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.