Introduction
Budget credibility refers to the extent to which a government's actual spending deviates from the approved budget. A government might underspend (if spending is less than what was allocated) or overspend (if spending is greater than the allocation) the national budget or a specific area of the budget. Underspending is a particular challenge for low-income countries and governments tend to underspend most on social sectors such as agriculture and health.
The reasons for why we see these deviations in spending are varied and complex, but they have a real impact on people’s lives. For instance, in Indonesia we found that allocations for fisherfolk in the country’s fuel subsidy program were routinely underspent and diverted to other sectors. Together with partners, we helped cut the red tape that results in underspending and expanded fisherfolks’ access to fuel that bolsters their livelihoods. Our efforts to address bottlenecks in healthcare spending in some of Nigeria’s states is bolstering investments that improve maternal healthcare. These efforts are turning unmet government promises into tangible service delivery that helps people thrive.
Key Messaging
Turning the tide on the global goals requires spending as promised on critical social sectors.
Effective management of public resources is essential to ensuring that countries can achieve the Sustainable Development Goals (SDGs), or global goals, and end extreme poverty by 2030. Unfortunately, as a result of the pandemic, we have seen backsliding in these efforts. Extreme poverty has increased for the first time in decades. Global debt is at an all-time high, which will undoubtedly constrain future spending toward sustainable development.
Turning the tide is going to take renewed effort by countries to mobilize financing and prioritize budget allocations that can help lift up underserved communities. As countries face intense tradeoffs, governments need to ensure that allocations for critical sectors such as health, education and sanitation are spent as promised.
We need to pull the curtain and look beyond aggregate spending figures to see how underspending in specific sectors is holding back progress on global goals.
The importance of effective implementation of government budgets has been recognized within the SDG indicators by the inclusion of a specific indicator on budget credibility: 16.6.1. But while SDG 16.6.1 measures deviations in central budgets, it does not show deviations by sector. Understanding how countries are deviating in their budgets by sector is critical to understanding how budget credibility is connected to SDG progress.
Our latest analysis examined expenditure deviations across seven sectors related to 10 global goals in 13 countries. We found that government budget shifts as a result of COVID did not necessarily worsen budget credibility patterns, but many countries shifted funding away from key sectors such as education and water and sanitation as they overspent on health and social protection.
Water and sanitation, gender and the environment had the lowest rates of budget execution; on average, these sectors were underspent by 18, 15 and 13 percent respectively.
Many countries have significant underspending in their gender ministries or sectors – for example, the Gambia, Nigeria and Zambia on average spent only half of their budgets for their gender ministries or programs from 2018 to 2020. Our case studies found that spending on gender had one of the lowest rates of implementation.
All 13 countries have established policies on promoting gender equity, but only three (Senegal, Mexico and Argentina) have put in place systems for systematically analyzing or tracking spending across ministries and programs that advance gender equity objectives.
The way forward requires more consistent reporting on sector spending.
Countries should use their Voluntary National Reviews (VNR) to report data on SDG indicator 16.6.1 and to report budget deviations by sector.
Better analysis of budget credibility challenges – both by using clear, consistent indicators of budget deviations in VNRs, as well as analyzing sectoral trends in budget credibility – can help governments identify which sectors are being deprioritized during budget implementation and work with government finance officials to address those issues.
Supreme Audit Institutions (SAIs) can include budget credibility issues as part of their audits of government spending to achieve the SDGs.
Budget credibility is critical to financing development and building back better.
Countries with greater budget credibility can benefit from cheaper and easier access to credit, which could ameliorate unsustainable debt levels.
By addressing the drivers of chronic underspending in social services, governments can ensure their budgets prioritize women, children and other marginalized communities.
When governments implement in alignment with their budgets, they send a signal to citizens that they are accountable and will deliver as promised.
HASHTAGS: #UNGA, #SDGs, #OpenBudgets
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Suggested posts: Sept 13th -14th
Explainer Video content (Twitter, Facebook & LinkedIn) - Sept 13th 2022
Download video 1: "Connecting Budget Credibility and the #SDGs"
As leaders gather for the 77th #UNGA session, how can countries regain lost ground on equity and turn the tide on the #SDGs? Our latest analysis examined sector spending on 10 #globalgoals across 13 countries. Read what we found here https://ibp.tiny.us/sdgs
How can we turn the tide on the Sustainable Development Goals, and ensure countries mobilize financing and prioritize budget allotments that can uplift underserved communities? Learn more here https://ibp.tiny.us/sdgs #GlobalGoals #SDGs
Did you know underspending is a challenge for low-income countries and spending on social services often loses priority during budget implementation? How can we change the trend? Download our briefs here https://ibp.tiny.us/sdgs #GlobalGoals #SDGs
During the pandemic, many countries shifted funding away from education, water and sanitation and overspent on health and social protection. How can lost grounds in these sectors be regained? Read here https://ibp.tiny.us/sdgs. #UNGA #SDGs #openbudgets
Gender #SDG5 Video content (Twitter, Facebook & LinkedIn) - Sept 14th 2022
Download video 2: "Connecting Budget Credibility, Gender and the #SDGs"
We have lost hard-won gains in gender equity as women and girls have borne the brunt of the pandemic’s fallout. To turn the tide on #SDG5, countries must mobilize financing and prioritize budget allotments that advance gender equity. Read more here https://ibp.tiny.us/sdgs
Many countries have significant underspending in their gender ministries/sectors. Gambia, Nigeria and Zambia on average spent only half of their budgets for their gender ministries or programs from 2018 to 2020. Read our country briefs here https://ibp.tiny.us/sdgs to learn more
Gender was among the top 3 sectors with the highest rates of underspending: 15% avg. Now, more than ever, governments must spend as promised on sectors that can propel progress on#SDG5 and ensure women are not left behind. Learn more here https://ibp.tiny.us/sdgs
Content / Posts for Launch of Budget Credibility Briefs - Sept 13th - 14th 2022
NEW: Our Budget Credibility briefs involving 13 country case studies show that effective management of public resources is essential to ensuring that countries can achieve the #GlobalGoals and end extreme poverty by 2030. Download here: https://ibp.tiny.us/sdgs
The world has seen an increase in extreme poverty. To turn the tide on the #GlobalGoals requires spending as promised on critical social sectors. Download our budget credibility briefs here https://ibp.tiny.us/sdgs
Our budget credibility research has shown that budget deviations impact underserved communities the most as governments tend to underspend most on social sectors such as agriculture and health. To learn more https://ibp.tiny.us/sdgs
As countries gather for the 77th #UNGA session, finding ways to regain lost ground on #SDGs must be at the top of the agenda. Our 13-country case studies show how countries can turn the tide by prioritizing spending on critical social sectors. Read here: https://ibp.tiny.us/sdgs
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Facebook & LinkedIn
NEW: Effective management of public resources is essential to ensuring that countries can achieve the Sustainable Development Goals (SDGs), or global goals, and end extreme poverty by 2030. Unfortunately, as a result of the pandemic, we have seen real backsliding in these efforts. Extreme poverty has increased for the first time in decades. Turning the tide on the global goals requires spending as promised on critical social sectors. To learn more, download our newly released budget credibility briefs here: https://ibp.tiny.us/sdgs
NEW: Our Budget Credibility briefs covering 13 country case studies are out. We argue that turning the tide on the #SDGs is going to take renewed effort by countries to mobilize financing and prioritize budget allocations that can help lift up underserved communities. As countries face intense tradeoffs, governments need to ensure that funding is targeted at critical sectors such as health, education and sanitation and that allocations are spent as promised. Download here https://ibp.tiny.us/sdgs
Our budget credibility research in 13 countries has shown that underspending is a particular challenge for low-income countries and governments tend to underspend most on social sectors such as agriculture and health. To download our briefs, click here: https://ibp.tiny.us/sdgs
Content / Posts for Country Briefs: 15th - 21st Sept 2022
Indonesia - 15th Sept
Twitter: The Indonesian government has made a firm commitment to meeting the #SDG target by 2030, but to accelerate achievement, it must develop a mechanism to translate these action plans into development programs and activities. Learn more here https://ibp.tiny.us/sdg-indonesia.
Facebook & LinkedIn: The Indonesian government has made a firm commitment to meeting the targets of the Sustainable Development Goals (SDGs) by 2030 but to have a significant impact on accelerating achievement of the SDGs, Indonesia should develop a mechanism to translate these action plans into development programs and activities. Learn more here https://ibp.tiny.us/sdg-indonesia. Download graphics here
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Nigeria - 16th Sept
Twitter: In Nigeria, budget deviations during implementation can undermine spending on the priorities laid out in the budget and the National Development Plan’s key sectors. Find out how it can turn the tide https://ibp.tiny.us/sdg-nigeria
Facebook: In Nigeria, total expenditure on education was less than 10 percent while the country needs at least 20 percent for it to meet its #SDG target. The government must pay more attention to critical sectors by increasing allocations and seeking partnerships with the private sector for infrastructural development. Download here https://ibp.tiny.us/sdg-nigeria for more.
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Romania - 19th Sept
Twitter: Romania has significant deviations in almost all of its budget's chapters related to SDGs ranging as high as 70%. Now it must align its institutional framework with its commitments to the SDGs. Read more here: https://ibp.tiny.us/sdg-romania
Facebook & LinkedIn: Romania has significant deviations in almost all of its budget's chapters related to SDGs ranging as high as 70% in some cases. Now it must align its institutional framework with its commitments to the SDGs. Read more here: https://ibp.tiny.us/sdg-romania
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Ghana - 20th Sept
Ghana’s efforts to achieve the #SDGs by 2030 call for improving spending gaps in sectors related to the goals on #hunger, gender equity, and health. For more download Ghana’s brief here: https://ibp.tiny.us/sdg-ghana.
Facebook & LinkedIn: In Ghana, Food and Agriculture was underspent by 28% while the sector is stagnating on the SDG index trend. Efforts to spend as promised on the food sector could help accelerate progress on #SDG2 toward zero hunger. For more, read our brief here https://ibp.tiny.us/sdg-ghana.
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Mexico - Sept 21st
Twitter: We did not find conclusive evidence that the Mexican government is prioritizing resource allocations, except for social protection, to accelerate compliance on the SDGs. Download here: https://ibp.tiny.us/sdg-mexico
Facebook & LinkedIn: Mexico's government has implemented an #SDG database that lists their programs contributing toward the #SDGs, and detailed data on government budgets and expenditures related to each sector is also published annually. However, we found that allocations towards education, health and the environment in particular have been insufficient. Read more here: https://ibp.tiny.us/sdg-mexico
Mexico's government publishes expenditures that relate to women and men as Annex 13 of their annual budget, although civil society has questioned the transparency and clarity of the methodology that the government uses for including programs in this Annex. Read more here on how spending patterns affect #SDG5: https://ibp.tiny.us/sdg-mexico
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Gambia - 22nd Sept 2022
Twitter: The Gambia has experienced underspending on its overall budget allocations that have had huge effects on public service delivery, especially in agriculture and the environment. What can it do in order to achieve the #SDGs? Read more here https://bit.ly/3TRuOD
Facebook & LinkedIn: Between 2018 and 2020, the Gambia has been experiencing underspending on its overall budget allocations that have had a significant effect on public service delivery, especially in agriculture, environment, gender equity and social protection. What can it do in order to achieve the #SDGs. Read more here https://bit.ly/3TRuOD
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Stories of champions fighting to ensure budget allocations get to critical sectors: 23rd - 24th Sept
Ghana: Janet a mother of 3, a rice farmer and a fierce activist is leading her community of women farmers to confront huge challenges both from government and her male counterparts, hindering them from accessing their allocation of scarce fertilizers. Read here https://ibp.tiny.us/janet.
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Indonesia: Nilawati, a fisherwoman in Medan, Indonesia, with organizations @DPPKNTI and @inisiatif_org, is fighting the obstacles hindering her fisherfolk community from accessing promised fuel subsidies. Read her remarkable story here: https://ibp.tiny.us/nilawati.
Download graphics here