Published in the Feburary 2012 PNG Report magazine
For many years provincial governments have had to cope with insignificant budgets. This is no longer the case.
Four separate provinces - Southern Highlands, the newly established Hela Province, the Autonomous Region of Bougainville and Morobe - have each brought down substantial budgets of more than K300 million for the current year.
Southern Highlands, previous home to most of the PNG LNG Project gasfields that now come within the jurisdiction of Hela, passed a budget of K304 million on January 17. This included a development budget of K92 million, public investment project grants of K113.8 million and K43.2 million in LNG-related commitments.
Bougainville, scene of civil strife throughout the 1990s, also brought down a budget of K390 million, 113% more than in 2012. However, this included a rollover of K94 million for high-impact projects that were not implemented last year, as well as K30 million under the District Services Improvement Program and K15 million under the Provincial Services Improvement Program.
For the much criticised former Somare government, the O'Neill government's decision to continue to pursue substantial money transfers to the nation's 89 districts seems like an endorsement of previous policies. Some of the criticism focused on the lack of local developments that have flowed from direct provision of funds to the district level.
The 2013 national budget pointed to several issues that continue to retard effective implementation of the development budget. It cited these reasons:
- no submission of annual work plans, cash flows and monitoring reports by implementing agencies;
- mely release of funds by the Department of National Planning and Treasury on a monthly basis;
- Delay in preparation of trust instruments;
- Poor capacity within agencies to design, scope and manage the implementation of projects;
- Poor monitoring by National Planning and Treasury;
- Inception of supplementary budgets that stretched capacity of agencies;
- Lengthy procurement processes; and
- Funding of unbudgeted items.
It is most doubtful if any of these problems have been tackled in a meaningful manner. Nevertheless, the development budget has grown to a massive K5.8 billion, or 44% of the total 2013 budget. It totalled K4.437 billion in 2012.
"This increase is due to the K1.492 billion being allocated as direct funding to the provinces, districts and local level governments, as well as massive investments in key infrastructure to fill the resource gap to fulfill the achievements of the Medium Term Development Plan goals," according to Minister for Treasury Don Polye.
Already there are signs of some innovative planning on the part of some provincial governments. Hela governor Anderson Agiru has announced the establishment of two agro-industrial centres at Koroba in the Koroba-Lake Kopiago electorate and at Piwa in the Tari-Pori electorate.
Anderson was investing K20 million in each centre, which will be managed by Agro Industry Ltd, a subsidiary of Israel's L.R. Group.
The two centres would distribute seedlings and train 100 farmers every fortnight.
In the newly established Jiwaka Province, its governor Dr William Tongamp is funding a development forum in March at which the elite from his province will brainstorm ideas on the way forward.
The former prime minister Sir Michael Somare, now the governor of his East Sepik home province, is among the provincial leaders who will be well-pleased with the budget outcomes.
On January 19 he was able to hand down a K269 million budget, up 150% from the 2012 East Sepik budget of K103.95 million. This included K109.8 million in development grants and K36.2 million in rollover funds from the previous year.
Interestingly in terms of "budget quality assessment" carried out by the National Economic and Fiscal Commission, the East Sepik province last year was the best performer in the Momase region with a score of 72, nine points ahead of Madang, 10 points ahead of Sandaun and a massive 21 points ahead of Morobe.
Only three other provinces bettered the East Sepik score - Central (77.5), East New Britain (75) and Eastern Highlands (74). The well-resourced Southern Highlands had a score of 62, while Western Province came in with a lowly 53.5.
The O'Neill government's decision to continue to pursue substantial money transfers to the nation's 89 districts seems like an endorsement of previous policies.
It is most doubtful if any of these problems have been tackled in a meaningful manner.
