At a press conference yesterday, Vice President Dr. Bharrat Jagdeo explained that while the use of the oil revenues are not itemized in the national budget, he underscored that the government’s spending is transparent.
Jagdeo was at the time, responding to questions about the government’s handling of funds from the Natural Resources Fund (NRF). He explained that the NRF is governed by a strict legal framework, and the funds remaining in the NRF have to be invested in a manner prescribed by the law.
“The law is very specific (on) what instruments you can invest the funds in the NRF in…” Jagdeo noted. He further emphasized that the law is clear about how the money flows from the NRF into the national budget, and detailed the formula that determines how much is transferred into the budget.
However, he noted, “How do you balkanize revenue coming into the budget; it becomes a very difficult thing to do.” Jagdeo went on to highlight the significant transparency measures in place, pointing out that every receipt of oil revenue received by the government is published in the official gazette and that Parliament must be notified within three months. He noted that failing to adhere to this rule could result in a 10-year jail sentence for the responsible minister—an accountability measure introduced only after 2020.
“There has been no greater clarity surrounding oil resources in any country that I have seen than what we have done here…” Jagdeo argued.
Moreover, the Vice President explained that there is also transparency in government’s spending. He stressed that every cent of government expenditure—whether from oil revenue, non-oil revenue, or borrowing—must be appropriated by the National Assembly through the budgetary process. This includes both the initial and supplementary budgets, which are later formalized into an appropriation act.
Jagdeo highlighted that from Guyana’s first, historic $1.146 trillion budget less than 30%, about $300 billion accounts for oil money, while nearly 40% of the budget comes from non-oil sources. He dispelled the notion that the growth in the budget is primarily driven by oil money, explaining that the oil revenue can be absorbed to only cover a few government ministries or agencies. He disclosed that the massive infrastructural spending is funded from non-oil revenues and borrowing.
In simpler terms, Jagdeo clarified that the real drivers of budget growth are non-oil revenues and selective borrowing. Despite the borrowing, he pointed out that Guyana’s debt stock today is lower than it was when his government first took office in 1992.