Guyana’s debt ceiling now $900B following approval of motion in National Assembly

The National Assembly on Thursday approved a motion to confirm increases to the limits of external and public loans that may be contracted by Guyana.

This will enable the country to access more funds from international markets, bolstering investments in infrastructure, social programmes and economic development.

The motion to increase the loan limits was moved by Senior Minister in the Office of the President with Responsibility for Finance, Dr. Ashni Singh during the 66th sitting of the National Assembly on Thursday.

The confirmed Orders, titled the External Loans (Increasing of Limit) Order 2023 – No. 48 of 2023 and the Public Loan (Increasing of Limit) Order 2023 – No. 49 of 2023, sought to move the limit of external loans from $650 billion to $900 billion, and the limit of public loans from $500 billion to $750 billion.

Defending the motion in the National Assembly, Minister Singh noted that the discussion surrounding the necessity of the motion is central to the country’s development and growth over the next few years.

“The People’s Progressive Party’s record in government as far as it relates to the maintenance, preservation and strengthening of debt sustainability is incomparable in the entire history of this country. History will record that in 1992, the People’s Progressive Party assumed office in an environment where Guyana was completely bankrupt as a country, where we were uncreditworthy, where the international community was unwilling to lend Guyana… where we were an economic pariah state. That was the circumstance in which the People’s National Congress left government in 1992,” Dr. Singh highlighted.

He noted, however, that when the current administration entered office in 1992, it faced the task of restoring Guyana not only to the fold of democratic nations, but of restoring Guyana to the fold of economically viable states worldwide. It did so, and achieved the task of bringing Guyana back from a point beyond bankruptcy.

“The proposed adjustment to the debt ceiling that we have brought to this Parliament keep Guyana firmly within the boundaries of highly sustainable debt position, and debt sustainability. In fact, if you [look at] Guyana’s debt-to-GDP ratio, today we have one of the lowest debt-to-GDP ratios in the entire hemisphere- a reflection of sustained prudent management by the People’s Progressive Party,” Dr. Singh said.

He noted that debt can be beneficial to a country’s development, and pointed out that successful businesses, households and countries utilise debt to finance their development while accumulating their financial assets.

“This motion and the proposed increase in the debt ceiling is not only a debate about complex economic matters… debt sustainability, and the debt-to-GDP ratio, it is about the People’s Progressive Party wanting to deliver development to the people of Guyana in the shortest possible time, without compromising our capacity to service the financing that we contract. It’s about delivering on our commitment to improve the lives of every single Guyanese person in the shortest possible time. And that is what the APNU wants to obstruct, and wants to stand in the way of,” Dr. Singh stressed.

Additionally, he went into detail about the lack of financial literacy exhibited throughout the opposition during its five-year tenure.

“The reality is that the APNU+AFC displayed to Guyana throughout 2015 to 2020, not only their alienation from fact and truth, but their woeful and pathetic incompetence. In all of the things that contributed to their loss of the elections… bad and atrocious economic policy was a major factor.”

He compared this to the economic policies of the PPP/C government.

“We on this side of the house are very clear that we will use our current  fiscal situation to leverage in a sustainable manner, debt that we can afford to contract. And we will invest the proceeds of that debt into the things that will earn us even greater income in the future: the infrastructure, the social services, etc. Borrow to build, if you like. The APNU+AFC, on the other hand, is trying to convince the people of Guyana that even if they have the capacity to borrow, they should continue to live in the same house and ride the same bicycle… And that, essentially, is what we are dealing with here.

“What we see today— the APNU, in objecting to this motion, is essentially objecting to the delivery of services to the people of Guyana. They are objecting to development in Guyana… to any initiative that will improve the lives of the people. And the People’s Progressive Party, by bringing this motion to this Honourable House is saying, ‘we are in a hurry to deliver development to the people of Guyana. We will do so by mobilising financing from available sources, but we will also ensure that we do so in a manner that we can afford to do as a country, preserving and further reinforcing our debt sustainability going forward,” Dr. Singh said.

The motion received the support of Minister of Housing and Water, Collin Croal, Minister of Human Services and Social Security, Dr. Vindhya Persaud, Minister within the Ministry of Public Works, Deodat Indar, Minister of Agriculture, Zulfikar Mustapha, Minister of Public Works, Bishop Juan Edghill, and Prime Minister, Brigadier (Ret’d ) Mark Phillips.

Meanwhile, in his presentation, the Prime Minister described the long history of imprudent fiscal management and poor project execution under the previous government, juxtaposing it with the government’s extensive developmental projects executed over the past three years.

“We have formed the government, and for three years, the people of Guyana have experienced transformation, and accelerated development,” he pointed out.

He noted that multiple roads were asphalted for the first time under the current administration, a stark contrast to the neglected roads under the previous administration, in keeping with its promises of development for all Guyanese in its 2020 elections manifesto.

“We have unleashed a programme of development that has taken Guyana by storm. Unfortunately, the entire opposition cannot keep abreast of what is around them. But you know, those who have eyes to see will see, and those who have ears to hear will hear. The people are seeing, and the people are hearing.

“We have a holistic plan that we are delivering to the people of Guyana. We are a people-centred government, and I ask the members of the opposition to endorse this motion,” the Prime Minister said.