Analysis of Medium Term Expenditure Planning and Budget Allocation in Ethiopia

Negera, Getachew (2005) Analysis of Medium Term Expenditure Planning and Budget Allocation in Ethiopia. Masters thesis, Addis Ababa University.

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Abstract

One of the principal objectives of the developing countries is to accelerate the pace of social and economic development. But the over all effort to achieve this development objective has remained an elusive and difficult task. This is so partly due to lack of financial resources, problems of resource allocation and inefficient utilization of the resources in the public sector. The over all objective of the study is to assess the process and integration of medium term expenditure planning and budget allocation in Ethiopia. The study also identifies the key problem areas that seek attention and improvement in expenditure planning and budget allocation. The assessment is based on two approaches: use secondary data to analyze the linkage between medium term expenditure planning and budget allocation. The other was to collect primary data by using 41 respondents through structural questionnaire and unstructured interview. In Ethiopia, although, budget reform and expenditure planning projects have been attempted to address the weakness of budgetary system and try to reconcile conflict between annual budget perspectives with medium term horizons, successful modern budgeting system remains a continuous problem of the country. Descriptive and qualitative analyses demonstrate that there were no systems, which allowed to facilitate yearly updated policy framework and development priorities to allocate resources in the public sector. Budget is highly an input oriented rather than a performance oriented system. There is no unit cost and standardization of activities to estimate operational and project costs. On the basis of the empirical finding, the linkage between medium term fiscal framework, poverty reduction program and sector development program is inadequate. The data used in preparing public investment program is unreliable and unrealistic. Capital budget request is greater than planned expenditure by more than 100 percent for the period 2001/02 - 2004/05. The recurrent budget allocation is based on inadequate information and without sufficient knowledge about government programs. The linkage between government budget and macroeconomic policy is also inadequate. Therefore, in order to improve budget allocation in the public sector, it calls further reform, which considers policy review process, development priority, performance based activities and efficient resource allocation at all levels of public expenditure management.

Item Type:	Thesis (Masters)
Subjects:	H Social Sciences > HB Economic Theory H Social Sciences > HF Commerce > HF5601 Accounting H Social Sciences > HG Finance
Divisions:	Africana
Depositing User:	Tim Khabala
Date Deposited:	25 Sep 2018 14:27
Last Modified:	25 Sep 2018 14:27
URI:	http://thesisbank.jhia.ac.ke/id/eprint/5633

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