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Beyond the Annual Budget
Table G.16 Summary of Case Study of Uganda Issue
Details
Implementation
An MTFF was introduced in 1992. A pilot MTBF followed in 1995, with full implementation in 1997. Basic features The three-year rolling framework has fixed expenditure ceilings. All central government agencies and spending are covered, although government wages are not subject to MTEF scrutiny. The process of extending the MTEF to local governments began in 2000. A contingency reserve is built into the MTEF. Macro-fiscal Macroeconomic and fiscal forecasts and projections are coordinated framework with the International Monetary Fund. Overestimates of tax revenue and donor support have resulted in budget deviations. While tax revenue forecasts have improved, donor support remains unpredictable. Strategic objectives Initial emphasis was on achieving macroeconomic stability. Since 1997, allocations have been guided by the Poverty Eradication Action Plan and, more recently, by the National Development Plan. The MTEF is also consistent with the Public Investment Plan. Link to budget The MTEF is the centerpiece of a budget framework paper that guides preparation of the annual budget. Participants and The Ministry of Finance is in the lead, aided by strong political support. support Spending agencies have become increasingly engaged. Sector working groups play a central role in ensuring that policy priorities are funded and responsive to domestic stakeholder and donor views. Institutional Merging the finance and planning ministries allowed for strong capacity leadership and effective management of technical assistance. Implementation capacity at the local level is an issue. Performance focus Output-based budgeting was initiated in 2008 with a view to monitoring budget performance. Only a few sectors have made progress with this. Quality of The MTEF has been hailed a success across many dimensions of budgeting budgeting. Budget predictability has improved. However, MTEF updates mimic incremental budgeting, and powerful ministries ignore ceilings. Other issues Despite success, there are major areas for improvement, including the need to integrate donor financing and projects fully into the MTEF. Note: MTBF = medium-term budgetary framework; MTEF = medium-term expenditure framework; MTPF = medium-term performance framework.
Design Uganda’s MTEF is a rolling framework covering a three-year period. Allocations serve as hard budget constraints for prioritization and resource use at the sector level. However, out-year ceilings, especially for sectors such as security and public administration and beneficiaries of project aid, are often an unreliable guide to final ceilings.