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July 26, 2010

Program-Based Budgeting in Mauritius – A Successful Big Bang Approach

Posted by Michael Schaeffer, PFM Advisor East AFRITAC


The Collaborative Africa Budget Reform Initiative (CABRI) organized a regional workshop on May 17-21, 2010 in Mauritius entitled ‘Good Financial Governance: Towards Modern Budgeting’. The workshop was separated into a number of different sessions with the overriding intention to deepen understanding and capacity in the budgeting institutions of participating African countries to manage reform of budget systems. In the first of two blog posts, the presentation of the case study reviewing the implementation of Program Based Budgeting in the host country, Mauritius, is discussed, with reflections on lessons learned.


The session was designed to gain an understanding of the government’s challenges and lessons learned. Why did Mauritius undertake program budgeting reforms? And, what were the catalysts to achieving successful program budgeting reforms so quickly?


The Mauritian government’s concerns about a high level of public debt, an excessive level of expenditure growth that constrained the countries fiscal space, and a desire to introduce more public sector accountability into the budget process constituted the prime motivating force for introducing program budgeting in 2007. The 2006/07 program budget reform effort followed an initial unsuccessful attempt to implement program budgeting in six (6) pilot ministries in 2003.


To successfully implement the second wave of reforms, the Government of Mauritius enacted the Finance and Audit (Amendment) Act of 2008. This act enabled expenditure estimates to be submitted to the National Assembly according to programmes and sub-programmes on a 3-year rolling basis, together with outcomes to achieve and outputs to be delivered.


Mauritius engaged in a big bang approach where all ministries were introduced to PBB simultaneously, together with parallel reforms in the chart of accounts, and a new Financial Management System. In moving forward with PBB, Mauritius developed a sequenced reform strategy and action plan which described the various tasks that needed to be performed, the deadline for each task, and the individuals responsible.


An indicative program-based budget was submitted alongside the traditional line item budget in 2007/08 as a starting point. The trial period enabled the Ministry of Finance and Economic Empowerment (MoFEE) to revise and update the budget structures and the systems required for full implementation. Subsequently, in the following year, the government engaged in a full-fledged program based budget that was embedded in the three-year MTEF (2008/09-2010/11).


Challenges and lessons learned by the Government of Mauritius in introducing PBB, included:


§  The necessity to have a well-thought-out implementation strategy and plan;

§  An agreement on terminology, concepts, and formats needed to be developed and presented to all appropriate authorities early in the process;

§  The need for a strategic plan to be in place for each line ministry, clearly identifying responsibility for program management;

§  The need to update the accounting and information systems to cope with the new system of budget formulation and execution;

§  Mechanisms for monitoring and evaluating program performance from both a financial and non-financial perspective are essential to effective PBB practices; and

§  It is essential that performance information be included in budget documentation and that members of Parliament and civil society are able to use the information presented to them.


According to the Government of Mauritius, the introduction of PBB has resulted in a change in the relationship between the Budget Strategy Department (BSMD) in the MoFEE and the line ministries. The relationship appears to be more collaborative with more interaction taking place on a more frequent basis. The role of the BSMD has also changed from that of preparing budgets for line ministries to that of commenting, refining and assessing quality and coordinating. Furthermore, line ministries apparently feel that they have greater flexibility in determining and managing their own budgets. Changes in virements rules and the relaxation of procurement rules have led to additional in-year flexibility.


The workshop presentations on Mauritius program-based budgeting experience (and on the rest of the workshop topics) can be accessed by clicking on the following link: http://www.cabri-sbo.org/en/component/content/article/20-downloads/137-seminar-presentations. In my next blog post, the session on ‘Public Financial Management in Africa – Where are we?’ will be discussed.




Note: The posts on the IMF PFM Blog should not be reported as representing the views of the IMF. The views expressed are those of the authors and do not necessarily represent those of the IMF or IMF policy.


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