FILE COPY Report No. EX-1 ., I P10POSALS FOR THE IMPROVEMENT OF DEVELOPMENT PLANNING IN UPPER VOLTA The Creation and Operation of a Programming Bureau in the Ministry of Finance by C. J. Martin Adviser on Planning Organization Development Services Department International Bank for ~econstruction and Development February 18, 1970 This report was prepared at the request of the Government of UPPER VOLTA. The views and recommendations contained in the report are those of the author rather than those of the Bank Group. The Government of UPPER VOLTA is responsible for the release and distribution of the report. INTRODUCTION The National Budget sets out the government 1 s revenue and expenditure estimates for the year. 'l'".ne Budget does not, however, cover all recurrent or capital expenditures being made in the public sector since the financia:~. assistance given by foreign aid-giving agencies, such as FAC and FED, are noi.. recorded. Some regular governm&it activities are being financed by these foreign agencies with smaller contributions co:rr.ing from the Voltaic budget. Since there is a shortage of revenue in Upper Volta, operating funds for other important government activities (such as livestock service and the agricultural service) which are not financed from abroad are being reduced to such low figures as to make them practically ineffective. Unless atten- tion is given to the claims on future government revenue arising out of existing commitments, the government may find rev~.nues inadequate to meet these commitments, forcir.g it to reduce or eliminate contributions to foreign financed projects or to deny adequate operating funds for projects aftt3r completion. It rr.ight be that to meet such carnrnitments other important exp&iditures would have to be cut. Because of this dile.'mlla, I suggested, j_n my report on "Proposals for Improving Development Planning in Upper Volta, 11 the establishment of a Programming Bureau in the I1:inistry of Finance, since tr.is l1i.nistry is responsible for the collection of revenues, the preparation of expenditure estimates and the control of govermnent spending. Because recurrent budget revenues are subject to fluctuations, because the budget has only recently been brought into balance, and because recurr&it expen- ditures arising from new projects can lay heaVY burdens on existing sources of finance, it is important that the Ministry of Finance should be able to anticipate for periods greater than the year immediately ahead what revenues are likely to accrue and what the claims on these revenues are likely to be. For this purpose a Programming Bureau should be established in the Director- ate of the Budget of the ~1i.nistry of Finance with responsib~lity for fore- casting trends of future revenues and recurrent expenditures and for making adequate provision for recurr&it expenditures arising out of new capital projects, whether financed by foreign agencies or from taxation and other local revenues. Such a Bureau should work in close cooperation with the Ministry of Planning. In line with this suggestion, the Government of Upper Volta issued on October 23, 1969 a Presidential Decree (No. 69/234) sanctioning the establishment of a Programming Bureau (Le Bureau des Programmes) as a sub- unit within the Directorate of the Budget (La Dir~ction du Budget) in order to serve as 11 a liaison bet-v1een the Ministry of Fin!lllce and the Ministry in charge of Planni:;:J.g. 11 I have prepared this paper at the request of the Director of the Budget. It describes the types of activity which the Bureau should undertake, suggests the methods which could be adopted to make the necessary forecasts and estimates, and indicates the foreign technical assist,ance, as well as Voltaic, staff required to develop and maintain this service. It is conside~ed that some 18 months would be required to mrutveen expenditure on capital equipment and expenditure to maintain existing organizations. The amounts devoted by aid-giving agencies to recurrent costs should also be analyzed into personal emolumE>nts, materials, maintenance expenditure and other expenditure. 3. Bring together the information under 1 and 2. The addition of these two sets of information will provide the Bureau with all estimate of the total recurrent expenditure on government activities. 4. Ha.l'i:e projections of existing recurrent expenditures. The Bureau should make estirr..ates of expected changes in tvages and salaries and materials, the material.s being divided into local and foreign. Indices of changes for the next five years should be prepared. 5. Calculate the capital cost of on-going and nelv projects. Estimates giving ar.nual disbursements should be provided, together tdth an indication of sources of finance. This should be linked with those estimates to be made under #6. 6. Make estimates of future recurrent expenditure arising from on-going and net