1. Monitoring-PRS Budget Links THE MOZAMBICAN CASE
Jose Sulemane
PREM Knowledge & Learning Forum
17 April 2007

2. Planning/Budgeting: System Overview
GOVERNMENT’S 5-YEAR PROGRAMME (PQG)
AGENDA 2025
MEDIUM-TERM PROGRAMMING
ANNUAL OPERATIONAL PLANS
Integration of
objectives &
targets +
Coordination of monitoring process
Action Plan to Reduce
Absolute Poverty
(PARPA)
ECONOMIC & SOCIAL PLAN
(PES)
Prioritization of resources
Harmonization of sectoral policy & strategy
Sectoral & Provincial Strategic Plans
Integration of
Sector objectives &
targets
Consistency of budgeting with
policy actions and objectives
Integration of sectoral policy & strategy
Global resource envelope &
allocation amongst sectors
Macroeconomic &
sectoral scenario
Medium Term Expenditure
Framework (CFMP)
Expenditure
limits
STATE BUDGET
(OE)

3. Planning/Budgeting: Annual Cycle
PES/OE
GBS/IMF
Jan
Drafting Review of PES (BdPES) (yr n – 1)
Feb
BdPES/Budget Execution Report IV Semester (RTEO) year n-1 (annual also)
Mar
State Accounts (CGE) (n-2) analysis in AR
Preparation of Joint Review; IMF Mission
Apr
CFMP discussed in Cabinet
Joint Review
May
CGE(n-1) submitted to TA and AR;
Budget Ceilings (31 May);, RTEO I Quarter
Commitments for GBS (4 weeks after the end of JR)
Jun
Drafting PES/OE (n+1) by sectors
Jul
Drafting PES/OE (n+1) by sectors, submitted to MPD/MF by 31 July
Aug
Globalization of PES/OE (n+1);
BdPES First Semester; RTEO II Quarter
Preparation of Mid-Year Review
Sep
Submission of PES/OE to Cabinet and AR (end Sep)
Mid-Year Review; IMF Mission
Oct
Nov
RTEO III Quarter
Dec
Discussion/Approval of PES/OE (n+1) in AR

4. Planning/Budgeting: Monitoring Instruments
PES/PAF monitored by PES Review (produced in Feb each year) & PES Half-Year Review (Aug).
PES Review = overall review of GoM performance, including an evaluation of performance vis-à-vis PAF targets.
PAF targets derived from key objectives of the PQG/PARPA  PES Review key instrument for PARPA monitoring.
PAF set jointly by GoM & Direct Budget Support donors (PAPs).
Budget monitored through Annual Execution Report (CGE) and Half-Year Execution Report (RTEO).
CGE & REOE both include monitoring of expenditure in PARPA priority areas (current target = 65% total exp. to priority are
Quantitative (HH Survey) and qualitative analysis (QUIBB)

5. Integration Issues: Assessment to Date
Some barriers:
CFMP = medium-term macro/fiscal projections. Not a “classical” MTEF (programme-based etc).
CFMP  State Budget link weak, let alone with planning instruments (PQG, PES etc). First Time discussed in Cabinet in 2006
Budget split btn. “current” & “investment” (project rather than capital expenditure!)
MPF divided (2005)  MF = current budget & overall execution, MPD = “investment” and overall budgetary ceilings, inc CFMP.
Some positive points:
PAF =  monitoring of PARPA.
 integration of planning, budgeting & monitoring instruments.
Good progress made in some Provinces/Districts (e.g. Nampula’s integrated Planning & Budgeting);

6. Integration Issues: Constraints & Opportunities
Key constraints to integration:
Sequencing of reform (full integration not feasible now!);
Capacity constraints;
Aid: Off-budgets, project-focus, unpredictability;
Institutions: Separation of Planning, Finance & Cooperation;
Lack of electronic budget management system, &;
Monitoring tied to PAP conditionality   GoM incentive to improve it
Weak Parliament and its technical commissions (need more oversight role)
Opportunities for improvement:
New PARPA to be costed and aligned with CFMP (more on this…);
Ongoing integration & strengthening of planning/budgeting documents;
Aid effectiveness agenda (lead by PAPs & GoM)  aid beginning to reinforce rather than undermine integration;
Increased emphasis on role of district in planning and budgeting, &;
New electronic budget management system (SISTAFE) set to begin roll-out.

7. New Developments: PARPA 2006 - 2009
PARPA II = “operationalization of the PQG” (also taking into account MDGs & Agenda 2025).
Time horizon altered to electoral cycle, i.e. period of PQG  Next time, no PARPA, only extension of PQG!
Participatory drafting process including civil society, provinces, districts, international partners.

8. Final Remarks
Working Groups and mechanisms should be part of a normal routine of doing business in public administration in particular on policy design and following the planning/budget cycle
Institutional framework, in particular levels of decision-making are critical for better integration, and now that emphasis is giving to decentralization (this might require institutional reforms!!!)
Domestic Coordination in public administration is critical. Domestic institutions have to talk more among themselves
Key challenges to  PARPA integration in planning/budgeting:
Ensuring GoM/sector ownership
Prioritisation & Costing of activities/policies
Matching plans with overall CFMP fiscal framework
Taking into account external funding
Alternative Scenarios???

9. THANKS FOR YOUR ATTENTION!
PREM Knowledge & Learning Forum
17 April 2007