Ram & McRae’s false contention that government is misusing the NRF

In a recent commentary, Christopher Ram contends that the Government of Guyana (GoG) is “misusing” the Natural Resource Fund (NRF). The allegation is now being pushed as if it were an established fact. It is not.
This is what we can expect from the newly minted, largely recycled opposition narrative: a mix of legal insinuation, economic illiteracy, and political theatre—packaged as public interest advocacy.
Let me be clear from the outset: there is no demonstrated misuse of the NRF. There is no established violation of the NRF Act. There is no established violation of the Fiscal Management and Accountability Act (FMAA). To substantiate an allegation of “misuse”, one must first establish a breach of law, rules, or mandated procedures. Ram and McRae have failed to do so. They have not even met that basic threshold.
And when it comes to the economics, their argument collapses entirely.
Budget 2026 makes one thing obvious: Guyana is in a decisive phase of structural transformation. The national strategy is to convert petroleum wealth—an exhaustible asset—into productive capital: infrastructure, human capital, institutions, and private sector scale. That is not misuse. That is precisely what the NRF is for.
SphereX’s Fiscal & Investment Outlook (2026–2030) finds that NRF withdrawals—while material—are being deployed strategically to expand productive capacity and diversify the economy rather than to fund structural recurrent imbalances. The macro-fiscal framework remains strong and stable, with debt sustainability risks contained.
In 2026, NRF withdrawals account for 46.4% of central government revenue and 31.8% of total expenditure. Critics have seized on these ratios as if they are self-evident proof of wrongdoing. They are not. They are evidence that Guyana is using its oil revenues as intended—to finance the investment phase of development.
Here is the key economic point that escaped Ram and McRae’s postulations: you cannot expand non-oil revenue without expanding non-oil output. Non-oil revenue is not an independent variable. It is the product of non-oil output.
If you want more corporate taxes, PAYE, VAT, business activity, export earnings, and resilient public finances, you must first expand energy reliability, logistics corridors, agriculture processing, digital infrastructure, skills, and industrial capacity. And that requires capital.
Capital expenditure surged from GYD 104bn in 2021 to GYD 779bn in 2026. That is the development playbook: build the enabling platform first, and the tax base follows.
One of the most misleading features of the anti-NRF narrative is the implicit demand that every dollar spent today must produce immediate visible returns tomorrow. That is not how development works.
Infrastructure projects have gestation periods. Roads, bridges, gas-to-energy plants, housing schemes, ports and industrial zones do not produce full economic returns in the year the budget is passed. They produce returns over several years. This is why the correct debate is not “NRF withdrawals are too high.” The correct debate is whether NRF-financed expenditures are being converted into productive assets fast enough to expand non-oil capacity before oil production plateaus.
Since oil production began in 2019, the non-oil economy has nearly doubled (≈1.96×), rising from roughly GYD 0.8tn to 1.6tn by 2025. Non-oil tax revenue more than doubled (≈2.13×), from GYD 240bn to 514bn, despite no new taxes.
SphereX’s Outlook identifies the principal medium-term risk as absorption constraints and implementation bottlenecks—procurement capacity, engineering constraints, environmental approvals, and institutional execution limitations. That is where scrutiny should be directed.
Debt sustainability remains strong. Public debt-to-GDP is 21.6%, external debt-to-GDP is 1.9%, debt service-to-revenue is 2.2%, and foreign reserves cover approximately six months of imports—well above adequacy benchmarks.
The NRF is not a museum display. It is not an ornamental savings account. It is not meant to exist only to impress critics with a large balance. It is a rule-based mechanism of capital conversion—transforming exhaustible wealth into long-lived productive assets that expand the non-oil tax base and strengthen fiscal sustainability over time.
Ram and McRae are free to argue for a more conservative fiscal stance. That is a policy preference. But it is irresponsible to dress that preference up as legal breach and “misuse” without proving what rule was violated, what section of the NRF Act was breached, what section of the FMAA was breached, and what withdrawal was unlawful.
Guyana’s challenge today is not whether the NRF is being “misused.” Guyana’s challenge is whether it can execute—fast enough and well enough—to build non-oil capacity before the cycle turns. That is the serious national conversation. And that is where scrutiny should be focused.