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Investments with foreign funding, the government cuts projects. Open Data analysis for the years 2018-2024

2023-11-16 10:13:33Biznes SHKRUAR NGA REDAKSIA VOX

Investments with foreign funding, the government cuts projects. Open Data

Open Data has disclosed the budget capital expenditures for the years 2018-2024. What is observed in these budget years is the intervention of the government to reduce investments with foreign financing and to increase those with internal investments, specifically through normative acts to change the law of the initial budget, where the Albanian government has constantly changed these categories of expenses . Specifically, in 2019, the amount of expenses with foreign financing was reduced from 45.6 to 31 billion ALL, i.e. 32 percent less. In 2020 there is a reduction of 20 percent, in 2021 with 10 percent and in 2022 there is a larger reduction from 34.5 to 22 billion ALL or 36 percent less. Cuts are also planned for 2023, specifically by 29 percent or 13.1 billion lek less, reflecting the progress of project works, mainly in the infrastructure sector with a 9 billion lek less planned.

Budgetary capital expenditures for the years 2018-2024

According to Open Data Albania, over five years, capital expenditures have increased from 78.4 to 112 billion ALL or 43 percent more. While domestically financed expenses have increased by 24 percent from 51.5 to 63.7 billion ALL, foreign financed expenses are 29 percent less in 2022 than in 2018, respectively at 18.7 billion ALL or 7.5 billion ALL less than in 2018. Expenditures capital in the plan for 2024 (128.5 billion ALL) are less than the most recent plan of 2023 amended by normative act (136.6 billion ALL), however, foreign financing expenses are higher, specifically at 44 billion ALL in 2024 from 32.5 billion ALL in 2023.

Investments with foreign funding, the government cuts projects. Open Data

 

Capital expenditures are dominated by internally financed expenditures. In 2018, spending on foreign-financed investments accounted for almost a third of total capital spending (33 percent), but this share has decreased in the following years to 26 percent in 2021 and 17 percent in 2022. The drastic drop in the latter mainly results because the reconstruction fund is also registered in the category of capital expenditures, which has a significant weight with about a quarter of capital expenditures, a fund which until 2021 was registered as a separate category, but after many recommendations from the parties international was reflected in the 2022 budget. In 2024, the weight of investments with foreign financing is planned to increase, specifically to 34 percent of capital expenditures.

In general, investment expenditures are not fully realized in any budget year, on average 91 percent were realized in these five years. However, the most problematic are those with foreign financing, an average of 83 percent, while those with internal financing are realized around 96 percent. Expenditures for investments with internal financing have a faster surge in the month of December, i.e. before the end of the fiscal year, where almost a third of the expenditures are generally realized. While expenditures with foreign financing marked the weakest performance in 2019, where only 76 percent of the amended plan was realized. Compared to the initial plan, the result is weaker in 2022 with about 54 percent.

What is observed in these budget years is also the intervention of the government to reduce investments with foreign financing and to increase those with internal investments, specifically through normative acts to change the law of the initial budget, the government has constantly changed these categories of expenses. Specifically, in 2019, the amount of expenses with foreign financing was reduced from 45.6 to 31 billion lek, i.e. 32 percent less. In 2020 there is a reduction of 20 percent, in 2021 with 10 percent and in 2022 there is a larger reduction from 34.5 to 22 billion ALL or 36 percent less. Cuts are also planned for 2023, specifically by 29 percent or 13.1 billion lek less, reflecting the progress of project works, mainly in the infrastructure sector with a 9 billion lek less planned.

The list of public investments, detailing the source of funding, domestic or foreign, accompanies the budget law in the Assembly, but does not pass to the latter for approval as part of the budget package. Similarly, in the approval of the actual budget, no information is reported or forwarded on the list of these projects and their progress.

Capital expenditures are the expenditures made by the budget unit for the provision of new public assets or the repair of the previous ones and whose life expectancy goes beyond one fiscal year, as well as for capital transfers. Capital expenditure is financed from internal and external sources that go to public investment. These expenses make up no more than a fifth of the state budget, since the main part, about 75 percent, consists of current expenses.


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