Natural Resource Fund another step closer
−Finance Min and Central Bank sign MOU to administer revenues
DPI, Guyana, Wednesday, December 11, 2019
A simple but historic Memorandum of Understanding was signed in the Ministry of Finance’s boardroom today between the ministry and the Bank of Guyana. The agreement will put into operation the management of the Natural Resources Fund (NRF).
According to Minister of Finance Hon. Winston Jordan, “it is one more piece of evidence of our unremitting drive to bring transparency and accountability to this Natural Resource Fund.”
Addressing the media Minister Jordan stated, “We intend to make everything open and transparent as it relates to the NRF and it allows me to urge all who wish to write on the fund, to first read the Natural Resource Fund Act.”
He explained that the Act which is comparable with any existing or similar pieces of legislation but only that which applies to Guyana, as a developing country, is used, “We’re trying to get the best of both worlds given the stage of development of which we are at.”
The Bank of Guyana’s responsibilities in the management of the NRF was explained by its Governor Dr. Gobind Ganga. These include: receiving and accounting for all deposits into the NRF; investing the NRF In eligible asset classes; appointing private managers and custodians; reporting on the performance of the NRF on a monthly, quarterly and annual basis; implementing management systems, procedures and risk management arrangements following international standards; and, providing the public with information on the NRF as required by law; among others.
According to the MOF’s website; “The Agreement, which will be published on the Ministry’s website in accordance with section 42 of the NRF Act, also includes the obligations of the Minister of Finance as the overall manager of the NRF that will allow for the effective operational management of the NRF by the Bank of Guyana.
Dr. Ganga cautioned that sanctions can be brought against stakeholders in case of misconduct or acts of omission. The Finance Minister will also provide at least five working days’ notice, of written payment instructions to transfer amounts from the NRF to the Consolidated Fund
The MOF’s website noted that preparations towards becoming an oil-producing country, work commenced in 2017 on the drafting and consultations regarding the development of a Sovereign Wealth Fund (SWF) legislation for Guyana
To secure public feedback on the content of the document His Excellency President David Granger called for a Green paper to be laid in parliament – this was published in August 2018. Based on the response “the Natural Resource Fund (NRF) Bill No. 14 of 2018 was tabled in Parliament on November 15, 2018, and assented to on January 23rd, 2019.”
To safeguard those savings and ensure they are wisely invested, the NRF Act of 2019 specifies the procedures under which revenues will be banked and how investments are to be conducted, including the eligible investments allowable.
In preparation for its role as operational manager the Bank of Guyana has begun building additional capacity, supported by the World Bank’s Reserves Advisory and Management Programme (RAMP), with whom an agreement was signed on October 1, 2019.”