The MTEF needs to be reinforced. Introduced in 2003/04 as part of the fiscal restructuring project financed by the European Union, it has guided the ministry of finance and line ministries in preparing a three-year budget outlook on which one-year budgets are based. Still needed, however, are a public expenditure tracking system aligning the annual budget with the PRSA and better project evaluation. The monitoring system should also cover delivery of services.
The improvements in the transparency, quality, and depth of the budgeting process for ministries and departments envisaged by the MTEF would allow for better prioritization of spending. The composition of current expenditure in Swaziland is less growth-enhancing than that in other SACU members. A review of the capital expenditure program is needed to focus on projects directly linked to more productive areas with a high social rate of return (e.g., irrigation programs). Project evaluation is critical for ensuring that public investment projects do not jeopardize debt sustainability; priority should be given to high-return, progrowth, and propoor projects where bottlenecks to be resolved by such projects have been clearly identified.
Well-functioning PEM systems and the MTEF help improve governance by ensuring that public resources are used transparently and efficiently. Greater transparency, tighter rules governing budget procedures and reporting, and preparation of medium-term expenditure plans would not only enhance the productivity and accountability of public policy, they could have a positive impact on business climate.
Empirical evidence shows that good governance is essential if spending is to be effective. The adverse impact of corruption and poor governance on economic and social outcomes is well recognized Corruption tends to be associated with poorly enforced property rights, weak rule of law, and few incentives for productive investment, all which damage economic growth.
Source: Kingdom of Swaziland: Selected Issues and Statistical Appendix
Swaziland - Public expenditure review
MEDIUM TERM BUDGET POLICY STATEMENT