Jun 30, 2022 News
…Months after largest budget approved
Kaieteur News – Months after the largest Budget in the country’s history was approved in the National Assembly, the Government of Guyana has turned to the Inter-American Development Bank for a total of US$546.12 million in loans.
Notably, the Bank has already approved US$841,000 in loans for the year as well as released US$83.3 million to Guyana which was being held to fund sustainable projects. If one were to factor in the loans already approved with those being requested, it would take the total figure to US$630,261 million.
A perusal of the Budget document notes that some of the loans were catered for in the 2022 Budget; however this publication could not locate provisions for a number of the loans in the National Estimates. The smallest loan being requested by government from the IDB is to the tune of US$20,000. This will be used to facilitate learning by police officers within the Guyana Police Force through dialogue with their counterparts in the Jamaica Constabulary Force. The loan has not yet been approved by the Bank; however two other small loans to the tune of US$500,000 and US$600,000 towards supporting the health care sector in Guyana and assisting businesses in Guyana respectively are also being processed.
Meanwhile, the largest loan being sought by the government is for the improvement of health services being offered at the public hospitals in Guyana. In Tuesday’s edition of the Kaieteur News, it was reported that the Ministry of Health is seeking a US$160 million loan to help boost the services offered at three major hospitals in the country and also initiate the digitization of health care services to the Hinterland region. The second largest loan being pursued by the government is to the tune of US$130 million for the strengthening of the fiscal policy and management in response to the health and economic crisis caused by COVID-19, through the design and implementation of effective and fiscally responsible policy measures. “The specific objectives of the program are:(i) to promote the availability and timely execution of financial and material resources to respond to the effects of the health crisis caused by COVID-19; (ii) to strengthen the countercyclical effect of fiscal policy through the temporary introduction of measures to protect the income of vulnerable households and increase liquidity for businesses during the health and economic crisis; and (iii) support the effective and continuous provision of essential goods and services through public policy and management measures; and iv) promote economic and fiscal recovery in the post-pandemic period,” the IDB notes on its website.
The $552.9 billion National Budget was laid in Parliament on January 26 this year and was approved on February 10.
Minister with responsibility for Finance in the Office of the President, Dr. Ashni Singh who presented the document to the House indicated that the country’s loan portfolio is projected to double this year. According to the Estimates, Guyana’s loans and grant stock portfolio is expected to be some $37B this year, up from $17B last year. The loan aspect of this portfolio however, is expected to double moving from $13.6B last year to $26.8B this year.
According to the information presented, Guyana’s highest loan stock stands and will remain; the IDB projected this year to be some $11.2B, up from $9.6B last year. India is listed as the source of the next highest source of financing expected to be some $4.2B this year, up from a mere $400M last year. Loans from China are also expected to skyrocket this year moving from 779.6M last year to $1.2B this year. Grants from institutions such as the European Union (EU), Japan, the World Bank, the Caribbean Development Bank and China is expected to account for some $10.2B of the $37B that will account for financing in the 2022 Budget with funds coming from external sources through loans and grants.
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