Cabinet approves MTEF

Cabinet has approved adoption of the Medium Term Expenditure Framework (MTEF) budgeting approach, for Central Government’s annual budget preparation process.

According to a Ministry Paper issued by the Office of the Prime Minister (OPM) and tabled at Tuesday’s (February 15) sitting of Parliament, the MTEF will introduce three-year rolling fiscal and budgeting frameworks, as the context within which annual budgets are prepared. It will also introduce a ‘strategic phase’ in the budget process, in which Cabinet approves strategic policy priorities and the economic /fiscal frameworks to guide the preparation of annual budgets.

Additionally, it will introduce an approach to annual budgeting, in which the focus will shift from being a short-term annual exercise, to a process with a more policy-oriented medium-term perspective.

The Ministry Paper states that, in addition to adoption of the MTEF, Cabinet also approved presentation to Parliament of the 2011/12 Baseline/Forward Spending Estimate budgets of six pilot Ministries, and their on-budget public bodies, departments and agencies. The phased introduction of the MTEF process, over a period of no less than three years commencing in 2011/12 and 2011/13 as proposed in the implementation plan, is also included.

The Ministries earmarked are: Health; Education; Agriculture and Fisheries; National Security; Transport and Works; and Finance and the Public Service.

Further, Cabinet has approved the proposed methodology developed under the Public Investment Prioritization System (PIPS). The PIPS is designed to facilitate ranking and selection of projects based on objective criteria. Projects so arrived at will constitute the public investment component of the MTEF.

Also approved is a new budget calendar to for implementation in the 2011/12 financial year.

CONTACT: DOUGLAS McINTOSH