Latest update June 16th, 2024 12:59 AM
Jan 23, 2024 News
Kaieteur News – Opposition Member of Parliament and Shadow Minister of Finance, Juretha Fernandes on Monday condemned the government’s plan to have 40 percent of the substantial $1.146 trillion budget supported by loans. Fernandes said this amounts to $458.4 billion through borrowing.
Fernandes noted the impact of this decision on individual households and citizens, stating that it would effectively saddle each household with an additional $1.8 million in debt, which translates to around $588,000 per citizen. Fernandes’s remarks were part of her scathing response to what she perceives as the government’s reckless financial planning.
She said, “So in an oil rich economy, instead of creating a pathway to sustainable prosperity for Guyanese, the PPP has decided to shackle every man, woman and child with a debt burden, and there seems to be no light at the end of this tunnel.”
The Shadow Minister added, “For every child that will receive the $40,000 ‘Because we care cash grant,’ they will also be receiving a ‘because we do not care’ debt burden of more than half a million-dollars, complements of the PPP administration.”
Fernandes said having $458B in loans is not to be taken lightly. She recalled that in 2020, the same time the government took office, the external debt ceiling was $400 billion.
“So in this one budget, the PPP is adding almost the same amount of debt to the nation as the total external debt ceiling under the coalition; a ceiling the coalition never met and never saw a need to increase,” she said.
To make matters worse, Fernandes expressed alarm that the government plans to return to the House to increase the debt ceiling for a third time as well as revise the Natural Resource Fund’s (NRF) withdrawal rules to spend more of the oil revenues. Fernandes said this does not bode well for the nation’s economic wellbeing.
Sharing similar concerns was her colleague, Shadow Minister of Legal Affairs, Roysdale Forde. During his contributions, Forde questioned whether the $1.146 trillion budget represents a true cost or would government return with supplementary requests.
“I am not being facetious. The records would show that for the past four years, the Government has returned to this August House, again and again, for supplementary funds,” said Forde.
In 2023, he said the government returned about six times for funds totaling the more than $900B. When added to the 2023 budget total of $782B, he said this is $1.6T.
In the realm of fiscal responsibility, Forde said the government’s penchant for presenting budgets only to scurry back to Parliament for supplementary funds, marks not only a sign of improper planning, but also, places the legislative process in a precarious position.
“…Does the Finance Minister not know that: the reliance on supplementary funds not only signals a failure in accurate forecasting but also unveils a disturbing lack of strategic planning? It reflects a government that may be either oblivious to the true financial needs of the nation or intentionally downplaying them for optics. In either case, it undermines the very essence of responsible governance and prudent financial management,” Forde argued.
Overall, Forde said the government is showing a dangerous overreliance on oil revenues. He warned that this is one of the key signs of the dreaded Dutch disease.
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