By 2028, Guyana projects that a year’s oil revenue will be equivalent to almost its total outstanding debt. However, political opponents to the current administration have said the country’s debt is mounting and this could impact its future prospects.
Political party, Alliance for Change (AFC) had expressed concern during a press conference last week about the government’s recent loan agreements and the potential burden they could impose on future generations.
“The fact that we are borrowing excessive amounts without understanding or knowing what the price [of oil] is going to be in another two, three, ten years, especially when you also consider that the world is moving towards renewable energy,” said Member of Parliament, Cathy Hughes.
She reminded that the US government had vetoed an Inter-American Development Bank loan intended for the Guyana Shore Base Inc. due to a new policy of not supporting oil and gas projects. “So, those are the realities,” Hughes stated.
One newspaper also wrote that the debt Guyana has sought in half a year would be greater than the oil revenues earned in the same period.
But Vice President Dr. Bharrat Jagdeo said this week the administration has a sterling record of debt management and is primed for an even more robust fiscal footing, thanks to the ongoing oil boom.
He pointed out that his party, the People’s Progressive Party Civic (PPP/C), has had a good record of debt reduction over the years it’s been in office.
“Our capacity to carry debt has vastly been enhanced. And our capability for servicing the debt has grown now,” the Vice President said. “And then also, our future revenue, projected revenue, even from the oil and gas sector, by 2028, a year’s revenue will be equivalent to almost our total outstanding debt.”
Jagdeo also elucidated why the government is borrowing. He said the purpose of these debts is to invest in the country’s future capacity, people’s welfare, and productive capability.
He said the current government is using funds like the US$150 million loan from Saudi Arabia to create housing infrastructure, produce 50,000 house lots, and construct a bridge in the mining town of Linden, among other projects. He said borrowing is also supporting the Gas-to-Energy project aimed at bringing down electricity prices, building 12 new hospitals, and constructing a bridge across the Demerara River.
