Guyana’s Natural Resources Fund (NRF) legislation passed this week in Parliament is part of the country’s broader legal architecture, subject to rules and procedures already in place that govern the handling of public funds.
And according to Senior Minister with responsibility for Finance in the Office of the President, Dr. Ashni Singh, multiple layers of checks and balances exist both under the NRF legislation and within the existing legal framework for the allocation and use of revenues.
“Any use of the fund, whether for natural disasters or for national development…has to be subject to prior Parliamentary approval,” he said.
All withdrawals from the Fund must be deposited into the Consolidated Fund and should be used for development priorities and essential projects.
In the case of emergency financing, this will require that a supplementary appropriation bill is taken to Parliament accompanied by relevant documentation, debated and approved, before funds are released for spending.
“So, the Minister of Finance, the incumbent or any of his successors hereafter, as long as this Act is in force, cannot unilaterally go into the fund and draw down a single dollar,” Dr. Singh stated.
All expenditure will be audited by the Auditor General and scrutinized by the Public Accounts and Economic Services Committee of Parliament.
Penalties
The finance minister explained that to withdraw a single cent from the fund, Parliamentary approval must be sought and if this is not done, that constitutes an offence under the law, which is punishable.
“When the Parliament approves an amount to be withdrawn from the fund that amount has to be deposited in the Consolidated Fund. So, you don’t draw down from the Natural Resources Fund and then go and spend willy-nilly outside of the framework for spending public money,” Dr. Singh said.
The maximum amount that can be withdrawn from the Fund in a fiscal year should not exceed the total withdrawal from the Fund approved by the National Assembly for that fiscal year, unless in the case of an emergency.
Board of Directors
Critics have taken issue with the President being the person that appoints the governing board, saying that this allows for the installation of persons who will be inclined to do the government’s bidding.
But Dr. Singh explained that under the previous framework, the functions that will now be exercised by the board were consolidated under the minister of finance, a single individual, who is also an appointee of the President.
“None of those people seem to have had a problem with the minister, one individual, who is also incidentally appointed by the president, exercising all that authority,” Dr. Singh said. “The mere fact that we are moving from the minister who is clearly a political person, to a board of directors required to have certain professional qualifications listed in the law…represents a vast improvement of the governance architecture.”
According to the legislation, the Directors will be selected from among persons who have wide experience and ability in legal, financial, business, or administrative matters, one of whom will be nominated by the National Assembly and one from the private sector.
The legislation also makes provision for a Public Accountability and Oversight Committee which will comprise members appointed by the president from the National Assembly, religious community, private sector, organized labour and professions.
An investment committee will also be established with one nominee each from the minister responsible for petroleum, Attorney General, Leader of the Opposition, private sector and two ex officio non-voting members.
