By HARLYNE JOKU
TREASURER Patrick Pruaitch has defended the Government’s decision to allocate K10 million to each districts in the country, telling business houses yesterday the Government will improve its capacity to spend these large sums and account for their use.
The Government allocated K534 million in the 2008 Budget and K356 million in the 2007 Supplementary Budget (K890 million in total) for projects in the 89 districts.
But with the guidelines of their expenditure yet to be drawn up, the monies were being parked in trust accounts, and not held in consolidated revenue.
A number of critics, including the International Monetary Fund, said this had a “loosening of the fiscal policy”, warning that such large allocations raises risks to the economy because the capacity to spend in districts was weak.
But Mr Pruaitch said the K10 million to the districts would be used effectively, and district administrators would be held accountable for the use of these funds.
He said the large funding would be held and spent over time while spending plans are developed and implemented.
Mr Pruaitch added the funds would be placed in District Service Improvement Programme (DSIP) trust accounts which were created as part of the 2007 Supplementary budget for multi-year expenditure plans.
“The district allocations will be spent strictly in accordance with Finance instructions.
“Given the size of the funding, it would be necessary to monitor and review the programme on an on-going basis.
“Full accounting on the use of these funds would be included in regular public reports on the budget,” Mr Pruaitch said.
In the 2008 Budget, the K6 million provided for each districts will go to six DSIPs, namely the district transport, health, education, water, law and justice, and agriculture.