Inter-American Development Bank (IDB)

Consultant (Incorporating Oil & Gas in National Accounts / Capacity Building for The Bank of Guyana on National Accounts and Macroeconomic Analyses Within The Oil and Gas Economy)

Inter-American Development Bank (IDB)

Job Description

Consultant for incorporating Oil & Gas in National Accounts / Capacity Building for the Bank of Guyana on national accounts and macroeconomic analyses within the oil and gas economy Background of this search: The Connectivity Markets and Finance (CMF) Division of the Inter-American Development Bank (IDB) is currently supporting a Technical Cooperation, ATN/OC-17831-GY: (GY-T1166), to strengthen the institutional capacity of two key national institutions: the Bank of Guyana (BoG) and the National Insurance Scheme (NIS). Under this job opportunity, the CMF Division expects to assist the BoG also known as “the Central Bank” to improve its accounting of the financial flows emanating from the oil and gas sector by strengthening its national accounts and balance of payments methods considering the new economic context, strengthening its analytical capabilities developing modeling tools to analyze the flow of oil revenues, and ensuring the effects are incorporated into updated monetary and exchange rates policies. They are looking for a Senior Macroeconomist (Oil & Gas) Consultant with a strong background in economics and public policy, experience working in research or policy departments of Central Banks, and highly experienced in oil producing countries to help build the institutional capacity of the Bank of Guyana. Guyana’s economy has traditionally been highly concentrated in mining and Agriculture, with these two sectors making up approximately 30% of the whole economy. The economy has been stable with an average GDP growth rate of 4.0% between 2009-2018. Other key macroeconomic indicators have also remained relatively stable for prolonged periods. The annual inflation rate averaged 2% over the last decade and currency depreciation has been negligible. However, with recent oil findings of offshore oil reservoirs and first oil production projected for 2020 Guyana is set to experience a new set of economic opportunities as well as challenges. Since 2015 there have been a total of 14 oil discoveries with estimated recoverable oil-equivalent reserves of more than 6 billion barrels. Oil production is expected to begin in 2020, initially with 120,000 barrels per day (bpd). Production is expected to increase with production starting at two other oil fields in 2022 and 2023 with combined production volumes of an additional 440,000 bpd by 2023. ExxonMobil claims to have the potential to produce at least 750,000 bpd by 2025. Based on production at the first two oil fields, the IMF estimates that Guyana’s economy will grow by 85% in 2020 and that average Economic Growth between 2020 and 2024 will be approximately 28%. Oil exports as a share of GDP are expected to grow from 30% of GDP in 2020 to 55% in 2024. These developments are expected to have profound economic impacts mainly affecting the fiscal sector. The public sector is expected to benefit from increased revenues (profit-sharing and royalties). Government oil-related revenues are expected to exceed US$3 billion in the mid-2020s in an economy that currently has a GDP of US$3.6 billion. The external sector will also be affected by greater foreign direct investment as the economy prepares to become an oil producer with great and growing trade surpluses reaching 62% of GDP in 2024, after the start of oil production. Although these developments seem inherently beneficial for the economy, they are expected to have significant implications for price levels and exchange rate stability. Government has created the Natural Resource Fund (NRF), an important first step to safeguard macroeconomic stability. By the Design of the NRF, all oil revenues will be channeled to a savings account abroad and transferred gradually to the National Budget on an annual basis. In the short-term, when oil revenues are relatively small, a large share of oil revenues are expected to be transferred to the budget. As oil production grows, a smaller share of oil revenues would be transferred to the budget and in the long-term, annual transfers to the budget will be limited to 3% of the balance of the NRF. All transfers from the NRF to the budget are earmarked for Economic Development activities. In this context, the Bank of Guyana is seeking to strengthen its institutional capacity and be prepared for the upcoming oil boom. The team’s mission: The IDB Connectivity Markets and Finance Division together with the IDB Country Office in Guyana lead the Bank’s support on this project in collaboration with the Governor of the Central Bank of Guyana. What you’ll do: The scope of work for the Consultant will include but not be limited to, the following:
  1. Review and provide recommendations to update current inflation and exchange rate polices and guidelines for implementation to ensure adequate provisions are made for O&G. This should be based on best practices in similar (oil) economies and to maintain macroeconomic stability in Guyana.

  2. Develop modeling tools to analyze the flow of oil revenues from the Natural Resource Fund into the budget as these may have implications for the economy in terms of inflation, currency value, and real exchange rate. The capacities to monitor these developments need to be strengthened.

  3. Compile national accounts data in Coordination with the Bureau of Statistics. The Bureau of Statistics is currently the branch of the government responsible preparing the national accounts which are later supplied to the Bank of Guyana. In order to assure the quality of the updated national accounts data, the consultant will have to collaborate with the Bureau of Statistics.

  4. Ensure that the balance of payments and all other reports and systems at the Central Bank adequately account and capture the financial flows emanating from the O&G sector.

  5. Transfer knowledge to the various staff within the Bank of Guyana, on the modelling tools and new policy guidelines as well as staff of the Bureau of Statistics to maximize transfer relevant knowledge and skills.

Deliverables and Payments timeline: It is expected that by the end the Bank of Guyana would benefit from the following:
  • Deliverable 1: Inception Report

This report will outline the workplan for completion of consultancy including timelines, etc. It should incorporate a diagnostic Analysis of the current national accounting and balance of payment practices and identify key weaknesses and recommendations for improvement. The diagnostic should include a guideline on next steps to incorporate better practices in national accounting.  
  • Deliverable 2: Report on the modelling tools developed

The Report should explain how the BoG developed in its capacity to model transfers from the NRF to the budget based on the inputs from this consultancy. In addition, the Report should clarify how BoG improved in its ability to assess any potential macroeconomic risks either from the size of the transfers to the budget or the amount of increased government spending. It is not clear whether the amount of the transfers will define government expenditure increases since under the current fiscal framework the government could borrow and spend in excess of the transfers from the NRF to the budget (Note: The capacity of modeling transfers from the NRF to the budget may already be development under the Ministry of Finance). The report should provide an assessment of the application and use of modelling tools developed.  
  • Deliverable 3: Macroeconomic Policy Recommendations Report

This Report should make recommendations on the policy and guidelines changes to the monetary and exchange rate framework based on analysis conducted. Maintaining price stability and integrity and value of the Guyana dollar are two key mandates of the Bank of Guyana. Considering the first mandate, it is essential for the Bank of Guyana to develop the capacity to formulate and implement policy that is supportive of maintaining price stability hence the consultant’s Report should provide a detailed outline of how to update current monetary policy in a context of potentially high inflationary pressures. Similarly, in line with the second mandate, the consultant should be aware of Guyana’s policy context to potentially recommend updates to Guyana’s exchange rate policy and related macroeconomic governance policies. It is anticipated that oil export revenues are going to be for the government only, which indicates they will not be directly transmitted into the real economy. Further, export sale payments are not expected to enter Guyana since by law, they should be directly channeled into the NRF which will lies abroad. This policy may significantly contribute to sterilizing export payments and mitigate appreciation of the exchange rate. The principal mechanism through which oil revenues may affect the national economy may be through greater government spending. Considering the exchange rate acts as a buffer to external price shocks, the consultant should be fully aware of Guyana’s policy context in preparing this deliverable.
  • Deliverable 4: Report on Training Activities

Key personnel and relevant stakeholders from the Bank of Guyana including the Bureau of Statistics are to benefit from selected trainings. This Report should explain the training activities undertaken to transfer knowledge to key stakeholders. Copies of the training materials should also be attached to this Report.   Payment terms will be based on project milestones or deliverables achieved. The Bank does not expect to make advance payments under consulting contracts unless a significant amount of travel is required.
  • Deliverable 1: Upon completion of finalized of Inception Report 20%

  • Deliverable 2: Upon completion of finalized Report on modelling tools developed 30%

  • Deliverable 3: Upon completion of finalized Report on recommendations for Monetary and Exchange Rate policies and guidelines 30%

  • Deliverable 4: Upon completion of Finalized Report on training activities 20%

  What you’ll need:
  • Citizenship: You must be a citizen of one of the IDB’s 48 member countries.

  • Consanguinity: You have no family members (up to fourth degree of consanguinity and second degree of affinity, including spouse) working at the IDB Group.

  • Education: Master’s Degree in Economics, Social Sciences, Public Policy, Law, or any related field.

  • Experience: More than 10 years’ experience working in research or policy departments of Central Banks or related field. Experience in oil producing countries is a must.

  • Languages: Proficiency English is required.

Core and Technical Competencies:
  • Professional/technical knowledge in completing national accounts statistics.

  • Extensive experience and expertise with System of National Accounts Statistics.

  • Experience in the application of the Balance of Payments and International Investment Position Manual of the IMF (BPM6).

  • Monetary and Flexible Exchange Rate Policy Implementation.

Opportunity Summary:
  • Type of Contract and modality: Products and External Services Consultant (PEC), Lump Sum.

  • Length of contract: 12.5 months.

  • Location: The Central Bank of Guyana and remote work at country of origin.

  • Responsible person: Coordination and technical supervision of the consultancy will be carried out by CJA/CMF, Financial Markets Senior Specialist, IDB in collaboration with Governor of the Central Bank in Guyana.

  • Requirements: You must be a citizen of one of the IDB’s 48 member countries and have no family members currently working at the IDB Group.

Our culture: Our people are committed and passionate about improving lives in Latin-America and the Caribbean, and they get to do what they love in a diverse, collaborative and stimulating work environment. We are the first Latin American and Caribbean development institution to be awarded the EDGE certification, recognizing our strong commitment to gender equality. As an employee you can be part of internal resource groups that connect our diverse community around common interests. We encourage women, afro-descendants, people of indigenous origins, and persons with disabilities to apply. About us: At the IDB, we’re committed to improving lives. Since 1959, we’ve been a leading source of long-term financing for economic, social, and institutional development in Latin America and the Caribbean. We do more than lending though. We partner with our 48-member countries to provide Latin America and the Caribbean with cutting-edge research about relevant development issues, policy advice to inform their decisions, and technical assistance to improve on the planning and execution of projects. For this, we need people who not only have the right skills, but also are passionate about improving lives. Our team in Human Resources carefully reviews all applications. “Due to the current Covid-19 pandemic and its implications for our Region, the IDB Group is reviewing its hiring needs and re-prioritizing its areas of talent acquisition. We encourage candidates to continue to apply to the active postings, yet current job openings may be subject to further decisions in terms of timing of the processes, or other actions, in accordance with business needs. Final hiring decisions may also be conditioned to the candidate’s ability to timely relocate to the post of duty at the moment of starting service.” Additional Information

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