Despite having two more sanctioned oil projects—Liza Phase One and Payara—coming into operation in 2022 and 2023 respectively, thereby taking production volumes to 560,000 barrels, the PPP/C Government has decided against wild borrowing. Governemnt took that stance even as it faced astronomical costs associated with several flood relief measures and COVID-19 response programmes, as well as the economic ramifications on trade due to unprecedented levels of global and domestic shocks.
Due to its prudent public debt management capabilities, the government was able to ensure Guyana’s total stock of public and publicly guaranteed (PPG) debt, was only US$3.1B at the end of last year, or 38.7 percent of GDP. This was the lowest gross debt-to-GDP ratio of the region. Bank of Guyana statistics also shows that the debt-to-GDP ratio in Guyana had decreased to 37 percent in 2020 from 39.80 percent in 2019.
During his 2022 budget speech, Senior Minister with responsibility for Finance, Dr. Ashni Singh said at the end-2021, the stock of PPG debt represented a 20.6 percent increase from the end-2020 position, primarily driven by growth of domestic public debt.
At the end of last year, he explained that domestic public debt totalled US$1.7B, 36.4 percent higher than the position at the end of 2020, mainly due to two factors. “The first is an 81 percent increase in the stock of treasury bills to US$702.7 million, reflecting Government’s commitment to finance fiscal operations by recourse to the market instead of perpetuating the inherited malpractice of overdraft accumulation at the Bank of Guyana (BoG),” the minister stated.
He added, “The other factor responsible for the higher domestic debt is the issuance of debentures to the BoG in June 2021 for a total value of US$959.2 million. These debentures were issued primarily to securitise the inherited overdraft. The issuance of these debentures restored a positive balance on public deposits at the BoG, along with the integrity of Guyana’s fiscal accounts.”
With respect to the stock of external public debt, he said this grew by 5.5 percent over the last year, to US$1.4B at the end of 2021. Dr. Singh said this increase was largely influenced by positive net flows from large creditors.
He noted that total public debt service payments amounted to US$121.9 million in 2021, representing an increase of 32.1 percent, mainly as a result of higher domestic debt service payments.
