Ahead of the parliamentary debate on the Natural Resource Fund Bill – which sets out the legal framework for the management of the country’s oil resources – Senior Minister with responsibility for Finance Dr Ashni Singh last evening responded to public concerns and criticisms of the proposed legislation.
Reminding of the various flaws with the previous Bill that was tabled by the then illegitimate APNU+AFC Govenrment in January 2019, the Finance Minister explained how this new Bill is a drastic improvement in terms of governance structure and in the provision of transparency and accountability in the spending of the oil money.
“Removing the powers of the Minister [of Finance] and introducing the requirement of a Board of Directors where you once had the Minister as the all-powerful autocrat discharging roles, responsibilities and exercising all powers where you had under APNU/AFC configuration, this all-powerful Minister, we have removed from that Act this all-powerful Minister and we have inserted a five-person Board of Directors,” Dr Singh explained.
“The mere fact that you are moving from one person to five represents an improvement…put aside whether it was the Minister or put aside who is appointing the Board of Directors, the very fact that you’re moving from a point where you had one individual performing these functions to a panel of five persons, by mere virtue of the fact that you have moved from one to five, that constitutes improvement,” Dr Singh contended.
“But add on top of that that, this is not just five random persons, it’s five persons appointed by the President, meeting certain requirements with representation from key stakeholders so, we have dramatically strengthened the governance architecture.”
The Finance Minister also explained that the new NRF Bill streamlines the Public Accountability and Oversight Committee. According to him, the structure for the Committee in the old NRF Act was a “smokescreen”.
“We’ve streamlined the Public Accountability and Oversight Committee to bring it down from 22 (persons) to a more manageable, a more realistic number, I think we have nine. Nine is still a large number but we have brought it down to nine, we include representations from the religions, we include representation from the private sector, representation from labour, representation from the professions, so it still a very broad-based and widely-representative committee and we streamline its functions to make those functions more relevant, to factually reflect what an oversight committee would be involved in,” he highlighted.
“So, we remove the smokescreen that APNU/AFC tried to do, to create the impression that there is good governance, and we put in place a Board of Directors responsible for overall management and we put a Public Accountability and Oversight Committee responsible for non-governmental oversight.”
Another key improvement, according to the Finance Minister, is the formula for transfers from the Fund to the Budget. He described the previous formula as opaque and incomprehensible to even the experts, and therefore, lacking accountability.
“The third major amendment that we’re seeking to do it relates to the formula for transfers for the fund to the budget so, the APNU/AFC Act defined a mechanism for determining the formula. Incidentally that mechanism had the minister’s fingerprints all over it. So, under their mechanism, you had a number of concepts that were introduced, you had something called an economically sustainable amount, that amount incidentally was determined by the minister, he received recommendations from a macro-economic committee but he is not bound to follow those recommendations,” Dr Singh explained.
In contrast, he pointed out that “under our Bill, anybody can calculate how much is going to be transferred from Fund, that amount is completely transparent, everybody knows that.”
He went on to challenge naysayers, saying that “all of the people who are offering comments on the amount that’s going to be transferred from the Peoples Progressive Party/Civic formula as contained in our Bill, I challenge anyone of them to articulate what the amount or tell us what the amount would have been under the APNU/AFC formula. The formula was designed to be obscure.”
According to Dr Singh, the PPP/C Government has introduced a “simple, understandable, clear and therefore transparent formula for transfers, that will govern transfers from the Fund to the budget.”
Against this backdrop, he explained that no citizen has to worry about the lack of accountability or transparency regarding the spending of the country’s oil revenues.
“Every dollar that is spent is determined by the Parliament, so the government will not be unilaterally determining how to spend and how much to spend. The Parliament will be determining that as a part of the budgetary process, as part of determining budgetary priority., The Parliament will have an opportunity to scrutinise that spending…during the consideration of the budget and…during the consideration of the Auditor General’s reports and the deliberations of the Public Accounts Committee, and so there’s no question on how the money is going to be spent,” Dr Singh expressed.
