Municipalities increase the share of personnel expenses, reduce them for investments

Last year, local government expenditures totaled 74 billion lek, of which personnel expenses accounted for the largest share, at 46% of the total, up from 43%, which was the weight of this item in 2023.

On the other hand, the share of investment spending fell further in 2024. This item last year accounted for 19% of total local government spending from 24% in 2023.

Expenditures for local personnel are increasing year after year for two reasons. The first is related to the transfer of central government functions to local government, as a result of the implementation of the decentralization reform, and the second, from the increase in salaries for local administration from September 2019, with an additional effect of 3 billion lek.

The results show that investment performance in the country's municipalities is not progressing at the same pace as investments in human resources.

According to official data from the Ministry of Finance, last year the local government implemented only 43% of the 2024 investment program. Of the planned 46.3 billion lek, only 19.9 billion lek were invested, or less than half of the program.

The inability of municipalities to allocate investments comes at a time when they are facing great needs to invest, especially in local road infrastructure.

More detailed data shows that the Municipality of Tirana had the largest investment fund with around 18 billion lek in 2024, but managed to invest only 6.1 billion lek or 34% of the program.

The Municipality of Durrës, which is the main host of tourists in the country and has great needs in local infrastructure, has only implemented 50% of the investment program for 2024. Out of about 4 billion lek programmed, it has only implemented 2 billion of them.

Among the municipalities with a prefecture center, it is seen that Vlora had the weakest implementation with only 17% of the program. In 2024, only 251 million lek were invested out of the 1.4 billion lek that was the annual program.

The Municipality of Vlora has developed marine tourism with the most beautiful coastline in the country, while the needs for investment, especially in waste management and water supply, are still great.

The largest territorial reform of the last decade aimed to increase the independence of municipalities and their capacity by transferring more financial resources and competencies. But almost 10 years after the implementation of this reform, there is still ambiguity and confusion between basic functions.

For example, the central government has transferred firefighting services and maintenance of local roads, forests, etc., to the local government, but has not provided them with funds.

Municipalities suffer from a lack of capable human capacity to manage development projects in favor of the community. Local government has a great impact on the quality of life of the communities where they exercise their functions./ Monitor