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The government brought to record levels the realization of the investment item over the last year by about 1 billion euros, but could not avoid their concentration during December.
According to official data from the Ministry of Finance, the actual capital investments in 2021 reached a value of ALL 128 billion (over EUR 1 billion), but 32% of this value of ALL 42 billion (EUR 340 million) was given during December. A few days ago the World Bank released criticism of the way the government spends investment money in a broad report on the review of economic developments in our country; “Public investments in Albania have a significant lack of quality project preparation documents, there are outdated reference price guidelines and a culture of postponing project deadlines through simplified procurement procedures.”
The item of capital investments marked an increase of 50.4 percent compared to the fact of 2020, but was 13.5 percent lower than the annual plan of ALL 146 billion.
The increase in capital expenditures in 2021 was also driven by investments from projects for the reconstruction of the consequences of the earthquake. But even without this voice, capital investments in 2021 were at historical records. The investment item (excluding earthquakes) was ALL 98.4 billion, an increase of 43.7 percent compared to last year.
As can be seen from the official data of the Ministry of Finance, the highest concentration of funds in December occurred for projects that were not related to the earthquake.
Funds for the reconstruction of the consequences of the earthquake at the end of the year resulted in ALL 29.5 billion, almost double the funds that were used for this purpose in 2020.
Very high government injections in December through capital investments have led to an increase in currency in circulation and consequently to an increase in prices. In December 2021, inflation marked the highest level of the year with 3.7%. The Bank of Albania has historically advised the government to have a harmonious distribution of investment sound throughout the year in order to maintain, among other things, the effectiveness of the use of funds.
In a recent report, the World Bank noted that there are serious cost overruns and delays in the execution of investment projects that undermine the efficiency of public budget spending.
The World Bank noted that public investments in Albania have a pronounced lack of quality project preparation documents, outdated reference price guidelines, and a culture of postponing project deadlines through simplified procurement procedures.
The Bank has advised the Ministry of Finance that it should strengthen the quality control of project preparation documents, increase the capacity of human resources for strict monitoring of the progress of investment contracts./Monitor/
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