Getting our priorities right

By Mohun Kanhaya 

The TINAs have cleverly deflected some awkward questions with an easy grace by simplifying the issue as one of poor management rather than a lack of funds. It portrays an incorrect perception on the issue that pertains more to the problem of getting their priorities right rather than that of funding or poor management. Indeed decision-making is a teamwork with civil servants doing their part and policy-makers theirs. What if our TINAwallahs – the top civil servants – have failed in doing their part, that they have mismanaged the whole process of decision-making? Let me explain:

Previously, before the implementation of the medium-term expenditure framework or programme-based budgeting (MTEF/PBB) although polices are formulated according to national needs, they were largely formulated independent of costs and especially independent of anticipated medium-term fiscal envelopes. Expensive polices were adopted without due consideration for the strategic allocations of the annual budget. Under the MTEF/PBB, ministries are forced to formulate policies (and design projects) within the boundaries of likely medium-term allocations to the sectors. Under the MTEF/PBB, policies that are out of sync with the likely medium-term allocations would not be acceptable by the government. MTEF is a transparent planning and budget formulation process within which the government establishes credible contracts for allocating public resources to their strategic priorities while ensuring overall fiscal discipline. The process entails two main objectives: the first aims at setting fiscal targets, the second aims at allocating resources to strategic priorities within these targets.

Government thus prepares annual budgets within a sustainable fiscal strategy, which extends over several years. It facilitates a progressive reshaping of budget allocations across and within sector portfolios, consistent with the strategic goals of the vision or the long-term plan for the economy. A PBB within MTEF is a central tool for prioritising and allocating resources between sectors. It thus facilitates a progressive reshaping of budget allocations across and within sector portfolios, consistent with the strategic goals of the Vision or the long-term perspective of the economy. The chief elements of this process are the development of a macroeconomic framework, medium-term fiscal targets, an aggregate expenditure limit, and sectoral allocations.

For an MTEF to perform its strategic allocation function, the top echelons of government need to have ownership of the medium-term intersectoral allocations. The MTEF requires that policies and supporting projects be formulated according to their sector’s medium-term allocations. The MTEF disciplines ministries to make policies consistent with likely availability of resources and given government’s view on what the priority in the use of those resources should be. MTEF helps minimize the gap between ambitious polices and implementation rate. Thus a proper implementation of the MTEF/PBB process, rather than the present caricatured one, would not have given the TINAs excuses like the systemic issue of capacity for implementing projects.

Many crucial steps have not been followed in the implementation of our PBB. The TINAs have made a caricature of the whole process depriving our policy-makers of the right ingredients to prioritize and frame the right policies.

* First of all, the MTEF introduces new tasks at the level of MOFED to extend the depth of the fiscal framework analysis and to assess sectoral polices. This new dimension of policy analysis (not just project costs) and implementation monitoring was totally absent in the MTEF process.

* Policy proposals are not analyzed for its relevancy to development strategy and its conformity to likely medium-term budget availability.

* There were few sector strategic plans with need rigorous costing, both new and existing policy.

* Absence of inter- and intra-sectoral resource allocation by effectively prioritising all expenditures and canalising resources only to the most important ones.

* There was no mechanism in the macro-fiscal framework that allowed Cabinet to make intersectoral allocation decisions/recommendations and thus articulate the policy priorities of Mauritius.

Last but not least, there were no mechanisms within the budget process that encourage the re-evaluation of policies and priorities and that facilitate the generation of policy alternatives.

Though in the end, the allocation function remains the privilege and responsibility of the political leadership — the Prime minister and his Cabinet — the TINAs failed in properly advising them on the allocation choices and trade-offs faced by government, and associated implementation issues.

If only the TINAs had given the chance for a proper MTEF/PBB process to work, we would have had our priorities right.

* Published in print edition on 10 June 2011