Policy Brief No. 07 of 2006 on Strengthening Budget Reforms in Kenya: Issues and Challenges

Abstract

The Government has been undertaking budget reforms with a view to improving fiscal policy, planning and budget management functions. Following a 1997 assessment of public expenditure composition and management, the Government initiated reforms which included adoption, in 2000/01, of the Medium Term Expenditure Framework (MTEF) approach to budgeting;the establishment of a Budget Monitoring Unit;and the introduction of the Integrated Financial Management Information System (IFMIS). The adoption of the MTEF approach was intended to achieve four key goals, namely: linking policy-making to planning and budgeting; maintaining fiscal discipline;facilitating prioritization of expenditure across policies, programmes and projects; and encouraging efficient use of resources to improve budget outcomes. These reforms have begun bearing fruits in terms of improved expenditure prioritization. However, there still remains some challenges in the budget reform process that, if addressed, will result in improved budget outcomes.