Vice President, Dr Bharrat Jagdeo during a press conference at the Office of the President on Thursday, debunked a contention that the country has been plunged further into debt, stressing that the government is committed to sustainable borrowing to ensure that the state of the economy is not put at risk.
Earlier this week, the government presented a whopping $1.146 trillion fiscal plan for this year, and over 60 per cent of this budget will be financed from locally generated revenues, while the remainder is financed through external loans.
The VP recalled that in the early 1990s, Guyana’s Gross Domestic Product (GDP) was around US$300 million, with an external debt stock of US$2.1 billion.
External debt is the portion of a country’s debt that is sourced from foreign lenders such as foreign commercial banks and governments.
According to the vice president, the size of Guyana’s economy stands at approximately US$22 billion, with US$1.8 billion in external debt, lower than the 1990s figure.
“At the end of 2023, the stock of debt was $4.5 billion. This was all the debt we had accrued historically, of which $1.8 billion is external debt,” he noted.
Dr Jagdeo continued, “The fact of the matter is that in spite of our borrowing over this period, our stock of debt to the external world is less than it was in 1990, when APNU was in office. The rest, the US$2.7 billion is domestic debt. But the external has been the big issue. Our future revenue, if we forecast based on oil production, even for the approved projects, and Whiptail, which will be approved, if we only factor in production at those levels, at current oil prices, and at the volume that we expect to produce from those projects, the revenue for the state in the outer years, that is, maybe by 2028, 2030, could be US$5.6 billion.”
It is expected that Guyana will earn about US$2.6 billion in oil revenue by 2025, which is significantly more than the external debt.
Additionally, many of the mega projects funded by external loans are set to generate substantial revenue, effectively paying for themselves. Such projects include the flagship Gas to Energy project, which is expected to facilitate the marketing of excess natural gas.
“Even if it didn’t pay for itself, the burden on the fiscal would not make it unsustainable,” the Vice President said.
Guyana’s debt also remains among the Region’s lowest, due in large part to the government’s strategic investments and prudent debt management. (DPI)