GUYANA – A whopping US$34 million in interest alone was paid by the state to service its debt during the first six months of 2024, a burden this country would not have had if government had executed better strategies in the management of the petroleum sector.

This is according to Publisher of Kaieteur News and businessman, Glenn Lall. The advocate in a recent public message emphasized that the climbing interest rates could force Guyana to fork out another USD 35 million in interest for the remaining months of the year, taking the total interest on debt service to USD 70M by December.

The country’s debt service reached USD 85.2M in the first six months of 2024, with USD 34M alone paid in interest. Although the country’s total debt climbed from USD 4.5B at the end of December 2023 to USD 5B at the end of June 2024, the Bank of Guyana (BoG) in its 2024 Half Year Report revealed that Guyana’s total debt service, during the period under review, decreased by 7.7 percent to USD 85.2 million.

Lall was adamant that the USD 5B debt that currently hangs over the head of each Guyanese “like a dark cloud” would not have been present had the oil sector seen prudent management over the last five years.

The businessman reasoned that since Guyana began producing oil in December 2019, consecutive governments have failed to prevent the wanton abuse of the country’s resources by foreign companies.

He said, “Five years into pumping oil, and we still haven’t capped the interest rates or equity charges on the oil companies’ investments, nor have we ring-fenced any of the oil projects…had the government and opposition simply ring-fenced these oil projects, Guyana could’ve paid off its debts by now.”

A ring-fencing provision would ensure only costs related to one project are paid off from those revenues. In this way, more money would be available to share as profits between the government and Exxon, after the co-venturers recover the cost of the project. Presently, Guyana could have been receiving a greater share of profit from the three projects producing oil- Liza One, Liza Two and Payara. This, as Exxon has since recovered over USD 19B from the Stabroek Block, well above the cost for the three projects.

To this end, Lall said, “Guyana would be on a development drive unmatched in the region, with our people already enjoying the wealth from our resources. But no, instead, we’ll be heading back to those same overseas banks next year, borrowing more money and paying more interest, while boasting about “development” financed by loans.”.  (Kaieteur News) …[+]