PUBLIC Sector Investment Programme (PSIP) projects have been adversely affected by inadequate allocation from Treasury resulting in stalled projects and poor service delivery, a new report has shown.
A research by Poverty Reduction Forum Trust in conjuction with Zimbabwe Coalition on Debt and Development revealed that local authorities, responsible for providing primary health and education services, were failing to effectively carry out their mandates due to limited funding coming from Treasury under PSIP.
The research titled Public Sector Investment Programme Feasibility Assessment for Health and Education Infrastructure Financing.
The PSIP is a programme that funds medium-term developmental priorities and aims to facilitate the construction and rehabilitation of critical infrastructure such as roads, schools, hospitals, and water supply systems.
Before each fiscal year, local authorities and other government departments propose and submit infrastructure bids to the Finance, Economic Development and Investment Promotion minister for funding consideration in the national budget.
The infrastructure proposals are consolidated into the annual infrastructure plan and the infrastructure investment programmes which details funded programmes.
Presenting the findings of the research over the weekend, Poverty Reduction Forum Trust programmes manager Nyasha Nyatondo said the country’s fiscal challenges had created a budget execution deficit that hampered the effective financing of PSIP projects.
“The reliance on cash-based budgeting means that funds are often unavailable when needed, resulting in stalled projects and poor service delivery," he said.
“While reforms have been made to tighten the legal and regulatory framework through the Public Investment Management Guidelines of 2017, the reforms have not been comprehensive to improve regulation of Public-Private Partnerships (PPPs) to mobilise additional resources.”
The PSIP funding mechanisms rely on government funding, but they also explore PPPs to mobilise additional resources.
“At present the Minister of Finance [Economic Development] and Investment Promotion determines the quantum and distribution of fiscal support at his discretion,” Nyatondo said.
“While it is noble that the government is financing local infrastructure development through lending and equity participation annually, it is prudent that the government develops a multi-year PSIP programme to allow for intergovernmental planning and budgeting.”
Combined Harare Residents’ Association director Reuben Akili said there was need to operationalise devolution as provided for in Chapter 14 of the Constitution.
“When we have got the operationalisation of devolution provided for in the laws and even sometimes to some extent we need to reform our local government laws, we align them with the Constitution including the Rural District Council’s Act,” he said.
“That way we can then be able to start to manage issues around devolution, including the devolution funds provided for in Chapter 301, sub-section 3 of the Constitution. So that is very, very important.
“And then also going forward, we understand that the Intergovernmental Fiscal Transfer Manual will then guide the disbursement of such funds, which is a positive.”
