Gov’t makes first withdrawal from oil fund

The Government of Guyana has withdrawn US$200 million (or GY $41.7 billion) from the country’s Natural Resource Fund (NRF).

This is the first withdrawal that has been made from Guyana’s oil wealth fund.

The withdrawal was announced on Tuesday night via a press release from the Ministry of Finance, which indicated that this sum has been transferred to the Consolidated Fund to finance national development priorities.

According to the release, the withdrawal was done in accordance with the Natural Resource Fund Act of 2021.

The law sets out how the country’s petroleum revenues will be managed – this includes monies earned from oil sales, royalties and any signing bonuses.

And as per this Act, all withdrawals from the Fund shall be deposited into the Consolidated Fund. This means that Parliament will know how the money is being spent and the National Assembly will have to give approval for withdrawal. Having been deposited into the Consolidated Fund, these funds can now only be withdrawn to meet expenditure approved in the national budget.

Earlier this year, when the National Assembly approved the $552.9 billion 2022 National Budget, it also approved a motion for $129.6 billion (or US$607.6 million) to be withdrawn from the NRF to help fund the government’s projects that were included in the budget.

The US$200 million represents the first withdrawal from that approved US$607.6 million sum.

Meanwhile, the press release also noted that the withdrawal follows the publication of all of the petroleum revenues paid into the NRF from January 1 to March 31, 2022.

Publishing this information in the Official Gazette is now a legal requirement, since the enactment of the strengthened NRF Act last December.

At the end of that period, Guyana’s oil fund had a total of $150 billion (or US$638.5 million). The Bank of Guyana has, however, updated those figures to illustrate that there is now GY $154 billion in the NRF as at April 30, 2022.

The additional money, based on the Bank’s financial reports, were garnered as royalty payments.