The government’s efforts to lift the debt ceiling so that more money could be borrowed to fund local projects and initiatives sparked a lively and occasionally tense debate among lawmakers on Thursday.
And after lengthy discussion, the National Assembly approved a motion authorizing the government to increase the ceilings on internal and external borrowing from $650 billion to 900 billion and $500 billion, respectively.
The debt ceiling, to put it simply, is the most money that the government is permitted to borrow. The government will be able to borrow up to $750 billion and $900 billion more if these ideas are accepted.
And Finance Minister Dr. Ashni Singh, who tabled the motion on behalf of the government, defended this move amid criticisms from the parliamentary opposition that the state appeared to be borrowing more than it could repay.
“The proposed adjustments to the debt ceiling keep Guyana firmly within the boundary of good debt management… (and) we will still remain the country with the lowest debt to GDP ratio,” Dr. Singh said.
The debt to Gross Domestic Product (GDP) ratio indicates how much a country owes (that is, its debt) against how much it produces to pay off those debts since GDP reflects the value of all goods and services produced by a country over a specified period.
Though the country will be borrowing more money, Dr. Singh pointed out that Guyana’s “rapid economic growth” over the past few years coupled with high growth projects for the years ahead will enable the country to adequately manage its debt.
So he refuted concerns that increasing the debt ceiling would augur badly for Guyana.
“There isn’t a prosperous country in the world without the incurrence of debt… we shouldn’t stigmatize debt.
“There is nothing wrong with responsible borrowing within your capacity to withstand your debt,” Dr. Singh said.
Opposition Parliamentarians were still wary of borrowing more and Guyana’s ability to satisfy those debts.
MP Juretha Fernandes contended that volatile commodity prices may result in lower levels of economic growth in the coming years.
“Our growing debt burden will limit the government’s ability to invest in crucial public services such as healthcare and education.
“… and in the future, with any negative fluctuations in the oil prices, it will be even worse,” Fernandes posited.
Her opposition colleague, Ganesh Mahipaul believed that the government should clearly define all the large projects it intends to invest in before hiking the ceiling.
Still, Government Parliamentarians defended the move as a necessary one given that investments are needed to stimulate economic growth locally.
