SOFAZ not to cut expenditures in 2016

Economy Materials 27 December 2015 20:24 (UTC +04:00)
The State Oil Fund of Azerbaijan (SOFAZ) has no plans to cut budget expenditures for 2016.
SOFAZ not to cut expenditures in 2016

Baku, Azerbaijan, Dec. 27

By Maksim Tsurkov - Trend:

The State Oil Fund of Azerbaijan (SOFAZ) has no plans to cut budget expenditures for 2016, the fund told Trend.

"The budget of the fund, as well as the state budget, is approved by the decree of the president of Azerbaijan in manats and is a financial document, expenditures of which should be executed," the fund said. "In this regard, regardless of income level in the next year, SOFAZ is obliged to fulfill the expenditure budgeted."

The revision of the budget expenditures of the fund due to the fact that expenditures of the SOFAZ are linked to expenditures of the consolidated budget, the limit of which is approved by law on the state budget, will be possible only in case of revision of the state budget of the country, according to the fund.

The SOFAZ budget project has been submitted for approval to the president of Azerbaijan. SOFAZ budget revenues for next year are projected at 6.712 billion manats, expenditures - 8.261 billion manats, including expenses for running the fund estimated at 24,420 million manats.

The structure of the fund expenditures includes transfers to the state budget of Azerbaijan, expenses for the improvement of living conditions of refugees, reconstruction of the Samur-Absheron irrigation system, within the framework of the Baku-Tbilisi-Kars railway project, expenditures for financing the state program on education of Azerbaijani youth abroad, financing the state's share in the projects of the Southern Gas Corridor and the construction of the new generation drilling rig of SOCAR.

SOFAZ was established in 1999 with assets of $271 million.

Based on SOFAZ's regulations, its funds may be used for the construction and reconstruction of strategically important infrastructure facilities, as well as solving important national problems.

The main goals of the State Oil Fund include: accumulation of resources and the placement of the fund's assets abroad in order to minimize the negative affect on the economy, the prevention of "Dutch disease" to some extent, promotion of resource accumulation for future generations and support of current social and economic processes in Azerbaijan.

As of October 1, 2015, SOFAZ assets reduced by 6.38 percent compared to early 2015 ($37.1 billion) and were estimated at $34.74 billion.

Follow the author on Twitter: @MaksimTsurkov