This presentation was made by Gelardina PRODANI, Romania, at the 13th Annual meeting of OECD-CESEE Senior Budget Officials held in Paris on 6-7 July 2017

1. PUBLIC FINANCE REFORM PROGRESS IN ALBANIA
MRS. GELARDINA PRODANI
GENERAL SECRETARY
MINISTRY OF FINANCE

2. UP TO DATE PROGRESS
 Adoption of the National Strategy for Development and Integration 2015-2020, NSDI II.
 Steady progress towards improving the alignment between the sector strategies and the MTBP
 The alignment between the sector strategies and the MTBP as the ratio of total funds estimated in the
sector strategies to total funding identified for corresponding sectors in the MTBP increased (from 42%
in 2014 to 53% in 2015)
 Important amendments to the Organic Budget Law in June 2016:
 New fiscal rules that aim at reducing debt to GDP ratio over the medium and long term;
 Restrict spending during election years;
 Control over multi-year commitments;
 Better harmonisation of public investments with budget preparation;
 Ensure that proceeds from privatization can only be used for retiring public debt and/or capital.
 Introduce Gender Equality as a Core Principle in the Budget Management System

3. UP TO DATE PROGRESS (I)
 MoF to strengthen its oversight and monitoring of public investment spending:
 Public Investment Management Department was re-established within the MoF and with support from
the EU/IMF, has started to prepare and approve criteria for prioritizing large public investment projects
and to establish a unique pipeline of appraised projects
 Prevention of Arrears accumulation:
 the multi-year commitments are within the three-year ceilings approved with the annual budget Law in
the Parliament.
 By the year end, the amount committed on multi-year projects for 2016 as compared to the approved
budget for those projects was reduced by more than 50% (according to AGFIS), only 0.21 billion Lek
new arrears were created during projects implementations
 New Local Finances law approved in April 2017:
 Increase local finance autonomy, by providing more financial resources
 Strengthen the rules and procedures for the management of public finances at the local level
 Establish a medium-term financial planning tool for local government units

4. FUTURE CHALLENGES
 2017 – onwards: MoF to lead the process of clearly identifying new and existing
policies with its related budgetary allocations (SIGMA/OECD to assist MoF in this
process)
 2017: Design an MoF instruction on Fiscal Risks assessment and monitoring;
 2017 – onwards: On time preparation of an up-to-standard Statement of Fiscal Risks
(SFR), which will be reported to the government and disclosed to the Parliament on
annual basis;
 Ongoing: Clearance of hidden arrears and prevention of new arrears in Central and
Local Government Units

5. FUTURE CHALLENGES (I)
 2017: Approve and adoption of the New Public Investment Management Procedure
 These procedures define the criteria for planning, appraisal and prioritization of public
investment projects, drawing on the NSDI-II document, the IPS framework, and the recent
Western Balkans SPP initiative. It also emphasis a definition for an investment project in order
to rationalise project classification and avoid unnecessary multiplications of projects.
 2017-2018: Development of Albania’s Financial Management Information System (AFMIS)
 The new IT system will enable the MoF and Line Ministries to manage MTBP process on a
more efficient and user friendly manner while providing real time communications with other
key IT systems in place such as Treasury System and Integrated Planning System Information
System (IPSIS).

6. THANK YOU FOR YOUR ATTENTION!