Medium Term Budget Frameworks in West Africa: Lessons learnt

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Conclusion of the five day seminar on medium trer budget framework and fiscal planning in West Africa. MTFF and MTFB have constributed to strengthen the budget preparation process. However these tools are not sufficient to ensure fiscal discipline and budget credibility that remains an issue across the region. The solution is the coordination of fiscal planning reforms with other reforms.

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Medium Term Budget Frameworks in West Africa: Lessons learnt

  1. 1. Workshop on Medium-term Budget Frameworks Accra, 2 – 6 June 2014 Medium Term Budget Frameworks: Lessons Learnt from the Seminar
  2. 2. Diagnostic of the current situation • All countries of the region have put in place sequenced Medium Term Frameworks with mix results • Fiscal reporting is already in place but quality of information remains an issue. • All countries are progressing toward better fiscal transparency but the role of civil society in budgetary discussions remains limited. • The main PFM issues in the region remain fiscal discipline and budget credibility 2
  3. 3. Main achievements • All countries are producing MTFFs and use them to allocate budget ceilings. • Pre-Budget Reports are in place. • Significant investments have been made in capacity development. • Quality of reporting and budget transparency is improving. 3
  4. 4. Main benefits from MTBFs All countries of the region report that MTFs have delivered intermediate gains: • MTFs are catalysts for better planning and priority of expenditures. • Budgets are already more policy driven • PBP have simplified the budgetary debate • Sector ceilings are in place and accepted by MDAs 4
  5. 5. Remaining weaknesses in the MTF programming process • Macroeconomic data are lacking in quality with an impact on the reliability of projections; • The high level of vulnerability of the local economies make them very vulnerable to endogenous and exogenous chocks. • Revenue forecasting remains difficult. • Linkage between the budgets and MTFs remains weak. • Sector strategies remain weak and difficult to implement. • MTEF are still missing but are probably premature. 5
  6. 6. Fiscal discipline and budget credibility A sound fiscal planning process is not enough to establish budget credibility. Other factors should be taken into consideration such as: • Adjustment of the budget calendar + budget analysis • Cash management • Better information on planned expenditures • Commitment control • Better budget execution processes • Monitoring of arrears • Better reporting………………….AND……… 6
  7. 7. 7 STRONG POLITICAL COMMITMENT !!!
  8. 8. The way forward • Keep improving the quality of fiscal planning • Link introduction of MTFs to other budget reforms • Consider the role of fiscal rules, budget norms, sub-ceiling etc. 8
  9. 9. Last recommendations • Don’t move to bottom-up budgeting before top-down budgeting is successfully implemented. • Don’t move to full program based budgeting before budget credibility is established. • Don’t move to program budgeting before line item budgeting has been trim down and successful. • DoN’t integrate sector planning in the budgeting process before national planning is fully integrated. • Control inputs before seeking to control outputs • Budget for work to be done before budgeting for results to be achieved. 9

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