Senior Finance Minister highlights PPP/C’s sterling achievement at maintenance, preservation and strengthening of debt sustainability

– Motion passed to increase External and Domestic Debt Ceilings

–Paves the way for further massive and aggressive development agenda

As Government continues to move aggressively to further its development agenda and create financial room for more massive projects and policies to improve the living standards of Guyanese across the country, Senior Minister in the Office of the President with Responsibility for Finance Dr. Ashni Singh Thursday successfully piloted the motion to increase the external and domestic debt ceilings.

The Minister at the last sitting of the National Assembly proposed the Motion on behalf of Government for the confirmation of the External Loans Increasing of Limit Order 2023, Order No. 48 of 2023, and the Public Loan Increasing of Limit Order 2023, Order No. 49 of 2023. Late this afternoon, following rigorous debate by both sides of the House, the Motion was successfully approved by the National Assembly.   

The new external debt ceiling now stands at $900 billion, while the domestic debt ceiling stands at $750 billion. Given Guyana’s economic outlook, these revisions to the external and domestic public debt ceilings are consistent with Guyana’s long-term debt sustainability. Additionally, in line with the government’s commitment to maintaining its sterling track record of transparent and prudent debt management, the increase in the debt ceilings aims to avert the dependency on utilising the Consolidated Fund overdraft as a means of financing, which was done under the APNU/AFC administration.

“We can speak about debt sustainability, and I am going to speak about debt sustainability because the PPP/C’s record in Government as far as it relates to the achievement, maintenance, preservation and strengthening of debt sustainability is incomparable in the entire history of this country,” Dr. Singh said as he recalled that when the PPP/C entered office in 1992, it had  inherited an extreme crisis circumstance in which the People’s National Congress (PNC) had left Guyana in a state of bankruptcy and the country had become a pariah State.”

Like many developing countries, Government revenues are not enough to propel a country to be developed. Government revenues are often complemented with financing raised externally and domestically. It is an opportune time in Guyana’s history, that this country now has a debt carrying capacity that allows it to borrow to finance an array of transformative projects aimed at accelerating development.

This Government, with its pro development agenda borrows to invest in what matters. Over the last two and a half years, Government has contracted financing to cover areas of infrastructure, health, education, housing, energy and tourism. Some of these transformational projects being undertaken include the Linden to Mabura Road Upgrade Project, Guyana Paediatric and Maternal Hospital, 6 Regional Hospitals Project in Guyana, Construction of the New Demerara River Bridge , Infrastructural Development Works for the Housing Sector Project, the Soesdyke-Linden Highway Project, and Construction of the Wismar Bridge.

The Finance Minister further admonished the Opposition for its anti-development stance and for continuously refusing to recognize that a move to increase the debt-ceiling is a reflection that the country is now in a much better financial and economic position under its current leadership to be able to do so and will also allow for further development of the lives and environment of the citizens of the country as a whole. 

“Let us be clear Sir that the ramblings on the other side reflect their studied opposition to development in this country because they are well aware that every single loan that has been contracted in this Government has been invested in economic and social development and improving the circumstances of the people of Guyana,” Dr. Singh noted.

History has shown that in 1992 when the PPP/C assumed office, Guyana was completely bankrupt, and uncreditworthy, with the international community unwilling to provide loans to the country.  

“That was the circumstance in which the PNC left Government in 1992. The PPP/C administration was faced with the task of restoring Guyana, not only to a democratic Nation, but restoring Guyana to the fold of an economically viable States, rebuilding fiscal and debt sustainability, bringing back our country not from the brink of bankruptcy, but bringing back our country from over the precipice of bankruptcy.” Dr. Singh explained to the National Assembly today.

It must be highlighted that even with the increase in the debt ceilings, the ratio of debt ceiling to nominal GDP is the lowest in Guyana’s history. The external debt ceiling to GDP ratio is estimated to be 24.5 percent down from 38.8 percent, when the ceiling was revised in 2021. Similarly, the domestic debt ceiling is estimated to be 20.4 percent down from 29.8 percent. In addition, the total public debt to nominal GDP is estimated to be 26.2 percent, one of the lowest in the Caribbean region and the western hemisphere. Notably, when this Government took office in 1992, Guyana was one of the world’s most heavily indebted countries. However, after several rounds of successful debt relief initiatives coupled with the government’s continuous efforts to strengthen the domestic economy, Guyana’s debt became sustainable in 2006. Over the last three decades, Guyana’s debt has declined from 617 percent of GDP (more than six times the economy) at end-1991, to a remarkable 24.6 per cent (about a quarter of the economy) at end-2022. Additionally, when this government took office in 1992, about 90 cents of every dollar of revenue earned was used to make debt service payments. Today, this has been significantly reduced to seven cents of every dollar.

Given the ramping up of oil production and the resurgence of the non-oil economy, Guyana registered real GDP growth of 62.3 percent in 2022, making it the fastest growing economy in the world. This appreciable growth performance and the country’s robust economic outlook underpin Guyana’s sustainable absorption of the new debt.

The PPP/C Government will continue to focus on debt management policies and practices that hinge on a strategy that prioritises the mobilisation of development financing at the lowest cost, within prudent risk parameters.

Over the last three decades, this is the second time this administration has increased the debt ceiling. This is testimony of the administration’s endeavours to continue its sterling track record of prudent debt management, to safeguard Guyana’s long-term fiscal integrity and debt sustainability.

With the increase in the debt ceiling, Guyana will harness its debt-carrying capacity to finance the transformative projects which will redound to the benefit of all Guyanese.