Budgeting Process

10662 Words May 19th, 2012 43 Pages
1. Nchite and Nsana, (2004): Public Finance Management and Utilization Project- Report on strategies and Mechanisms of an effective system of public finances management in Zambia.
2. Gumboh Steven, (2004): MTEF Manual for Central Government: Zambia.
3. Mudenda Dale, (2005). The budgeting Processes and Economic Governance in Zambia: A Literature Review.
4. Bolnick Bruce, (1995): Establishing Fiscal Discipline: the Cash budget in Zambia.
5. Dinh Hinh, (2000) Cash Budget in Zambia: Stabilizations versus Growth and Poverty Reduction.
6. Mwanawina, I, M, (2002): Transparency and participation in the budgeting process: Zambia Country Report.
7. Mwansa John, (2005): Zambia Public Financial Management Performance Report.
8. Byaruhanga Charles,
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(Nchite and Nsana, 2004)

1.2 BACKGROUND

Since the 1980s, Zambian policymakers have been pursuing a reform programme to increase wealth creation and improve the capita income of the country. Policies have been devised to resolve declining per capita Incomes, the increasing poverty situation, and the declining budgetary allocations and effectiveness of budget implementation. An aspect of this reform process has focused on macroeconomics reform and budgetary policy. (Mudenda, 2005)

The budgetary process has over the years become a very important aspect of macroeconomic management, resource allocation and governance in the country. Since 1993, Zambia has attempted a number of budgeting systems which range from cash budgeting to activity based budgeting. The reform programme under the IMF and World Bank has largely influenced the type of budgeting system that the country has pursued.

1.2.1 MEDIUM TERM EXPENDITURE FRAME WORK (MTEF) AND ACTIVITY BASED BUDGETING (ABB)

Before the introduction of MTEF and ABB government followed the traditional budgeting approach which was functional and incremental based on a yearly basis. The budget structure was limited to an administrative and broad economic classification. It lacked programmatic classification and was not linked to policy priorities of government (Gumboh Steven, 2004). The structure hid the detailed activities of the programmes being carried out by the Ministries and other spending agencies (MPSA’s). This
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