Finance Minister Winston Jordan on March 18 signed a bilateral debt settlement agreement with the State of Kuwait, through the Kuwait Investment Authority, to cancel US$50,739,255.67 of Guyana’s debt to that country.
In a statement, the Ministry of Finance said the agreement would see a reduction of Guyana’s external debt and allow the country to expand its development agenda, as funds saved under the agreement would be allocated to social projects within the context of the national budget.
It reports Jordan as saying that it was the result of renewed efforts by his ministry to engage Guyana’s non-Paris club bilateral creditors in negotiating debt relief that is acceptable and sustainable. Since assuming office in 2015, Jordan has pursued debt relief from other bilateral non-Paris club creditors with whom Guyana’s debts are in arrears, the release added. It further notes that the agreement, which came after an ardent negotiation process, paves the way for greater cooperation and the strengthening of cordial ties between Guyana and Kuwait.
The statement explained that the remaining amount of Guyana’s debt to Kuwait, US$26,853,585.23, will be settled through a combination of cash payments to be made over nine years, and a debt swap arrangement that will be worked out in due course.
The ministry explained that Guyana’s debt to Kuwait originated from a Loan Deposit, contracted in 1975, from the Central Bank of Kuwait for Kuwaiti Dinars 3.0 million (US$10.3 million at that time), for balance of payments support to the Bank of Guyana. “The debt accumulated massive arrears over the past four (4) decades, at high market interest rates. As at December 31, 2017, the debt to Kuwait had grown to US$77,592,840.90, comprising principal arrears of US$9,940,500 and interest arrears of US$67,652,340.90,” it said.
