Guyana plans to squeeze the most of its access to competitive funding from multilateral lenders and is in no hurry to gain access to the bond market, Economy and Finance Minister Ashni Singh told LatinFinance.
The South American nation, once one of the continent’s poorest and most indebted, has become a burgeoning oil producer in recent years and now boasts one of the continent’s smallest public debts.
But with ample financing available from development banks and national funds, Singh said the government is steering clear of debt markets for now and nor is it angling for an international credit rating. Such efforts could come down the road, he said on the sidelines of the annual Inter-American Development Bank (IDB) meeting in the Dominican Republic.
“We have a significant pipeline of official financing available to us from multilaterals, so we continue to access them as aggressively as we can. We want to continue to access the most concessional resources that we have access to for as long as we can,” he said.
Sources of funding include the Saudi Fund for Development, which provided $150 million in loans from last June to cover part of the budget.
When asked if Guyana was considering a bond sale, the minister said: “The short answer is no.” He added that the country would seek an international credit rating “when the time is right.”
Guyana’s debt to GDP ratio has come down from 60% to 30% since the start of this decade. It had been a massive 600% in 1991.
“Guyana’s debt remains among the region’s lowest, due in large part to the government’s strategic investments and prudent debt management,” said the minister.
OIL BOOM
Guyana is now an oil and gas producer and has the world’s fastest economic growth. The International Monetary Fund forecasts growth this year at 26.6%. The economy has expanded above 20% every year this decade.
While aware that the oil and gas sector is the motor for growth, the minister said the government wants to use this period “to ensure that we put in place the prerequisites for a globally competitive non-oil economy.”
Guyana’s policymakers see the country’s new global presence as a way of attracting the investment it needs to finance the country’s transformation.
The government is investing heavily infrastructure and agriculture, working to turn the country into an export route to northern America, especially for Brazil’s northern states. It is working on an all-weather highway that will connect its southern border with Brazil to ports on its northern coast, where Georgetown, the capital, is located. The financial infrastructure for the highway should be completed this year.
REGIONAL HUB
It is also vying to become both an agriculture hub and a technological hub for the Caribbean, taking advantage of its geography and size compared to the region’s smaller island states.
The country’s 2024 budget of $5.4 billion, a whopping 47% higher than the previous year, reflects the change. It includes important “strategic investments that are critical for long-term competitive, strategic infrastructure,” Singh said.
Oil revenue covers a big part of the budget. The Natural Resource Fund, its sovereign wealth fund, held $1.97 billion at the end of 2023. The budget is funded with taxes and revenue from environmental services.
Guyana has sold carbon credits for $750 million and in February became the first country eligible to trade carbon credits on the compliance market with sectors such as airlines.
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