The Government of Sarajevo Canton (KS) has presented the draft budget for 2025, amounting to 1.478 billion BAM (Bosnian Convertible Marks), and has sent it for parliamentary review. A public consultation period of 15 days has been proposed. The draft budget emphasizes the continuation of crucial infrastructure investments, despite the challenges posed by projected reductions in certain public revenues.
Government’s Financial Strategy and Revenue Projections
Prime Minister Nihad Uk emphasized that the budget for 2025 is designed to ensure that public services and subsidies for citizens remain stable. However, the canton faces financial challenges due to a reduction in corporate and income taxes and changes in the distribution of public funds from the federal government. Specifically, a decrease in the revenue-sharing coefficient (known as the “ponder”) in 2025 will further constrain the resources available to KS, meaning that although indirect taxes may rise, the citizens of Sarajevo Canton will not feel the benefits.
Despite these challenges, Prime Minister Uk assured that the quality of public services would not be diminished. “We will not cut subsidies for kindergartens, extended school hours, free public transportation for pensioners and students, free textbooks, maternity benefits, or student scholarships,” he stressed. “Our commitment is to maintain these services while finding ways to navigate the financial difficulties ahead.”
Continued Investment in Infrastructure Projects
The government’s budget proposal highlights the continued focus on infrastructure development as a central pillar of the upcoming fiscal year. Significant investments in transportation, energy efficiency, and public utilities are planned to modernize the city and improve quality of life for residents.
Key infrastructure projects for 2025 include:
- **Water Supply System Upgrades**: Continued efforts to repair and modernize Sarajevo’s water supply network.
- **Traffic Infrastructure**: The completion of major urban roads, including the Nulta and Prva Transverzala highways, which will improve city traffic flow and connectivity. The Kobilja Glava Tunnel, part of the Prva Transverzala project, will be operational once it is connected to Alipašina Street.
- **New Roads**: The tender process for the South Longitudinal Road has been launched, with an expected completion in 2025, which will connect the Grbavica stadium to Hamdije Čemerlića Street.
- **Tram System Expansion**: The purchase of additional trams and modernization of minibus and bus fleets to improve public transport.
- **Energy Efficiency**: Continuing efforts to increase energy efficiency in public buildings, alongside a focus on reducing air pollution.
- **Cycling Infrastructure**: The development of cycling paths throughout the city, as part of a broader sustainable transport initiative.
- **New University Library**: A major cultural investment with the construction of a new University Library to enhance the educational infrastructure of the city.
Additionally, a new tram line connecting Ilidža and Hrasnica is planned to further expand the public transport network.
Housing and Social Infrastructure Investments
The draft budget also includes significant investments in housing, particularly for veterans and their families. The Ministry of Education is also continuing to invest in educational infrastructure, with plans to build new schools in Pofalići, Šip, and Rosulje, along with the renovation and equipment of various existing educational facilities.
Healthcare Investments
The 2025 budget proposal allocates funding for essential healthcare projects, including the digitalization of pathological analysis, the procurement of medical equipment, and the renovation of healthcare facilities to improve service delivery.
**Fiscal Challenges and Measures to Address the Deficit**
Finance Minister Afan Kalamujić outlined a cautious fiscal approach in response to the forecasted revenue shortfall. Due to a reduction in the expected federal revenue by 25 million BAM for the final quarter of 2024, the canton faces an additional challenge in meeting its financial obligations. As a result, the government is taking a conservative approach to spending in 2025, focusing on reducing the deficit and increasing revenue.
In line with these fiscal goals, the Ministry of Finance will also form an expert advisory body to help enhance revenue collection and expenditure management, aiming to stabilize the budget over the coming years. A total of 20 million BAM, possibly more, will be allocated to deficit reduction measures.
Conclusion
Despite the financial constraints posed by the changes in federal revenue distribution and economic pressures, the 2025 draft budget of Sarajevo Canton places a strong emphasis on infrastructure investment as a driver of urban development and long-term prosperity.
The continued focus on transportation, energy efficiency, housing, and education will not only improve the city’s functionality but also enhance the quality of life for its residents. By strategically managing public finances, the government aims to navigate the challenges ahead while ensuring the sustainability of key public services and investments.
