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Sector Medium Term Planning

This theme and its four sub-themes deal with approaches to public sector management reforms, with specific focus on the medium-term financial planning approach. 

Most countries are undergoing public sector management modernization, which includes the design and testing of new approaches for the development and planning of the public sector, such as decentralization, medium-term financial planning, budget support and a sector-wide approach.

Medium-term financial planning has become one of the central features of ongoing public sector management reform. This approach covers a period of three to five years, compared to the traditional single-year budget practice, and affects traditional ways of planning and budgeting in the public sector, including the education sector. 

An essential purpose of medium-term financial planning is:
(i)  to assess the financial resources that will be required to implement 
     the programmes and activities to achieve the goals and targets of the plan,
(ii) to ensure that funding is available as and when needed, and
(iii) to monitor the efficient use of resources and of progress towards reaching 
     the goals and targets.

Medium-term financial planning is a key part of the budget setting process which comprises linked but separate processes of:
(i) the Medium-Term Fiscal Framework (MTFF) whereby the total government budget
    (expenditure and revenue) is determined and within which broad sector expenditure
    ceilings are set for all public sectors and;
(ii) the Medium-Term Expenditure Framework (MTEF) which determines the allocation and
     distribution of expenditure and revenues within each sector.

The MTEF is a tool for linking policy, planning and budgeting over a medium-term period, usually for three to five years. It consists of a top-down resource envelope and a bottom-up estimation of the current and medium-term costs of existing policies.

The MTEF matches these costs with available resources in the context of the annual budget process; provides a key mechanism for allocating the overall funds for the sector to the various sub-sectors; revises performance targets in line with the available ceiling; and serves as the basis for holding national and sub-national authorities to account in a results-based management framework.

In this regard, Financial Planning specifically seeks to address the following four areas:

Modernization of Public Sector Management
This deals with recent public sector management reform, especially public expenditure management. 

Budgeting Process
This concerns budget practice and process. 

MTEF for Public Sector
This concerns the concept, methodology, process and country experiences of developing the medium term expenditure framework-MTEF.
MTEF for Education Sector
This deals with the medium-term expenditure framework-MTEF applied to in the education sector.