Guyana’s Senior Finance Minister Dr. Ashni Singh announced on Tuesday that the government has made its first drawdown from the Natural Resource Fund (NRF) in accordance with the Natural Resource Fund (NRF) Act 2021.
Dr. Singh indicated that pursuant to Section 16 of the NRF Act 2021, US$200 million equivalent to G$41.7 billion has been transferred from the Natural Resource Fund to the Consolidated Fund to finance national development priorities.
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“This transfer was made in accordance with the strengthened legal architecture of the NRF Act 2021 and follows the publication in the Official Gazette of all petroleum revenues paid into the Natural Resource Fund during the period 1 January to 31 March 2022,” a statement from the Ministry of Finance said.
The NRF Act 2021 which came into operation on the January 1, 2022, represents a significant improvement, the government posited, in transparency and accountability and the overall management of the natural resources wealth of Guyana for present and future generations.
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The ministry said it would be recalled, that as part of the Budget 2022 process, Parliamentary approval was granted for a total of US$607.6 million to be transferred during the fiscal year 2022.
While the funds will not be directly injected into projects, the government’s stated priority areas for oil revenues are capital projects which would support development in the long term. This is reflected in the fact that the 2022 budget agenda, which these funds were approved to support, has placed the country’s spending axis on the development of Guyana’s physical infrastructure, energy security and social services.
The government has shunned proposals to use a substantial portion of oil revenues for direct cash transfers and subsidies, and criticised the previous administration for its spending posture in prior budgets which Vice President Dr. Bharrat Jagdeo said appropriated too much for current expenses and neglected the development of long term impact projects.
Over the next four years, Guyana estimates it will spend about 60% of its oil revenues, approximately US$3.45 billion.