Malawi Economic Justice Network (Mejn) has hailed the programme based budgeting (PBB) reforms expected to be fully rolled out in all ministries, departments and agencies (MDAs) in 2016/17 fiscal year as timely intervention to achieve tangible results.
In the State of the Nation Address (Sona) on Friday in Parliament marking the start of the budget meeting, President Peter Mutharika said government will roll out PBB reforms, which were piloted in selected ministries in the 2015/16 fiscal year.
Under this budgeting model, all MDAs will now prepare their budget in line with PBB framework.
“PBB approach will complement government’s initiative on institutional performance assessment. PBB framework provides an effective linkage between resources utilised and results achieved,” said Mutharika.
PBB—which directly links planned expenditures to clearly determined results—is also being implemented in Kenya and Ghana, among others, with noticeable results, according to International Budget Partnership (IBP).
PBB shifts emphasis from input (activities) and outputs to outcomes, service delivery and results.
In this model, the budget is formed around groupings of related services and activities that are all
determined to achieve a single strategic purpose called a programme, which may be broken down for the purposes of management into sub-programme and activities.
In a brief interview yesterday, Mejn executive director Dalitso Kubalasa, speaking from Washington DC in the United States of America, commended the model as key to achieving results.
“This is the way to go, if we really want development results, focussed priorities, programmes and projects in line with the national developmental goals and vision,” he said.
Treasury spokesperson Nations Msowoya yesterday said he needed more time to consult relevant officials on how the PBB has performed in the piloted ministries.
But in Kenya, for instance, since 2013/14 fiscal year, PBB changed the way the annual budget is presented to Parliament, according to IBP April 2015 report.
The report said previously, budget estimates were presented based on line item budgeting, with a focus on allocations for inputs, with no linkage between allocations and expected outputs and no narrative.
But since it was introduced, it has been hailed as a major reform because it emphasises the objectives and outputs of government spending and presents information in ways that make it easier to relate allocations to the goals of spending such as improved service delivery.
In Ghana where it is called Activity Based Budgeting (ABB), the model has been implemented since 1998 and the results have been phenomenal, according to IBP.
“The performance of each programme can be measured in terms of its outcomes, the extent to which its sub-programmes and activities have contributed to the advancement of the strategic objectives,” said the IPB.
However, there are drawbacks to the approach.
IPB said this budgeting approach has proved overly detailed, making the budget cumbersome to prepare and contributing to excessively centralised control over budget implementation. n