Although the government relaxed the Covid-19 protocols, budgetary agencies struggled to utilise the capital budget in the fiscal year 2021-22.
Only 38 percent of the capital budget was utilised at the end of the third quarter of the fiscal year (March 31), according to data released by the Department of National Budget (DNB).
The low budget utilisation rate has been a concern for the government as it has ramped up government spending to offset the impact of the Covid-19.
Only Nu 16.288 billion (B) of the total capital budget of Nu 42.735B was utilised at the end of the third quarter. The fiscal year ends on June 30.
Officials said that the recent lockdown and Covid-19 protocols were some of the major hurdles in the implementation of the activities.
However, according to finance ministry officials, the expenditure performance is expected to improve in the fourth quarter as the Covid-19 protocols were normalised.
The officials say that with the successful completion of the mid-year review of budget and Annual Performance Agreements (APAs), budgetary agencies are expected to speed up the implementation of activities.
The government, according to the DNB, has pre-financed some of the donor-funded activities where the release has not been received from the development partners.
However, about 71 percent of the current budget was utilised as of the end of the third quarter of the fiscal year.
Officials said that the government had not faced issues when it came to implementing the current budget, which comprises operational expenditure of agencies.
Budgetary agencies utilised about Nu 25.298B of the total current budget of Nu 35.55B.
According to the DNB, the expenditure reported is less as compared to the release provided. However, it is expected that a portion of the release will be in the form of advances, which will be booked as expenditure when the bills are submitted for settlement.
Although some portion of the release can be construed as expenditure, there could still be some that are not used indicating cash lying idle, according to DNB.
The current budget has decreased in recent years on account of rationalisation of the current budget in line with the revenue performance, which was affected by the Covid-19 pandemic.
The government has also decreased operations and management expenditure, according to the finance ministry.
The most significant change in the current expenditure was in grants and subsidies, which decreased significantly.
Meanwhile, the government provided more than Nu 3B to various budgetary agencies for Covid-19 containment measures. Of the total, Nu 1.843B was transferred from the General Reserve.
During the fiscal year, Nu 5.7B was provisioned under the General Reserve in meeting the unforeseen expenditures.