No political hand in Guyana’s oil revenue – President Ali assures US
The money Guyana receives from its burgeoning oil and gas sector is arms-length away from any political body, His Excellency, Dr. Mohamed Irfaan Ali revealed on Tuesday.
In fact, the robust monitoring mechanism in place ensures transparency to the people of Guyana, holds the Minister of Finance accountable for guaranteeing the timely sharing of information on revenues earned, and significantly reduces the sitting government’s reach into the fund.
Appearing on the Wilson Center’s Latin American Programme on the sidelines of his visit to Washington DC, the Guyanese leader relayed the principles in place to effectively manage proceeds from the industry.
“In addressing transparency, one of the key aspects in oil and gas management is the reach and involvement of politicians,” Dr. Ali told moderator, Ambassador Thomas A. Shannon, Jr.
“Ensuring transparency and accountability is ensuring the population has access to information. There can be no secrets, the population must be aware of what is coming in. The second issue is addressing transparency, one of the key aspects in the oil and gas sector is the reach and level of involvement of politicians in the government, so that is another issue. three, a clear approach to how revenues are utilised and developed for the transformation of the country and the type of oversight that is given to that approach.”
He explained that whenever revenue comes in, there is a defined time where the finance minister must make the information of that income public.
“It must be published. If he fails to do that, there is a jail term of 10 years. There is an independent board that is arms-length from the government. On that board we have international people… No political reach in terms of the board of directors. There is an investment committee that works with the central bank to determine how investments are made. So, we have removed the political hand that is a major international issue in the process,” he said.
Dr. Ali said money spent from the revenue must go through a parliamentary process since it has to be in the national budget. For him, that is the greatest level of scrutiny since the national budget is subjected to parliamentary debate and approval.
“So, the resources coming to be invested in the country and the transformation of the country, pass through the parliamentary process, pass through the approval process, because the national budget has to be approved. So, the parliamentary oversight is there,” he maintained.
He said “a very simple formula” exists which ensures the ordinary Guyanese understands what revenue goes into the development of the economy.
“The formula is very simple, everyone can understand it, everyone can calculate it and the transparency is addressed, scrutiny is addressed, the parliamentary oversight is addressed the arms-length relationship with government and politicians is addressed, the access, the nature of information is addressed.”
The amended Natural Resource Fund Act 2021 – No. 19 of 2021, was passed in the National Assembly in December 2021, repealing clauses imposed by the previous APNU+AFC Administration.
The Act a proposes simple, clear formula that the public could understand, ensuring complete transparency. It also adds a new requirement that all reports and receipts of all petroleum revenues must be published in the official gazette. Failure to comply with this obligation would result in a harsher penalty of $5 million, and 10-years’ prison time.
The most recent notification receipts of revenues paid into the NRF was presented to the National Assembly on Thursday, July 21. The report covers the period April 1, to June 30 2022, pursuant to Section 33 (2) of the NRF Act 2021.
In June, the International Monetary Fund (IMF) commended Guyana for the amendments made to the National Resource Act 2019, which now ensure the prudent, transparent and accountable management of the country’s oil funds.