Lack of human capacity is the biggest problem for almost all ministries – says Finance Minister

Oct 06, 2017 News

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By Kiana Wilburg

Lack of human capacity seems to be one of the biggest problems affecting efficient spending on projects by almost all ministries.
Finance Minister, Winston Jordan, during a discussion with Kaieteur News on budget 2017, on several occasions acknowledged that most ministries have spent less than half of their 2017 budgetary allocations.
He was asked if the 2018 budget will see Government “cutting back” or being more conservative with the monies allocated for ministries.
The Finance Minister said, “I don’t want to say it is ‘cutting back’ but I could tell you we will be exercising more than just greater diligence. We have moved swiftly.
“Firstly, one thing we have done is that we now have a high level policy committee in place, headed by the President. And we meet once a month with the permanent secretaries and the project managers.”
Minister Jordan stated, “Secondly, we are identifying the gaps, particularly in the big ministries. In almost all of the ministries, they don’t have human capacity. It’s a huge problem. So we have to find ways and means of dealing with that.”
Jordan said that one of the ways being employed by the government is working along with the Inter-American Development Bank (IDB) to establish a Delivery Unit and a Super Implementation Unit.
The Finance Minister articulated that these Units are being established to get around the need for 10 procurement officers, for example when a Ministry has 10 projects and so forth. He noted that in Jamaica, for example, there is a Planning Institute of Jamaica which has a significant role in the implementation of projects in that Caribbean island. The Finance Minister said that the Planning Institute of Jamaica also has centralized skills and an efficient database system to rely on.
The economist said that Guyana attempted a similar institute but it was removed when the People’s Progressive Party (PPP) took the reins of office in 1992.
He said, “We attempted that with state planning but the then Government in 1992, as you know, disbanded that. We said from Day One that we approached the Caribbean Development Bank (CDB) for assistance to put in place that capacity for planning…”
The Finance Minister added, “The whole thing is just fractionalized at the moment. But coming back to my point about human capacity; you wouldn’t believe that the CDB has approved that technical assistance over a year ago but it has been proven extremely difficult to find people…”
For the time being, the Ministry of Finance has put in place, a Chief Planning Officer who “is now wetting his feet”
Jordan said, “But at least we have someone there who can begin the work that is needed to redo planning in Guyana.”
The rate of implementation of projects was also highlighted in the half-year report of the Ministry of Finance.
According to the Ministry, the Public Sector Investment Programme (PSIP), which is financed by both local and foreign funded sources, expended $15.8 billion during the first half of 2017, reflecting a 19.8 percent increase over the first half of 2016.
Finance Ministry officials said, however, that this represents only 27.9 percent of the PSIP’s budgeted allocation of $56.8 billion.
It was noted that the locally-funded projects were primarily constrained by delays in the project implementation as a result of a dearth of procurement planning, apparent lack of capacity, and delays in the tender process.
The Ministry noted that this resulted in only 26.8 percent of the budgetary allocation of $34.6 billion expended at half year. The implementation of the foreign-funded projects was also plagued by delays emanating from the late finalization of a number of financing agreements with both multilateral and bilateral development partners and the subsequent setting up of the project implementation unit.
The Finance Ministry noted that a mere 29.6 percent of the budgeted sum of $22.1 billion of the foreign-funded portfolio was expended. In the first half of 2017, the amounts expended for major projects including the Cheddi Jagan International Airport (CJIA) Expansion Project, the Power Utility Upgrading Programme, and the West Coast Demerara highway Project, were $2.8 billion, $1.2 billion, and $0.6 billion, respectively.
In spite of these constraints, Government said that it remains committed to delivering the budgeted PSIP and has taken steps towards the improvement of the pace of implementation. These include increased monitoring, the introduction of a Cabinet level reporting mechanism in June 2017, and training Ministry officials from key sectors in procurement planning.
Further, in an effort to attract more persons to the national pool of evaluators a stipend of $3,000 per session was approved by Cabinet, for each evaluator. In addition, monthly stipends were introduced for members of the Ministerial, Regional, Departmental, and Agency Tender Boards.
On June 30, 2017, there were a number of ministries which were below the 30 percent margin regarding their rate of implementation. The Ministry of Social Protection for example had a budgetary allocation of $477M but up to June, it had only used up $81M. This represents an execution rate of 17 percent.

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