Category: Business and Economic Commentary

…says refusal to renegotiate, failure to manage deal responsible for country’s low earnings

(Kaieteur News) – ExxonMobil and its partners in the Stabroek Block recorded a staggering US$12.5B in profits last year while Guyana barely received US$2.5B, a reflection of not only government’s failure to renegotiate the lopsided 2016 agreement, but the administration’s inability to better manage the contract as promised.

This is according to chartered accountant and attorney, Christopher Ram. The advocate in an invited comment shared his opinion on the explanation provided by Minister of Natural Resources, Vickram Bharrat on the reason Guyana’s shares paled in comparison to the oil companies.

Chartered Accountant and Attorney, Christopher Ram

Bharrat told Kaieteur News that the Stabroek Block partners use a different accounting mechanism which includes depreciation, financing structures and taxes, whereas Guyana’s earnings are calculated using only profit oil and royalty payments.

For his part, Ram argued that, “Minister’s reliance on the “legacy agreement” argument is disingenuous and deflective, serving more to excuse the government’s inaction than to address the substantive concerns surrounding the 2016 Production Sharing Agreement.”

The lawyer reminded that the 2016 PSA was largely a resurrection of the 1999 Janet Jagan agreement framework, modified and expanded by the APNU+AFC administration.

Moreover, Ram pointed out that Bharrat is fully aware of the PPP’s promise to renegotiate the agreement and secure a better deal for the country as he was a prominent voice during the party’s 2020 elections campaign.

Consequently, Ram said, “He had the opportunity to act and did not. Today, instead of accountability, we are offered excuses.”

Additionally, the lawyer said the minister’s record on contract administration is equally troubling.

“After six years in office, his ministry has failed to bring a single cost recovery audit to completion. Rather than asserting the authority of the state, the government has allowed the oil companies to dominate the pace and terms of engagement, effectively running rings around the very ministry charged with regulating them,” Ram contended.

As such, he told Kaieteur News that the promised era of stronger oversight and tougher management of the sector has simply not materialised.

Instead, the lawyer noted that Bharrat’s statement suggests an acceptance of two of the most egregious features of the agreement.

He explained, “The minister seems not to know that under this agreement, the taxes he pays for the oil companies should come from Guyana’s share of profit oil. And that if the agreement is applied there is no money left in the Natural Resource Fund.”

Secondly, Ram highlighted that Guyana bears 50% of the decommissioning costs when the production wells run dry. He also emphasised that millions are being taken out of Guyana’s oil to pay for cleaning up the ocean floor years before the revenue is required; not only that, but the entire fund is held and controlled by the companies.

To this end, Ram argued, “The issue is not whether Guyanese understand the PSA. It is whether he does. And if he does, is doing nothing about it his chosen option?”

On Tuesday the Ministry of Natural Resources explained how the Stabroek Block partners recorded US2.5B in 2025, although the 2016 oil contract allocates a greater share of revenues to the country.

The fiscal terms mean that Guyana’s profits should exceed that of the partners, yet the three companies recorded five times the revenue that flowed into the country’s oil account in 2025.

Financial statements filed however revealed that Exxon recorded a staggering US$6B in profit before taxes, while its partners, Hess and CNOOC earned US$4B and US$2.5B respectively- some five times the US$2.5B that flowed into Guyana’s account that year.

Bharrat acknowledged the public concerns stemming from the profits reported by the companies and the petroleum revenues received by the state.

He explained, “Such comparisons must be understood within the legal and economic framework of the 2016 Stabroek Block Production Sharing Agreement.”

Bharrat stated that Guyana does not receive 50% of gross revenue, nor 50% of the companies’ accounting profits. Instead, the minister noted that under the PSA, the state first receives 2% royalty on petroleum produced and sold after which the contractor is then allowed to recover approved exploration, development and operating costs, up to 75% monthly. As such, Bharrat explained that the remaining balance, known as ‘profit oil’, is divided equally between Guyana and the contractor group.

“Therefore, where the full cost-recovery ceiling is applied, Guyana’s direct cash receipt is approximately 14.5 percent of gross revenue: 12.5% from its share of profit oil and 2% from royalty,” the minister said.

As such, Bharrat pointed to the reason Guyana’s profits only amounted to US$2.5B versus the companies’ US$12.5B. “Corporate profits are calculated under accounting rules and may reflect revenues, depreciation, financing structures, tax treatment and other corporate adjustments, whereas Guyana’s petroleum receipts represent the cash revenues due to the State under the PSA and deposited into the Natural Resource Fund,” according to the minister.

Following a three-month hiatus in parliamentary sittings, the Government on June 5th initiated moves to repeal the Former Presidents (Benefits and Other Facilities) Act 2015 and replace it with a new one that sets no caps to the benefits now being received by those who served in the highest office of the land.

The move has sparked consternation in some circles and raised questions about the government’s priorities.

Senior Minister in the Office of the President with Responsibility for Finance, Dr. Ashni Singh introduced the Bill – Former Presidents (Benefits and Other Facilities) Act 2026 – and it was read for the first time at the last sitting.

According to the explanatory memorandum of the Bill it seeks to put into law certain benefits and other facilities to be enjoyed by every former President.

“Having regard to the services rendered by former Presidents and the dignity attached to the office of the President, it is considered necessary to extend certain amenities and benefits to them during the remainder of their lifetime,” it was stated.

While the Act will empower the finance minister to make necessary regulations for giving effect to the legislation it made clear that Clause 4 of the Bill repeals the one that was passed by the former APNU+AFC coalition government in 2015.

The uncapped benefits that the beneficiaries of the Bill will receive include “provision of utilities at the place of residence, services of personal, technical and household staff, payment of health-care related expenses, for self and dependant members of family, full time personal security and Presidential Guard Service arrangements at the residence and taxable status identical to that of a serving President”.

Commentator Christopher Ram roasted the government over the bill. 

In a comment on Friday to Kiskadee Watch, he said “The Presidents Benefits Bill tells you everything about this Government’s priorities. Parliament has sat idle for the better part of four months – no scrutiny, no questions, no relief for the cost of living – and the first thing it stirs to do is restore tax-free, uncapped benefits for the handful of men who have already held the highest office. A former President would again draw utilities, staff, vehicles, security, and medical care without limit, plus a tax exemption identical to a serving President, on top of a pension already at seven-eighths of the sitting President’s salary – while the worker on the minimum wage is too poor even to be taxed.

“We need not even make the argument. We can recall then Finance Minister Winston Jordan, who in 2015 called these very benefits “vulgar” and an entitlement that “degrades servant leadership.” This Bill simply brings back the vulgarity. It shows how the ruling cabal sees the top office – not as a responsibility laid down, but as a plum to be enjoyed for life at the public’s expense. Strip away the talk of “dignity” and what remains is greed”.

In 2015 the then APNU+AFC Government had repealed what it described as a  “vulgar” insult to hardworking taxpayers who had had to foot the bill.

At the time the Bill was passed the then opposition – the PPP/C – was not in the House as it was yet to take up the opposition seats in the National Assembly.

The benefits in the previous Bill were enacted by the then Bharrat Jagdeo-led PPP/C administration in 2009 and were defended by then President Donald Ramotar in 2013, when he vetoed a similar bill passed by APNU and AFC to cap benefits.

In 2015 Jagdeo was the only former president who had benefitted under the then Act. Ramotar, former Prime Minister Samuel Hinds, who had served as president for 288 days in 1997 after the death of Dr Cheddi Jagan and prior to the election of Janet Jagan and former President David Granger will all now benefit from the uncapped benefits once the Bill becomes law.

The explanatory memorandum of the 2015 Bill had said that its was to repeal the Former Presidents (Benefits and Other Facilities) Act of 2009, and to replace it with the new Act, to provide greater specificity “especially if account is taken of the fact that the former president is eligible for a pension which is 7/8’s that of the president in office.”

During his address, then Minister of Finance Jordan described the uncapped, taxpayer-funded benefits package set out for former presidents in the 2009 Act as “vulgar”, adding that “It lacks the imprimatur of important moral values”.

Jordan gave the example of a retired graduate headmistress who drew a pension of $86,857 a month after working for over 34 years and which she would receive for the rest of her life. The plight of the teacher demonstrates the “absurdity” of the “anomalous situation,” he had said, where a former president then received $1.4M, which would be automatically increased whenever the sitting president’s salary is increased.

…flags lack of independent supervision

…no accountability safeguards and clear lending priorities

…says $40B at risk

(Kaieteur News) – The proposed Guyana Development Bank may be a promising initiative aimed at supporting small and medium-sized enterprises (SMEs), but Chartered Accountant and Attorney Christopher Ram is warning that flaws in the legislation governing the institution could leave billions of taxpayers’ dollars vulnerable to misuse.

In an invited comment, Ram, an advocate for good governance told this publication that the proposed legislation raises serious concerns about governance, accountability and financial prudence.

He said, “The most troubling feature is that the Bank is exempt from the Financial Institutions Act and therefore from oversight by the Bank of Guyana. Unlike every other financial institution, it will not be subject to independent prudential supervision, inspections or regulatory intervention. With $40 billion of taxpayers’ money at stake, this is a significant weakness.”

Chartered Accountant and Attorney, Christopher Ram

Ram went on to point out that governance is another concern. The lawyer explained that the Bill tabled in the National Assembly lays the foundation for the Finance Minister to appoint all directors, including the Chairperson and Deputy Chairperson. ‘That concentration of authority is particularly troubling given his well-documented history of delayed appointments to statutory bodies and institutions under his oversight. Ironically, the same Minister was once a vocal critic of similar shortcomings when they occurred under the previous administration,” Ram said.

Additionally, the attorney noted that the Guyana Development Bank also falls outside of the Companies Act. As such, the lawyer flagged that the legislation contains no statutory indemnity for directors acting in good faith and omits many of the governance safeguards normally associated with corporate entities.

Kaieteur News reported in an article on Sunday that no penalties have been included for rogue banking officials that may seek kickbacks or special favours for granting loans to members of the public.

Equally concerning for the attorney is the areas not covered by the Bill. Ram said, “It establishes a $40 billion development bank without identifying lending priorities or sectors that should be targeted.”

Additionally, Ram highlighted that the proposed law does not explain how losses will be financed or risks shared in co-financing arrangements.

He concluded, “There is a good idea at the heart of this Bill. Unfortunately, a good idea is not a substitute for good legislation. A Development Bank entrusted with $40 billion of public funds requires stronger governance, clearer accountability and independent oversight.” Consequently, Ram suggested that the Bill needed more consultation and scrutiny before being laid in the National Assembly.

Proposed legislation to govern the Guyana Development Bank was on Friday afternoon tabled in the National Assembly by an energetic Finance Minister, Dr. Ashni Kumar Singh.

News of the financial institution sparked excitement among Guyanese as the Government of Guyana (GoG) marketed the facility as one that would offer zero interest on loans up to $3 million with no collateral required.

The legal framework however reveals a different picture than that promised by government.

According to Section 5 (2) of the Bill, “Subject to the other provisions of this Act, the Bank may- (a) assist small and medium-sized enterprises in establishing, carrying on or expanding their operations by providing loans with or without collateral and with or without charging interest.”

The proposed law does not clearly outline what specific projects will require collateral or attract interest and at what specific rates.

Moreover, $40B or approximately US$200M initially – as the sum can be revised in Parliament – will be disbursed at the sole discretion of government appointees. The Bill makes no provision for any nominees to be submitted by the Opposition, civil society or any transparency bodies, raising concerns over the direct control of billions by the administration and the likelihood of selection based on “political alliance”.

Business and Economic Commentary

This column also brings to mind an earlier series, Business Page, which began in the early years of Sunday Stabroek under the editorship of David de Caires and Anna Benjamin. That column was interrupted after a disagreement over a piece on Caribbean Containers Inc. which prompted a defamation threat by its CEO, Ron Webster. Sunday Stabroek published an apology over my objections, which I felt might weaken my position should the matter reach the courts. I stood my ground and defended the action. No case ultimately succeeded, and the column eventually resumed.

The decision to bring Sunday Stabroek – a sibling of Stabroek News – to its final edition marks more than the end of a newspaper. It closes a chapter that began in 1986, when Guyana’s economic circumstances were vastly different from today. The economy was small and constrained, public finances were tight, shortages were common, and the state’s capacity to finance development was limited. Few would have imagined that four decades later the country’s economic output would be measured in the trillions of dollars.

Today the economy is estimated at roughly $1.5 trillion, a transformation – driven largely by offshore petroleum discoveries just over a decade ago – that reshaped both expectations and fiscal capacity. In a remarkably short period, the country has moved from harsh scarcity to the paradox of abundance.

Yet economic expansion does not automatically resolve the deeper questions of governance and accountability. Indeed, it often magnifies them. A striking illustration of this transformation lies in the public accounts themselves. The fiscal deficit projected for 2026 is larger than the entire national budget of 1986. That single comparison captures both the extraordinary growth of the economy and the expanding scale of the state’s financial commitments.

An unusual institutional development deserves notice. For the first time in Guyana’s post-independence history, responsibility for the nation’s finances has not been assigned to a separate Minister of Finance. However long-titled Dr. Ashni Singh’s designation might be, the portfolio remains with President Irfaan Ali, departing from long-standing administrative practice. The reasons were never clearly explained. At a time when public finances have expanded dramatically, concentrating fiscal authority in the executive inevitably raises questions about motive, institutional balance and oversight.

There is also a paradox that deserves reflection. The current administration came to office with what many regarded as one of the most academically accomplished economic leadership teams in the country’s history. Yet outcomes in several areas raise uncomfortable questions. Years after the completion of field work, the report on the 2022 national census is still outstanding. Long-standing structural challenges at the National Insurance Scheme appear to have deepened rather than eased. And in an economy experiencing unprecedented inflows of foreign earnings, complaints about the scarcity of foreign exchange continue to surface within the business community.

The contrast between the promise of technical expertise of Dr. Singh and the persistence of these difficulties, illustrates how economic management ultimately depends not only on credentials, but on the effectiveness of individuals, institutions and policy execution. Indeed, growth has also been accompanied by persistent concerns about the management of public resources. Over the years, observers have increasingly remarked on the pervasiveness with which corruption is alleged to have entered public life. What once appeared episodic now seems, to many citizens, more open and institutionalised.

Large and ambitious undertakings – among them the proposed development of Silica City and the gas-to-shore project – have been promoted as symbols of national ambition. Yet, their costs, their financing arrangements, their priorities, and their long-term economic justification are mired in obfuscation and opacity.

Fiscal policy itself has also evolved in notable ways over the past four decades. Personal income rates were dizzyingly high, reaching a combined marginal rate of 75%. Estate duty, sometimes referred to as Death Duties, formed part of the fiscal regime that had existed since income tax was first introduced in 1929. Except in the CIA inspired action against the 1962 tax measures introduced by the Cheddi Jagan premiership, most Guyanese grudgingly met their obligations.

Over the life of Sunday Stabroek, tax rates have tumbled, while some taxes have disappeared altogether. Capital taxes on death have vanished from the system, and more recently the wealth-related levy known as property tax for individuals, has effectively faded from relevance. At the same time, businesses and their leaders routinely advocate additional relief and concessions as “measures to stimulate investment and growth”.

Such developments raise legitimate questions about balance within the fiscal framework. A state with expanding expenditure obligations must also maintain a revenue system that is transparent, equitable, and sustainable. Otherwise, the burden of financing development shifts in ways that may prove difficult to sustain over time.

One area that has received remarkably little attention is the steady decline of the labour movement. Institutions such as the Trades Union Congress and the Guyana Public Service Union appear weaker and less effective than at any time since the colonial era. Leadership has too often placed politics ahead of membership, and the purchasing power of the minimum wage seems to bear a striking relationship to the quality of labour leadership.

These are precisely the types of issues that newspapers have traditionally examined. One of the enduring contributions of Stabroek News was its willingness to provide space for economic commentary that explored not only the promise of growth but also the institutional challenges that accompany it.

No reflection on this moment would be complete without acknowledging the role that Stabroek News played in holding the nation to account. That task was not always welcomed. At various moments, the newspaper faced pressures – political, commercial and financial – that might well have weakened a less determined institution. Yet it persisted in asking questions, examining public decisions and providing a forum where issues of national importance could be debated openly.

Particular recognition must go to the newspaper’s Editor-in-Chief, Anand Persaud, whose stewardship in recent years has required an extraordinary range of responsibilities. In many respects he has carried forward the demanding editorial tradition established by the newspaper’s founder, David de Caires, while simultaneously assuming functions that were once shared among several senior figures in the newsroom. That continuity of purpose has been essential in preserving the paper’s distinctive voice.

Equally deserving of recognition are the many individuals whose work rarely appeared in print, but whose dedication ensured that the newspaper reached its readers day after day. The production staff who kept the presses running through long nights, particularly after the paper moved to a seven-day schedule, demonstrated a level of commitment and resourcefulness that is seldom fully appreciated outside the walls of a newsroom.

Since the announcement of the newspaper’s closure, tributes from readers, writers and columnists have poured in – many eloquent, some deeply emotional, others personal, and a few that brought tears to the eyes. Together they testify to the quiet but profound place the newspaper has occupied in the intellectual and civic life of the country. Those tributes speak for themselves, and one can only join in endorsing the appreciation they express for the many people who sustained this institution over the years.

As the final issue rolls off the expertly maintained press, the national ledger which Stabroek News helped to maintain remains far from settled. The economic story of Guyana continues to unfold, shaped by decisions about governance, fiscal discipline and public accountability. One ledger may close with this edition.

The larger ledger, the one that records how Guyana manages its wealth, builds its institutions and governs itself, remains very much open.