SEMARNAT’s Water Programs to See Budget Cuts in 2024

As water resources become scarcer and industry insiders ask for more resources to secure access, the Ministry of Finance (SHCP) plans to reduce the budget for key drainage, drinking water and water treatment programs managed by the Ministry of Environment and Natural Resources (SEMARNAT). 

According to SHCP’s Pre-Economic Criteria 2024, the government could reduce the budget for the Program for the Infrastructure of Drinking Water, Sewage and Sanitation by 64%. The federal government approved a budget of MX$19.6 billion (US$1.08 billion) in 2023, but the proposed budget for 2024 is MX$7.03 billion (US$388.4 million). 

Similarly, the Program for the Protection of Population Centers and Productive Areas, which is in charge of the development and adaptation of projects for the construction, operation and maintenance of infrastructure in watercourses, particularly in high-vulnerability areas, is also expected to suffer budget cuts. This program had resources approved for over MX$5.5 billion (US$303 million) for 2023 but the suggested budget for 2024 is of MX$4.05 billion (US$223.5), a 31% reduction.

The Infrastructure Program for the Modernization and Rehabilitation of Technified Irrigation and Temporary Systems is expected to face a 76% budget cut. The government approved a budget of MX$23.1 billion (US$1.27 billion) in 2023 and cut it to MX$5.4 billion (US$300 million) in 2024. 

While other programs managed by SEMARNAT are expected to see budget increases, these average at 4.8%, which is below the 7.1% year-to-year inflation rate reported by the Central Bank’s (Banxico) latest update of 1Q23. 

Programs that are expected to see budget increases include the Operation and Maintenance Program for Water Infrastructure, which will grow slightly from MX$4.6 billion (US$253.1 million) to MX$4.8 billion (US$264.1 million). The Program for Hydro-agricultural Infrastructure Support will also receive a 4.8% increase, rising from MX$1.7 billion (US$93.6 million) in 2023 to MX1.78 billion (US$98 million) in 2024. The Sustainable Forest Development Program will receive a nominal increase of 4.8% as well, with its budget rising from MX$862 million (US$47.4 million) to MX$903.6 million (US$49.7 million). The Water Supply, Drainage, and Treatment program will also receive a 4.8% budget increase, with its funding rising from MX$3.4 billion (US$187.2 million) in 2023 to MX$3.5 billion (US$192.9 million) in 2024.