Case study

Getting money where it's needed

How DFID helps the Moldovan government improve the way it plans its budget

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Vasile Bulicanu has seen it all during his time in Moldova’s Ministry of Finance. As head of the budget coordination section, it is his job to bring together budget requests from across the Moldovan government. Not so long ago these requests would arrive in pure numerical form.

“We used to receive a figure and that was it,” says Vasile. We weren’t told the priorities for the year or if the money was going to a sustainable project. It was impossible to know if it was enough or too much.”

The arrival of a new budget planning tool has changed all that. Vasile refers to the Ministry of Education as an example.

“They used to simply say, ‘Give us 10 million for our needs’,” Vasile explains. “Now they tell us they need 50,000 for school repairs, 250,000 for salaries and money for the children’s breakfast.”

Development of the new tool, known as the Medium Term Expenditure Framework (MTEF), started in 2002, with £2.7 million of support from DFID up until the end of 2010.

It had a rough ride, surviving several changes of government and the early scepticism of many officials. There are still challenges in training Moldovan civil servants to use the tool, but it is now in place and helping with the budget process.

Clarity and continuity

Lilia Gantea, of the Ministry of Health, sees the benefits of the new tool every day.

“The main advantage is the clarity,” she says. “You know that if you have a figure there, you stick to it.”

The MTEF also strengthens the link between policy and the budget.

“Our ministers have changed quite often and all of them have their own priorities,” explains Lilia. “With a well constructed 3 year plan it’s easier for us to keep some continuity in our work.”

The final phase of DFID’s involvement has helped to link the National Development Strategy, which sets out the government’s plans for reducing poverty, to the MTEF.

The World Bank is continuing to help the Moldovan government improve its financial management by funding further work to strengthen its macroeconomic forecasting and expenditure management.

Key facts and stats

DFID also provided a range of awareness and consultation activities to improve the transparency of budget planning and an extensive programme of briefing and training for Moldovan MPs and government staff.

DFID provided £880,885 between 2002 and 2008 for the establishment of the MTEF as a primary decision making tool for linking government policy with budgetary allocations. DFID will further strengthen this activity as part of its £1,787,196 support to the implementation of the National Development Strategy between 2009 and 2011.

A total of 183 months of national consultant inputs and 23 months of international consultant inputs were provided under the project.

Published 8 July 2010