The Government of Guyana Financial Plan 2002

The table at the bottom of this page presents a summary of the Government's projected financial plan for 2002.  Some of the 2001 figures, which appeared in the 2001 Estimates, have been restated in the 2002 Estimates without any explanation. The Plan projects a negative current balance of G$2.052Bn after taking interest and current expenditure from current revenue, compared with a negative balance of G$1.942Bn in the 2001 Budget. This is a major turnaround from a budgeted surplus of G$1.393Bn. The principal elements of the 2002 Plan are:

Current revenues are projected to increase to G$43.790.3Bn in 2002 from G$41.426.2Bn in 2001. The Revenue Authority projects an increase of G$3.134Bn or 8.3% over 2001 and now hope to bring in 93% of the total current revenue. In 2001, the Revenue Authority realised decreased revenues of 0.79% over the previous year and fell short of budget by 4.45%. Although collections in 2001 over 2000 of the Internal Revenue Department increased by G$0.719.1Bn or 3.6%, the Customs and Trade collections decreased by G$1.021Bn or 5.6%. The Minister explained that the lost revenue from the Customs and Trade Administration was due to the reduction in international trade from the September 11 aftermath.

Total Current expenditure is projected to increase by 5.23% from G$35.375Bn to G$$37.228Bn in 2002. It is made up of interest expenditure of G$8.615Bn or 19% (2001-18.43%), personal emoluments of G$15.814Bn or 35% (2001- 34%) and other charges of G$21.413Bn or 47% (2001- 48%).  The main allocations of the non-interest expenditure were the Ministry of Finance 14.14%, Ministry of Education 11.21%, Ministry of Home Affairs 9.63%, Guyana Defense Force 7.60% and Ministry of Health 6.29%.

There are several significant projected changes in the allocation of certain expenditure in comparison to the 2001. Major decreases over 2001 include: Office of the Prime Minister (60)%, Elections Commission (36.7%), Ministry of Finance (8.59)% and Ministry of Housing and Water (8.61)%.

Significant projected increases over 2001 include Ministry of Health G$1,213Mn, Ministry of Labour, Human Services and Social Security G$739Mn, Ministry of Education G$606M, Guyana Defense Force G$334Mn, Ministry of Public Works and Communications G$227Mn and Ministry of Home Affairs G$244Mn.

For further details of allocation of non-interest expenses please refer to page 22.

Total interest expenditure is projected to increase by 7.8%% from G$7.993Bn in 2001 to G$8.614Bn in 2002 or approximately 19.67% of current revenue compared with 19.29% in 2001. Interest on domestic and external debts is projected to increase by 5.4% and 11.3% respectively.

Capital revenue is projected at G$9.822Bn (2001-G$5.716Bn) and capital expenditure at G$19.954Bn (2001-G$16.511).  The revenue figure is made up principally of HIPC grants ($6.363Bn) and Project and Programme funds ($3.387Bn).

Capital expenditure of G$19.954Bn represents a 21% increase over 2001. This follows a decrease of 3.6% in 2001 and an increase of 37.9% in 2000. The proposed allocation of the capital expenditure includes Ministry of Public Works and Communications 21%, Ministry of Education 13.93%, Ministry of Finance 23.36%, Ministry of Housing and Water 11.78%, Ministry of Agriculture 4.97%, and Ministry of Local Government & Regional Development 4.86%.

Debt repayment is projected at G$3.021Bn (2001-G$3.064Bn) made up of domestic debt repayments of G$176.6Mn and external debt repayments of G$2.844Bn, representing increase of 75% and decrease of 4% respectively over the previous year. There is an overall deficit of G$15.2Bn compared with a deficit of G$15.8Bn in 2001. It is projected that the deficit will be financed from domestic and external sources of G$3.96Bn and G$11.2Bn respectively.  The overall balance of deficit before grants is projected at G$25.03Bn which is G$3.51Bn more than the deficit of G$21.52Bn in 2001.

During 2002, Domestic and External Debt Service as a percentage of current revenue is projected at 26.6% compared with a revised percentage of 26.7% in 2001 and 38.6% for the preceding year.

Ram and McRaes Comments

It is surprising that the 2001 Budget presented in mid-2001 could be so wide of the mark. Instead of a positive budgeted current balance of G$1.392Bn, the actual results were a negative balance of G$1,942.3Bn. The principal factors contributing to this turnaround were a decrease in current revenue of G$2.592Bn, and an increase of current expenditure of G$1.842Bn. The deficit would have been greater had there not been a lower than budget charge for domestic and external interest repayment of G$1.098 or 12%. 

The composition of projected revenue for 2002 is essentially the same as 2001. Corporation Tax fell slightly in 2001 compared with 2000.

Source: 2002 Estimates of Public Sector




Source: 2002 Estimates of the Public