To ensure successful implementation of the National Development Plans (NDPs), section 13(6), of the Public Finance Management Act, 2015 provided that the Annual Budget (AB) shall be consistent with the NDP, the Charter of Fiscal Responsibility (CFR) and the National Budget Framework Paper. It also requires the National Planning Authority under section 13(7) to issue a certificate of compliance of the annual budget of the previous financial year to accompany the annual budget for next financial year.

The overall purpose of the Certificate of compliance is to institutionalize alignment of the annual budgets to the national planning frameworks. Compliance was assessed based on consistence of the Annual Budget (AB) with the Charter of Fiscal Responsibility (CFR), the National Development Plan (NDP) and National Budget Framework Paper (NBFP)

Approach and Methodology (compliance assessment of the FY2015/16 AB)

The second National Development Plan (NDPII) was used as a benchmark against which the Annual Budget (AB) instrument was expected to be aligned. In that, the AB should have primarily implemented the NDP. Assessment was carried out at 4 levels, namely: The Macroeconomic; National Strategic; Sector; and, MDA levels.

The CoC assessment used an elaborate scoring criteria which attached weights at different stages in the planning process. At the first stage of scoring, the existence and alignment of the planning sector planning instruments with NDP was assessed. At the second stage, the alignment of budgeting instruments (the National Budget Framework Paper (NBFP) and the Annual Budget (AB)) with NDP was assessed. At the final stage, the actual absorption and release of funds in line with Budget plans was accessed. The scoring penalized for failure to comply at each of these stages and the final score was arrived at from a weighted system that provides different levels of importance of each stage. Note that at final stage a penalty was given for both low absorption and over absorption, since both indicate weak planning, budgeting and implementation processes. That is a supplementary expenditure is a sign of weaknesses in planning and leads to budget cuts elsewhere

Overall Findings (compliance assessment of the FY2015/16 AB)

Overall, the FY2015/16 AB was 68.3 percent compliant with the NDPII. At macroeconomic level it is 72 percent compliant, it is 75 percent at National Strategic level, and 58.9 percent at Sector/MDA level. Therefore, the AB is largely consistent with the NDPII in terms of macroeconomic and national strategic level priorities, nevertheless, substantial gaps remain especially at the sector and MDA levels.