INCREASE IN 2021 DEVELOPMENT BUDGET

THE 2021 National Budget builds on the overall commitment of the Government’s policy redirection objectives to protect citizens and communities while making our economy more resilient and sustainable.

Permanent Secretary to the Ministry of National Planning and Development Coordination (MNPDC) Susan Sulu highlighted this during the PAC hearing recently.

The 2021 National Budget Theme is “Towards A Path To Economic Recovery: Advancing Growth and Service Delivery Through Better Partnerships”.

Ms. Sulu said the 2021 budget theme calls for strategic collaboration across all sectors to be able to deliver capital investment projects and essential services effectively and efficiently.

She said the 2021 Development Budget will target sectors that aims to drive economic activity, address food security, support the provision of basic essential services, and support job retention and employment.

“This is to ensure there is maximum result and quick economic recovery in preparedness and response to the impacts of covid19 in the short to medium term and long term economic growth,” she said.

Ms. Sulu informed the PAC that total Development Budget Estimates for 2021 is $938, 049,000, including $90,000,000 from Peoples Republic of China. This is an increase of 33% ($310,894,294) from the 2020 Development budget.

The Permanent Secretary said investment programmes and projects are to be streamlined with the DCGA redirection policy priorities that are urgent and critical for implementation in 2021.

“Other considerations are given to on going investment programmes and projects that have commenced in 2020 and are progressing well. Contractual obligations are also prioritised in the 2021 development budget to ensure accumulation of outstanding arrears to contractors and suppliers are minimised, and on-going projects implementation progressed,” she said.

Ms. Sulu further highlighted that another important consideration, which the 2021 development budget takes into account, is the need to address current socio economic vulnerabilities that the Covid 19 pandemic compounds or further excercebates.

She said the Ministry of National Planning and Development Coordination adopted a joint consultative approach together with Ministry of Finance and Treasury (MoFT), Ministry of Public Service and Office of the Prime Minister and Cabinet (OPMC) during the 2021 budget preparation process with all line ministries and government agencies. 

“Development budget bids and proposals received were thoroughly appraised by technical officers at MNPDC, to ensure that only programmes and projects that are properly scoped and designed with credible business case justifications, detailed procurement plans, and realistic budget costing’s goes into final budget compilation.”

The Permanent Secretary said the compiled budget version had gone through a thorough process and was presented at the Budget Standards Committee (BSC), Budget Coordination Committee (BCC), Budget Strategic Committee (BSC) and, Caucus and Cabinet for endorsement.

“New capital investment programmes prioritised in the DCGA redirection policy and targeted for implementation in 2021 are also factored in the 2021 development budget,” Ms Sulu said.

The Permanent Secretary said they have also advised ministries to do proper designing, scoping and costing of these new inclusion and review the scope and financing of the on-going programmes and projects to better align with the redirection policy.

“The 2021 Development Budget will continue to support new and on-going SIG-Donor co-funded capital investment projects,” she said.

 

2021 Development Budget to target economic driven sectors

THE 2021 Development Budget will target sectors that aims to drive economic activity, address food security, support the provision of basic essential services, and support job retention and employment.

Permanent Secretary of the Ministry of National Planning and Development Coordination Susan Sulu said the economic returns from targeted sectors will continue to finance activities in other equally important sectors such as the social sector going into the long term. 

Overall, she said the 2021 Development Budget is aimed to continue to fund programmes and projects across all sectors to keep the economy afloat and to ensure service delivery progresses well during this COVID-19 pandemic crisis.

She said whilst efforts have been made to collect and show more comprehensive data on the non-appropriated funding that is expected to be injected into the local economy in 2021, collecting sufficient reliable donor data is an on-going challenge.

Ms Sulu said it needs improvement to be able to show a holistic picture of the entirety of the funding towards capital investments and development.

“Other considerations which the 2021 development budget takes into account is the need to address current socio economic vulnerabilities that the COVID-19 pandemic compounds or further excercebates,” she said.

She said the impacts of COVID-19 are results of the measures put in place to mitigate the health effects of the pandemic.

“The main pathways of impact experienced from the COVID-19 pandemic have been through boarder closures, which has affected the tourism industry in particular; shift in demand for timber and round log exports which have impacted government revenue; and a shift in demand for tuna exports, which have also affected government revenue and businesses involved in tuna exports. In the medium term, a shift in the volume of aid flows is another pathway through which COVID-19 could impact the country,” she said.

Source: PMO