suboptimal economic model—one in which public finances remain dependent on debt even in the presence of abundant natural resources.

There are also risks that extend beyond fiscal arithmetic. External debt exposes Guyana to exchange rate vulnerabilities. Despite becoming an oil producer, the Guyanese dollar has not experienced significant appreciation. In fact, the dollar is depreciating  thereby increasing the burden of servicing foreign-denominated debt. Moreover, reliance on external financing introduces exposure to global financial conditions, which can shift rapidly and unpredictably.

History forewarns us. Guyana has experienced the consequences of excessive borrowing before, particularly in the late 20th century, when it entered a cycle of debt dependency that ultimately required painful adjustment. While today’s circumstances are different, the structural dynamics of debt accumulation remain relevant. Debt, once entrenched, has a tendency to perpetuate itself.

International institutions such as the IMF and World Bank often endorse borrowing strategies deemed “sustainable.” Yet their frameworks are not infallible. They prioritize quantitative indicators and global benchmarks, which may not fully capture the unique realities of resource-rich economies. For Guyana, the question is not simply whether debt levels meet international standards, but whether they align with national interests in the context of oil wealth.

A more prudent approach would emphasize maximizing domestic resource mobilization, particularly from the oil sector, while minimizing reliance on external borrowing. This would involve strengthening fiscal terms, improving revenue capture, and ensuring that oil wealth is deployed efficiently and transparently. Borrowing should play a supplementary role, not a central one.

Ultimately, the debate over Guyana’s debt is inseparable from a larger, more fundamental question: is the country obtaining its fair share of its oil wealth? If the answer were unequivocally yes, the rationale for continued heavy borrowing would be far weaker. This is the issue that Glenn Lall has persistently raised and one that remains insufficiently addressed in official discourse.

Guyana has the opportunity to translate its oil wealth into sustainable, inclusive development without falling into the traps that have ensnared many resource-rich nations. But doing so requires more than assurances of debt sustainability. It requires a coherent strategy that aligns fiscal policy with the realities of resource abundance.

Borrowing in the face of booming oil revenues is not inherently catastrophic. But it is, at the very least, incongruous. And unless this contradiction is resolved, it risks becoming more than a curiosity of economic policy—it may become a source of long-term vulnerability.

(The views expressed in this article are those of the author and do not necessarily reflect the opinions of this newspaper.)

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• Glenn Lall, Guyana debt, Guyana Oil, Peeping Tom, world’s fastest-growing economy

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