Guyana’s Natural Resource Fund now law
─ Public Accountability Oversight Committee to be appointed
─ measures in place to ensure proper spending
DPI, Guyana, Friday, February 15, 2019
The way has been cleared for income from the country’s natural resources is to be properly managed. This follows the enactment of the Natural Resources Act signed by President David Granger on January 23, 2019.
“The Natural Resources Fund Act provides the legal framework for the establishment of the Natural Resources fund that will manage the natural resources wealth of Guyana for the present and future benefit of the people and for the sustainable development of the country,” Minister of State, Joseph Harmon explained today.
He further explained that the Natural Resources Fund Act Number 12 of 2019 is geared towards ensuring accountability and proper management of income earned by Guyana from the utilisation of its natural resources. It comes at a time when the country is preparing for the harvesting of more than 12 Billion barrels of oil from its newly discovered petroleum resources.
“The legal framework of the fund includes provisions for public oversight, management, the nature and source of deposits, withdrawals including parliamentary approval and determination of amounts to be withdrawn eligible investments for its resources accounting reporting and auditing for its records and code of conduct for members of its oversight and investment committees,” the State Minister noted.
The Act also lays out the types of assets into which funds can be invested and the levels of investments that can be pursued, according to Minister Harmon.
“Included in the Act is the first schedule that outlines the procedures and considerations that shall obtain in calculating the fiscally sustainable amount of the fund. Also, included in a second schedule which sets out the ceilings and floors for the investment of the Natural Resources Fund for the purpose of long-term savings. Some of the eligible assets classes for long term investments are treasury bills, bank deposits, sovereign bunds, corporate bonds, equities derivatives and commodities.”
Government’s Natural Resource Fund Bill 2018 was passed in the National Assembly with minor amendments on January 3, 2019. The Bill was first tabled in November 2019.
The passage followed the presentation of Government’s ‘Green’ paper titled “Managing Future Petroleum Revenues and Establishment of Fiscal Rule and a Sovereign Wealth Fund” to the National Assembly in August last year.
During his presentation to the National Assembly, Minister of Finance, Winston Jordan had outlined strict measures in the proposed establishment of the “Public Accountability Oversight Committee” to ensure proper spending and management of resources derived from oil and gas.
“This committee will ensure funds are managed in accordance with best practices,” Minister Jordan said.
Last year when the minister introduced the Green Paper to the National Assembly, he had indicated that the document was being issued by the government to present preliminary proposals to stimulate discussion.
It also detailed specific issues and pointed out possible courses of action in terms of policy and legislation.
During the passage of the Bill, the minister had outlined the importance of the committee, which will have 22 members from different sections of society to avoid mismanagement of the national patrimony.
“So important is this committee that representatives will be from communities, women will be represented, members of the bar association, press association, the consumer association, Guyana Extractive industries, private sector and the 10 Regional Democratic Councils,” Minister Jordan had stated.
Kidackie Amsterdam.
Image: Department of Public Information.