Auditor General, Deodat Sharma, has noted that the coalition administration entered into 12 new loan agreements last year totaling $34.5 billion. In his latest report, Sharma said that amounts totaling $5.6 billion or US$27.311M were disbursed from some of the loans.
These included the International Development Association (IDA) loan; Inter-American Development Bank (IDB) loan; Export/Import Bank of China, and Republic Bank, Trinidad and Tobago.
Sharma said that in accordance with Article 221 of the Constitution, the Public Debt of Guyana and service of that debt are direct charges on the Consolidated Fund.
In addition, Section 3(1) of the External Loans Act, Chapter 74:08 of the Laws of Guyana, authorises the Government to raise loans outside of Guyana not exceeding $400 billion. Section 3(6) of the said Act also requires all agreements relating to such loans to be laid before the National Assembly as soon as practicable after the execution of such agreements.
That said, Sharma noted that the related loan agreements taken by the coalition administration were all laid in the National Assembly during 2017.
The Auditor General noted, however, that the following agreements related to PetroCaribe which were entered into during 2015, were still not laid in the National Assembly at the time of reporting: a) Compensation agreements between the Bolivarian Republic of Venezuela and the Cooperative Republic of Guyana; and b) A draft sales agreement for oil shipment to Guyana through the PetroCaribe Agreement for the year 2015 with a total value of $5.293 billion or US$25.632M.
Sharma said that the compensation agreements between the Governments of Venezuela and Guyana provided for the cancellation of the oil debt in compensation for white rice and paddy under the Guyana/Venezuela Rice Trade Agreements.
According to the agreement, the Guyana Rice Development Board (GRDB) would supply rice and paddy to the Bolivarian Republic of Venezuela. During 2015, there was a cancellation of $9.038 billion or US$43.766M of which there was no official agreement signed between the Government of Guyana and Republic of Venezuela for the said cancellation of the debt.
In response to this matter, the Finance Ministry said that in 2015, the seventh Oil Debt Compensation Agreement between Guyana and Venezuela was not concluded.
The Ministry said that this Agreement specified that in 2015, the white rice and paddy shipped to Venezuela from Guyana was intended to compensate Guyana’s Oil debt to Venezuela.
It noted that oil shipments under the PetroCaribe Agreement from Shipment №. 33 of 2013 to Shipment №. 27 of 2015 are included in the Seventh Oil Debt Compensation Agreement. The Ministry said that there has been no contract concluded between the Government of Guyana and Venezuela for the 2015 Sales of Oil Shipment №. 1 of 2015 to Shipment №. 27 under the PetroCaribe agreement.
The Ministry said that promissory Notes were prepared reflecting shipments made in 2013 to 2015 through the sales contract. It said that the terms and conditions outlined in the promissory notes are still valid and enforceable.
The Ministry further noted that money representing repayments to Venezuela for oil shipments are currently being placed in an account held at the Bank for International Settlements (BIS). It said that all such funds will be placed on fixed deposits with BIS until sanctions against the Government of Venezuela are lifted.
Auditor General, Deodat Sharma noted that the total Public Debt stood at $381.7billion or the equivalent of US$1.848 billion at the end of 2017, as compared with the sum of $364.6 billion or US$1.766 billion at the end of 2016, representing an increase of $17.1 billion or US$82M at the end of 2017.
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