Sep 27, 2019 News
Petroleum production is likely to start before the end of the year on the Stabroek Block. That means that Guyana will collect its first share of oil before General and Regional Elections. Despite that, the People’s Progressive Party (PPP) is unwavering in its quest to repeal and replace the Natural Resource Fund Act if it wins the upcoming election.
During a recent press conference at the Office of the Leader of the Opposition, PPP General Secretary, Bharrat Jagdeo, reiterated that intention, after a question was posed to him by Kaieteur News.
The Opposition Leader has staunchly resisted the Act on two fronts. His first contention is that Government delayed the passing of the Natural Resource Fund Act, and passed it during a period when the People’s Progressive Party (PPP) considered the Government to be illegal. The Act was passed earlier this year, after the December 21, 2018 no confidence motion.
“And so, as far as we’re concerned, it is illegal.”
Jagdeo had said that, should the PPP win the next general election, it will repeal and replace the act quickly, “with another model that reflects some of the principles that we’ll outline in our manifesto, [namely] Santiago Principles on Transparency, and Norwegian-type management.
His second contention is that the management of the fund is not distanced enough from the politicians.
He said that the current act, if operationalised, will produce a Fund “where [Minister of Finance, Winston] Jordan will have all the control over the oil money.”
The Opposition has already, according to Minister Jordan, hampered the operationalisation of the Fund, by refusing to name a nominee for the Investment Committee.
During a presentation of the mid-year report, the Finance Minister had called out the Private Sector Commission (PSC) and the Opposition for not naming nominees to the Public Accountability and Oversight Committee and the Investment Committee respectively, as is required by the Act.
While PSC Chair, Gerry Gouveia, has responded that it is looking to the diaspora for a nominee, the Opposition rejected the call altogether, in protest of the Act.
The replacement of the Act, if the PPP wins the election, would not affect Guyana’s oil revenues in any way, according to Jagdeo. This is because he intends to have the funds placed into an escrow account while the replacement is done. “Nobody touches it. We publish how much money. We gazette how much we receive. In any case, they can’t spend any money, because no budget.”
He said that that process would include making the account auditable, and subject to scrutiny from the Auditor General.
In such an event, the money would be transferred from the escrow account to the Sovereign Wealth Fund after the PPP completes its replacement of the Act.
The Natural Resource Fund, or Sovereign Wealth Fund, as it is commonly referred to, is vital for the proper management of Guyana’s oil revenues. The International Monetary Fund (IMF) has assessed that Guyana is set to receive its first 1,000,000 barrels of oil by February 2020. Once that oil is sold, it will need to be stored and properly managed. The Natural Resource Fund Act was envisaged to be the law which sets the framework in which revenues from Oil will be supervised.
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