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EITI urges Govt. to show how money from extractive sector is being used
Kaieteur News- The Extractive Industries Transparency Initiative (EITI) has called on Guyana to show how revenues generated from the extractive industries are used.
EITI urges Govt. to show how money from extractive sector is being used
In its most recent report for the year 2022, the transparency watchdog noted that the utilisation of revenues generated from extractive industries is an area which may be addressed by countries implementing EITI, to the benefit of their people.
The EITI Board approved Guyana’s application to join the EITI at its meeting in Manila on 25th October, 2017. EITI sets out to promote an understanding of natural resource management, strengthen public and corporate governance and accountability, and provide the data to inform policymaking and multi-stakeholder dialogue in the extractive sector.
By becoming a member of the Extractive Industries Transparency Initiative, countries commit to disclose information along the extractive industry value chain – from how extraction rights are awarded, to how revenues make their way through government and how they benefit the public.
As such, the 2022 Report states, “The IA (Independent Administrator) recommends that the MSG (Multi-Stakeholder Group) obtains information on how extractive industry revenues are utilised for the advancement of national development goals including the Sustainable Developmental Goals.”
This recommendation was repeated from the 2021 EITI Report, under the heading ‘National distribution of extractive revenues’. The recommendation from EITI comes at a time when the Government of Guyana (GoG) has been slapped with a lawsuit by a citizen, who argues that the administration is faced with a court challenge to ensure transparency in the use of billions of US-dollars, generated specifically through offshore oil production.
Currently, ExxonMobil Guyana Limited (EMGL) is producing over 650,000 barrels per day (bpd) at three projects in the Stabroek Block.
The Natural Resource Fund (NRF) Act, which governs the use of the resources, revenue generated from the petroleum sector states at Section 16.2 that, “All withdrawals from the Fund shall be deposited into the Consolidated Fund and shall be used only to finance: (a) national development priorities including any initiative aimed at realizing an inclusive green economy, and (b) essential projects that are directly related to ameliorating the effect of a major natural disaster.”
Be that as it may, the government has not highlighted any national development priority or essential project funded through this source of income.
In fact, the VP said at his December 5, 2024 press conference reasoned, “How do you balkanize revenue coming into the budget? (It) becomes a very difficult thing to do.”
This explanation attracted criticism from both the Leader of the Alliance For Change (AFC), Nigel Hughes and former Finance Minister, Winston Jordan who argued that in the absence of transparency, the NRF has become a slush fund for the government.
Jagdeo however said that providing a breakdown of how the resources are used is not a legal requirement of the Natural Resource Fund Act of 2021.
According to Jagdeo, government would only identify projects funded by oil money which was withdrawn for emergency purposes.
He explained, “Outside of this annual withdrawal which is captured by a ceiling now and formula…government can draw down money for one specific additional purpose that’s in case we have a national emergency; for example, a major flood disaster or a tsunami…in that case, there is no ceiling but you can’t go and say oh I’m forecasting. You have to give the projects and the specific use of the fund if you trigger that provision of the law.” He pointed out that that provision was never triggered. “So that’s the only case where you have to detail the expenditure made from the oil revenue to have the withdrawal done,” Jagdeo said.
(EITI urges Govt. to show how money from extractive sector is being used)
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