The Natural Resource Fund

In December, writing in his oil and gas column in the Stabroek News, civil society activist Christopher Ram disclosed that the Natural Resource Fund is overstated by $274,765 Mn. He explained that this arose out of a failure by the Natural Resources Ministry to account for the taxes paid to the Guyana Revenue Authority in accordance with the 2016 Petroleum Agreement. Ram called for this to be addressed as a matter of urgency.

The Vice President described Ram’s disclosure as a storm in a teacup, while the Attorney General

in his Facebook page suggested that the NRF Act superseded the Agreement. Neither of them has addressed the issue of where the money has come from to pay the taxes of the oil companies to enable the GRA to issue to the oil companies a certificate of taxes paid. The Minister joined in that silence.

Meanwhile, the Minister announced that the Government intends a revision to the NRF withdrawal rule involving two conflicting effects: an increase in withdrawals while increasing the share of the inflows into the NRF! After touting the superiority of its version of the Natural Resource Fund Act (NRF) in 2021, the Government is now proposing to overhaul its own Act far as withdrawals are concerned.

This dangerous proposition is all part of the spending extravaganza and more directly, the possibility that the expected loan to support the gas-to-shore project may not materialise. Focus shares the view of both the IMF and the Inter-American Development Bank concerning the structure and operations of the NRF. The Fund is already structured to allow substantial sums to be withdrawn before sums are retained as intergenerational savings.