When Jamaica’s Independent Fiscal Commission (IFC) warned against “over-ambition in materially executing additional capital projects amid local capacity constraints,” the phrase sounded technical. But behind it lies a simple and persistent question: if the money is approved, why don’t the projects happen?

The issue has taken on new urgency after Hurricane Melissa, which caused an estimated US$8.8 billion in damage, or about 41 per cent of gross domestic product (GDP), and left the Government facing the task of delivering large-scale reconstruction. The concern now is not only whether Jamaica can finance rebuilding, but whether it can execute it quickly and effectively.

What is capital under-execution?
Capital expenditure refers to spending on long-term assets such as roads, bridges, schools, hospitals, housing, drainage systems and water infrastructure. When Parliament approves a budget, it authorises the Government to spend specific amounts on these projects.

Capital under-execution occurs when the approved money is not spent within the fiscal year. In the first half of the 2025/26 fiscal year (April–September), Jamaica budgeted $35.5 billion in central government capital spending but executed only $19.2 billion — nearly 46 per cent below plan. Across the wider specified public sector, which includes most public bodies, under-execution was even larger. This did not mean the Government “saved” money. In most cases, projects were delayed, postponed or slowed, pushing the spending into future years or leaving it unrealised altogether.

Why does this keep happening?
The IFC does not frame the problem as a lack of effort or intent. Instead, it points to structural and institutional constraints that limit how much can realistically be delivered in a given year.

Procurement delays are a major factor. Public procurement involves multiple stages — feasibility studies, environmental approvals, tendering, evaluation and contract award — each of which can take months. Legal challenges and bid disputes can add further delays.

Project readiness is another issue. Some projects enter the budget before designs are finalised or land acquisition is completed. When obstacles arise, timelines slip.

Capacity constraints also matter. Executing large infrastructure programmes requires engineers, quantity surveyors, project managers and contract supervisors. These skills are in short supply across the public sector, and competition with the private sector is intense.

The result is a recurring mismatch between what budgets assume can be delivered and what institutions can actually execute.

Why do budgets remain ambitious?
Budgets serve multiple purposes. They are not just financial documents, but policy statements that signal priorities — housing, roads, climate resilience, social infrastructure.

There are incentives to budget ambitiously:

To demonstrate commitment to development

To signal readiness to use available financing

To align with multi-year plans and political promises

However, budgets are rarely built around a hard assessment of execution capacity. Projects that are technically feasible over several years are often booked as annual targets, even when approvals or staffing constraints make full delivery unlikely. Over time, this has normalised under-execution as an adjustment mechanism — spending simply doesn’t happen when systems cannot cope.

Why does this matter now?
Historically, capital under-execution helped Jamaica meet tight fiscal targets during years of austerity. But the context has changed.

Hurricane Melissa has shifted priorities from consolidation to reconstruction and resilience. Housing, infrastructure repair and climate adaptation projects are now time-sensitive. Delays have real economic and social costs.
The fiscal stakes are also higher. Public debt, which had fallen to 60.3 per cent of GDP before the hurricane, is now projected to rise to 68.2 per cent. Delayed projects can prolong recovery, weaken growth and keep debt elevated for longer.

Is financing the problem?
According to the IFC, Jamaica has access to approximately US$663 million through disaster-risk financing instruments, and international development partners have mobilised up to US$6 billion in potential support for recovery and reconstruction.

In other words, money is available. The binding constraint is the ability to turn financing into completed projects.
This is why the commission cautions against “over-ambition” — not to argue for less development, but for better alignment between plans and capacity.

What are the risks if nothing changes?
Persistent under-execution carries several risks:

Slower recovery: Delays in infrastructure and housing projects slow economic rebound after shocks;

Weaker growth: Public investment supports productivity and private-sector confidence; delays defer these benefits;

Fiscal strain: Unfinished projects can raise costs over time and prolong the need for borrowing; and

Credibility challenges: Repeated gaps between budgets and outcomes can undermine confidence in fiscal planning.

There is also a political risk. Communities that see projects announced but not delivered may lose trust in public institutions.

What would improvement look like?
The IFC does not prescribe specific projects, but its assessment points to several areas where progress could matter:

More realistic capital budgeting, based on execution capacity rather than aspiration alone;
Stronger project preparation, ensuring designs, approvals and land issues are resolved earlier;
Procurement reform and streamlining, without sacrificing transparency; and
Investment in public-sector technical capacity, particularly for large, complex projects.

None of these are quick fixes. But as Jamaica enters a reconstruction phase, they may prove as important as financing itself.

The bottom line
Jamaica’s fiscal discipline over the past decade created buffers that allowed it to respond to Hurricane Melissa. The next test is different.

As the IFC’s warning suggests, resilience now depends not just on sound finances, but on the State’s ability to deliver what it plans. Turning approved budgets into finished projects may be the defining challenge of the recovery — and of Jamaica’s next phase of development.