“Public expenditure is one of the critical ingredients of a country’s development. To ensure that public expenditure is efficient and effective, it is essential that resource allocation decisions are underpinned by sound analysis and that a well-designed set of institutions,
systems, processes, and a performance focus guide budget formulation and execution. Public expenditure issues touch on virtually every aspect of a country’s development management as the budget is almost everywhere a central mechanism in translating policies into results on the ground. Sustainable poverty reduction, for example, will always require informed and well functioning resource allocation processes – due to their impact on macroeconomic stability, the allocation of resources to strategic priorities, and the
efficiency and effectiveness with which policies are implemented. Most African countries face conflicting pressures and hard choices in their budget processes. Budgets, and how public funds are raised, allocated and managed, are the main avenue through which governments channel resources for carrying out their functions, including poverty reduction. Conflicting choices have to be made between giving priority to economic infrastructure or to social services. Sequencing factors also need to be
taken into account, as some interventions may yield higher returns in the short term.”
