Georgetown: Senior Minister within the Office of the President with Responsibility for Finance, Dr. Ashni Singh has reported that the APNU+AFC Administration exceeded its income by $130 billion over the last five years.
Dr. Singh revealed that the total expenditure over that period amounted to $1.2 trillion, while the revenue collection amounted to $992 billion.
“If you look at the period from 2015 to 2019, the aggregate deficit, the amount by which government expenditure exceeded government revenues and grants, the aggregate of the fiscal deficit, the amount by which expenditure exceeded inflows was $130Billion.”
When the PPP/C Administration assumed office in August, it found some worrying developments as it relates to management of public finances with a large amount of the growth in public expenditure over the last five years being extremely ‘unproductive and wasteful,’ the Minister said.
“So, you saw a rapid escalation in government current expenditure, not expenditure in physical assets or expanding the infrastructure.”
Additionally, Dr. Singh discovered that the previous administration contracted external debt in excess of almost US$400 million; in fact, a large number of the debts contracted were not disbursed due to inefficiency in the implementation of projects.
On the domestic side, Dr. Singh said, not only were public deposits run down and exhausted, but the government at that time accumulated a large overdraft at the Central Bank. When the PPP/C demitted office in April 2015, it had a net depository at the Central Bank of $16 billion; however, in July 2020, the APNU+AFC government net position at Central Bank was an overdraft of $93 billion.
“If you add the overdraft that was incurred to the domestic debt, you in fact find, that government effectively would have breached the ceiling of how much domestic debt can be borrowed…in law there is a ceiling on how much domestic debt the government can contract, that ceiling is $150 Billion…I have asked my staff to look more closely in to confirm because if that’s the case it has very serious implications.”
Speaking on the state of the economy, Dr. Singh said the country went through an extremely challenging period over the last five years. This manifested itself in very modest, sluggish economic growth at a time when Guyana was preparing for oil production.
A large part of this was due to the political situation created by the opposition after the passage of the ‘no confidence motion’ in 2018, which led to an environment that was severely harmful to the economy, Dr. Singh added.
“The investor community became extremely worried about investing in Guyana and so investor and business confidence plummeted to an all-time low that resulted in very limited economic activities; consumers’ confidence dried up and people were very worried and cautious,” he said.
The situation worsened during March to August 2020 with the prolonged elections and therefore, Minister Singh said, “It will not be an exaggeration to say that the state of the public finances that we found when we came into office was nothing short of disastrous.
Notwithstanding the situation inherited, Dr. Singh said that over the past three months, the PPP/C Administration went about in earnest, to turn the situation around on a number of fronts.
The administration has been moving apace with the implementation of its projects, policies and programmes with those measures reflected in the 2020 National Emergency Budget.
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