Guyana’s Oil Economy: Structural Challenges and Policy Responses, 2020–2026

 

GBJ Special Report · The Oil Economy

Guyana’s Oil Economy: Structural Challenges and Policy Responses, 2020–2026

The fastest-growing economy in the world is also one of the slowest-changing

Six years into the boom, the non-oil economy has been rebuilt around publicly financed construction, non-gold exports earn no more than they did in 2016, and the domestic economy now pays for barely a third of its own imports. Ramesh Gampat sets the record of 2020–2026 against the advice the government accepted — and the advice it set aside.

By Ramesh Gampat · October 2026

1. Introduction

Guyana is the fastest-growing economy in the world and one of the slowest-changing. In six years it has gone from one of the poorer economies in the Western Hemisphere to a high-income oil exporter producing roughly 900,000 barrels per day, yet the boom has deepened rather than solved several of its structural weaknesses. ExxonMobil’s Liza Phase 1 project began producing in December 2019 and the first cargoes were sold in early 2020. Since then, output from the Stabroek Block has multiplied through successive floating production vessels, the latest of which, the One Guyana FPSO, started up in August 2025 (World Bank, 2026).

The headline numbers are without precedent. The IMF recorded average real GDP growth of 47 percent a year over 2022–24, the highest in the world (IMF, 2025b). The World Bank estimates growth of 15.4 percent in 2025, overall GDP of about US$26.4 billion and overall GDP per capita above US$31,600 for a population of roughly 0.8 million (World Bank, 2026). Non-oil GDP per capita is only about US$12,600, on the author’s calculation from Bureau of Statistics data. The World Bank classified Guyana as high-income in 2023. According to the Ministry of Finance’s 2026 Mid-Year Report, output averaged about 902,000 barrels per day in the first half of 2026 and the economy grew 33.3 percent. The ministry projects full-year growth of 20.8 percent, with non-oil growth of 10.2 percent. A fifth FPSO, Errea Wittu, is due to start in the last quarter of 2026 and a sixth, Whiptail, in 2027 (Ministry of Finance, 2026b). These are expected to lift capacity to about 1.3 million barrels per day (World Bank, 2026).

These aggregates overstate what Guyanese have gained. Guyana now has a dual economy: a foreign-owned offshore oil enclave and a domestic non-oil economy where most people live and work. Between 2020 and 2026, real oil GDP grew elevenfold, while the non-oil economy grew 1.9 times, averaging about 8.5 percent a year. Per capita income for the whole economy (oil + non-oil) is about 2.5 times per capita income in the non-oil economy (Gampat and Mahabir, 2026). A large share of the headline wealth accrues to the oil consortium, not to Guyanese households.

For this reason, the paper reports macroeconomic ratios against both denominators: overall GDP (oil plus non-oil), which official and IMF sources use, and non-oil GDP. The oil sector is an export enclave with weak links to the rest of the economy, and all government spending takes place in the non-oil economy. Ratios to overall GDP therefore understate the weight of deficits, debt and spending in the economy Guyanese actually live in. In 2025 overall GDP was about 2.6 times non-oil GDP, and in 2024 about 2.9 times. Unless a source reports the non-oil figure directly, the non-oil ratios here are the author’s conversions, using nominal GDP and non-oil GDP at purchaser prices from the Bank of Guyana (2026a, Table 10-I).

Growth of this size is not the same as structural transformation. This paper makes three arguments:

1. Oil has deepened, not solved, Guyana’s structural problems: an enclave economy dominated by one block and one operator; a stagnant non-oil export base; persistent foreign exchange shortages despite balance-of-payments surpluses; weak returns on public spending; and corruption, inequality and ethnic polarization that oil rents intensify.

2. The government’s response has been to spend: it legislated a savings fund, known as the Natural Resource Fund (NRF), and local content rules, then loosened the fund’s withdrawal rules to finance rapidly rising public investment and cash transfers. Laws and spending are inputs. On outcomes such as export diversification, human capital, cheap power and clean procurement, the record is weak.

3. The government has accepted outside advice that supports faster spending and broad distribution. It has modified or rejected advice that would limit spending or executive discretion: on the pace of oil-fund withdrawals, independent oversight, central bank financing of the budget, anti-corruption institutions and the terms of the 2016 production sharing agreement.

Section 2 sets out the structural problems. Section 3 describes the policies the government is implementing and assesses how far they can solve those problems. Section 4 reviews the solutions proposed by researchers and international institutions. Section 5 assesses how far those proposals have been accepted, modified and implemented, and Section 6 concludes.

2. Structural Problems Confronting the Economy

The central structural problem is that Guyana has become dependent on one commodity, one offshore block and one operator faster than its institutions, infrastructure and workforce can adapt, and oil rents are flowing through a state with weak accountability. The problems below are interlinked. Most predate oil, but oil has raised the stakes of each.

2.1 Concentration and exposure to oil prices

All of Guyana’s oil comes from the ExxonMobil-operated Stabroek Block, whose capacity now exceeds 900,000 barrels per day (OilNOW, 2026b). The World Bank calls the extractive sector the dominant source of both growth and fiscal revenue, leaving the country exposed to oil-price shocks (World Bank, 2026).

That exposure became visible in 2025. Production rose, but lower prices meant oil revenue fell slightly from 2024, so the legal ceiling on 2026 withdrawals from the Natural Resource Fund (NRF) dropped to about US$2.37 billion from US$2.46 billion the year before (OilNOW, 2026b). A large share of oil earnings also never stays in Guyana: net foreign direct investment is negative, equal to about 11.5 percent of overall GDP, or about 30 percent of non-oil GDP, in 2025, because the oil companies repatriate their proceeds (World Bank, 2026).

The 2026 oil price shock showed the same exposure in reverse. Brent averaged US$92.5 a barrel in the first half of 2026, 29 percent above a year earlier, after war in the Middle East closed the Strait of Hormuz. Oil made up 92.9 percent of Guyana’s exports in that half-year (Ministry of Finance, 2026b). The windfall benefits the budget, but it also tightens Guyana’s dependence on one commodity: a price fall would now cut deeper.

2.2 The fiscal terms of the 2016 production sharing agreement

The size of Guyana’s share is set by the 2016 Stabroek production sharing agreement (PSA), signed by the previous APNU+AFC government. Its main terms are a 2 percent royalty, a cost-recovery ceiling of 75 percent of output and a 50/50 split of the remaining profit oil (Argus Media, 2022; Department of Public Information, 2025b). The contractor’s taxes are paid on its behalf, there is no ring-fencing of costs between projects, and Article 32 bars the state from imposing new fiscal burdens (Department of Public Information, 2021, 2025b). Without ring-fencing, the costs of each new project can be recovered from the oil of existing ones, which slows the growth of Guyana’s profit oil as the block expands. The current government’s own natural resources minister has called the deal one of the worst ever struck between a government and an oil company (Argus Media, 2022).

The Ministry of Finance’s own account in 2026 shows how these terms work. High prices and rising output accelerated cost recovery, so the consortium’s backlog of unrecovered costs was used up. The government now expects 84 lifts of profit oil in 2026, against the 40 assumed in the budget, and petroleum deposits of US$6.5 billion instead of the US$2.7 billion budgeted. The ministry itself cautions that this will not last: “as additional projects are approved, and their development costs enter the cost bank, the profit-oil ratio will move again” (Ministry of Finance, 2026b). That is the practical consequence of no ring-fencing. Each new project’s costs are recovered from oil already flowing, pushing back the point at which Guyana’s share rises.

2.3 Dutch disease and the non-oil tradable sectors

Whether Guyana has Dutch disease is contested. The World Bank lists overheating and Dutch disease effects among the main downside risks (World Bank, 2026). A 2026 analysis for the University of Geneva’s MEIG programme found no evidence yet that oil has eroded non-oil competitiveness, largely because the oil sector employs few people and has not pulled labor from other sectors; it still warned that an expansionary fiscal stance could change that (MEIG Programme, 2026).

Sector data make the problem clearer. Rice output reached a record of about 1.14 million tonnes of paddy in 2025, but only with a government subsidy for each bag sold to millers (Food and Agriculture Organization of the United Nations, 2025). Rice export earnings were G$49.9 billion in 2025, against G$45.2 billion in 2015, a small nominal rise (Bureau of Statistics, 2026). Sugar, historically the largest rural employer, produced 59,200 tonnes in 2025, short of a target already cut to 60,000 tonnes (Caribbean National Weekly, 2026). That compares with 231,071 tonnes in 2015 (Mustapha, 2025). Section 2.4 shows the same pattern across non-oil exports.

2.4 Stagnant non-oil exports and the foreign exchange paradox

Outside oil, Guyana’s export base has hardly grown. Non-oil exports were between US$2.2 billion and US$2.5 billion in 2025, depending on the source (Bank of Guyana, 2026b, Table 8.2(b); PwC Guyana, 2026), but gold accounted for about US$1.6 billion of that total (Kaieteur News, 2026b). Gold’s value rose with world prices, not output: 484,321 ounces were declared in 2025, well below the more than 700,000 ounces declared in 2016 (Ministry of Natural Resources, 2016). Other traditional exports have shrunk, as can be seen from Table 1.

At the same time, firms and households face recurrent foreign exchange shortages, even though the balance of payments is in surplus and the official rate has been held near G$208.50 per US dollar. Collin Constantine calls this a “paradox of plenty” and traces it mainly to the Bank of Guyana financing government spending. To hold the peg, the central bank absorbs the surplus foreign exchange. Its financing of the budget then adds Guyana-dollar purchasing power, which turns into demand for foreign exchange that the market cannot meet at the official rate. In 2025, the central bank financed about G$196 billion of the government’s G$309 billion financing need, directly or through banks swapping excess reserves for government bonds. Since 2003, monetary financing has tracked the measured foreign exchange shortage with a correlation of 0.89 (Constantine, 2025, 2026). The shortage raises costs for importers and small firms and drives a parallel-market premium. It is a structural result of how the oil boom is being financed.

Figures for the first half of 2026 reinforce both points (Ministry of Finance, 2026b). Non-oil exports rose 24.6 percent to US$1,146 million, but gold provided US$826 million of that, or 72 percent, on a 52.5 percent rise in the gold price to an average of US$4,694 an ounce. World prices for sugar, rice and logs all fell. Although the current account was in large surplus, the overall balance of payments recorded a deficit of US$294 million in the half-year. It was financed by drawing down the Bank of Guyana’s foreign reserves, which stood at US$1,062 million at the end of June. Meanwhile the official rate stayed at G$208.50 to the US dollar while the market mid-rate weakened from G$220.6 to G$223.7. The parallel-market premium is now about 7 percent, a direct measure of the shortage.

The IMF’s 2025 Article IV staff report shows how the pressure built (IMF, 2025c). The gap between the official and (cambio) market rates had been widening since early 2023 and reached almost 4 percent in late 2024; by mid-2026 it was about 7 percent. The Bank of Guyana sold about US$318 million in 2024 to contain it. Gross reserves were just over US$1 billion at end-2024, only 1.9 months of non-oil imports. The IMF projected US$1.57 billion by end-2025, but reserves stood at US$1.06 billion in June 2026. Broad money grew 25.3 percent in 2024, about 7 percentage points faster than nominal non-oil GDP, against the IMF’s advice to keep the two in line. That is consistent with Constantine’s account of budget financing that adds Guyana-dollar purchasing power faster than foreign exchange is released.

2.5 The changing composition of imports and the foreign exchange shortage

The composition of imports supplies a missing piece of the foreign exchange puzzle. Headline import figures are dominated by the oil sector. In 2025, mining capital goods, mainly the One Guyana FPSO and other oil-field equipment, made up 42 percent of all merchandise imports, much as they had in 2019, when the first FPSO arrived (Bank of Guyana, 2026b, Table 8.1(c)). These imports, like the large payments for oil-field construction and other services, are financed offshore by the consortium through foreign direct investment and cost recovery, and they never pass through Guyana’s foreign exchange market. The imports that do are those of the domestic economy. Table 2 separates them by removing mining capital goods and sets them against non-oil exports (US$ million).

Three changes stand out. First, the domestic economy’s import bill has grown far faster than its export earnings. Non-mining imports rose 2.6 times between 2019 and 2025, from US$2.3 billion to US$5.9 billion, and were running at an annual rate of about US$7 billion in the first half of 2026. Non-oil exports rose only 1.5 times, and all of the increase came from the price of gold: other non-oil exports earned US$588 million in 2025, slightly less than in 2019 and no more than the 2016–18 average.

Second, the mix has shifted toward the goods that public investment and transfers buy. Capital goods outside mining grew fivefold, and their share of non-mining imports doubled from 12 to 24 percent, as machinery, vehicles and materials for roads, bridges, housing and other public works poured in. Fuel imports rose 2.6 times, driven by oil-fired power generation, leased power ships and construction (Section 2.8). Consumer goods rose 2.7 times, and imports of motor cars roughly doubled, from US$52 million in 2019 to US$109 million in 2025. The pattern continued in 2026: in the first half, imports of intermediate goods rose 37.8 percent and of consumption goods 21.9 percent (Ministry of Finance, 2026b).

Third, domestic exports now pay for a shrinking share of domestic imports. Non-oil exports covered 82 percent of non-mining imports in 2016–18 and 65 percent in 2019, but only 37 percent in 2025 and 31 percent in the first half of 2026.

This sheds further light on the persistent shortage of foreign exchange. The balance-of-payments surplus is earned almost entirely by the oil enclave, and most of it never reaches the domestic market: profit oil is repatriated, cost oil pays for goods and services bought offshore, and the government’s share is deposited in the NRF abroad. In the first half of 2026, net payments for services and factor income reached US$8.8 billion, of which US$4.7 billion was factor income, chiefly the consortium’s repatriated profits, and US$4.1 billion was mainly oil-field construction and other services; net foreign direct investment was negative by about US$3.0 billion as cost recovery outpaced new investment (Ministry of Finance, 2026b). What the domestic market faces instead is a trade gap that widened from about US$0.8 billion in 2019 to US$3.7 billion in 2025, equal to about 14 percent of overall GDP and about 35 percent of non-oil GDP. That gap must be filled from three main sources: the foreign exchange the government converts from NRF withdrawals (US$2.46 billion in 2025), the oil companies’ local spending on wages and Guyanese suppliers, and remittances and other private inflows. The first, and largest, is released through the Bank of Guyana at a pace the government and the central bank choose. The domestic economy’s access to foreign exchange therefore depends less on what it earns and more on decisions of the state.

The import data reinforce Constantine’s (2025, 2026) explanation rather than replace it. Monetary financing of the budget adds Guyana-dollar demand; the composition of imports shows where that demand goes: into capital goods for public works, fuel and consumer goods. Because the non-oil economy now earns only about a third of the foreign exchange it spends, any growth in Guyana-dollar spending that runs ahead of the central bank’s release of oil dollars appears at once as a queue for foreign exchange and a parallel-market premium. That is why the shortage persisted in the first half of 2026 despite record oil exports: the overall balance of payments was in deficit by US$294 million, reserves fell and the market rate weakened (Section 2.4). The shortage cannot be cured by exhortation or by rationing foreign exchange administratively. It requires public spending, and the way it is financed, to be paced to the foreign exchange the oil sector actually makes available to the domestic economy, together with a non-gold export base that can earn more of its own.

2.6 The changing structure of the non-oil economy

The non-oil economy has grown fast since oil began, but the growth has come mainly from construction, not from tradable production. Measured at constant 2012 prices, non-oil value added grew 2.9 percent a year in 2012–2019 and 7.6 percent a year in 2019–2025, making it 56 percent larger in 2025 than in 2019. Bank of Guyana data show where that growth came from (Figure 1 and Table 3).

Construction alone accounted for 34 percent of non-oil growth between 2019 and 2025. Quarrying, which mainly supplies sand and stone to builders, added another 10 percent. Together their share of non-oil output more than doubled, from 9.4 to 21.8 percent. The traditional staples that once earned Guyana’s foreign exchange moved the other way, falling from 25.4 to 15.9 percent. Real value added in gold fell 24 percent from 2019 to 2025 and 32 percent from its 2016 peak. Sugar’s value added, cane and milling combined, is 73 percent lower than in 2012. Taking agriculture, gold, bauxite and manufacturing together as the tradable sectors, their share of non-oil output fell from 47.5 percent in 2019 to 38.9 percent in 2025. Utilities (0.7 percent) and the FISIM adjustment (−2.8 percent) account for the remainder of growth.

Share of non-oil GDP at constant 2012 basic prices, 2012–2025 (percent)

There are bright spots. “Other manufacturing” more than doubled, growing 14 percent a year since 2019, and livestock output rose 91 percent. Much of the gain in services, however, is in professional, financial and administrative support services, whose growth tracks the oil sector’s demand for local suppliers. Professional services alone tripled. Some of this activity is recorded in non-oil GDP but depends on oil, so “non-oil” growth is less independent of oil than the label suggests.

The pattern fits the spending effect of Dutch disease. Oil revenue spent through the budget raises demand for non-tradables, chiefly construction, while tradable sectors such as gold, sugar and rice lose ground in relative terms. Measured at current prices, the tradable share has held near 37 percent since 2018, because higher gold and food prices offset falling real output. At current prices most of the decline, from 46 to 38 percent, happened between 2012 and 2019, before oil. Either way, the non-oil economy is being reshaped by public construction. It is not becoming a more diversified exporter, and construction growth will slow when the public investment program does.

The IMF’s 2025 view that Guyana “does not yet show clear symptoms” of Dutch disease, which the government’s Executive Director cited as vindication, rests on weak foundations (IMF, 2025c, Annex IV). Its main tests are a broadly stable real effective exchange rate and moderate measured inflation, itself a contested and probably understated figure (Section 2.7). But under a peg defended by central bank intervention, the strain shows up as a parallel-market premium and a foreign exchange shortage, not as nominal appreciation. The IMF’s labor-market evidence ends in 2021, before the bulk of oil spending, and it rates Guyana’s national accounts and price statistics as deficient. Its own annex also concedes the sectoral shift documented above: agriculture’s share of non-oil GDP has declined “despite government’s efforts,” while construction’s share “has steadily increased.” The structural symptom of Dutch disease, resources moving from tradables to non-tradables, is already visible in the national accounts.

The first half of 2026 continued the pattern. The Ministry of Finance attributes non-oil growth of 10.1 percent “principally” to construction, services and mining. Construction grew 24.7 percent and is projected to grow 27.6 percent for the year. Quarrying grew 40 percent, with sand declarations up 61.7 percent. Agriculture, by contrast, contracted 0.5 percent, as heavy rain cut other crops by 6.4 percent, and the ministry warns that El Niño now threatens the second half (Ministry of Finance, 2026b).

Two cautions apply. Constant-price shares depend on 2012 relative prices, and the Bureau of Statistics periodically revises the series. The 2016 jump in gold and the 2020–2021 dip in agriculture also reflect a mining surge and the 2021 floods, not only policy.

2.7 Absorptive capacity, overheating and the cost of living

The deeper risk is that the state spends faster than the economy can absorb. Public investment and transfers have grown so quickly that the overall fiscal deficit reached 7.4 percent of overall GDP in 2024 and 5.8 percent in 2025, equivalent to about 21 and 15 percent of non-oil GDP. Public debt rose to 29.1 percent of overall GDP, about 75 percent of non-oil GDP (World Bank, 2026). Public and publicly guaranteed debt reached US$7.7 billion at end-2025 and is projected at US$10.3 billion by end-2026. By the author’s estimate, that is roughly 85 percent of 2026 non-oil GDP, assuming nominal non-oil growth of about 15 percent (the ministry’s 10.2 percent real growth plus about 4 percent inflation) (Kaieteur News, 2026d).

IMF staff estimates point the same way. Across 2003–2023, each additional 1 percent of non-oil GDP in public investment is associated with about half a percentage point of extra non-oil growth. The estimated effect falls in the oil period, which staff say suggests “absorptive capacity constraints,” although the estimate is not statistically significant (IMF, 2025c, Box 2).

Official inflation figures should be treated with caution. Guyana’s measured inflation rate is heavily contested, and anecdotal evidence on food, rents, building materials and services suggests it is most likely underestimated. The index covers urban areas only and rests on an outdated basket, and the IMF rates Guyana’s price statistics as deficient, calling for updated coverage and a new base year (IMF, 2025c, Annex VIII). On the official measure, inflation is still moderate, at an average of 3.5 percent in 2025, but food prices rose 6.6 percent, which hits poorer households hardest. Prices accelerated in 2026: consumer prices rose 4.4 percent in the first half alone, with food up 6.7 percent, and the Ministry of Finance projects 4.3 percent for the year (Ministry of Finance, 2026b). The World Bank expects inflation to rise to around 5 percent by 2028 as public investment and consumption grow (World Bank, 2026). Construction bottlenecks, rising land and rental prices, and contractor delays are the everyday face of this constraint.

2.8 Energy and infrastructure deficits

Electricity is expensive and unreliable, and it is the binding constraint on manufacturing and agro-processing. President Ali has described the power system as facing a massive problem, with a transmission overhaul costing about US$600 million (OilNOW, 2025). The state utility has relied almost entirely on imported heavy fuel oil since January 2025 and has leased power ships to cover shortfalls, according to Kaieteur News (2026c), an outlet critical of the government.

The Gas-to-Energy plant, meant to cut power costs by half, has slipped again. The Ministry of Finance now expects only the first gas turbine to operate by the end of 2026, with the full combined-cycle plant completed in the first half of 2027 (Ministry of Finance, 2026b). Public enterprise spending rose 53.5 percent in the first half of 2026, driven largely by Guyoil’s fuel costs and GPL’s cost of generating enough power to meet rising demand.

2.9 Human capital and the labor market

Guyana spends heavily on people but gets poor returns. Gampat and Mahabir (2026) summarize this with a “64/80 ratio”: across 18 comparator countries, Guyana’s investment rate in health and education is higher than in 64 percent of them, yet 80 percent achieve better outcomes. Its World Bank Human Capital Index (HCI) of 0.50 means a child born in Guyana will reach only half her potential productivity. That is the lowest score in their nine-country Latin American and Caribbean sub-sample. Harmonised test scores (346) are the third-lowest of the 18 comparators, and the adult survival rate (77 percent) is matched only by Ghana. Adjusted for how much human capital is actually employed, the HCI falls to 0.26, and to 0.21 for women. Women out-perform men in school at every level but have far lower labor force participation (44.8 percent, against 68.2 percent for men) (World Bank, 2026). About 46 percent of 15–24-year-olds are not in employment, education or training.

The spending pattern helps explain these results. Between 2020 and 2026 the health budget rose 3.2-fold and the education budget 3.4-fold, but the overall budget rose 4.6-fold. Health’s share fell from 15.2 to 10.3 percent of the budget, and education’s from 14.4 to 10.7 percent. The authors find that new facilities are built faster than they can be staffed and run, and they argue that showcase construction has crowded out the quality of teaching and care. Oil and gas pay far above other sectors, pulling skilled workers away from the public service and private firms (OilNOW, 2022b). The IOM estimates the economy needs at least 100,000 more skilled workers (as cited in Gampat and Mahabir, 2026).

The government now acknowledges the skills constraint. Its 2026 Mid-Year Report states that “the binding constraint faced is no longer the creation of jobs, but the supply and composition of the skills available to fill them,” and lists labor shortages among the main risks to project delivery. The sector-by-sector manpower studies needed to target training, however, are only “slated for the second half” of 2026, six years into the boom (Ministry of Finance, 2026b).

2.10 Inequality, data gaps and institutional capacity

Poverty has long been concentrated in the hinterland and among Amerindian communities, and over 70 percent of the working-age population lives in rural areas. Yet there is no recent official poverty estimate, so the World Bank says progress on poverty cannot be properly assessed (World Bank, 2026). This matters politically in an ethnically polarized system where each major party draws on a distinct base and distribution is closely watched.

The IMF rates Guyana’s national accounts and price statistics “C”, meaning shortcomings that “somewhat hamper surveillance.” It notes that the last household survey was conducted in 2019 and that progress on technical-assistance recommendations for the statistics has been “slow” (IMF, 2025c, Annex VIII). A new household survey is planned for 2026, but no information is available on its progress.

Institutional capacity to manage a budget that has grown roughly fivefold is the last and perhaps most serious constraint. The 2026 budget of GY$1.558 trillion (about US$7.5 billion) is the largest in Guyana’s history (Moodey, 2026). Procurement oversight, audit capacity and project management have long been criticized (Goolsarran, 2015). The IMF has repeatedly urged stronger monitoring of spending outcomes and oversight of public enterprises (Kaieteur News, 2026d).

Measured against human development, Guyana’s oil income gives a flattering picture. Gampat and Mahabir (2026) compute a Human Development Index (HDI) based on non-oil income only. It lowers Guyana’s 2023 HDI from 0.776 to 0.739, moving it from 89th to about 107th in the world. Under one of their distributional scenarios, adjusting for inequality in income, health and education cuts the HDI to about 0.567, a loss of more than a quarter of potential human development.

2.11 Corruption, elite capture and social discontent

Corruption is a structural feature of Guyana’s political economy, and the oil boom has intensified it. Guyana scored 40 out of 100 on Transparency International’s 2025 Corruption Perceptions Index (84th of 182), and has been at or near the bottom of the Caribbean group for four consecutive years (Goolsarran, 2025, as cited in Gampat and Mahabir, 2026). In June 2024 the US Treasury sanctioned gold exporter Nazar Mohamed, his son Azruddin Mohamed and a former permanent secretary in the Ministry of Home Affairs. It alleged gold-smuggling, more than US$50 million in evaded duties and taxes, and bribery of officials to manipulate procurement (Moodey, 2024). The first systematic study of Guyana’s procurement system finds that its legal framework is adequate on paper but ineffective in practice, because officials are reluctant to report irregularities and accountability mechanisms are weak (Adams, 2025, as cited in Gampat and Mahabir, 2026).

The mechanism is familiar from other resource-rich states. Large rents flowing through a small executive raise the stakes of holding power and fund patronage. In an ethnically divided system, corruption also works as a way of consolidating ethnic constituencies, which makes reform politically costly (Edwards, 2017, as cited in Gampat and Mahabir, 2026). There is no recent official poverty or income-distribution data to measure inequality, but informal evidence suggests rapid growth has widened it. The concentration of activity in Region 4 (around Georgetown) has deepened regional and ethnic grievance. Discontent is visible in politics. In the September 2025 election, the new WIN party, led by the sanctioned Azruddin Mohamed, displaced the established opposition, and Mohamed became Leader of the Opposition (Caribbean Today, 2026).

3. The Government’s Strategy: Policies in Force

The PPP/C government, in office since August 2020 and re-elected in September 2025, has framed its response as using oil revenue now to build a diversified non-oil economy before oil declines. Its program rests on six pillars, all of which are being implemented rather than merely proposed (Section 3.1). Section 3.2 assesses how far they can solve the problems set out in Section 2.

3.1 The six pillars

1. A legislated savings fund: The Natural Resource Fund Act 2021 replaced the 2019 law passed by the previous government, including its withdrawal rule. All oil revenue is deposited in the NRF, and withdrawals are set by a published formula applied to the previous year’s deposits, not to the fund’s total balance. Since a 2024 amendment, the schedule allows the budget to take 100 percent of the first US$1 billion deposited, 95 percent of the second, 90 percent of the third, and progressively less on higher tiers, down to 10 percent above US$5 billion (OilNOW, 2026d). The 2021 Act also created a board of directors to oversee the fund (OilNOW, 2026b), alongside an investment committee and a parliamentary oversight committee.

2. Local content: The Local Content Act 2021, the first such law in the Caribbean, reserves 40 categories of oil-sector goods and services for Guyanese firms and workers, with minimum procurement shares that rise over time. A Local Content Secretariat certifies eligible companies (Department of Public Information, 2025a; OilNOW, 2026a; Sobers, 2026).

3. Better terms for future oil, not renegotiation of Stabroek: The government’s line is to honor the 2016 PSA while improving its administration and setting tougher terms elsewhere (Department of Public Information, 2021). It passed a new Petroleum Activities Act in 2023 to replace the 1986 law and adopted a model PSA for new licenses whose royalty rises from 2 to 10 percent (Bhagwandin, 2024) and which, unlike Stabroek, provides for ring-fencing.

4. Gas-to-Energy infrastructure: The flagship diversification project pipes associated gas from the Liza field to a 300 MW power plant and gas-liquids facility at Wales. The government expects it to cut electricity costs by about half and make manufacturing viable (OilNOW, 2025). A second phase with another 250 MW plant is planned (OilNOW, 2024). Around it sits a large public investment program: roads and bridges, a new Demerara Harbour Bridge, hospitals, housing and a road link to Brazil.

5. Agriculture and food security: President Ali has led the CARICOM drive to cut the region’s food import bill by 25 percent by 2025, and Guyana has invested in new crops, shade houses, drainage and the revival of state sugar estates (Stabroek News, 2024). Agriculture minister Zulfikar Mustapha presented a five-year plan in 2026 intended to return GuySuCo to profitability by 2030 through mechanization and sustained state funding (Guyana Chronicle, 2026c). The Low Carbon Development Strategy 2030 adds a forest dimension, earning carbon-credit revenue for forest protection.

6. Direct transfers and cost-of-living relief: The government has chosen to share oil wealth directly. The 2026 budget, themed Putting People First, restored a GY$100,000 (about US$480) cash grant to every adult aged 18 and over, raised the income tax threshold to GY$140,000 a month and removed net property tax on individuals (EY Guyana, 2026). The “Because We Care” grant rose to GY$60,000 per schoolchild, plus a new transport grant (Guyana Chronicle, 2026b). Further cash grants were promised over the next five years (Guyana Chronicle, 2026a). The budget also created a Guyana Development Bank to lend to small businesses, women and young entrepreneurs (Ministry of Finance, 2026a). Excise tax on fuel has been kept at zero since 2022 to contain transport and food costs.

3.2 How effective are these policies?

The six pillars will make the economy bigger, but most of them will not make it different. Pillars 1 to 5 add physical capacity: power, roads, bridges, land under cultivation, and local firms able to supply the oil sector. That capacity is necessary, but Guyana’s binding constraint is not the quantity of capital. It is the ability to turn spending into capability, and that depends on procurement, maintenance, skills and management, the areas in which the state is weakest (Gampat and Mahabir, 2026; Sections 2.9 to 2.11). The record so far is consistent with this diagnosis. Construction and quarrying supplied 44 percent of non-oil growth in 2019–2025, the share of tradable sectors in non-oil output fell from 47.5 to 38.9 percent (Section 2.6), and non-oil exports other than gold earned no more in 2025 than in 2016–18 (Table 2). The strategy is building the economy’s shell faster than it is building the firms, skills and institutions that would fill it.

Taken one at a time, the pillars are weaker than they look. The NRF rule, loosened in 2024, governs how fast oil money is spent, not how well, and it now sets a ceiling rather than an anchor (Section 5.1). Local content has created a market of about US$743 million a year for Guyanese suppliers, but it sells non-tradable services to the enclave that will shrink when drilling slows, and rigid ownership rules invite front companies (Goldwyn, 2023). Tougher terms for new licenses are sound but will yield little revenue for a decade, because almost all production comes from Stabroek. Gas-to-Energy is the one pillar that could change the structure of the economy, by halving power costs for manufacturing and agro-processing. It is two years late, depends on a US$600 million transmission upgrade, and cheap power alone will not create exporters without skills, finance, standards certification and market access. In agriculture, record rice output rests on a per-bag subsidy, and the revival of GuySuCo has absorbed heavy state funding while sugar output fell to about a quarter of its 2015 level (Section 2.3). That is employment support, worthwhile in itself, but not the creation of a competitive industry.

Pillar 6, direct transfers and tax relief, is not a solution to a structural problem at all. Universal cash grants such as the GY$100,000 paid to every adult relieve a cost-of-living squeeze that the boom itself has created, and they put some oil money in the hands of households who would otherwise see little of it. But they do nothing for productivity, skills or exports. Because they are paid to everyone regardless of need, they are an expensive way to reduce poverty. Because they are discretionary and were enlarged around the 2025 election, they work as instruments of political distribution rather than of development policy (Section 5.4). They also add to the foreign exchange pressure described in Section 2.5: consumer goods imports rose 2.7 times between 2019 and 2025. Gampat (2018) warned against unconditional transfers to all households on these grounds, and Khemraj (2018) set out how conditional designs could tie payments to schooling, health and training (their responses to Thomas’s proposal, and an earlier alternative proposed by Gampat, are summarized in Section 4). The government has adopted neither the conditionality those authors discussed nor the rule-based, taxed design of the Oil-to-Cash model (Moss and Majerowicz, 2013).

More effective policies would shift the emphasis from building to using. They would include: an efficiency and stocktaking study before budgets for health and education grow further, and staffing and equipping the facilities already built (Gampat and Mahabir, 2026); better teaching and technical and vocational training matched to labor demand; independent procurement oversight and an anti-corruption agency that reports to Parliament; a fiscal anchor that paces spending to absorptive capacity and to the foreign exchange actually available to the domestic economy; and an export strategy for non-gold tradables, such as agro-processing and light manufacturing, built around cheap power, logistics and quality standards. Without these, the expanded capacity is likely to be used to build more rather than to produce and export more.

4. Solutions Proposed by Researchers and International Institutions

Outside proposals share the government’s goal of diversification but put far more weight on pacing, saving, efficiency and institutional checks. These proposals fall into seven groups.

1. A fiscal anchor tied to absorptive capacity. The most developed proposal comes from IMF economists Rina Bhattacharya and Do Yeon Park, who set out a medium-term fiscal framework that balances spending on infrastructure and human capital against overheating, loss of competitiveness and the exhaustibility of oil. They compare options including a permanent-income-style rule and an expenditure growth rule (Bhattacharya and Park, 2024). Meredith McIntyre, a former IMF mission chief for Guyana, argues for capping the non-oil overall deficit at the expected NRF transfer and setting a public investment path consistent with absorptive capacity. He also urges Guyana to implement the findings of the IMF’s Public Investment Management Assessment (McIntyre, 2023). The IMF’s 2025 staff report restates the agenda (IMF, 2025c). It calls for a medium-term fiscal framework with an “explicit anchor and an operational target” and a balanced budget by 2031, followed by a narrowing non-oil primary deficit consistent with intergenerational equity. It also recommends regular expenditure reviews and household surveys to test whether spending works, and anchoring investment on the cost of reaching benchmark development outcomes. In 2026 the IMF added that if oil prices stay high, a larger share of the extra revenue should be saved (Kaieteur News, 2026d).

2. Stronger, more independent oversight. The World Bank stresses transparent governance and stronger public financial management, warning that faster NRF withdrawals raise the risk of inefficient spending (World Bank, 2026). The IMF wants closer monitoring of spending outcomes and of state enterprises, continued anti-corruption and anti-money-laundering work, and macroprudential tools for a fast-growing banking system (IMF, 2025a). An Atlantic Council analysis recommends independent professional management of the NRF and international-standard procurement capacity (Goldwyn, 2023). Domestic critics have long pressed for a fully functioning Public Procurement Commission so that Cabinet does not approve major contracts itself (Goolsarran, 2015).

3. Renegotiating or reinterpreting the Stabroek PSA. Opposition parties, civil-society groups and Kaieteur News argue the 2016 contract should be renegotiated, at minimum to ring-fence new projects and raise the royalty, on the grounds that the block is now a proven, low-risk asset (Kaieteur News, 2026e). The counter-argument, made by the government and many investment analysts, is that reopening the contract would damage Guyana’s credibility with future investors (Department of Public Information, 2021).

4. Sharing the windfall through a citizen dividend. Economist Clive Thomas proposed in 2018 that part of oil revenue be paid as a direct transfer of about US$5,000 to every household once production reached scale (Department of Public Information, 2018; OilNOW, 2019). The Center for Global Development’s “Oil-to-Cash” model goes further: a universal, regular dividend set by a public formula and then taxed, so that citizens have a stake in monitoring the state and the state must build a tax system (Moss and Majerowicz, 2013). The idea’s key features are that payments are rule-based and predictable rather than discretionary. The IMF takes a different line: it advised that the 2025 universal transfer to all adults “should target the poor” and be integrated into a medium-term fiscal framework (IMF, 2025c).

5. Diversification built on productivity, not protection. Researchers broadly support cheaper power, agricultural modernization and skills investment as the route to a competitive non-oil economy (OilNOW, 2022a). They add design cautions. The Atlantic Council warns that rigid ownership requirements in local content rules can invite “paper owners” who front for foreign firms (Goldwyn, 2023). The World Bank calls for better poverty and labor data and for policies that raise women’s participation and create jobs outside oil (World Bank, 2026). The IMF has suggested that the exchange rate framework be reassessed over the medium term as the economy transforms (IMF, 2025a).

6. Efficiency before more spending. Ramesh Gampat and Minakshi Mahabir argue that Guyana’s binding problem is converting spending into capability, not the amount spent (Gampat and Mahabir, 2026). Before budgets for health and education grow further, they call for a comprehensive efficiency and stocktaking study of each sector. They also call for a ten-year strategic plan made with the private sector, civil society and the University of Guyana, with time-bound targets. Their other proposals: raise secondary completion and learning quality; expand vocational and technical education calibrated to the labor market, on the Taiwanese and Singaporean models; staff and fund existing health facilities before building more; and remove barriers to women’s employment through childcare and enforced anti-discrimination law. On governance, they propose an anti-corruption agency with security of tenure that reports to Parliament rather than sitting in the Office of the President, stronger horizontal accountability in procurement, and an upgraded, politically insulated Bureau of Statistics alongside an independent policy research institute.

7. End monetary financing of the budget. Constantine’s analysis implies that the foreign exchange shortage is a fiscal-monetary problem, not one of bank hoarding. It would ease if the budget were financed from NRF transfers, external borrowing and genuine domestic saving rather than by the central bank (Constantine, 2025, 2026). The IMF has similarly advised keeping money growth in line with non-oil growth (IMF, 2025a).

Many of these proposals are themselves contested. Clive Thomas’s proposed transfer of about US$5,000 a year to every household, for example, has been criticized by Gampat (2018), Khemraj (2018), and others in Stabroek News. Critics have questioned its production and price assumptions, its affordability, and its effects on work incentives, inflation and political patronage (Wiggins, 2018; Guyana Oil and Gas Energy Chamber, 2019). Gampat (2016) had earlier proposed an alternative: instead of a universal “free money” model, he suggested using the oil resource wealth via a Sovereign Wealth Fund to issue a targeted endowment of US$15,000 for every newly born child. The endowment would be strictly conditional, tied to long-term human development pillars. Questions of the same kind apply to the other contested proposals: renegotiating the Stabroek contract, fiscal rules and a more flexible exchange rate. If the government decides to consider any of these proposals, each should first be examined for its viability and feasibility in Guyana’s circumstances. That assessment should be made by an independent expert panel of appropriately qualified Guyanese, both in Guyana and in the diaspora, together with international organizations such as the Inter-American Development Bank and the United Nations. The panel should publish its findings so that Parliament and the public can weigh the options.

5. Acceptance, modification and implementation

The government has accepted outside advice that supports faster spending and broad distribution. It has modified or rejected advice that would limit spending, constrain the executive or subject it to independent checks. Where proposals were implemented, they were implemented mainly as legislation and expenditure; the outcomes those laws and budgets were meant to deliver have mostly not followed. Table 4 summarizes the record, and the discussion follows.

5.1 The savings fund: adopted, then loosened

The NRF is the clearest case of a solution accepted in form and then hollowed out. The 2019 Act, passed by the previous government (APNU+AFC), was replaced by the 2021 Act and its new withdrawal rule. In 2024 the Fiscal Enactments (Amendment) Act raised the withdrawal ceilings again: each band widened to US$1 billion and the percentages rose. The change also applied retroactively. Parliament had already approved the 2024 withdrawal under the old rule, and the Act automatically raised that approved amount to the new, higher ceiling, US$1.586 billion, without a separate vote (Ministry of Finance, 2024). The World Bank says the 2024 change was made to accelerate withdrawals and public investment, and it warns of inefficient spending, faster inflation and lost non-oil competitiveness (World Bank, 2026).

The effect is large. A government-aligned analyst calculated that on deposits of US$12 billion, the ceiling rises from US$1.6 billion under the 2021 formula to US$4.9 billion under the 2024 one (Guyana Chronicle, 2025). The amendment passed without bipartisan support (Changlee, 2025). In 2025 the government withdrew US$2.463 billion, slightly more than the roughly US$2.445 billion deposited that year. Vice President Jagdeo has defended this on the grounds that spending now yields higher returns than saving (Kaieteur News, 2026a).

Withdrawals rose about fourfold, from US$607 million in 2022 to US$2.463 billion in 2025 (OilNOW, 2026b). The 2026 price windfall shows how the rule works in practice. Petroleum deposits for 2026 are now projected at US$6.5 billion, 137 percent more than budgeted. Because the ceiling is set by the previous year’s deposits, 2026 withdrawals stay at US$2.374 billion, and the fund is projected to end 2026 at US$7.59 billion, up from US$3.25 billion (Ministry of Finance, 2026b). For one year, the rule saves most of the windfall.

The saving is temporary. Applying the 2024 schedule, as tabulated by the IMF, to US$6.5 billion of 2026 deposits gives a 2027 withdrawal ceiling of about US$4.35 billion, roughly two-thirds of the windfall. That is far above the US$2.62 billion the 2026 budget had planned for 2027 (OilNOW, 2026c). Under the original 2021 schedule, the same deposits would have allowed only about US$1.4 billion. The IMF’s own comparison: on US$5 billion of deposits, the 2021 schedule allowed US$1.35 billion and the 2024 schedule allows US$4.2 billion. By its estimate, the higher withdrawals delay a balanced budget from 2028 to 2031 (IMF, 2025c, Box 1). The 2024 amendment therefore roughly triples what a windfall year can release, so a temporary price spike turns into a large permanent step-up in spending a year later. Given the returns on public spending documented in Section 2.9, the case that spending now beats saving has not been demonstrated.

5.2 Fiscal discipline: on paper, not in institutions

The government points to its headline numbers: a fiscal deficit that fell from 7.4 percent of overall GDP in 2024 to 5.8 percent in 2025, and debt below 30 percent of overall GDP. Measured against non-oil GDP, the deficit fell from about 21 to 15 percent and debt stood at about 75 percent (World Bank, 2026; see Table A1). Those ratios are flattered by the size of oil GDP. In absolute terms, public debt rose from US$6.0 billion at end-2024 to US$7.7 billion at end-2025 and is projected at US$10.3 billion by end-2026, even while the NRF was being drawn down to its legal limit. The IMF’s “low risk of debt distress” rating should be read with care. Its standard model scored Guyana’s debt-carrying capacity as “weak,” and staff upgraded the overall rating by “applying judgement” to allow for structural transformation (IMF, 2025c). IMF surveillance is built around macroeconomic ratios. It has little to say about how spending is distributed, how well it is executed, or how far it is captured, which are the problems this paper identifies as structural.

The IMF’s 2025 record of how its earlier advice was handled is telling (IMF, 2025c, Annex VI). In both 2022 and 2023, staff recommended a fiscal responsibility framework with a non-oil primary balance path consistent with the NRF ceilings. Staff record that “recent budgets have not spelled out a medium-term anchor for fiscal policy (beyond the debt limits).” Those debt limits were themselves loosened in early 2024, the same year as the NRF schedule: the statutory ceilings on domestic and on external debt were each raised from 19 to 32 percent of overall GDP. At 2025 values, that is a rise from about 49 to about 82 percent of non-oil GDP for each ceiling, or a combined limit of about 165 percent of non-oil GDP. The authorities told the IMF that the higher withdrawal ceiling was “providing greater room to finance national development priorities.” They agreed in principle to close the deficit by 2031, but did not commit to an anchor or an operational target.

The government has not legislated a fiscal rule, created an independent fiscal council or adopted a non-oil deficit target. The IMF expects the 2026 deficit to widen because of social transfers and electricity subsidies, and it has asked that more of any price windfall be saved. The first half of 2026 bears this out (Ministry of Finance, 2026b). The non-financial public sector ran a deficit of G$108.9 billion. The universal G$100,000 cash grant cost G$42.5 billion in four months. The capital program for the year was revised up from G$779.6 billion to G$829.7 billion. Public debt reached US$8.57 billion by June and is projected at US$10.33 billion by year-end, even as oil revenue is running far ahead of budget. About 84 percent of domestic debt is short-term Treasury bills, yielding around 1 percent and held largely by banks with excess reserves. That pattern is consistent with Constantine’s (2026) finding that the Bank of Guyana financed most of the 2025 financing need, the main source of the foreign exchange shortage. Fiscal discipline measured as a share of overall GDP, inflated by oil, hides both the true weight of the deficit and this monetary channel.

5.3 The oil contract: proposal rejected, alternative adopted

The government has firmly rejected renegotiating the Stabroek PSA. It has said the contract is not up for renegotiation, citing the stability clause and the need to keep investors’ confidence (Department of Public Information, 2021, 2025b). Instead it substituted two partial remedies: the Petroleum Activities Act 2023 and a model PSA with a 10 percent royalty for other blocks (Bhagwandin, 2024). Because nearly all expected production for the next decade comes from Stabroek, these reforms do little for revenue in the medium term. The unresolved question is whether the government will use contract administration, such as audits of recoverable costs, as aggressively as it promised.

5.4 Distribution: the dividend idea, reshaped

Guyana Chronicle, 2026b). The IMF advised in 2025 that the one-off universal transfer “should target the poor.” The authorities replied that they were “open to assessing” social assistance but defended transfers to specific groups and work incentives (IMF, 2025c). The 2026 budget made the universal grant recurring instead. These grants are not governed by a published formula, are not linked to oil revenue and are not taxed, so they lack the accountability features that the Oil-to-Cash model treats as essential (Moss and Majerowicz, 2013). Their timing around the 2025 election has fueled the charge that they are discretionary political tools. The IMF credits recent social transfers with raising disposable income and reducing poverty, but with no household survey since 2019, that claim cannot be tested (IMF, 2025a).

5.5 Diversification: spending without structural change

The diversification agenda has been funded on a large scale, but the structure of the economy has barely changed. Non-oil GDP grew 14.3 percent in 2025 (World Bank, 2026), but much of that growth is construction and services financed by the public investment program, not new tradable activity: construction and quarrying supplied 44 percent of non-oil growth in 2019–2025 (Section 2.6). Non-oil exports remain small, concentrated in gold, and driven by gold prices; sugar, shrimp, timber and raw bauxite earnings have fallen sharply since 2015 (Section 2.4). Local content has delivered about US$743 million in purchases from Guyanese firms in 2024 and US$466 million in the first half of 2026 (Ministry of Finance, 2026b; Offshore Source, 2026), but these are services to the oil enclave, not new exports.

Delivery has lagged most on the project that matters most for competitiveness. The Gas-to-Energy pipeline, built by ExxonMobil, was finished on schedule, but the onshore plant is about two years late; the Ministry of Finance now expects one turbine by the end of 2026 and the full plant only in the first half of 2027 (Ministry of Finance, 2026b), and its full benefit depends on a US$600 million transmission upgrade (OilNOW, 2025). Reuters (2024) reported that the US$1.9 billion project faced legal disputes and cost-overrun risks. Sugar remains far below official targets despite heavy subsidies (Caribbean National Weekly, 2026). On human capital, the government has not adopted the efficiency-first approach Gampat and Mahabir (2026) propose. Budgets keep rising while the shares going to health and education fall, and outcomes remain among the weakest of their comparators.

5.6 Governance and anti-corruption: pledged, not delivered

On governance, the gap between promise and practice is widest. When sworn in for a second term on 7 September 2025, President Ali pledged a dedicated Anti-Corruption Unit, asset declarations by all officials and pursuit of “both the corrupted and the corrupters” (as reported in Stabroek News and cited in Gampat and Mahabir, 2026). As proposed, the unit would sit inside the Office of the President rather than reporting to Parliament with protected tenure, the design that made Botswana’s and Rwanda’s agencies credible. Critics have long argued that Cabinet’s role in approving major contracts undercuts independent procurement oversight (Goolsarran,). The opposition member of the NRF Investment Committee has called its oversight bodies “rubber stamps” (Guyana Chronicle, 2024). Independent anti-corruption institutions, the most consistent recommendation from researchers and international institutions, are the one the government has done least to build.

6. Conclusion and Outlook

Guyana has avoided the most visible symptoms of the resource curse, such as high inflation and a debt crisis, but its quieter symptoms are already present. The economy is a dual one: a foreign-owned oil enclave growing at rocket pace and a domestic economy growing far more slowly. Outside gold, whose value rises and falls with world prices, the non-oil export base has stagnated or shrunk. Foreign exchange is scarce despite balance-of-payments surpluses, because non-oil imports have grown more than twice as fast as non-oil exports and the budget is partly financed by the central bank. Guyana spends more on health and education than most comparable countries but gets weaker results than 80 percent of them (Gampat and Mahabir, 2026). Corruption, elite capture and ethnic and regional inequality, which oil rents make more valuable to capture, cut across all of these problems.

The government’s response has been to legislate and to spend. It created a savings fund, local content rules and a new petroleum law. It then loosened the fund’s withdrawal rules and raised the statutory debt ceilings, both in 2024, to finance record public investment and cash transfers; in 2025 it withdrew slightly more than the fund received. Measured by inputs, much has been implemented. Measured by outcomes such as export diversification, cheaper power, human capital and clean procurement, little has been achieved. The pattern of selection is consistent. Outside advice that supports faster spending and broad distribution has been accepted. Advice that would limit spending or bind the executive has been modified or set aside: saving more, a fiscal council, an end to central bank financing, independent anti-corruption institutions, rule-based rather than discretionary transfers, and reopening the Stabroek contract.

The window for correcting course is open but narrowing. Capacity is set to rise to about 1.3 million barrels per day as a fifth FPSO starts in late 2026 and a sixth in 2027, and the 2026 price windfall could raise the NRF withdrawal ceiling to about US$4.35 billion in 2027, nearly double this year’s (World Bank, 2026; OilNOW, 2026c). As Norway and Botswana showed, institutions must be built before revenue peaks, not after. Four indicators will show whether Guyana is changing direction: whether non-gold non-oil exports grow; whether central bank financing ends and foreign exchange shortages ease; whether health and education outcomes, not just budgets, improve; and whether an anti-corruption agency independent of the executive is created and used. Without these, the oil era is likely to leave Guyana richer on paper but no more diversified, no better governed and more unequal. The oil will run out within a generation; the institutions Guyana builds, or fails to build, while it flows will last far longer.

Annex A. Key ratios against overall and non-oil GDP

In 2025 overall GDP was about 2.6 times non-oil GDP, and in 2024 about 2.9 times. Ratios expressed against overall GDP therefore make deficits, debt and other flows look about two-thirds smaller than they are relative to the non-oil economy, where all government spending takes place.

Disclosure: The author used AI tools to assist with research and language editing. The author is responsible for all content and interpretations.

Endnotes

1. Juan Pablo Pérez Alfonzo (1903–1979) was Venezuela’s minister of mines and hydrocarbons and, in 1960, a founder of the Organization of the Petroleum Exporting Countries (OPEC). He gave this warning in the 1970s, when soaring oil prices were flooding Venezuela with revenue, and he called oil “the devil’s excrement” for the waste, corruption and debt he saw it bringing (Useem, 2003). His prediction proved largely correct. Venezuela’s oil wealth financed decades of spending that left it with a narrow economy, weak institutions and, eventually, economic collapse, a trajectory that became the textbook case of the “paradox of plenty” (Karl, 1997). The quotation is used here for three reasons. Venezuela is Guyana’s neighbour and still claims about two-thirds of its territory. The warning was given at the height of a boom, the stage Guyana has now reached. And the mechanisms Pérez Alfonzo feared are those this paper documents. The paper does not predict that Guyana will follow Venezuela; it asks whether Guyana is building the institutions that Venezuela did not.

References

Argus Media. (2022). Guyana seeks bigger take from new oil contracts. Argus Media, July 2. [https://www.argusmedia.com/en/news-and-insights/latest-market-news/2299461-guyana-seeks-bigger-take-from-new-oil-contracts. Accessed on June 12, 2026].

Bank of Guyana. (2021). Annual Report 2020 (Statistical annex, Table 10-II). Bank of Guyana.

Bank of Guyana. (2026a). Annual Report 2025 (Statistical annex, Tables 10-I and 10-II). Bank of Guyana.

Bank of Guyana. (2026b). Half-year Report 2026 (Statistical annex, Tables 8.1(a), 8.1(c), 8.2(b), and 10.2). Bank of Guyana.

Bhagwandin, J. (2024). New production sharing agreement models will apply in nine new blocks once proven commercially viable [Letter to the editor]. Stabroek News, July 9. [https://www.stabroeknews.com/2024/07/09/opinion/letters/new-production-sharing-agreement-models-will-apply-in-nine-new-blocks-once-proven-commercially-viable/. Accessed on June 14, 2026].

Bhattacharya, R., & Park, D. Y. (2024). A suggested medium-term fiscal framework for Guyana (IMF Working Paper No. 24/151). International Monetary Fund.

Bureau of Statistics, Guyana. (2026). Exports of selected commodities by value, Guyana: Annual, 1990 to 2025. Bureau of Statistics. [https://statisticsguyana.gov.gy/?p=6219. Accessed on July 13, 2026].

Caribbean National Weekly. (2026). Guyana President Ali warns sugar estates will face changes if targets are missed. Caribbean National Weekly, January 11. [https://www.caribbeannationalweekly.com/news/guyana-president-ali-warns-sugar-estates-will-face-changes-if-targets-are-missed. Accessed on July 17, 2026].

Caribbean Today. (2026). WIN leader elected unopposed as Opposition Leader in Guyana. Caribbean Today, January 28. [https://caribbeantoday.com/sections/politics/win-leader-elected-unopposed-as-opposition-leader-in-guyana. Accessed on July 16, 2026].

Changlee, J. (2025). The Fiscal Enactments (Amendment) Act 2024 allows for the aggressive depletion of the NRF [Letter to the editor]. Kaieteur News, January 31. [ https://kaieteurnewsonline.com/2025/01/31/the-fiscal-enactments-amendment-act-2024-allows-for-the-aggressive-depletion-of-the-nrf/. Accessed on July 14, 2026].

Constantine, C. M. (2025). Accounting for the paradox of plenty: Foreign exchange shortages amid BoP surpluses [Preprint]. University of Cambridge. [https://www.researchgate.net/publication/396449514. Accessed on February 14, 2026].

Constantine, C. M. (2026, July). Forex shortages in Guyana: The paradox of plenty [Non-technical brief]. Macro-Finance Intelligence.

Department of Public Information. (2018). Cash transfer proposal to be discussed following recommendations from Department of Energy. Department of Public Information, September 7. [https://dpi.gov.gy/cash-transfer-proposal-to-be-discussed-following-recommendations-from-department-of-energy/. Accessed on February 16, 2026].

Department of Public Information. (2021). Stabroek block oil contract not up for renegotiation. Government of Guyana, November. [https://dpi.gov.gy/stabroek-block-oil-contract-not-up-for-renegotiation/. Accessed on March 16, 2026].

Department of Public Information. (2025a). President Ali to review PSC’s proposed amendments to Local Content Act. Government of Guyana, January 30. [https://dpi.gov.gy/president-ali-to-review-pscs-proposed-amendments-to-local-content-act/. Accessed on March 16, 2026].

Department of Public Information. (2025b). VP Jagdeo exposes attempts to rewrite history of 2016 oil agreement. Government of Guyana, June 5. [https://dpi.gov.gy/vp-jagdeo-exposes-attempts-to-rewrite-history-of-2016-oil-agreement/. Accessed on March 16, 2026].

EY Guyana. (2026). Tax alert: Guyana budget 2026. Ernst & Young, January 27. [https://www.ey.com/content/dam/ey-unified-site/ey-com/en-gy/documents/ey-gy-budget-summary-2026-20260127.pdf. Accessed on October 16, 2026].

Food and Agriculture Organization of the United Nations, Global Information and Early Warning System. (2025). Country brief: Guyana. FAO, October 30. [https://cb.apps.fao.org/country.jsp?code=GUY. Accessed on June 15, 2026].

Gampat, R. (2016). A sovereign wealth fund could be used to invest in Guyanese [Letter to the editor]. Stabroek News, January 10. [https://www.stabroeknews.com/2016/01/10/opinion/letters/sovereign-wealth-fund-used-invest-guyanese/. Accessed on October 23, 2026].

Gampat, R. (2018). Unconditional cash transfer to all households is unsound economic advice [Letter to the editor]. Stabroek News, August 10. [https://www.stabroeknews.com/2018/08/10/opinion/letters/unconditional-cash-transfer-to-all-households-is-unsound-economic-advice/. Accessed on August 10, 2026].

Gampat, R., & Mahabir, M. (2026). Guyana’s human capital paradox: Investing more, returning less. Xlibris.

Goldwyn, D. L. (2023). Six steps Guyana can take to avoid the resource curse. Atlantic Council EnergySource, November 16. [https://www.atlanticcouncil.org/blogs/energysource/six-steps-guyana-can-take-to-avoid-the-resource-curse/. Accessed on October 15, 2026].

Goolsarran, A. (2015). Public financial management post 5/11: An action plan for improvement (Part II). Stabroek News, April 13. [https://www.stabroeknews.com/2015/04/13/features/accountability-watch/public-financial-management-post-511-an-action-plan-for-improvement-part-ii/. Accessed on January 17, 2026].

Guyana Chronicle. (2024). Jagdeo dispels Campbell’s NRF criticism, claims. Guyana Chronicle, December 13. [https://guyanachronicle.com/2024/12/13/jagdeo-dispels-campbells-nrf-criticism-claims/. Accessed on March 15, 2026].

Guyana Chronicle. (2025). Amended NRF withdrawal formula ensures effective rate of withdrawal kept under 80 per cent. Guyana Chronicle, February 2. [https://guyanachronicle.com/2025/02/02/amended-nrf-withdrawal-formula-ensures-effective-rate-of-withdrawal-kept-under-80-per-cent/. Accessed on January 17, 2026].

Guyana Chronicle. (2026a). Monday is Budget Day. Guyana Chronicle, January 20. [https://guyanachronicle.com/2026/01/20/monday-is-budget-day-4/. Accessed on January 25, 2026].

Guyana Chronicle. (2026b). Budget 2026 charts course for diversified growth, wider prosperity. Guyana Chronicle, January 27. [https://guyanachronicle.com/2026/01/27/budget-2026-charts-course-for-diversified-growth-wider-prosperity/. Accessed on July 17, 2026].

Guyana Chronicle. (2026c). ‘GuySuCo will return to profitability’. Guyana Chronicle, February 3. [https://guyanachronicle.com/2026/02/03/guysuco-will-return-to-profitability/. Accessed on October 17, 2026].

Guyana Oil and Gas Energy Chamber. (2019). Stabroek’s promise, part II: Cash transfers of $5,000 (US) to each Guyanese household by 2025 are illusory and without factual foundation, October 21. [https://guyanaogec.net/index.php/2019/10/21/stabroeks-promise-part-ii-cash-transfers-of-5000-us-to-each-guyanese-household-by-2025-are-illusory-and-without-factual-foundation-and-would-constitute-a-non-refundable-round-trip-tick/. Accessed on October 16, 2026].

International Monetary Fund. (2025a). Guyana: Staff concluding statement of the 2025 Article IV mission, March 7. [https://www.imf.org/en/News/Articles/2025/03/07/cs-030725-guyana-staff-concluding-statement-of-2025-aiv-mission. Accessed on October 16, 2026].

International Monetary Fund. (2025b). IMF Executive Board concludes 2025 Article IV consultation with Guyana, May 7. (Press Release No. 25/132). [https://www.imf.org/en/News/Articles/2025/05/07/pr-25132-guyana-imf-executive-board-concludes-2025-article-iv-consultation. Accessed on October 16, 2026].

International Monetary Fund. (2025c). Guyana: 2025 Article IV consultation—Press release; staff report; and statement by the Executive Director for Guyana (IMF Country Report No. 25/103).

Kaieteur News. (2026a). Govt. empties nearly all of 2025 earnings from oil fund. Kaieteur News, January 28. [https://kaieteurnewsonline.com/2026/01/28/govt-empties-nearly-all-of-2025-earnings-from-oil-fund/. Accessed on August 16, 2026].

Kaieteur News. (2026b). Gold export hit US$1.6B, bauxite reaches US$144.1M in 2025. Kaieteur News, February 2. [https://kaieteurnewsonline.com/2026/02/02/gold-export-hit-us1-6b-bauxite-reaches-us144-1m-in-2025/. Accessed on August 16, 2026].

Kaieteur News. (2026c). Two-year delay of Wales gas project costing Guyana $884M more. Kaieteur News, May 28. [https://kaieteurnewsonline.com/2026/05/28/two-year-delay-of-wales-gas-project-costing-guyana-884m-more/. Accessed on August 16, 2026].

Kaieteur News. (2026d). IMF praises govt’s prudent borrowing strategy. Kaieteur News, August 4. [https://kaieteurnewsonline.com/2026/08/04/imf-praises-govts-prudent-borrowing-strategy/. Accessed on October 16, 2026].

Kaieteur News. (2026e). Guyana and ExxonMobil going forward [Editorial]. Kaieteur News, August 26. [https://kaieteurnewsonline.com/2026/08/26/guyana-and-exxonmobil-going-forward/. Accessed on October 16, 2026].

Karl, T. L. (1997). The paradox of plenty: Oil booms and petro-states. University of California Press.

Khemraj, T. (2018). Some nuances of conditional cash transfers. Stabroek News, August 12. [https://www.stabroeknews.com/2018/08/12/sunday/business-page/some-nuances-of-conditional-cash-transfers/. Accessed on January 16, 2026].

McIntyre, M. A. (2023). Guyana’s challenge: Avoiding ‘Dutch disease’. OilNOW, March 10. [https://oilnow.gy/featured/guyanas-challenge-avoiding-dutch-disease/. Accessed on January 16, 2026].

MEIG Programme. (2026). Highlight 16/2026: To what extent has oil production affected the performance and competitiveness of Guyana’s non-oil sector? University of Geneva, May 25. [https://www.meig.ch/highlight-16-2026-to-what-extent-has-oil-production-affected-the-performance-and-competitiveness-of-guyanas-non-oil-sector/. Accessed on October 16, 2026].

Ministry of Finance. (2024). Second notification in 2024 made to Parliament for petroleum revenues paid into the NRF. Government of Guyana, May 9. [https://www.guyana-hc-south-africa.co.za/2024/05/09/second-notification-in-2024-made-to-parliament-for-petroleum-revenues-paid-into-the-nrf/. Accessed on August 16, 2026].

Ministry of Finance. (2026a). Budget 2026 at a glance. Government of Guyana, January 26. [https://finance.gov.gy/wp-content/uploads/2026/01/Budget_at_a_Glance_2026.pdf. Accessed on October 16, 2026].

Ministry of Finance. (2026b). Mid-year report 2026. Government of Guyana, August 28. [https://finance.gov.gy/mid-year-reports/. Accessed on October 16, 2026].

Ministry of Natural Resources. (2016). Gold declarations for 2016 surpass 700,000 ounces. Government of Guyana, December 31. [https://mnr.gov.gy/2016/12/31/gold-declarations-for-2016-surpass-700000-ounces/. Accessed on October 16, 2026].

Moodey, N. (2024). Guyanese government official, businessmen sanctioned by US. Colibri Advisory, June 24. [https://colibriadvisory.com/guyanese-government-official-businessmen-sanctioned-by-us/. Accessed on March 16, 2026].

Moodey, N. (2026). Massive US$7.4bn national budget tabled in Guyana. Colibri Advisory, February 23. [https://colibriadvisory.com/massive-us7-4bn-national-budget-tabled-in-guyana/. Accessed on October 16, 2026].

Moss, T., & Majerowicz, S. (2013). Oil-to-cash won’t work here! Ten common objections (Policy Paper No. 24). Center for Global Development. [https://www.cgdev.org/node/3120481. Accessed on February 16, 2026].

Mustapha, Z. (2025). Budget 2025 is forward-thinking, provides a strategic direction for Guyana. Ministry of Agriculture, January 28. [https://agriculture.gov.gy/2025/01/28/budget-2025-is-forward-thinking-provides-a-strategic-direction-for-guyana-min-mustapha/. Accessed on October 16, 2026].

Offshore Source. (2026). Guyana’s Local Content Act: What’s next in 2026. Offshore Source, January 15. [https://offshoresource.com/news/finance/guyanas-local-content-act-whats-next-in-2026/. Accessed on October 16, 2026].

OilNOW. (2019). PPP in favour of ‘targeted cash transfers’ from oil revenue. OilNOW, October 3. [https://oilnow.gy/featured/ppp-in-favour-of-targeted-cash-transfers-from-oil-revenue/. Accessed on October 16, 2026].

OilNOW. (2022a). Guyana: Gas-to-Energy implications. OilNOW, June 11. [https://oilnow.gy/featured/guyana-gas-to-energy-implications/. Accessed on October 16, 2026].

OilNOW. (2022b). Guyana guarding against Dutch disease impacts on non-oil labour market. OilNOW, September 10. [https://oilnow.gy/featured/guyana-guarding-against-dutch-disease-impacts-on-non-oil-labour-market/. Accessed on October 16, 2026].

OilNOW. (2024). Phase 2 of Gas-to-Energy project can be done in two years – Jagdeo. OilNOW, September 29. [https://oilnow.gy/featured/phase-2-of-gas-to-energy-project-can-be-done-in-two-years-jagdeo/. Accessed on October 16, 2026].

OilNOW. (2025). Ali signals last quarter 2026 as expected completion date for Gas-to-Energy project. OilNOW, December 31. [https://oilnow.gy/featured/ali-signals-last-quarter-2026-as-expected-completion-date-for-gas-to-energy-project/. Accessed on October 16, 2026].

OilNOW. (2026a). Data review guides next phase of local content expansion, Director says. OilNOW, January 4. [https://oilnow.gy/featured/data-review-guides-next-phase-of-local-content-expansion-director-says. Accessed on October 16, 2026].

OilNOW. (2026b). Guyana gov’t can withdraw US$2.37 billion from oil fund to support 2026 budget. OilNOW. [https://oilnow.gy/featured/guyana-govt-can-withdraw-us2-37-billion-from-oil-fund-to-support-2026-budget/. Accessed on October 16, 2026].

OilNOW. (2026c). Guyana plans to raise annual withdrawals from oil fund to US$4.3 billion by 2029. OilNOW. [https://oilnow.gy/featured/guyana-plans-to-raise-annual-withdrawals-from-oil-fund-to-us4-3-billion-by-2029/. Accessed on October 16, 2026].

OilNOW. (2026d). How Guyana’s Natural Resource Fund withdrawal rule works. OilNOW. [https://oilnow.gy/featured/how-guyanas-natural-resource-fund-withdrawal-rule-works/. Accessed on October 16, 2026].

PwC Guyana. (2026). Guyana national budget insights 2026. PricewaterhouseCoopers, January. [https://www.pwc.com/gy/en/library/pdf/guyana-national-budget-insights-2026.pdf. Accessed on October 16, 2026].

Reuters. (2024). Guyana gas-to-power project to shave weeks off oil output, hit revenue. Oil & Gas 360, April 8. [https://www.oilandgas360.com/guyana-gas-to-power-project-to-shave-weeks-off-oil-output-hit-revenue/. Accessed on September 16, 2026].

Sobers, T. (2026). Cabinet review next step for Guyana’s expanded local content list covering 20+ new areas. OilNOW, January 17. [https://oilnow.gy/news/cabinet-review-next-step-for-guyanas-expanded-local-content-list-covering-20-new-areas/. Accessed on September 16, 2026].

Stabroek News. (2024). Ali plugs GuySuCo crop expansion plans. Stabroek News, April 6. [https://www.stabroeknews.com/2024/04/06/news/guyana/ali-plugs-guysuco-crop-expansion-plans/. Accessed on October 16, 2026].

Useem, J. (2003). The devil’s excrement. Fortune, February 3. [https://money.cnn.com/magazines/fortune/fortune_archive/2003/02/03/336434/. Accessed on October 22, 2026].

Wiggins, D. (2018). Cash transfers as a poverty alleviating mechanism can work with carefully crafted conditions [Letter to the editor]. Stabroek News, August 14. [https://www.stabroeknews.com/2018/08/14/opinion/letters/cash-transfers-as-a-poverty-alleviating-mechanism-can-work-with-carefully-crafted-conditions/. Accessed on October 16, 2026].

World Bank. (2026). Macro poverty outlook: Guyana. World Bank Group, April. [https://thedocs.worldbank.org/en/doc/e408a7e21ba62d843bdd90dc37e61b57-0500032021/related/mpo-guy.pdf. Accessed on October 16, 2026].

---

---

With Thanks to Our Sponsors

Individual supporters: Courtney Noel | All Te Networks | Corine Locke | Tony Harris | Roderick Alsopp | Dr. Michelle Luard | Clarence Bone

🇬🇾 Support the Guyana Business Journal