Jul 12, 2018
By Kiana Wilburg
When the oil money comes on stream, there will be an inevitable pressure on the government to spend as quickly as possible on developing the country’s infrastructure. But the International Monetary Fund (IMF) is cautioning against this.
The international financial body contends that strong public investment management becomes even more important once the petroleum revenues start coming in. And given Guyana’s poor history with its Public Sector Investment Programme (PSIP), there will be a need for government to conduct a rigorous assessment of its management processes.
The Fund said, “There should be a thorough assessment of how fast investment could be scaled up without hitting supply bottlenecks and generating inefficiencies. If the public investment management process is weak, the investment will not be translated into better infrastructure, and will not support the diversification of the economy and sustainable economic growth.”
The IMF said that a robust capital budget process takes considerable time. It noted that project concept documents would generally be prepared two to three years before a project can be implemented, and the detailed development process of a capital project will usually take at least one year to complete.
The Fund said therefore, that it should be a high priority for Guyana to start strengthening public investment management processes immediately to be able to complete the project proposals for major investment projects ahead of actual inflow of resource revenues.
Earlier this year, Finance Minister, Winston Jordan, had indicated that he wants to see an improved performance when it comes to the PSIP. He made this known as he revealed that the national performance on the PSIP last year is still far below Government’s expectations and economic needs.
Since the beginning of the year, Jordan said, the Government has worked to accelerate implementation.
He noted that the Government even approached the preparation of Budget 2018 with a significantly sterner disposition, since continuing with the status quo was untenable and unthinkable.
The Finance Minister articulated that during the preparation process, Budget Agencies were mandated to ensure that procurement plans were prepared in support of their 2018 work programmes; bills of quantities and terms of references were prepared in 2017 for 2018.
Procurement processes commenced prior to the New Year. In short, Jordan said that Budget Agencies should be in a state of readiness to implement the PSIP for 2018.
Jordan said that the make-up of the PSIP, in Budget 2018, is one that should allow for a more structured and timely execution within the parameters of scope, time and cost. He said that the Government has conducted a Public Investment Management Assessment (PIMA) and, based on the findings, will be taking further actions to improve the quality of expenditure outlays.
In support of improved capacity of the Central Government, the economist noted that the Government will be piloting a procurement planning training programme in 2018. It is anticipated that key sectors, such as health, education, public infrastructure, public security and agriculture, will be targeted for this capacity building exercise.
The Finance Minister said that officers will be trained on the development of procurement plans, and SPEND analysis, and will benefit from clinical sessions where a specialist will facilitate the development of actual procurement plans. He said that these procurement plans are intended to serve as a benchmark against which performance will be measured and as an early warning mechanism to signal the need for remedial interventions.
The Finance Minister asserted, “In 2018, we will continue to strengthen our procurement systems through several new initiatives. We will be establishing a process for debarment, where the past performance of bidders will be appraised as part of the selection process.
“We will establish a contractor’s register to support this particular initiative. Also, a register of all procurement evaluators will be established to ensure that turnaround times and procedures are monitored and enforced.”
Additionally, the economist expressed that the Government will be updating the procurement legislation, and will begin the groundwork leading to the eventual implementation of an e-Procurement platform. This platform will allow for a more efficient and effective procurement system that has a greater capacity.