By Bibi Khatoon
The Government will be moving ahead to set up the Natural Resources Fund (NRF) or Sovereign Wealth Fund (SWF) as it is widely known at the Bank of Guyana without a fully constituted Public Accountability and Oversight Committee.
However, there will be no withdrawals from the fund until after general and regional elections and the reconvening of the National Assembly said Finance Minister Winston Jordan at the sidelines of an event at the Marriott Hotel, Kingston, Georgetown on Monday evening.
“We will open the account and park the money in there until we get a new Parliament in place.
“So you will have money but you can’t spend,” Minister Jordan said in response to questions asked.
The Minister explained that the setting up of the committee is stalled by the lack of nominees from the Opposition People’s Progressive Party and the Private Sector Commission (PSC).
The APNU+AFC coalition Government remains in a caretaker mode following the ruling by the Caribbean Court of Justice (CCJ) that the December 18, 2018 No Confidence Motion was validly passed.
There have been four sittings of the National Assembly since the of passage of the motion but the PPP did not attend any.
According to the Natural Resources Fund Act which was passed in 2018, the oversight committee comprises of 22 members inclusive of representatives from the Opposition, PSC, Transparency Institute of Guyana, the Guyana Press Association, trade unions, a nominee from each of the ten Regional Democratic Councils and various civil society organisations.
“In going forward, what will happen is if we can’t get the committee set up, we will open the account. The account will be governed by the law that is in place, it will receive the monies so to speak and it will be parked there until we can get a Parliament going,” the Minister said.
Other than the oversight body, however, the National Assembly’s approval is needed to spend the monies accumulated in the fund.
“Our model is everything goes to the Natural Resource Fund so there is a transparent process, you know how much is in that fund and then there is a detailed process about how it can be withdrawn from the fund,” Minister Jordan said.
According to Section 28 of the Act governing the NRF, “the amount that the Minister shall request the National Assembly to approve as the withdrawal from the Fund for the next ensuing fiscal year shall be included in the annual budget proposal and shall not exceed, for that year, the Economically and Fiscally Sustainable Amount plus any amount required for emergency financing.”
The Government, in its caretaker status, cannot present a National Budget.
Despite its constraints, the Minister said he does not believe the Government’s plans for oil revenues will be largely affected.
He noted that “monies will accumulate very slowly in the NRF and even when it gets into the NRF, there’s only a certain portion that can be withdrawn, is not everything.”
As such, he said there is not much that can be done in 2020 –the year oil production is set to begin.
In fact, Minister Jordan said, “come 2020, if anybody tells you that they will do big things based on oil money, you tell them I said don’t lie to me.”
Post-2020, the Minister estimates that is when large projects can begin since the revenue will meet a sustainable amount.
In the coming weeks, the Finance Ministry will be holding workshops for officers in charge of the management of the fund.