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A Preliminary Review of the MTEF Experience in Africa

A Preliminary Review of the MTEF Experience in Africa. Philippe Le Houerou Rob Taliercio AFTM1. Motivation. About twenty five MTEFs are currently being implemented in developing countries and ten more are under consideration Over half of MTEFs are being implemented in Africa

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A Preliminary Review of the MTEF Experience in Africa

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  1. A Preliminary Review of the MTEF Experience in Africa Philippe Le Houerou Rob Taliercio AFTM1

  2. Motivation • About twenty five MTEFs are currently being implemented in developing countries and ten more are under consideration • Over half of MTEFs are being implemented in Africa • World Bank has been explicitly involved in vast majority of cases (through PERs, conditionality, policy dialogue) • HIPC and PRSPs have refocused attention on MTEFs

  3. Objectives • Typology of MTEFs at the operational level • Preliminary assessment of MTEFs • Lessons for design, implementation, and management of MTEF reforms

  4. MTEF: An elegant concept

  5. However, the guidelines for MTEF design and implementation are unclear • Examples of operational questions: • Is performance-based budgeting part of an MTEF? • Should the MTEF include a contingency fund? • How long is the ‘medium term’? • What are the appropriate roles for the ministry of finance and the sector ministries? • Where and how does the MTEF fit in with the budget process? • What are the initial conditions and sequencing necessary for the success of the MTEF?

  6. Opening Up the Black Box:a three dimensional typology of MTEFs in practice • General • Technical • Organizational

  7. Dimension 1: General

  8. Dimension 2: Technical

  9. Dimension 3: Organizational

  10. Level of MTEF Development

  11. Preliminary Impact Assessment

  12. Conclusions • MTEFs in Africa have largely failed in their promise to deliver improved PEM in a number of countries where operational MTEFs do not closely resemble their textbook cousins. • In the two countries where it seems that the MTEF had some impact – South Africa and Uganda – the MTEF process started from very different “initial conditions” in terms of PEM capacity. In both cases they also enjoyed strong political support.

  13. Preliminary Lessons • MTEF reforms have not paid sufficient attention to initial PEM conditions • MTEF reforms have not been properly sequenced/phased • MTEF reforms have not paid sufficient attention to political-institutional issues

  14. New Opportunities? • The on-going PRSPs and HIPC tracking exercises provide an excellent window of opportunity to bridge the gap between theory (the target) and practice. • The first step should be to unbundle - country-by-country – the main PEM problems. • The second step should be to strengthen the major building blocks necessary for developing successful MTEFs.

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