Day Three of the 2022 budget debate saw the intensified hurling around of claims of corruption and mismanagement by the Government and the Opposition, with Minister within the Public Works Ministry, Deodat Indar spotlighting the former Government’s financial mismanagement.
During the debate on Wednesday, A Partnership for National Unity/Alliance For Change (APNU/AFC) Member of Parliament, Juretha Fernandes centred her presentation on the macroeconomic performance of the country.
She also spoke of how gold production soared under the former Government, compared to current production. But in his rebuttal, Minister Indar noted that this was only because of the large producers.
He also drew the National Assembly’s attention to how the country’s gold reserves were managed under the former Government. It is customary for gold to be sold when world market prices are high and the money remitted to the Consolidated Fund. According to Indar, however, this was not done.
“Let me talk about the gold issue. So, they talk about gold rise in their time in office. Gold production rise, because they had large producers. Check who were the small and medium sized miners. What were their output?! Those are the guys who go into the village economy and buy the ration, buy the parts, get the workers. Those are the guys. I’m not guessing this! I was in the industry; I know how it operates.
“They boast about that. I wonder, Mr Speaker, if they thought that the production rise under them, they had the God-given right to sell out all the gold we had in the Bank of Guyana reserves. Twenty-five billion dollars’ worth of gold they sold and spent out the money, and did not put the money in the reserves. Worst part is they spent it out and contracted the asset base of the bank,” he said.
Minister Indar also zeroed in on the overdrafts racked up by the former Government, which the People’s Progressive Party/Civic (PPP/C) Government had to take steps to correct after it took office in August 2020.
“If you check this same document (budget speech), you would see a part that deals with the public debt and in that, the domestic debt. In the domestic debt, you have to issue debentures – a debt instrument,” Indar said.
“Our Government had to put in debt instruments to secure the bank overdraft we found at the Bank of Guyana, that we’re now correcting. It is the highest form of corruption, where they draw money from the Bank of Guyana and carry up the overdraft. Our Government had to fix it.”
In January 2020, when the former APNU/AFC Government was still in office, the Bank of Guyana had registered a whopping overdraft of over $75 billion. Public deposits at the central bank were plunged into overdraft status back in 2015 when the new coalition government ended the year with a $2.3 billion overdraft. When the Government took over in May 2015, it had met public deposits of approximately $10.4 billion.
By 2016 year-end, the overdraft had grown to approximately $21.3 billion, after a year of increasing withdrawals. At the end of the 2017 fiscal year, the overdraft had reached $25.7 billion.
In contrast, Bank of Guyana data shows that the bank’s public deposits were in the positive – $21.4 billion to be precise – at the end of 2014, when the previous PPP Government was in power. In 2013, the bank’s deposits were $52.1 billion. And the preceding year, the funds were approximately $57.2 billion.
