Guyana government says it will reveal plan for spending oil money – VP Jagdeo

ByOilNOW – September 16, 2021
OilNOW is an online-based Information and Resource Centre

Guyana’s Vice President, Dr. Bharrat Jagdeo says a comprehensive programme will be made available to the public showing how oil revenues will be spent, with focus on priority areas such as infrastructure and social upliftment, inclusive of investments in education and healthcare.

In a recent interview published on social media, the Vice President said instead of leaving all of the money to accrue for future generations, the government has to address poverty and improve access to basic services.       

Dr. Jagdeo said President, Dr. Mohamed Irfaan Ali, intends for there to be a balance between the utilisation and saving of oil funds.

“We cannot have poor people, people who don’t have water and electricity and basic minimum, and not address those concerns whilst we are saving for intergenerational equity,” the Vice President said.

He explained that when the time comes for the monies to be spent, the public will see a programme for its use, and a transparent, accountable process.

“The process will be publicly identifying the project, saying how much money will be utilized from the fund for that project, ensuring that the auditor general is also aware…” he said. “It will require parliamentary approval. You know, we’ll go through the parliamentary process where the project can be scrutinized, all the questions asked, and then implemented.”

That spending will not begin any time soon. The Government has made it clear that it will not use the current framework for the management of the funds, which was established by the previous administration.

The Vice President also considers the current amount in the fund, US$436 million, to be negligible.

“Now, our idea is that in the latter year by 2026 or so, 2025/2026, you’re gonna have a steep ramp up of how much money will come to us,” Dr. Jagdeo pointed out, referencing a timeline by which cost recovery for Liza Phase 1 is expected to conclude and other projects will be online. It is estimated that Guyana could be producing over 1 million barrels of oil per day by 2025.

At that juncture, the Liza Phase Two and Payara projects, which have already secured government approvals, will have already come on stream. ExxonMobil, operator of the prolific Stabroek block, is also seeking government approval for the Yellowtail development, targeting first oil in 2025.

Notably, the Guyanese government has stressed that the economy will not be based on oil, nor will it be overdependent on oil funds.

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Comments

  • brandli62  On 09/17/2021 at 4:11 am

    As usual VP Jagdeo remains in transparent on how he wants to spend the oil money. His statement: “We cannot have poor people, people who don’t have water and electricity and basic minimum, and not address those concerns whilst we are saving for intergenerational equity.” and previous comments illustrates two points:

    1) He still does not understand the Guyana’s oil revenues will end at some point, probably by 2050. Hence, why would you want to spend all money now and have nothing left for the years after the oil boom? He is probably hoping that he will not be around to oversee the post 2050 period.

    2) He has no real interest in getting the public and other stakeholders involved in the discussion. It appears that he is the sole source of knowledge.This is not a good approach for gaining public acceptance of your strategy on how spend the oil revenue.

    As mentioned in the past, Guyana would do best now and in the future, if it were to adopt the Norwegian model of running a sovereign wealth fund. The Norwegian fund currently has assets in the range of 250’000 USD per Norwegian citizen. It generates billions annually. In 2020, it contributed 44 billion USD to the Norway’s national budget. Guyana’s population is 1/7 Norway, but its proven oil reserves are currently twice those of Norway. And actually they might turn out to be 5-fold higher once the entire Stabroek block has been surveyed.

    Guyana follow Norway’s model and you’ll serve your citizens best for generations to come!

    • P. Dial  On 09/19/2021 at 9:00 pm

      It would be good if Brandli carefully read and understand Dr Jagdeo’s comment. Dr Jagdeo is aware of the ephemeral nature of oil wealth. He is aware that such wealth is to be used to meet long-felt capital investment needs in such as agri and industrial investment so that when oil goes, Guyana would still be a prosperous place. He has said that some of the oil wealth must be spent on social and economic development of the present population. The Government of Guyana has engaged some of the world’s best experts to advise on its oil profile and oil expenditures. It would be wise that amateurs like myself and Brandli, a university academic listen and learn from specialists.

  • wally n  On 09/20/2021 at 1:07 pm

    Not a big fan of Government releases, promises, master plans, all diplomatic blabber especially when it deals with spending. There are usually loopholes large enough to pass Hotels, Bridges …..through.The Government has access to brilliant consultants,experts, many Guyanese, but usually they already have a lil sumptin different already there.
    I prefer.. We will build the largest and best Health System in the Caribbean. We will have most progressive service for Seniors (you know the ones that laid the foundation). We will ensure that we have the an Education system that will be the envy of all developing nations. OK so I was dreaming, Guyana will probably end up with a biden $3 trillion master plan, and everyone lamenting, “Where have all the money gone?”

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