Spending analysis
Introduction
Based on the Government’s priorities as set out in its Policies and Targets, the Cabinet, which recommends the Estimates, seeks the approval of the National Assembly to allocate the funds. As the pie chart above shows, Budget Agencies spend including Ministries and Departments, Constitutional Bodies, Regions and through divisions and subsidies made through various Ministries. Certain expenditure is automatic and does not require parliamentary approval: as the Constitution states, these are direct payments although in many cases the actual amount is often a matter of some negotiation. In this section, we look mainly at the allocations to the main Budget Agencies by examining the details in Volume 1 of the National Estimates.
In order of expenditure, the top five Budget Agencies are the Ministry of Health, the Ministry of Finance, the Ministry of Home Affairs, the Ministry of Education, the Guyana Defense Force and then the Ministry of Agriculture.
Ministry of Health
The Ministry of Health has eight programs for which spending of $ 33,797 million is allocated. The largest single Program is Regional and Clinical Services expected to spend $ 21,030 million. The two largest items of expenditure are salaries and salaries of $ 5,604 billion and subsidies and contributions to local organizations totaling $ 11,810 million, primarily to the Georgetown Public Hospital Corporation. This Ministry will employ 4,257 people of whom less than 20% are contract workers.
Ministry of Human Services and Social Security
The Ministry has three Programs budgeted to cost $ 26,218 million. Of the three Programs, Program 392 Social Services appropriates $ 25,067 million of the total budget. Under this Program, Elderly Pensions and Social Assistance make up the largest item of expenditure of $ 23,590 million or 94% of the apportioned amount.
Ministry of Finance
The two programs under the Ministry of Finance are Policies and Policy Services and Public Financial Administration and Management for $ 21,061 million and $ 12,203 million respectively. The two largest items of policy and Administration expenditure are Other Employment Costs and Subsidies and Contributions to a Local Organization. The main recipient of the Ministry of Finance subsidy remains the Guyana Finance Authority which is slated to receive 84.4% of the Ministry’s subsidy budget. Under Program 32, the main expenditure is pension and statutory gratuities of $ 5,774 million and provision for pension increases of $ 4,362 million.
Ministry of Home Affairs
The Ministry of Home Affairs has six Programs, budgeted to cost $ 20,321million. Of this amount, Guyana Police accounts for 71% or $ 14.385 million, of which salaries and salaries account for 52%. Of the balance, Overhead Expenses account for $ 2,923 million and Transport, Travel and Postage account for $ 1,983 million.
Ministry of Education
The allocation for the Ministry of Education is $ 19,789 million across six programs including one each for Nursery, Primary, Secondary and Post-secondary education. $ 5,347 million is allocated to Secondary Education while $ 4,834 and $ 4,592 million are allocated to Post-Secondary and Primary education.
Ministry of Agriculture
A total of $ 11,313 million is allocated to the Ministry of Agriculture across four programs, the largest of which is Agriculture and Development and Support Services with $ 9,677 million or 86% of the total allocation. Out of this, the National Drainage and Irrigation Authority (NDIA) receives $ 6,615 million and the National Agricultural Research Institute receives $ 1,218 million.
Ram & McRae comments
Our understanding of the law is that it provides that payment of the Elderly Pension is means tested. If this payment were targeted, legitimate recipients could see their payment increase significantly.
Capital Expenditure
Central Government capital expenditure for the year is budgeted at $ 103.2 billion or 27% of total budget expenditure. The allocation is 35.6% higher than the latest 2020 estimate and 55.8% higher than the 2019 capital expenditure.
The top five allocations of the Capital Budget are discussed below.
Ministry of Public Works
Under Public Works there are six major road projects. An amount of $ 1.06 billion is budgeted for the design and construction of a road link between East Coast and East Bank. For the completion, construction, and restoration of roads and drains in Regions 1, 2, 4, and 6-10, a sum of $ 1.1 billion is budgeted. Completion, construction and restoration of sea and river defenses and budget retention have a $ 3 billion budget. For the construction of a ferry ship and the restoration of stellings at Kumaka, Morawhanna and Port Kaituma, a sum of $ 1.2Billion is allocated. The CJIA Modernization Project is allowed a $ 2.5 billion budget for two boarding bridges, two fixed links and facility completion.
Ministry of Finance
The Ministry of Finance is budgeted to receive $ 11,677 million across two Programs, under Program Policy and Administration 31, $ 11,586 million or 99% of the total is allocated. The two largest allocations under this Program are $ 8,085 million or 70% toward the Low Carbon Program Development Program. The project also includes renewable energy interventions and $ 1,300 million to the Guyana Finance Authority (GRA) for revenue management system, buildings, software, vehicles, furniture and equipment.
Ministry of Housing and Water
A total of $ 8,918 million is allocated to the Ministry of Housing and Water.
Ministry of Agriculture
A budget of $ 8,177 million is allocated. Under which 7,374 million or 90% is allocated to Program 212 Agriculture Development and Support In this Program, $ 3,250 million is allocated for the completion, construction, and restoration of drainage and irrigation structures and pump stations. Also covered by the agricultural development and support services is a $ 432 million provision for the development of rural agricultural infrastructure. GUYSUCO’s contribution of $ 2 billion is $ 5 billion lower than the latest 2020 estimate of $ 7 billion. In addition, an amount of $ 832 Million to the Integrated Agriculture Development Program for enterprise development and agriculture initiatives.
Office of the Prime Minister
The Office of the Prime Minister is allocated $ 5,690 million, of which $ 4,934 million or 87% is apportioned to Power Generation Program 23. Under this program, $ 1,800 million is spent on strengthening and upgrading institutional electrification systems.
Ministry of Education
The Ministry of Education is budgeted to receive $ 5,456 million. Policy Development and Administration, Secondary Education and Post-Secondary / Tertiary Education are the three largest programs allocated $ 1,650, 1,293 and $ 1,285 million respectively or 77%.
Ministry of Health
The Ministry of Health has eight programs for which expenditure of 5,291 million is allocated. The two largest Programs are Disease Control – Communicable Disease of $ 2,128 million and Regional and Clinical Services of $ 1,878 million. Under the ‘Disease Control – Communicable Disease’ program, $ 1,750 million is being allocated towards the project called ‘COVID-19 Response Program’, for reducing the transmission of the disease and adverse effects on citizens. Major project allocations under the ‘Regional and Clinical Services’ Program would include the Ministry of Health – Buildings, GPHC, Equipment – Medical and Primary Healthcare System Modernization of $ 370, $ 600, $ 450 and $ 350 million in the respectively.
Other Capital Expenditure worth noting include:
– Ministry of Local Government and Regional Development of $ 2,680 million, of which $ 2,519 million or 93% is allocated to Local Government Development;
– $ 1,577 million Ministry of Amerindian Affairs, of which $ 1,543 million or 97% is allocated to Community Development and Empowerment;
– $ 920 million Ministry of Tourism, Industry and Commerce, of which $ 883 million or 96% is allocated to Business Development, Support and Promotion;
– $ 3,307 million Ministry of Human Services and Social Security, of which $ 3,171 million or 95% is allocated to Policy Development and Administration;
– Ministry of Home Affairs of $ 4,093, of which $ 2,273 56% is allocated to the Guyana Prison Service.
A breakdown of expenditure per head using the 2012 Census as a basis is as follows:
Source: Budget Estimates, Volume 1, Table 5 and Census, Office of Statistics.
The region with the highest capital expenditure is understandably Region 4 accounting for approximately 42% of the population.
While Region No. 4 appears to receive the lowest direct allocation per capita, agencies such as the Georgetown Public Hospital Corporation (GPHC) are located in this region and receive allocations outside the regional administration. The GPHC is slated to receive $ 11.8 billion, a 10% increase over the 2020 review figure of $ 10.7 billion.