EU releases almost US$95M to Guyana as budget support

The second tranche of funds from the European Union (EU) Budgetary Support Programme to the tune of $19.8 billion (in excess of US$90M), was officially released to Guyana.

In a statement, the EU explained that budget support is a proof of trust and of a true partnership as the funds are channeled through the national treasury and implemented by the government under agreed indicators. “This should provide a major contribution to the inclusive and sustainable development of the Country, and substantial fiscal space for the Country finances, in the context of an unprecedented COVID-19 crisis,” the EU said.

This latest disbursement brings the total released to Guyana at $51.6 billion. The last tranche of funds, around some $20 billion, is expected to be released shortly as the programme comes to an end.

During the simple ceremony to announce the release of the fund, the EU Ambassador, Fernando Ponz Canto, stated that budget support offers a valuable platform for dialogue with the government, national oversight bodies and civil society on policies and their financing, objectives and results, consistent with the principles of ownership, transparency and accountability.

“The EU direct contribution to the state budget of Guyana provides the legitimacy and the opportunity to enter into this dialogue, allowing a comprehensive view on a Guyana´s development and reform strategy and ways to achieve it,” he said. Ambassador Canto also noted that Guyana had “two crises for the price of one” and with the added support, can move to further improving the country in terms of governance, reforms, and fight against corruption among other areas.

The announcement was made yesterday afternoon at the Bel Air, Georgetown residence of the ambassador where President Irfaan Ali and a number of his cabinet members were also present. President Irfaan Ali, in his brief remarks, noted that the release “goes a long way to show the new Guyana and helps in regaining our trust and creditability,” that dwindled during the fivemonth elections crisis.

Guyana was expected to receive the funds since back in 2018, but according to Finance Minister, Dr. Ashni Singh, the December 2018 noconfidence motion and the absence of parliamentary oversight were key factors in why the payment was stalled.

“This country was found unable to secure the disbursement because of the absence of parliamentary oversight, but I want to say now that this government intends to work hard to qualify for every cent of budget support,” Minister Singh vowed.

The EU Budget Support Programme is a contract based on a partnership with mutual accountability. As stated in the financial regulations of the European Union, the use of budget support is subject to conditions. Eligibility criteria have to be met before signing a contract and maintained during its implementation, before payments are made.

Budget support involves the transfer of financial resources to the national treasury of Guyana, following the fulfillment by the latter of the agreed conditions for payment set out in the contract. Transfers are made in Euros to a government account held at the Central Bank and then converted into local currency to the national treasury account.

Budget support funds must be included in the state budget of Guyana and fiscal accounts as grants.

Once the transfer has taken place, budget support funds are used in accordance with the partner country’s own Public Financial Management (PFM) systems. The responsibility for the management of these transferred resources rests with the government of Guyana. The EU´s responsibility when accounting for and auditing its resources is to ensure that the stipulated conditions have been met and that resources are transferred to the national treasury of Guyana in accordance with the financing agreement. (Kaieteur News)