Money from oil fund to spur non-oil growth – Bharrat knocks criticisms

Minister of Natural Resources Vickram Bharrat has knocked criticisms of the government’s intended withdrawals from Guyana’s oil-wealth fund, explaining that the money will be used to spur non-oil growth.

“How can you actually say that Budget 2022 is killing the non-oil sector when the money flowing from the Natural Resource Fund (NRF) is to incentivise the non-oil sector?” Bharrat said during the budget debates on Thursday.

Bharrat talked up the massive allocations made to all of the local sectors through the country’s largest budget yet.

But importantly, Bharrat said that while oil and gas is a large contributor to Guyana’s economic development, the importance of developing the non-oil, productive sectors is crucial. This includes the agriculture, tourism and manufacturing sectors.

Guyana’s economy grew by a significant 19.9 per cent largely on account of the nascent oil and gas sector, with the non-oil sector growing at a rate of 4.6 per cent. Efforts are being made, Bharrat said, to ensure that the non-oil sector remains competitive.

Why this is important, Bharrat explained, is because there are not very many jobs available in the oil and gas sector. Job opportunities for Guyanese are instead found in abundance in the other non-oil, productive sectors.

“That is why we are committed to continue growing the non-oil sector, most of the Guyanese are employed in this sector,” he emphasised.

But even so, Bharrat highlighted that the government has rolled out the new Local Content law that allows Guyanese to benefit from specific carve-outs in the oil and gas sector.

This law sets out 40 areas under which local companies should be used, detailing the percentage requirement by the end of 2022. Simply, it identifies how much Guyanese services should be used in the various sectors.

The minister’s statements were made in response to criticisms from the members of the opposition that the 2022 Budget will focus heavily on development in the oil and gas sector, neglecting other productive sectors.

On Thursday too, concerns on the government’s planned developments for the oil and gas sector were raised by Opposition Parliamentarian David Patterson.

The Opposition Parliamentarian specifically raised concerns about the proposed massive gas-to-energy project planned for Region Three that will see natural gas being used to supply energy. Patterson said that the government should have taken more time to conduct further studies on the impact of this project.

Bharrat, however, noted that the cost and reliability of power generation is Guyana’s “biggest problem” and this gas-to-energy project will solve those woes. This massive project is also expected to spur manufacturing activity with the reduction in the cost of electricity.

A total of $29.4 billion has been allocated to the energy sector in 2022 and a majority of that sum- a total of $20.8 billion- will be channelled towards the development of the Wales Gas-to-Energy project.