Section 11 of the Fiscal Responsibility Act (2007) stipulates that the minister of finance shall prepare the Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP), which then has to be approved by the federal executive council as well as the national assembly.
It will be recalled that the reason given by President Jonathan on why he has still not presented his budget for 2014 to the national assembly is because the senate and the House of Representatives are divided on the benchmark of oil to approve following the submission of the MTEF. Whereas the president wants $74/barrel as benchmark, the senate wants $76, while the House wants $79.
Anyway, the MTEF isn’t just about showing benchmarks; it actually shows how the FG plans to manage the nation’s resources for the next three years. It’s the MTEF that serves as basis for the annual budget planning. It shows fiscal targets and estimates, revenues and expenditure, including government financial obligations in the medium term. It gives us the assumptions, analyses previous budget and presents an overview of consolidated debt and potential fiscal risks.
For so many people who are not economically literate, this just flies over the head. But that’s why we have BudgIT – to make the jargons plain and easy to understand for the everyday person.
So here’s the MTEF in three infographics (actually supposed to be four, so one more to follow soon).
PS: Click on infographics to enlarge.