Public Investment Disbursement Accelerates

According to a report by the Ministry of Finance on public investment disbursement in the first six months and estimated performance in the seven months of 2023, public investment disbursement was expected to rise by 3.88% year on year to VND80,777 billion (US$3.5 billion) in the first seven months of 2023. However, 40 ministries and 24 localities disbursed public investment at a slower pace than the national average.

Adjusting capital plans in a timely manner is essential for redirecting funds from poorly invested projects to better projects that are likely to be invested as scheduled

Disbursement reaches 35.49% of the plan, higher than last year

The Ministry of Finance reported that the investment budget in 2023 was over VND808,179 billion (US$35 billion), including VND54,123 billion carried over from previous years. Of this amount, VND284,238 billion was disbursed from January to July, fulfilling 35.17% of the full-year plan. Regarding the fund planned for 2023, VND267,625 billion was spent by the end of July, equivalent to 35.49% of the target (compared to 31.61% in the same period of 2022) and 37.85% of the Prime Minister’s assigned target (compared to 34.47% a year ago).

In addition, VND16,613.2 billion carried over from previous years was expended in the reporting period, reaching 30.7% of the target. The Ministry of Finance stated that the spending of 12 ministries and 39 localities was higher than the national average. The top performers included Dong Thap (58.29%), Tien Giang (56.3%), Long An (54.29%), Vietnam Development Bank (100%), the State Bank of Vietnam (63.38%), Vietnam Bank for Social Policies (62.75%) and the Vietnam Institute of Science and Technology (47.14%).

However, the disbursement by 40 ministries/central agencies and 24 localities was below the national average, with 32 ministries/central agencies and four localities spending less than 20% of the budget plan.

The need for timely funding adjustment

The Ministry of Planning and Investment made an integrated report on the activities of the working groups, including public investment disbursement in 2023, based on the reports by five working groups of the Prime Minister assigned to monitor and remove difficulties and obstacles to accelerate public investment disbursement in 2023 and other working groups led by Cabinet members to urge and work with localities on public business, public investment, infrastructure construction, import and export.

In addition, according to the 7-month reports submitted by ministries, central agencies and localities, some shortcomings hindered rapid disbursement. Specifically, some projects could not complete investment procedures to allocate their assigned investment fund in 2023, resulting in their failures in public investment disbursement.

“Foreign-funded projects lagged behind because it took more time to handle more investment and equipment procurement procedures. Difficulties emerged in the process of contractor selection because certain advanced equipment has not yet been quoted on the market for valuation,” said the Ministry of Finance.

Although the disbursement pace is speeding up across the country, more efforts still need to be made by central and local bodies to achieve 95-100% of the disbursement target assigned by the Government.

Therefore, the ministry continued to request central and local agencies to focus on directing and removing obstacles to quickly and effectively implement key public investment disbursement tasks, and revise budget plans, including the unallocated fund as per Resolution 97/NQ-CP dated July 8, 2023 of the Government.

The ministry emphasized that “central and local agencies need to adjust their capital plans in a timely manner to redirect the fund from poorly invested projects to better projects that are likely to be invested as scheduled.” At the same time, the ministry requested them to urgently allocate the investment fund as planned after the Prime Minister assigned relevant bodies to supplement and adjust medium-term public investment plans in the 2021-2025 period; and allot additional capital for the socioeconomic recovery and development program.

Source: Vietnam Business Forum