Finance opens the sack in December, daily payments from the treasury, 8 times higher

2024-12-23 08:10:00, Ekonomi CNA

Finance opens the sack in December, daily payments from the treasury, 8 times

On December 18, 15.9 billion lek or about 160 million euros in payments were given from the public budget through the treasury. This amount was on average 8 times higher than payments on the same date in the other 11 months of 2024 (see chart below).

On October 18, 2024, only 0.9 billion ALL payments were made and on November 18, 3 billion ALL. The concentration of budget expenditures has become routine in recent years, where almost a third of the budget is concentrated in the last two months of the year.

According to official data from the Ministry of Finance, 33% of the annual budget is expected to be allocated in the last two months of the year.

From January to October, a total of 517 billion ALL were spent, while the annual plan is 771 billion ALL, according to official data. In the last two months of the year, 254 billion lek remain to be spent (2.5 billion euros, or 33% of the total budget).

A detailed table with the progress of annual investments in 2024 shows that the weakest allocation in capital investments is in education, where at the end of the year not even a third of the funds have been spent at the pre-university level. Since this part of the investments is the responsibility of the local government, they fail to be realized according to the program, leaving the schools in miserable conditions.

Also, investments in the local government have performed very poorly. Last year only half of the program was implemented and this year progress is very poor.

The inability to spend on time is creating excess liquidity in government accounts. The High State Control in an inspection at the Ministry of Finance verified deficiencies and incompetence of the staff in liquidity management.

The concentration of expenses at the end of the year indicates a lack of effectiveness in the use of taxes. The High State Control has verified that almost 20 percent of the 2023 budget has been allocated in the first two months of 2024.

In addition to deficiencies in the design of projects and their implementation according to planning, procurement officers are reluctant to sign for fear of involving SPAK investigations.

The government borrows to finance budget expenses that are not covered by income, but in recent years there is always liquidity in the budget accounts, which is not being managed in the right way, the High State Control points out in an audit carried out in Ministry of Finance.

KLSH notes that liquidity management is found to be problematic due to several factors. The Ministry of Finance lacks specialized structures for the good administration of general government funds.

The lack of operational instruments, which are applied unilaterally by the Bank of Albania and with exclusive conditions, have been found.

Another reason is the accumulation of funds during the last part of the budget year. The frequent change of the budget with normative acts and not detailing the budget plan in time is creating liquidity.

It has been verified that monetary assets in euros are presented with significant liquidity surpluses and the possibility of investing them in deposits has not been used to benefit from interest income, at the same time when holding these currencies is associated with costs./ Monitor Magazine