Guyana’s Natural Resource Fund—the South American nation’s Sovereign Wealth Fund for its Oil and Gas (O&G) earnings—will be managed by the Ministry of Finance, headed by Minister Winston Jordan.
The Green Paper for the Natural Resource Fund that was recently laid before the country’s legislative body states that the “Ministry of Finance would be responsible for overall management of the NRF, including requested withdrawal in the Annual Budget Proposal; calculating the Fiscally Sustainable Amount; drafting the Investment Mandate; entering into the Operational Agreement with the Bank of Guyana and drafting the Annual Report and reporting on the NRF through the Annual Budget.”
It also indicated that the Bank of Guyana (BoG) would be the Operational Manager of the Fund—managing it in “accordance with the Operational Agreement and Investment Mandate.”
The Central Bank will also be responsible for drafting quarterly reports and annual accounts, as well as “procure Private Managers and draft Management Agreements and Investment Instructions.”
The Private Managers in question will be mandated to “manage the overall investment portfolio in accordance with Management Agreement and Investment Instructions and submit reports to Bank of Guyana.”
Meanwhile, a seven-member Sovereign Investment Committee, which is to be established, would be responsible for advising the Minister of Finance on the Investment Mandate.
Spending and Accountability
Money from the Fund will be used for transformative investments; however, in order for these funds to be used to finance such ventures the withdrawals from the Fund must be deposited into the Consolidated Fund “to form part of the financing streams for the annual budget.”
However, the Green Paper noted that “ withdrawals from the Natural Resource Fund cannot exceed the amount approved by Parliament” which has responsibility for approving the Annual Budget which would include the annual withdrawal from the Natural Resource Fund, and reviewing the Annual Report.
The Finance Ministry will also have to report to Parliament on the Fund and its use. “Ultimately, the Ministry of Finance would lay an Annual Report in the Parliament each fiscal year and provide further reporting through the annual budget process which will include additional documentation. Each instance would see comprehensive analyses being made public,” the Paper stated.