Planning and Budgeting

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.

KRA 2.1 : Budgets aligned to Strategic Plans and the Medium Term Expenditure Frameworks

• Key interventions include:
  1. Establish Programme based planning approach to anchor programme based budgeting reforms in development planning. This will include restructuring NDP III and Sector strategic plans along programs linked to national strategic objectives to ease PBB/S implementation;
  2. Strengthen institutional capacity for the planning function.;
  3. Enhance institutional frameworks for effective development planning and budgeting through strengthening NPA’s strategic planning function
  4. Private Sector engagement forum through strengthening coordinated and participatory mechanism at sector level to inform budget preparation
  5. Functional National Management Information System for effective development planning;
  6. Review of Sector and MDA planning guidelines. Includes harmonization with the PFMA,
  7. Review, develop and disseminate certificate of budget compliance framework to strengthen budget alignment; and
  8. Strengthen Program-Based Budgeting (PBB) reform for the planning and budgeting function in government.

On multiyear planning:

1. Strengthened accuracy and comprehensiveness of multi-year budgeting. Includes review and establishment of policy framework for multi-year budgeting and commitment monitoring;
2. Introduce Certification Programme on development planning for Economists, Statisticians etc; and, a sustainable apprenticeship programme for improved specialised and standardized sector-level planning across government. This will be an extension of the graduate economists’ scheme.
3. Enforcement of multiyear commitment reporting as required by the PFMA. This includes enhancing capacity for effective contract management to monitor and report multi-year contract performance and planning.
4. Policy requirement for annual variance analysis and attendant explanation between the 2^nd year of the previous MTEF with the current budget year
5. Government economists trained to improve quality of MDALG plans with a realistic multi-annual perspective.

KRA 2.2 :Increased Equity and Discretion of Resources Allocated to LGs for Improved Service Delivery

• Key interventions (outputs) include:
  1. Enhance gender and equity budgeting in selected key sectors (Education, Health, Water, Energy and Agriculture). Includes capacity building to deepen GEB planning and budgeting process gender statistics refined in line with M&E methodologies
  2. Embed green concerns in national and sectoral policies and plans. This include selection of instruments (whether market or non-market) to promote green behaviour,
  3. Engender and Green the MTBF. This includes consideration on Climate Expenditure Tracking Framework (CETF) to track climate change related expenses; capacity building for greening the policy formulation process
  4. Review service delivery costs at LG level based on sector standards to establish norms in the target sectors for rural and urban LGs as recommended in the Fiscal Decentralisation Architecture report, including service delivery standards and costing;
  5. Improve the institutional framework for management of inter-governmental fiscal transfers and assignment of roles and responsibilities; and
  6. Enhance enabling legal, policy and reporting framework for local service delivery. Includes, review compliance with the current strategy/policy and legal framework for devolution of services, and assess feasibility of introducing enhanced discretion of funds (reduced earmarking) for LGs, with incentives for improved accountability performance.

KRA 2.3 : Strengthened Evidence-based Policy (EPB) making

This outcome aims to support and drive demand for the use of analysis and evidence in economic and fiscal policy formulation.

• Key interventions (outputs) include:
  1. Enhance ools, procedures and capacities for gathering evidence, including statistics, and undertaking analysis to inform policy.
  2. Strengthen coordination and harmonization of fiscal and monetary policy framework of Government
  3. Establish and enhance mechanisms for fostering and requiring the use of evidence in policy formulation and planning.
  4. Harmonize monitoring and evaluation framework within Government. Includes developing harmonized guidelines for project ex-ante, mid-term and ex-post evaluation,
  5. Enhance reporting capability on service delivery, including at LG level. Includes establishing a working interface between PBS, IFMS and AMP; and, strengthen the GAPR process for follow up of recommendations in service delivery.
  6. Strengthen monitoring of the budget and evidence uptake. This will include mechanisms for dissemination of budget monitoring information; and
  7. Develop an Economic Policy research program that is relevant and timely to inform government policy formulation.
  8. Establish an economic research forum to discuss research findings and how to inform policy