Moving to a Medium Term Budget Framework

Project Information

OPM is assisting the Government of Pakistan to implement its Medium Term Budgetary Framework reforms. The aim of the MTBF project is the reform of Pakistan’s budget preparation process. 

In collaboration with local partners and through a full time team based in the Ministry of Finance, OPM is providing technical assistance - in macroeconomic forecasting, budgetary management, and organisational development - to federal ministries implementing the MTBF. The MTBF is a system of budgetary management now being adopted in developed and developing countries alike. This system aims to strengthen and rationalise the budgetary process through:

• Introducing a medium term perspective to the budget, by casting annual budget preparation within a rolling three-year planning and budgeting framework;
• Strengthening the strategic allocation of resources, through the development of capacity in forecasting medium term resource availability and procedures which establish the government’s strategic priorities for the use of those resources;
• Adoption of output-based budgeting techniques, which identify the costs of delivery of services so that this information can be used by policymakers, ministries and managers to plan future budget allocations and service delivery.

In the last two years the MTBF project has developed the core technologies for a modern budgeting system to operate in Pakistan’s political and administrative environment.  Equally important, the project has contributed to the creation of a cadre of senior officials within the Finance Ministry who understand and support the reforms. These outputs are being delivered within a wider strategy to engage the support and attention of different stakeholders and integrate the new budgeting system within the wider institutions of government.

The MTBF is being implemented in 25 ministries of the federal government, with a view to establishing it as the budget system of Government within the remaining period of technical support. The role of the current phase is to ensure that:

• components of the reforms are properly tested and functionally effective
• key stakeholders have the opportunity internalise the new processes, and;
• capacity within the Ministry of Finance is built to ensure a tidy phase-out of existing practices and installation of the new system in terms of personnel, systems, and good practice standards.