GEORGETOWN, Guyana, Tuesday April 2, 2019 – Government has signed a bilateral debt settlement agreement to cancel more than US$50 million of a US$77 million-plus debt owed to Kuwait.
The disclosure came in a press release today from the David Granger administration, which stated the agreement was signed with the government of the Arab nation, through the Kuwait Investment Authority, by Minister of Finance Winston Jordan last month.
It said the cancellation of the US$50,739,255.67 debt will reduce Guyana’s external debt and allow the country to expand its development agenda, as funds saved under the agreement would be allocated to social projects within the context of the National Budget.
The remaining debt of US$26,853,585.23 will be settled through a combination of cash payments to be made over nine years, and a debt swap arrangement that the government said would be worked out in due course.
Guyana’s debt to Kuwait originated from a Loan Deposit, contracted in 1975, from the Central Bank of Kuwait, for the equivalent of US$10.3 million at that time, for balance of payments support to the Bank of Guyana. The debt accumulated massive arrears over the past four decades, at high market interest rates. As at December 31, 2017, the debt had grown to US$77,592,840.90, comprising principal arrears of US$9,940,500 and interest arrears of US$67,652,340.90.
The government said that the agreement to cancel part of the debt, which came after “an ardent negotiation process”, paves the way for greater co-operation and the strengthening of cordial ties between the two countries.
Since assuming office in 2015, Minister Jordan has pursued debt relief from other bilateral non-Paris club creditors with whom Guyana’s debts are in arrears.