In most developing countries, the government prepares a medium term development plan that lays out the strategic priorities and key objectives for the country over a five-year period.
This exercise however is almost always done independently of the annual budget process, and often results in a wish list of programs and activities which cannot be realistically achieved given the finances of government. The reforms are focused on ensuring that planning is not a perfunctory process but rather strengthened as as effective instrument for promoting socio-economic development.
Objective 2 aims to strengthen budgeting and planning at several levels: (i) high-level Sector plans to be of better quality and prioritised in line with national objectives; (ii) multi-year commitments and cost estimates of sector plans are captured in the MTEF and reflect realistic budget projections; (iii) the MTEF itself is more accurate and credible, validated using bottom-up estimates as well as top-down ceilings and any adjustments are explained and transparent; (iv) Annual budgets include accurate costings, information on fiscal risks, impacts and linked to MTEF.