Medium-Term Budget Frameworks in Sub-Saharan African Countries

Abstract

More than 15 years ago, many countries in sub-Saharan Africa embarked on a program of budgetary reform, an important element of which was a medium-term budget framework (MTBF). This working paper focuses on the performance of these frameworks in six countries-Kenya, Namibia, South Africa, Tanzania, Uganda, and Zambia. It assesses the effectiveness of MTBFs in achieving improved fiscal discipline, resource allocation, and certainty of funding, as well as wider economic and social criteria such as poverty reduction and more efficient public investment. In most countries, early successes were not sustained, and budgetary outcomes did not improve, partly for technical reasons, such as poor data and inadequate forecasting methodologies, but also because the reforms were largely supply driven. The paper argues that the development of MTBFs typically falls into four distinct phases. To make the transition from one phase to the next, developing countries should focus on building their capability in macrofiscal forecasting and analysis, and in improving the credibility of the annual budget process.

Identifying the latent shortcomings in achieving value for money within the Ghanaian construction industry

“…More so, the transparency in the award of government contracts is unknown. Allen et al (2017) stated that politically motivated projects are usually not subjected to any form of appraisal, with some non-viable projects being undertaken with no form of scrutiny. Poor procurement strategies, on the other hand, describes inefficient procurement processes that lead to loss or waste of money.…”

Medium Term Expenditure Framework (MTEF): A Panacea for Public Expenditure Management (PEM) In Nigeria?

“…Finally, the Medium-Term Performance Framework (MTPF) which measure and evaluates outputs and outcomes of the spending programs (Allen, et al 2017). MTPF reinforces an important characteristic of MTEF -a resource usage evaluation tool as its emphasis value for money in public sector spending and seeks to link budgetary policies from inputs to outputs (Zaman and Gebeity 2014).…”

“…To date Nigeria has prepared and laid before the National Assembly several METFs: 2010METFs: -2012 and currently had prepaid the 2020 MTEF and submitted to the National Assembly. As Allen, R. et. (2017) puts it, "The question remains whether the introduction of MTBFs-which, appears to have been substantially driven by external pressures from the development partners has achieved its desired objectives, and whether the initial benefits received have been sustained".…”

Macro-Fiscal Management Practices in Eastern and Southern Africa

“…Hiller et al (2018) suggest that the lack of institutionalization of budget transparency practices is a major explanatory factor for the reversal. Allen et al (2017) also note that early successes were not sustained; these authors recommended that "countries should focus on building their capability in macro-fiscal forecasting and analysis, and in improving the credibility of the annual budget process. "…”

“…In some countries, two or more ministries and/or central government agencies perform MoF functions.3 Allen et al (2015) describes the challenges facing developing countries in strengthening their MoFs.4 For simplicity, we have used the term MTFF throughout, rather than the term medium-term budget framework (MTBF). For a discussion of the differences between a MTFF and MTBF, seeAllen et al (2017).5 The 16 countries were selected because all were invited to an IMF-sponsored regional workshop on the macrofiscal function, held in Dar es Salaam in January 2018. The IMF's two technical assistance centers (AFRITAC East and AFRITAC South) invited participants from the MoFs to make presentations and verify data, for which the authors are most grateful.…”