Everything in sovereign wealth fund will have parliamentary oversight – President Ali

In response to criticisms of Guyana’s newly tabled Sovereign Wealth Fund (SWF) legislation, His Excellency, Dr. Mohamed Irfaan Ali said every aspect of the fund will have parliamentary oversight. The President gave this assurance while on a site visit to a Deep Water Port in Palmyra, Berbice on Friday.

The involvement of the National Assembly, provided for in the Bill, includes the nomination of a director to sit on the board, and of a member of the Public Accountability and Oversight Committee. The National Assembly will also have the last say on the approval of the withdrawal from the fund in each fiscal year.

The Natural Resource Fund Bill 2021, was tabled last Thursday, and some sections of the media have singled out the proposal of a government-appointed Board of Directors to handle regular management and oversight for the Fund.

Responding to the distrust registered by some critics of the Bill, the President reminded that the people chose the PPP/C Government to lead them.

“The people of this country went to a poll, and they have placed their confidence in a president, in a government. Are you saying that after the people have placed that confidence that we don’t have the right or we can’t be trusted to name people on a board?”

The President urged critics to move past the habit of negatively characterising persons who embrace the government’s development agenda.

Making similar comments on Friday, Senior Minister in the Office of the President with responsibility for finance, Dr. Ashni Singh, said that the NRF Bill will have the effect of strengthening transparency and oversight, as it strips the minister of some powers and vests them into the newly proposed Board of Directors. In this regard, Dr. Singh explained that the board gives a layer of scrutiny that is not catered for in the current Act.

A Ministry of Finance statement on Friday responded pointedly to a page one comment by Stabroek News, which appeared to cast a shadow of negativity on the proposed withdrawal rule. The ministry posited that the new withdrawal rule in the least, allows one to easily determine how much will be transferred, whereas under the APNU+AFC system, the public would be left in the dark due to the complicated mechanism used to determine the ceiling.

Emergency financing

In an interview with DPI on Friday, the finance minister also discussed the emergency finance mechanism in the Bill. The provision in question would provide for the withdrawal rule to be overridden, removing the ceiling, if there is a major natural disaster.

Dr. Ali had said on Wednesday, that the proposed Bill is not an entirely new piece of legislation, but that it has retained some parts of the current Act, and has improved on other parts which were deficient. Though the Kaieteur News’ Sunday edition’s lead headline states that the “PPP/C wants to give itself power to override oil money rules”, the emergency finance mechanism is not a new feature. It is already in the current Act, which was passed by APNU+AFC in January 2019.

And, like regular annual withdrawals which would be subject to the withdrawal rule, the emergency finance mechanism requires the National Assembly’s stamp of approval.

“So, this is not a fund that can be spent or monies that can be drawn without parliamentary approval and without parliamentary scrutiny,” Dr. Singh said.

He added that, while Guyana’s contingency fund is there for in-year execution of unforeseen requirements, the emergency finance mechanism in the NRF complements it in that it provides for ex-ante withdrawals.