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Gov’t added US$4.2B debt to Guyana since 2019
…as debt grows from US$1.8B in 2019 to US$6B in 2024
Kaieteur News- Despite commencing oil production in 2020, the Government of Guyana (GoG) has grown the country’s debt by a significant US$4.2B as at the end of December 2024.
In 2019, the country’s debt was US$1.8B; according to Annual Reports from the Bank of Guyana (BoG), the nation’s debt grew by 46.7% in 2020 to US$2.6B.
In 2021, the debt surged to US$3.1B, and in 2022 this trend continued with the total stock of debt climbing to US$3.7B.
In 2023, debt increased further by 23.4% to US$4.5B while this grew to a massive US$6B at the end of 2024, as indicated by Finance Minister, Dr. Ashni Singh last week.
The Irfaan Ali-led administration has often touted the low GDP to debt service ratio, meaning that the country’s Gross Domestic Product (GDP) far outweighs the country’s annual payment repayment on loans.
Graph showing the massive growth in Guyana’s debt (in US-billions) from 2019 to 2024
For instance, Dr. Singh pointed out the country’s progress over the past four years in this regard. He said, “Importantly, over the last 4 years, the ratio of total PPG (Public and Publicly Guaranteed Debt) debt-to-GDP plummeted by more than 20 percentage points, from 47.4 percent at the end of 2020 to 24.3 percent at the end of 2024. This provides clear indication of a marked improvement in Guyana’s capacity to maintain public debt into the future, without the need for fiscal adjustments, and places Guyana in the position of having one of the lowest debt-to-GDP ratios worldwide. Indeed, the latest available statistics rank Guyana as having the second lowest debt-to-GDP ratio within the Western Hemisphere in 2024.”
It should be noted that the country’s growth is GDP, while largely reflective of exports from the petroleum sector, is not the real value that the country received from the sector.
In fact, only on Sunday Kaieteur News reported that exports from the oil and gas sector totalled US$18B while Guyana only received US$2.6B in 2024 in the Natural Resource Fund (NRF).
Previously, Advisor to the Opposition Leader on Economics, Elson Low said the nation may be slipping into a debt trap that could see the country failing to meet its loan obligations should oil prices collapse.
Low has a degree in Economics and Political Science from Amherst College, USA and previously worked at Goldman Sachs and Co. He also has a certificate in anti-money laundering and anti-corruption from the International Law Institute and was an investigator and policy researcher at the State Assets Recovery Agency (SARA).
He reminded that Dr. Ashni Singh informed the International Energy Conference in 2023 that with the tripling of Guyana’s economy, the country is now in a better position to take more loans.
Low said, “This implies that the reason we are able to take on more debt is because of the oil sector. As a result, our ability to repay these debts is dependent on the oil sector.”
Be that as it may, Vice President Bharrat Jagdeo argued otherwise.
Debt-to-GDP smokescreen
The Opposition contends that the debt-to-GDP formula is a smokescreen and does not depict the gravity of the administration’s borrowing trend.
Low highlighted that since Guyana’s GDP has significantly increased, the ratio reflects a reduced debt. This however does not mean that the country’s total stock of debt has declined; contrarily, Guyana’s public debt has grown substantially.
The Opposition Economist explained, “Because the country has grown so quickly, the debt to GDP number has fallen sharply so even if you take on a huge amount of debt you would still have a low debt to GDP ratio. This is misleading however because we must bear in mind that a growth in Guyana’s GDP is not the same as growth in government revenue.”
(Gov’t added US$4.2B debt to Guyana since 2019)
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- Debt, GDP, Government, increase, oil
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