Making good on its vow to prepare an emergency budget within 21 days, the Irfaan Ali-led People’s Progressive Party Civic (PPP/C) administration announced that the 2020 Emergency Budget, estimated at a whopping $330 billion, is ready to be presented to the National Assembly tomorrow.
That budget represents an increase of $29 million or 10% of the 2019 budget.
Yesterday at a media conference, Vice President Bharrat Jagdeo noted that the masses may question why the PPP/C tabled such a large budget with only three months remaining for 2020.
The reason for this, he explained, was because a substantial part has already been expended by the previous David Granger-led A Partnership For National Unity + Alliance For Change (APNU+AFC) coalition administration.
Jagdeo explained that of the $330 billion budget, $72 billion has been allocated for capital expenditure.
With the exclusion of foreign funded capital expenditure, $49 billion of local expenditure remains and it is of that $47 billion that the APNU+AFC expended $27 billion.
APNU, the Vice President stated, “went on a spending spree with money they did not have, when they didn’t have a budget, when they gave out a large number of contracts, etc.
With that roll over and illegal release of money on the capital side… because they didn’t have a budget for 2020, when you combined the two, that’s $27 billion of the $49 billion of this year’s budget that has already been spent as of 31 July.”
According to Jagdeo, that only left the new administration with room in the budget from local expenditure to programme $22 billion for new initiatives.
Jagdeo noted that this did put a damper on the many initiatives the PPP/C wanted to introduce but noted, however, that it still managed to fulfill many of the promises laid out in its manifesto.
With such a large budget, questions have surfaced as to how it would be financed.
Jagdeo stated that it would be from foreign financing.
“We would have to borrow,” he told the press, “and we would have to continue borrowing given that the revenue shortfall and given what I said that a lot of the expenditure is a roll over expenditure so when we look at the foreign financing, we’d have to continue accessing the domestic market for financing the budget.”
Notwithstanding this, however, the Vice President stated that it is the new administration’s hope that it can retire a significant part of Guyana’s domestic debt that the coalition took to finance previous budgets.
“So immediately, we will have to continue borrowing from the domestic market and we would have to do so carefully so it doesn’t crowd our private sector investment or would not push up interest rates,” he said.
The budget will be presented by Public Works Minister, Juan Edghill.
The country has been operating without a 2020 budget after the APNU+AFC administration fell in 2018 after a vote of no confidence.
The five-month delay of a declaration of the March 2, 2020 General and Regional Elections was also a contributing factor to a 2020 budget not being released.
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