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Beyond the Annual Budget
• Budget credibility. This is not examined because predictability is required for credibility. Overall, the efficiency gains from MTEFs are yet to emerge, but MTEFs in Africa are still young. Based on experience to date, Le Houerou and Taliercio (2002) recommend the following: • MTEFs should complement basic budget reform, be integrated with the budget process, and be based on sector expenditure frameworks. • They should be implemented governmentwide, taking into account country capacity and political and institutional constraints. Holmes and Evans (2003), in an Overseas Development Institute study, focus on links between MTEFs and the Poverty Reduction Strategy Paper (PRSP) process in Albania, Benin, Burkina Faso, Cameroon, Ghana, Rwanda, South Africa, Tanzania, and Uganda. Detailed case studies are prepared for each of these countries. The main lessons from the study are the following: • Recognize that initial conditions matter (Albania paid attention to this, MTEF played a catalytic role in Tanzania, but excessive “projectization” in Ghana was problemmatic). • Integrate various phases of the budget cycle (Albania, South Africa, and Uganda—countries with maturing MTEFs—did this). • Pay early attention to fiscal stability and sustainability (doing so lent credibility to the aggregate resource constraint in South Africa, Tanzania, and Uganda, while not doing so had the opposite effect in Burkina Faso, Cameroon, and Ghana). • Foster political engagement (Albania, South Africa, and Uganda engaged politicians in setting priorities, but focused more on new than on existing policies). • Allow for a strategic phase in budget preparation (most countries are developing sector expenditure frameworks). • Engage sector and line ministries (the quality of budget execution distinguishes different groups of countries, especially struggling countries such as Burkina Faso, Cameroon, and Ghana). • Sequence the introduction of a performance focus (important given that PRSPs are about outcomes, but only South Africa made significant progress in this regard).