The Effect of the Medium Term Expenditure Framework on the Budgetary Process in Kenya

Abstract

Medium Term Expenditure Framework (MTEF) is intended to facilitate a number of important outcomes in the budgetary process including; improved inter- and intra – sectoral resource allocation, greater budgetary predictability for line ministries, promotion of consultation in decision making on resource allocation, promotion of transparency and accountability and fiscal discipline. This study assesses the effect of the Medium Term Expenditure Framework on the budgeting process in Kenya in terms of fiscal discipline, resource allocation, budget predictability and credibility of budgeting decisions. The study adopteda descriptive survey research approach and target population comprised of budget officers and economists from the government ministries in Kenya. The main tool for collection of primary data was a questionnaire complemented by secondary data which was obtained from financial reports at the National Treasury.Data wasanalyzed using both descriptive (mean and standard deviation) and inferential statistics (multivariate regression analysis). The study established that MTEF has been instrumental in the management of fiscal deficit and resource allocation in Kenya. The study recommends that the government review the implementation of MTEF guidelines regardingpolitical accountability in the budgetary process, enhancestakeholders’ participation in the budgeting process, set up a budget secretariat office or a budget office independent of the National Treasury to implement the MTEF and integration of MTEF into all structures of governance in Kenya. The study recommends a further study on factors that intermediate the influence of Medium Term Expenditure Framework on the budgeting process and a further study on policy alignments between MTEF and other financial reform policies in Kenya.