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Component 1

Enhancing Budget Credibility

This component is divided into four sub-components aimed at improving budget management and enhancing the credibility of the national budget through the development of tools and processes that will support effective participation of Cabinet, Parliament and other relevant stakeholders in the budget process.

The objective of this component is to improve budget management and strengthen credibility of the national budget.

Sub-component 1.1: Strengthening Budgetary Planning and Macro-Fiscal Management

The objective of this sub-component is to establish and strengthen controls on all claims on fiscal resources.

ACTIVITIES

    • Review and strengthening of Cabinet’s formal engagement  in  the budget  process  and  designing a  “budget  charter” that  will  establish  the principles, roles and obligations of key stakeholders in a sound budget process;  
    • Design a strengthened budget framework paper to be used as a vehicle for obtaining Cabinet approval to medium  term  forecasts  of  fiscal  space;  
    • Build  MDA  capacity  to  develop  costed  sector strategies  and  Sector  Medium  Term  Development  Plans  (SMTDP);
    • Strengthen technical linkages and information sharing between fiscal forecasting and analysis and the budget formulation and execution processes; and specialist on-going training for forecasters in ERFD; v) provide technical training to ERFD forecasting staff; and
    • Strengthen capacity in the DMD.

Sub-component 1.2: Strengthening Public Investment Management Capacity

The objective of this sub-component is to ensure that all investment projects for financing through the budget are selected, appraised and prioritized in relation to available fiscal space.

ACTIVITIES

    • Improving capacity to ensure effective evaluation and ‘whole-of-Government’ prioritization of projects before they enter the budget process;
    • Improving coordination of the Public Investment Management (PIM) with the budget process; and
    • Reviewing the functionality of the Public Investment Management System (PIMS) to ensure that the system will adequately support the determined processes.

Sub-component 1.3: Strengthening the Budget Operational Framework

The objective of this sub-component is to implement improved management practices to enhance the performance of public spending at MDA level, including the use of appropriate technological tools, while ensuring better predictability of resource flows for budget implementation.

ACTIVITIES

    • TA to advise the BD on the changes required to ensure the benefits of PBB are maximized;
    • TA to review MDA program structures, performance measures and targets, and narratives over the period of the project; and refresher training  for MDAs  implementing PBB;
    • On-going training  for MDAs  in  PBB,  and 
    • Facilitation of an intense engagement between MoF and MDAs with a view to identify service delivery problems in MDAs and to use PBB as a tool to address these progressively, and
    • Additional Hyperion licenses for provision of on-site access to all budget controllers in central MDAs (33), annual maintenance and support for the Hyperion software, implementation services for rolling-out Hyperion to the MDAs, and developing an interface between HRMIS and Hyperion, as well as training on Hyperion.

Sub-component 1.4: Fiscal Risk Management and Reporting

The objective of this sub-component is to establish comprehensive systems for monitoring and review of all sources of risk to the planned budget out-turn to enable timely mitigation of these risks.

ACTIVITIES

    • Development of a comprehensive system for monitoring expenditure arrears and other risks arising from the CF, SOEs, and other sources;
    • TA to review current risk analysis and reporting practices by existing entities and recommend an appropriate organization and mandate to take over the function of risk analysis and development of risk mitigation policy;
    • Building capacity and establish the authority for the entity to carry out its functions effectively; and
    • Development a fiscal risk statement as a regular part of the budget presentation.