GUYANA: Government makes first withdrawal of US$200M from Natural Resource Oil fund

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This is the first withdrawal that has been made from Guyana’s oil wealth fund.

The withdrawal was announced on Tuesday night via a press release from the Ministry of Finance, which indicated that this sum has been transferred to the Consolidated Fund to finance national development priorities.

According to the release, the withdrawal was done in accordance with the Natural Resource Fund Act of 2021.         

The law sets out how the country’s petroleum revenues will be managed – this includes monies earned from oil sales, royalties and any signing bonuses.

And as per this Act, all withdrawals from the Fund shall be deposited into the Consolidated Fund. This means that Parliament will know how the money is being spent and the National Assembly will have to give approval for withdrawal. Having been deposited into the Consolidated Fund, these funds can now only be withdrawn to meet expenditure approved in the national budget.

Earlier this year, when the National Assembly approved the $552.9 billion 2022 National Budget, it also approved a motion for $129.6 billion (or US$607.6 million) to be withdrawn from the NRF to help fund the government’s projects that were included in the budget. Ministry of Finance

The US$200 million represents the first withdrawal from that approved US$607.6 million sum.

Meanwhile, the press release also noted that the withdrawal follows the publication of all of the petroleum revenues paid into the NRF from January 1 to March 31, 2022.

Publishing this information in the Official Gazette is now a legal requirement, since the enactment of the strengthened NRF Act last December.

At the end of that period, Guyana’s oil fund had a total of $150 billion (or US$638.5 million). The Bank of Guyana has, however, updated those figures to illustrate that there is now GY $154 billion in the NRF as at April 30, 2022.

The additional money, based on the Bank’s financial reports, were garnered as royalty payments.

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Comments

  • Jerome  On 05/11/2022 at 9:33 am

    Hopefully that money will get to where it’s suppose to go. Where there’s a will, there’s a way!!!!

  • brandli62  On 05/11/2022 at 2:59 pm

    This is the beginning of the draining the NRF to cover oversized infrastructure projects (e.g. an airport at Rose Hall, a stadium in Berbice, a railway link between Boa Vista and Georgetown and many more). The Ali administration is planning to use 60% of the NRF in the coming years. The alternative would have been to withdraw only the revenue from investing the NRF on the capital markets (in the range of 3%). This would allow to build up the NRF rapidly and 3% withdrawals annually will become 1 billion USD by 2030. Norway was smarter than the Ali administration….

  • Caldrick  On 05/12/2022 at 5:31 pm

    Waste! Waste! Waste! This is a wasteful government that will squander the wealth of the country with friends abroad. 150 million for a 200 bed hospital; what a disgrace! 460 million for a slaughterhouse; what a disgrace! Does Guyana need a slaughterhouse for 460 million dollars instead of a bridge across the Demerara at the narrowest point in the vicinity of the already condemned floating bridge. The floating was condemned in 2017. In Florida today, a well known hospital is adding a wing twenty floors high for less than the cost of the proposed hospital. Why is it the new hospital is not built across from the real hospital so it can be linked to the sewer system? Will you dig another hole to add to the septic tank sewer city that Georgetown is? 150 million for a hospital is a damn lie. 460 million for a slaughterhouse is a darn waste of the Peoples’ money. Stop the darn waste. It is not your money.

  • Emily  On 05/13/2022 at 9:13 am

    Is this going to benefit Guyanese, or is this going to line the pockets of the corrupt and politically connected elite you see on the front pages?

    I’ve heard that starvation and hunger is worse in Guyana.

  • Dennis Albert  On 05/13/2022 at 3:40 pm

    Will Shell Mohammed become the first US Billionaire in Guyana? Only time will tell. I guess that doing certain business ventures reaps rewards, even though it’s Haram in Islam.

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