Legal framework for fund holding close to US$100 million in oil revenue to be amended or repealed

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Guyana’s Natural Resources Fund (NRF) will either be amended or repealed and replaced by the new government over what it has described as ‘serious flaws’ which put ‘overwhelming dominance’ in the hands of the Minister of Finance.

On January 23, 2019, then President, David Granger, had signed the Natural Resources Fund into law. At the time, the APNU+AFC government had explained that the legal framework for the fund includes provisions for public oversight management, the nature and source of deposits, withdrawals, including Parliamentary approval, and determination of amounts to be withdrawn. However, the PPP/C which was then in opposition, had repeatedly contended that the framework places too much authority in the office of the finance minister.

Speaking at a press conference on Thursday, new Vice President under the PPP/C administration, Bharrat Jagdeo, said major changes can be expected to the legal framework of the fund.

“The Natural Resources Fund will be very soon either…repealed, or amended…through a Bill. Clearly, we have a number of issues with the Natural Resources Fund, and one of which is the overwhelming dominance of the influence of the Minister of Finance on the sector and the use of the funds,” Mr. Jagdeo told reporters.

He said as far as the management of the fund is concerned, the new government would like to have “a more arm’s length relationship…That was our fundamental problem with the Bill and the Act that was passed.”

Speaking on a local radio programme this week, Minister of Natural Resources, Vickram Bharrat, said the intent is to “remove the Minister’s powers and increase the involvement of the Private Sector and other stakeholders” while protecting the fund from political interference.

Guyana’s second royalty payment from oil produced and sold in Q2 2020 has now pushed the total revenue the country has received since oil production began last December to more than US$98 million which is being held in the NRF account at the Federal Reserve Bank of New York.

Mr. Jagdeo said when Parliament reconvenes in the coming weeks there will be a proposal in line with a budget which is to be presented, that addresses the question of withdrawals from the fund.

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