Morocco Support for Improved Public Expenditure Management (MTEF) Morocco: Support for Improved Public Expenditure Management (MTEF)  Activities to be financed by the IDF grant:  It is crucial to create the necessary conditions for a sound implementation of the reform measures already taken as well as preparing the grounds for the continuation of the reform process, and, in this regard, to build and strengthen capacity of the ministries both at the central level as well as at local level. This IDF Grant is meant to support the implementation of the PARP reforms, especially the preparation of MTEFs. To that effect, the IDF Grant would finance in sequence the following activities: (i) capacity building in the MOF to prepare macroeconomic framework and aggregate MTEF; and (ii) capacity building in the central and decentralized services in the field of MTEFs preparation of key selected ministries. The objective of this IDF grant is to build and strengthen institutional capacities within selected ministries (5-6 ministries), both at the central level and in their de-concentrated branches, so that sectoral Medium Term Expenditure Frameworks (MTEF) can be prepared in the selected ministries and become the central tool for the preparation of sectoral budgets.  Building institutional capacities in the selected ministries in the field of MTEFs preparation will help introduce performance-based, multiyear perspectives budgeting process in line with the goals of the on-going budget reform (BR) to enhance efficiency and effectiveness in public spending leading to performance-oriented management, good governance and transparent institutional development.  The MTEF is being introduced as a three-year moving budgeting process putting the budget management in a multiyear perspective. By introducing such a tool, the government is seeking to strengthen the sustainability of the public policies by aligning their future budgetary impacts with provisional financial resources of the State and the macroeconomic constraints. It also aims at improving the inter-sector resource allocations through a better delineation of policies into programs/activities in the annual budgets, and improving operational performance of public service delivery. The latter would be the outcome of an enhanced visibility of line managers in managing their programs and the use of a performance-monitoring framework of public expenditures.  In the preparation for the launching of the of MTEF process, the Government organized two seminars in April 2006 and in April 2007 with the support of the World Bank through P-ESW instrument. The seminars have provided opportunity to disseminate the MTEF methodology and international best practices to all ministries. The P-ESW also supported the preparation of a Methodological Guide for the preparation of MTEFs adapted to the institutional and regulatory conditions of the country. Subsequently, following the successful preparation of pilot MTEFs for 2007-2009 by the ministries of National Education, Housing, Health, and Equipment, the Prime Minister officially launched in February 2007 the process of MTEFs preparation. So far, a total of 9 out of 34 ministries have prepared draft sectoral MTEFs for 2008-10. To help extend the preparation of MTEFs to the remaining ministries, the Government requested Bank support in the form of technical assistance and training.  Several factors are expected to concur in ensuring the sustainability of the proposed institutional capacity building. First, budget reform, including the MTEF preparation process, is a key component of the Public Administration Reform Program (PARP) launched by Morocco in 2002. The steady implementation of the PARP has been set as a priority by the Government, which demonstrated increasing ownership of the reform, creating the necessary momentum and conditions towards achieving its intended objectives.  As of now, almost all the ministries have structured their projects to comply with the results-based program budgeting process, which entitled them to benefit from some flexibility in the reallocation of non-salary resources within programs. Second, the process of MTEFs preparation has been recognized by the Government as an essential mechanism for improving the inter- and intra-sectoral allocation of resources in line with Government policies and priorities. In this regard, a Prime Minister Ordinance has been disseminated to all ministerial departments urging them to prepare MTEFs according to the related Methodological Guide. Third, the PARP in general and the BR in particular are being supported by the World Bank through DPLs and specific P-ESW activities. Two DPLs have been awarded in 2004 and 2006, and a third is expected to be signed in mid-2008. In addition, P-ESW supported two seminars to disseminate the MTEF methodology and the preparation of a Methodological Guide.