There have been calls for an increase in Government spending over the past year, following complaints from the business community that the economy has significantly slowed down.
On Monday (March 13, 2017), Finance Minister, Winston Jordan while agreeing that a greater level of Government spending would result in the economy doing better, blamed the slowdown on the greater level of scrutiny in the public sector.
Jordan was at the time speaking during a live interview on 94.1 FM’s programme ‘JumpStart’.
In 2016, the Private sector complained of a significant decline in the economy. Also, during the presentation of Budget 2017 in December, the Government had disclosed that majority of its Agencies only spent 50% or less of their budgeted allocation for that fiscal year. One such Agency is the Central Housing and Planning Authority (CH&PA) which according to reports, had only spent 20% of its budgetary allocation last year.
Jordan said “the Government spending is large, $250B is the budget…I think one of the things we don’t recognise is that greater transparency and scrutiny sometimes come slowing up the progress.”
He alluded to a system under the previous administration where medical drugs were sole-sourced. “Now you have to go through a range of procurement, and that could take quite a while indeed, so the spending is not as great as that. The systems are not in place to ensure this greater transparency, and I think worst of all, people, bodies on the ground is a major issue,” Jordan said.
Currently, the Ministry of Public Health is faced with a drug shortage at some of its institutions. This led the subject Minister, Volda Lawrence to influence the decision of the National Procurement and Tender Administration Board (NPTAB), for ANSA McAL to supply drugs and pharmaceuticals to the tune of some G$605M recently.
Lawrence in a statement on Saturday (March 11, 2017) blamed the issue on the staff of the Ministry whom she said are in some cases unqualified for the job, and also unwilling to follow protocols and processes.
An issue which Jordan on Monday morning said exists throughout the public sector.
However, he said the numbers as it relates to Government Spending are looking “better than last year.”
The plight of small business owners who have been complaining of seeing reduced returns was also raised with the Minister. In response, he said this is because several sectors of the economy are not doing as well as before because when the government took over, the country was running on fumes.
Jordan said “after 50 years you still had the same sectors; same rice, same gold, lesser extent forestry, lesser extent bauxite. Gold has taken over somewhat.”
A decline in those sectors lead to a decline in employment and subsequently spending.
The Minister once again alluded to the production of oil scheduled to come on stream in 2020.
“The economy has to the right itself and it cannot right itself overnight…The smaller man may not be feeling as he was 4-5 years ago but the economy is righting itself and during this period, we have to prepare this economy for what we call ‘the take off’ because as you know, on the horizon is a fairly large inflow of funds in another couple of years, so we have to use the opportunity now to prepare the economy for that,” Jordan said.
However, he expressed his belief that Guyanese need to adjust their focus to the positives of the Government’s most recent Budget as opposed to the tax measures. He said there had been an increase in disposable income.