Answer to Question #216290 in Management for Sikelele

Question

Is MTEF a budgeting approach

Answer 1

Yes, MTEF is a budgeting approach that attempts to link policy, planning and budgeting to improve budgeting outcomes in developing countries. The Medium Term Expenditure Framework (MTEF) is a budget formulation process within which the cabinet and central agencies establish credible contracts for allocating public resources to their strategic priorities while ensuring overall fiscal discipline. The objectives of an MTEF approach to budgeting include setting sound fiscal targets and allocating resources to strategic priorities within these targets. It achieves this by prioritizing all expenditures on the basis of government's socio-economic programs and dedicating fiscal resources only to the most important ones. A further objective of MTEF approach is making public expenditures more efficient and effective by enabling some ministries greater flexibility in managing their budgets. Even so, MTEF budgeting approach cannot improve the budgeting outcomes in countries in which other key aspects of budget management such as budget execution and reporting remain weak.