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International
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International Journal of Economic and Business Management Vol. 3(4), pp. 23-38, September, 2015. ISSN: 2384-6151 DOI: 10.14662/IJEBM2015.018
Full Length Research
Medium Term Expenditure and Budgetary Practices in Ethiopia
Mohammed Yimer
Department of Civic and Ethical Studies, College of Social Sciences and Humanities, Arba Minch University.
Accepted 9 September 2015
Despite its
top ranked position in formulating and launching national development
plans in the post derg era, budgetary system in Ethiopia is not
digitalized and budget is highly an input oriented rather than a
performance oriented system. Although substantial policy changes have
been undertaken to improve resource allocation in the public sector,
more remains to be done to strengthen the process of expenditure
planning and budget allocation. In face of limited resource and
increasing demands, there is a need to strengthen expenditure planning
and budget allocation processes, so as to promote efficiency and
sustainability of public investment program. This synthesis paper
indicated that there is no unit cost and standardization of activities
to estimate operational and project costs. MTEF can improve the
efficiency of public expenditure by locking countries into a process
which, over time, channels resources from low value to high value uses
and helps ensure that key services are adequately funded. Also equally
important is the role of MTEF to improve predictability of resource
flows if estimates are based on more realistic assumptions about
revenue. Moreover, MTEF can raise resource consciousness and promote
more output or outcome focused approaches by requiring line departments
to be more explicit about what they propose to do, why they want to do
it and what it will cost. The framework improves accountability by
encouraging governments to consider the medium/long term financial
implications of their policy choices. Cite This Article As: Yimer M (2015). Medium Term Expenditure and Budgetary Practices in Ethiopia. Inter. J. Econ. Bus. Manage. 3(4): 23-38.
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