MTEF LESSONS Initial conditions are very important;   Initial conditions are very important; Honesty/realism in forecasting/projecting/estimating 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;

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.

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;

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;

THE WHAT (CONT) Central to an MTEFs relevance is the degree of political engagement in the country’s 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.

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)

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)

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