Vice President Dr Bharrat Jagdeo has scoffed at the proposal by Leader of the Alliance For Change (AFC) Nigel Hughes for the direct transfer of 10% of annual earnings from the oil and gas sector to citizens of Guyana.
Speaking at a news conference on Thursday, Jagdeo said political parties like the AFC often make lofty-sounding promises that have no merit. “They don’t have a [plan] to generate wealth as yet, to generate diversification, to create future income for our people but he has a plan on how to distribute money, spend money,” Jagdeo said.
Hughes in a social media post demanded that the government table legislation which mandates that every adult receives direct cash transfers of a payment not exceeding 10.5% of the annual transfer to the Natural Resource Funds. He added that another minimum of 10% must be saved.
But according to Jagdeo, the cash transfer is little compared to what is spent on public servants salaries, health, education and other sectors. He said “if you take $300 billion today and you take 10% of it which is $30 billion and you divide by 850,000 people you will probably get about $35,000 per year. That’s what he wants transferred to us.”
“And next year, if we double, you get $70,000, and he believes that that is the great proposal we must implement,” Jagdeo contended.
While he noted that more than 10% of the earnings will be saved in 2-3 years, he said spending or transferring monies irresponsibly is not sustainable.
“What about the years we don’t have any money…what if the price for oil drops as predicted?” he questioned.
In fact, Jagdeo noted that the sum being earned from Guyana’s petroleum sector is only a fraction of the cost of ongoing development projects.
He pointed to the ongoing investments into improved roads, drainage and irrigation infrastructure, cheap and reliable electricity, security and other sectors along with the payment of wages and salaries.
“The money that we’re getting at this stage from the oil and gas sector is a fraction of our development needs as a country,” he said.
The Vice President further explained that “all of our people want their roads fixed, they want to be safe from flooding so they expect you to spend money on kokers, pumping capacity, etc…they want cheap and reliable power, they want security…they want leisure time, they want sporting facilities built so that people can have a leisure time…These are legitimate needs of people and with all those needs, what we get now is a fraction of that.”
He pointed out that $90B have been the wage increase from 2020 to present and “if you add health and education [budgets], it is gone.”
This, he said, is the current situation but will change in the future as the country repays for loans taken to complete its infrastructure projects.
Even as the AFC Leader calls for direct cash transfers now, the Vice president highlighted that the position is inconsistent. He referred to an April 18, 2017 article in which the then Minister of Natural Resources Raphael Trotman dismissed the notion of cash transfers from oil revenues.
In that article, Trotman is quoted as saying “people just sit back and don’t believe they need to do anything but receive and spending habits go bad.”
Trotman is a co-founder of the AFC.
On Wednesday, the Government announced its third withdrawal for the year from the Natural Resource Fund (NRF) of US$300 million.
This withdrawal was made pursuant to the Natural Resource Fund (NRF) Act 2021, as amended by the Fiscal Enactments (Amendment) Act 2024, following parliamentary approval.
According to a statement from the Ministry of Finance, the total parliamentary approval for withdrawals from the NRF in 2024 amounts to US$1.586 billion.
The recent transfer of US$300 million to the Consolidated Fund occurred earlier this week.
This latest withdrawal brings the total withdrawals for the year 2024 to US$850 million out of the approved total of US$1.586 billion.
