MTEF Case Studies
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A key factor contributing to the past decade of good fiscal performance and continuous PFM reform has been the government’s commitment to modernization and, more important, strong ownership by the MoF, which has been responsible for most aspects of PFM reforms since 2000. The fact that the current minister of finance has been holding the post for the last 10 years has contributed to the continuity and consistency of reform efforts.
South Africa Table G.14 summarizes the case study of South Africa.
Origins An MTBF was introduced in 1998. It was not piloted at the central and provincial levels, but it was recognized that the quality of implementation would vary across agencies. A pilot approach was planned for local
Table G.14 Summary of Case Study of South Africa Issue Implementation Basic features
Macro-fiscal framework Strategic objectives
Link to budget Participants and support Institutional capacity Performance focus
Quality of budgeting Other issues
Details An MTBF was introduced in 1998, with an MTPF following in 2002. The three-year rolling framework has indicative out-year expenditure ceilings. The MTEF covers all categories of spending at both national and provincial levels. Revenue forecasting has been an area of significant improvement. Sector strategic plans can be a largely pro forma effort to satisfy a formal requirement rather than to inform prioritization decisions. Parliament provides significant strategic guidance. The MTEF is fully integrated into budget preparation. The Ministry of Finance is in the lead, but the process is consultative, involving numerous bodies including national and provincial medium-term expenditure committees. Technical capacity at the central level is high, especially at the National Treasury, but provincial governments are weaker. The initial effort, in 2002, to introduce a performance element into the MTEF was premature, producing information of variable quality that was not used to inform spending decisions. Neither parliament nor provincial legislatures make full use of MTEF information. The 2011 MTEF is to be driven by activities and outputs specified in service delivery agreements.
Note: MTBF = medium-term budgetary framework; MTEF = medium-term expenditure framework; MTPF = medium-term performance framework.