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THE UNITED REPUBLIC OF TANZANIA
2012 GENERAL BUDGET SUPPORT
ANNUAL REVIEW
19th
November 2012
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TABLE OF CONTENTS
TABLE OF CONTENTS ......................................................................................................... I
LIST OF ABBREVIATIONS ................................................................................................... II
EXECUTIVE SUMMARY ..................................................................................................... IV
1.0 LAUNCH OF THE 2012 GBS ANNUAL REVIEW ........................................................... 6
1.1 INTRODUCTION .............................................................................................................................. 6
1.2 WELCOMING REMARKS BY THE PERMANENT SECRETARY OF MINISTRY OF FINANCE .................... 6
1.3 REMARKS BY GBS CO-CHAIR ......................................................................................................... 6
1.4 OPENING REMARKS BY THE MINISTER OF FINANCE ....................................................................... 8
2.0 PRESENTATIONS AND DELIBERATIONS .................................................................. 11
2.1 PAF 2012 IMPLEMENTATION AND 2013 PAF OVERVIEW ........................................................ 11
2.1.1 Presentation: 2012 PAF Implementation and 2013 PAF Overview .................. 11
2.1.2 PLENARY DISCUSSION .............................................................................................................. 14
2.2 NEW BUDGET CYCLE AND RAPID BUDGET ANALYSIS................................................................... 15
2.2.1 Presentation- New Budget Cycle and Rapid Budget Analysis ............................. 15
2.2.2 Presentation- New Budget Cycle ................................................................................ 15
2.2.3 Presentation - Rapid Budget Analysis ........................................................................ 16
2.2.4 Comments by Government........................................................................................... 17
2.2.5 Presentation by the Commissioner, Budget ............................................................. 17
2.2.6 Plenary Discussion ........................................................................................................... 19
2.3 BIG FAST RESULTS NOW.............................................................................................................. 20
2.3.1 Presentation: Big Fast Results Now ........................................................................... 20
2.3.2 Plenary Discussion ........................................................................................................... 23
2.4 GBS INDEPENDENT EVALUATION PRELIMINARY FINDINGS ......................................................... 24
2.4.1 Presentation: GBS Preliminary Findings .................................................................... 24
2.4.2 Plenary Discussion ........................................................................................................... 28
3.0 CLOSING REMARKS .............................................................................................. 30
3.1 CLOSING REMARKS BY GBS CO-CHAIR ........................................................................................ 30
3.2 CLOSING REMARKS BY MINSTER FOR FOREIGN AFFAIRS AND INTERNATIONAL CO-OPERATION .. 31
ANNEXES ........................................................................................................................ 32
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LIST OF ABBREVIATIONS
ANPD Annual National Policy Dialogue
ASDP Agricultural Sector Development Program
BFRN Big Fast Results Now
BG Budget Guidelines
BMS Block Management System
CAG Controller and Auditor General
CSO Civil Society Organisation
CWG Cluster Working Group
DADPs District Agricultural Development Plans
DP Development Partner
EFD Electronic Fiscal Device
FYDP Five Year Development Plan
GBS General Budget Support
GDP Gross Domestic Product
HBS Household Budget Survey
IFMS Integrated Financial Management System
IPSAS International Public Sector Accounting Standards
JAST Joint Assistance Strategy for Tanzania
KPA Key Policy Area
KPI Key Performance Indicators
KRA Key Results Area
LGAs Local Government Authorities
LGRP Local Government Reform Program
LSRP Legal Sector Reform Program
LTPP Long Term Perspective Plan
M&E Monitoring and Evaluation
MDAs Ministries, Departments, and Agencies
MDGs Millennium Development Goals
MKUKUTA Mkakati wa Kukuza Uchumi na Kupunguza Umasikini Tanzania
MKUZA Mkakati wa Kukuza Uchumi na Kupunguza Umaskini Zanzibar
MoF Ministry of Finance
NGO Non-governmental organization
NKRA National Key Results Areas
NPS National Panel Survey
NSGRP National Strategy for Growth and Reduction of Poverty
OI Outcome Indicator
PCCB Prevention and Combating of Corruption Bureau
PER Public Expenditure Review
PFM Public Finance Management
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PFMRP Public Financial Management Reform Program
PFMS Public Financial Management System
PMO Prime Minister’s Office
PMO-RALG Prime Minister’s Office – Regional Administration and Local
Government
PMS Poverty Monitoring System
PSRP Public Service Reform Program
RGZ Revolutionary Government of Zanzibar
TDV Tanzania Development Vision 2025
TPA Temporary Process Action
URT United Republic of Tanzania
VAT Value Added Tax
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EXECUTIVE SUMMARY
The 2012 General Budget Support (GBS) Annual Review meeting marking the end
of the 2012 GBS annual review cycle was on the 19th November, 2012 at the
National College of Tourism. The meeting brought together the Government of the
United Republic of Tanzania and its 12 Development Partners providing GBS. The
Development Partner’s GBS Group is made up of 9 Bilateral Development Partners
(Canada, Denmark, Finland, Germany, Ireland, Japan, Norway, Sweden and the
United Kingdom), and 3 Multilateral Development Partners (African Development
Bank, the World Bank and the European Commission).
The objective of the annual review is to assess the Government and GBS Partners
performance against their respective commitments as agreed in the Partnership
Framework Memorandum [2011- 2016] and the Performance Assessment
Framework (PAF). It provided an opportunity to receive presentations and discuss
key issues namely: the New Budget Cycle, Rapid Budget Analysis, Big Fast Results
Now initiative and preliminary findings from the GBS Independent Impact Evaluation.
The discussion on PAF 2012 results noted achievements and concerns. It was
agreed that the lessons from 2012 will be taken up as future actions and targets for
PAF 2013 which will focus on fewer strategic and results oriented indicators. Overall
PAF performance was considered to be SATISFACTORY.
The Government and Development Partners agreed to enhance dialogue on results.
The key focus for dialogue next year between Government and development
partners will be: sustainable growth (energy and agriculture), quality of social
services at local government level, and public financial management and
transparency. The meeting also heard about the Government’s new Big Fast Results
Now! Agenda which will strengthen delivery across six critical areas: Energy, Oil and
Gas, Agriculture, Education, Transport, and Revenue collection.
In the course of the deliberations it was reconfirmed that GBS remains Tanzania’s
preferred aid modality. GBS Development Partners were acknowledged for
improving their disbursements and for ensuring predictability of GBS in 2012/13 –
just under half a billion US dollars. They pledged to enhance predictability of GBS
disbursements on the basis of reinforced dialogue. In conclusion there was
consensus that the continuing challenge for both partners is to support sustainable
growth which benefits Tanzanian citizens’ at large leading to a significant decline in
poverty.
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The presentation on the proposed Big Fast Results Now initiative as a new approach
to improve implementation and delivery of results was positively received. The
initiative recognized the need to make improvements in prioritization, discipline, and
efficient public sector, economic and political governance and in addressing key
constraints to development.
The presentation on the on-going GBS impact evaluation was commended for
bringing the GBS partners back to its basic principles: flow of funds, policy dialogue,
and technical assistance and capacity building. A joint team will be established to re-
engineer GBS around the recommendations from the final evaluation due out in
March 2013.
In conclusion there was consensus that both parties (government and development
partners) will continue to address the challenges of sustainable and shared growth to
ensure that growth benefits the majority of Tanzanian citizens.
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1.0 LAUNCH OF THE 2012 GBS ANNUAL REVIEW
1.1 Introduction
The 2012 General Budget Support (GBS) Annual Review meeting which marks the
end of the 2012 GBS annual review cycle was held for one day (19th November,
2012) at National College of Tourism – Bustani Campus. The main objective of the
review was to assess the Government and GBS Partners performance against their
respective commitments as agreed in the Partnership Framework Memorandum that
was signed in May 2011 and the Performance Assessment Framework (PAF) 2012.
It provided an opportunity to discuss preliminary findings of the GBS Independent
Evaluation that is being conducted by FISCUS and REPOA.
Against this objective the 2012 GBS annual review had four main agenda items:
i. Presentation and discussion of 2012 GBS PAF implementation, including
successes and challenges and an overview of the PAF 2013;
ii. Presentation and discussions of the New Budget Cycle and Rapid Budget
Analysis;
iii. Presentation and discussions on the Big Fast Results Now initiative; and
iv. Presentation and deliberation on the preliminary findings from the GBS
Independent Evaluation.
1.2 Welcoming Remarks by the Permanent Secretary of Ministry of Finance
The Permanent Secretary for the Ministry of Finance made a welcoming statement
to all participants. In his welcoming remarks, the Permanent Secretary expressed
sincere appreciation on behalf of the Government to the GBS Partners for their
support during the year under review as most were able to meet their commitments
on schedule and provided valuable advice. He appreciated the spirit and cordial
relationships during the year with respect to dialogue at various levels (Sector,
Cluster and Troika). He assured the Development Partners (DPs) that the
Government will continue to fulfill its obligations as agreed in the Partnership
Framework Memorandum (PFM) and in the Performance Assessment Framework
(PAF).
1.3 Remarks by the Development Partner Chair
In his remarks, the Chair of the PRBS Development Partners Group in Tanzania
applauded overall PAF 2012 performance. He appreciated the realism of this year’s
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budget although implementation remains a challenge in terms of improving public
sector finances and expenditure. .
He further noted that this year’s commitment from the budget support donors
remains just under half a billion US dollars - a significant contribution to the budget.
He also noted that DPs have provided 68% of their budget support payments –$337
million - in the first quarter of this year.
He said that there are a large number of other stakeholders who have a legitimate
interest in GBS, including Parliamentarians, CSOs and the Tanzanian citizens.
Therefore it is essential that the outcome of this review is shared transparently with
these other stakeholders. This is an important contribution in the promotion of
national accountability.
Growth and poverty
In his remarks the Chair identified the crisis in the energy sector as one of the critical
challenges confronting Tanzania. He further noted that energy is fundamental to
growth, and the continuing crisis is a brake on Tanzania’s development. Addressing
sustainable financing for the energy sector is essential and action is needed
urgently.
Results and the longer term
The Chair applauded the Government for recognizing the need to transform ideas
and policy into implementation and results. This commitment is being borne out by
the development of a new and exciting approach to the delivery of results drawing
lessons from successful approaches adopted in Malaysia.
The Chair welcomed the opportunity to align DPs behind a more focused set of
Government priorities and focus DP dialogue on the Government’s own achievable
priorities for implementation and delivery - particularly important as the proportion of
assistance subject to performance tranches increases (to as much as 50% in some
cases).
The Partnership
The Chair concluded that dialogue around budget support leaves room for
improvement. Removing underlying processes monitored in the PAF and ensuring a
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common assessment of the underlying principles1 of budget support provide a critical
opportunity in the short term. Development partners are also working at the request
of Government to harmonise their performance tranche assessments. This should
help focus and strengthen dialogue.
1.4 Opening Remarks by the Minister of Finance
The 2012 GBS Annual Review was officially opened by the Minister for Finance. In
his opening speech, the Hon. Minister said that the GBS annual review event is an
important requirement of the Partnership Framework Memorandum. It provides an
opportunity for the Government and the GBS partners to assess performance of
mutually agreed commitments that are considered essential for Tanzania’s growth,
development and poverty reduction.
The Minister expressed the Government`s commitment to implementing issues
agreed in last years` GBS annual review which include; (i) linking tangible results to
the GBS’s Performance Assessment Framework (PAF), (ii) Reviving the Public
Expenditure Review (PER) process as a tool for strengthening budget management
and systems that promote accountability and efficiency in the utilization of public
resources; (iii) strengthening of public financial management systems. He also noted
that the Government and DPs have put in place a results oriented and multi-year
Performance Assessment Framework, the assessment of which forms a crucial part
of 2012 GBS Annual Review.
The Minister commended the good progress made to revitalize the PER process as
committed to last year. The Champions Group has been formed consisting of key
senior Government and DP officials and the joint permanent PER Secretariat has
been reconstituted with a dedicated team to coordinate and ensure delivery of
agreed commitments.
The Minister emphasized the continuing strengthening of its systems and processes
for ensuring that the funds received are effectively allocated, managed and
accounted for in support of the country’s growth, development and poverty reduction
agenda. He noted that the GBS modality is still facing a number of challenges which
need to be addressed if it is to remain a long term predictable financing instrument.
He expressed concern over signs of non-adherence to the agreed commitments and
1 Underlying principles of GBS for this partnership arrangement:(i) Continuing sound
macroeconomic policies and management;(ii) Commitment to achieving MKUKUTA II objectives and Millennium Development Goals;(iii) Continually strengthened budgeting and public financial management systems; (iv) Continuing peace and respect for human rights, the rule of law, democratic principles, and the independence of the judiciary; and (v)Good governance, accountability of the Government to the citizenry, and integrity in public life, including the active fight against corruption in accordance with the laws of the United Republic of Tanzania.
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principles as laid out in the Partnership Framework Memorandum (PFM). In the spirit
of partnership, there is a need to identify and address the challenges that the GBS
modality is facing.
The Minister also observed that there is a need to have fewer actions and indicators
in order for GBS to deliver more meaningful dialogue.
Public Expenditure Review and Public Financial Management
The Minister reiterated the importance of the Public Expenditure Review (PER)
process as a tool for strengthening budget management and ensuring the efficiency
and transparency in the utilisation of public resources. This has been done in the
context of MKUKUTA and MKUZA implementation, carried out in a participatory
manner, involving all stakeholders in growth, development and poverty reduction
issues to effectively engage in open dialogue.
The Minister pointed out that over the last year the Government has made efforts to
revive and strengthen the PER process and provide space for it to play its role
effectively. It is with this understanding that the Government used the work of the
Joint (Government and DPs) Task Force and the PER retreat to generate inputs that
were fed into the Planning and Budgeting Guidelines Committee. He also noted the
Government’s commitment to further strengthen the PER process as a basis for
effective dialogue on budget issues and broad participation of key stakeholders.
The Minister reiterated Government commitment to effectively implement PFMRP
Phase IV, launched in June this year. The programme will be implemented over the
period of five years, covering revenue management, planning and budget
management, budget execution, transparency and accountability, budget control and
oversight, change management, and programme monitoring and evaluation.
Other 2012 National Issues
Progress in several National issues was reported by the Minister as follows:
(i) The population and housing census successfully took place from 26th
August to 7th September;
(ii) The Household Income and Expenditure Survey is in the field and on
track to deliver results in mid-2013;
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(iii) Parliament passed the Public Private Partnership (PPP) Act No. 18 of
2010 in August;
(iv) The Government has initiated joint venture negotiations with power
generation investors for the following projects:
- Mtwara 300 MW;
- Mpanga 144 MW;
- Power transmission projects of 400 KV for Morogoro – Tanga –
Kilimanjaro – Arusha (682 kms) and
- Expansion of the North West Grid for Kagera, Kigoma and Rukwa
Regions (1000 kms).
The Chair of the GBS Development Partners asked the Minister and his team for clarification on the issue of adverse effects on the disbursement schedule. He reminded the meeting that DPs have provided 68% of their budget support payments –$337 million - in the first quarter of this year, against the target of 55%, and as of November DPs will have made 100% of their disbursements in line with their quarterly commitments. He requested the speech to be amended before being circulated to the press.
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2.0 PRESENTATIONS AND DELIBERATIONS
2.1 PAF 2012 Implementation and 2013 PAF Overview
The session on 2012 PAF Implementation and 2013 PAF overview was co-chaired
by Mr. Ramadhan Khijjah, the Permanent Secretary, Ministry of Finance, and Mr.
Marshall Elliot, Head of DFID Tanzania and Chair of the PRBS Development
Partners Group in Tanzania.
2.1.1 Presentation: 2012 PAF Implementation and 2013 PAF Overview
The presentation by Government gave an overview of PAF 2012 implementation and
PAF 2013 overview. He presented PAF 2012 implementation following the three
structure of the PAF, namely: underlying processes, key policy actions, and outcome
indicators.
Underlying Processes
The Government noted that out of seven (7) underlying processes six (6) were rated
as satisfactory and one (1) was unsatisfactory.
Key Policy Actions
The rating of key policy actions shows seven (7) achieved, and five (5) key policy
actions not achieved.; The KPA s not achieved were:
1. Put in place integrated land management information system in Northern and Eastern Zones. This target was missed by 10% due to delays of funding from our Development Partners. Plans to fully install the Northern and Eastern geodetic control system are now delayed by about 6 months.
2. Interface central and local government ICT;
3. Streamline and rationalize national systems and processes for inter-governmental transfers to LGA;
4. The Government enhances domestic tax revenue mobilization with better transparency and business environment ; and
5. Strengthen institutions of public investment management and PPP.
Outcome Indicators
Out of 37 outcome indicators, 20 indicators were achieved, 13 were not achieved
and 4 were not assessed. Outcome Indicators showing good results were:
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(i) Enhancement of Cargo Handling at the Port
(ii) Extractive Industries Transparency Initiatives; good progress towards validation
(iii) The Public Expenditure Review Process has been revamped, and enhanced Secretariat in place
(iv) Maintained sound macroeconomic stability and public financial management; PSI on track
(v) Rural roads maintained to good and fair condition
(vi) Primary schools leaving exam results have improved
(vii) Increased births taking place at health facilitied
(viii) Reduced number of legal cases delayed in the judiciary.
The outcome indicators not achieved include:
(i) Proportion of villages with land use plans
(ii) Electricity plant availability
(iii) % of trunk and regional roads network in good and fair condition
(iv) Proportion of councils in which less than 40% of standard VII pupils passed the PSLE in the previous year
(v) Form 4 examination pass rates (Division I-III) national average for the previous year disaggregated by gender
(vi) Nurses and nurse midwives per 10,000 population by region
(vii) Proportion of households in rural settlements with access to clean and safe water from improved/ protected sources
(viii) Proportion of households in regional towns with access to clean and safe water from improved/ protected sources
(ix) Proportion of households in Dar es Salaam with access to clean and safe water from improved/ protected sources
(x) % of under five children receiving birth certificates
(xi) Reduction in outstanding audit matters
(xii) Value of tax exemptions as a share of GDP
Despite good results shown in PAF 2012, challenges still remain in the areas where
achievement was below expectations. In particular, the following areas were singled
out:
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(i) Access to clean and safe water slightly missing the targets for 2012, and
further work is still needed on the new water MIS system.
(ii) Legislation on simplified domestic tax revenue mobilization was delayed.
(iii) Delays on revising the institutional changes to manage public investments
and public private partnerships better.
(iv) Remaining challenges in the energy sector despite achievement of the PAF
2012 action on energy subsidies.
(v) Two studies in public financial management are detailed, but the overall
PFMRP M&E framework shows a much more positive development.
The presentation concluded by drawing lessons learned for PAF 2013:
(i) Fewer indicators with clear methodologies for monitoring;
(ii) Actions should be realistic and strategic that demonstrate results on increased growth and poverty reductccvvvcion; and
(iii) Endorse PAF 2013 by the end of December 2012 to allow ample time for implementation.
PAF 2013 proposals were summarized as follows:
(i) The Underlying Principles under the Partnership Framework Memorandum will be monitored through a joint assessment to be established by January 2013;
(ii) Based on (i) above agreed to remove all underlying processes to reduce
transaction costs and to be monitored at sector level;
(iii) GBS Development Partners to harmonize their performance tranches for increased transparency;
(iv) Opportunity to focus dialogue on sustainable growth, service delivery at the local level, transparency and public financial management; and
(v) Agreed to monitor poverty trends more comprehensively going beyond numeric targets.
The presentation concluded with the following observations to support GBS dialogue
going forwards:
Frank dialogue based on mutual trust and focused on substance.
Reduce transaction costs by agreeing to fewer meetings that monitor
implementation and ensure that dialogue has value added.
Less frequent change of leadership from the DP side in order to build stronger
sustained dialogue and institutional memory.
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2.1.2 Plenary Discussion
In the discussion that followed the presentation, the following points were raised:
(i) There was an appreciation that this year’s PAF performance has slightly
improved compared to the previous year. Having set clear assessment
criteria for most of the elements measured through the PAF, it is now
possible to more clearly demonstrate where action is most needed.
(ii) While commendable progress was made in launching the new public
finance management programme, publishing budget books, and
enhancing domestic accountability concern was expressed over the delay
of publication of budget information and guidelines that allow citizens’
access to budget information.
(iii) Concern was expressed over the constraint the energy sector is having on
growth and development. In particular, concern over governance and
operationalization of Tanesco (subsidy and cost recovery) was expressed.
In this regard, it was pointed out that the Government is working closely
with the WB and IMF to address the financial sustainability of Tanesco.
Furthermore the Government is ready to work with serious investors in the
energy sector and is ready to work with Development Partners.
(iv) Concern was expressed over the quality and equity of public service
delivery especially to poor people and poorly resourced areas. Specifically,
the health sector was mentioned as a sector where quality and equity
needs to be addressed by allocating more resources to marginalized areas
and addressing the shortage of staff and security challenges in rural areas.
(v) Efforts being made to include more strategic agriculture indicators in PAF
2013 were welcomed. However, concern was expressed over the
effectiveness of the indicators used and the challenges of monitoring;
(vi) It was suggested that DPs should increase their commitments and
disbursements in the first quarter of the financial year. It was noted that
this year, the amount released in Quarter 1 was ahead of target. However,
there is room for discussion on how to make the targets more stretching
for DPs. The Government should back this proposal with more explicit
indication of the needs for further frontloading and present the case for
discussion with DPs. It was proposed that Government and DPs should
identify constraints to further frontloading of disbursements and take action
to address those constraints.
(vii) Use of natural resources in more sustainable ways deserves greater
attention and stronger action by Government to curb unsustainable use of
natural resources.
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2.2 New Budget Cycle and Rapid Budget Analysis
2.2.1 Presentation – New Budget Cycle and Rapid Budget Analysis
This session was jointly chaired by the, Permanent Secretary, President’s Office
Public Service Management and the Country Director of the World Bank. The New
Budget Cycle was presented by the Deputy Permanent Secretary, Ministry of
Finance and the Rapid Budget Analysis was presented on behalf of the DP`s by, the
Lead Economist from the World Bank.
2.2.2 Presentation – New Budget Cycle
The Government presented the current budget cycle, the challenges it faces and
justification for the new budget cycle. The presentation recapped on the importance
of the Government budget which serves as a tool for economic and financial
management and accountability. Despite the importance of the Government budget,
the current budget cycle faces the following challenges (i) Stakeholders less than full
involvement in the budget process; (ii) Aligning sectoral priorities to overall national
priorities; (iii) Insufficient time for Parliamentary Committees to effectively engage in
the scrutiny of the budget proposals (iv) the misalignment of the PER/GBS review
process with the budget cycle has resulted in insufficient input into the budget
process; (v) delays in firming up development partners support in the government
budget renders budgeting for foreign funded projects/activities problematic; (vi)
delays in implementation of the new budget by at least two months; and (viii) under-
estimation of non- tax revenues by MDAs, RSs and LGAs.
The new budget cycle will address these challenges. The timing of the new budget
cycle will be as follows:
i. Preparation of the Plan and Budget Guidelines will commence earlier (in
August and end in October);
ii. The Planning and Budget Guidelines will be approved by Cabinet by
November and will be distributed to MDAs, RS and LGAs immediately;
iii. MDAs, RS and LGAs will prepare their budget proposals between November
and February;
iv. The budget proposals will be submitted to the Ministry of Finance (by MDAs,
RS and LGAs) by end of February for scrutiny and consolidation
v. Cabinet will approve the budget proposals in April;
vi. Budget books will be printed and made available to the Parliamentary
Committees beginning May;
vii. The Minister of Finance will present the National Budget to Parliament on the
second Thursday of June as is currently done;
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viii. Parliament will approve the Finance Bill and the Appropriation Bill by of June
to make it possible for budget implementation to commence on 1st July; and
ix. Parliament will continue to debate MDA and regional programmes in the
National Budget from June to August.
The new budget cycle is expected to give ample time for MDAs, RS and LGAs to
make adequate preparations of their budgets and to widen space for Parliamentary
Committees and other stakeholders to participate more effectively in the budget
process. It is also expected that DPs and other stakeholders will align their activities
with the new budget cycle as appropriate.
2.2.3 Presentation - Rapid Budget Analysis
The presentation by the World Bank on the Rapid Budget Analysis reiterated
Tanzania’s good macroeconomic performance with rapid and constant real GDP
growth above 6 percent over the decade. He also noted that the external balance
has been under control with stable reserves. The presentation pointed out that there
had been significant improvement in fiscal policy management for the year
2011/2012 and a reduction of the deficit from 6.6 per cent to 5.5 percent of GDP.
The adjustments made were higher than agreed with the IMF’s PSI and represented
a first time reduction since 2008/9. The adjustments were driven by significant but
unequal cuts in current spending; more revenue collection; and higher execution of
development spending than in 2010/11 most of which was directed to roads and
energy.
In the last review period, however, there have been a number of challenges including
growing inflationary pressures, a decline in external reserves from 4.5 to less than 4
months equivalent of non-factor imports, depreciation of the local currency by about
20% in less than 1 year, and higher fiscal deficits.
The presentation further pointed out the:
i. Increasing gap between planned and executed budget;
ii. Shift towards new infrastructure needs to be accompanied by capacity to
select and implement investment projects optimally; maintaining the right
balance between infrastructure with investments in the social sectors; and
paying close attention to maintenance;
iii. New sources of funding which include concessional loans and non-
concessional borrowing on both domestic and international market and the
associated increase in debt stock and debt servicing with implications on debt
management;
iv. Increasing off budget expenses;
v. Rising tax exemptions despite commitment by Government to reduce them;
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vi. Rising public pension spending in relation to earnings; and
vii. Local Government Authorities effectiveness is hampered by allocations not
being clearly defined, transfers from Central Government, and inadequate
monitoring of expenditures on the ground.
The presentation concluded by urging all parties to develop a work programme to
ensure a revitalization of the PER process. There was a need for close monitoring:
RBA and information sharing along the budget cycle and TA through analytical tools;
and joint analytical work to address some emerging issues.
2.2.4 Comments by Government
In discussing the presentation on the Rapid Budget Analysis, the Commissioner for
Policy Analysis expressed appreciation on the RBA as a guiding tool for addressing
challenges of budget implementation and minimizing the deviation from budget
approvals. It was appreciated that the presenter made proposals to address them. It
was mentioned that the RBA has been addressing both revenue and expenditure
issues which the Government has been considering with great attention as inputs for
the next budget process. All challenges and proposals raised through the RBAs have
enabled the Government to improve the preparation and execution of plans and
budget, service delivery and monitoring and reporting from various stakeholders. The
Government indicated willingness to continue providing requisite data and
information on a timely basis for this exercise and proceeded to identify several
steps that the Government was taking to tackle inflation, reduce tax exemptions, and
manage new funding sources. Detailed responses to each issue raised in the RBA
included:
1. Inflation: continues to reduce reaching 12.9% in October and the Government
is focused on reaching single digit inflation by mid-2013
2. Reducing tax exemptions: the Government welcomed recommendations by
the RBA team to address the high level of tax exemptions which contributed
almost 4 percent of GDP in tax revenue losses in 2011/12, a situation which is
of concern to the Government. A study on managing tax exemptions with
recommendations to achieve “quick wins” in the 2013/14 budget will be
presented to the PER Champions group in early 2013.
3. New sources of funding: the Government experienced limited availability of aid
in-flows including concessional funds, and as a result the Government
embarked with non-concessional borrowing for key infrastructure
development projects. Government does not assess the fiscal and debt
sustainability “at risk”, has established monitoring systems, and is in the
process of establishing a debt management division within MOF to be a one
stop centre for debt management issues.
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4. Low execution rate: affecting the implementation of planned activities, shift of
the budget to finance infrastructure, off-budget expenses, increased tax
exemptions, increased government borrowing from pension funds, inequality
in resource allocation among LGAs, as well as monitoring and evaluation of
public resources. The government takes these challenges and proposals
positively. It was indicated that the Government will take them into account
during the preparation and implementation of budget in the medium term.
5. Planning vs. Execution: the Government budget is executed based on
resource availability (cash based budgeting). However, release of funds for
infrastructure ministries averaged above 80%. The underfunding was caused
mainly by low or delayed disbursement of external funds and procurement
procedures.
6. Off-budget expenses: The Government has stopped issuance of guarantees
for one year to pave the way for detailed evaluation of previous guarantees so
as to come up with a more appropriate modality of managing the off-budget
expenses. Furthermore the Government will make follow-up on IMF advice of
effective management of off-budget expenses.
7. Expenditure cuts in 2011/12: The budget cuts for 2011/12 were necessary in
order to comply with IMF and WB advice on reducing budget deficit from 6.5%
to 5.5% of GDP for ensuring macro/fiscal sustainability. The budget was
affected by the emergence power plan. The Government is taking measures
to avoid unnecessary expenditure cuts in future.
8. Delays in release of development as well as built-up of arrears in 2011/12: It
was pointed out that sources of development financing include: 5% of
domestic revenue; domestic borrowing (1% of GDP); non-concessional
borrowing; and external funds (Basket, project funds, D-Funds). It was
observed that there have been some challenges in the negotiation process
and borrowing procedures for accessing non-concessional loans, which in
2011/12 were accessed during the last quarter. For the case of D-Funds,
most of data have been declared during the fourth quarter. As a way forward,
it was proposed that the Government will start negotiations early in line with
the new budget cycle. On the side of the DPs, those who are yet to abide to
AMP requirements are urged to post their support on AMP soon after release
of such funds.
9. Infrastructure maintenance: the Government has been allocating resources
for maintenance of infrastructure across sectors at different levels; this
problem is accentuated by classification challenges in terms of capturing the
relevant data. For instance, funds that have been allocated to public
institutions and LGAs are classified under line items of transfers which include
maintenance budgets.
10. Spending on public debt: it was pointed out that the increases resulted from
payment of due debts from previous loans and new government initiative to
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finance infrastructure development projects through non-concessional loans
with short maturity period.
11. Available data on actual local government expenditures: since 1st July, 2012,
133 LGAs have adopted the use of Epicor/IFMS for revenue and expenditure.
This makes it possible to access data on actual LGAs expenditure and carry-
over balances are to be entered into the IFMS as part of revenue for new
financial year and respective expenditure will be reflected.
12. Inequity in resource allocations among LGAs: it was reaffirmed that the
Government is reviewing formulae used in allocation of resources to LGAs.
13. Health sector foreign funding: is highly under-estimated due to large off-
budget funding: The gravity of this issue was acknowledged and the
Government agreed to continue to address the problem by urging the DPs
who have not managed to channel their budget support through the
Exchequer system to do so.
2.2.6 Plenary Discussion
Plenary discussion included:
(i) Appreciation was made of the RBA and noted as a good input for stressed
that the RBA is to be a guiding tool that requires the Government to stick
to the approved budget. It was observed that discussions were in the final
stages regarding renewal of the PSI programme, macro-economic
performance was still strong, and inflation is coming down.
(ii) The DP`s welcomed the new budget cycle and are open to provide more
support as necessary. An observation was made on the current financing
gap that needs to be clearly known with proposals for addressing it;
(iii) It was observed that budget cuts are painful but necessary. They should
be taken as a challenge to making the budget more realistic, a challenge
that will be addressed by adopting the new budget cycle;
(iv) The Ministry of Finance will continue to provide requisite data and
information on timely basis. It was suggested by DPs that timely reporting
should also include reporting by parastatals;
(v) It was observed that the increase in debt should be interpreted with some
caution. In particular, the following observations were made:
a. The debt stock is cumulative reflecting more of past debts than current
over-borrowing;
b. The debt ratio is influenced by the use of nominal GDP growth pointing
to the need for deflation to present values;
(vi) DPs were encouraged by Government leadership on an action plan for
Tanesco and initial discussions with the WB. However, fiscal monitoring
would be facilitated by enforcing timelier parastatal reporting to MoF. This
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would facilitate having a more holistic view, highlighting risks but also a
broader view of economic impact of the parastatal sector.
(vii) From the DP side, concern was expressed over the contribution of
parastatals like Tanesco and TPDC to the budget deficit and national debt.
The Government side acknowledged these challenges but clarified that
Tanesco was also a major concern for the Government and that it was
working on its repositioning in the short, medium to long term. The
Government is working closely with DP`s to achieve the targets that
ensures Tanesco operates effectively and efficiently. It was also pointed
out that the magnitude of the deficit due to TPDC could be reduced if the
revenue side of TPDC operations was recognised; It was also pointed out
that if prioritization and sequencing of projects should fall short, leading to
further disruption of works and accumulation of overdue obligations, the
Government might have to consider external borrowing to settle the latter.
The Minister of Finance promised to look into the matter.
(viii) It was also observed that large fiscal threats were imminent due to a large
backlog of contracts as in the case of Tanroads. The need to prioritise
transport in the MTEF was advised.
(ix) It was observed that a substantial part of tax exemptions are on
investment projects. The Ministry of Finance will review this situation with
a view to reducing the exemptions to less that 1% of GDP.
2.3 Big Fast Results Now
This session was jointly chaired by the Permanent Secretary for the Ministry of
Energy and Minerals and H.E, the Ambassador of Sweden in Tanzania. The
presentation on the Big Fast Results was made by the Executive Secretary of the
Planning Commission.
2.3.1 Presentation: Big Fast Results Now (BFRN)
The government provided the background of the Big Fast Results Now which came
as a result of warning lights from a review of the implementation of the Tanzania
Development Vision (TDV) 2025 which was carried in 2009/10. The review pointed
out four issues that need to be worked on to unleash Tanzania`s growth potential:
(a) Prioritisation of actions and strategic resource allocation;
(b) Implementation discipline grounded in performance benchmarks;
(c) Political and economic governance; and
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(d) Tackling head-on the key constraints such as the infrastructure gap; low
agricultural productivity; low industrialization; human capital and skills gap;
critical services, tourism, trade and financial.
In the case of Tanzania, Big Fast Results Now (BFRN) came as a result of Langkawi
International Dialogue held in June 2011 in Malaysia. The President of the United
Republic of Tanzania participated in this dialogue where the Prime Minster of
Malaysia shared his country`s transformation experience in the spirit of fostering
South-South Cooperation and smart partnership. During this retreat the Head of
States and Government were exposed to methodology used by Malaysia to score
Big Fast Results. This was followed by 4 days BFRN seminar held in November,
2011 in Kuala Lumpur, Malaysia where a Government team led by the Executive
Secretary of Planning Commission participated.
In the presentation the Government shared the pillars, and other countries
experience of the BFRNs approach. The following pillars were presented:
(i) Bold leadership committed to change and take the country forward;
(ii) Ruthless focus on priorities;
(iii) Selection of drivers and enablers;
(iv) Discipline of implementation; and
(v) Entrenched government accountability.
BFRN approach involves the following steps:
(i) Set your strategic direction (True North);
(ii) Conduct labs which facilitate an intense problem solving environment with a dedicated full time working;
(iii) Run open days to share lab output with the public and solicit inputs;
(iv) Publish the roadmap, meaning telling the people what they are going to do;
(v) Set KPI (key performance indicators) for the whole Cabinet;
(vi) Implementation;
(vii) Independent Performance Review and Audit; and
(viii) Annual report
Other experiences of working with the BFRN approach were mentioned including
United Kingdom, South Africa, South Korea, Indonesia, Philippines, Bhutan, Kenya
Vision 2030 Delivery Secretariat; Ethiopia’s Agricultural Transformation Agency and
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South Australian Public Sector Performance Commission (PSPC). The presentation
also noted that the BFRNs approach was undergoing the process of domestication in
Tanzania. This was being done through Cabinet retreats in August and October
2012.
In the August 2012 two-day Cabinet retreat the key theme was “Transformational
leadership for efficient and effective Government delivery on vision 2025”. The
intention was to expose the Government leaders to the methodology used by
Malaysia to score “BIG FAST RESULTS NOW” where key lessons, the missing link,
resolutions and catalytic steps were agreed. Among the resolutions for the retreats
are:
(i) Adopt and customize the BFRN model to suit the Tanzanian environment;
(ii) Improve delivery and accountability by emulating the PEMANDU model of coordination, problem solving and M&E; and
(iii) Put in place a robust and enforceable M&E system and transparent incentives system for performers and non-performers.
The catalytic steps agreed were:
(i) Establish a multi-disciplinary team drawing from a wide spectrum of stakeholders to propose and prepare a roadmap for operationalization of an efficient and effective Government delivery unit and the lab approach; and
(ii) Within the context of the national development and MKUKUTA and MKUZA, Ministries were tasked to review their strategic and action plans and come up with focused National Key Results Areas (NKRAs) and KPIs. Ministries were also tasked to create respective delivery units that will feed into the national delivery unit.
In implementing the retreat resolutions the Government pointed out that a multi-
disciplinary committee team had been set up; Ministries had prepared action plans
to implement ADP 2012/13, FYDP and LTPP; and POPC had conducted training
seminars for management teams of MDAs to share the BFR methodology,
resolutions of August 2012 Cabinet retreat; build consensus; and get MDAs
feedback on its operationalization in the context of Tanzania.
The August resolutions were followed by another three day Cabinet retreat in
October 2012 which discussed the selected MDA`s action plans to implement TDV
2025; the report of the multi-disciplinary team on the proposed road map to
operationalize an efficient Delivery Unit and the Lab approach.
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The presentation touched on the elements of BFRN approach applied in Tanzania.
Ministry of Health and Social Welfare; Tanzania Revenue Authority, Road Fund
Board; and others like Swissport, Universities’ promotion system for academic staff,
MCC projects; and private sector companies were pointed to have the approach of
BFRN.
The government provided the road map to improve Government Delivery which
includes;
(i) Establishment of the Delivery Unit which will be an independent
department under the Presidency. The unit will be known as President`s
Delivery Bureau (PDB); and
(ii) Operationalisation of the Lab approach where NKRAs have been
identified:
1. Energy, Oil and Gas
2. Transport (Central transport Corridor)
3. Revenue Collection
4. Water
5. Agriculture
6. Education
The presentation was concluded by urging the DPs to strongly support the
Government on this important Government led initiative.
2.3.2 Plenary Discussion
In the discussion the following points were raised:
(i) Many of the contributors appreciated these important Government-led
initiatives, especially the quest for more results and accountability. A
number of DPs expressed willingness to support the initiative. However,
DPs proposed that the Government needed to indicate how DPs were
expected to participate and to clarify how this initiative related to existing
national development programmes and strategies as set in MKUKUTA and
Five Year Development Plan;
(ii) The initiative was commended as a good case of South-South
Cooperation. It was also suggested that experiences of Thailand, Vietnam
or other Asian countries would be useful too;
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(iii) Support on prioritization was expressed by reiterating the need of having
few priorities and to focus on them instead of having a large number of
priorities which are not attainable.
(iv) Some caution was made to the effect that some countries like Indonesia
had adopted similar approach but it has taken a long time without seeing
results. This implies that measures to transform words and intentions to
action and ensure that results are realised. It was suggested one important
prerequisite for realisation of results was the need to get this agenda into
the minds of the people so that it is understood and owned by the public.
It is important that accountability to the people on the ground is facilitated.
(v) The Government was encouraged to put a strong emphasis on improved
access to information, and to consider value of new technology and the
central role of the media. It was suggested that Tanzania may also want to
consider development of an information society. ICT, e-governance etc.
develop fast, can help to do things faster and more interactively, and
enhance transparency.
(vi) Interest in understanding the potential links between the BFRN lab outputs
and GBS going forwards. One commentary suggested that if this succeeds
the PAF of tomorrow is already drafted
(vii) The Executive Secretary concluded that they have chosen 6 areas to start
with, and there is still a heated exchange around approaching access of
water. He also said that the programme is deliberately ambitious to cover
lost ground in meeting Vision 2025. It is important to start from the top but
inclusivity is central and communication across a range of stakeholders
including the media is a key element.
2.4 GBS Independent Evaluation Preliminary Findings
The session on GBS preliminary findings was co-chaired by the Permanent
Secretary, Ministry of Industry and Trade and H.E, the EU Ambassador to Tanzania.
The presentation of the preliminary findings was made by Andrew Lawson on behalf
of ITAD, REPOA and FISCUS.
2.4.1 Presentation: GBS Preliminary Findings
Mr. Andrew Lawson started his presentation by making clear that these were
preliminary findings of the consultants and are subject to modification and refinement
in the light of additional data and analysis in the subsequent stages.
His presentation focused on three specific areas – i) the flow of funds, with a
particular focus on results in the education sector, ii) policy dialogue, iii) technical
assistance and capacity building. The presentation includes feedback on the
25
consultancy team's preliminary recommendations in relation to the design and
management of GBS. Information on the methodology and timeline of the evaluation
was also shared.
(i) Flow of Funds
He noted that the preliminary findings of the consultancy team suggest that GBS has
had an important “flow of funds” effect, which has facilitated the expansion of public
spending in the MKUKUTA and MKUZA priority sectors, with consequent benefits for
the improved coverage of social services and the improved maintenance of the road
network. GBS disbursements during the period were substantial both in fiscal
terms, where they represented on average 13.7 % of public spending over the seven
year evaluation period, and they comprised an average of 37.5 % of ODA. Secondly,
total annual disbursements were predictable; indeed they were generally in excess
of the amounts projected by the GBS members at the conclusion of the annual
review process. However, although quarterly disbursements were broadly consistent
with projections at the beginning of the evaluation period, over 2009/10 and 2010/11,
quarterly disbursements have been subject to more substantial delays (of 3-6
months), which may have created problems for Treasury management.
In terms of the use of funds, the consultants concluded that given the scale of GBS
and its discretion – a significant part of the increases evidenced during the
evaluation period in respect of non-salary recurrent spending, internally financed
Development spending, and in staff numbers within the health and education
sectors, were made possible by the GBS transfers. They noted that these increases
accrued predominantly to the six priority sectors identified in MKUKUTA and
MKUZA.
Further analysis in terms of the application of these funds within the priority sectors,
suggest that a major expansion in the coverage of primary and secondary education
has been achieved, as well as a significant improvement in the size and the quality
of the national road network. The Tanzania 2010 Demographic & Health Survey also
attests to a range of improvements in the water and health sectors since the 2005
survey. While some of these would seem more obviously related to programmes
funded under the Global Fund or GAVI (such as the rise in vaccination coverage, the
vast increase in HIV testing, the increased use of insecticide-treated bed nets), the
improvement in the proportion of households using a protected water source (from
49% to 57%), the increased coverage of post-natal care, the reduction in respiratory
infections in children and their more frequent treatment are all results which are likely
to have been significantly supported by the expansion in the GoT budget for these
sectors, and thus by GBS.
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The consultants recognise that problems of quality, equity and efficiency in social
service delivery remain. However, the consultants did not find anything to suggest
that these are any more pronounced than they would be in other countries at a
similar stage of development of the network of public service provision. Moreover,
the consultants indicate that there are signs – at least in the education sector, of
appropriate policy responses to such problems.
(ii) Policy Dialogue
While recognising that good results have been achieved through GBS, the
consultancy team identified challenges in the quality of policy dialogue. The
evaluators recognise that stakeholders in Tanzania have been aware of these
weaknesses for some time and have started to introduce some corrective measures.
The evaluation team identified four inter-related weaknesses with the current
structures for performance assessment and policy dialogue:
- a less than adequate Government ownership and leadership, largely prompted by the DPs’ increased recourse to the use of GBS as “policy leverage”;
- high transaction costs;
- technical weaknesses in the definition of performance indicators and targets; and
- lack of a strategic, problem-solving orientation within the dialogue process.
The evaluation report will come up with recommendations on how to address the
challenges and make GBS more effective. The following preliminary
recommendations are made in light of the observed findings to enable stakeholders
to start addressing the weaknesses identified:
i. Consider introducing a formal separation between the assessment of the
disbursement conditions for the fixed tranches of GBS and the wider
assessment of progress with the implementation of MKUKUTA and MKUZA
and related sectoral and thematic reforms. The former should depend
essentially on fulfilment of minimum conditions related to macro-economic
management, commitment to MKUKUTA and MKUZA, implementation of
PFM reforms and transparency in budget reporting, as well as respect for
the underlying principles agreed in the Partnership Framework
Memorandum.
ii. In order to avoid conflicts of interest and ensure a more streamlined
assessment process, the assessment of the core conditions for the
disbursement of the fixed tranche should be undertaken through an annual,
independent, professional evaluation/review process whose findings would
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provide the basis for the individual disbursement decisions of each GBS
provider. This would be a single unified process, which would draw on the
conclusions of the IMF PSI review, as well as the results of PEFA
evaluations and other such independent assessments.
iii. As part of this process, or in parallel, a formal annual or perhaps two-yearly
independent assessment of compliance by DPs with their commitments
under the Partnership Framework Memorandum should be undertaken.
iv. The Government of Tanzania should take the lead in defining a set of
service delivery targets and policy implementation targets for MKUKUTA
and MKUZA and for the related sectoral and thematic reforms. The
disbursement of the fixed, base tranches of GBS would not depend upon
progress in these areas, although the disbursement of performance
tranches would. In order to protect Government ownership over these
processes, the DPs providing performance tranches would need to commit
to make adaptations to the design of these arrangements, where
appropriate.
v. Support should be provided to Government to help with this reformulation
of the assessment and dialogue process. Its precise format would need to
be decided by Government but it might conceivably take the form of direct
long-term TA support to the GBS secretariat within the Ministry of Finance,
combined with high-level intermittent support from short term TA. Training
in the design and monitoring of performance indicators should probably be
provided too.
vi. A formal strategy should be developed to reduce transaction costs and to
keep control of them in future. This is likely to mean the elimination of the
cluster level from the framework of dialogue. It might also entail a formal
examination of the processes and procedures utilised for making
assessments, distributing analytical reports, undertaking consultations and
reaching decisions, so as to permit some streamlining (or business process
re-engineering) of these functions.
(iii)Technical Assistance and Capacity Building
The provision of technical assistance and capacity building is generally perceived as
the third element of the “Budget Support package”. Such inputs would normally be
focused on aspects of policy, institutional reform and monitoring linked directly to the
Budget Support dialogue - such as support to the monitoring of the PRSP and to the
development of statistics, or to PFM reform. In Tanzania, such arrangements are
notably absent. There are two principal reasons for this:
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Firstly, GBS is now a mature instrument in Tanzania, having formally started
in 2001/02 after several years of programme aid and multilateral debt relief.
Secondly, there is a l “technical assistance fatigue” in Tanzania, which is in
part a reaction to the high levels of long-term technical assistance, which
were provided in the 1980s and 1990s, and which – rightly or wrongly –
have come to be rather negatively perceived by the Government of
Tanzania.
Thus, the evaluation team were unable to identify specific technical assistance or
capacity building support to Government, which was directly associated with the
GBS arrangements, which are the subject of the evaluation although a variety of
technical assistance arrangements are in place to provide technical and
administrative support to the GBS secretariat and to the various secretariats of the
Development Partners’ Groups for different sectors and thematic areas. These TA
support arrangements carry quite a high profile within the policy dialogue process for
GBS because they provide significant administrative support to the different tiers of
the GBS dialogue, and also provide funding for studies and high-level advisory
inputs, aimed at assisting the DPs to carry out their roles within the GBS dialogue.
There is some evidence that the extensive support provided through these
arrangements may have inadvertently served to undermine Government ownership
of the GBS process. Firstly, it seems to be the case that most of the studies and
technical outputs generated by these arrangements are made available in the first
instance to the DPs, rather than being tabled as independent inputs for the mutual
benefit of all parties in the GBS dialogue, including Government and, where
appropriate, civil society. Secondly, the volume of this TA support appears to be
excessive and, in their efforts to be useful, it appears that some of these staff may
have inadvertently taken up administrative and organisational functions, which
should more properly be managed by Government staff.
2.4.2 Plenary Discussion
i. In the discussion there were much appreciation from every stakeholder with
respect to this study and the request was made to make this report available
by early March 2013 to all stakeholders.
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ii. The interim report was discussed actively. It was pointed out that even before
the final report is out some improvements were already being made. For
instance, partners have started to improve budget support through joint
assessment and harmonised tranches and starting to establish key focus
areas for dialogue. There is now a need to swiftly agree on an action plan for
the way forward.
iii. The point about separating policy dialogue from disbursement was particularly
appreciated. Time for evaluation will be known in advance so that the
substantial time is spent on implementation not derailed by too frequent and
sometimes unplanned evaluations.
iv. It was observed that transaction costs are still high and that there is still room
to reduce the PAF drawing from lessons of the past years. Ensuring that the
GBS Chair represents the donor partner group with one voice was stressed.
v. The evaluation was commended for taking us back to principles of what is
GBS. The 3 areas: the flow of funds, policy dialogue, technical assistance and
capacity building for improvement are good.
vi. It was proposed that a joint team be set up to focus on process re-engineering
the GBS systems in line with what has been recommended. Such a process
would need careful management highlighting the size of GBS to Tanzania at
half a billion USD. It was proposed to get Lawson to work alongside the GoT
to implement the changes that are implied by the proposed recommendations.
It was further proposed that by the next GBS annual review a new agreement
would be signed that is consistent with the recommendations of the GBS
evaluation.
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3.0 CLOSING REMARKS
The closing session was officiated by the Minister for Foreign Affairs and
International Cooperation, Honourable Bernard K. Membe (MP), on Monday 19th
November, 2012.
3.1 Closing Remarks by GBS co-Chair
In his closing remark, Mr. Elliot thanked the Government of Tanzania and his GBS
colleagues for a positive and constructive GBS annual review. He emphasized the
following points:
1. PAF 2012: the Chair highlighted the successes of 2012 such as
macroeconomic management, the progress being made on PFM and initial
signs of improving quality in primary education; and also the challenges
including the urgent need to address financial challenges in the energy sector,
and to closely monitor debt sustainability in relation to non-concessional
borrowing including by parastatals.
2. Much of the discussion today has been about how we can work together more
effectively. We have agreed two new ways of working that will help us finalize
PAF 13 in a way that will enhance our dialogue:
(a) Move to a shared annual assessment of the underlying principles.
(b) Budget support donors aim to harmonize performance tranches and
triggers next year and use this to focus our dialogue on three areas for
the year ahead. These areas include:
- Sustainable growth – specifically the energy sector (and possibly
agriculture),
- Services at the local level – looking at quality and equity of service
delivery, and
- Transparency and public financial management – continuing
implementation of PFMRP, EITI validation, and implementation of
commitments made by Tanzania in the context of the Open
Government Partnership.
3. Highlighted the exciting new BIG FAST RESULTS NOW (BFRN) approach,
and stressed that enhancing institutional delivery capacity will be
fundamental.
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4. Concluded by commending the evaluation session which provided insights
into ways to better organize GBS, with policy dialogue that adds value.
3.2 Closing Remarks by Minster for Foreign Affairs and International Co-Operation
(i) Expressed his gratitude for the honor of closing the 2012 General Budget
Support (GBS) Annual Review. He thanked the audience for participating and
providing insightful contributions. This has been possible due to the high level
commitment and participation by the Government and Development Partners.
(ii) Noted the impressive progress against a number of outcome indicators with
many of the agreed actions achieved and rated “satisfactory”. He also
restated the Government`s commitment to ensure the deliberations of this
meeting are fruitful. These deliberations are:
a) Sustaining GBS as the Government’s preferred aid delivery mechanism;
b) Enhancing equity and efficiency in service delivery by addressing the
remaining challenges in pay reforms, particularly implementation of an
incentive policy for the hard to serve areas;
c) Sustaining macroeconomic stability and robust public financial
management;
d) Ensuring effective implementation of the Big Fast Result approach; and
e) Adhering to the new Budget Cycle and ensuring enhanced predictability
of the medium term framework for both foreign and local funds.
(iii) The Minister reiterated Government's view to take further steps to enhance
efficiency in the dialogue including making sure that the next PAF is
simplified, implementable and focuses on promoting growth and poverty
reduction.
(iv) The Minister noted the achievement made by Tanzania under the MDGs. It
achieved Goal 2: universal primary education; way back in 2009. It has
registered considerable gains on Goal 3: promoting gender equality and
empowerment of women; and Goal 6: combating HIV/AIDS, Malaria and other
diseases. Other goals have also achieved moderate results. However, much
remains to be done to emancipate our people from poverty.
(v) The Minister concluded by urging Development Partners to continue
supporting the country and ensuring medium term predictability of aid flows.
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ANNEXES
ANNEX 1
GBS ANNUAL REVIEW, 19TH NOVEMBER 2012: PROGRAMME
VENUE: NATIONAL COLLEGE OF TOURISM – BUSTANI CAMPUS
TIME PROGRAMME RESPONSIBLE CO-CHAIRS
0800 - 0830 Registration Secretariat
0830 - 0845 Remarks from the PS MOF PS MOF Facilitator
0845 - 0900 Remarks from the GBS Chair
GBS Chair Facilitator
0900 - 0930 Opening Remarks by the Minister for Finance
Hon. Dr. William A. Mgimwa (MP) Minister for Finance
PST to Welcome Minister for Finance
0930 – 1000 Presentation of 2012 PAF Implementation and 2013 PAF overview
DSPFM PST / Head of DFID
1000 - 1030 Discussions on 2012 PAF Implementation and 2013 PAF overview
All PST / Head of DFID
1030 -1100 TEA BREAK All
1100 - 1115 Presentation on New Budget Cycle
CB PS- POPSM/World Bank
1115 - 1130 Presentation on Rapid Budget Analysis
World Bank & CB PS-POPSM/ World Bank
1130 – 1200 Discussion on New Budget Cycle and Rapid Budget Analysis
All PS- POPSM / World Bank
1200 - 1220 Presentation on Big Fast Results
PO-PC ES-POPC / Ambassador of Sweden
1220-1300 Discussion on Big Fast Results
All ES-POPC
1300 - 1400 LUNCH BREAK
1400 – 1430 Presentation on GBS Independent Evaluation Preliminary Findings
Consultants from FISCUS and REPOA
PS- MIT / EU Ambassador
1430 - 1630 Discussions on GBS Independent Evaluation Preliminary Findings
All PS- MIT / EU Ambassador
1630 - 1640 Closing remarks from GBS Chair
GBS Chair
1640 - 1700 Closing Statement
Hon. Bernard K. Membe (MP) Minister for Foreign Affairs and International Cooperation)
1700 - 1730 Press conference GBS Chair and Minister For Finance
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ANNEX 2
WELCOMING REMARKS BY MR. RAMADHANI KHIJJAH
ACTING PERMANENT SECRETARY, MINISTRY OF FINANCE AT THE OPENING OF
THE 2012 GENERAL BUDGET SUPPORT ANNUAL REVIEW NOVEMBER 19, 2012 AT
THE NATIONAL COLLEGE OF TOURISM, DAR ES SALAAM
Hon. Ministers Permanent Secretaries, Excellencies Ambassadors and High Commissioners, Excellencies Resident Representatives, Heads of Development Cooperation, Government Officials, Members of the Media, Invited Guests, Ladies and Gentlemen. It gives me great pleasure to welcome you all to the 2012 General Budget Support (GBS) Annual Review meeting which marks the end of the 2012 GBS annual review cycle. I wish to express sincere appreciations on behalf of the Government to the GBS Partners for their support during the year under review. Most were able to meet their commitments on schedule and whenever necessary, they provided valuable advice. I am optimistic this spirit will be sustained in future. Let me assure you that the Government will continue to fulfill its obligations as agreed in the Partnership Framework Memorandum (PFM) and in the Performance Assessment Framework (PAF). Excellencies, Ladies and Gentlemen, as you will have noted from the program circulated, this year’s Annual Review is unique, we have agreed on a one day programme. The main objective of the review is to assess the Government and GBS Partners performance against their respective commitments as agreed in the Partnership Framework Memorandum and the Performance Assessment Framework. Furthermore, it will be an opportunity to discuss preliminary findings of the GBS Independent Evaluation that is being conducted by REPOA and FISCUS. The 2012 GBS annual review will have four main agenda items. First, there will be a presentation and subsequent discussions on the 2012 GBS-PAF implementation, including successes and challenges. There will also be an overview of the PAF 2013. Secondly, there will be a presentation and discussions of the New Budget Cycle and Rapid Budget Analysis. Thirdly, there will be a presentation and discussions on the Big Fast Result Programme. Finally, we will have an opportunity to deliberate on the preliminary findings of the GBS Independent Evaluation. As you can see, we have a heavy agenda to be covered in one day. In preceding years, the Annual Review used to take two days but this year, we have agreed to do it in one day. I would therefore like to urge and appeal for your co-operation and commitment to the work ahead of us, in order to be able to achieve the same level of output and outcome. In our deliberations during this Annual Review meeting, Prof. Samuel Wangwe will assist us as facilitator and rapporteur of the 2012 GBS annual review. Excellencies, Ladies and Gentlemen, before I conclude, I want to extend special thanks to my Co-Chair, Mr. Marshall Elliot for his outstanding leadership during the year under review. Under his leadership, the GBS family has become more united, as reflected by the absence
34
of incidences of disagreements between Government and GBS Partners; there is also enhanced trust in cooperation between the two Partners. This has made my work as the Co-Chair much easier and effective. I thank you and commend you Mr. Elliot for this outstanding leadership. On the other hand, I want to welcome the incoming Co-Chair. I look forward to another wonderful year of strengthened Partnership under the new leadership. I would also like to take this opportunity to thank the Sector and Cluster Working Groups and the GBS Secretariat for the hard work that they have put in the preparation and facilitation of this year GBS annual review meeting. Please sustain that spirit so that we can be able to achieve even more next year. Excellencies, Ladies and Gentlemen, I would now like to invite my Co-Chair Mr. Elliot make some opening remarks before we welcome the Honourable Minister for Finance to deliver his opening remarks and to officiate the opening of the 2012 GBS annual review meeting.
I thank you all for your attention.
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ANNEX 3
Opening Statement at the 2012 GBS Annual Review by Marshall Elliott, Head of the UK’s Department for International Development and Chair
of the PRBS Group of Development Partners in Tanzania
Honorable Minister of Finance
Permanent Secretaries
Ambassadors
Ladies and Gentlemen
Introduction
Tanzania remains one of, if not the largest recipient of General Budget Support anywhere in the world. This year’s commitment from the budget support donors remains just under half a billion US dollars - a significant contribution to the budget. This is a similar level to last year. We have provided 68% of our budget support payments –$337 million - in the first quarter of this year. The target was 55%. And as of November we are 100% on track with disbursing in line with our quarterly commitments.
We assess Government performance through the Performance Assessment Framework - the ‘PAF’. This year’s overall assessment is that PAF performance is satisfactory. But with a lower proportion – 58% – of key policy actions achieved, performance is not as strong as 2011. And notwithstanding the satisfactory rating, with overall PAF achievement at only 60% it is clear there is scope to significantly improve performance; particularly as some of the more important performance indicators have not been met. This is reinforced by the lack of any significant reduction in the level of poverty and the persistent levels of inequality.
Looking forward, this years’ budget is more realistic than last, as was recognized by the IMF in the context of the PSI, and we encourage you to implement it as planned. But implementation of the budget remains a challenge and getting quality basic services – schools, clinics, water points – to Tanzania’s citizens, including in remote rural areas, remains a priority for budget support partners.
The budget doesn’t cover everything. In particular it gives only limited information about parastatals, such as Tanesco, or about major new investments such as the new gas pipeline down to Mtwara. Given their developmental and financial importance we need to expand our dialogue to encompass a broader definition of public sector finance and expenditure. This will be particularly important over the longer term as Tanzania develops its newly discovered gas resources.
The Government is leading a revision of the joint assistance strategy for Tanzania –the JAST. In this context we hope we can use the evaluation session to think constructively about how we can strengthen the budget support instrument going forward so that it can continue to be relevant for the next decade.
Like last year, this annual review meeting is being held as a contractual event between Development Partners and Government. Because of its broad scope, there are a large number of other stakeholders who have a legitimate interest in Budget Support, including Parliamentarians, CSOs and the Tanzanian citizens. Development Partners believe it is essential that the outcome of this review is shared transparently with these other stakeholders. This is an important contribution to promoting accountability and we hope to work together to jointly improve the format of this annual review in the future. We welcome
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the Government’s commitment to including a substantive session at the Annual National Policy Dialogue where Government and Development Partners can jointly report back on this annual review.
Performance in 2012 based on the PAF
So let me turn to 2012 performance.
On the positive side:
Tanzania has made some progress in addressing the quality of basic services. Standard VII exam pass rate improved, and more people are receiving treatment for HIV. Policy actions on pay and incentives are starting to identify ways of supporting service delivery staff in some hard to reach areas.
Investment in infrastructure is showing results: with 59% of rural roads now passable (slightly above target).
2012 has seen the welcome launch of a new PFM programme by the Prime Minister and strengthened dialogue.
Tanzania is on track to be validated as EITI compliant.
Transparency of the budget has improved with more information being published on line and made available to the people of Tanzania, although continued efforts are needed to ensure that information is published in a timely fashion.
Dialogue between Development Partners and the Government has improved in some areas: the high level dialogue on anti-corruption has provided a valuable forum for discussing government action on anti-corruption. I would like to take the opportunity to thank the Honorable Minister of Finance for his constructive participation.
Tanzania has systems and institutions that are increasingly able to identify and deal with corruption and we have heard about positive progress in this respect. But we are all agreed that much more remains to be done to ensure accountability to taxpayers in Tanzania, and also abroad. Earlier this year we saw the role that accountability institutions, including the media took in identifying allegations of wrongdoing. If these allegations are substantiated it will be important to see due legal process applied expeditiously and transparently.
The restarting of the PER process under the supervision of the “Champions Group” has also been a welcome development. This process is at an early stage but I hope we can all continue to give it the commitment to take it forward.
Against this positive picture, progress still remains [too] slow in other areas:
The government has been slower than expected in taking forward important new legislation on tax administration and public investment management.
Studies on important Public Financial Management issues have been delayed.
In the water sector targets have been missed. However, significant improvements in financial management should help to speed up implementation in the sector. This along with improvements in monitoring data should make it possible to set more realistic targets for 2013.
Significant concerns remain over progress in accountable governance, particularly in the areas of: transparency and access to information, particularly on local level
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expenditure; quality of consultations between government and domestic stakeholders; and the Executive’s accountability to Parliament. These issues can be addressed as part of Tanzania’s important commitment to the Open Government Partnership.
Although the overall rating of the PAF is satisfactory, it is disappointing that after efforts to streamline the PAF there are still so many indicators that are not achieved. This begs the question: Are they not really a high priority for government? Are the timetables unrealistic? Or is it because the capacity to track and measure them remains weak? We need to think how to avoid these problems in the future.
Looking beyond the PAF public financial management remains a critical issue for budget support Development Partners. The recent supervision mission concluded that the programme was making good progress. It is frustrating that the key policy actions in the PAF were not able to mirror this.
2012 has also seen a Budget that is in better shape than it was a year ago and Tanzania seems to have weathered the global economic problems better than many. There has been continued effective dialogue between the GoT and IMF and we welcome the outcome of the PSI/SCF review in July. Its macro-economic and fiscal assessment remains the way we assess one of the most important underlying principles of budget support.
Growth and poverty
Looking forward, a number of critical challenges confront Tanzania. The PSI review highlighted one of the most immediate: the crisis in the electricity sector.
Energy is fundamental to growth, and the continuing crisis is a brake on Tanzania’s development. Sorting out sustainable financing for the sector over the longer term is essential and action is needed urgently.
Over the long term there are huge opportunities presented by the discovery of gas. Managing this resource effectively for the benefit of all Tanzanians will be critical and will have major implications for the Government’s budget. A number of Development Partners are already providing support on these issues and the recent high level mission on Gas sets out some key issues facing the Government and provides an opportunity for all stakeholders, including other Development Partners to provide coherent support to the Government.
Poverty in Tanzania remains stubbornly high despite high growth rates. Tackling this challenge will require action in a number of areas:
Improving the quality of basic services is an important part of a broad based approach to poverty. There has been some progress but it is still limited. Quality of services is poor across much of the country – and systems for managing service delivery are weak and fragmented. In education only 58% pass the primary leaving exam, and only 10% pass the lower secondary exam. Access to water is too low, even in Dar only 51% have access to clean and safe water. Given that 29% of the budget goes on basic services, ensuring they represent good value for money remains central to our dialogue with Government.
74% of Tanzanians live in rural areas and are dependent on agriculture. Agriculture still represents the best opportunity for reducing rural poverty in Tanzania and is one of the Government’s top priorities. Increased growth in agriculture is badly needed. Past progress has been slow, but things are starting to change with a new partnership between the State and the private sector. Although still early days we can see the vision in areas like the Kilombero valley where a mixture of public policy, private investment, and diversification are creating jobs for the rural population.
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Getting agriculture more effectively represented in the PAF would help to focus the dialogue on real priorities.
Finally, while agriculture remains central to any poverty reduction strategy, urbanization is happening even faster all around us. Dar es Salaam is now one of the fastest growing city in Africa! Effective cities deliver enormous benefits in terms of increased jobs and productivity. Dar es Salaam, Mwanza and others have the potential over the coming decade to boost growth and poverty reduction. But this kind of change requires well thought through public investment decisions.
Results and the longer term
To meet these challenges the Government recognizes the need to transform ideas and policy into implementation and results. It is committed to developing a new and exciting approach to the delivery of results by learning lessons from successful approaches adopted in Malaysia and other countries.
We look forward to hearing more about this Big Fast Results Now! approach later on today. If this new approach enables the Government to sign up to a clear set of sequenced results, with clear accountability to deliver within different parts of Government, then the PAFs of tomorrow are already drafted. We welcome the opportunity to align ourselves behind a more focused set of Government priorities, and focus our dialogue on the Government’s own achievable priorities for implementation and delivery - particularly important as the proportion of assistance subject to performance indicators increases (to as much 50% in some cases).
The partnership
Finally, six months into my role as Chair of the budget support group we are clear that dialogue processes around budget support are not optimal. We have, however, made some progress in bringing about change. We have agreed that we will replace the range of underlying processes monitored in the PAF by a shared assessment of the long established underlying principles2 of budget support, such as the respect of human rights and the rule of law which are becoming more prominent as a foundation of the budget support partnership. This should reduce transaction costs and increase transparency. Development partners are also working at the request of Government to harmonise their performance tranche assessments. This should help focus and strengthen our dialogue.
In addition, we are fortunate that we’ll be hearing from the evaluation team later on today – interim findings we know – but they should nonetheless be able to give us some useful ideas on how to make budget support a stronger instrument. A more effective dialogue is one of the critical areas for change. We are determined that we should build on these lessons and on the opportunity provided by the Government’s new delivery approach to improve the way we work together. We hope that this annual review will be able to agree how we can jointly take forward an agenda of radical change over the coming months which will be mutually beneficial.
2 Underlying principles of GBS for this partnership arrangement:(i) Continuing sound macroeconomic policies and management;(ii)
Commitment to achieving MKUKUTA II objectives and Millennium Development Goals;(iii) Continually strengthened budgeting and public
financial management systems; (iv) Continuing peace and respect for human rights, the rule of law, democratic principles, and the
independence of the judiciary; and (v)Good governance, accountability of the Government to the citizenry, and integrity in public life,
including the active fight against corruption in accordance with the laws of the United Republic of Tanzania.
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ANNEX 4
OPENING SPEECH BY HONOURABLE DR. WILLIAM A. MGIMWA (MP), MINISTER FOR
FINANCE, AT 2012 GENERAL BUDGET SUPPORT ANNUAL REVIEW 19TH NOVEMBER
2012 AT THE NATIONAL COLLEGE OF TOURISM, DAR ES SALAAM
Hon. Ministers
Permanent Secretaries
Excellencies Ambassadors and High Commissioners
Excellencies Resident Representatives
Heads of Development Cooperation
Government Officials
Members of the Media
Invited Guests
Ladies and Gentlemen
Introduction
1. We meet here today for the 2012 General Budget Support (GBS) Annual Review, an
important event that provides opportunity for the Government and DPs to discuss issues of
common interest and cordial for the development of Tanzania. I feel greatly honoured,
therefore, to have this opportunity to officiate the opening this year’s GBS annual review
meeting. I welcome you all. The large number of representatives from the Government and
Development Partners present at this annual review is clear testimony of the importance we,
as development stakeholders, attach to this event. I am very much encouraged and would
like to thank you for your time and presence.
2. Excellencies, Ladies and Gentlemen, the GBS annual review event is an important
requirement of the Partnership Framework Memorandum that we signed on in May 2011. It
is intended to provide an opportunity for the Government and the GBS partners to assess
Government and GBS partners’ performance in implementing our mutually agreed
commitments that are considered essential for Tanzania’s growth, development and poverty
reduction. The experiences of the past years’ annual reviews have proved to be very
beneficial in various aspects. With these reviews, we have been able to assess our
performance against the agreed set targets. We have also been able to identify areas of
strengths, weaknesses and challenges, thus enabling the Government to take appropriate
actions to tackle them. These events have also helped us to strengthen our dialogue in
advancing the country’s development agenda.
3. Excellencies, Ladies and Gentlemen, Much work has gone has gone into
preparations for this event. I would like to take this opportunity to thank all Government
officials and Development partners who have worked tirelessly to make this event possible.
Let me assure you that the Government and the People of Tanzania value your time and
contributions to this country’s overall development efforts.
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4. Excellencies, Ladies and Gentlemen, I would like to commend the sector and
cluster working groups for their outstanding work during the year. Through this work we have
been able to monitor implementation of the 2012 GBS Performance Assessment Framework
(PAF). Let me also commend the Joint GBS Secretariat for the support and guidance to the
sector and cluster working groups, and for the logistical arrangement of this event. I also
wish to commend the good work done by the Troika Plus, under the able leadership of Mr.
Ramadhani Khijjah, Permanent Secretary - Ministry of Finance and Mr. Marshall Elliot, Head
of DFID in Tanzania and Chairperson of the GBS Donor Group in Tanzania, for guiding the
2012 GBS annual review cycle. I wish to thank them earnestly for their able leadership and
demonstrated high level commitment. Last, but not least, I commend the joint strategic PAF
team for their work and effort to make the 2013 PAF even more focused, result oriented, and
for making it more relevant and better aligned to the country’s needs. It is important that we
commit ourselves to what is achievable, easy to measure and monitor.
5. Excellencies, Ladies and Gentlemen, among the key issues that were identified
and agreed upon at the last year GBS annual review include: linking tangible results to the
GBS’s Performance Assessment Framework (PAF), reviving the Public Expenditure Review
(PER) process as a tool for strengthening budget management and systems that aim at
promoting accountability and efficiency in the utilization of public resources; as well as
continuing with strengthening of public financial management systems. I am pleased to note
that jointly, we were able to put in place the Result oriented and Multi-year Performance
Assessment Framework, whose 1st annual assessment form part of today’s discussions,
along with emerging issues in response to developments that have evolved since the last
annual review. I want these efforts be sustained as we jointly envisage making PAF a
powerful instrument to delivering key results in our priority areas. I also understand that
commendable progress has been made to revitalize the PER process as committed last
year. I am informed that the Champion Group has been formed consisting of Key Senior
Government officials and the joint permanent PER secretariat has been reconstituted with a
dedicated team to coordinate and ensure delivery of the agreed commitments. I hope that
these efforts will be sustained to ensure the PER process becomes our vehicle for key
decisions and policy choices for better management of public financial resources.
General budget support and performance assessment framework
6. Excellencies, Ladies and Gentlemen, I wish to reiterate my Government’s
position that General Budget Support is the Government’s preferred modality for providing
official development assistance to Tanzania. This is because GBS gives the Government full
ownership over resource allocation in line with national priorities for the implementation of
the MKUKUTA and other national policies, strategies, plans and programmes. Furthermore,
GBS is consistent with the Constitution of the United Republic of Tanzania, Chapter 7,
Articles 135 and 136, which provides for the control of public finances. The Article states that
all Government finances must be deposited into the Consolidated Fund and be appropriated
by the Parliament. It is also in line with the Public Finance Act No. 6, 2001, Part II on the
control and management of public finance, which states that the Parliament should maintain
control over public money. By making full use of the national budget process for resource
allocation and spending, as well as the national systems and procedures for procurement,
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accounting and auditing, it contributes to strengthening national capacities. GBS helps also
to reduce transaction costs and facilitates harmonization among Development Partners, as
all GBS Partners use a single system/ process for dialogue, review and assessment.
7. Excellencies, Ladies and Gentlemen, let me use this opportunity, therefore, to
request our Development Partners to continue using the GBS modality and to increase the
GBS share in their portfolio. The Government on its part will continue to strengthen its
systems and processes for ensuring that the funds received are effectively allocated,
managed and accounted for in support of the country’s growth, development and poverty
reduction efforts.
8. Excellencies, Ladies and Gentlemen, the experience of the last two financial years
reveals, however, that the GBS modality is facing some challenges which need to be
addressed if it is to remain a long term predictable financing instrument. We are witnessing
signs of non-adherence to the agreed commitments and principles as laid out in the
Partnership Framework Memorandum (PFM). This has seriously affected the disbursement
schedule. Over the past few years our GBS Partners have not met the agreed commitments
of frontloading 95% of commitment in the first quarter. This causes a huge challenge on the
Government side as far as implementation of the Budget is concerned. I pray that this trend
should not be encouraged. As of today, for example, GBS disbursement for FY 2012/13 is
only 70% against the agreed target of 95%. In the spirit of partnership, let us identify and
address the challenges that the GBS modality is facing.3
9. Excellencies, Ladies and Gentlemen, as I have stated earlier on, the GBS annual
review is intended to provide an opportunity to the Government and GBS-DPs to assess
their respective performance in implementing the mutually agreed Performance Assessment
Framework. I have been made to understand that the 2012 GBS-PAF performance is
encouraging despite the challenges encountered. We have, however, to aim for higher
performance as we move forward. Let us take this as a challenge and work to achieve
higher result in 2013.
10. Excellencies, Ladies and Gentlemen, the message we get is that, we need to
undertake sufficient scrutiny of the actions we propose before committing ourselves. Equally
important is the need to have a few actions and indicators in order to make meaningful
impact. Following the 2010 GBS annual review, the Government and Development Partners
agreed to revisit the PAF, in substance and structure, to ensure that the PAF is results-
oriented, and with fewer but strategic actions and performance indicators. The 2011 GBS-
PAF was the first such joint output and has shown some success. The Government and its
Development Partners should continue to work on the PAF to ensure that the GBS-PAF
2013 is more focused and results-oriented, and better aligned to the country’s growth and
development agenda.
3 This statement is clarified in the Joint Statement Press Statement - Annex 8
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Public expenditure review and public financial management
11. Excellencies, Ladies and Gentlemen, the Public Expenditure Review has
continued to be an important tool for strengthening budget management, and in ensuring
efficiency and transparency. This has been done in the context of MKUKUTA
implementation, carried out in a participatory manner, involving all stakeholders. The overall
objective has been to provide avenue for all relevant stakeholders in growth, development
and poverty reduction issues to effectively engage in open dialogue; particularly as we
address issues of budget management, control and accountability. It has, therefore, helped
Government in identifying priority areas and directing resources towards them.
12. Excellencies, Ladies and Gentlemen, over the last year the Government has
undertaken efforts to revive and strengthen the PER process and provide space for it to play
its role effectively. A joint task force with membership from Government and Development
Partners was constituted. A PER retreat was convened where four analytical papers were
presented and discussed. The conclusions reached at the retreat provided some inputs to
the Plan and Budget Guidelines Committee.
I would like to reiterate the Government’s commitment to further strengthen the PER process
so that it continues to provide a basis for relevant dialogue on budget issues, involving
Government, civil society, academia, private sector, research institutions and DPs; as well
as to provide the comfort needed in supporting the GBS as a preferred modality. It should
also significantly contribute to the Government’s capacity to analyze budget issues, and to
strengthening its capacity in budget management.
13. Excellencies, Ladies and Gentlemen, I believe you are aware of the Public Finance
Management reforms the Government has undertaken since the mid-1990s. PFM is among
the priorities of the Government with the objective to achieve a high level of public service
delivery and reduction of poverty. The PFM Reform Program will, therefore, continue to
guide the reforms in this area with a view to strengthen the public financial management
system in the country. The PFMRP Phase IV, which was launched in June this year, will be
implemented in a span of five years, covering revenue management, planning and budget
management, budget execution, transparency and accountability, budget control and
oversight, change management, and programme monitoring and evaluation. The
Government is committed to effectively implement this programme and we thank you for
your support.
Other national issues
14. Excellencies, Ladies and Gentlemen, since last year’s GBS annual review, a
number of other issues of national importance have occurred. I would like to share with you
some of these political, social and economic developments. First, is the population and
housing census which successfully took place from 26th August to 7th September 2012. The
household Income and Expenditure Survey is also on track. The survey started in October
2011, and the report is expected in July 2013. This will assist in establishing the status of
income poverty.
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15. Excellencies, Ladies and Gentlemen, in August 2010 the parliament passed the
Public Private Partnership (PPP) Act No. 18 of 2010 to provide room for private sector
participation in public infrastructure investments. With the completion of PPP Regulations, it
is expected that some key infrastructure projects will be implemented through Joint Venture
arrangements between the Government and Private Sector. The government has already
initiated joint venture negotiations with power generation investors for the following projects:
Mtwara 300 MW, Mpanga 144 MW, and power transmission projects of 400 KV for Morogoro
– Tanga – Kilimanjaro – Arusha (682 kms) and expansion of the North West Grid for Kagera,
Kigoma and Rukwa Regions (1000 kms). Similar efforts will be initiated in other sectors. We
welcome the private sector from your countries to take advantage of this arrangement and
participate in joint ventures in Tanzania.
Conclusion
18. Excellencies, Ladies and Gentlemen, after those remarks, let me now take this
opportunity to declare the 2012 GBS Annual Review meeting officially opened. I wish you
fruitful deliberations.
I thank you for your kind attention.
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ANNEX 5
PRESENTATION OF 2012 PAF IMPLEMENTATION AND PAF 2013
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46
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ANNEX 6
PRESENTATION ON NEW BUDGET CYCLE
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49
50
51
ANNEX 7
PRESENTATION ON RAPID BUDGET ANALYSIS
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53
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ANNEX 7 (Continued)
GOVERNMENT RESPONSE TO THE RAPID BUDGET ANALYSIS
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ANNEX 7 (Continued)
GOVERNMENT WRITTEN RESPONSES TO THE RBA 2012
A: GENERAL ISSUES
The Government of the United Republic of Tanzania appreciates for commendable analytical
work which has been done by the World Bank in collaboration with other development
partners since we introduced this consultative process through the Rapid Budget Analysis
(RBA). The RBA has been addressing both revenue and expenditure issues which the
government has been considering with high attention, as inputs for the next budget process.
All challenges and proposals raised through the RBAs from time to time have enabled the
government to improve the preparation and execution of plans and budget, service delivery
and monitoring and reporting from various stakeholders.
In the RBA for 2012, broad issues raised include low execution rate which affected
implementation of planned activities, shift of the budget to finance infrastructure, off-budget
expenses, increased tax emption, increased government borrowing from pension funds,
inequality in resource allocation among LGAs, as well as monitoring and evaluation of public
resources. The government takes note these challenges and proposals positively and will
continue to consider during the preparation and implementation of budget in the medium
term.
B: SPECIFIC ISSUES
Planning vs. Execution: Over the past few years, the gap between approved and executed
expenditures has been increasing, however economic, social, and infrastructure ministries
have proportionally suffered more than ‘administrative’ ministries.
Government budget is executed based on resource availability (cash based budget).
However, release of funds for infrastructure ministries was on the average of above
80% as shown in table No.12 of the synoptic note. The underfunding was caused
mainly by un released foreign funds, especially for Ministry of Water.
In 2011/12, the execution of many projects in economic, social and infrastructure
ministries were low due to procurement procedures.
Off-budget expenses: An increasing share of public money is managed outside of the central
government.
This issue is noted as attributed by government guarantees.
The government has stopped issuance of guarantees for one year to pave the way
for detailed evaluation of previous guarantees so as to come up with modality of
managing the off-budget expenses.
The government will make follow-up of IMF advice of effective management of off-
budget expenses.
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Expenditure cuts in 2011/12 – affected some sectors including transfers to LGAs which
might have impacted services delivery especially education and health. (Para 16 - 18)
The government is implementing PSI programme under the IMF as acknowledged n
by the presenter in the recent macro-fiscal developments.
The budget cut for 2011/12 was necessary in order to comply with IMF and WB
advice on reducing budget deficit from 6.5% to 5.5% of GDP for ensuring
macro/fiscal sustainability.
Likewise, the budget was affected by addressing unforeseen expenditures mainly on
implementing the emergence power plan.
The government is taking measures to avoid the unnecessary expenditure cut in
future.
The level of execution of development expenditure was relatively low as the result of the
fiscal adjustment and persistent bottlenecks at different level of chain of public expenditures.
(Para 20)
This challenge is mainly attributed by foreign inflows which are channeled direct to
projects. The government has introduced an Aid Management Platform (AMP), which
captures foreign inflows (D-Funds).
DPs are advised to honor their commitments, post respective support through AMP
and increasing their support through the exchequer system.
Delays in release of development as well as built-up of arrears was again experienced in
2011/12. About half of MDAs development funds were released during the last quarter of
fiscal year, with more than 36 percent being during the last month of FY (Para 21)
Sources of development financing include: 5% of domestic revenue; domestic
borrowing (1% of GDP); non-concessional borrowing; and external funds (Basket,
project funds, D-Funds).
There are some difficulties (i.e, negotiation process and borrowing procedures) to
access non-concessional loans, which in 2011/12 were accessed during the last
quarter. For the case of D-Funds, most of data have been declared during the fourth
quarter.
As a way forward, the government will start early the negotiations in line with new
budget cycle. Likewise, DPs are urged to post their support on AMP soon after
release of such funds.
Infrastructure maintenance continues to receive limited attention, except for roads. The
share of infrastructure maintenance in the 2012/13 is projected to remain flat at around 3
percent of total budget. While there are some allocations for roads maintenance in the
2012/13 budget there is virally no allocation for maintenance of social infrastructures
especially in education health sectors. (Para 31).
This issue is noted. The government has been allocating resources for maintenance
of infrastructure across sectors at different levels.
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However, there is a challenge of capturing those data due to budget classification at
different levels. E.g. Funds that have been allocated to public institutions and LGAs
are captured as line item of transfers which includes maintenance budget.
Spending on public debt and general services increased significantly in 2011/12. (Para 42)
This issue is noted. The increase resulted by payment of due debts from previous
loans.
New government initiative to finance infrastructure development projects through
non-concessional loans with short maturity period which requires government to start
repayment of such loans in short period.
Available data on actual local government expenditures continues to inhibit detailed analysis
of local government expenditures. Transparency of LGAs expenditure continues to be limited
for two reasons: (i) inclusion of LGA budgets in regional votes especially with regards to
releases and (ii) lack of transparency on the planning and expenditure of carry-overs. (Para
51)
With effect from 1st July, 2012, 133 LGAs started to use Epicor/IFMS for revenue
and expenditure. Thus, data on actual LGAs expenditure can be accessed.
Likewise, carry-over balances will be entered into the IFMS as part of revenue for
new financial year and respective expenditure will be reflected.
Inequity in resource allocations among LGAs continues and is impacting service delivery.
(Para 52).This issue is noted. The government is reviewing formulae used in allocation of
resources to LGAs.
Health sector foreign funding is highly under estimated due to large off-budget funding
(paragraph 85). This issue is noted. The Government will continue to persuade DPs to
channel their budget support through the exchequer system.
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ANNEX 8
PRESENTATION ON BIG FAST RESULTS NOW!
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ANNEX 9
PRESENTATION ON GBS INDEPENDENT EVALUATION PRELIMINARY FINDINGS
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ANNEX 9 (Continued)
BRIEFING NOTE TO INFORM DISCUSSIONS DURING THE GBS ANNUAL REVIEW
SESSION ON THE BUDGET SUPPORT EVALUATION
Context:
This Briefing Note provides a summary of some preliminary findings of the consultancy
team on the on-going budget support evaluation, for the purpose of presentation and
discussion at the Budget Support Annual Review on the 19th of November 2012. It needs to
be stressed that these are preliminary findings of the consultants, and are subject to
modification and refinement in the light of additional data and analysis. It is important to
stress that the management team has not analysed and commented on the findings.
Furthermore, the findings included in this brief are only partial, and the scope of the
evaluation goes far beyond what will be covered in the presentation of the lead evaluator,
Andrew Lawson. The management committee has guided the consultant to focus the
presentation on two specific areas – flow of funds, with a particular focus on results in the
education sector, and policy dialogue – in order to facilitate discussions at the Annual
Review. The presentation is likely to include feedback on the consultancy team's preliminary
recommendations in relation to the design and management of Budget Support. Information
on the methodology and timeline of the evaluation is annexed.
Partial and preliminary findings/recommendations of the consultancy team:
Preliminary findings of the consultancy team suggest that Budget Support has had an
important “flow of funds” effect, which have facilitated the expansion of public spending
in the Mkukuta priority sectors, with consequent benefits for the improved coverage of
social services and the improved maintenance of the road network.
Budget Support disbursements during the period were substantial both in fiscal terms, where
they represented on average 13.7 % of public spending over the seven year evaluation
period, and as a proportion of ODA, where they comprised an average of 37.5 % of ODA.
Secondly, total annual disbursements were predictable; indeed they were generally in
excess of the amounts projected by the BSG members at the conclusion of the annual
review process. However, although quarterly disbursements were broadly consistent with
projections at the beginning of the evaluation period, over 2009/10 and 2010/11, quarterly
disbursements have been subject to more substantial delays (of 3-6 months), which may
have created problems for treasury management.
In terms of the use of funds, the consultants conclude that given the scale of Budget Support
and its discretionality –a significant part of the increases evidenced during the
evaluation period in respect of non-salary recurrent spending, internally financed
Development spending and in staff numbers within the health and education sectors
were made possible by the Budget Support transfers. They also noted that these
increases accrued predominantly to the six priority sectors identified in Mkukuta.
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In terms of the application of these funds within the priority sectors, the consultants suggest
that a major expansion in the coverage of primary and secondary education has been
achieved, as well as a significant improvement in the size and the quality of the
national road network. The Tanzania 2010 Demographic & Health Survey also attests to a
range of improvements in the water and health sectors since the 2005 survey. While some of
these would seem more obviously related to programmes funded through the Global Fund or
GAVI (such as the rise in vaccination coverage, the vast increase in HIV testing, the
increased use of insecticide-treated bed nets), the improvement in the proportion of
households using a protected water source (from 49% to 57%), the increased coverage
of post-natal care, the reduction in respiratory infections in children and their more
frequent treatment are all results, which are likely to have been significantly supported
by the expansion in the GoT budget for these sectors, and thus by Budget Support.
The consultants recognise that problems of quality, equity and efficiency in social service
delivery remain, while they indicate that there is nothing to suggest that these are any more
pronounced than they would be in other countries at a similar stage of development of the
network of public service provision. Moreover, the consultants indicate that there are signs –
at least in the education sector, of appropriate policy responses to such problems.
While recognising that good results have been achieved through GBS, the consultancy team
has identified challenges in the quality of policy dialogue. The evaluators recognise that
stakeholders in Tanzania have been aware of these weaknesses for some time and have
started to introduce some corrective measures.
The evaluation team suggests that there are four inter-related weaknesses with the current
structures for performance assessment and policy dialogue:
- a lack of adequate Government ownership and leadership, largely prompted by the DPs’
increased recourse to the use of Budget Support as “policy leverage”;
- high transaction costs;
- technical weaknesses in the definition of performance indicators and targets; and
- A lack of a strategic, problem-solving orientation within the dialogue process.
While the evaluation report will come up with recommendations on how to address the
challenges and make general budget support into an even more effective tool in support of
development in Tanzania, the following preliminary recommendations4 of the consultancy
team are likely to be presented by Andrew Lawson during the annual review as suggestions
for how the stakeholders could already start addressing together the weaknesses identified:
i. Consider introducing a formal separation between the assessment of the
disbursement conditions for the fixed tranches of Budget Support and the
wider assessment of progress with the implementation of Mkukuta and related
sectoral and thematic reforms. The former should depend essentially on fulfilment
of minimum conditions related to macro-economic management, commitment to
4 The presentation of the independent evaluation team is yet to be finalised. Hence the
preliminary recommendations of the team, listed in this document, may well be revised and expanded in the presentation that will be delivered.
72
Mkukuta, implementation of PFM reforms and transparency in budget reporting, as
well as respect for the underlying principles, agreed in the Partnership Framework
Memorandum.
ii. In order to avoid conflicts of interest and ensure a more streamlined assessment
process, the assessment of the core conditions for the disbursement of the
fixed tranche should be undertaken through an annual, independent,
professional process whose findings would provide the basis for the individual
disbursement decisions of each Budget Support provider. This would be a
single unified process, which would draw on the conclusions of the IMF PSI review,
as well as the results of PEFA evaluations and other such independent assessments.
iii. As part of this process, or in parallel, a formal annual or perhaps two-yearly
independent assessment of compliance by DPs with their commitments under
the Partnership Framework Memorandum should also be undertaken.
iv. The Government of Tanzania should take the lead in defining a set of service
delivery targets and policy implementation targets for Mkukuta and for the
related sectoral and thematic reforms. The disbursement of the fixed, base
tranches of Budget Support would not depend upon progress in these areas,
although the disbursement of performance tranches would. In order to protect
Government ownership over these processes, the DPs providing performance
tranches would need to commit to make adaptations to the design of these
arrangements, where appropriate.
v. Support should be provided to Government in order to assist with this
reformulation of the assessment and dialogue process. Its precise format would
need to be decided by Government but it might conceivably take the form of direct
long-term TA support to the Budget Support secretariat within the Ministry of
Finance, combined with high-level intermittent support from short term TA. Training in
the design and monitoring of performance indicators should probably be provided
too.
vi. A formal strategy should be developed to reduce Transaction costs and to keep
control of them in future. This is likely to mean the elimination of the cluster level from
the framework of dialogue. It might also entail a formal examination of the processes
and procedures utilised for making assessments, distributing analytical reports,
undertaking consultations and reaching decisions, so as to permit some streamlining
(or business process re-engineering) of these functions.
The Evaluation Process: Methodology and Timetable
The evaluation is following the “3-step” methodology, which has been established for the
evaluation of Budget Support by the OECD-DAC5. Steps One and Two of the analysis have
been undertaken simultaneously over the course of the desk phase and the main field
mission. However, they have not been fully completed, pending receipt from the Ministry of
Finance of the full set of fiscal data for the period, and pending finalisation of the data
analyses foreseen within the evaluation, including notably the econometric analysis of
education sector outputs and outcomes. Step Three, consisting of the synthesis of the
5 Details of the methodology are available at
http://ec.europa.eu/europeaid/how/evaluation/evaluation_reports/2008/budget_support_en.htm.
73
results of Steps One and Two, will be undertaken in late November after completion of the
analyses pending. Thereafter, the results of the evaluation will be written up, reviewed with
the Reference Group and Management Group, and then finalised.
Final results will be presented in February 2013 at public seminars in Dar es Salaam and in
Europe. Feedback will be incorporated into the Final Evaluation Report, which will be
available for full public dissemination from March 2013. The key elements of the work plan
and the current stage within this process are shown below:
Evaluation Timetable
Preparatory Mission ........................................................... 13th – 24th, February 2012
Inception Report ............................................................................. 30th, March 2012
Fact finding & data collection mission ......................................... 3rd - 12th, May 2012
Desk Report........................................................................................ 20th July 2012
Main Field Mission .......................................... 24th, September – 10th, October 2012
Field phase presentation .............................................................. 8th , October 2012
Presentation of Preliminary findings at Annual Review...…………19th, November
2012
1st draft Final Report .............................................................. 14th, December 2012
2nd draft Final Report (incorporating comments from Mgt. & Ref. Groups)28th, January
2013
Dissemination seminars in Tanzania & Europe .................................. February 2013
Final Evaluation Report ................................................................... 15th March 2013
74
ANNEX 10
CLOSING STATEMENT AT THE 2012 GBS ANNUAL REVIEW BY
MARSHALL ELLIOTT, HEAD OF THE UK’S DEPARTMENT FOR INTERNATIONAL
DEVELOPMENT AND CHAIR OF THE BUDGET SUPPORT GROUP OF DEVELOPMENT
PARTNERS IN TANZANIA
Honorable Minister of Foreign Affairs
Honorable Minister of Finance
Permanent Secretaries
Ambassadors
Ladies and Gentlemen
1. Our thanks to the Government of Tanzania and my budget support colleagues for a
positive and constructive budget support annual review.
2. PAF 2012: we heard this morning about some the successes of 2012 such as
macroeconomic management, the progress being made on PFM and initial signs of
improving quality in primary education; and also about some of the challenges – we
heard a lot about the urgent need to address financial challenges in the energy sector,
and to closely monitor debt sustainability in relation to non-concessional borrowing
including by parastatals.
3. Much of the discussion today has been about how we can work together more
effectively. We have agreed two new ways of working that will help us finalize PAF 13
in a way that will enhance our dialogue.
First, we have agreed to move to a shared annual assessment of the underlying
principles. Once this is finalized we will be able to remove underlying processes from
the PAF.
Second, budget support donors aim to harmonize performance tranches and triggers
next year and use this to focus our dialogue on three areas for the year ahead. These
areas include sustainable growth – specifically the energy sector (and possibly
agriculture), services at the local level – looking at quality and equity of service
delivery, transparency and public financial management – continuing implementation
of PFMRP, EITI validation, and implementation of commitments made by Tanzania in the
context of the Open Government Partnership. We must agree these critical actions and
indicators by the end of the calendar year so we can move ahead with implementing
PAF 13.
4. It has been really exciting to hear about the big fast results, now! Enhancing
institutional delivery capacity will be fundamental. That said we are ready to bring
everyone together as this emerges in the early New Year. This has the potential to set
75
the framework for our partnership going forwards, and will allow budget support donors
to align behind a clear set of Results for systemic change. If we get clear and real
priorities my expectation is that the PAFs of the future will write themselves.
5. The Evaluation session was useful helping us to think about ways we might better
organize ourselves around a policy dialogue that adds value. A range of useful ideas
were discussed. We must swiftly consider how we use these preliminary ideas to
improve our partnership. Changes are needed and we need collectively to work out how
to work together to agree a new approach. By the end of the calendar year, we need to
have agreed how to take forward joint work on this issue. As GBS Chair and budget
support development partners we will put forward some suggestions on a process to
take this forward. We will also keep wider stakeholders – MPs, civil society, academia
and the media – in the loop as discussions progress.
Asanteni Sana
76
ANNEX 11
CLOSING STATEMENT BY
THE MINISTER FOR FOREIGN AFFAIRS AND INTERNATIONAL COOPERATION,
HON. BERNARD KAMILLIUS MEMBE (MP), AT THE CLOSE OF THE 2012 GBS
ANNUAL REVIEW, 19TH NOVEMBER, 2012
Hon. Ministers;
Excellencies Ambassadors and High Commissioners;
Heads of Development Cooperation;
Members of the Media;
Invited Guests;
Ladies and Gentlemen:
At the outset let me take this opportunity to express my gratitude for the honor to
close the 2012 General Budget Support (GBS) Annual Review. The meeting has indeed
been very productive and successful in addressing our development challenges; that is the
need to register high and broad-based growth that translates into meaningful reduction of
poverty.
This has been possible due to the high level commitment and participation by the
Government and Development Partners. Special thanks go to those who in one way or
another made the event successful. The collaborative effort by the Permanent Secretary -
Ministry of Finance and other Permanent Secretaries, Chair of the Development Partners –
General Budget Support group, Mr. Marshall Elliot and his team, Cluster Working Group
leaders, and the joint GBS Secretariat, all worked very hard to make this event successful. I
commend them all for their tremendous efforts.
Excellencies, Ladies and Gentlemen, it is gratifying to note the impressive progress in a
number of Performance indicators with many of the agreed actions achieved and rated
satisfactory. I want to commend all those who were involved in their implementation and
should aim for even better achievements during the year 2013.
I understand that, the deliberations today have been fruitful and you were able to agree on
key messages as follows:
a) Sustain GBS as Government’s preferred aid delivery mechanism;
b) Enhancing Equity and efficiency in Service Delivery by addressing the remaining
challenges in Pay reforms, particularly implementation of an incentive policy for the hard
to serve areas;
c) Sustaining Macroeconomic Stability and robust Public Financial Management;
d) Ensuring effective implementation of the Big Fast Result Programme;
e) Adhering to the New Budget Cycle and ensuring enhanced predictability of the medium
term framework for both foreign and local funds;
These are important goals that should be pursued vigorously. The Government is committed
and will be able to meet all obligations in order to ensure achievement of these objectives.
77
Excellencies, Ladies and Gentlemen, I am informed and therefore convinced that this
year's Annual Review has been very productive in that it has allowed open and constructive
dialogue between all parties; and has facilitated assessment of critical issues in achieving
the objectives of the national development agenda. The focus on growth and poverty
reduction, including renewed attention on the importance of social indicators to address
equity challenges, is especially relevant, given the short time remaining to meet the
Millennium Development Goals. It is my expectation that the Government and Development
Partners will continue to engage in constructive dialogue, to finalise the PAF 2013. It is the
Government's view that we will further take steps to enhance efficiency in our dialogue
including making sure that the next PAF is simplified, implementable and focuses on
promoting growth and poverty reduction.
Excellencies, Ladies and Gentlemen, Tanzania has made progress in the achievement of
the MDGs. It achieved Goal 2: universal primary education; way back in 2009. It has
registered considerable gains on Goal 3: promoting gender equality and empowerment of
women; and Goal 6: combating HIV/AIDS, Malaria and other diseases. We have also
achieved moderate results on other goals. However, much remains to be done to
emancipate our people from the poverty traps. It is also evident that growth of the world
economy is still very fragile as a result of the financial crisis in Europe.
Excellencies, Ladies and Gentlemen, It is evident that the global economic crisis is far
from over. Many reports are predicting the re-occurrence of the crisis which will certainly
affect the flow of development assistance, trade, FDIs and remittances to developing
countries. Despite these challenges, there is still hope for the future. We have an opportunity
to prevail over the turbulent waves if we abide and work together. This calls for all of us to be
prudent in the use of all available resources in order to deliver results and value for money.
Also I would like to urge our Development Partners to continue supporting us and ensuring
medium term predictability of aid flows.
Excellencies, Ladies and Gentlemen, I am quite confident that the outcome of this year’s
GBS Annual Review are jointly owned by all parties. The Government and Development
Partners will continue to engage in constructive dialogue to finalize some of the outstanding
issues on the 2013 PAF. I understand that the 2013 PAF will be completed within the coming
few weeks. At this stage, I would like to emphasize the need to ensure that the next PAF is
more realistic and consistent with the need to reduce transaction costs and improve
efficiency and effectiveness of development assistance.
Excellencies, Ladies and Gentlemen, with these few remarks, I now have the pleasure
and honour to declare that the 2012 GBS Annual Review closed.
I THANK YOU ALL FOR YOUR KIND ATTENTION
78
ANNEX 12
THE 2012 GENERAL BUDGET SUPPORT ANNUAL REVIEW
JOINT PRESS RELEASE
The Government of the United Republic of Tanzania and its 12 Development Partners
providing budget support successfully completed the budget support annual review dialogue
today the 19th November 2012.
This year’s dialogue endorsed progress in the overall performance in 2012 noting that:
macroeconomic stability has been maintained with the IMF’s PSI programme on track with a
positive PSI review completed in July; more rural roads have improved to good and fair
condition; and iincreased number of births is taking place in health facilities. Substantial
cchallenges remain, notably around targets tracking access to clean and safe water; quality
and equity of social service delivery; accountable governance; access to electricity and the
financial sustainability of the energy sector.
The Government and development partners agreed to enhance the dialogue on results. The
key focus for dialogue next year between Government and development partners will be:
sustainable growth (energy and agriculture), quality of social services at local government
level, and public financial management and transparency. The meeting also heard about the
Government’s new Big Results Now! Agenda which will be strengthening delivery across a
number critical areas: Energy, Oil and Gas, Agriculture, Education, Transport, and Revenue
collection.
In the course of the deliberations it was reconfirmed that GBS remains Tanzania’s preferred
aid modality. GBS Development Partners were thanked for improving their disbursement
mechanism and, for ensuring predictability of budget support in 2012/13 – just under half a
billion US dollars. They pledged to enhance predictability of GBS disbursements on the
basis of a reinforced dialogue In conclusion there was consensus that the continuing
challenge for both partners is to support sustainable growth, which benefits Tanzanian
citizens at large leading to a significant decline in poverty.
Budget support is undergoing an in depth evaluation. Initial findings from the evaluation were
discussed, in particular how Government, development partners and other stakeholders can
better discuss Tanzania’s policy challenges in a forum that adds value.
The outcome from this Annual Review will be reported back to wider stakeholders at the next
Annual National Policy Dialogue in early 2013.
The Development Partner’s GBS Group is made up of 12 Development Partners, 9 Bilateral
and 3 Multilateral: The African Development Bank, Canada, Denmark, the European
Commission, Finland, Germany, Ireland, Japan, Norway, Sweden, the United Kingdom, and
the World Bank.
79
ANNEX 13
LIST OF PARTICIPANTS
GENERAL BUDGET SUPPORT - ANNUAL REVIEW 2012 ATTENDANCE REGISTER 19TH NOVEMBER, 2012 HELD AT NATIONAL
COLLEGE OF TOURISM BUSTANI CAMPUS CONFERENCE CENTRE
William Mgimwa Minister Ministry of Finance
Bernard Membe Minister Ministry of Foreign Affairs and International Cooperation
Janet Mbene Deputy Minister Ministry of Finance
Ramadhani Kijjah Permanent Secretary Ministry of Finance
Dr. Servacius Likwelile Deputy Permanent Secretary Ministry of Finance
Laston Msongole Deputy Permanent Secretary Ministry of Finance
Peter Ilomo Permanent Secretary President´s Office - State House
John Haule Permanent Secretary
Ministry of Foreign Affairs and International Cooperation
Eliakim Maswi Permanent Secretary Ministry of Energy and Minerals
Fanuel Mbonde Permanent Secretary Ministry of Constitution and Legal Affairs
Maimuna Tarishi Permanent Secretary
Ministry of Natural Resource and Tourism
Dr. Philip Mpango Executive Secretary Planning Commission - President´s Office
George Yambesi Permanent Secretary
President´s Office - Public Service Management
K.M Omar Permanent Secretary Ministry of Finance Zanzibar
Joyce Mapunjo Permanent Secretary Ministry of Industries ,Trade & Marketing
Sihaba Nkinga Deputy Permanent Secretary
Ministry of Information, Youth, Culture and Sports
Patrick Magungu Deputy Permanent Secretary
Ministry of Communication, Science and Technology
Shabaani Mnubi Ag. Permanent Secretary Ministry Community Development, Gender & Children
Dr. Yohana Budeba Deputy Permanent Secretary
Ministry of Livestock and Fisheries Development
Claudi Kumalija Rep. Permanent Secretary Ministry of Health and Social Welfare
Sophia Kaduma Deputy Permanent Secretary
Ministry of Agriculture, Food Security & Co-operatives
Uledi Musa Deputy Permanent Secretary Ministry of East African Co-operation
Benedict Njau Ag. Permanent Secretary Ministry of Home Affairs
Eng. Happiness Mgalula
Deputy Executive Secretary President´s Office - Planning Commission
F. Mwandri Deputy Executive Secretary President´s Office - Planning Commission
80
Beno Ndulu Governor Bank of Tanzania
Harry Kitilya Commissioner General Tanzania Revenue Authority
Bedason Shallanda Commissioner Policy Analysis Ministry of Finance
Anna Mwasha Director Poverty Eradication Ministry of Finance
M. K. Mutagwaba Assistant Commissioner Ministry of Finance
Juma Maguru Assistant Director Ministry of Finance
Fatma Kiongosya Director Ministry of Finance
Gabriel Safue Director Ministry of Water
Albina Chuwa Director General National Bureau of Statistics
Kigahe Exaud Director Policy & Planning Ministry of Industries ,Trade & Marketing
Elizabeth Tagora Director Policy & Planning Ministry of Water
Melania Sanga Assistant Director Ministry of Water
Grace Ngallo Director Policy & Planning Vice President´s Office
John Cheyo Assistant Commissioner Ministry of Finance
Jerome Buretta Assistant Commissioner Ministry of Finance
Benedict Daimon Head of Planning President´s Office - State House
E. Maponde Assistant Director Prime Minister's Office
Theresia Msaki Assistant Director
Ministry of Agriculture, Food Security & Co-operatives
Singi Madata Coordinator Reform Unit President´s Office - State House
Egbert Ndauka Director Policy & Planning Ministry of Education & Vocational Training
Raphael Munola Ag. Director Policy & Planning Ministry of Health & Social Welfare
Matilda Mtenga Director Policy & Planning Ministry of Fisheries & Livestock Development
Richard Mkumbo Director Policy & Planning Ministry of Energy and Minerals
Girake Nkonoki Director President´s Office - Public Service Management
Ahmed Haji Commissioner Planning Commission - Zanzibar
Bihindi Khatib Commissioner External Finance Ministry of Finance - Zanzibar
Ramadhani Mlinga Chief Executive Officer Public Procurement Regulatory Authority
H. Mbise Commissioner for Energy Ministry of Energy and Minerals
Emmanuel Achayo Director Policy & Planning
Ministry of Agriculture, Food Security & Co-operatives
Mary Faini Assistant Director Ministry of Natural Resources and Tourism
B. A. Mtui Assistant Director M&E Prime Minister's Office - Regional and Local Government
Joachim Otaru Ag. Director Policy & Planning Ministry of Foreign Affairs and International Cooperation
Henry Kandiero Ag. Director Policy & Planning President´s Office - Public Service Management
Basil Kauga Director Policy and Planning Prime Minister's Office
81
Grace Mosha Assistant Director Prime Minister's Office
E. Kasamwa Engineer Tanzania Road Agency
Morrice Oyuke Director National Bureau of Statistics
Teddy Mwaijumba Assistant Director M&E Ministry of Water
Simon Lazaro Ag. Director Policy & Planning Ministry of Land & Human Settlement Development
Mwita Mgeni Commissioner - Budget Section Ministry of Finance Zanzibar
Verdiana Mushi Ag. Director Policy & Planning Ministry of Information, Youth ,Culture and Sports
C. A. Lushiku Director Policy & Planning
Ministry of Community Development, Gender & Children
Joseph Haule Director General Road Fund Board
Omary Khama Personal Assistant - MF Ministry of Finance
A. Meena Assistant Director M&E Ministry of Transport
Melkoir Paschal ` Ag.Chief Accountant/FMGT Ministry of Finance - AGGEN
Dismas Chilala Director M&E LSRP Ministry of Constitutional and Legal Affair's
Prof. H. Magwenga Tanzania Mining Authority Agency
Emmanuel Mayeji Assistant Director Ministry of Constitutional & Legal Affair's
Aziza Ally Head Aid Coordination Ministry of Finance - Zanzibar
Claud Kumalija Director Policy & Planning
Philimina Malisa Assistant Commisioner Ministry of Finance - Aid Coordination
Omar J. Mkima Financial Management Officer Ministry of Finance
Adrian Njau Principal Economist Ministry of Finance
E. Kachenge Secretary Ministry of Finance
Emmanuel Msengi Economist Ministry of Communication Science & Technology
Waryoba .N Economist Ministry of Finance
Scola Malinga Communication Specialist Ministry of Finance
Msafiri Nampesya Personal Assistant - Governor Bank of Tanzania
Felista Rugambwa Senior Security Officer Ministry of Foreign Affairs & International Cooperation
Moses Malipula Financial Management Officer Ministry of Finance
Maguye Maguye Economist Ministry of Finance
Joseph Haule Financial Management Officer Ministry of Finance
Maregeli Mark Economist Ministry of Finance
James Msina Financial Management Officer Ministry of Finance
E.A Mwankenja Ministry of Finance
Alex Mwakisu Financial Management Officer Ministry of Finance
Alex Mpangala Economist Ministry of Finance
Kelvin Mdeme Ministry of Finance
Glory Sindilo Financial Management Officer Ministry of Finance
Kakulu Buchard Financial Management Officer Ministry of Finance
82
Neema Mkwizu Financial Management Officer Ministry of Finance
Mukajungu Kamuzora Financial Management Officer Ministry of Finance
Seo Mutalemwa Economist Ministry of Finance
Lelansi Mwakibibi Ministry of Finance
Amina Shaabani President´s Office - Planning Commission
Awezae Juma Procurement Policy Analyst Ministry of Finance
Athumani Msabila Financial Management Officer Ministry of Finance
Sayi Nsungi Ministry of Finance
Harrieth Chamuriho Ministry of Finance
Malima Nkilijiwando Head Planning Unit Ministry of Finance - National Audit Office
Vicky Jengo Ministry of Finance
Michael Nyagoga Sen. Financial Management Officer Ministry of Finance
Andrew Lawson GBS Evaluation Team Leader FISCUS
Prof. Samuel Wangwe Facilitator REPOA
Johannes Sein Rapporteur REPOA
Prosper Buchafuo
Tonia Kandiero Resident Representative AfDB
John Moore Acting Ambassador Canada
Johnny Flentø Ambassador Denmark
Marshall Elliott Head DfID DfID
Filiberto Ceriani Sebregondi Head of Delegation European Commission
Sinikka Antila Ambassador Finland
Klaus-Peter Brandes Ambassador German
Thomas Baunsgaard Resident Representative IMF
Fionnuala Gilsenan Ambassador Ireland
Masaki Okada Ambassador Japan
Yukihinde Katsuta Head of Development JICA
Ingunn Klepsvik Ambassador Norway
Lennarth Hjelmåker Ambassador Sweden
Philippe Dongier Country Director World Bank
Alberic Kacou Resident Coordinator UN
Patricia McCullagh Head of Cooperation Canada
Steen Sonne Andersen Head of Cooperation Denmark
Eric Beaume Head of Cooperation European Commission
Kimmo Laukkanen Head of Cooperation Finland
Gisela Habel Head of Cooperation German
Gerald Considine Head of Cooperation Ireland
Sato Tomonobu First Secretary Japan
83
Anne Kristin Hermansen Head of Cooperation Norway
Hajime Iwama Head of Cooperation JICA
Prosper Charle Economist AfDB
Jonathan Arnold Counsellor Canada
Signe Skovbakke Winding Coordination Group Member Denmark
Olivier Coupleux Head of Economic Section European Commission
Rikka Torppa Economist European Commission
Kati Manner Economist Finland
Wolfgang Solzbacher Head KfW German
Chelaus Rutachururwa Coordination Group Member IMF
Fenohasina Maret Economic Advisor Ireland
Yuko Ikeda Coordination Group Member Japan
Mundal Håkon Senior Economist Norway
Johan Kiessling Coordination Group Member Sweden
Richard Moberly Senior Economist Uk/DfID
Jacques Morriset Country Economist World Bank
Emmanuel Mungunasi Economist World Bank
Yutaka Yoshino Senior Economist World Bank
Juho Ushikala Counsellor Finland
Aran Corrigan Senior Governace Advisor Ireland
Samer al Fayadh Energy DP Sector Lead Sweden
Jim Halliday PFM DP Lead Canada
Angus Miller General Budget Support Advisor DfID
Kondoh Yoshisuke JICA
Liz Tayler MDG Team Leader DfID
Stuart Forster Governace Team Leader DfID
Niels Knudsen DPG Secretariat UNDP
Kalle Hellman PFM Secretariat PFM Group
Verena Knippel GBS Secretariat DFID/GBS Chair
Paulina Mrosso GBS Secretariat DFID/GBS Chair
Monkam Daverati French Development Agency
84
ANNEX 14
2012 PERFORMANCE ASSESSMENT FRAMEWORK
END YEAR RESULTS
KEY POLICY ACTIONS CLUSTER 1 Lead
1 Implement intermodal transport measures to ease movement of goods to & from Dar
es Salaam Port
2012: Enhance cargo handling capacity through DSM Port demonstrated by fully
operational Port Community System, increased container throughput (10%) of the port,
advancement in TPA moving towards Land Lord Status and a prioritised investment and
business plan for TRL
2013: Enhance TRL off-take capacity to and from DSM Port demonstrated by procurement
for central line spot improvements and rolling stock purchase finalized, options for
improvement of rail operations within the port identified
2014: Improve access by rail and road to DSM Port demonstrated by reliable rail transport
service restored: TRL cargo volumes to/from DSM port increased by 15%, improving road
access to DSM Port identified, bypass road to the central corridor from the DSM Port
identified, exit and entrance gates to the port of DSM introduced
MoT
Target 2012:
- Port Community system fully operational
- Container throughput increased by 10%
- Funding for the study to identify Critical Path for TPA to move to the Land Lord
Status secured.
- Prioritized investment and business plan for TRL in place
Status:
• Milestone 1: Port community system fully operational - TPA has established a one stop
centre where all public service providers operate on a manual single window basis under
one roof. This is a temporary arrangement before establishing an electronic single window
operation, i.e., Port Community System. The procurement for the latter, retendered for
technical reasons, is still under way. It takes some time to develop a Port Community
System, up to two years according to some. Milestone 1 will not be reached this year. It
should be noted that the one stop centre, inaugurated in July 2011, has met with some
success in streamlining port procedures and has contributed to reducing dwell time from 12
days to 9 days in one year.
• Milestones 2-4: Two are met and one is on track but will miss the timing. Overall
assessment this year is border line.
85
KEY POLICY ACTIONS
ACHIEVED
2 Formulation of energy subsidy policy by August 2013
2012: Analytical study forming basis for drafting of an energy subsidy policy finalized by
September 2012
2013: Energy subsidy policy proposal completed by MEM by September 2013
2014: New Energy subsidy policy in place by October 2014
MEM
Status 2012:
The consultants presented an Inception Report on 27 August, 2012. In that report the
consultants indicated a tentative deliverable schedule for 4 further reports as follows. The
first interim report was delivered on 21 September covering issues of: (i) defining and
measuring access and (ii) a review of power sector demand and supply. The second interim
report will be delivered on 28 October covered issues of: (i) customer willingness and ability
to pay, (ii) review of current subsidy mechanism, and (iii) effectiveness of the current
subsidy mechanism. The third report expected in December will deals with issues of: (i)
constraints to the expansion of electricity access, (ii) a cross-country comparison of best
practices in subsidy systems, and (iii) recommendations for a comprehensive, economically
rational, and commercially sustainable subsidy policy. A fourth and final report will be
delivered within two weeks of the receipt of comments on the Draft Report. This is likely in
January 2013.
MEM will use the study to inform the preparation of its proposals for an energy subsidy
policy which are, according to the PAF targets to be complete by end September 2013 and
an energy subsidy policy is to be in place by September 2014. Although the delivery of the
deadline for the final stage of documentation of stakeholders’ inputs set in the PAF for 31
August is likely to be missed by 4 months, delivery of a draft report in December still allows
time for MEM to factor in the analysis and recommendations of the study in its policy review
for the preparation of the Medium Term Expenditure Framework for the 2013/14 budget
year and beyond. In addition it should still be feasible for MEM to complete its proposals for
an energy subsidy policy by September 2013 as required for PAF 2013 assesment.
ACHIEVED
86
KEY POLICY ACTIONS 3 *Implementation of natural resources decentralization to districts and communities
2012: Increase the number of declared forest reserves on village forest land by 40, number
of signed joint management agreements by 16, authorised associations among wildlife
management areas by 3, registered beach management units by 10
2013: Increase the number of declared village land forest reserves by 70 and signed Joint
management agreements by 32, authorised associations among wildlife management
areas by 3, and registered beach management units by 10
2014: Increase the number of declared forest reserves on village forest land by 80 and
signed joint management agreements by 40, authorised associations among wildlife
management areas by 3, and registered beach management units by 40
MNRT+
MoFD
Status 2012:
Sensitization on involvement of communities in wildlife conservation and establishment of
WMAs, was done in Tunduru, Namtumbo, Kilwa, Morogoro Rural, Rufiji, Serengeti,
Mpanda, Kilombero and Ulanga Districts.
Three CBOs of Chingoli in Tunduru District (G.N 64), Kimbanda and Kisengule in
Namtumbo District G.N 63 and G.N 62 respectively were gazetted to Authorised
Associations (AA’s) and the areas managed by these CBOs became Wildlife Management
Areas on 24th February, 2012.Currently, 26 forest reserves on village land have been
declared in 4 districts (Morogoro rural -10; Ruangwa -5; Mbarali -3; and Mbozi -8).A task
force responsible for revising Joint Forest Management (JFM) guidelines has been formed.
The guidelines especially on cost benefit sharing have been done. Preparations for wide
stakeholders meeting are underway.
For the period between July, 2011 to June, 2012 twenty six (26) BMUs were registered
making a total of 57 registered BMU.
ACHIEVED
4 Put in place integrated land management information system in Northern and
Eastern zones
2012: Geodetic control network containing 700 control points of different levels (CORS 5;
Zero Order Points 10; First Order Points 72 and Second Order Points 613) in place,
homogenized across Tanzania, and fully operational
2013: Consolidation of all relevant information from all 6 sectors’ registries
2014: Integrated land management information system in Eastern and Northern Zones fully
functioning with digitalized records, and trained staff using the new system
MoLHSW
Status 2012:
700 control points are almost in place with ~10% outstanding. The horizontal GBS testing
was completed but still waiting for the vertical GPS. Plans to fully install the Northern and
Eastern geodetic control system are now delayed by about 6 months. To rectify these
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KEY POLICY ACTIONS delays a contract was signed with COWI in July including two phases: phase 1 is full design
of the network by December 2012, and then a further 18 months for implementation. As
this action progressed it became clear that there was insufficient finance (committed by
Development Partners) and the project was initially ‘under-designed’. The reasons for delay
are: aerial work should have started earlier, financial constraints (only received 25% of
expected budget for this project), need to get public understanding for such a project – the
end users will be the public and district authorities. Going forwards the sector partners will
review the criteria in the light of financial and technical obstacles.
NOT ACHIEVED
CLUSTER 3
1 Implement the pay and incentives strategy
2012: Administrative orders issued for facilitating staff in hard to serve areas by October
2012
2013: Pay and incentives scheme incorporated into budget 2013/14
POPSM
Status 2012:
The formal approval of the P&I Strategy has not yet been obtained. Definition of Hard to
Serve Areas - Government has gone beyond a definition to actual identification of thirty
three districts. Moreover, POPSM has completed work with eleven LGAs and is working
with the remaining twenty two Districts/LGAs to develop locally owned and formulated
strategies. Government is also working towards the provision of budgetary resources in
fiscal year 2013-14 to implement some of the incentive schemes. In so doing, Government
has initiated implementation of incentives, a step which is ahead of the target. Despite the
formal asymmetry in the achievement of the two parts of the KPA, it is highly significant that
the government has achieved the more actionable and results oriented part related to the
identification of the districts, the development of local incentive schemes and is pursuing
the provision of budget resources for the implementation of the incentive schemes in FY
2013/14.
ACHIEVED
2 Tanzania validated as an EITI compliant country
2012: Government will produce a report resolving the discrepancies between companies
and GoT that were identified in the TEITI first reconciliation report; and, Tanzania EITI will
submit a second report to the EITI Board addressing the 5 indicators identified by EITI as
being unmet in Tanzania EITI’s first validation report by June 2012
2013: 1) Tanzania is validated as an EITI-compliant country; (2) Domestic legislation
MEM
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KEY POLICY ACTIONS institutionalizing EITI and establishing an enabling framework for EITI’s operation is drafted
and completes stakeholder consultation by October 2013.
2014: (1) Bill of legislation institutionalizing EITI and establishing an enabling framework for
EITI’s operation presented to Parliament (2) Tanzania publishes annual Tanzania EITI
report approved by the International EITI Secretariat by Oct 2014
Status 2012:
The validation committee proposed that Tanzania receives a waiver from conducting a
second EITI validation. As brief background, Tanzania was last validated in 2011 and
declared close to compliant. It had to carry out certain remedial actions and at the same
time made the transition to new EITI rules for becoming compliant which were introduced
last year. Receipt of a waiver means that Tanzania would not have to undertake a second
validation under the new rules but will be reviewed by the Secretariat – if it is deemed to
have met the criteria there will be a recommendation to the Board that Tanzania is declared
compliant, otherwise it will be delisted and have to start the process from scratch again.
After the EITI Board meeting held in Lusaka, Zambia, from 24th to 25th October, Tanzania
was declared as an EITI compliant country by the EITI Board.
ACHIEVED
3 Implement key recommendations from the case flow analysis and roll out of
case/work flow reforms
MOCAJ
Status 2012:
The KPA is on-track. A sub-set of non-legislative recommendations emanating from the
case flow analysis was identified. Originally 32 recommendations were deemed to be non-
legislative. As the work progressed, however, it was agreed that 25 recommendations
were, in fact, non-legislative or ought to be folded together with other recommendations. Of
these recommendations, as of October 2012, 9 were completed (no. 7, 10, 11, 12, 13, 15,
24, 27, 29), 10 were well underway (no. 1, 2, 3, 9, 16, 21, 23, 26, 28, 30), 3 were initiated
(no. 6, 17, 22), and 3 were not yet started (no. 5, 8, 19).
ACHIEVED
CLUSTER 4
1 Interface central and local government ICT with technical control and new software
acquisition, and all new software developed becomes centrally coordinated
2012: ICT mapping exercise showing location and owners of all and peri-financial software,
software functions, outputs and the actual potential data sharing, integration requirements /
opportunities commenced with inception report published by October 2012, showing
commitment to complete the mapping by December 2012.
MoF /
PMO-
RALG
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KEY POLICY ACTIONS 2013: Bring all GoT financial and peri-financial software under one common architecture
with technical support structures. Costed action plan approved by GoT.
2014: Milestones for 2014 to 2016 are taken from approved action plan and jointly agreed
by GoT and DPs
Status 2012:
Engagement of a consultant for the mapping study did not meet the agreed deadline. It is
expected that the inception report will be finalised in early 2013.
NOT ACHIEVED
2 Increase budget transparency and public access to key fiscal information
2012: Guidelines for the preparation of the annual plan and Budget for 2012/13 published
on Ministry of Finance website by May 2012. The Executive Budget proposal as submitted
to the Parliament published by end of June 2012. The Approved Budget is published on
Ministry of Finance website by September 2012. Publish Citizens Budget by November
2012.
2013: A Year-End Report (preliminary budget out turn) wish published on Government of
Tanzania websites by October 2013.
MoF
Status 2012:
The Budget Guidelines for 2012/13 were uploaded on the Ministry of Finance Website. The
Executive Budget Proposal and the Approved Budget for FY 2012/13 were posted on line in
September 2012. The latter three months later than the agreed end June deadline.
The Budget Execution reports for FY 2011/12 for quarter 1, 2, 3 and 4 were posted on MoF
website.
The Citizens’ budget was uploaded on the MoF website as of November 14th 2012.
ACHIEVED
3 Streamline and rationalize national systems and processes for intergovernmental
transfers to LGAs
2012: Review and mapping of the systems and processes for intergovernmental transfers
initiated with inception report finalized by October 2012, showing commitment to complete
the mapping by December 2012.
2013: Comprehensive and sequenced two-year work plan, including a time-bound M/E
framework with defined roles and responsibilities, to address shortcomings of the systems
and processes of intergovernmental transfers finalized by June 2013. Key actions starting
to being implemented by October 2013.
2014: Key actions from the work plan implemented as per M/E framework by October 2014
MoF /
PMO-
RALG
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KEY POLICY ACTIONS Status 2012:
Engagement of a consultant for the mapping study did not meet the agreed deadline. It is
expected that the inception report will be finalized in early 2013.
NOT ACHIEVED
4 The Government enhances domestic tax revenue (tax and non-tax) mobilization with
better transparency and business environment
2012: Submission of a bill to Parliament to enact Tax Administration Act for the purpose of
establishing a common tax procedure among different taxes collected by Tanzania revenue
authority (TRA) by November 2012
2013: Submission Finalization of the study on Non Tax Revenue (NTR) -“Integration and
Harmonization of Revenue Collection Systems” by November 2013. Review the current
system of tax exemptions with the value-added Tax (VAT) regime and amend the VAT Act
with a view to be in line with international best practices by November 2013
2014: Reform local government tax system to improve LGAs’ own source revenue
mobilization by November 2014. Take policy action to improve revenue mobilization from
natural resources sector
MoF
Status 2012:
As a matter of procedure, a Cabinet Paper was prepared and was submitted together with
the draft Tax Administration Act to the Cabinet Secretariat for consideration and approval
before further processing and submission to the Parliament.
NOT ACHIEVED
5 The Government to strengthen institutions of public investment management and
PPPs to ensure that public investments and PPP projects are selected based on
proper economic and financial assessments
2012: Set up the legal mandate of the President’s Office Planning Commission (POPC)
with respect to those of the Ministry of Finance, Prime Minister’s Office, and sector
ministries in planning and managing public investments
2013: Ensure that implementation of economic and financial analysis of public investment
projects is mainstreamed among the MDAs and LGAs based on an operational manual
prepared by POPC. The Cabinet approves PPP finance regulations on government support
and unsolicited bids. Establish operational PPP facilitation fund.
MoF /
POPC
Status 2012:
In the Financial Year 2011/12, POPC finalized a study on “The Alignment of POPC
Functions in the Context of its new Roles”. Findings of the study, among others,
recommended review of Act No. 11 of 1989 which established the Planning Commission.
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KEY POLICY ACTIONS Based on the study recommendations, POPC has prepared a draft schedule of amendment
of Act No. 11 (1989). Currently, the schedule is being shared by stakeholders within
Government.
NOT ACHIEVED
UNDERLYING PROCESS
1. ENERGY SECTOR - SATISFACTORY
The implementation of the Government’s MKUKUTA II is supported by some Development Partners through the provision of General Budget Support in line with principles and terms set out in a Partnership Framework Agreement (May 2011 which include an annual review of GBS support based on a Performance Assessment Framework (PAF). The JESR provides inputs into that annual review. The PAF takes specific account of developments in the energy sector through outcome indicators and temporary process actions. The technicalities of the GBS process are not readily accessible to stakeholders other than MEM and its development partners but they are nonetheless very relevant for the JESR process, not least as they have some influence on perceptions of the performance of the energy sector. This relevance is apparent when one considers that in the 2011 Annual GBS Review,
MEM
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made in November 2011, the Energy Sector Review was rated as unsatisfactory. This actually means that the performance of the energy sector was rated as unsatisfactory: it was not an assessment of the quality of the review process. The reasons for the unsatisfactory rating were that one “temporary process action” and two of three “outcome indicators” were not achieved in the timeframe set in the PAF. In addition one outcome indicator could not be assessed. The “temporary process action” was the construction of a 100 MW gas-fired power plant in Dar es Salaam and the Heavy Fuel Oil (HFO) fired 60 MW in Mwanza. Both plants had been originally expected to reach overall completion by end October 2011. The ‘outcome indicators’ were the total electricity capacity installed and the availability of electricity generation capacity in MW and utilization in percentage terms. The 2011 targets had been 1,087 MW of installed capacity and a utilization rate of 85%. Actual capacity availability at the point in time measured for the PAF purposes was 1,220 MW but utilization was at 60%. The outcome indicator that was not assessed was percentage of population with access to electricity. The reason it was not assessed was because “a methodology for defining access was not in place”. (Annual GBS Review 2011:15-16) MEM’s responsibility for timely installation of new generation capacity is one shared with its agency TANESCO but also with the contractors building the plants. Its responsibility for the delivery of the two generation plants is primarily one of ensuring timely and full availability of budget resources for TANESCO to pay for the plants; beyond that it has no control and only an indirect and hard-to specify influence over delivery timing. Delivery of the two power plants was already behind schedule when the 2011 PAF was drawn up. The TPA should have focused on the actions that were required by MEM and its agency to facilitate timely implementation. If that sort of measure is to be used for PAFs there should be much more detailed specification of the necessary actions required of MEM. In infrastructure projects of that sort that means going into the detail of the project implementation plan to find the necessary planning, budgeting and funding actions by MEM and the actions it can and should take in its role as sole shareholder and a board member of TANESCO. The electricity plant utilization rate, especially where hydropower generation is significant, can only very remotely be influenced by MEM, if at all beyond providing budgetary resources for capacity charges and fuel purchases where litigation technicalities and/or TANESCO’s cash flow leave no better immediate alternative. The absence of a methodology for defining access was not a good reason not to assess access to electricity as it improving access is a core goal of energy policy and is a target for both MKUKUTA II and the Five Year Development Plan as well as in MEM’s own Medium Term Plan which has been monitored and regularly reported on. Strictly speaking, the problem for the PAF was that there are various and vague definitions of access being used by different stakeholders and so there is no agreed indicator for the PAF for which a measurement method could be set. In that sense and respect it was the PAF that was unsatisfactory. Indicators should be SMART – specific, measureable, achievable, relevant, and timed. The indicator failed on specificity and measurability. The result should be a PAF TPA to draw up a SMART access indicator. MEM, with
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support from MCA-T, has now commissioned research for this. In addition, during the GBS review the DPs expressed concern that there were significant fiscal risks related to the Energy Emergency Plan.2 There are fiscal risks associated with the EPP, and there the same risks for the sector as a whole: explicit and implicit contingent liabilities from MEM’s agencies and the risks associated with private sector investment in a strategic infrastructure sector like energy. The first step in risk management is risk identification. MEM and its DPs should explore ways to identify the fiscal risks in the sector in consultation with the Ministry of Finance. This is part of good public financial management and would be something that MEM would benefit from in presenting its case to the Cabinet through the planning and budgeting process for budgetary resources that the sector requires for the implementation of policy and the delivery of the national development plan. MEM’s case in making funding requests could be strengthened through reference to the Rapid Budget Analysis (RBA) presented at the Annual GBS Review which indicated that the budgetary allocations for energy were weakly aligned to its policy priority and the lower allocation to energy (in the original 2011/12 budget) may have bad implications for the required growth momentum. (Annual GBS Review 2011:23). The RBA presentation also highlighted the key issue of establishing strategic partnerships with the private sector to fill resource gaps for capital investment and the need to raise more resources for public sector investment from cost recovery tariffs in the energy sector. (Annual GBS Review 2011:23). The PAF for 2012 includes the Energy Sector Review as an underlying process indicator and the assessment criteria have been agreed between MEM and its DPs. It has also set the four steps in formulation of an energy subsidy policy by August 2013 as a Key Policy Action. The outcome indicators for the PAF remain installed generation capacity, plant availability, and population with access to electricity. The Key Policy Action is underway with some slippage in process timing but not to an extent that should delay the desired outcome and ultimate timing. This focus on a policy action is an improvement to the PAF as it relates to the energy sector as it deals with something, which is central to MEM’s mandate and responsibility and entirely within its control and for which it can reasonably be held to account. The outcome indicators remain problematic for the reasons discussed above. Installed capacity should be met. In 2012, total installed capacity has increased to 1,333 MW, but plant capacity was lower at 45%. While this has been pulled down significantly by lower utilization of hydropower generation capacity (largely due to poor rainfall), gas utilization alone is still 71%. Finalisation of a definition of electricity access is unlikely in time for the PAF review. MEM and its DPs should use the opportunity of the stakeholders’ workshop to consider what the appropriate outcome indicators for the sector should be. In terms of the PAF for next year, an obvious and SMART Key Policy Action would be completion of a Gas Policy by MEM by June 2013 with additional steps showing stakeholder consultation processes.
2. EDUCATION SECTOR – SATISFACTORY
To determine rating for the Education Sector, the performance assessment was
conducted jointly by Government and DPs on November 5th, 2012, using the agreed
MOEVT
94
rating framework which was approved in the Education Sector Development
Committee meeting held on 20th March 2012. Three key areas were assessed: a)
Finance and budgeting whereby the score was 20.5% out of 22%, b) progress on
agreed targets and results, the sector scored 32.5% out of 60% and c) Accountability
and sector dialogue the score was 9% out of 18%. Based on this rating the total score
was 62% whereby, the Education Sector Performance in 2011/12 was assessed as
SATISFACTORY after reviewing all relevant documentation. Key areas of good
performance included among others the Resource allocation to the Education Sector
remains National Priorities. The share of public spending in the education sector
remains higher than any other economic sector. The share of expenditure allocated to
education sector as percentage of total budget in FY 2011/12 was 16.90%. Finalization
and approval of the Adult Education Development Plan, unit cost study for higher
education and conducted Human Resource Situational Analysis finalised.
3 ACCOUNTABLE GOVERNANCE – UNSATISFACTORY
Accountable governance is a broad thematic area with a range of components and multitude of stakeholders’ views to consider. This makes it a challenging area to assess. The development of specific, assessment criteria in year 2011 is a notable achievement. To conduct assessment of the DPs and GoT jointly agreed on the following assessment criteria during 2012:
1) Budget Transparency and access to information; 2) Quality of consultations between government and domestic stakeholders; and 3) Executive’s accountability to Parliament and oversight bodies.
Progress of each criteria is as follows:
Budget Transparency and access to information
The Budget Guideline for 2012/13 was uploaded in the Ministry of Finance Website.
Executive's Budget Proposal and the Approved Budget for FY 2012/13 were posted on line
in September 2012;
Budget Execution report for FY 2011/12 for quarter 1, 2, 3 and 4 have been posted on MoF
website;
Citizens’ budget has been uploaded on MoF website as of November 14th 2012;
Annual CAG Report was published and made available online and physically by May, 2012;
Quarterly Budget Execution Reports for Q1, 2, 3, 4 available online but 2 – 3 month late;
Budget allocation to LGAs are posted on the Ministry of Finance website, however
stakeholders recommend that information should be posted in coherent manner so that
information is not mixed;
5 out of 11 MDAs Strategic Plans were posted on Websites and 3 out of 11 MDAs posted
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their Medium Term Expenditure Reports. Physical accessibility of information has improved
according to Non State Actors; however procedures for accessing information are not clear
or comprehensive;
PMORALG has updated their website in September all the LGA budget and disbursement
data for all quarters of FY 2011/12. Although this information was late but PMORALG has
explained the delays were due to the New Council Financial Reporting format; and
A letter with reference no. BA.254/307/01 dated 4th October, 2012 was issued to all
Regional Administrative Secretaries for transmission to LGAs clarifying which documents
can be publically accessed at local level. As the circular was only recently issued we can’t
yet assess if it has been implemented by LGAs. As a proxy, the group agreed to assess the
extent to which CSOs can physically access information at LGA level. Survey responses
indicate that most NSAs are managing to access information from LGAs and the situation is
somewhat improved. Reports are accessible before the full council meeting but hard copies
are difficult to secure. However, there is limited understanding among LGA officials on info
sharing and access is curtailed by bureaucracy, and negative attitudes. Councillors are not
receiving adequate information. Some districts are open whilst others are not. Procedures
and tools (e.g. websites) need to be established.
Quality of consultations between government and domestic stakeholders
To collect factual evidence that could inform the assessment a survey was sent by POPSM to 31 CSOs jointly selected with GBS Secretariat and DPs. Of these 11 responded as follows:
On the Quality of consultations/dialogue between government and domestic stakeholders, positive developments have been reported. Out the 11 respondents 9 responded to the 3 questions. On the 2 first questions (adequate advance notice and circulation of the minutes), the result is qualified : while the majority (6/9) reported progress in the transparency of the process (circulation of the minutes); 50% of consulted CSO’s still consider not receiving either an invitation letter, or the supporting documents, insufficient for making a meaningful contribution;
On the other hand, progress has been made by the GoT if we consider the result of the 3rd question of the survey on the quality of dialogue. The receptiveness by the Government (7/9 CSOs considered their inputs and recommendations were duly considered).
Executive’s accountability to Parliament and Oversight bodies 1) During the period from January-August 2012 a total of 1,172 questions were received by the
parliamentary office for Government responses.
639 Principal questions and 1,533 supplementary questions were asked and responded by
the government.
2) 69 direct questions and 48 supplementary questions were directed to the Prime Minister and
responded in a session of direct questions to the PM every Thursday. During this
Parliamentary session, various Bills were tabled for discussion and Approved to become
State Laws.
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The Anti-Money Laundering (Amendments) Act, No. 1/ 2012 The Constitutional Review Amendment Act, No. 2/2012 The Business Laws (Miscellaneous Amendments) Act, 2012 (No.3 of 2012) The Tanzania Livestock Research Institute Act, 2012 (No.4 of 2012) The Social Security Laws (Amendments) Act, 2012 (No.5 of 2012) The Written Laws (Miscellaneous Amendments) (No.2) Act, 2012 (No.6 of 2012)
3) During this period, various reports on the implementation of Government commitment were
submitted in the Parliament.
The Annual Report and Audited Accounts of fair competition commission for the financial year 2009/2010 The Mid-Year Review of Monetary Policy Statement of the Bank of Tanzania for the Year 2011/2012 The Annual Performance Evaluation Report of Public Procurement Regulatory Authority for the Financial Year 2010/2011 The report of the Controller and Auditor General on Performance Audit on the Management of the Government Vehicles Management The report of the Controller and Auditor General on performance audit on the management of water distribution in urban areas The report of the Controller and Auditor General on performance audit on the management of forest harvesting The Report of the Controller and Auditor General on performance audit in the management of outsourced revenue collection functions by the Local Government Authorities in Tanzania The Annual Report and Audited Accounts on the Activities of the Open University of Tanzania for the Financial Year 2009/2010 The Annual Report of Energy and Water Utilities Regulatory Authority for the year ended 30th June, 2011 The Annual Report and Audited Accounts of Tanzania Tobacco Board for the Financial Year ended 30th June, 2010 The Annual report of the National Board of Accountants and Auditors Tanzania for the year 2010/2011 The assessment of the Accountable Governance Underlying Process in year 2010 and 2011 was conducted by Independent Consultants and thereafter discussed at stakeholders meeting and agreed on final assessment. Due to time constraints the independent assessment could not be conducted and therefore Government and DPs agreed to conduct a survey to CSOs at least on criteria regarding physical accessibility of information. Although the survey was conducted, not much information was collected.
4. ANTI-CORRUPTION – SATISFACTORY
The assessment of the Underlying Process was based on three key areas including:
1. Domestication of the UNCAC/NACSAP;
GGCU/
PCCB
97
2. Progress on outstanding and agreed targets and results: PAF 2011; and
3. Accountability including quality of dialogue and stakeholder consultations
throughout the year including information sharing, timeliness and relevance.
Domestication of the UNCAC/NACSAP
The National Anti-corruption Strategy and Action Plan II was implemented from 2008 –
2011. Upon its completion in early 2012 the GoT commissioned the evaluation of the
NACSAP II so as to assess the impact and recommend the design of NACSAP III. The
Evaluation was completed and Final report submitted on the 10/09/2012. Consultation
was adequate and dissemination/publication included to all invitees to stakeholders
meeting. Discussion of the Final Revised report took place at the National Steering
Committee also attended the Stakeholders meeting and endorsed the
recommendations of the evaluation report. The NACSAP II Steering Committee met
once on 23/08/2012 to discuss the evaluation. Steering Committee attended the
stakeholders Financial reporting of NACSAP II programme confirms that Tshs.
218,247,191,978/= had been allocated to all MDAs for FY 2010/11. Furthermore the
NACSAP II UNDP Project for the whole period disbursed total of Tshs. 1,790,442,179.
Progress on outstanding and agreed targets and results: PAF 2011
Various meetings have been held with Bank of Tanzania regarding implementation
Progress on non-litigious elements of the EPA Action Plan. An updated written report
was received on the 11/9/12 setting out progress on EPA Action Plan. Overall
progress in BoT’s divesting of non-core functions (Credit Guarantee etc.) and
generally, taking a cumulative assessment – many of the 18-odd recommendations
have now been implemented wholly or in part (although progress has been limited
during the current review period). Key outstanding areas relate to the reconciliation of
the EPA account itself delayed because of Technical Assistance problems and
amendment to the BoT Act. Progress of Grand Corruption cases were provided on a
report submitted on the 30/4/2012 and 6/5/2012.
Progress of the 3 pieces of legislation was received on 15/11/12: The key elements of
this report are summarised below:
A) Public Leadership Code of Ethics Act
During the period under review the following has been done:
- On 6/03/2012 Cabinet memorandum regarding its amendment was discussed by
government approval system;
- On 10/03/2012 the Memorandum was returned to Ethics Secretariat, with
comments on areas for improvement including the necessity to involve all
stakeholders in order to get their views on the specific areas for review and take
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them into consideration where appropriate;
- On 1/10/2012 a Stakeholders workshop was held to enable stakeholders to give
their views;
- From 3/10-15/10/2012 Stakeholders comments were incorporated;
- A final refined and revised draft of the Cabinet memorandum was returned to
government for approval on 13/11/2012.
Next Steps:
- The Cabinet memorandum is expected to be discussed and approved before the
end of December, 2012;
- The reviewed Act is expected to be tabled before Parliament for enactment during
its sitting in April, 2013.”
B) Whistleblowers Act:
AG Chambers have identified key stakeholders to be involved in the law to be
enacted –undertaken in mid-October, 2012;
Next Steps:
Conduct a Stakeholders workshop to collect views on the scope of the proposed
Act. Activity to be undertaken by AG Chambers early December 2012;
Preparation of a Cabinet Memorandum to be completed by early January, 2013.
Submission of the Cabinet Memorandum through government approval systems for
scrutiny and approval by March, 2013.
Proposed Act tabled in Parliament for first reading by April, 2013.
C) Right to Information Legislation
Tanzania is a member of the Open Government Partnership initiative of which
enactment of a Freedom of Information act is mandatory and a criteria for eligibility to
membership. Therefore, work on preparation for its enactment is underway. The
responsible ministry is searching for best practice from countries which have enacted
the law.
Next Steps:
Identification of countries which have enacted freedom of information law with a
view to learn from them by December, 2012;
Revisit a number of global legislation related to the freedom and access to
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information through archives and internet to update on issues related to the law by
December, 2012;
Engage Public information officers as prospective implementers of the Act by
December, 2012;
Prepare a Cabinet Memorandum for its enactment and pass it through the
government approval system;
Plan is to have the law enacted by the end of this financial year.
3. Accountability including quality of dialogue and stakeholder consultations throughout
the year including information sharing, timeliness and relevance.
Three High-level anti-corruption meetings were held between GBS Troika Heads of
Mission/Cooperation and Government representative. Informal discussions also took
place in July 2012 during the Troika Plus Meeting. High Level Meetings were Chaired
by the Minister for Finance and well attended with informed contributions and
productive dialogue. Since NACSAP II ended on December 2011, the annul
Anticorruption Forum was not held, however Stakeholders meeting was held on the
24/9/2012 to discuss the evaluation of NACSAP II and recommendation for design of
NACSAP III.
5. MACROECONOMIC STABILITY – SATISFACTORY
The Government of Tanzania remains committed to policies that will sustain macroeconomic stability while promoting accelerated economic growth and poverty reduction. These goals are being successfully pursued under the economic and financial program supported by the PSI and the SCF arrangement. Policies have remained broadly on track. As of end-June 2012 all assessment/performance criteria and structural benchmarks were met. For end-September 2012 all quantitative indicative targets were met with the exception of a small shortfall for tax revenues. It was noted that a grant element of 34.68 percent of the US$920 million gas pipeline loan, contracted in November 2012, was computed using a calculator from the Commonwealth Secretariat debt management reporting system rather than the IMF loan calculator. It was on this basis that decisions were made in good faith. Fund staff has advised that the resulting grant element using the program methodology is 33 percent, below the required 35 percent. This caused non-observance of the continuous external non-concessional debt ceiling performance/assessment criterion for which a waiver is requested. All structural benchmarks through end December 2012 are largely on track except for a delay in preparation of a cost of service study for the power utility TANESCO and implementation of its findings, and preparation of a report on Tanzania’s macroeconomic management of the new gas economy. We request that these benchmarks be reset (see MEFP) to allow us sufficient time for their completion. Economic activity has remained robust, and projected GDP growth of 6.5 –7.0 percent in 2012 (6.7 percent in 2012/13) is likely to be achieved. Real GDP growth reached 7
MOF
100
percent in the first half of 2012 compared with 6.6 percent in the corresponding period of 2011. This positive performance was broad based—it was especially strong in transport and communications, financial intermediation, trade and repairs, and manufacturing. The overall inflation rate has receded from a peak of 19.8 percent in the year ending December 2011 to 12.9 percent in October 2012 following improved food supply and slowdown in the increase of fuel prices. Headline inflation is projected to continue easing in the months to come, and return to single digits by end-June 2013. The Government is pursuing continued fiscal consolidation in 2012/13 to progressively rebuild fiscal buffers after responding to the last global recession with counter-cyclical fiscal policies. The budget aims to reduce the overall fiscal deficit to 5½ percent of GDP in 2012/13, down from the 6 percent of GDP average for the past three years. Over the medium-term, further deficit reduction to debt-stabilizing levels is targeted. Tanzania’s current account deficit in 2012/13 is projected to record a deficit of 16 percent of GDP and decline in the next years as domestic gas powered electricity generation leads to lower demand for imported petroleum fuels.
6. EFFECTIVE PER DIALOGUE – SATISFACTORY
The PER workshop took place in July. Key agreements: 1) the Champions group would
be chaired by PS MoF (or his representative, not the Minister) and would include some
external representation (Academia, Private Sector and maybe CSOs; 2) There would
be a PER Main Consultative meeting at the beginning of May to feed into the budget
preparation process; 3) The PER process would report to the Champions group not the
Troika, although it would inform the Troika of progress; 4) The Champions Group
committed to meeting more regularly at the beginning of the process. The meeting
agreed four areas for immediate attention.
• Tax exemptions
• Agriculture subsidies and vouchers
• Public Expenditure Tracking Survey (probably in relation to district level
expenditure/transfers)
• PPPs
The Champions group reviewed terms of reference for all 4 studies in October.
Comments across each ToR will be incorporated, budget included, and circulated to
the Champions group to finalise by 11 October. The Champions group will meet again
in the first week on December. Each of the 4 studies should aim to be completed by
mid - February to feed into the next budget.
1). TOR on Agricultural inputs Subsidies/ Vouchers - preparation was jointly
undertaken by the team comprising officials from Government side led by Ministry of
Agriculture and DPs’ side members led by World Bank. According to the presentation,
the justification of the study is the fact that the Government of Tanzania and the World
Bank have heavily invested over TSh.330 billion in input subsidies over the last eight
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years, and roughly 85 percent of the investment has been in National Agricultural Input
Voucher System (NAIVS). It is thus rational to conduct an expenditure review of the
NAIVS in its entirety to assess whether there has been value for money for the inputs
support programme, and whether there is a strong enough justification for continuation
of the programme after getting evidence of economic gains. Further, the review will
assess how the programme has contributed to increased production, productivity and
profitability of the Tanzanian farmer, the sustainability of these investments, and the
options for scaling up the programme to cover a much larger farming population in the
country. The study is expected to use two approaches. First step would involve a
detailed PER study focusing only on the NAIVS to be undertaken collaboratively by
REPOA, MAFC and World Bank; and the second step would involve a broader
summary assessment of all input subsidy programmes that would utilize the results
from the more detailed NAIVS PER study, as well as the findings from additional
analysis of other input subsidy programmes (including support to livestock and crops
not covered under NAIVS).After the presentation, a point was added about the
substantive work already done in terms of impact analysis on NAIVS, although the
study in the context of PER is still highly required. Furthermore, there were concerns
about other critical issues in the Agriculture sector including questions whether inputs
reach the beneficiaries, sustainability of inputs voucher scheme, and moving to
electronic voucher system. Other concerns were about rural roads and markets in
connection with improving agricultural productivity. Another concern was while looking
critically at agricultural inputs, export taxes on agricultural products or ad-hoc export
bans could be another dimension to analyse because it has a bearing on the whole
question of promoting production in agricultural sector. The TOR team responded that
they will work in collaboration with the Ministry of Agriculture to take the concerns into
consideration, but bearing in mind that there is time constraint and the fact that the
study is supposed to be well focused. In concluding the discussion in this area, the
chairperson elaborated the issue of crop export bans. He said that there are no more
restrictions for producers to sell their crops only to NFSR, giving example of Rukwa
farmers who recently refused to sell their crops to NFSR, and they have been allowed
to sell their products elsewhere. He said such bans were short term attempts to
stabilize food shortages during disaster times in the country whereby around 750,000
metric tons of food have been mobilized, despite having agricultural subsidies for about
eight years. Therefore, he emphasized the study should be forward looking to ensure
food security now and in the future, including more strategies for farmers to exit from
worse to better poverty levels. It was finally agreed that, generally the TOR for this
topic are clear, but need to be sharpened enough to make study more focused in the
context of PER. So, the drafting team should continue to improve the TOR and share
with Champion group before the actual work begins.
2).TOR on Managing Tax Exemptions. The study will look at the Costs and Benefits
of Tax Incentives in Tanzania. The justification is the seemingly high level of tax
incentives and tax allowances in Tanzania. Tanzania is currently in the high range in
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Sub- Saharan Africa in terms of the fiscal cost of such practices (estimated at 2-3% of
GDP for indirect taxes and overall 5-6% of GDP- IMF report of April 2011 and ADB
report of 2010). Despite efforts to reduce the number of exemptions, new exemptions
are invariably introduced each year. The CAG report (covering fiscal year 2010/11)
found exemptions to be 18% of the total tax collection and recommended a decrease
from this level. Even with the high estimated costs of the tax incentives in Tanzania
since the early 1990s, there has been no comprehensive study to assess the costs and
benefits of these incentives and their contribution to Government’s development goals.
The study is aimed at facilitating policy and decisions making process in the country by
providing reliable information on the cost and benefits of tax exemptions as well as
best practices which could have been adopted to achieve better tax incentives recipe
that would minimize unnecessary losses of revenue as a result of the application of tax
incentives. To do this, the study will among others, focus on the following aspects:
i. Review the current situation of both fiscal and non-fiscal incentives
provided in Tanzania (Mainland) and the transparency of the processes.
ii. Analyse and estimate the distribution and magnitude of tax incentives by
main category of beneficiaries.
iii. Briefly review existing literature and their recommendations on
international experience with incentives. Specifically, the study will
review evidence relating to both the advantages and disadvantages of
incentives, the costs in terms of revenue losses and their gains in terms
of contribution to attracting foreign investment.
iv. Assess the cost and benefits of tax incentives to Tanzania for a time
period to be agreed. A suggestion is to have 1995 as a base year (prior
to introduction of VAT) include 2000 as middle year and then assess
yearly from 2005 to 2012. This gives 10 data points in time.
v. Assess, to the extent possible, the benefits and costs by sector,
beneficiary and commodity.
vi. Benchmark the level of Tanzania’s performance in incentives with EAC
partners and two other selected successful emerging countries to
determine whether Tanzania’s experience is in line with best practice.
vii. Make recommendations that will help to improve revenue collections
and reduce the level of tax incentives in Tanzania, including engaging
the stakeholders in the proposed interventions. Recommendations will
be specific to each type of incentive and will spell out possible changes
to the legal framework underpinning these incentives.
The TOR team further proposed that the study be undertaken by a highly experienced
international Economist in this area, who would be assisted by two local senior
economists, two interns and a high level political tax consultant. After the presentation,
the members were generally comfortable with the TOR, although they suggested
further sharpening of the same to be more focused in the context of PER studies. The
only issue of concern was the so called ‘’high level political tax consultant’’ and criteria
103
to get that person. It was clarified that, the political experience is crucial since normally
exemptions have political influence and interests. An option discussed was exploring
experience of a retired Minister for Finance, or Pay Master General in Tanzania, Africa
(West Africa, Sub-Saharan Africa or countries like Mauritius). It was agreed that, this
issue will be worked out in the course of implementation. Finally in this area, the
drafting team was directed to improve and finalize the TOR and share with Champion
group before the actual work begins.
3) PER TOR on Public Private Partnerships (PPPs). The core focus of the TOR Is to
identify key priorities, identify gaps, develop budget and sources of financing, agree on
administrative arrangements etc. The study is expected to borrow from ongoing
interventions including the Five Years Development Plan, PPP Strategy and
Guidelines. After the presentation, members had concerns that the TOR seems like
focusing on improving institutional arrangements because they are process oriented,
not analytical since it lacks technical questions as opposed to impact and future looking
studies that are envisaged in the PER and or research context. Both the chair and co-
chair made it clear that the study should look at the extent to which PPPs can help to
provide financial window for public budget, i.e. looking at public expenditure
components or programmes that can leverage funds from the private sector. In this
regard, there is a need to come up with a critical list of projects in the public
expenditure that could be financed under PPP arrangement. It was suggested that as a
starting point, two sectors of Transport and Power may be a focus for this study. While
strengthening institutional structures is vital in coordination of PPPs, it was suggested
this to be dealt with in a separate arrangement and the study be focused in the context
of PER. Finally in this area, the drafting team was directed to be very specific with
study, re-work and finalize the TOR and share with Champion group before the actual
work begins.
4). PER TOR on Public Expenditure Trucking studies (PETs). The work is behind
schedule because there is a debate on whether the PETs should be narrowed to
specific sectors or look at the overall transfers and flow of funds to LGAs. According to
the presentation, the initial thinking is that the study could shed light on PFM
challenges at local government levels with the objective of improving PFM as an
enabler for quality service delivery. In order to ensure a focused study with
concrete/practical examples, these PFM challenges will be explored through a
sector(s) lens – probably looking at Education and Health as the biggest spenders.
However, the challenges themselves will mostly be generic/systemic and thus
applicable to other sectors. The PETS will provide recommendations to assist in
improving PFM at both central and local government levels. After the presentation, the
chairperson emphasized that the spirit of PETs is normally tracing every shilling from
the first point of departure/disbursement to the last point and ascertain whether it has
reached the beneficiaries, spent on the intended activities and resulted to a desired
output or outcome. It may also be looked at another dimension of public expenditure by
104
analyzing areas where funds are not allocated when it was actually supposed to be
(i.e. critical areas for multidimensional issues that are somehow not addressed in the
public expenditure). Finally in this area, the drafting team was directed to be specific on
the study, re-work and finalize the TOR and share with Champion group before the
actual work begins.
The secretariat reported that there is a balance of USD 389,099.24 in the PER basket
account. It was agreed that the TOR be finalized and presented with draft budget
estimates for each study. The Secretariat will then compile the information and advise
on whether the studies be financed on individual arrangements or using the PER
basket fund, taking into account time constraints in approval and procurement
procedures.
Status of the PER work program since the last Champions group meeting held on 1st
October 2012. Also included are the required actions in order to proceed with
implementing the work program.
(i) Agriculture input subsidy study; and
(ii) Tax exemptions study
Status: The terms of reference (ToRs) for the two studies have been revised, taking
into account comments received from the last Champions group meeting and are
attached. Required action: Champions group approval of revised ToRs and guidance
on funding so that implementation of the studies can effectively commence. Note that
REPOA is already doing the assessment work of the NAIVS and the PER work will be
an extension to the ongoing work; so the only pending issue for this study to proceed is
budget for the extension work which is estimated at US$68,465. For the Tax study,
pending is the approval of the ToRs, initiate implementation of the work and guidance
on funding sources of this study, which is estimated at 133,750 USD. The findings from
the two studies are expected to feed into the 2013/14 budget preparation, and so
prompt implementation is required.
(iii) Public Private Partnerships (PPP)/Public Investment Management (PIM)
study
Status: The terms of reference (ToRs) for both PPPs study and PIM study have also
been developed taking into account the guidance received from the last Champions
group meeting. However, attached for now are the ToRs for the PPP work while PIM
ToRs will be circulated later. The PPP ToRs include the study on how to use effectively
public funds to leverage private funds in transport and energy sectors as well as
needed operational and capacity building activities for effective operation of PPP in
Tanzania.
105
Required action: Champions group review (including further guidance) and approval of
the ToRs, guidance on funding sources of the study/work, initiation of the
implementation of the study/work. Note that the PPP work is a medium term (3 years)
with estimated budget of US$1,410,000. The study on effective use of public funds to
leverage private funds in transport and energy sectors is estimated to consume
US$360,000.
(iv) Public Expenditure Tracking Surveys (PETs) in LGA study
Status: The terms of reference are yet to be prepared but initial thinking has been
developed.
Required action: Further guidance from the Champions group on the focus and scope
of the PETs study so that preparation of the ToRs can commence. The secretariat
needs to coordinate the responsible government institutions and DPs to jointly develop
the ToRs as was done with other studies.
7. PUBLIC FINANCIAL REFORM - SATISFACTORY
The assessment of PFM was organised under five Key Results areas (KRAs) relating
to: (i) Revenue management (ii) Budget and planning (iii) Budget execution,
transparency and accountability (iv) Budget control and oversight and (v) Change
management, programme monitoring and communication.
The joint assessment concluded that PFM reforms are making tangible progress. In
regard to the PAF 2012 assessments, PFM as an underlying process has been rated
as satisfactory with 90% achievement. Three of four assigned KPAs were not achieved
although work has been initiated on all KPAs and progress will continue to be followed
under the M&E framework. Three of the five PFM RP outcome indicators were
achieved while targets were not met for the remaining two.
The PFMRP IV M&E framework includes 160 detailed milestones. The majority of
these were found to be broadly on track where “on track” is defined as an activity that
is planned and in process or that is considered achievable based on the deadline
established in the M&E. A small number have already been achieved; others are
considered to be at risk, in need of revision or delayed.
MOF
106
OUTCOME INDICATORS
CLUSTER I
Outcome Indicator Baseline 2011 Target 2012 Target
2013
Target
2014
1. Head count ratio for basic needs poverty
line by rural/urban (Mkukuta II) (MOF-
NBS)
Improvement towards
2015 MKUKUTA target
including analysis of
NPS. (33.6%)
Status 2012:The poverty targets set by the Government in the MKUKUTA II and the MDG are considered for information (not for
rating). Review this element by recording
Baseline 2007 MKUKUTA II 2015 MDG 2015, by
a) National average 33.6% 24.0% 19.3%
b) Rural areas 37.6% 26.4% 20.4%
NOT ASSESSED
2. Growth of Value of Agricultural Exports
(US $ million)6 (MAFS)
905 991 1,078 1,166
Status 2012: 1132 USD
ACHIEVED
3. Flow of Private Funds into the
Agricultural Sector (Tsh Billion) (MAFS)
691 741 847 957
Status 2012:Tsh. 995 Billion
ACHIEVED
4. Proportion of villages with land use
plans (MLHS)
8 15 22 31
6 Revised forecast using actual figures instead of previous forecasted data
107
Status 2012: 12%
NOT ACHIEVED
5. Time (days) taken by Registrar of Titles
to approve a transfer of certificate of
right of occupancy (MLHS)
7 7 6 4
Status 2012: 7 days
ACHIEVED
6. Total electricity installed Capacity (MW)
(MEM)
1,220 MW
1,400 MW 1,730 MW
2,300 MW
Status 2012: 1438.24 MW
ACHIEVED
7. * % population with access to electricity
(MEM)
14.7% 16.5% 17% 17.5%
Status 2012:
NOT ASSESSED
8. Plant Availability (%) (MEM) 60% 70% 80% 85%
Status 2012: 60%
NOT ACHIEVED
9. % of Trunk and Regional Roads Network
in Good and Fair Condition (MOW)
91% 91% 92% 93%
Status 2012: 85%
NOT ACHIEVED
10. % of rural roads that are passable (good
and fair conditions) (MOW/PMORALG)
56% 58% 61% 63%
Status 2012: 59%
ACHIEVED
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11. Time Taken for Container from
offloading until clearing from port (MOT)
11 days 9 days 7 days 5 days
Status 2012: 9 days
ACHIEVED
CLUSTER II
Outcome Indicator Baseline 2011 Target 2012 Target
2013
Target
2014
1a Standard VII exam pass rate
93. National average for the
previous year, disaggregated by
gender (MoEVT)
A: Baseline 2011:
53.5% (M=59.0%;
F=48.3%)
55%
60.2%
62.1%
Status 2012: A: 2011 Exams: Average: 55% Actual Results: 2011 Exams: Average = 58.3% (M= 62.5%; F= 54.5%)
ACHIEVED
1b B. Proportion of councils in which less
than 40 % of Standard VII pupils passed
the PSLE in the previous year (MoEVT)
B: 12.1%
9%
12.5%
11.7%
Status 2012: B: 2011 Exams: 9% Actual Results: 2011 Exams: 11.4%
NOT ACHIEVED
2. Form 4 examination pass rates
(Division I-III) national average for the
previous year, disaggregated by gender
(MoEVT)
T=11.5%
(M= 14.6%; F= 7.8%)
14% 12% 13%
Status 2012: 2011 Exams: 14% Actual Results: 2011Exams: Average = 10.0% (M= 12.13%; F= 7.13%)
NOT ACHIEVED
3. Total enrolment in Degree Programmes
(% females) (MoEVT)
121,204
(34.7% female)
124,500 127,000 130,500
109
Status 2012: 143,380 (35.2%)
ACHIEVED
4a A. Proportion of births at Health
facilities, national average
A: Baseline 2010
58.4%
60%
65%
70%
Status 2012: A: 63%
ACHIEVED
4b
B. Proportion of districts in which at
least 60% of births take place at health
facilities (MoHSW)
B: Baseline 2010
54%
55%
60%
65%
Status 2012: B: 55%
ACHIEVED
5. Persons with advanced HIV disease
(CD4<200 or <350) currently receiving
ARV combination treatment
(disaggregated under 15 and over 15
and by sex) (MoHSW)
Baseline 2010
384,816
362,570
404,788
459,594
Status 2012: Under 15 years: 42,837
Above 15 years: 496,537
ACHIEVED
6. Nurses and Nurse midwives per 10,000
population by region (MoHSW)
Baseline 2010
3.96
4.0
4.4
5
Status 2012: 3.0% (3 per 10,000 people)
NOT ACHIEVED BUT POSITIVE TRAJECTORY
7. Total number of enrolment in health
institutes (MoHSW)
Baseline 2011 7,475 8,325 9,000
110
6,713 (101%) 75% 83% 90%
Status 2012: 7,458 (75%)
ACHIEVED
8 Proportion of households in rural
settlements with access to clean and
safe water from improved/protected
sources (MOWI)
Baseline 2010: 57.8% 60.5% 62.1% 63.6%
Status 2012: 56.6%
NOT ACHIEVED
9 Proportion of households in small towns
with access to clean and safe water from
improved/protected sources (MOWI)
Baseline 2009: 53% 54.3%
55.7% 56.3%
Status 2012: 52.5%
NOT ACHIEVED
All indicators in the water sector were not achieved due to delays In completion of Large scale Water Infrastructure
Investments, while the population is continuing to increase. Furthermore there were challenges with the M & E system.
10 Proportion of households in Regional
urban centers with access to clean and
safe water from improved/protected
sources (MOWI)
Baseline 2010: 86% 89.6% 91.4% 93.2%
Status 2012: 81%
NOT ACHIEVED
All indicators in the water sector were not achieved due to delays In completion of Large scale Water Infrastructure
Investments, while the population is continuing to increase. Furthermore there were challenges with the M & E system
11 Proportion of households in Dar es
Salaam with access to clean and safe
water from improved/protected sources
(MOWI)
Baseline 2010: 55% 60% 67% 71%
Status 2012: 51%
NOT ACHIEVED
111
All indicators in the water sector were not achieved due to delays In completion of Large scale Water Infrastructure
Investments, while the population is continuing to increase. Furthermore there were challenges with the M & E system.
CLUSTER III
Outcome Indicator Baseline 2011 Target 2012 Target
2013
Target
2014
1. Percentage number of cases pending for
two or more years (MOCAJ)
14% 13% 12%
Status: 13%
ACHIEVED
2. Citizen Satisfaction with Service delivery
in LGAs.(PMORALG)
LGAs 54%
Status: POPSM have commissioned Citizen Satisfaction Survey on MDAs services. The Survey results for MDAs are looking
positive, however the survey could not be used to assess the situation for LGA level.
NOT ASSESSED
3. % of Under Five children receiving birth
certificates (MOCAJ)
Baseline from DHS
2010
6.2%
8%
11%
14%
Status 2012 : 4th June - 13th July, RITA piloted a new registration process in14 wards in Temeke DSM. This pilot used a new process for registration which reduced the number of forms, the process of registration (health facilities and officers of the LGAs), scanning and mobile up-loading of data. The results of this pilot were significant and increased the volume of registration. Next Steps: the RITA team is currently planning to take the new system, with the lessons learned from Temeke, to 5 new regions (Geita, Shinyanga, Simiyu, Mwanza and Mbeya). Mbeya likely next. This scale up will be costly and funding requests has been made and expectations of GoT budget for RITA as the under 5 registration receives stronger recognition as part of the current priorities within overall civil registration systems. NOT ACHIEVED
4. Joint commitment to develop anti-
corruption OI with agreed milestones in
PAF 2013
NOT ASSESSED
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CLUSTER IV
Outcome Indicator Baseline 2011 Target 2012 Target
2013
Target
2014
1. Average level of compliance of:
i) All audited procuring entities and;
ii) The top 20 procuring entities with the
(revised) Procurement Act 2010. (MOF-
PPRA)
(63%+75%)/2=68% i) 75%
ii) Baseline(BL) (New
set of indicators)
BL+5% of
baseline
BL+10%
of baseline
Status 2012: 74%
ACHIEVED
2. Non-salary (OC-DEV) funds released to
RAS and LGAs by end Q3, as
percentage of the Resources Available7
(OC+DEV) for the year. (MOF-BUDGET)
42.1% 60%
(Prel actual = 60.1%)
65% 70%
Status 2012:60.1%
ACHIEVED
3. Reduction in outstanding audit matters
(MOF-ACGEN)
Central: Tshs. 362026
millions.
Local: Tshs. 5515
million.
Central: Tshs.
8,076,574,791
Local: Tshs.
5,668,730,107
ii) Targets for 2013 and
2014 TBD by June
2012.
Status 2012: Central: Tshs. 8,076,574,791; Local: Tshs. 5,668,730,107
Improved performance and reduction in value of last year’s baseline at central and local levels in outstanding matters.
For the Financial year 2010/2011, Payments made without supporting documents for the Central Government
operations have been reduced to Tshs.8,076,574,791 as compared to 2009/2010. This is an improvement for the
Central Government also trends show that Central Government have significant improvement in performance as
unqualified opinions have increased from 71% in 2009/2010 to 85% in 2010/2011 and qualified opinions have
7 “Resources available” is equivalent to final allocated budget at the end of the year which takes into account adjustments, such as necessary expenditure cuts
and reallocations within the year.
113
decreased from 26% in 2009/2010 to 15% in 2010/2011 and no adverse opinion. While payments without supporting
documents for LGAs have increased to Tshs.5,668,730,107 in 2010/2011 as compared to last financial year 2009/2010.
Trends in the LGAs show that unqualified opinions have increased from 49% in 2009/2010 to 54% in 2010/2011 and
qualified opinions have decreased from 64% in 2009/2010 to 56% in 2010/2011 and adverse opinions have increased
by 1%, that is from 3% in 2009/2010 to 4% in 2010/2011. Trends indicate an improvement in LGA’s performance as
compared to 2009/2010.
NOT ACHIEVED
4 Approved budget broadly in line with
policy objectives (MKUKUTA, 5YDP,
sector policy priorities) (MOF-BUDGET)
75% 75% 75% 75%
Status 2012: 75%
ACHIEVED
5 Share of total actual expenditure on
education, health, water, agriculture,
road, and energy sectors in total
government spending excluding
interest. (MOF-BUDGET)
57.7% 58.7% (prel actual=
59.2%)
59.7% 60.7%
Status 2012: 59.2%
ACHIEVED
6 Domestic tax revenue + non-tax revenue
as a share of GDP (MOF-PAD)
16.3% 17.6% (prel actual =
17.56%)
17.8% 18%
Status 2012: 17.56%
ACHIEVED
7 Value of tax exemptions as a share of
GDP (MOF-PAD)
2.2% 1.9% 1.6% 1.2%
Status 2012: Value of tax exemptions as a share of GDP was declining from 4.2% in 2006/07 to a minimum of 2.2% in 2009/10. The
magnitude of exemptions started to grow up again, rejuvenating to a level of 3% in 2011/12. The revival was attributed by
reinstatement of the deemed capital goods, reinstatement of exemptions to mining companies with MDAs, exemptions on fuel for
emergence power plants operations.
NOT ACHIEVED
DONOR PAF 2012
114
OUTCOME INDICATOR Baseline
2011
Target
2012
Target
2013
Target
2014
1. % of Budget Support disbursed within the first quarter of the GoT
fiscal year.
17% 55% 60% 65%
Status 2012: 68%
ACHIEVED
2. % of budget support disbursed at the latest during the quarter
indicated in the disbursement schedule agreed with GoT at the time
of confirmation of commitment.
98% 98% 98% 98%
Status 2012: 100%
ACHIEVED
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ANNEX 15
PERFOMANCE ASSESMENT FRAMEWORK 2013
KEY POLICY ACTIONS (assessment criteria annexed)
CLUSTER 1 Lead
Implement intermodal transport measures to ease movement of goods to & from Dar es Salaam Port
2013: - Increases pre-arrival lodgment system and cargo manifest reported into the ASYCUDA (Automated System
for Customs Data) system to 95%.
- Start implementing the action Plan Matrix for strategies for TPA to move to a landlord status
- RAHCO/TRL investment programme and business plan approved by GoT.
- Procurement for central line spot improvements and rolling stock purchases commenced.
2014: - Port Community System fully operational.
- Reliable rail transport service restored: TRL cargo volumes to/from DSM port increased by 10 percent
- Improving road access to DSM Port identified
MoT
Formulation of energy subsidy policy by September 2013
2013: Energy subsidy policy proposal completed by MEM by September 2013. (Additional milestones to be
agreed based on World Bank Energy Loan Negotiations by February 2013, if not agreed roll over to PAF
2014)
2014: New energy subsidy policy in place by October 2014
MEM
Put in place integrated land management information system in Northern and Eastern zones
2013: Complete the final 10% of the geodetic network and consolidation of all relevant information from all 6
sectors’ registries
2014: Integrated land management information system in Eastern and Northern Zones fully functioning with
digitalized records, and trained staff using the new system
MoLHS
D
CLUSTER 3
Tanzania validated as an EITI compliant country MEM
116
2013: 1) Tanzania is validated as an EITI-compliant country; (2) Domestic legislation institutionalizing EITI and
establishing an enabling framework for EITI’s operation is drafted and completes stakeholder consultation by
October 2013.
2014: (1) Bill of legislation institutionalizing EITI and establishing an enabling framework for EITI’s operation
presented to Parliament (2) Tanzania publishes annual Tanzania EITI report approved by the International EITI
Secretariat by Oct 2014
Implement key recommendations from the case flow analysis and roll out of case/work flow reforms
2013: Roll out the key non-policy recommendations emanating from Case Analysis Report to the following courts:
High Court Bukoba, High Court Dodoma, High Court Labour division and RMs Court Kisutu
MoCLA
Implement the pay and incentives strategy
2013: Pay and incentives scheme incorporated into Budget 2013/14
POPSM
CLUSTER 4
Interface central and local government ICT with technical control and new software acquisition and all new
software developed becomes centrally coordinated
2013: Costed action plan for ICT integration interfacing is completed and approved by June 2013. This target date
may shift once the inception report is available
2014: Subsequent targets to be extracted from the approved action plan
MoF /
PMO-
RALG
Streamline and rationalize national systems and processes for intergovernmental transfers to LGAs
2013: Comprehensive and sequenced two year work plan, including a time bound M&E framework with defined
roles and responsibilities to address shortcomings of the systems and processes of intergovernmental transfers
finalized by June 2013. This target may have to shift to a later date based on the inception report
2014: Key actions from the work plan implemented as per the M&E framework
MoF/
PMO-
RLG
Increase budget transparency and public access to key fiscal information
2013: Based on the new budget cycle for FY2013/14, the Government ensures publication of the budget with: (i)
guidelines for the preparation of the annual plan and budget for 2013/14 published on Ministry of Finance website
by December 2012; (ii) the executive budget proposal [volumes I-IV] as submitted to the Parliament published on
the Ministry of Finance website June, 2013; (iii) the approved budget [all volumes] published on Ministry of
Finance website by September, 2013; (iv) and citizens’ budget published by November, 2013; and (v) Budget
Execution Report (year-end report) preliminary budget out turn published on Government of Tanzania websites by
November, 2013
MoF
The Government enhances domestic tax revenue (tax and non-tax) mobilization with better transparency and
business environment
2013: i) Submission of a Bill to Parliament to enact Tax Administration Act for the purpose of establishing a
common tax procedure among different taxes collected by Tanzania Revenue Authority by end-April 2013
ii) Study on Non-Tax Revenue – “Integration and Harmonization of Revenue Collection Systems” in place by
November 2013, and action plan to follow-up on recommendations by June 2014
iii) Submission of a new VAT Bill in line with best practice to Parliament by end-April 2013
MoF
117
The Government to strengthen institutions of public investment management to ensure that public
investments are selected based on proper economic and financial assessments
2013: The Government (a) drafts a bill to amend the Planning Commission Act, and (b) develops a public
investment operational manual to provide guidance for the ministries, departments and agencies (MDAs), and local
government authorities (LGAs), to carry out economic and financial analysis of public investment projects"
POPC
The Government to strengthen institutions of public private partnerships (PPP) to ensure that PPP projects
are selected based on proper economic and financial assessments
2013: The Minister for Finance approves PPP finance regulations on government support and unsolicited bids by
June. Establish operational PPP facilitation fund.
MoF
118
Cluster 1 Outcome Indicators Baseline 2011 Target 2013 Target 2014 Target 2015
1. Head count ratio for basic
needs poverty line by
rural/urban (Mkukuta II)
(MOF-NBS)
33.6% (HBS 2007) Joint monitoring
of poverty
reduction with the
help of HBS and
NPS trends
8
2. Growth of value of
agricultural exports (US $
million)9 (MAFS)
905 1,078 1,166
3. The amount of lending to the
agriculture sector by
domestic banks (Tshs Billion)
691 1083 1347
4. Food self-sufficiency ratio
(MAFS)
111 113 114
5. Proportion of villages with
land use plans (MLHS)
8 15 18
6. Time taken by registrar of
titles to approve a transfer of
certificate of right of
7 6 4
8 Mkukuta and Mkuza target for basic needs poverty line by 2015 is 20%
9 Revised forecast using actual figures instead of previous forecasted data
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occupancy (MLHS)
7. Total electricity installed
capacity (MW) (MEM)
1,220 MW
1,730 MW
2,300 MW
8. % of the population with
access to electricity (MEM)
14.7% 17% 17.5%
9. Plant availability (%) (MEM) 60% 80% 85%
10. % of trunk and regional
roads network in good and
fair condition (MOW)
85% 87% 89%
11. % of rural roads that are
passable (good and fair
conditions)
(MOW/PMORALG)
59% 61% 63%
12. Container dwell time 9 (Baseline 2012) 7 5
13. Ship turnaround time
(container)
8 (Baseline 2012) 4.3 4
14. Implementation of natural
resources decentralization to
districts and communities
120
a) Declared village land forest
reserves
b) Signed joint management
agreements
c) Authorized associations
among wildlife management
areas
d) Registered beach
management units
473
180
17
47
523
200
20
75
583
240
23
110
640
300
26
150
Cluster 2 Outcome Indicators Baseline 2011 Target 2013 Target 2014 Target 2015
1a Staffing for delivery of basic
services at LGA level reduced
number of districts with
primary school PTR ≥ 50
47
out of 133 districts
30
out of 160 districts
25
out of 160
districts
15
out of 160
districts
1b Reduced number of districts
with nurses/midwives <=
3/10,000 population
Baseline 2012: 55% 48% 41% 34%
2. Standard VII exam pass rate
A. National average for the
previous year, disaggregated
by gender (MoEVT)
B. Proportion of councils in
which less than 40 % of
Standard VII pupils passed
Baseline 2011: 53.5%
(M=59.0%; F=48.3%)
Baseline 2011: 12.1%
60.2%
12.5%
62.1%
11.7%
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the PSLE in the previous year
(MoEVT)
3. Form 4 examination pass
rates (Division I-III) national
average for the previous year,
disaggregated by gender
(MoEVT)
T = 11.5%
(M= 14.6%; F= 7.8%)
12% 13%
4. Total enrolment in Degree
Programmes (% females)
(MoEVT)
121,204
(34.7% female)
127,000 130,500
5. A. Proportion of births at
Health facilities, national
average
B. Proportion of districts in
which at least 60% of births
take place at health facilities
(MoHSW)
Baseline 2010 = 58.4%
Baseline 2010 = 54%
65%
60%
70%
65%
72%
67%
6. Persons with advanced HIV
disease (CD4<200 or <350)
currently receiving ARV
combination treatment
(disaggregated under 15 and
over 15 and by sex)
Baseline 2010 =
384,816
404,788
459,594
500,000
122
(MoHSW)
7. Proportion of councils in
which at least 8 out of 10
tracer medicines are available
at Primary Health Care
facilities (dispensary and
health centres).
Baseline 2012 = 47.0%
59.3%
66.6%
74.1%
8. Total number of enrolment in
health institutes (MoHSW)
Baseline 2011 = 6,713
(101%)
8,325 9,000 10,000
9. Proportion of households in
rural settlements with access
to clean and safe water from
improved/protected sources
(MOWI)
Baseline 2010 = 57.8%
62.1%
63.6%
65%
10. Proportion of households in
small towns with access to
clean and safe water from
improved/protected sources
(MOWI)
Baseline 2010 = 53%
55.7%
56.3%
57%
11. Proportion of households in
regional urban centers with
access to clean and safe water
from improved/protected
Baseline 2010 = 86%
91.4%
93.2%
95%
123
sources (MOWI)
12. Proportion of households in
Dar es Salaam with access to
clean and safe water from
improved/protected sources
(MOWI)
Baseline 2010 = 55%
67%
71%
75%
Cluster 3 Outcome Indicator Baseline 2011 Target 2013 Target 2014 Target 2015
1. Percentage number of cases
pending for two or more
years (MOCLA)
14% 12.5% 12% 11.5%
2. % of Under Five children
receiving birth certificates
(MOCLA)
Baseline from DHS
2010
6.2%
11%
14%
3. Score in Control of
Corruption Indicator (one of
World Bank Worldwide
Governance Indicators)
-0.52 Positive trend.
Agree way
forward on
developing ‘home
grown’ indicator.
4. Joint commitment to continue
work on a consistent
methodology to measure
Citizen’s Satisfaction with
124
Service delivery for PAF 2014
Cluster 4 Outcome Indicator Baseline 2011 Target 2013 Target 2014 Target 2015
1. Average level of compliance
of:
The top 20 procuring entities
with the (revised)
Procurement Act 2010.
(MOF-PPRA)
67.7% BL+5% of
baseline (71.1%)
BL+10% of
baseline
(74.5%)
2. Non-salary (OC-DEV) funds
released to RAS and LGAs by
end Q3, as percentage of the
Resources Available10
(OC+DEV) for the year.
(MOF-BUDGET)
46.5%
[FY 2010/11]
65% 70%
3. Reduction in outstanding
audit matters (MOF-NAO)
Targets to be confirmed
by March 2013
Tbc Tbc
4 Approved budget broadly in
line with policy objectives
(MKUKUTA, 5YDP, sector
policy priorities) (MOF-
BUDGET)
75% 75% 75%
10 “Resources available” is equivalent to final allocated budget at the end of the year which takes into account adjustments, such as necessary expenditure cuts and reallocations within the year.
125
5 Share of total actual
expenditure on education,
health, water, agriculture,
road, and energy sectors in
total government spending
excluding interest. (MOF-
BUDGET)
57.7% 59.7% 60.7%
6 Domestic tax revenue + non-
tax revenue as a share of GDP
(MOF-BUDGET)
16.3% 17.8% 18%
7 Value of tax exemptions as a
share of GDP (MOF-PAD)
2.2% 1.6% 1.2%
DONOR PAF 2013
DP OUTCOME INDICATORS Baseline 2011 Target 2013 Target 2014 Target 2015
1. % of Budget Support disbursed
within the first quarter of the
GoT fiscal year.
17% 60% 65% 65%
2. % of budget support disbursed
at the latest during the quarter
indicated in the disbursement
schedule agreed with GoT at the
time of confirmation of
98% 100% 100% 100%
126
commitment.
Note: All Underlying Processes to be removed based on finalisation of Joint assessment of underlying principles process.