MTEF BUDGET PROCESS – A TOOL FOR MAINSTREAMING MDGS

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 2005- Launch of Sector Working Groups • Sept-Nov. 2005, - Development and Finalization of MPER’s • Oct- Nov. 2005 – 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 2006 - Finalize Sector Reports • February 2006 – Sector Hearings • March 2006- Develop Budget Strategy Paper • April 2006 – Finalize Itemized Budget • May 2006- Approval of estimates by Cabinet • Early June 2006 – Presentation of Budget to Parliament.

16. THANK YOU