MTEF LESSONS

1
MTEF LESSONS

•  
• Initial conditions are very important
• Honesty/realism in forecasting/projecting/estimati
  ng the aggregates is crucial
• Providing space for a strategic phase to budget
  preparation and separating it from the detailed
  preparation and consideration of the budget
  estimates is at the heart of MTEF implementation

2
MTEF LESSONS (CONT)

• Engaging sectors/line ministries/budget agencies
  in strategic management and clearly
  distinguishing between the resource allocation
  choices that are made collectively at the centre
  (Cabinet, Committee of Ministers) and ministers
  individually
• Integration of the various phases of the budget
  cycle, including the MTEF, and of the budget and
  other key processes, including the PRSP, is what
  distinguishes the countries in the maturing
  category.

3
THE WHAT

• An MTEF is a whole of government framework for
  supporting a strategic and policy based approach
  to budget preparation
• It is an integral part of the annual budget
  cycle

4
THE WHAT (CONT)

• Its key components are a medium term perspective
  to
• A disciplined aggregate constraint
• A disciplined sector/organisation constraint
• A clear focus on policy priorities and
  inter-sectoral allocations
• A much greater emphasis on intra-sectoral
  allocations and, hence, strategic management at
  the sector and organisational level

5
THE WHAT (CONT)

• Central to an MTEFs relevance is the degree of
  political engagement in the countrys strategic
  decision making processes and their link to the
  budget
• It supports and demands a top down approach to
  budgeting
• The MTEF is becoming increasingly associated with
  making budgets more performance oriented and
  transparent.

6
ISSUES EMERGING

• Positive impact of PER process in East Africa
• Strong case for a single budget agency and for
  the PRSP to be coordinated there
• Excessively detailed costings being submitted to
  MoF as part of budget
• You really cannot pilot an MTEF (you can pilot a
  MT perspective at the sector level)

7
ISSUES EMERGING (CONT)

• Top-down budgeting not just a financial
  constraint but also a policy (priority) one
• A budget timetable that is adhered to and
  provides time for the strategic phase
• A more strategic approach raises the demands on
  donors
• Maturity simply brings out new problems
• Cash budgeting (still)

8
UNRESOLVED QUESTIONS

• Performance based budgeting systems
• The nature and extent of authority and
  flexibility for decision makers
• PRSPs, MTEFs and intergovernmental financial
  arrangements
• The nature of participation