The Ministry of Economy and Finance (MEF) established at S/ 880 million 300,000 the public investment goal for local governments during the first quarter of this year, which has been coordinated with said entities. To achieve this goal, 120 municipalities have been prioritized and it is planned to strengthen technical assistance and accompaniment.
As had been anticipated in the last meeting with the regional governors, yesterday the Minister of Economy and Finance, Pedro Francke, together with MEF officials, held a virtual meeting with more than 1,800 provincial and district mayors in the country, to whom this objective was conveyed.
“Boosting public investment is a high priority task, particularly decentralized investment by regional and local governments. It is essential for two reasons: to close the social and infrastructure gaps that exist in our country and, from a macroeconomic, because public investment is an essential variable to be able to reactivate the economy”, indicated Minister Francke.
He also recalled that local governments represent 40% of the State’s public investment and, for this reason, in addition to improving execution capacity, the quality of public spending must be improved.
Performance
In 2021, local governments executed S/ 15,645 million, representing 63.6% of its Modified Initial Budget (PIM), the most important percentage in the last five years. More than 889 municipalities exceeded 75% of their budget execution. In this way, those who as a whole achieved a greater execution, by department, were: Puno (75.4%), Cusco (71.3%) and Tacna (71.1%).
In this regard, the Vice Minister of Economy, Álex Contreras, indicated that in the last five years, local governments have executed an average of S/ 12,741 million annually in investments; However, there is still a large margin to continue expanding this level of execution considering that last year 63% of execution was achieved by local governments, when in countries such as Chile and Colombia the level of execution reaches 90%.
On the other hand, the MEF provided guidelines for the good start of execution in 2022, recommending that the municipalities keep their record formats updated, update their portfolio of investments, determine their balance sheet balances, identify and report risks, manage the request for continuity and prepare the Annual Procurement Plan.
It should be noted that, during 2021, the technical team that advises regional and local governments answered 3,773 queries, carried out 718 training sessions, provided 80 learning resources (ppt, infographics, tutorial videos, etc.), made 62 site visits. By 2022, it is expected to increase these actions and also implement a digital information platform to monitor the execution of investments that will be customizable in each subnational government.
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