Government borrows money for financing badly planned projects

The National Audition Office has for the first time released an audit report on public debt management.

This office has suggested that the government in the 2009 period of 2009 has respected the total limit allowed for receiving public debts and the debt level does not pose any threat to the financial stability of the state.

ZKA says public debt has been used to fund the budget deficit and finance investment projects that are estimated to be of national interest.

According to this office, international and domestic debt has a trend of growth where in 2009 the total debt was 6.12% BPV, while in 2017, has increased to 16.63%.

Until the quality of public debt management is highly valued, worrying is the poor ability of implementing projects in the long-time exploitation of these funds. In the absence of adequate preparations for the start of the project execution, 295,809,378 euros are tools that have not been withdrawn/expensed under agreements reached with international financial institutions, even though they have been available to use”, says the National Auditor's Office, Koha.net.

As a result of the decoupling of the time dynamics between credit rating and implementation of projects, the ZKA says the paid price of loan-acquired tariffs reached $850,000.

The “has been noted that out of the 6 capital projects planned in the budget Law according to 2014, 2015, 2016 and 2017 and two-year projections included in the medium-term spending period, realisation is very low, while in 3 of them the value of realisation or withdrawal of loans is 0%. Such delays are the result of a poor feasibility study of projects, as well as shortcomings in creating the necessary preconditions for eliminating all infrastructure and legal barriers to the implementation of these projects, for which the Government should have additional oversight”, the ZKA says in its report.

On the other hand, the trend of increased domestic debt, and especially the increased use of bonds and reduced treasury bonds, the ZKA says it contributes to increased interest rates (borrowing costs).

The general audience has recommended that before the borrowing process begins, detailed analysis and planning be made so that borrowing funds can be used over time, effectively, effectively and economically, until the current debt, the Government must have additional supervision in order to increase the dynamic use of available funds.