Revenues from petroleum, mining and forestry to be placed in Natural Resource Fund
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─ NRF will be US dollar bank account held by Bank of Guyana
─ withdrawals from NRF to be deposited into Consolidated Fund
─ Priority will be placed on catalytic investments to transform the country
DPI Guyana, Wednesday, August 15, 2018
The passage of the Natural Resource Fund Act will enable the establishment of the Natural Resource Fund (NRF) to efficiently manage the country’s natural resource wealth.
Once the NRF is established, the government envisions that this will ensure the prudent management of revenues accrued from natural resources for the benefit of current and future generations.
This was highlighted in the Government’s ‘Green’ paper on the NRF which was laid recently in the National Assembly.
According to the ‘Green’ paper, establishment of the fund will contribute to economic stabilisation by ensuring that the volatility of natural resource revenues does not lead to volatile public spending.
The administration’s plan is to have the fair transfer of natural resource wealth across generations. This wealth will be used to finance development priorities through the National Budget towards the creation of an inclusive green economy.
The ‘Green’ paper outlines that petroleum revenues, as well as excess revenues from mining and forestry, will be deposited into the NRF.
The NRF will be a US dollar bank account held by the Bank of Guyana from which withdrawals will be made based on a fiscal rule.
Withdrawals from the Natural Resource Fund will be deposited into the Consolidated Fund to form part of the financing streams of the annual budget, along with loans, tax and non-tax revenues.
“Priority will be placed on catalytic investments to transform communities, regions and the country as a whole, within the context of the measurable targets identified in the GSDS [Green State Development Strategy],” the paper states.
Importantly, withdrawals from the NRF cannot exceed the amount approved by the National Assembly. In addition to withdrawals from the NRF being deposited into the Consolidated Fund for development priorities, the only further drawdowns that can be made would be for Petroleum Tax Refunds, when necessary.
By: Stacy Carmichael
Image: Kawise Wishart