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Business Commentary Part 28: Sugar: Reality clothed in rhetoric – Part 1

Business and Economic Commentary by Christopher Ram No. 33

When criticism meets political pressure, grand schemes emerge from thin air

Introduction

Within just a few weeks, Guyana has been treated to two competing visions for GuySuCo. First, President Ali’s appointee as CEO, Paul Cheong promises salvation through drone technology and Brazilian partnerships – focused on making sugar work. Next comes President Ali’s vision of GuySuCo as a “hub of rural development” – many of them towns – extending into rice, cassava, and livestock – essentially admitting sugar alone cannot work.

The contradiction is telling. One vision assumes sugar can be saved through technology. The other requires diversification – or more accurately, diversion – into entirely different sectors. Both appeared as reactive responses to pressure rather than genuine planning. Yet they point in fundamentally different directions, revealing an administration with no coherent strategy whatsoever.

The trigger: Reactive announcements

Cheong’s technological pitch emerged directly in response to my critical analysis published in this newspaper in June. Within days of “Sugar Dreams and Capital Nightmares” appearing, Cheong felt compelled to respond with his vision of transformation.

Ali’s diversification scheme was unveiled weeks later at the Enmore Martyrs’ commemoration – a setting unsuitable for accountability for the PPP/C’s and his own administration’s failures. Faced with explaining why production has collapsed after nearly five years in office, Ali chose to pivot to fantasies about GuySuCo’s future transformation.

Neither vision emerged from planning sessions or stakeholder consultations. Both were hasty responses: Cheong defending against criticism, Ali deflecting from decades of failures.

What both visions completely lack

More telling than what these visions promise is what they lack: any known planning whatsoever. Neither has provided clear objectives, implementation timelines, cost projections, risk assessments, management structures, marketing strategies, or financial projections.

Nothing. For an administration with nearly five years to develop a coherent GuySuCo strategy, this absence of substance is breathtaking. This is governance by public pronouncements designed for all the wrong announcements and certainly not solid strategies for results.

The logical absurdity is staggering. We have wasted hundreds of billions on GuySuCo even when we had actual plans – flawed though they were. To expect better results with no plan and no execution sounds like insanity. Yet both are proposing grand visions plucked from thin air, unencumbered by planning or realistic assessment.

Cheong’s recycled technology

Cheong’s vision reads like a Silicon Valley pitch: drone technology, predictive maintenance, Brazilian partnerships, new dryers, packaging machines, and “greater mechanisation.” Yet these are hardly revolutionary concepts for GuySuCo – similar technological promises have been made repeatedly over the years, with mixed results at best.

The pattern is familiar: new management arrives promising transformation through the latest technology, whether it’s modern factory equipment, improved field techniques, or partnerships with international experts. Each time, the focus remains on capital expenditure and technological fixes rather than addressing fundamental issues of management, planning, and market viability.

Rather than acknowledging this history of failed technological promises and seeking proven leadership like former successful chairpersons Vic Oditt and Ronald Alli who understood both the industry and sound management principles, Cheong retreats to the same playbook of technological solutions that have disappointed before.

Ali’s trademark diversion

Ali’s pronouncement reveals his characteristic response to failure: pivot to even grander schemes that ignore present realities. Rather than explain why sugar production has collapsed, he declared GuySuCo should expand into rice, livestock, agro-processing, and fabrication services.

This is not a diversification strategy – it was Ali’s trademark diversion from accountability. His approach treats GuySuCo as a political instrument rather than an economic enterprise. The audacity is breathtaking. A complex organisation producing sugar at twice world market prices, struggling with basic operations, is somehow going to become competitive in multiple unrelated sectors?

The track record: Five times the opportunity

Before accepting either vision as credible, examine the track record. The PPP/C has governed for 27 of the past 32 years versus just 5 years and 3 months for APNU+AFC.

This means the PPP/C has been in charge of GuySuCo for more than five times longer than the Coalition. They have had the opportunity to implement technological solutions more than five times, pursue diversification, and achieve the very goals they now promise. The PPP/C tried technological solutions before. They attempted diversification before. They announced grand plans before. Each time: more money spent, more targets missed, more excuses offered.

Ali specifically has had nearly five years to deliver on reopening estates. The results: “catastrophic” production levels and a corporation whose “very future is under real threat.”

We have been this way before

Every element has been promised before. The 2010 Turnaround Plan promised 400,000 tonnes by 2013, mechanisation and transformation. The Skeldon Project promised technological revolution. Previous diversification attempts promised GuySuCo would become more than sugar. Each time, grand announcements without substance. Each time, the same result: failure dressed up in new rhetoric.

Conclusion

Both visions represent competing versions of the same delusion, made worse by their fundamental contradiction and complete absence of planning. When the CEO and President offer incompatible visions within weeks of each other, both triggered by external pressure, it reveals an administration that has lost control of its narrative, let alone its strategy.

Next week: Part 2 examines what this fool’s gamble has cost Guyana while public services crumble and opportunities are squandered.

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The Financial Statements of EXXON, HESS and CNOOC – a story of opacity and confusion

Every Man, Woman and Child in Guyana Must Become Oil-Minded – Column 162 – 20 June 2025

Introduction

Columns 159 – 161 examined the individual income statements of each Stabroek Block contractor in detail. Today’s column shifts focus to analyse the combined results of the three entities, providing a broader perspective on the collective financial performance and strategic positioning of the consortium operating Guyana’s most significant petroleum asset.

Before doing so, however, let us have a brief look at a report in the Kaieteur News of 17th. June quoting Mr. Vickram Bharrat, Minister of Natural Resources on the state of relinquishment provisions on the Petroleum Agreement for the Kaieteur block.

The Kaieteur block agreement was signed with Exxon in April 2015 with a four-year initial exploration period that should have expired in April 2019 and two three-year renewals to 2025. At the end of the initial period (to 2019) the company should have relinquished 45%, a further 20% in 2022 and the balance in 2025, except for any area for which a production licence is issued, or any extension for cause. However, according to a statement from the company an extension was granted to February 2026 on the grounds, cited by the Minister, that the government was “compelled” by law to do so. Such a statement reveals a fundamental misunderstanding of the Production Sharing Agreement or deliberate deflection of responsibility.

That statement is false and would not be made by anyone with a passing understanding of Article 4.1(e), which states, unambiguously, that the Minister “may” extend exploration periods upon a showing of good cause – making his claim of legal compulsion demonstrably false while revealing dangerous regulatory weakness.

The danger is aggravated by the failure of the company to meet the conditions required to qualify for extensions. Despite only one sub-commercial well being drilled since 2015, no mandated relinquishments have occurred despite deadlines passing in 2017, 2019 and 2022. Notably, ExxonMobil simply walked away rather than meeting drilling commitments – failures which should disqualify from any extension eligibility under any competent contract administration.

This regulatory capture traces back to the Jagdeo Administration’s overly-generous force majeure relief for the entire 26,806 sq KM Stabroek Block following the Suriname vessel boarding incident – a vast distance from actual operations. With Jagdeo now heading petroleum policy, this permissive approach has become institutionalised, creating an environment where industry wishes consistently trumps national interest while the government rubber-stamps requests without rigorous scrutiny.

The PPP/C Administration has watered down its campaign commitment, first to renegotiate the 2016 Petroleum Agreement, then to better contract administration and reform, then to sanctity of contract and the latest, that the Minister is legally compelled to extend the duration of a petroleum agreement. To sum up. The PPP/C Administration has been unable to cross the lowest of the low bars that it has set itself.  

That the individuals responsible for the petroleum sector are so poorly informed must be a serious cause for concern. Note: This Agreement was signed days before the 2015 elections.

Now, back to those financial statements.

Challenging presentation of annual reports

Nearly eight years after the signing of the now-infamous 2016 Petroleum Agreement, it is clear that neither the foreign oil companies nor the Government of Guyana have any real interest in accountability. While the country’s leaders boast about revenue inflows, the foundational elements of transparency – consolidated project accounts, proper cost audits, and consistent financial reporting – are glaringly absent or deliberately obfuscated. The Guyanese people remain in the dark as to whether they are receiving even the bare minimum promised under the Agreement, including their so-called 50% share of profit oil.

Annex 2 of the Agreement, which sets out the companies’ reporting obligations, is weak and ineffectual. Reports are submitted solely to the Minister, with no legal requirement for publication or independent audit. There is no consolidated field-level financial statement, no disaggregated cost data, and no mechanism to ensure that the separately published financial statements with limited, inconsistent, and opaque information is accurate, reliable and timely. As a result, neither Parliament nor the public can verify whether the oil companies are overstating costs or underreporting profits. To correct this, Government should mandate publication of all Annex 2 statements, require independent project audits, and adopt the EITI standard in full.

What makes matters worse is the inconsistent, and in some cases misleading, financial disclosures by the oil companies themselves – all audited by the same firm. Only CNOOC acknowledges the joint operation classification under IFRS 11while Hess and Exxon remain silent on the nature of the arrangement. On taxation, CNOOC correctly states that the Government pays the contractor’s income taxes out of its share of profit oil. Exxon evades the issue entirely, while Hess claims to be subject to a 25% corporate income tax, even producing a tax computation – a misleading practice at best, and a dishonest one at worst.

The contents of the Income Statements are all different. Even the reporting currency lacks consistency. Hess reports in U.S. dollars, CNOOC in millions of Guyana dollars, and Exxon in Guyana dollars. Then there are differences in treatment and disclosure of items like royalties, retirement obligations and Decommissioning and Royalties. Such differences frustrate comparability, undermine audit quality, and suggest that the companies are dictating the terms of disclosure to their auditors – not the other way around.

Since the Government pays the corporate tax of all the companies from its share of profit oil, there should is no differential treatment. Yet, the effective tax rate of tax on the income earned by each of the companies differs significantly. This is not helped by three divergent disclosure notes, the reason for which is far from apparent. Even more troubling is the illusion of equity embedded in the so-called 50/50 profit-sharing arrangement. The financial statements of the oil companies show multibillion-dollar earnings while Guyana’s share remains comparatively meagre. The ratio for the year 2024 and cumulatively for the five years to December 2024 is in excess of 5:1.

Government 

But the Government too is guilty of opacity, if not deception. Public filings of the Exxon and Hess in the US suggest that the Government issues them with proper tax certificates confirming the discharge of their Guyana tax obligations. See Article 15:5 of the Agreement. Two problems: no money is paid out of Guyana’s share of profit oil and there is no oil company taxes paid into the Consolidated Fund. The rules of EITI, the principles of accounting, and transparency require full, complete and comprehensible disclosure. Whichever accounting route is followed – whether the taxes are deducted before transfer to the Natural Resource Fund, or after – the outcome is equally misleading.

Because the NRF has a significant component of intergenerational funds, the Government has an interest in window-dressing the balance – to make it seem better than it is. It is therefore comfortable manipulating the balance by not reflecting the amount of the tax required to be paid on behalf of the oil companies. The oil companies for their part, are not concerned about the small matter of accountability and transparency, or whether the Government manipulates the NFR or whether Tax Certificates are issued for money not received.

Compounding these financial distortions is the government’s ongoing failure to enforce one of the few clear powers it has under the Agreement: the relinquishment clause. Exxon and Co. was required to surrender 20% of the Stabroek Block contract area nearly a year ago. Instead, we are told the Ministry of Natural Resources is still “finalising” the areas to be given up. See also the introductory note on the Kaieteur Block for evidence of the wider incompetence and laissez faire attitude to see how our marine petroleum assets are managed.

Next week, we will close out on the financials by looking at the companies’ aggregated balance sheets and the state of the Natural Resource Fund.

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Christopher Ram Responds to AG Nandlall’s unsubstantiated allegation

Christopher Ram Responds to AG Nandlall’s unsubstantiated allegation

I recently viewed a video of Attorney General Anil Nandlall (AG) responding to a column written by Mr. Ralph Ramkarran, SC, who heads Cameron and Shepherd, arguably Guyana’s oldest law firm. I retained Mr. Kamal Ramkarran, the son of Ralph Ramkarran, as my attorney to challenge Article 160 (2) (a) of Guyana’s Constitution, which I believe permits individuals to contest parliamentary elections in geographical constituencies. Readers might recall that Kamal was also my Counsel — right up to the CCJ – in the case he successfully filed over the 2018 no-confidence motion in the National Assembly.

In the video, the AG made the grave allegation that Mr. Ramkarran Senior’s column was “an attempt by him to distance his law firm from a statement that I (AG) made… from a contention that I (AG) advanced.” The AG went on: “And the contention that I advanced was that based upon the information that I have received, information that I have no reason to doubt, the legal proceedings are being financed by a political presidential aspirant.”

After reviewing the video, I contacted the AG to inform him that his allegation about the financing of the proceedings was false and challenged him to provide us with the information or issue a retraction and apology. The AG subsequently issued what can only be described as a non-statement. Rather than providing evidence or retracting his defamatory claims, he now attempts to justify his conduct by claiming he was merely “sharing information already being publicly peddled” and that such information was “published on social media.”

His feeble justification raises even more serious concerns. If he is basing official statements on unverified social media posts and rumors, this speaks to a fundamental failure in his duties as the nation’s chief legal officer. Social media gossip and speculation do not constitute the reliable information he initially claimed to possess. It is profoundly disappointing that our nation’s chief legal officer would conduct himself in this reckless manner. His refusal to accept accountability when challenged sets a dangerous example that undermines the integrity of his office and erodes public confidence in our legal institutions.

I also take this opportunity to apologise to Ralph and Kamal Ramkarran and their families for the embarrassment and pain that the AG’s wild accusations and his subsequent refusal to retract them would have caused. The best vindication is honour, truth and justice. It will come their way.

Christopher Ram

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Not one respondent addressed the substantive issues raised concerning President Ali’s conduct

Dear Editor,

The southern American expression “A hit dog will holler” was brought to Guyana in a coordinated response across the controlled media to my letter appearing last week under the caption `Presidency has been diminished by Mr Ali and he ought not to be re-elected’. Featuring media houses closely connected with the State and roleplaying by varying persona large and small, they have cast me in the memorable role of the Brave Little Tailor of “Seven at One Blow” fame, their combined failure allowing me to entertain the thought that Guyana has more unfeathered than feathered parrots, that we are one big soup kitchen. What emerges from their collective effort is not a defence of presidential conduct, but pseudo intellectualism and cowardly attacks from individuals whose supper depends on how often and how they mix up the pot.

Notably, not one respondent addressed the substantive issues I raised concerning President Ali’s conduct: concealing the expenses on Silica City, his vanity project; the documented WhatsApp evidence of a President engaging in communication on taxes; abandoning a public pledge to rebalance a most lopsided contract; the hidden Clyde & Company report; and the systematic undermining of constitutional and statutory bodies. Having documented numerous cases of tax concessions and benefits granted outside of the law, I can attest that such irregular practices are far from isolated incidents.

Most telling is President Ali’s refusal to establish a Commission of Inquiry to examine these matters – the one action that could definitively clear his name. And is there another way to describe a government that goes to court to challenge the award of a meagre pension equivalent to two hundred United States dollars per month to Zainul, a poor but dignified former carpenter while channeling hundreds of millions to friends and supporters than morally bankrupt and devoid of basic human decency?

To the first respondent, who refers to me as a friend, I am reminded of Caesar’s final words: “Et tu, Brute?” There is something particularly damning about betrayal couched in friendship’s language when all is done in the name of opportunism.  Regarding questions about electoral preferences, my answer is simple: NOTA – None of the Above. When choices are between persons who are seriously compromised, including a president who has diminished my country’s highest office for party and supporters’ profits, the principled position is rejection.

To another, your transformation from closet critic to fervent defender illustrates how lucrative appointments alter perspectives -a la Martin Carter. To anyone who thinks that embracing facts is engaging in extremities, and who possesses that rare and unprecedented wisdom to equate a simple accountant with billionaire and liberal democrat George Soros, I say, thanks but no thanks. To them both, I say, some knives cut three ways – toward enemy, friend and, ultimately, oneself. Their blade has found all three targets.

As for those respondents vying for bit parts (extras in the film business), they constitute the “et al” of the government dependency support cast whose feeble attacks are unworthy of any response, or respectability. Among these is one who substitutes fantasy and creativity – embellished with racist undertones –  for truth and accuracy, qualities identified with the fiction shelves in the library. 

But they all have one thing in common. Their very existence depends on the electoral success of their party, are probably otherwise unemployable, and therefore deserve some understanding, but not respect.

I reserve my final words for the President himself. As a practicing Muslim, he knows that the Prophet (peace be upon him) declared that “a word of truth before a ruler” is among the highest forms of jihad. Hurtful they might be, they are the unblemished truth while his defenders swear that the emperor’s clothes are made of the finest silk when honest men, women and children can see that he stands naked.

Yours faithfully,

Christopher Ram

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The NIS Cash Grant: A solution for a solution that is not a solution

In October 2024, President Irfaan Ali announced to the Parliament of Guyana that a payment of a one-off Cash Grant would be introduced for National Insurance Scheme (NIS) contributors and that the full details of this allocation will be revealed in the 2025 National Budget. The additional information – that the money would facilitate the payment of a one-off sum to persons who have made between 500 and 749 contributions was so unhelpful that accountants Ram & McRae commented in their flagship Budget Focus that such sparseness was “not only disappointing but thoughtless”.

Then on 10 April 2025, the Department of Public Information issued a statement that with the injection, “more than $10 billion in disposable income will be placed into the pockets of some 25,000 pensioners nationwide.” Displaying an incredible lack of understanding of how the NIS works, the President urged “eligible pensioners who are not on the NIS database to swiftly register at the various NIS branches to benefit from this programme.” As if that was not bad enough, the President added that “the payout could even begin this Friday after some $10 billion is transferred to the NIS.” The calendar shows that the first Friday after the announcement was 11 April, which made any immediate payment impossible.

Reminiscent of his mis/announcement of the general cash grant of $200,000 per household in October 2024, the President’s advisers seem to provide him with poorly thought-out information that embarrass him.  The fact is that the NIS cash grant is as muddled as the wider grant and plays on the poverty, the hopes and the lives of pensioners. The reality is that no one with the possible exception of the President himself knows how the disbursement will be made – and certainly not to persons on the “NIS database”.

The poor NIS is placed in a bind. It has published on its website a document with limited information setting out as the conditions of eligibility that persons must have between 500 to 749 contributions on record; be 60 years or older as of 31 December 2024; and “MUST NOT  (emphasis the NIS) be receiving and/or do not qualify for any pension from NIS”. It invites persons to insert their NIS number or their personal data to determine their eligibility. 

We tested the system for three persons who were paid an NIS Old Age Grant. The system came back promptly: Record Not Eligible. This runaround will be worse than the general cash grant and is further support of the view of the Attorney General that this “solution is not a solution.” See chrisram.net on 15 May 2025.

I anticipated the problem and wrote a WhatsApp message to the President on 21 April offering a solution. He is yet to respond while the confusion continues.

Anong the suggestions were:

Calculating payments as a percentage of what contributors would have received with full contributions, based on their last insurable earnings. For example, a contributor with 500 contributions would receive 500/750 of their potential pension for life. This maintains the core principle that benefits should reflect contribution history and earnings.

Amending the NIS Benefit Regulation to make the payment a permanent feature, thus avoiding the recurrence of the problem and the accompanying dissatisfaction. 

I advised the President that the recommended approach is implementable within a similar fiscal framework while offering a more equitable distribution. As he is entitled to do, the President never responded to my message and the system  is a total mess. The responses to my inquiries using real particulars suggest that the benefit applies to 2024 Old Age grants only. Not next year, not last year. So here is the rub. Using the most recent available NIS Annual Report, the one-off Cash Grant will cost approximately $750 million dollars, about 7.5% of the $10 Bn.

This raises questions about the seriousness of the entire process and the people involved. On this, the NIS is without blame. President Ali never consulted or instructed the Board. So was the Budget Office and the Ministry of Finance to negligent, so reckless, to just plug $10 Bn simply because the President told them to? And was the famous Cabinet asleep or too coward to ask any question when it gave the Minister approval to present the Budget with that big, beautiful sum included? Is there now no one, not even the Budget Office that we can trust with managing public money? Is this the resource curse in action? Will anyone listen, let alone answer?

There is precedent of Ali reversing himself on a cash grant. Then we can make something good out of this mess by establishing some proper solution, withdraw the appeal against the Zainul decision and show how much we care for our elderly. The money has already been voted on and is available. It can be put to good and constructive use.