To finance development projects, Gov’t to further increase debt ceilings

In a bid to facilitate new financing for the government’s transformative development agenda, Finance Ministry Dr. Ashni Singh has announced moves to further increase the country’s debt ceilings.

In early 2021, Dr. Singh led the government’s move in the National Assembly to increase the domestic and external debt ceiling to $500 billion and $650 billion, respectively.

Those increases were approved and came almost three decades after the last upward revision to $150 billion and $400 billion in 1994.

Since 2021, borrowing occurred and as the government nears the maximum amount authorized under the ceiling, the National Assembly will soon be approached to raise the limit on borrowing.

Dr. Singh will now have to issue an order which will be laid in the National Assembly with the specific proposed adjustments. The adjustments are needed to accommodate the anticipated new borrowing to fund the government’s development agenda.

In an exclusive interview with the News Room this week, Dr. Singh pointed out that the PPP/C government has demonstrated a strong track record of prudent and responsible economic management.

He assured that the revisions to the external and domestic debt ceilings will not threaten Guyana’s long-term debt sustainability, given the substantial economic progress and the country’s robust economic outlook.

“That is one of the most distinguishing legacies of PPP governments throughout the history of Guyana,” Dr. Singh said.

He believes this level of prudent financial management was most amply demonstrated when the PPP returned to government in 1992 and met a national debt that was 600 per cent of the country’s Gross Domestic Product (GDP).

“We worked very hard in the immediate post-1992 period to return Guyana to a position of debt sustainability,” Dr. Singh added.

Now, with heavy investment initiatives and the ramping up of social programmes, more financing is needed and Dr. Singh has repeatedly assured that the government will ensure borrowing is done prudently.

“The APNU (opposition) when in government, didn’t borrow to finance the deficit, they incurred an overdraft at the central bank… we regularised that when we came to government (in 2020),” Dr. Singh explained.

He anticipates that the opposition will oppose this new increase in the debt ceilings.

“They are well aware we are borrowing for financing development programmes. They don’t want these projects to be delivered by the PPP/C although they were incapable of delivering when they were in government,” the Finance Minister said.