Capital spending 71% below plan in 3-months, lowest level since 2009

2024-04-26 07:27:00, Ekonomi CNA

Capital spending 71% below plan in 3-months, lowest level since 2009

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The most productive item of the budget, capital spending this year is showing marked weakness as some public entities that provide vital services such as hospitals are experiencing difficulties.

In the first quarter of 2023, the state budget allocated only 4.8 billion ALL investments. This amount is 71 percent lower than the 2024 quarter plan, while it was also 61 percent lower than last year's fact in the same period of 2023.

Official data from the Ministry of Finance show that the investments of the first quarter of 2024 were the lowest since the first quarter of 2019, but meanwhile the capital investment fund this year is the largest in history.

The performance of the capital investment fund so far signals the concentration of allocations at the end of the year, raising doubts about the efficiency of their use.

As the first quarter of the year has passed, the budget has spent only 3.6 percent of the annual investment program of 145 billion ALL.

The history of the use of the public investment fund shows that in the first quarter allocations have difficulties due to delays in procurement. But this year the performance of investments has been much weaker than all the first quarters of the last 15 years.

Sources from public entities claim that there is reluctance to sign tenders for fear of SPAK.

The Special Corruption Investigation Structure has investigated alarming schemes of tax abuses of Albanians through public procurement. Corruption in procurement from percentage payments has gone to such levels, where officials create companies and channelize the entire tender for personal gain.

In recent years, Albania has improved the collection of budget revenues in value as a result of economic growth and high inflation, but the redistribution of taxes remains very problematic.

International financial institutions, on the other hand, have raised concerns that the management of the public investment framework faces weaknesses in all phases from the classification of projects to their implementation.

In the full analysis of the review of the program with Albania this year, the International Monetary Fund referred that SPAK has confirmed previous concerns that corruption has increased the cost of public investments. "Recent high-profile prosecutions by SPAK involving some of the largest PPP projects in the country show how corruption, coupled with a weak investment framework, can increase the cost of public investment. ” noted the IMF in January 2024./ Monitor magazine