PPP withdraws 1 year of oil production in 6 months

Spend, Baby Spend. The announcements come faster. And with just two withdrawals, the Peoples’ Progressive Party (PPP) has withdrawn USD$400 million or G$84 billion from the Natural Resources Fund. This amount equals the total oil revenue Guyana earned in 2021 which stood at G$75 billion in profit oil plus G$10 billion in royalties.

The Natural Resource Fund (NRF) was set up by the APNU+AFC administration to serve as an intergenerational savings fund that would ensure that Guyana’s oil revenue would be there for many decades. However, the PPP has outlined a plan to spend, in 2022 alone, all the oil revenue deposited into the fund in both 2020 and 2021.

The PPP has not taken into account Guyana’s lack of ability to absorb the spending or the significant risk of inflation that comes with such a policy. As a result, Guyana is now experiencing inflation that is almost three times worse than the already very high inflation levels of 2021.

Yet, with such a significant increase in spending and inflation, Guyana’s non-oil economy is still struggling. In 2021 alone there was a 4% reduction in sugar production, 20% reduction in rice production, 3.8% reduction in Bauxite, 14.8% reduction in gold production, and more.

More, In The Ring.