Public Sector Governance and Accountability Series: Budgeting and ...

Country Case Study: Kenya 483
were also not interested in participating in the SWGs: they perceived the
process to be of little value. Second, early resource allocation also meant that
the MTEF did not operate as a rolling budget: issuing new ceilings at the start
of the budget preparation process created the impression that each budget
cycle started afresh, disconnected from what went previously.
For the 2007/08 budget, however, the budget framework presented in the
BOPA will use the final sector ceilings of the previous year for years 1 and 2
and will add a third year. The framework will show the total pool of projected
“new” money separately as unallocated funds. This new system will provide
an incentive for spending agencies to improve the quality of their forward
estimates (which will form the base of future budgets) and for new spending
to maximize ministry shares in the indicated additional resources.
The Kenyan emphasis on the role of sectors in the budget process has
brought significant benefits. Reports on the 2004/05 budget process—when the
BOPA was first launched and sectors worked internally on intrasectoral allocations
before the BSP—show that in some SWGs a real process of negotiation
occurred. Ministries were prepared to concede that fellow sector ministries’
priorities might be more pressing than their own, given the interests of the
sector as a whole. They were prepared to relinquish funding in the short term—
in favor of a priority ministry—in exchange for additional funding down the
line. In effect, the cooperative nature of the SWG process forced individual
spending ministries to better understand the opportunity cost of their own
spending proposals, to provide better information on their own spending, and
to be prepared to look for greater efficiencies in their own spending.
The SWGs’ work culminates in the production of an SWG report. These
reports document SWG analysis and decisions in accordance with the SWG
functions listed previously. The report is a key document for ministries: it is
the primary instrument through which their proposals for additional funding
will be heard at the central level. The draft SWG reports are published before
the sector hearings.
sector hearings. The sector hearings take place in February and
March and provide an opportunity for government to consult with stakeholders
on its spending proposals. The hearings are open to any member of
the public. They are attended mostly by sector NGOs, research organizations,
and sector donors.
the budget strategy paper. The BSP is the second and
final prebudget statement and marks the end of the MTEF phase of the
MTEF-budget process. The paper updates the BOPA in terms of the