1. MTEF BUDGET PROCESS – A TOOL FOR MAINSTREAMING MDGS
Presented by
Ms. Monica Aoko – Ministry of Finance

2. Introduction
A credible budget system requires, an effective and politically anchored mechanism to decide on and fund priorities. i.e having to use the budget as a tool to deliver the national agenda.
Strengthening the link between Governments policy priorities and public expenditure is one of the key objectives of MTEF budgeting

3. MTEF Process 2006/07 Comprehensiveness of the Budget:
This will involve shifting the focus from line item level to comprehensive analysis of policy priorities. This will be done through the Ministerial Public Expenditure Reviews (MPERs) which will be the key input to the sectoral reports.

4. MTEF Process continued
Deepening the participation of the stakeholders in the key decision making stages of the budget. This will be achieved through the Sector Working Groups and the Public Sector Hearings.
Strengthening continuity between overlapping years ( the budget year and the two forward years) by ensuring that projects/activities that are ongoing are considered while projecting the outer years.

5. MTEF Process Continued
Political Buy in the budget:
Putting in place a clear mechanism for political engagement in the budget process especially parliament
As many times as will be praticable the cabinet and parliament will be consulted as they are key to creating a credible budget.

6. MTEF process continued
Improving the classification system: During the last MTEF Budget Treasury rolled out a new Economic classification and will continue to develop it further to achieve a consistent classification of the budget.
Increasing the Budget time table: a revised annual calendar that allows an early start of the MTEF hence the reason for todays launch of the SWG’s

7. Institutional Arrangement
There are nine sector Working Groups Namely:
Agriculture and rural Development, Physical Infrastructure, General Economic Services, Public Safety law and Order, Health, Education, Public Administration Information communication and Technology and National Security
The distribution of Ministries into sectors has closely followed the type of activities and functions the Ministries do.

8. Institutional arrangements …. contd
Composition of Sector Working Group
Chairperson - Permanent Secretary
Convenor Ministry of Finance
Co-convenor - Ministry of Planning
Representatives from line Ministries making up a sector
Private sector, Civil Society, and Development Partners
Each sector will have a secretariat formed from Finance, Planning and the sector Ministries

9. Terms of reference for Sector Working Groups
Review sector objectives and strategies in relation to the overall National Goals as stated in the ERS.
Coordinate all activities leading to the development of of MPER’s and finalization of Sector report.
Identify sector priorities and rank them accordingly
Identify inter and intra – Sectoral linkages

10. Terms of reference for SWG…..Contd
Analyse cost implications of policies and strategies in the sector and identification of sector wide resource needs, including potential sources of funds
Improve communication and build partnership with other stake holders ( private sector, development partners and civil society)
Develop criteria for additional resources if any to Ministries/Departments within the sector in accordance with an agreed criteria.

11. Budget Steering Committee
A budget steering Committee has been formed in the Ministry of Finance. Its main objective will be to co-ordinate and monitor the overall budget estimates for consideration at policy level.
Review expenditure proposals in the budget
Review the overall projections of revenues, domestic borrowing and external resource flows
Coordinate the preparation of the Budget Outlook Paper and the Budget Strategy paper
Review and monitor budget execution

12. Budget Secretariat
The budget Secretariat Based at the Budgetary supply Department will provide the linkage between the sectors, line Ministries: Its role will include the following
Assist the director in the overall coordination of the MTEF process
Technical Analysis of policy and budgetary issues
Preparation of technical briefs for budget steering Committee ( Including Agenda)
Secretariat to the budget steering Committee

13. Macro Working Group
This will be coordinated by the Director Economic Affairs Department and have membership from KIPPRA, EAD, Macro DEPT, Central Bank, ERD, KRA, BSD and other agencies to be co-opted as need arises

14. Schedule of events leading to the Finalization of the 2006/07 Budget
August 2005 – Review of Strategic Plans
September Launch of Sector Working Groups
Sept-Nov. 2005, - Development and Finalization of MPER’s
Oct- Nov – Development of Budget Outlook Paper
December 2005 – Issuance of MTEF guidelines

15. Schedule of events leading to the Finalization of the 2006/07 Budget
January Finalize Sector Reports
February – Sector Hearings
March Develop Budget Strategy Paper
April 2006 – Finalize Itemized Budget
May Approval of estimates by Cabinet
Early June 2006 – Presentation of Budget to Parliament.

16. THANK YOU