Transcript 4a&b Country 3&4 aBAN Md Zahidul Haque_MTEF Slides_Final

DEVELOPING MEDIUM TERM
BUDGET FRAMEWORK:
BANGLADESH EXPERIENCE
Md Zahidul Haque
Budget Wing
Finance Division
Ministry of Finance
People’s Republic of Bangladesh
Overview
• In 2004, the Government of Bangladesh
introduced MTBF and the budgets for four
ministries for fiscal year 2005-06 were
prepared under the MTBF.
• In fiscal year 2010-11, all the ministries came
under MTBF in phases.
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Aims and Objectives of MTBF
• Establishing linkage between strategic objectives
stated in the policy documents of the Government
and resource allocation
• Delegating more responsibility and authority to the
line ministries
• Institutionalizing a system for measuring outputs/
results from the resources allocated
• Improving budget discipline and predictability
• Achieving greater budget effectiveness
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Basics of Bangladesh MTBF
 Government budget is prepared within a
medium-term context and include estimates and
projections of revenues, financing and
expenditures for the coming fiscal year and four
outer years.
 Line ministries are allowed to plan their
programmes in the knowledge of expected future
funding levels.
 MTBF provides for more explicit linkage between
government spending plans and its strategic
policy objectives.
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Basics of Bangladesh MTBF(Contd.)
 Line ministries are being given greater authority
over the allocation and management of
budgetary resources in order that they can
manage their programme more effectively and
efficiently.
 Resource allocation is linked to performance
criteria through MTBF frameworks
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Building Blocks of MTBF
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A macroeconomic and fiscal framework
An analysis of key strategies and choices
Ministry level budget strategy frameworks
Resource ceilings and expenditure plans
Strengthened budget implementation
procedures
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Results Achieved
 Introduction of a strategic phase to budget
planning before the detailed annual budget is
prepared.
 A more integrated and unified approach to
budget planning.
 A single resource ceiling covering both
development and non-development expenditure
 Establishing performance indicators
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MTBF Implementation Strategy
 Building capability of the Finance
Division, Planning Commission and
line ministries
 Deepen and institutionalize the
MTBF process
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Roles and Responsibilities Played by the Key Actors
Roles/Responsibility
Key Actors
Developing Medium Term Macroeconomic
Framework
Finance Division, National Board of
Revenue, Economic Relations Division,
Savings Directorate, Bangladesh Bank
Preparation of Ministry Budget Framework
Line Ministries, Finance Division,
Planning Commission
Setting Key Performance Indicators
Line Ministries, Finance Division
Determining ministry/division-wise indicative Budget Monitoring and Resource
Committee headed by the Minister for
expenditure ceiling and revenue target
Finance
Preparing detailed budget estimates
Line Ministries
Reviewing and finalizing the estimates
Finance Division, Planning Commission
Presentation of annual Budget along with
the MTBF to Parliament
Finance Division
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Key Challenges Encountered
 Capacity constraints in line ministries
 Frequent transfer of trained and experienced personnel
 Separate non-development and development budget and
lack of a single unit responsible for integrated budget
management in each line ministry
 Non-existence of Management Information System in most
ministries necessary for setting and monitoring KPIs
appropriately
 Less participation of senior policy makers of line ministries in
budget processes;
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Measures taken to Resolve the Issues Encountered
 Public Moneys and Budget Management Act
2009 requires to arrange necessary education
and training to establish sound and effective
financial management and utilize experience
and services of the trained and educated
manpower;
 Above mentioned Act also requires
establishment of a Budget Management
Wing/Branch in each line ministry
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Measures taken to Resolve the Issues Encountered (Contd.)
 All line ministries have been advised to
establish an MIS;
 It has been made compulsory to form a
Budget Management Committee headed by
the Secretary of the ministry to ensure
participation of senior policy makers in
budget management processes
 Steps are underway to unify the nondevelopment and development budget.
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