Finance Minister Dr Ashni Singh on Wednesday schooled former Junior Housing Minister in the APNU/AFC coalition administration, Annette Ferguson, on the financial management and functioning of government.
He was at the time responding to Ferguson, who had asked how much monies the Coalition Government had left in the Consolidated Fund.
Ferguson, during the sitting of the National Assembly, had also asked where the new PPP/C administration got funds from for the 2020 emergency budget as well as for the COVID-19 cash relief initiative.
Dr Singh informed the House that the Consolidated Fund was empty when the PPP/C took office on August 2, 2020.
“No monies were remaining in the Consolidated Fund as of that date. In fact, Mr Speaker, the Consolidated Fund account was in overdraft in the amount of $78.7 billion. And I might add, Sir, that, that amount would not have reflected as of that date cheques that were issued but had not yet been cleared and therefore would not yet be reflected in the bank balance,” he stated.
The Finance Minister further pointed out that if the overall picture of government’s accounts at the Central Bank were taken into consideration, then the net overdraft left by the Coalition regime would have been a staggering $93 billion. Again, he explained, this does not cover the aggregate of cheques that would have been issued on those bank accounts and are yet to be cleared.
Dr Singh noted that this $93 billion net overdraft should be contrasted with last PPP/C government’s net position when it demitted office in April 2015.
“The [last PPP/C] government was a net depositor at the Central Bank with an amount totalling $16 billion in the aggregate of government’s bank accounts in the Central Bank.
Further contending that the Coalition’s overdraft is “even bigger”, the Finance Minister reminded that this accumulation of overdraft was previously flagged by a number of commentators including the international agencies such as the International Money Fund (IMF).
However, after this response from the Finance Minister, Ferguson followed up asking, again, about the source of the monies for the $330 billion 2020 Emergency Budget, which the PPP/C presented in September just one month after taking office.
But even after Minister Singh explained that these were largely revenues generated by the State daily from services offered along with grants and loans obtained through regional and international donor partners, the Opposition MP again enquired about the source of the $4.5 billion for government’s COVID-19 relief programme, which was also in included in the budget.
“Can the Honorable Minister say where exactly these monies, the $4.5 billion that is being distributed as COVID relief funds to the Guyanese people, where those monies came from… if is the Consolidate Fund or which other Fund…,” the former Minister, who had joined Wednesday’s sitting via zoom, questioned.
In response, Dr Singh declared: “For a long time, I tried to understand how the public finances could’ve been left in such a dismal state of disarray. I now understand. The piece of the puzzle are finally falling into place, Sir, because such a display of lack of understanding of the way in which the public finances work could only have resulted in complete and absolute mismanagement of the public purse of the last five years.”
“I could be clearer, Sir, all of the expenditure provided in the budget and appropriated in the Appropriation Act is financed by the traditional sources of financing of budget and expenditures around the world. Firstly, government revenues are being collected everyday… Secondly, government grants being received where we have partnerships with external agencies that we might be eligible for and we might drawn down on government grants. Thirdly, there is domestic and external borrow. We borrow for fiscal purposes both domestically and externally. And so all of the expenditures in the budget is financed by one or all of these sources… It is beyond my humble faculties to break these down into simpler terms.”
