Guyana’s external debt is now US$50M lower. Following the signing of a Bilateral Debt Settlement Agreement between Finance Minister, Winston Jordan, and the state of Kuwait, Guyana had its 44 year loan from the Middle Eastern nation cancelled.
On March 18, 2019, Minister Jordan and the State of Kuwait, through the Kuwait Investment Authority, signed the agreement to cancel the US$50,739,255.67 debt.
Guyana’s debt to Kuwait originated from a Loan Deposit, contracted in 1975, from the Central Bank of Kuwait for Kuwaiti Dinars 3.0 million (US$10.3 million at that time), for balance of payments support to the Bank of Guyana. The debt accumulated massive arrears over the past four (4) decades, at high market interest rates. As at December 31, 2017, the debt to Kuwait had grown to US$77,592,840.90, comprising principal arrears of US$9,940,500 and interest arrears of US$67,652,340.90.
This debt cancellation will reduce Guyana’s external debt and allow the country to expand its development agenda, as funds saved under this agreement would be allocated to social projects within the context of the National Budget, a statement from the Ministry of Finance claimed. The agreement, which came after an ardent negotiation process, paves the way for greater co-operation and the strengthening of cordial ties between the two countries.
Commenting on the agreement, Minister Jordan said that it is the result of renewed efforts by his Ministry to engage Guyana’s non-Paris club bilateral creditors in negotiating debt relief that is acceptable and sustainable.
The remaining amount of US$26,853,585.23 will be settled through a combination of cash payments, to be made over nine (9) years, and a debt swap arrangement, which will be worked out in due course.
Since assuming office in 2015, the Finance Minister has pursued debt relief from other bilateral non-Paris club creditors with whom Guyana’s debts are in
