Botswana Technical Assistance Report Introducing A Medium Term Expenditure Framework

Author: International Monetary Fund. Fiscal Affairs Dept.
Publisher: International Monetary Fund
ISBN: 1498397506
Size: 52.63 MB
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Botswana Technical Assistance Report Introducing A Medium Term Expenditure Framework. This Technical Assistance Report focuses on Botswana’s Medium-term Expenditure Framework (MTEF). The Government of Botswana has committed to introduce the MTEF by 2016. The MTEF will provide a more explicit linkage between National Development Plan priorities and budget allocations by adopting a medium-term budgeting horizon. An MTEF model based on a binding nominal expenditure ceiling covering 100 percent of government expenditure is appropriate. To support the commitment to the resource allocations approved under the MTEF, a number of prioritization, control, and accountability arrangements need to be put in place.

Botswana

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Botswana. "The Government of Botswana has committed to introduce a Medium-Term Expenditure Framework (MTEF) by 2016. The MTEF will provide a more explicit linkage between National Development Plan (NDP) priorities and budget allocations by adopting a medium-term budgeting horizon. The design characteristics of the MTEF need to be chosen carefully to meet specific fiscal consolidation objectives of the government. The proposed model is aimed at maintaining expenditure discipline to meet the government's objective of reducing spending to 30 percent of GDP from the current 36 percent of GDP and running budget surpluses in order to rebuild government reserves that had fallen significantly in recent years. An MTEF model based on a binding nominal expenditure ceiling covering 100 percent of government expenditure is appropriate. The key features would include: Three-year aggregate expenditure ceilings - fixed for the budget year(BY) and the first out-year (BY+1), but which may be adjusted in the second out-year, in recognition of the volatility facing Botswana's economy; and Binding ministerial allocations for the budget year (BY); indicative allocations for first out-year (BY+1) and second out-year (BY+2), constrained by the aggregate expenditure ceiling - to allow reallocation of spending from low- to high-priority areas. To support the commitment to the resource allocations approved under the MTEF, a number of prioritization, control, and accountability arrangements need to be put in place. These arrangements form a key part of the MTEF and are required to: (i) increase the legitimacy of expenditure allocations; (ii) ensure that once the allocations are decided upon, they can be executed effectively; and (iii) demonstrate that the government is meeting its previously stated commitments, and if not, state reasons for any deviations. Some of these elements are in place, but they will require strengthening and refinement. These include: (i) the need to undertake more frequent forecasting rounds that cover the full range of macroeconomic, revenue and expenditure areas; (ii) building a margin for contingencies in the outer years; and (iii) a greater degree of political involvement in the prioritization between different spending areas in order to give the allocation legitimacy. Successful MTEFs require credible macro-fiscal forecasts, which inform the setting of aggregate expenditure ceilings. Botswana is strengthening its macro-fiscal forecasting capability. The government now has a coherent medium-term framework that can provide aggregate revenue, expenditure, and fiscal balance projections. Further improvements would include: (i) broadening the coverage of the framework; (ii) incorporating balance sheet dynamics; and (iii) systemized assessment of past forecast errors to improve the credibility of the forecasts"--Abstract.

Botswana 2014 Article Iv Consultation Staff Report And Press Release

Author: International Monetary Fund. African Dept.
Publisher: International Monetary Fund
ISBN: 1498315933
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Botswana 2014 Article Iv Consultation Staff Report And Press Release. KEY ISSUES Setting: The seeds of good governance and prudent macroeconomic and natural resources management planted by the Botswana authorities paid off with an impressive increase in the GDP per capita during the last three decades. However, as in many other small middle-income countries (SMICs) in the region, trend growth has softened in recent years, reflecting the decline in the contribution of total factor productivity (TFP) to growth which calls for policies to reduce structural bottlenecks in the economy. Current conditions and outlook: Botswana’s economy remains broadly internally and externally balanced and the authorities’ near-term macroeconomic policy mix is appropriate. Output growth is expected to slowdown in 2014 reflecting partly weaknesses in the non-mineral sector, while inflation is expected to remain within the Bank of Botswana’s (BoB) medium-term objective range of 3-6 percent. Fiscal policy: Staff supports the FY2014/15 budget, which reins in unproductive current spending, while protecting growth-promoting capital spending. Achieving medium-term fiscal consolidation objectives adopted in the budget, would require articulating concrete measures to reduce the wage bill relative to GDP and broaden the revenue base. Financial sector development: Botswana’s banking system is well-capitalized and profitable with relatively low nonperforming loans. Although from a low base, credit growth to households continues to expand at a high rate, which poses potential vulnerabilities for the financial sector. Thus, staff recommends that macro prudential measures be considered to temper the rate of growth of household borrowing. In this context, staff welcomes the government’s emphasis on enhancing greater financial deepening and inclusion, while preserving the stability of the financial system. Reinvigorating growth: Returning to an era of strong growth and accelerating Botswana’s convergence to higher income levels would require policies to reinvigorate TFP growth. These include improving the quality of public spending, notably in public investment projects and education to ensure the transformation of diamond wealth into sustainable assets. The authorities’ efforts to improve the country’s competitiveness, including through reducing the regulatory burden on firms, is also welcomed. Past advice: There is broad agreement between the Fund and the authorities on the macroeconomic policy stance and structural reform policy priorities. Consistent with staff’s advice, the FY 2014/15 budget outlined a framework to reduce the burden of loss- making state-owned enterprises on fiscal resources and propel them toward commercial viability. Furthermore, the budget includes medium-term projections of government accounts, as recommended by staff during past consultations. However, progress towards reducing the wage bill relative to GDP remains modest.

Botswana

Author: International Monetary Fund
Publisher: International Monetary Fund
ISBN: 1455295973
Size: 70.35 MB
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Botswana. The economy entered the crisis from a position of considerable strength because of past prudent macroeconomic management. Macroeconomic policies are being appropriately redirected away from short-term demand management toward medium-term considerations. Fiscal policy was strongly countercyclical during the past two years as the government ramped up spending despite a drop in revenues. The framework for managing the government’s assets and liabilities needs strengthening to cope with a more challenging fiscal environment. The authorities agreed that their development model would need to change.

Botswana

Author: International Monetary Fund
Publisher: International Monetary Fund
ISBN: 145276672X
Size: 21.37 MB
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Botswana. Botswana’s 2003 Article IV Consultation reports that Botswana’s core economic database is largely adequate for surveillance, although the quality and timeliness of national accounts and key trade data need to be improved. Financial sector reforms, including a partial privatization of the civil service pension scheme, are an important part of the economic strategy. The increased risk associated with these reforms should be addressed through enhanced supervision of the sector. The authorities are making efforts to strengthen monetary management.

Fiscal Management In Russia

Author: Philippe Le Houerou
Publisher: World Bank Publications
ISBN: 9780821335680
Size: 73.59 MB
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Fiscal Management In Russia. Presents contributions from more than 200 World Bank staff members and consultants on their experiences with participatory approaches to development activities. The Sourcebook serves as a reference guide to participatory development, featuring country case studies, pointers for participatory planning and decisionmaking, and ways of enabling the poor to participate. It also discusses the role of nongovernmental organizations in this area. Annexes include descriptions of methods and summaries of background papers.

Beyond The Annual Budget

Author: World Bank
Publisher: World Bank Publications
ISBN: 0821396277
Size: 66.70 MB
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Beyond The Annual Budget. Beyond the Annual Budget is a comprehensive review of country experience with Medium Term Expenditure Frameworks (MTEFs) worldwide. It looks at countries both with and without MTEFs over the period 1990 to 2008 to obtain results about their impact on fiscal performance.

Foreign Aid In Africa

Author: Jerker Carlsson
Publisher: Nordic Africa Institute
ISBN: 9789171064141
Size: 63.50 MB
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Foreign Aid In Africa. This volume reports on the findings of an international research project on aid effectiveness in Africa. Field studies were conducted in Botswana, Burkina Faso, Ghana, Kenya, Senegal, Tanzania and Zambia and the findings show that Africa??'s economic crisis has had a devastating effect on aid effectiveness and that too often donors dominate aid decisions, leaving governments without any sense of ownership over their own development efforts. The conclusion is that aid to Africa will have to develop more effective public institutions that fully take charge of the development process.