By Antonio Dey | HGP Nightly News |
APNU Parliamentary Leader and finance expert, Dr. Terrence Campbell, has issued a stern warning to the government regarding Guyana’s rapidly accelerating external debt. Delivering his maiden budget presentation, Dr. Campbell argued that the current borrowing trajectory is unsustainable and could trigger a significant depreciation of the Guyanese dollar, leading to long-term financial instability.
Labeling the $1.558 trillion 2026 Budget as the “emptiest fiscal plan ever,” Campbell cautioned that the administration is overestimating the country’s “absorptive capacity” for debt while ignoring the cooling non-oil economy.
The 15% Danger Zone
Dr. Campbell’s analysis focused on the shift in how Guyana’s budget deficit—currently projected at GYD 450 billion—is being financed. He noted that over half of this deficit is now tied to foreign loans rather than domestic reserves.
- Debt Service Projections: While debt service as a percentage of revenue currently stands at 6.8%, Campbell projected that at the current rate of borrowing, it will exceed 15% within six years.
- Currency Vulnerability: Campbell warned that high external debt levels make the nation’s credit rating vulnerable and expose the Guyanese dollar to volatility.
- The “Instability” Region: “At this rate… Guyana will enter a region of financial instability,” Campbell told the House, noting that funds will eventually be diverted from critical development to mere debt repayment.
The Cooling Non-Oil Economy
A significant portion of Campbell’s critique addressed the “arithmetic” of Guyana’s growth. He pointed out that while oil-driven growth remains high, it is sharply declining from previous years, and the non-oil sector is showing signs of volatility.
| Sector | 2024 Growth | 2026 Projected Growth |
| Total GDP Growth | 43.8% | 16.2% |
| Non-Oil Growth | 14.3% | 10.2% |
Campbell argued that the 10.2% non-oil growth is “artificial,” as it is almost entirely driven by government-led construction and quarrying. “If you eliminate those, you probably end up with a 5% non-oil growth,” he asserted, stressing that the manufacturing and agricultural sectors are being sidelined.
Infrastructure: “Inflationary Spending”
The MP also took aim at the quality and maintenance of flagship infrastructure projects. He cited the Diamond to Craig road and Heroes Highway as examples of projects that, while expensive, suffer from poor maintenance and contribute to recurring costs and inflation.
“This is a dangerous trend because what we need to be focusing in this country is on our non-oil economy,” Campbell stated. He urged the government to align infrastructure spending with the country’s actual capacity to manage and maintain those projects.
Conclusion: A Call for Caution
Dr. Campbell concluded by urging the Ministry of Finance to reconsider its aggressive external borrowing strategy. He emphasized that countries with high external debt are more vulnerable to exchange rate shifts, which can destabilize financial systems by exponentially increasing the actual cost of servicing that debt.
