National Public Investment System of Nicaragua

Country
Investment Bank Training Methodologies Projects Bank Legal Framework Processes Stakeholders Instruments Formulation Planning Cross-cutting Processes Budgeting Evaluation Cross-cutting Processes Ex-ante Evaluation Selection Execution Ex-post Evaluation Other Stakeholders Public Investment Policy Cycle Staturory Governing Body Decree 61-2001 on Creation, Organization and Functioning of the National Public Investment System (SNIP) of Nicaragua General Directorate of Public Investment of the Ministry of Finance and Public Credit General Budget Directorate Sectoral Public Investment Units Public Investment Technical Committee Steering Financing Coordination Information Project Management Cycle Public Investment Program

 

Stakeholders

Statutory Governing Body:

As the SNIP steering entity, the General Public Investment Directorate (DGIP) prepares the regulations and methodologies that contribute to the formulation and ex-ante assessment of investment projects. To facilitate the projects’ life cycle, the DGIP manages the Public Investment Information Systems (SIIP) where the entities register the investment projects to obtain the “Technical Endorsement”. The DGIP leads the investment project monitoring process and, through the SIIP, makes information available to the citizens on the physical-financial progress of the projects until their conclusion. The DGIP prepares the medium-term budget framework (MPMP) and the public investment program (PIP).

Related Entities:

 

The General Budget Directorate assigns the budget to the investment projects included in the PIP and monitors the financial execution through the Integrated Financial Administration Management System (SIGAF). It establishes the budget limits for the Ministries and other public entities and prepares and follows up on the national budget.

Incorporated Entities:

The sectoral public investment units are in charge of the formulation and ex-ante assessment of the projects of the ministry or public entity they belong to, register the projects in the SIIP, and follow up the observations by the DGIP. They are also responsible for managing the funding of the projects until they are included in the PIP. During the execution of the projects, the executory unit reports on the project’s physical-financial progress in the SIIP and SIGAF systems.

 

Legal Framework

By Presidential Decree 61-2001 the legal SNIP framework officially creates the system and gives it functions. In November 2003 its functioning is regulated by Presidential Decree 83-2003. With the acknowledgment of the SNIP as the associated system in the country’s financial administration, in title IX of law 550 of the Financial Administration and Budget Regime of July 2005, the legal SNIP framework is raised to law and its attributions are strengthened. Presidential Decree 19-2010 of May 2010 modifies the previous SNIP decrees and assigns National Public Investment System to the Ministry of Finance and Public Credit. See the complete legal framework.

 

 

Methodologies

To facilitate the process of presenting and assessing investment projects, the DGIP has prepared the “General Methodology for Preparation and Assessment of Investment Projects”. With this methodology, projects can be assessed based on the calculation of the Internal Return Rate (IRR), Net Present Value (NPV), Cost-benefit and Cost-effectivity, incorporating social costs. Additionally, several specific methodologies have been developed for the water and sanitization, education, energy, health, and road infrastructure sectors. There are also guides for risk mitigation and climate change adaptation for water and sanitization, energy and road infrastructure projects. See the list of methodologies (Available only in Spanish)

 

 

Public Investment Plans

The Public Investment Program is one of the most important planning instruments of the Nicaraguan government since it takes government policies, plans and programs into practice, to reach the medium and long-term goals and targets the country has proposed. To ensure high quality of public investment the DGIP, as the steering entity, promotes and supports, in a continuous process, the professional and technical teams of the SNIP in the ministries, public and local government institutions which fulfill public investment functions, in order to jointly and efficiently carry out the strategic tasks it is in charge of.

 

 

Investment Project Bank

The Public Investment Information Systems (SIIP) are the information platforms that support the Nicaraguan SNIP’s procedures and regulations. The Project Bank, as part of the SIIP, is the unique official register of all public-sector investment systems in the different stages of the project’s life cycle. The institutions that form the SNIP should enter all their projects into the Project Bank with the information required by the effective public investment regulations. The SIIP is divided into four sub-systems: Pre-investment, Programming, Contracts and Tenders. Each sub-system has a specific module to facilitate ex-ante assessment and technical support procedure, formulation of the public investment plan, follow-up of the tenders and the physical-financial execution of the public investment projects.

The SIIP is publicly accessible and, in the sub-systems that are part of it, the project files can be consulted, which contain general information such as the goal, total investment amount justification, ex-ante assessment results, expected results and quantification of beneficiaries separated by gender. In case of projects that have already received an opinion, the corresponding attached file can be consulted. The follow-up module shows the investment project programs from 2015 to present, consolidated or per institution, source of financing, or economic sector. There is information on the physical-financial progress of each of the investment projects too. The contract and tender modules show details on the contracts and tenders linked to the investment projects.  

 

 

Training

The SNIP website has a section on training that shows the material related to the use of systems and methodologies of investment project formulation and assessment. These materials come mainly from presence-based training that has been given to public officers.

 

 

Project Management Cycle

In the Nicaraguan SNIP, the project cycle is understood to include the pre-investment, finance management, investment and operation stages a project follows from beginning to end. The pre-investment phase is framed in the institutional planning, in accordance with the effective regulation. Public investment projects must contribute to achieving the targets and priorities the government has established in the different national and sectoral plans. The pre-investment phase starts in each one of the investment units of the ministries which formulate the investment projects in accordance with the formulation and ex-ante assessment methodologies.

Afterwards, the projects can be registered in the SIIP to obtain the “Technical Endorsement” of the DGIP. The Technical Endorsement guarantees that the projects are based on pre-investment studies to raise the efficiency of the expense, the impact on social well-being focused on gender, generation and interculturality, their financial and operational sustainability, their resistance and resilience to disaster risks and the effects of climate change; all this in concordance with the National Human Development Plan and the Institutional Strategic Plans. Projects of less than 500,000 USD can obtain their Technical Endorsement from the DGIP to proceed to the execution phase when filling out and attaching the Project Executive Document (DEP) and its annexes to the request. The Technical Endorsement, in accordance with the effective regulations, is considered of public interest and can be consulted by external users in the SIIP.

Once the projects have the “Technical Endorsement” the projects can look for finance according to the budget limits established for each ministry and decentralized entity, or based on external loans and/or donations. During the investment phase, the entities execute the investment project and report on the physical-financial progress in the SIIP and the Financial Administrative Management System (SIGAF). The DGIP and the Technical Investment Committee monitor the project execution. For large projects the DGIP pays physical visits to verify that the information reported in the SIIP reflects the information gathered during the visits. The life cycle of the project can be monitored through the SIIP too, which is publicly accessible and enables users to obtain detailed and monthly updated information of each of the projects that are part of the public investment program of the current year or previous periods.

 

 

Public Investment Policy Cycle

Public investment planning in Nicaragua is pluriannual, with a 4-year horizon and is depicted in the Medium-Term Budget Framework (MPMP) and the Public Investment Program (PIP). The PIP is prepared each year by the DGIP based on the projects registered in the project bank and that, when meeting the effective regulations and methodologies, obtain the “Technical Endorsement” as established in Art. 171 of Law 550. The General Budget Directorate determines the budget limits for the government entities and, based on these limits, the projects are selected to include in the PIP. Projects with external finance or donations need to accredit the finance with loan contracts and/or donation agreements, before being incorporated into the PIP. Once the PIP has been prepared, it is integrated into the Budget Bill for approval by the National Assembly.

The execution of the PIP is monitored by the Technical Investment Committee (formed by the DGIP, the Medium-Term Budget Directorate, the Ministry of Foreign Affairs and the Analysis and Follow-Up Directorate of the National Assembly). If any project needs to modify its assigned budget, the Technical Committee authorizes or rejects those changes.

The physical-financial progress of the PIP is monitored through the Public Investment Information Systems and the Financial Administrative Management Information System (SIGAF). These systems are publicly accessible and enable internal and external users to create different types of personalized reports monthly or annually for the year in course or previous years. The information that feeds these systems comes from the project executory entities who are responsible for registering the information on physical-financial progress. Based on the results registered during the year, decisions are made to prepare the next PIP.

 

Latest update: July 1, 2021