Following days of debate and the consideration of estimates, the 2022 Budget of $552.9 billion was passed yesterday by the National Assembly and it also approved the amount of $129.6 billion to be withdrawn from the country’s Natural Resource Fund (NRF) to help fund the expenditure.
Included in the budget, which has been called historical and transformational by Senior Minister within the Office of the President with Responsibility for Finance, Dr Ashni Singh, were provisions for a number of major projects to be conducted throughout the year.
These allocations include $29.4 billion to the energy sector which specifies that the sum of $20.8 billion be set aside for the gas-to-energy project. This is with the aim of moving the country to cleaner sources of energy, according to the Minister.
In addition, a total of $96.1 billion was allocated to the Ministry of Public Works to execute infrastructural mega projects in Guyana. Of that amount, $76.7 billion has been set aside for the construction of roads and bridges across the country.
Funds have been allocated for the construction of the Linden to Mabura Hill Road, the rehabilitation of the entire Soesdyke-Linden Highway, the East Bank-East Coast Demerara Road Linkage between Ogle and Eccles, and the completion of the Sheriff Street/Mandela Avenue network and expansion project.
Further, the budget also catered for expansion of public health care facilities with $16.1 billion being set aside for this. Of that amount, it was disclosed that $12.4 billion will be used for the construction of a state-of-the-art paediatric and maternal hospital, upgrades to the West Demerara and Bartica Regional Hospital, along with the construction of six regional hospitals at Anna Regina, Tuschen and other districts.
Natural Resource Fund
Prior to the passage of the budget, a motion was moved that the sum of $126.9 billion, equivalent to US$607.6 million be withdrawn from the NRF – the repository of the country’s oil and gas revenues – for the financial year 2022, in keeping with the Natural Resource Fund Act of 2021. This is the first time that oil revenues are being assigned to the budget.
While the House was still in the Committee of Supply, the question was asked by APNU+AFC Member of Parliament, Dr Karen Cummings how the funds from the NRF will be used and what projects it would be directed to as there was no specific line item with that information.
In response, Dr Singh stated that the new NRF Act of 2021 establishes a mechanism whereby transfers from the NRF would go into the country’s Consolidated Fund and later used for the various initiatives or projects.
“The mechanism that is provided for in the NRF act is one whereby withdrawals are made from the Natural Resource Fund, transferred to the Consolidated Fund and then all forms part of the fungible pool of resources in the Consolidated Fund and then national development priorities are appropriated through the budgetary process,” the finance minister said.
Shadow Minister of Finance, Juretha Fernandes pointed out that throughout the consideration of estimates for other agencies, opposition MPs were told that the Minister of Finance should be asked about specific projects that will utilise funds from the NRF.
“Could the Honourable Minister actually say how this House will know what specific projects will be utilising the NRF fund and also how that money will be audited?”
The Minister however reiterated that when the funds are deposited into the Consolidated Fund, the national development priorities are determined through the budgetary process of which he said the appropriation process is an integral part.
He explained, “The national budget is then subject to scrutiny during its implementation and execution and it is then subject to …auditing and importantly, scrutiny by the Public Accounts Committee process.”
Fernandes then responded that the opposition hoped that there would be a “transparent system” which would enable the committee to track specifically, the monies from the Natural Resource Fund and how it is being spent.
“This is the first time this fund is being utilised in a budget Sir, and the least we expect as members of the National Assembly, the least we expect is to be able to tell the people of this country that this is what the fund was used for!”
Despite the opposition’s discomfiture, however, the motion to have the US$607 million withdrawn from the fund was passed.
Meanwhile, the Fiscal Enactments (Amendment) Bill (No. 2 of 2022) was also approved to give effect to the measures announced in Budget 2022.
As the Minister of Finance addressed the Speaker of the National Assembly, he noted, “It would be recalled Sir, that there are provisions in Budget 2022 that are intended for example to increase the income tax threshold. That measure was announced in the context of Budget 2022. It was of course I believe, adequately and abundantly ventilated during the course of the debate of the Budget. This Bill seeks to give legislative effect to that announcement. It similarly, Sir, seeks to give effect to other tax measures announced during the course of Budget 2022.”
The Ministry of Finance in a release, noted that this year’s budget stands some 44.3 per cent larger than Budget 2021. It also added that measures in the budget focus on Local Content and Job creation, in keeping with the Local Content Act of 2021.
The budget further includes measures that speak to an excise tax rate reduction on gasoline and diesel from 20 per cent to 10 per cent. It also caters for an increase in public assistance, old age pension, the ‘Because We Care’ cash grant, along with the increase in the monthly income tax threshold from $65,000 to $75,000.
The government boasted that this year’s budget is being financed without the introduction of new taxes and without “excessive borrowing.”
