1. Collaborative Africa Budget Reform Seminar Budget Reform in Mauritius ---------------------------------------------------------------------------------------- Prepared by: Mr. A.K. Kokil (Assistant Director ) Mr. R.C. Khushiram (Ag. Principal Economist) Ministry of Finance and Economic Development Presentation Central MTEF Unit

2. Collaborative Africa Budget Reform Seminar Budget Reform in Mauritius ---------------------------------------------------------------------------------------- The Current Budgeting System How does the national budget perform in terms of the three core outcomes ? (i) aggregate fiscal discipline (ii) allocative efficiency and (iii) effective service delivery.

3. Collaborative Africa Budget Reform Seminar Budget Reform in Mauritius ---------------------------------------------------------------------------------------- The Strengths  Some of the foundations of the MTEF and RBB are already present  Financial monitoring systems and compliance to existing rules are strong The Limitations  Trade-offs between different priorities are difficult  Ill-equipped for strategic planning  A shopping list of projects by line Ministries, not necessarily in line with genuine needs

4. Collaborative Africa Budget Reform Seminar Budget Reform in Mauritius ---------------------------------------------------------------------------------------- A road map for Budgetary Reform Expenditure ceilings with a three-year horizon incremental but programme-based budgeting programme-based budgeting linking required resources to desired outputs Identify measures to improve efficiency and effectiveness (M&E )and prioritize programmes Develop a sector expenditure Framework Estimating the costs of implementing priority programmes and achieving agreed outputs Full fledged performance Budgeting MTEF RBB

5. Collaborative Africa Budget Reform Seminar Budget Reform in Mauritius ---------------------------------------------------------------------------------------- An annual project approach An in-built Input focus A rolling 3- year budgeting Emphasis on allocative choices and trade offs Introduction of MTEF

6. Collaborative Africa Budget Reform Seminar Budget Reform in Mauritius ---------------------------------------------------------------------------------------- Introduction of MTEF  Setting up a Macro-economic Technical Committee  A Medium Term Fiscal Framework  Targets for total revenue, spending and the deficit for the forthcoming budget and successive framework years

7. Collaborative Africa Budget Reform Seminar Budget Reform in Mauritius ---------------------------------------------------------------------------------------- Introduction of MTEF Government agrees on (a) Medium term fiscal targets (b) Aggregate expenditure limit and (c) Sectoral allocations

8. Collaborative Africa Budget Reform Seminar Budget Reform in Mauritius ---------------------------------------------------------------------------------------- Introduction of MTEF  The budget estimates of line-ministries are reviewed at the Ministry of Finance and Economic Development  Bilateral discussions with line ministries on their spending proposals  Arbitrary cuts and limited scope for contestability  Review sectoral policies and priorities of line- ministries

9. Collaborative Africa Budget Reform Seminar Budget Reform in Mauritius ---------------------------------------------------------------------------------------- Implementation of the top-down approach The top-down resource envelope Macroeconomic Framework Medium term fiscal targets Aggregate expenditure limit A bottom-up estimation of the costs of policies Sectoral spending demands - prioritise activities to fit within the sectoral resource ceiling Sectoral plans - programmes/sub-programmes to achieve agreed objectives and determine required resources to achieve the desired results Sectoral spending policies - review sectoral objectives, policies and strategies, and identify outputs

10. Collaborative Africa Budget Reform Seminar Budget Reform in Mauritius ---------------------------------------------------------------------------------------- Introduction of Results-Based Budgeting RBB was introduced (i) on a phased basis over a longer time frame and (ii) on a pilot basis in five sectors namely Education and Training, Health, Social Security, Environment (including Waste water) and Public Infrastructure (including Transport).

11. Collaborative Africa Budget Reform Seminar Budget Reform in Mauritius ---------------------------------------------------------------------------------------- Introduction of Results-Based Budgeting  An elementary RBB implemented in Education and Training  A recasting of the present line budgeting to a three- year rolling integrated budget within an incremental budgeting framework  Allocation of resources on a programme basis  Activities linked to outputs and outcomes  Developing a Monitoring and Evaluation mechanism

12. Collaborative Africa Budget Reform Seminar Budget Reform in Mauritius ---------------------------------------------------------------------------------------- Introduction of Results-Based Budgeting Institutional Structure CABINET Decide on policies and priorities and finalise expenditure ceilings and sectoral allocations Central MTEF Unit Review sectoral policies and priorities,and formulate 3-year programmes in collaboration with Sectoral MTEF Units Sectoral MTEF Units Develop qualitative and quantitative monitorable indicators Determine required resources to achieve the desired results Undertake monitoring and evaluation of programmes Macroeconomic Technical Committee Work out macroeconomic framework ; Derive total expenditure envelope, sectoral ceilings and allocations

13. Collaborative Africa Budget Reform Seminar Budget Reform in Mauritius ---------------------------------------------------------------------------------------- Lessons learnt  Budget reform is a long term process  A harmonised and phased approach  First the building blocks - a consistent macroeconomic framework and strategic allocation of resources  Gradual implementation of the different stages of results-based budgeting

14. Collaborative Africa Budget Reform Seminar Budget Reform in Mauritius ---------------------------------------------------------------------------------------- Lessons learnt  Establish and strengthen the causal links between activities and outputs and between outputs and policy outcomes.  Objectives and targets and responsibilities have to be properly disaggregated and cascaded down to smallest operating units.

15. Collaborative Africa Budget Reform Seminar Budget Reform in Mauritius ---------------------------------------------------------------------------------------- Lessons learnt  The budgetary reform programme should not remain a top-down approach  The degree of success in implementing the budgetary reform programme is higher when the whole process is driven and owned by implementing agencies.  Implementation decisions should be devolved to the lowest feasible level in the hierarchy.

16. Collaborative Africa Budget Reform Seminar Budget Reform in Mauritius ---------------------------------------------------------------------------------------- Lessons learnt Appropriate institutional mechanisms and structures should be put in place to support the budget reform programme

17. Collaborative Africa Budget Reform Seminar Budget Reform in Mauritius ---------------------------------------------------------------------------------------- Lessons learnt  Line ministries are restructured  Strategic planning and analytical capabilities for assessing and appraising programmes and policies are reinforced in line-ministries.  The Ministry of Finance is redesigned  Processes for deciding on sectoral priorities and allocations are devised and strengthened  Political will to carry forward the budget reform programme reinforced

18. Collaborative Africa Budget Reform Seminar Budget Reform in Mauritius ---------------------------------------------------------------------------------------- Thank You