By Kemol King
A curious discourse has erupted over comments made by Vice President Bharrat Jagdeo at a recent press conference when asked to identify specific projects funded by oil money. This is not a new conversation. The Vice President gave the same answer he always gives. In a nutshell, he could not zero in on any projects because the Natural Resource Fund Act, the law governing the management of the Fund that receives royalties and oil sales revenue, is not set up that way.
One critic of the government and the opposition’s representative on the NRF Investment Committee, Dr. Terrence Campbell, believes the government should list its spending plans for the oil money before it can be transferred to the Consolidated Fund. There is only one situation in which the NRF law requires the government to justify its request for funds, and this relates to emergency financing.
The law says that if the government’s annual national budget proposal includes a request for emergency funds, such as to respond to a major natural disaster, a detailed report is needed to outline the list of projects the withdrawal will be used to finance. Otherwise, the government could include such a request in a supplementary appropriation bill. Under normal circumstances, such as for typical budget support, this listing is not required. And why should it be?
There is an organization that oversees the Executive branch’s normal spending plans—the National Assembly. Members of Parliament (MP) scrutinize and debate the administration’s budget proposal annually, then vote to approve the budget and allow the transfer of oil revenue to support it.
Mind you—the previous iteration of the NRF Act that was legislated by the Granger government gave its Public Accountability and Oversight Committee the function of holding public consultations on the utilization of withdrawals from the Fund, but it made no requirement for this to guide the spending of the money.
Both the old law and the current one made by the Ali administration require that the money be spent on national development priorities. This provision seems to have no practical relevance. The Act does not define national development priorities. So, once the revenue is approved as budget support, just about anything may be construed as a priority.
Once the money is transferred to the Consolidated Fund, it is indistinguishable from other revenue sources. So, it really is impossible to say what the oil money is funding. Does it even matter? Is a hundred dollar bill more valuable because it came from oil, than a hundred that came from loans or taxes?
The focus should be on evaluating the government’s overall fiscal strategy rather than trying the futile task of tracing specific expenditures back to oil sales and royalties. Even if one gets those answers, what comes next? Who gets to decide whether that hypothetical list of projects is valid, aside from the government to which the people gave the mandate to govern?
Analyzing government spending at the parliamentary level can produce a clear perspective on the government’s priorities and whether they align with the country’s needs. The government has made its priorities clear: investing heavily in capital projects such as hospitals, roads, bridges, schools, energy plants, and housing developments. Categories of workers are getting multi-year salary increases. The University of Guyana and the government’s technical and vocational institutions will charge no tuition starting next month. There is already clear transparency about what is being funded and why. The debate over these investments, their necessity, execution, success, or the lack thereof, is already vibrant.
By analyzing the evolution of government spending practices and identifying trends, one can deduce the impact of oil money on national development. Is the criticism from the opposition and other detractors borne entirely out of genuine concern, or is it a lack of effort to engage with publicly available information?
Guyana has received more than US$5.5 billion in direct revenue from oil sales and royalties. Government expects total direct deposits from the sector to exceed US$2.6 billion this year, and this will only swell in the years to come, as ExxonMobil expands production. Accumulated withdrawals from the NRF will exceed US$3 billion by the end of the year. Next year, the government could withdraw another US$2.3 billion to support the 2025 budget. People want to know that their quality of life is being improved by their newfound riches.
It is not enough to read reports about double-digit economic growth while traffic backs up for hours on the East Bank Demerara public road. Nor is it acceptable that while this country’s leaders heap praise on a proud environmental record, its children have to turn on lamps and smartphone flashlights to do their homework in the dark because Guyana Power and Light Inc. continues to struggle to keep the lights on. Broader development narratives can get overshadowed by these problems that affect ordinary people. The truth is that projects being pursued to address such plagues, whether whole or in part, will take time to materialize.
While the curiosity about where Guyana’s newfound wealth is going is valid, the fixation on getting the government to name projects linked to oil money is misguided and a waste of time. It begs the question whether frustration about the pace of development, and the desire to heap negativity on the government’s actions, is getting in the way of real, meaningful discourse about using oil wealth to transform people’s lives.
