Natural Resources Fund to be reformed for greater transparency – Jagdeo

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Vice President Bharrat Jagdeo

The People’s Progressive Party (PPP) Government remains committed to reforming the Natural Resources Fund Act to ensure greater transparency in managing the fund. This is according to Vice President Bharrat Jagdeo.

According to Jagdeo, the PPP has always been critical of the fund even in Opposition because the former A Partnership for National Unity/Alliance For Change (APNU/AFC) used a model to create the fund that would not ensure the political impudence of the fund.

“In Opposition, we were very critical of the current Natural Resource Fund. Because it was passed in the Parliament after the No-Confidence Motion, without any input from any political party. The reason we were critical was we did not believe the model was arm’s length enough in terms of management.”

“So, we have all been in favour of one principle in the fund. That the fund must be managed in a professional manner, in an arm’s length way from political interference. We’re committed to that principle and the Santiago Principles in terms of transparency when using the fund,” Jagdeo said.

Jagdeo further reminded that it was the former PPP Government that signed Guyana up to the Extractive Industries Transparency Initiative (EITI). Therefore, he noted that the Government remains committed to transparency in using the fund.

“We’ve also made further commitments, when the previous Government collected the signing bonus and they did not tell the country for a year and a half. We made it clear that we will criminalise the non-disclosure of receipts from the oil companies.”

“So, if the Minister of Finance does not publish in the official gazette and notify the National Assembly, three to six months after the receipt of any funds from any oil company, then the Minister of Finance and maybe the secretary to the treasury will go to jail. So, at the end of the year, any Guyanese can get the official gazettes and add the sum collected from oil companies.”

Reformed

Meanwhile, Finance Minister Dr Ashni Singh also explained that money from the oil and gas sector that is banked in the fund cannot be actively invested with the fund in its current state. For now, the fund will passively accrue interest from the United States (US) Federal Reserve where it is currently banked.

Minister of Finance Dr Ashni Singh

“We came into Government with a natural resources fund that was already in existence. And in fact, it was set up by a law that was passed after the No-Confidence Motion had been approved. It was approved in December of 2018. The Natural Resource Fund Act was passed in 2019, with no Opposition involvement or input. The fund in its current configuration is not actively invested.”

“As you know, it’s our intention to reform the fund and its management. In due course we’ll be going to Parliament to address some of the deficiencies in the current arrangement. And at that point of time, we will consider an active investment strategy for the fund, a prudent but active investment strategy. But at this point the fund is not actively invested,” Singh said.

It was previously disclosed in February of this year that over US$200 million earned in oil revenues is currently in Guyana’s Natural Resource Fund, with the latest payment made in January this year.

It is expected that once the Natural Resource Fund Act, which stipulates that various committees must be established to provide oversight for the fund, is reviewed, it will be brought to the National Assembly by the current Government.

In keeping with its manifesto commitments, the Government has pledged to implement a number of measures to ensure accountable and transparent management of the country’s natural resources including establishing an arm’s length sovereign wealth fund insulated from political interference and upholding the Santiago Principles of transparency and accountability, and the EITI.