…before oil money arrives
Even as Guyana builds its systemic capacity to handle the revenues that would come from the oil and gas sector, Economist Ramon Gaskin, a former presidential advisor and current political commentator, is warning that failure to amend and strengthen legislation governing the Consolidated Fund may have dire consequences.
Noting that the Consolidated Fund has a history of being abused, Gaskin has called for legislative changes to be made to ensure that sums of money put therein are indeed used for the purposes set out by the law.
“Article 216 of the Constitution says that all money coming into Guyana must be (deposited) into the Consolidated Fund (to prevent it being) spent, or lost, or stolen,” Gaskin declared in a recent interview.
Advocating a five-point system of expenditure aimed at rectifying Guyana’s fiscal position, he noted the importance of slashing the national debt, accumulating reserves, investment in long-term projects, creating a price stabiliser fund, and reducing deficits in the national budget.
“So we must make some kind of amendment to the Constitution, to make sure that this money goes into this special fund and is spent (appropriately),” he said.
Article 216 of the Constitution of Guyana states, “All revenues or other (sums of) money raised or received by Guyana (not being revenues or other sums of money payable by or under an Act of Parliament into some other fund established for any specific purpose; or that may, by or under such an Act, be retained by the authority that received them for the purpose of defraying the expenses of that authority) shall be paid into and from one Consolidated Fund.”
Article 217 stipulates that money cannot be withdrawn from the Consolidated Fund except: “(a) to meet expenditure that is charged upon the Fund by this Constitution or by any Act of Parliament; or (b) where the issue of those (sums of) money has been authorised by an Appropriation Act; or (c) where the issue of those (sums of) money has been authorised under Article 219.”
Despite this regime of stipulations, however, Government has been red flagged by the Auditor General’s office for not using the Consolidated Fund in the rightful manner.
Auditor General Deodat Sharma declared in his 2015 Audit Report that Government had kept more than G$500M, rather than deposit same into the Consolidated Fund.
That report, made public in October 2016, had spoken of the millions of dollars used on the D’Urban Park construction, Mashramani celebrations, and G$51.5M being spent on ‘music’.
At present, there is a Petroleum Commission Bill — sent to the Special Select Committee for review — that provides for the establishment and functioning of the Petroleum Commission of Guyana, which will be the regulatory agency for Guyana’s oil industry.
The bill has 51 sections which cover areas such as establishment and incorporation of the Petroleum Commission; functions and duties of the Commission; and financing, among others. The Petroleum Commission Bill makes provision for the establishment of a Petroleum Commission to serve as a regulatory agency for Guyana’s oil and gas industry.
It was sent to the committee after the parliamentary opposition had made certain objections to the bill, stating that the bill gives too much power to the Minister of Natural Resources, currently Minister Raphael Trotman. The opposition has argued that, with the amount of power being given to the Natural Resources Minister, the commission would not be an independent one.
According to section 8 of the bill, the Minister is allowed not only to provide policy guidance, but to also give direction to the commission regarding a number of other issues, including the size of the establishment; the employment of staff, and the terms and conditions of employment; the provision of equipment, and use of funds; reorganisation, or such works of development as to involve a substantial outlay on capital account; training, education and research; the disposal of capital assets; and the application of the proceeds of such disposals.
Passage of the bill is to be delayed, however, until the committee completes its report.
At present, Government is slated to receive help from the International Monetary Fund (IMF) to build Guyana’s capacity to manage the utilisation of oil revenues accrued from the oil and gas industry.
