Former Auditor General issues warning about Guyana's growing external debt

Former Auditor General Anand Goolsarran has issued a warning to the government over its accumulation of public debts from loans. He particularity flagged two recent loans taken by the government from China.

Goolsarran explained in his Stabroek News column today that the country’s external debt was just over US$1.3 Billion.

He pointed out that the Exim Bank of China accounted for six loans which totals more than US$240.4 Million, representing a 17.5 of the external loan portfolio.

“Last week the authorities announced the signing of two loan agrrements with China in the sums of US$192 million and US$172 million for the East Coast road expansion and the construction of the new Demerara Harbour Bridge respectively. With these two loans, Guyana’s indebtedness to China is set to overtake 20 percent incurred by Sri Lanka which is currently in a state of severe economic crisis,” the Former AG observe.

Mr. Goolsarran posited that while Guyana’s medium-term economic prospects appear favorable due to anticipated oil revenues, the government should still exercise restraint in government spending, given the volatility in oil prices and other factors such as the current Russia/ Ukraine conflict, the climate crisis and other issues.

“Considering this, the government needs to intensify efforts aimed at ensuring that the economy is sufficiently diversified. After all, in the Guyanese context, it is the performance of the non-oil economy that makes the real difference in the lives of the ordinary citizens,” Mr. Goolsarran explained.

The Former AG said Guyana can learn from the experiences of other countries when it comes to borrowing and diversifying its economy in order to avoid terrible economic impacts which affected those countries.