Colombia is currently preparing the Biennial Royalties Budget 2025 – 2026 and in the balance of the item whose execution is about to end, for 2023 and 2024, it is not the best, since it reaffirms that the municipalities and departments are not taking advantage of these monies as they should. , that They could be an axis of transformation and development in their communities.
All this is managed through the General Royalties System, a mechanism to distribute resources derived from the exploitation of non-renewable resources in Colombia, such as mining and hydrocarbon extraction, with the aim of reducing territorial inequality and promoting sustainable development in the regions, in biennial cycles.
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A recent report from the Fiscal Observatory of the Javeriana University warns that, although the SGR has a robust and efficient model, for the 2023-2024 biennium the amount pending to be executed reached $19.6 trillion, this being the highest of all. the periods.
“Additionally, the initial availability of the SGR has grown significantly since the 2013-2014 biennium when the amount reached only $2.3 billion. Royalty resources that are not executed in the respective biennium They are included in the budget of the following biennium as initial availability,” they highlighted.
Royalties
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Faced with this reality, Mauricio Salazar, director of the Fiscal Observatory, indicated that this growth in initial availability reflects a need in the regions to implement instruments that allow these resources to be executed and used in the best way, since although they lose, yes it is development that stops occurring in the municipalities and departments.
“The SGR has been key to promoting regional development and reducing inequalities in Colombia. However, challenges such as dependence on hydrocarbon revenues and improvement in technical management persist. Prioritizing and executing projects recently is essential so that royalties not only distribute resources, but also generate a positive and sustainable impact on the communities,” said Salazar.
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According to other research by these analysts, in terms of transparency, the Royalty System has advanced considerably compared to the budget system of the General Budget of the Nation, by guaranteeing access to information and citizen participation.
“The SGR has various information systems, including: Royalty Map, the Distribution Information and Consultation System (Sicodis), the Bank of Programs and Projects of the General Royalties System, the instruments of the Monitoring, Evaluation and Control System (SSEC), the Budget and Royalties System (SPGR) of the Ministry of Finance and Public Credit,” he said.
Royalties
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In this sense, they projected that for the 2025-2026 biennium, the Nation’s income from royalties will amount to $30.9 billion and the main source of income for the system will be the collection of royalties from hydrocarbons ($17.2 billion) and the sector. mining ($8.3 billion). Based on this data, the Observatory highlights that it is a considerable amount of money and that one must prepare to know how to use it.
“The system faces significant challenges. The most obvious is the dependence of income from non-renewable resources, whose prices and production are subject to the volatility of the international market. This characteristic introduces a level of uncertainty in the System’s income, which can affect the long-term planning of the projects and the financial stability of the system,” said Mauricio Salazar.
A pedagogical aid
Aware of the challenges involved in the administration of the General Royalties System and the importance of the regions preparing themselves, the Javeriana Fiscal Observatory made available to the people a guide on how this budget works and how to use it correctly to get good results. advantage.
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“This guide is aimed at all citizens who, without being specialists, want to understand the main aspects of the SGR, the way in which the Biennial Royalty Budget is constructed and know which sources to refer to for further information when required. In this way, we provide pedagogical input to carry out oversight, make informed decisions and make accurate public policy recommendations,” they explained.
In total, between 2012 and 2024, the SGR has financed 31,907 investment projects, with an average of 4,558 projects per period. The average value of each project has been approximately $2.5 billion constant as of 2024. In addition, it is important to highlight that, in recent years, a trend towards a decrease in the average cost has been observed, which could suggest a lower scope in certain projects. .
Royalties.
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“On October 1, the Ministry of Finance and Public Credit and the Ministry of Mines and Energy presented to the Congress of the Republic the Biennial Budget Project of the General Royalties System (SGR) for the period 2025 – 2026. It remains to wait for approval in the first debate by the Economic Commissions of the Legislature before November 5, the approval definitive by the plenary sessions of Congress before midnight on December 5, and the presidential sanction before the end of the year,” they said in the Observatory.
It should be remembered that, as occurs with the General Budget of the Nation, if the bill is not approved on the previous dates, or if after the Law that approves the budget is sanctioned, the Constitutional Court leaves it without effect. , the President may issue the budget by decree.
For this, it will be based on the project presented by the Government for the first debate with the modifications. that have been approved in Congress in case you have managed to complete this stage.
