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THE UNITED REPUBLIC OF TANZANIA
MINISTRY OF FINANCE
PRBS MID YEAR REVIEW/ PRSC 2 APPRAISAL
MARCH - APRIL 2004
REPORTS FROM TECHNICAL WORKING GROUPS AND
MINUTES OF PLENARY SESSIONS
June 2004
PRBS Mid Year Review/ PRSC 2 Appraisal 2004
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Contents
Page
Objectives of Mid Year Review and PRSC 2 Appraisal...………………………..………2
Launch meeting minutes………………………………………………………………......3
Technical Working Group (TWG) Reports
Private Sector Development………………………………………………………6
Agriculture and rural development………………….…………………………...11
PRS and poverty monitoring………………………………………………..……16
Debt management………………………………………………………………..23
Tax policy and administration……………………………………………………26
Budget formulation and execution…………………………………………….…29
Public service management………………………………………………………34
Public financial management…………………………………………………….38
Governance……………………………………………………………………....42
External resource management………………………………………………..…45
Plenary session minutes
Session 1 – budget formulation and execution; growth………………………….47
Session 2 – fiduciary risk; PRS and poverty monitoring………………………...52
Wrap up meeting minutes……………………………………………………………..…57
Outcome of Review and PRSC 2 Appraisal …………………………………………….60
Development Partners’ Statement……………………………………………………….61
Annex I – Participants of Mid Year Review/PRSC 2 Appraisal……………………..….70
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Objectives of the PRBS Mid Year Review/ PRSC 2 Appraisal
Follow-up on outstanding issues from the PRBS Annual Review/ PRSC 2 pre-
appraisal in November 2003 including: update on progress on Nov. 2003
Performance Assessment Framework (PAF) actions; remaining steps for
completion of outstanding PRSC 2 prior actions; collection of evidence of
implementation for PRSC 2 negotiations.
Review of progress towards implementation of Nov. 2004/March 2005 actions
and confirmation of feasibility of completion of PRSC 3 triggers.
Discussion of proposals to enhance strategic focus of PAF (Nov.04/March 05
actions).
Discussion of monitorable indicators and steps towards a more results-orientated
PAF matrix.
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MINUTES OF THE PRBS MID YEAR REVIEW/ PRSC 2 APPRAISAL
LAUNCH MEETING
HELD ON MONDAY 29TH MARCH 2004 AT THE MINISTRY OF FINANCE
The meeting was opened by the Deputy Permanent Secretary, Mr. R.M. Khijjah, by
welcoming all participants to the beginning of the Mid Year Review period for PRBS and
the Appraisal of PRSC 2.
The Chairman extended the welcome to the African Development Bank representatives
and commented on the positive development in having the ADB, who provides Tanzania
with budget support loans, present in the common harmonized review process of budget
support.
The outstanding issues from the Performance Assessment Framework (PAF) matrix were
noted as follows:
1. The prior action on Government approval of the business licensing system
was noted to be incomplete.
2. On rural roads, the meeting agreed that the focus of the PAF action should be
on maintenance of rural roads and on coordination and clearly defined
responsibilities between the Ministry of Works and the President’s Office –
Regional Administration and Local Government (PO-RALG).
3. It was noted that the PAF action for November 2003 on preparing a unified
tax collection system for agricultural exports was not discussed during the
Annual Review. It was agreed that the Ministry of Agriculture and Food
Security and the Ministry of Finance would discuss this issue in the technical
working groups.
4. The PRS Progress Report III which was circulated in draft form at the time of
the wrap up meeting of the Annual Review, was noted to have been posted on
the Government website and submitted to the Government printers in January
2004.
5. The poverty monitoring indicators were noted to have been developed further,
particularly within the Routine Data System Working Group. It was noted
that the draft position paper would be discussed in a task force with the PO-
RALG.
6. On budget execution, the meeting was informed that the budget execution
report for the second quarter of 2003/04, with actual expenditures on priority
items identified (a PRSC 2 prior action), was finalized and would be
circulated via e-mail after the meeting for participants to review.
Furthermore, on budget formulation, it was stressed that the accuracy of
projections of external resources used in the Budget Guidelines needed to be
firmed up for 2004/05.
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7. On the Public Financial Management Reform Programme, it was noted that a
meeting with the Permanent Secretary was held before the launch meeting of
PRBS Mid Year Review /PRSC 2 appraisal. It was agreed that the note that
the Ministry of Finance had agreed to prepare on the way forward, should be
circulated to development partners within two days of the launch meeting in
order that the Technical working group on public financial management could
review the steps forward on the programme.
8. The meeting noted the delays in the submission of the amendments to the
Procurement Act to Parliament. The Ministry of Finance explained that it was
due to human resources capacity constraints in the Central Tender Board. It
was noted that 3 new members of staff had been recruited since January 2004,
which would help the process. The draft was expected to be circulated to
stakeholders prior to the expected submission of the bill to the June 2004
Parliament session. The Central Tender Board confirmed that the
amendments to the Act would reflect recommendations from the Country
Procurement Assessment Report (CPAR).
9. On governance, the Government confirmed that the revised version of the
National Anti-Corruption Strategy and Action Plan (NACSAP) had been
approved and circulated. Ministries, Departments and Agencies were noted to
be reporting on implementation. It was also noted that through the Local
Government Reform Programme (LGRP), work had begun with Local
Authorities on the fight against corruption. The development partners
expressed concern that the assessment of progress on governance during the
Annual Review was the weakest in the PAF matrix and therefore stressed the
importance of stronger coordination and cooperation between Government
lead representatives.
10. Three of the thirteen agreed PRSC 2 prior actions were noted to be
incomplete. The Chairman commented that on the whole the number of prior
actions compared to the previous year was higher and requested the members
of the Review to consider reducing the number. It was explained that it was
important to focus on priority areas of reform due to limited capacity in
Government to deal with a multiple of reforms. Few qualified staff are spread
across many issues and reporting of progress in many processes. The World
Bank representative confirmed that the discussion is open to reduce the
number of actions, but noted that the majority of the actions were already
completed, and the remaining actions were crucial actions for continuation of
budget support such as financial management and procurement processes.
The meeting agreed that for the future, the number of actions in the PAF
matrix needs to be reduced, and greater strategic focus and sequencing of
reform is needed given Government capacity constraints.
The meeting commented that the annual audit of the national accounts is required by
development partners for review, as stated in the Technical Note for the PRBS/PRSC
facility. The Note indicates that if the National Audit Office is delayed, then the
development partners would finance an audit of selected flows. The Ministry of Finance
confirmed that the financial statements for 2002/03 had been submitted to the Auditor
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General for audit. In addition, development partners requested a copy of the 2001/02
audit of national accounts for review.
The World Bank representative commented that tentative monitorable indicators for each
area of the PAF had been included in the draft PRSC 2 programme document. These
indicators were suggested to be discussed and worked on in the coming months prior to
the Annual Review in November 2004, with the aim of moving towards a more results-
orientated PAF matrix.
The African Development Bank representative explained that the ADB aims to harmonise
its assessment of progress with the other development partners. It would use the Mid
Year Review period to look at specific actions from within the PAF matrix which it could
use as conditions for release of funds. The proposed first tranche of the new loan was
indicated to be approximately USD 60 million. It was confirmed that an ADB office was
open in Dar Es Salaam and a Resident Representative would soon commence work in the
city, which would facilitate communication on budget support issues.
On the logisitics of the review period, it was agreed that all Technical Working Groups
would meet and submit inputs to the Ministry of Finance for compilation by the end of
the week, in advance of two scheduled plenary sessions. The Chairman agreed that the
Ministry of Finance would ensure high level participation at Permanent Secretary level
from the relevant Ministries, Departments and Agencies. Government representatives
would be required to present the main issues arising from the Technical Working Group
discussions at the plenary sessions.
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Report of the Technical Working Group on Private Sector Development
Actions/prior action – Nov 03/Mar. 04 Indicative actions-Nov. 04/Mar. 05
Completed preparation of PSD strategy Implementation of selected activities of
document (which mainstreams SME PSD strategy
development)
Status: Partly achieved
Progress of the Nov. 03/Mar. 04 action:
The TOR for the PSD Strategy formulation exercise were discussed by stakeholders
including private sector organisations in early 2004. A Review Mission of Danida funded
business sector programme recommended in March 2004 a revision of the TOR. It has
been recently decided by the BEST working group for TOR to undergo a last round of
revision by stakeholders before being firmly used as a basis for negotiation with the
consultant (ESRF). The negotiations with ESRF are still ongoing including the cost of the
exercise. Danida has indicated willingness to co-fund the exercise with a ceiling amount
of USD 100,000 subject to revision of TOR and clear commitment from both the
Government and the private sector. It was proposed that activities related to the strategy
be incorporated in the MTEF 2005/06 – 2007/08 to ensure government commitment, as
well as financial resources, for its implementation.
Progress on the indicative action:
It was proposed that the indicative action by November 2004 be revised to “PSD strategy
formulated and approved by the government”. The main justifications for rephrasing is
that it is unrealistic for implementation to start because of the delayed formulation of the
strategy, and once finalised, it has to pass through several government approval process.
Actions/prior action – Nov 03/Mar. 04 Indicative actions-Nov. 04/Mar. 05
Began implementation of the SME policy Successful elaboration of workplan based
on the SME policy. Implementation of
Status: Achieved selected activities of the workplan
Progress of the Nov. 03/Mar. 04 action:
The SME policy has already been translated to kiswahili, distributed throughout the
country and went through a consultative process. MIT is currently organising zonal
workshops beginning at Arusha and Mbeya on 23 April, while a stakeholders meeting on
8th April in Dar es Salaam will discuss on several projects as identified in the
implementation programme via SME policy. Potential source of financing for these
projects will also be discussed. Some of the activities related to the implementation of the
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SME policy have been financed by the FY 2003 budget and some of them will be
integrated into the MTEF 2004/05 – 2006/07.
Progress on the indicative action:
It was indicated that the indicative action above seems to be confusing. However it was
indicated the discussion on the proposed workplans will take place through the zonal
workshops to be started this April. The possibility for the indicative action to be fulfilled
by November 2004 is high.
Actions/prior action – Nov 03/Mar. 04 Indicative actions-Nov. 04/Mar. 05
Better Regulation Unit for the BEST Satisfactory implementation of 1st year
programme in PO-PP staffed, resources and workplan of BEST
operational
Status: Partly achieved
Status: Achieved
Progress of the Nov. 03/Mar. 04 action:
Currently, 3 government staff have been seconded to BRU and they have started to
execute some of the activities stipulated in the first year plan. BRU is currently working
on Phase II of the labour laws reform, BRELA as well as elements related to land
reforms. The recruitment process of CEO is ongoing and it is expected that s/he will
assume office on 1st of July. The recruitment of the Lead advisor will follow thereafter.
Progress on the indicative action:
Some of the activities related to the 1st year workplan have been initiated with the current
staff at BRU. BRU launched its operation after the signing of MoU between the
government and BEST basket donors while the 1st year workplan was designed to cover
1st half of 2003 to Mid-this year. In this case the execution of the 1st year workplan will
be pooled together with that of the 2nd year beginning June/July this year.
Actions/prior action – Nov 03/Mar. 04 Indicative actions-Nov. 04/Mar. 05
Prepared new Labour Policy and revised Drafted phase II labour legislation
Labour Act in consultation with (occupational safety and health,
stakeholders and secured Government worker’s compensation, and
approval of the same. employment promotion) for
submission to parliament
Phase I legislation (employment
relations, collective labour relations,
dispute resolutions, and labour
market institutions) presented to
parliament
Progress of the Nov. 03/Mar. 04 action:
Status: Ac
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The drafted law was presented to the parliament for first reading in November 2003 while
the second reading will feature in the upcoming parliamentary session (possibly April
13th). The Sectoral Parliamentary Committee meeting has been scheduled on 7th and 8th
April for final deliberation on the act before it is approved by the parliament. It will take
time for the law to be fully and legally operational as a number of institutions have to be
formed to cater for smooth functioning of the law.
Progress on the indicative action:
It was decided in the BEST working group that financial resources from BEST
programme will be utilised to finance Phase II of the labour laws reform. Currently, the
Ministry of Labour is in the process of forming technical committees that will advise the
Task Force governing the reform process. It is perceived that, under Phase II more time
will be spent on preparation of working papers by consultants that will inform
deliberations of the technical committees. The Ministry of Labour through the Labour
Commissioner has indicated firm commitment by the Ministry on the time set for the
process.
Recommendation:
Apart from the commitment from the Ministry of Labour, the indicative prior action was
recommended to be rephrased to “Phase II labour policy and legislation (occupational
safety and health, worker’s compensation/social security, and employment promotion)
revised, and new drafts presented to parliament.
Actions/prior action – Nov 03/Mar. 04 Indicative actions-Nov. 04/Mar. 05
Business licensing system reviewed New business licensing framework
after consultation with stakeholders under implementation in phased
and position paper prepared and strategy
approved by government
Status: Partly achieved
Progress of the Nov. 03/Mar. 04 actions:
Stakeholders discussion on the business licensing system took place last year. The
position paper will be presented to the cabinet secretariat in 1 week. MIT has recently
presented the Business Licensing Reform proposal to the Tax Task Force, in order to
build a consensus and support for the new system – the main objective of which has
changed from revenue collection to recovery of administrative and registration costs.
licensing would not be a source of revenue, rather, the recovery of the administrative
cost. The new business licensing system will be that of issuance of business licences for
a few large businesses for regulatory purposes and registration for the rest. This action
has been delayed due to the need to build stakeholder consensus and support given the
concerns regarding revenue loss implications from the introduction of the new system.
Progress on the indicative action:
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MIT has initiated a number of reforms in business licensing which has resulted in the
reduction of the number of days to issue and obtain a business licence to only two days.
In line with the new business licence reforms, MIT plans to initiate one-year pilot phase
of the new business licensing system in Dar es Salaam starting FY 2004/05.
Actions/prior action – Nov 03/Mar. 04 Indicative actions-Nov. 04/Mar. 05
New civil procedure code designed New civil procedure code design is
underway and a draft for consultation is
Status: Not achieved available
Progress of the Nov. 03/Mar. 04 actions:
Currently a consultant under BEST programme is finalising a draft work plan for CDR
Component under BEST which also include the civil procedure code (CPC) as part of the
proposed reforms. Two main challenges are envisaged regarding prioritising the civil
procedure code under CDR i.e. i) possibility of separating the commercial component
from the entire CDR package, and ii) integration of CPC reform into the legal reform
process. The prioritisation of CPC reform in the CDR component will appear in the draft
work plan expected in the first half of April 2004.
Progress on the indicative action:
It was noted from the meeting that the indicative action will not be fulfilled by November
2004. For this reason it was proposed to rephrase the action to “New Civil Procedure
Code is under way and a draft for consultation is available”
Actions/prior action – Nov 03/Mar. 04 Indicative actions-Nov. 04/Mar. 05
Coherent M&E system for BEST, SME
policy and PSD Strategy developed and
institutionalised
Progress on the indicative action:
The M&E framework for the business regulatory environment programme in Uganda is
currently being developed by consultants who will also assist the BEST programme in
developing the M&E framework in Tanzania. The consultants are expected to start
working in Tanzania in April 2004. For the SME policy, the M&E framework has been
prepared and integrated into the implementation programme of the policy. The indicative
action in relation to BEST and SME will be achieved by November 2004.
Proposed WB indicators1
1
These indicators include i) employment law index, ii) cost to register a business, and iii) time to enforce a
contract.
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It was agreed that, as a starting point the three indicators for the private sector
development should be integrated in the PAF matrix. However, it was proposed that an
indicator which captures the growth of enterprises be added.
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Report of the Technical Working Group on Agriculture and Rural Development
Attendance:
1. Mrs J.F. Bitegeko MAFS Chairperson
2. Mr. R. Townsend World Bank
3. Mr. M. Endo Japan Embassy
4. Prof. .A. Hayuma Ministry of Lands
5. Ms K. Matsushita JICA
6. Ms Elaine Baker Ministry of Finance
7. Rosemarie Twagirayezu Bank of Tanzania
8. Ms P. Kariuki ADB
9. P. Mwanakatwe ADB
10. T. P. Msaki MAFS
Agenda:
1. Update on progress in the implementation of PRSC-2 Prior Actions (Nov.
03/March 04)
2. Update on progress in the implementation of other PAF Actions (Nov. 03/March
04)
3. Detailed outline of remaining steps and timetable for completion of PRSC-2 prior
actions that have not fully met
4. Progress in the implementation of PAF actions (Nov 04/March 05)
5. Detailed assessment of feasibility of meeting PRSC-3 Prior Actions
6. Monitorable indicators
7. Issues that should be raised in Plenary discussions on Monday and Tuesday
Status of PRSC-2 Prior Actions
Review of Crop Boards and Regulations
In order to increase agricultural trade in the medium term, a thorough study on the roles,
functions and financing of coffee, cotton, cashewnuts and tea started in September 2003.
The review work is supported by the Government, World Bank and the European Union.
So far an Institutional Mapping and Financing study for coffee and cotton has been
completed. Stakeholder workshops will be organized for coffee in Moshi and cotton in
Mwanza in early May to discuss findings of the Study and contribute to the
rationalization and funding of the two Crop Boards.
Institutional Mapping for tea and cashewnuts is on-going. Arrangements are underway to
begin institutional mapping for tobacco, sugar, sisal and pyrethrum during April 2004.
Land and Village Land Acts
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Amendment of the Land Act
The Land (Amendment) Bill was passed by the Parliament during the last session on 10th
February 2004 and assented by the President on 30th March 2004. It contains legislative
proposals intended to bring about balance between the interest of the lender and the
borrower, bringing greater certainty to identification of a matrimonial home where it is
subject of mortgage and provides for mortgagee to take reasonable steps to ascertain that
requisite spousal consent is given in order for the mortgage to be legally valid.
The amendment also provides an avenue for sale of undeveloped bare land among
citizens and regulates such sales, including sale by mortgagees. The PRS-2 prior action
was fully met by the government before 30th March 2004
The issue of whether there is a need to review the Land Policy was discussed as
Indicative PAF Action to be completed by November 2004. It was agreed during the
meeting that there is no need to review the Land Policy because a policy gives broad
statements which could be interpreted into actions. In this regard, the review of the
policy should be omitted in the PAF Matrix.
District Roads/Rural Roads
A draft proposal to strengthen the institutional arrangements for district road maintenance
and rehabilitation has been developed. The proposal would be finalized by 26th April
2004 for submission to Permanent Secretary – PO-RALG and NORAD for further
discussions. The proposal is expected to be tabled in the Parliament during the
September 2004 Parliamentary Session for approval.
Micro Finance
The Micro Finance legislation was passed by the Parliament in February 2003 and
assented by the President in April 2003. Draft regulations are ready for review by the
Steering Committee in April/May 2004, before been submitted to the government for
approval and gazetting. It is expected that by end of June 2004 the legislation will have
been sent to the government for approval.
The delay in finalizing the regulations was due to the need to work on comments from the
World Bank on the initial draft report and the consultations workshops which were
organized involving key stakeholders.
Indicators:
Number of registered and operating Micro Finance Institutions (MFI’s)
Number of MFIs’ clients
PRSC-3 Triggers
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Review of Crop Boards and Regulations
It was agreed during the meeting that the action to be completed by Nov. 2004/prior
actions by March 2005 be changed (Col. 4) to read Implement recommendations of
Crop Boards Review. The decision was made based on the fact that the findings of the
study might recommend actions other than amendment of the Acts establishing the
Boards.
Indicators:
Proportion of improved quality of agricultural exports
Percentage increase in volume of agricultural exports
Relative increase in premium prices of agricultural exports
Land and Village Land Acts
Next Steps:
Preparation of Regulations:
The preparation of regulations after amendment of the Land and Village Acts was
discussed. This would be the next step after the amended acts have been assented in
order for the amended acts to be operationalized. Being a prior Action for PRSC-3 to be
completed by March 2005, a consultant would have to be recruited for this task. Funds
would have to be solicited because there was no budget provision by MLHSD in the
2004/2005 budget
Review of the Land Policy:
The revision of the Land Policy document to incorporate the amendments as a proposed
PAF action was said to be unnecessary because the National Land Policy (1995) is a
national principle governing land ownership use and management that clearly endorses
the principle of land marketability in Tanzania. After the amendment of the Land Act, a
legal and institutional framework for implementation of the Land policy is required thus
no need for revision of the land policy. This benchmark was agreed in principle that it
should be deleted in the Matrix.
.
Preparation of a Corresponding Program to Strengthen the Administrative
Capacity for Implementation of the Land and Village Acts:
Some delays were experienced in the preparation of a Prioritized Strategic Plan for
implementation of the Land and Village Land Acts. An International consultant was
recruited since 2/03/2004 to work with national consultants. The local consultants will be
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recruited for this work effectively by 01/05/2004. An estimated financial requirement of
Tshs 180 millions will be needed for this task in addition to the 147 million already
committed by GOT utilizing EU Funds.
The meeting also agreed on the wording of the PRSC-3 trigger for this task to read:
“Finalized and obtained Government approval of a Prioritized Strategic Plan for
Implementation of the Land and Village Land Act”. However, a detailed capacity
strengthening plan for actual implementation of the entire plan is unlikely to be
completed by November 2004.
Next Steps:
It was agreed during the meeting that, given serious capacity constraints in MLHSD, it
may be unrealistic to expect completion of a Prioritized Capacity Strengthening
Programme for implementation of both the Land and Village Acts by March 2005,
because this activity will involve detailed analysis of core functions of land
administration at national, regional, district and village levels. It will require careful
assessment of skill needs, evaluation of existing capacity and strategic phasing of
recruitment, training and deployment programmes
As an indicative PAF Action for 2005/2006, the wording should be changed to read
initiate Preparation of a Corresponding Programme to Strengthen the
Administrative Capacity for implementation of the Land and Village Acts”.
Indicators:
Number of people using land as collateral for accessing land
Number of women taking loans and using land as collateral
District Roads/Rural Roads
It was agreed during the meeting that options for strengthen institutional arrangement for
district road maintenance and rehabilitation after the Road Act is in place. The change
was as a result of the differing roles of Ministry of Works and PO-RALG. After the
Road Act is in place options for institutional arrangements will be clarified and
modalities for strengthening capacity at district level as well as on indicators for
monitoring performance.
Unified Tax collection system for agricultural exports
On issue of unified taxation, the meeting was informed that the government issued
directives on a 5 % CAP for local government taxation in July 2003 to Local Government
Authorities. In this directive the Local Government Authorities were asked to charge not
more than 5% of taxes listed in the Local Government Finance Act. In order to enforce
this, the Ministry of Finance and PO-RALG would have to monitor implementation of
the directive.
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The meeting however, suggested that the taxes listed in the Local Government Finance
Act should be published in newspapers in order for tax payers to have the right to task the
tax collectors. Further to this, the issue of taxation on export crops will further be
clarified by the findings of the study on the Role and Funding of Crop Boards.
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Report of the Technical Working Group on Improved Poverty Monitoring and
Evaluation
INTRODUCTION
PRBS TWG Three, Improved Poverty Monitoring and Evaluation met for the mid-term
review of the PRBS Performance Assessment Framework. Representatives from
VPO/PED, PO-RALG, Embassy of Finland, JICA, African Development Bank, the
World Bank, the Embassy of Switzerland and DFID were present.
REVIEW OF PAF ACTIONS
PAF Action
Published PRS progress report for FY03, which has been positively reviewed by
stakeholders, including achievements toward quantitative targets by November
2003.
Status: Achieved
Evidence
PRS Progress Report
This action was not fully completed for the Annual Review 2003 but is now achieved.
The final version of the PRS PR 2003 has been issued, including on the Government of
Tanzania website. Drafts of the Progress Report had been issued over December and
January and VPO had received comment. The Progress Report does offer comment
against achievement toward quantative targets. The JSA is under progress. Members
commented that the Progress Report had not identifiably influenced budget allocations
for 04/05 due to its timing. VPO/PED affirmed the intention within the PRS Review to
adopt a revised schedule to better ensure that poverty and PRS monitoring can
demonstrably inform budgetary allocation and policy development. [Link to TWG6 and
note second Action for March 2005]
PAF Prior Action
Progress in strengthening and sustaining capacity of the VPO secretariat to support
and monitor implementation of the PRS according to an updated action plan to be
approved by government
Status: Achieved
Evidence
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VPO’s Medium Term Strategic Plan (MTSP) 2004-2007; Statements in support of
the MTSP by the Ministers of State VPO and the Permanent Secretary VPO; Verbal
reports
The TWG reaffirmed the view of the Annual Review that this action had been achieved.
Since the Annual Review the President’s Office Public Service Management has
approved VPO’s Medium Term Strategic Plan, finalised in February 2004. The Plan sets
out the mandate of the VPO, including PED and focuses on sustaining capacity. VPO’s
MTEF for 2004-7 was developed following the Medium Term Strategic Plan and is
reported to reflect this in budget terms. The MTEF is still in production so members of
the TWG were unable to assess this. A training programme will begin in April for
members of the Poverty Monitoring Secretariat and for members of the PRS Technical
Committee and IT systems have been upgraded. Since December 2003 support from the
UN system has enabled VPO/PED to create and fill three positions to meet its immediate
needs for the period of the PRS Review. It was recognised that while the PRS Review
process may bring some change in terms of the content and structure of the PRS,
VPO/PED will continue to have a coordination role. It was also reported that the Ministry
of Finance has been requested to create a budget line for poverty monitoring within the
development budget for POPP, PO-RALG and VPO. The Annual Review raised the
importance of SASE; members of the TWG recognised that SASE rollout has been
delayed and therefore it is critical that sufficient financing is made available to VPO/PED
for PE costs within the MTEF, to ensure recruitment and retention of skills. It was
agreed that evidence presented also met the Tentative Action relating to VPO set for 2004
and therefore this would be dropped.
PAF Prior Action
Progress in strengthening and sustaining capacity of the coordination and
monitoring unit in PO-RALG for collecting, collating and analysing administrative
data according to an updated action plan to be approved by government
Status:
Evidence
Verbal reports
Members noted the conclusion of the Annual Review, which stated that, ‘The TWG
agreed that the evidence as presented by government in the PAF Status Report appeared
to meet the action as specified’. Efforts to strengthen capacity included: the recruitment
of a senior programmer to lead MIS unit in PO-RALG; two senior staff permanently
assigned to RDS TWG; report by consultant on MIS strategy for PO-RALG was
completed and the strategy is now operational; Database on LGA Social Economic
Profile completed by end-October 2003; Local Area Network installed and domain
registered to facilitate e-communication with Regional Secretariats and LGAs; purchased
11 additional (on top of 8 previous) computers for Regional Secretariats for storing and
managing data. It was also noted that discussion with PO-RALG during the course of the
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Annual Review had been insufficient. PO-RALG’s Medium Term Strategic Plan 2004-7
has been submitted to the President’s Office Public Service Management since the
Annual Review but not yet approved. The MTSP includes the recommendation to
establish a Monitoring Unit, as this does not exist at present. It was also reported that PO-
RALG’s MIS Strategy is operational. It was noted that the Prior Action as agreed was
confusing, as PO-RALG has not had a coordination and monitoring unit to date.
It was agreed that PO-RALG would need to provide the MTSP, the MIS Strategy and a
letter endorsing this by the PS PO-RALG to the PRBS Mid-Term Review in order for the
Review to conclude that this action had been achieved.
Members noted that the importance of strengthening routine and administrative data was
reinforced in the Annual Review by the agreement to Tentative Action for March 2004 as
follows;
Tentative PAF Action for March 2004
The Routine Data Systems Technical Working Group submits a position paper to
the PRS Technical Committee by the end of March 2004, detailing key actions
taken or planned to improve the collection of routine and administrative data in
support of the Poverty Monitoring System. This will require substantial
engagement by Ministries responsible for Health, Education, Water, Agriculture
and Roads. This paper will be presented and reviewed at the mid-term review of
PRBS/PRSC and actions for November 2004 and March 2005 be drawn from
them.
Status: Achieved
Evidence
Strategy for the Rationalisation of Routine Data Systems for Poverty Monitoring:
PO-RALG and VPO
The Position Paper has been produced and submitted to the PRS Technical Committee. It
was shared with TWG members. The Position Paper is currently a working draft and the
RDSTWG plans more substantial engagement at senior levels of line ministries in order
to achieve its aims. TWG members commented that the paper was a good beginning but
that there needed to be greater prioritisation of the paper and a clearer setting out of the
focus of action over the months ahead. This would include identifying benchmarks for
progress, key linkages between existing systems and considering how to fully engage
sectors in this process. It was noted that comments from the PRS TC echoed this general
direction. Members will provide more detailed comment to the RDSTWG on the paper.
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PAF Action
Under PRS Action Plan integrate MDGs into Poverty Monitoring Framework
Status: Achieved
Evidence
PRS Review Guide; PRS Progress Report; Plan for Review of the Poverty
Monitoring System; Verbal reports
The Vice President’s Office is launching a review of the Poverty Monitoring System that
includes a reflection on MDG integration. VPO/PED have presented the paper to the PRS
Technical Committee and the PRS TC has received training on the MDGs. UNDP would
be providing assistance in this area over the course of the PRS Review. The PRS PR 2003
does make comment against MDGs, but without setting these into one table. In addition
the PRS Technical Committee will be preparing the Second MDG Report for Tanzania
this year.
REVIEW OF INDICATIVE ACTIONS AND AMENDMENTS
Members reviewed all tentative actions and considered amendments, set out in Section
Four below. Indicative Actions related to the RDSTWG position Paper and VPO are
reported above and therefore not repeated here.
Tentative Action
Report progress and review performance against all indicators and targets in the
PRS and Schedule Three of the PAF Matrix by November 2004.
It was agreed that the meaning of this was Government should issue a performance report
that directly comments against all poverty monitoring indicators in the preceding year. It
was therefore agreed to delete ‘and Schedule Three of the PAF Matrix’ from this action
to make it clearer.
Tentative Action
Develop and finalise set indicators for policy responses in governance, gender,
agriculture, vulnerability, roads and the environment by November 2004. Explicitly
link set indicators to action plans, which specify the structure, process, timeline and
performance criteria by which data to inform these sets will be gathered
It was noted that this work is planned within the proposed PMS Review and the position
paper from the Routine Data Systems Technical Working Group to feed into the PRS
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Review. Plans for the PMS Review include an independent assessment. VPO/PED
commented indicators would need to reflect outcomes sought in the new PRS. It was
agreed that the plenary session would agree whether the final sentence beginning
‘Explicitly’ would remain as a Tentative Action.
Tentative Action
At a minimum, by November 2004 Government demonstrates improvements from
a baseline of November 2003 in the performance of data collection and analysis of
health and education data to inform the PMS
Members underlined the importance of this area. Whilst the Position paper from the work
of the RDTWG will address this, a strong focus is needed at sector level and strong
support from education and health. It was agreed that establishing a baseline was difficult
but that by November Government should be able to demonstrate what achievements had
been made in improving the systems of data collection in these sectors.
In this regard, members particularly commended work on the Health Information System
by the Ministry of Health and its partners since the last Review and urged that this be
incorporated into the Position Paper and action arising from it. Members noted the
following recommendations as particularly important and suggested that action towards
these be reviewed as part of the Annual Review.
Health Information For Decision-Making: Reconciling Systems And
Approaches
Ministry of Health, February 2004
An effective Health Information System (HIS) should comprise three
core elements: HMIS - Facility based information system; Demographic sentinel
surveillance system - Population-based information at the household level;
Coordinated regular and ad-hoc surveys.
HIS should be structured to contain the above three elements and be able to
deliver quality essential data on time to satisfy a wide range of
stakeholders, initiatives and interventions.
HMIS information system should be redesigned to make it smaller, more
focused and user friendly, taking advantage of the latest information
technology.
In the short-term, Health Information System should be in a position
to access and draw down additional resources from the Poverty Monitoring
System (VPO) to ensure the continuity of quality data for poverty monitoring.
The 12 PORALG health indicators should be harmonised with the 19 key
MOH indicators and the LGME system be modified accordingly.
Long-term financing of the Demographic Sentinel Surveillance System
should be secured from Government sources (VPO, MoH MTEF) and the MoH
basket fund mechanism.
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For Education, it was reported that the EMIS unit has drafted the Education Sector’s
EMIS development plan and the department of policy and planning of MOEC have
approved it as the Ministry’s draft. The document will be circulated in a month for input
from external stakeholders.
Tentative Action
Conduct a review of the PMS, to include reviewing how survey, census or routine
data defines and report indicators, the potential for addressing harmonisation and
rationalisation of data systems and considers the way in which PMS-related
institutions collaborate for most effective working. This review should influence the
expression of the PMS in the revised PRS.
Plans for this are set out in the PMS Review Paper, which has been submitted to the PRS
Technical Committee and shared with members of the TWG. It was reported that the PRS
Technical Committee had suggested amendments to the paper and that it will be
discussed with a broader range of stakeholders in the coming weeks. It was agreed to
revise this action to better reflect progress made.
SUGGESTED AMENDMENTS TO PAF MATRIX
Tentative Action set November 2003 Tentative Action proposed April 2004
Report progress and review performance against all Report progress and review performance against
indicators and targets in the PRS and Schedule all indicators and targets in the PRS by November
Three of the PAF Matrix by November 2004. 2004.
Develop and finalise set indicators for policy
responses in governance, gender, agriculture, Develop and finalise set indicators for policy
vulnerability, roads and the environment by responses in governance, gender, agriculture,
November 2004. Explicitly link set indicators to vulnerability, roads and the environment by
action plans, which specify the structure, process, November 2004.
timeline and performance criteria by which data to
inform these sets will be gathered
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The Routine Data Systems Technical Working By November 2004 Government demonstrates
Group submits a position paper to the PRS improvements at sectoral and coordination level in
Technical Committee by the end of March 2004, the performance of and planning for, routine and
detailing key actions taken or planned to improve administrative data collection and analysis of that
the collection of routine and administrative data in to inform the PMS.
support of the Poverty Monitoring System. This
will require substantial engagement by Ministries
responsible for Health, Education, Water,
Agriculture and Roads. This paper will be
presented and reviewed at the mid-term review of
PRBS/PRSC and actions for November 2004 and
March 2005 be drawn from them.
At a minimum, by November 2004 Government
demonstrates improvements from a baseline of [merged]
November 2003 in the performance of data
collection and analysis of health and education data
to inform the PMS
Conduct a review of the PMS, to include reviewing The PMS Review includes assessment and
how survey, census or routine data defines and recommendations for how survey, census or
report indicators, the potential for addressing routine data define and report indicators,
harmonisation and rationalisation of data systems achieving harmonisation and rationalisation of
and considers the way in which PMS-related data systems, stronger linkage with budgetary
institutions collaborate for most effective working. processes and improving the manner in which the
This review should influence the expression of the institutions of the PMS collaborate.
PMS in the revised PRS.
Finalise the Strategic Plan for VPO and approve the [Deleted as largely achieved]
structure for VPO/PED by November 2004 with
staffing and financing to meet planned
requirements anticipated in FY2004/5 budget.
REVIEW OF OTHER POINTS ARISING FROM THE TEXT OF THE ANNUAL
REVIEW FOR TWG3
Members briefly reviewed key recommendations made in the text of the Annual Review.
It was noted that a number of recommendations that had implications for development
partners had not been addressed.
These included, PRBS/PRSC donors to clarify expectations on progress against PRS
targets and links with budgetary positions, the World Bank to clarify the process of JSA
review, development partners to better define positions on performance reporting,
development partners to consider alignment of PRSC/PRBS processes with GoTz cycles
and development partners to communicate their expectations of the new PRS to
government. It was agreed that these would be raised in the plenary sessions.
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Report of the Technical Working Group Meeting on Macroeconomic Stability -
Debt Management
ATTENDANCE:
Mr Kamugisha Chair; Commissioner, Policy Analysis Department
Mr Madata Assistant Commissioner, PAD; Head of Debt Section
Mr Missana Economist, Debt Section, PAD
Mr Mlay Economist, Debt Section, PAD
Elsie Kanza Economist, Debt Section, PAD
Nuru A Ndile PAD, MoF
Susan Kabogo AccGen’s Department, MoF
Abbas Berya Bank of Tanzania
Martin Saladin SDC, PRBS representative
Monica Rubiolo Seco (Switzerland), PRBS representative
Adolf Evarist SDC, PRBS representative
Takashi Okuyama JICA, PRBS representative on debt management
Jackson Biswaro JICA, PRBS representative on debt management
Robert Utz World Bank, PRSC representative on debt management
Nitti Somaiya CIDA, PRBS lead donor on debt management
AGENDA
1. Assessment of progress against Nov 04 PAF actions
2. Update on progress more generally
3. Inclusion of quantitative indicators
1. Assessment of progress against Nov 04 actions
Developed a comprehensive workplan for PAD’s Debt Department (inclusive of medium
term objectives, more specific annual and sub annual activities, timeframe and
responsibilities) incorporative of NDS recommendations
While such a workplan has not yet been developed, PAD intentions are to host a
dedicated workshop (in May, perhaps) to agree on a medium term strategy for debt
management across GoT institutions. It is intended that key external stakeholders will be
invited to participate in the workshop, including MEFMI, DRI and interested
development partners. It was noted that from GoT’s side, engagement from AccGen’s
Department, Treasury Registrar and BoT will be necessary.
A position paper on debt is desirable as part of the preparatory work for the workshop;
given MEFMI’s role as close external observers of developments in issues of debt
management and sustainability, it is hoped that they would be able to play a role in
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preparing such a position paper. Discussions with MEFMI on their potential involvement
in, and views on, the proposed process are scheduled.
Systematic improvements in coordination between all departments generating and
hosting debt data (ACGEN; BoT External Debt Dept., International Economics Dept,
Foreign Markets Dept; National Bureau of Statistics; MoF Policy Analysis; Planning
Commission; Treasury Registrar and PSRC), led by Debt Section PAD, resulting in a
reconciled and synchronised debt data management system. Institutional arrangements
between relevant departments to be clarified such that there is a clear division of roles in
data management and data sourcing.
While there has been some movement on improving coordination and reconciliation
between BoT’s debt database and AccGen’s (eg monthly back-ups made by AccGen of
BoT’s data), it was noted that there clearly needs to be further synchronisation of
reporting formats and intra- and inter-institutional coordination before a single, unified
debt data management system can be developed to serve all requirements.
The delineation and rationalisation of roles by institution and department on debt data
needs to be looked into further and steering this agenda is a potential role for PAD’s debt
department to assume, although capacity to effectively lead on this area remains a serious
constraint. As noted during the Annual Review, this is a key action; reliable and
consistent data on debt forms a key input into effective macro/fiscal planning, analysis on
debt sustainability and resultant policies affecting debt.
National Debt Management Committee is fully operational and meeting quarterly to
advise the Minister of Finance on all proposals for new credit and monitor
implementation of the National Debt Strategy.
It was reported that the NDMC is now operational, and is due to hold its second meeting
this week. Pursuant to the endorsement of the amended Loans, Guarantees and Grants
Act, it is believed that all new credit proposals now pass through the Ministry of Finance.
While it is intended that all credit requests should be channeled through the NDMC for
scrutiny, use of parallel loan-assessing processes does occur at present in some instances
(including for loans offered by the World Bank and ADB), while the NDMC becomes
fully established in its role. It was noted that the IMF also monitors the debt sustainability
situation closely, including through the establishment of (foreign) borrowing ceilings.
The NDMC is shortly due to develop, adopt and publicise criteria by which all loan
requests are to be assessed. These might include: the projected return on the investment
(productivity of the loan); cost of the loan (does it fit within NDS-recommended 50%
grant element level of concessionality?); adherence with pre-determined borrowing
ceilings and debt sustainability targets.
Circulars distributed to all MDAs describing in clear language the changes in debt
contracting and management enacted in the Loans, Guarantees and Grants (Amended)
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Act including correct debt contracting procedures and punitive actions for flouters of the
legislation.
The issuance of such circulars is due to be discussed at the NDMC meeting this week,
and is on target for dissemination by November. Inclusion of criteria to be adopted by
NDMC in assessing loan proposals is anticipated. Awareness of the stipulations of the
amended L,G,G Act is expected to be enhanced following this publicity drive, which will
further reinforce the role of the NDMC.
2. Progress beyond PAF benchmarks
Progress in furthering external debt negotiations. PC creditors – negotiations
finalised with Japan; only Brazil remains pending from the PC group. Non-PC
creditors – agreement reached with Bulgaria; presently negotiating with Iran.
Quarterly Debt Reports: noted that those on the national website are almost two
years outdated. More recent reports have been produced, but posting these on the
national website remains problematic (coordination difficulties with those who
manage the site); the development of a MoF-specific website should facilitate
more regular public postings.
DSA: BoT is due to review the analysis and data of the draft DSA of October
2003 such that domestic and external debt sustainability analyses are
disaggregated (at present they are combined) in order that a comparison with the
HIPC DSA projections can be made (which models only external debt). Noted
that the IMF is due to prepare a revised DSA by May 2004.
Capacity within MoF continues to be a limiting factor (caused largely by
insufficient HR on debt; periods when negotiations with foreign creditors occur
leaves staffing very thin; insufficient HR for detailed analysis).
3. Inclusion of quantitative indicators
Given the wider PRBS/SC preference for inclusion of quantitative indicators to
supplement the process-oriented PAF benchmarks, the TWG agreed to include the
following monitoring indicators in the PAF matrix:
1) Net present value of public external debt to exports (as an indicator of
sustainability; information source: DSA)
2) Ratio between actual and budgeted:
a. Debt service (domestic and foreign)
b. Gross borrowing (domestic and foreign)
Information source: Quarterly Debt Reports for actuals; Public Debt Statement
(part of annual budget speech) for an articulation of intended/budgeted debt
service and gross borrowing (available from June 2003 onwards).
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Minutes of the Technical Working Group Meeting on Macroeconomic Stability –
Tax Policy and Administration
Attendance
Mr. Mughisha Kamugisha, Commissioner for Policy Analysis Department, MOF
Mr. Shallanda, Deputy Commissioner, PAD/MOF
Peter Mwawakatwe, Afircan Development Bank
Ms. Peninah Kariuki, African Development Bank
Ms. Monica SECO – Switzerland
Mr. Martin Saladin SECO/SDC
Adolf Evarist SDC
Mr. Robert Utz World Bank
Mr. John Piper DFID
Jytte Laursen Danish Embassy
________________________________________________________________________
Agenda:
(1) Review of Outstanding Issues from Annual Review Nov/Dec 2003
(2) Status of Progress: Actions for Nov. 2004/March 2005
(1) Outstanding Issues from Annual Review
There was one outstanding issue from the Annual Review: Developing a unified tax
collection system for agricultural exports
The responsibility for this action – between MAFS and MOF – was unclear. The
discussion revealed that the background for this action was directly related to the
actions reviewing the role of crop boards. If the role of crop boards is limited in the
future to only serve a regulatory function, these boards need to be funded from the
national budget.
It was agreed that: (i) Crop boards would prepare proposals for funding through the
national budget, once their role is limited to regulatory functions; and (ii) Taxation of
agricultural exports will be eliminated.
This action will be followed up in the future in connection with implementation of the
action concerning crop boards under rural development – thus removing the follow-
up from the macro section of the PAF.
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(2) Status of Progress: Actions for Nov. 2004/March 2005
Medium term outcome
(i) Submission to Parliament of amendment of tax laws including clear
provisions for tax exemptions completed
The review of tax laws is currently ongoing in TRA, with the assistance of
consultants from PWC. The consultants are charged with producing
recommendations for actual amendments of the tax laws. TRA is reviewing
proposals for some of the amendments at the moment; regarding amendments
to the Customs Act, work has not yet started.
MOF expressed concern of whether submission to Parliament in November
would still be realistic. The lessons from the Income Tax Act showed that
consultations on tax laws could be a lengthy process – and that substantial and
extensive consultations were important.
The process is the following: TRA prepares proposals for amendments and
submits to MOF; MOF conducts consultations (possibly through the Tax Task
Force); after consultations, a position paper is submitted to Cabinet; after
Cabinet approval, the amendments are submitted to Parliament. Members
expressed concern about the risk for further slippages. The view of MOF was
that the most likely and appropriate time for submission of amendments to tax
laws would be the June 2005 session, in connection with the Finance Bill
2005.
It was agreed that action should be reworded to the following: TRA submits
proposals for amendments of tax laws including clear provisions for tax
exemptions to Ministry of Finance and MOF conducts consultations.
The mission would follow-up with TRA to ascertain a realistic timetable for
submission the proposed amendments to Ministry of Finance. This has not yet
been possible.
(ii) Publish revised regulations for customs under EPZ Act
Work is currently on-going: a task force under Ministry of Industries and
Trade (MIT) has been established to propose streamlining of the EPZ law; the
National Development Corporation (NDC) is looking into this as well.
Recommendations from the task force are expected within the next 2 months,
after which amendments to the regulations would be drafted.
It was agreed that achieving the action in November 2004 was realistic.
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(iii) Progress in implementation of TRA corporate plan
Some discussion was held concerning the oversight function that MOF plays
over TRA. It was clear that MOF had not yet started using the framework
developed under the new corporate plan for reviewing TRA performance;
rather, MOF followed up on monthly collection targets and issues of
efficiency as they came up (e.g. the ongoing issue of the efficiency of VAT
refunds).
It was further discussed that this action – as formulated now – was very
difficult to monitor. Mention was given of the 8 key core performance
indicators used to monitor progress by TRA and the donors assisting TRA
through the Tax Administration Project. The key core performance indicators
would be submitted to all interested members of PRBS/PRSC.
It was agreed that the action would be reworded as follows: satisfactory
progress in implementation of TRA corporate plan, as evidenced by
achievements of targets for the 8 key core performance indicators used by the
Tax Administration Project. Evidence for this would be the reports on TAP
implementation.
(iv) Review local government revenues
It was noted that a review of local government revenues had been agreed
under the PER and with assistance from the World Bank PHRD grant for
PRSC2. Terms of Reference have been agreed and invitations for submission
of proposals has been sent to a short list of 6 consultants. The deadline for
submission of proposals is April 15.
Some concern was raised whether the PHRD grant could still be used for this
review, as it would not be completed prior to expected PRSC2 release of
funds. It was suggested that – in case of difficulties using the PHRD grant –
MOF seek assistance for this review from the PER Basket Fund.
It was agreed that submission of the report reviewing local government
revenues by November was a realistic target.
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Report of the Technical Working Group on Budget Formulation and Execution
The 2004 Mid-Year Review technical discussion on budget was held in the continuation
of several recent meetings between Ministry of Finance and the donor community, on the
Supplementary budget adopted by Parliament in its session of February 2004, on the
Budget Guidelines 2004/05 (PER Macro group meeting February 2004), and in the
context of the March IMF mission and of the PER External Evaluation.
A review of the actions for March 2004 has been conducted, and some changes to the
actions to be met in March 2005 have been agreed, including the introduction of three
results indicators.
4.1. Budget Formulation
Summary of progress
Approved budget 2003/4 in line with PRS objectives, delineating budget codes for
priority sectors and items.
See PRBS/PRSC Budget Review October 2003 and Annual Review November 2003. As
discussed then, a first range of reallocations in favour of priority sectors have been
processed. Roads and health envelopes have been increased by TZS 40bl, and the
allocation to energy was decreased by the same amount, as the initial estimates on
Foreign Development Expenditures have been adjusted. After the adjustment mentioned
above, the relative share of priority sectors in the budget above therefore has remained
constant year on year at 46%, and the total allocations to priority sectors have increased
by 25.6% (18% in the initial budget).
Budget Guidelines for 2004/05-2006/07 consistent with PRS priorities, resource
needs identified during PRS review process and sector performance. Guidelines
issued to MDAs/LGAs (action for March 2004)
Envisaged allocations to PRS priority sector remain broadly similar year on year 2.
However an unallocated amount of TZS 207 bl has been classified under Vote 50
(Ministry of Finance)3. This amount will be allocated as the budget process is taken
forward. This amount had to be relatively higher than in previous years because of the
costs entailed by the organisation of the general elections of 2005, which could not be
detailed in the Budget Guidelines. Apart from the elections, there are indications that
around 20bl would be allocated to transfers to LGAs in relation with the new grant
formulas for health and education. Around 84.5bl would be used to increase the Treasury
voucher system (from 31bl in FY 04 to possibly 115.5bl in FY 05), which would reflect
2
Taking into account 4% increase across the board for salaries and wages, and 23bl in favour of PRS
priority sectors as additional resources to local authorities (to Councils).
3
Other unallocated amounts in the budget guidelines are : 47 bl on salaries and wages (difference between
the aggregates and the sum of the allocated ceilings) + 21 bl (increase in OC for Vote 50 without
allocation), which increases the total unallocated to 279 bl.
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the impact of the new tax exemption regime on projects. Nevertheless the volume of the
unallocated amount does not allow, at the time of the Mid Year Review, to fully assess
the consistency of the Budget Guidelines with the PRS priorities. Development partners
expressed concerns about this situation and they wished that this amount would be
reduced substantially by the adoption of the budget.
Because of its delayed production, the 3rd PRS Progress Report could not be taken into
account for the Budget Guidelines, as was pointed at during the 2003 Annual Review.
Furthermore the budgetary information presented in the progress report does not appear
detailed enough to be a useful input for the Budget Guidelines. The usefulness of the PER
reviews for the Budget Guidelines is also limited due to the late production of a number
of reports. Improving the consistency between the PRS, PER and budget processes is
key. The PER External Evaluation should lead to recommendations in May to be taken
forward jointly.
Finally, inaccuracies in foreign aid inflows have made the MTEF quite unreliable for FY
05, 06 and 07. This seems to testify of difficulties in assessing outputs of the ERMIS
database.
All LGA 2003 Budgets prepared using GFS classification.
See PRBS/PRSC Annual Review 2003.
Cabinet paper on formula-based recurrent inter-government transfer system adopted
and institutional arrangements in place.
The Cabinet paper was approved. Institutional arrangements relate mainly to health and
education, and will cover basket funds. As mentioned above, around 20bl would be
allocated to transfers to LGAs in relation with the new grant formulas for health and
education.
Actions for March 2005
First, in the context of the overall attempt to make the PAF matrix more results oriented,
it is agreed to introduce an indicator of the share of priority sectors within the entire
budget. The indicator reads : share of PRS priority sector spending in total spending and
refers to the share of PRS priority sectors in the total budget.
Second, the state of play mentioned above on the Budget Guidelines is an indication of
the need to turn them into a more strategic document as discussed in the context of the
PER External Evaluation. It is therefore agreed to modify the formulation of the second
action for March 2005 as follows :
Budget Guidelines for 2005/06-2007/08 consistent with PRS priorities, and explicitly
taking into account recommendations of PRS review process, sector reviews, PER
sector reports, and the PER External Evaluation 2003/04 (action for March 2005).
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4.2 Budget execution
Summary of progress
Budget execution for 2002/03 and 2003/04 (FQ1 and FQ 2), in line with the approved
budget and with PRS priorities, consistently reported as per identified expenditure
budget codes for priority sectors and in 2003/04 also by identified codes for priority
items.
The reports on the execution of the first two quarters of the financial year have been
made public. Detailed information is provided especially on revenue collection and on
execution of the priority sectors and priority items. It was noted that disaggregated
information on non PRS priorities is not detailed in the Budget Execution Reports, but is
available in the monthly ‘expenditure flash reports’.
During the first half of the financial year, reported execution was in line with the
approved budget and PRS priorities, as priority sectors have continued to receive their
full quarterly allocations. The overall execution of Other Charges expenditure in the
priority sectors has made substantial progress compared to the rate of progress made for
the corresponding period in FY 03. Expenditure in Quarter 2 was almost on target (after
75% achievement in Quarter 1). This is a positive development that could indicate that
procurement planning and implementation are improving.
From this year, PRS priority sector expenditure is included with full details, at item level,
according to GFS codes (in annexes E, F, G and H of the execution report). This change
of format greatly improves the usefulness of the execution report as a monitoring tool in
relation to PRS implementation for the development partners and the Tanzanian society
at large. New expenditure items in some sectors, such as the health insurance fund in the
health sector, were discussed. It was agreed that there is a need to explicitly show any
such changes in classification of the reports in order to allow analysis over time.
It was also agreed to check the consistency of the analysis of Personal Emoluments in the
various budgetary documents. PEs should include Basic Salaries - Pensionable, Basic
Salaries - Non Pensionable, Contributions to Pension & Welfare, as agreed at the 2003
PRBS/PRSC Budget Review.
Information was shared by Ministry of Finance on the Supplementary Budget as
approved by Parliament in February 2004. It provides for an overall increase in
expenditure by 140.7bl, of which 87.2bl is funded from new resources, 53.5bl from
reallocation of amortization payments. An amount of 36bl has also been reallocated
within the approved budget.
There was a net increase in Other Charges expenditure to priority sectors by 8.6 bl, which
includes :
- net increase in Other Charges allocation to agriculture sector for 18.6bl : mainly due to
the replenishment of the Strategic Grain Reserve.
- net decrease in Other Charges allocations to other priority sectors, by 9.9bl : health,
with a decrease by 3.7bl, and education, by 1.8bl, originate more than half of the savings.
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The items affected by these savings have been selected in consultation with sector
ministries and Ministry of Finance has ensured that only expenditures such as lower
priority per diems, travel allowances, training, seminars etc. were affected. It was agreed
to jointly monitor the implementation of the Supplementary Budget in PRS priority
sectors.
As far as non priority sectors are concerned, the Supplementary budget will allow for
supplementary funding of Tanesco by 41bl, the rest being used to cater for the Permanent
Voters Register, the new Government aircraft, contributions to LGAs resources to
compensate for shortfall of local tax revenues, additional pension costs, replenishment of
contingencies (see table 1 below). Other non priority sectors are partly affected by cuts
along the approach described above for priority sectors. The details of cuts were being
finalised by the Ministry of Finance at the time of the Mid Year Review.
Overall the relative share of priority sectors in the entire budget was 45.9% account taken
of PE adjustments according to the Joint Note on Budget Review 20034, which was in
line with past years’ levels. With the Supplementary Budget the share of priority sectors
drops to 45%5. This Supplementary Budget was prepared in the context of the drought
and the energy crisis in Tanzania, and part of it – for an amount of 63.6 bl6 out of total
supplementary expenditures of 176.8 bl - are directly and appropriately related to these
emergencies. In addition, 2.4 bl for education is allocated to the PRS priority sectors. Out
of non PRS priority expenditure, another 14.3 bl for the permanent voters registry is
related to governance and the compensation to LGAs reflects Government’s commitment
to promoting a good business environment.
Table 1 - Supplementary budget of February 2004 (OC + PE)
Amount in TZS Supplementary Amount in TZS
Supplementary resources billions expenditures billions
Suppl. resources 87.3 Replenishment of SGR 20
Transportation of
Reallocation of imported food for
amortization 53.5 drought 2.3
Enrolment of additional
students to secondary
Expenditure cuts 36 school 2.4
TANESCO liquidity 41.3
Compensation to LGAs 18.9
Permanent Voters
Registry 14.3
Additional pension costs 18
Government aircraft 40
Contingencies 19.6
Total 176.8 Total 176.8
4
November 2003, see pages 6 and 7 : 43.1% + 2.8%.
5
[(Total priority sectors acc. to Budget Review 2003) + (Additional for priority sectors in Suppl. Budget) –
(Subtracted from priority sectors in Suppl. Budget)] / (Total initial budget + suppl. resources from Suppl.
Budget) = (1,198 + 24.7-9.9) / 2,694.5 = 45%
6
SGR & transportation + Tanesco subsidy : 22.3 + 41.3 = 63.6 bl
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Expenditure tracking study completed
The study is underway and should be produced by May. It will be a model study which
approach and methodology can be replicated in other sectors. Ministry of Finance
confirmed the strategic importance he intends to give to expenditure tracking studies in
the future, especially through the Technical Audit Unit.
Agreed new format for LGA budget execution reports by MoF and PO-RALG (by
June 03). LGAs quarterly budget execution for Q3 submitted to PO-RALG and
consolidated information submitted to MoF in agreed format.
See 2003 Annual Review.
Actions for March 2005
Also in view of a more results oriented matrix, it is agreed to consider an indicator of
budget deviation which will read: share of votes with budget deviations greater than 5
percent. This indicator will allow assessing progress on the reliability of the budget as a
financial programming instrument.
The action introduced during the 2003 Annual Review on reconciliation of figures of
direct foreign assistance is combined with the corresponding action under section 5.3.
Ministry of Finance intends to take measures to ensure that MDAs will provide
information on donor inflows as requested.
It was also agreed to consider introducing a global result indicator on the budget process
and execution based on HIPC monitoring: ‘expenditure tracking benchmarks met (out of
15)’. This indicator relates to the overall quality of the budget execution, with the
following list of benchmarks :
- Budget reporting follows GFS definition of consolidated general government
- Government activities are not funded through extra-budgetary sources to a significant degree.
- Budget outturn data (levels, functional allocation) are quite close to that of the original budget.
- Budget includes capital and current expenditure financed by donors.
- Budget classified on an administrative, economic, functional basis.
- Poverty-related expenditure clearly identified in the budget.
- Poverty-related expenditure clearly identified in the budget.
- Multi-year expenditure projections integrated into the budget cycle.
- Small stock of expenditure arrears; little accumulation of new arrears over past year.
- Internal audit is active.
- Tracking surveys supplement internal control.
- Fiscal and banking reconciliation undertaken routinely.
- Internal budget reports from line ministries/Treasury received within four weeks of the end of the relevant
period.
- Functional classification is reflected in the in-year budget reports.
- Closure of the accounts occurs within two months after the end of the fiscal year.
- Audited account presented to the legislature within 12 months of the end of the fiscal year.
According to the PER external evaluation 2003, Tanzania was meeting 8 benchmarks out
of 15 on FY 02, and 9 in FY 03.
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Report of the Technical Working Group Meeting on Public Service Management
1.0 IN ATTENDANCE
1. Mr. G. D. Yambesi - Director of Policy Development – PO-
PSM - Chairman
2. Mrs. S. A. Mkony - PAA – PSRP – PO-PSM
3. Prof. Gelase Mutahaba - CTA – PSRP – PO – PSM
gmutahaba@hotmail-com
galasemutahaba@yahoo.co.uk
4. Mr. S. Swai - Assistant Director – PO – PSM
5. Mr. D. Biseko - Public Sector Specialist – World Band
(dbiseko@worldbank.org)
6. Ms. M. Ruboko - SECO Switzerland
7. Mr. E. Adolf - SDC – Switzerland
8. Mr. M. Saladin - SDC – Switzerland
martin-saladin@sdc.net
9. Mr. Eric Jonsson - SIDA – Sweden
erik.jonsson@sida.se
10. Mr. Dan Kobb - M & E Consultant – PO – PSM
11. Ms. Annabel Gerry - DFID
a-gerry@dfid.gov.uk
12. Ms. Denyse Morin - World Bank
13. Mrs. F. E. Meena - PO – PSM - Secretary
2.0 OPENING OF THE MEETING
The Chairperson opened the meeting at 10.00 a.m. by welcoming all members.
3.0 AGENDA OF THE MEETING
The Agenda of the meeting was to discuss the implementation status of the
Performance Assessment Framework for PRBS/PRSC pertaining to section 4.3 –
Improved Performance of the Public Sector.
4.0 IMPLEMENTATION STATUS
4.1 Approved updated annual plans performance budget for eleven (11)
MDAs taking to account results of service delivery surveys (SDSs).
Performance Analysis Framework (PAF) Action:
It was reported that:
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(i) 18 strategic plans are already approved out of 34 (5 for
economic 5 for social ministries and 8 for Independent
Departments - IDs).
(ii) 5 reports in final draft form for IDs, 5 Medium Term Strategic
Plans for lead ministries in Draft. Activity is 75% completed.
(iii) 13 annual operating plans approved and 21 in draft (awaiting
approval). Activity is 80% completed. These annual operating
plans are presently being discussed with MOF. This linkage
with MOF is a positive development and will strengthen the
credibility of the instrument being a credible one for allocation
of resources.
(iv) 10 Ministries and 8 Independent Department Staff trained in
OPRAS. This activity 50% has been covered.
4.2 Service Delivery Surveys
Performance Analysis Framework (PAF) Action:
It was reported that all Service Delivery Surveys (SDS) instruments for 34
MDs were completed. Though the activity is 100% completed, the
Committee noted the following weaknesses: -
While external clients were adequately covered in the survey internal
clients (i.e. employees) were not necessarly taken into account:
(i) The criteria for the selection of the sample clients were at times
not clear.
(ii) There was need for clear identification of types of customers
based on the particular customer type.
(iii) There is also a case of some MDAs being less amenable to
SDS, eg, State House and others. Lack of clarity over which
services – PRS services (eg policies or performance
management systems) or sharp and service delivery (e.g,
primary education or hospital services); and location –
unspecified as to whether urban, rural, hospital, LDA etc
The TWG concludes that some more thinking need to be given
to the use of SDSs, the scope, who they fit in with the overall
poverty monitoring framework of government. It was agreed
that for now:
PO-PSM completes the analysis of the survey results and
disseminates findings to the public prior to deciding how to
assess client satisfaction in the future. It was agreed that the
indicative PAF action for November 2004 be changed to read:
SDSs completed for the remaining MDAs with results of SDSs
disseminated to the public.
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This will partly be covered by the planned annual report on the
State of the Public Service. However, it should also involve
additional steps such as public consultation.
4.3 Performance Monitoring and Evaluation
Performance Analysis Framework (PAF) Action:
Performance monitoring system is expected to be rolled out and
functioning in all MDAs by November 2004. Currently the
implementation is as follows.
(i) M & E rolled out in 19 MDAs;
(ii) M & E installed and functional in 3 IDs and 1 ministry
(TACAIDS, Ethics, Electoral Commission and PO – PSM);
(iii) 19 MDs users trained;
(iv) 14 MDs Manager trained in awareness on M& E system has
been done;
(v) 8 Consultants requested our inspection on data base
installation;
(vi) 4 already inspected; and
(vii) 4 on waiting list.
(viii) In almost all cases the Performance Management System
(PMS) is located in Planning Departments, otherwise it is in the
Departments of Administration and Personnel (DAP) – the
decision on where to locate the PMS was taken on a case-by-
case basis after a review of which part of the MDA concerned
was most likely to run and use the system properly.
The TWG is satisfied that the process is well under way and that the
measures are being taken to ensure that the installation of M&E is
understood and own by MDAs.
4.4 Pay enhancement:
Performance Analysis Framework (PAF) Action:
It was reported that Cabinet approved the Medium Term Pay Policy. In
approving it, it requested for more clarification on Selected Accelerated
Salary Enhancement (SASE). Cabinet considered the SASE issue in
January 2004 and decided that four ministries i.e. Health, Finance, PO–
PSM and PO- POP should continue being paid SASE. PO-PSM was
asked to explore other options to enhance salaries in the remaining MDs.
Work has not yet started in PO- PSM but it was agreed that it should be a
priority.
The TWG continues to express concern about the pace of implementation
of the pay reform strategy and believes that a solution needs to be found to
accelerate pay reform in order for MDAs to truly believe that the
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installation of a strategic process is linked to a system that will reward
performance. Therefore, the TWG requests that high priority continue to
be given to pay enhancement.
5.0 AMENDMENT TO PUBLIC SERVICE ACT NO. 2 (2002):
Performance Analysis Framework (PAF) Action:
Study of results and action plans indicating how the harmonisation of the Public
Service Act and the Local Government Service Act and regulation will take place
are available.
It was reported that PO – PSM has prepared 1st draft of Terms of Reference to
commission a study to review the two Acts with a view to ensure consistency.
These TORs will be agreed to by both PO-RALG and PO-PSM. The TWG
recommends contracting the services of independent team of consultants to
include a HR, Legal and Public Policy/decentralisation expertise to carry out this
work. This has been of concern to the group that this issue still remains to be
addressed.
6.0 MINISTRY OF FINANCE ORGANISATION STRUCTURE
Performance Analysis Framework (PAF) Action:
Revised MOF organisation structure reflecting legislative and technological/
systems changes, in accordance with the Public Finance Act, submitted to the
President’s Office -Public Service Management.
After the meeting, the findings gathered by PO-PSM is that, MOF has not
submitted its organisational structure for analysis and review by PO-PSM.
It was agreed that it would be key to change the PAF action for November 2004
to read as follows:
Public Sector Management Working Group (PSMWG) established and
functioning.
This will be the body responsible for ensuring linkages between PFMRP and
PSRP (as well as LGRP) at the operational level.
7.0 Indicative PAF Actions to be completed by November 2004 prior action by
March 2005.
These are as indicated in the matrix.
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Report of the Technical Working Group on Public Financial Management
A. Progress on implementation of prior actions 2003/04
1. Implementation of the Public Financial Management Reform Programme.
A key issue here concerns progress in implementation of the Public Financial
Management Reform Programme. The main assessment continues to be that of the
November 2003 Annual Review, that there has been slow progress in the establishment
of the new PFMRP programme.
Positive progress should be noted in the implementation in some areas, where there are
projects already in place. However, while this does improve outputs in those areas of
work, it should be noted that this does not result in coordinated nor sequenced progress
and does not address some components which are key for reducing the fiduciary risk of
budget support. For these requirements of budgetary support to be met it is essential
that a coherent programme for public financial management commences implementation.
As noted in the Annual Review report, key inputs required from the Ministry of Finance
in order to launch the first phase of the programme by March 2004 are:
o Present to the development partners a programme of work including a budget for
the required external TA for the first phase of the programme. The Joint Steering
Committee should meet and review the proposal and act on it quickly.
o Present to development partners the management structure of the programme
including the organisation of the IT component.
o Appoint a programme manager and establish a secretariat for the programme. The
need for a CTA would also be considered.
o Review and respond to the appraisal checklist that the development partners
require in their funding proposals.
There has been progress in establishing the framework of the IT component and the
management structure has become clearer. However, the management structure still
remains to be outlined in detail, in as much as a decision has been taken on who will fill
the role of the Programme Manager, and that they will be supported by a Programme
Coordinator. Despite this progress, overall the inputs required from MoF by March 2004
to start the first phase of the programme have not been achieved.
As noted in the Annual Review, it is expected that the imminent recruitment of the
Programme Coordinator will help to move these areas forward and will work closely
under the leadership of the Programme Manager to achieve a focussed work programme
for the first year, to enable the programme to commence and to allow the secretariat to
start functioning
Therefore, the first step towards the implementation of the programme would be to
recruit a Programme Coordinator. The following immediate actions are required:
MOF needs to confirm the availability of the Programme Coordinator candidate in
order to determine if there is an additional need for an interim short term
consultancy.
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MOF needs to submit the funding requirements for (1) the Programme
Coordinator and (2) the Secretariat (explicitly indicating the proportion of staff to
be drawn from within and outside the Ministry).
Development Partners need to confirm to MOF that funding for the above needs is
available until the Basket is established.
Subsequent steps required to move towards the implementation of the programme are:
Detailed outline of the management structure. This could be achieved by MOF
submitting an updated PFMRP programme document reflecting the management
structure.
Establishment of the Secretariat. This would involve the recruitment of staff
(explicitly indicating the proportion of staff to be drawn from within and outside
the Ministry).
Development of a more focussed phase one programme. The revised programme
document should reflect the reduced TA activities as well as coordinated and
sequenced programme activities, outputs and outcomes over time.
Establishment of basket-funding modalities, which includes (1) a Memorandum
of Understanding and (2) an Operations Manual (covering the Institutional
arrangements, Reporting arrangements, Financial Management & Procurement
arrangements, and Monitoring & Evaluation).
Once the above have been fulfilled it should be followed by a meeting of the Steering
Committee who will finally assess the programme.
1. Submission of Procurement Bill to the Parliament reflecting the CPAR
recommendations
It was agreed, during the November 2003 Annual Review that the Government would
have submitted the amended Procurement Bill, reflecting the CPAR recommendations to
the Parliament during January/February 2004 session. This prior action has not been
accomplished; main reason being inadequate capacity of the Central Tender Board (CTB)
to spearhead the required changes. A new target date is now June 2004 as per IMF
condition under Poverty Reduction and Growth Facility (PRGF).
In an effort to alleviate the capacity problem, which is a reflection of the Government
commitment towards achieving this prior action, the following has been achieved:
CTB has received 3 more staff to reinforce its capacity.
New Central Tender Board has been constituted in line with the existing Act, and
started its operations in January 2004. With the Board being operational, CTB
will be in a position to make fast decisions. The Executive Secretary was
appointed in August 2003.
As an interim measure, CTB has proposed an increase of prior review thresholds
for procuring entities. Revised thresholds will be presented to the Minister for
Finance by April 2004. Reducing the number of contracts to be awarded by CTB,
will significantly reduce the work load of CTB and thus increase capacity to focus
on procurement reforms.
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A. Progress on implementation of other PAF actions for 2003/04 and 2004/05
While most of the PAF actions are on track, the following ones still raise concerns or
poses challenges:
The implementation of payroll control procedures will probably be slightly
delayed.
A revised MOF organisational structure (reflecting legislative and
technological/systems changes in accordance with the Public Finance Act) should
be submitted to the President's Office. There seems to be resistance to make these
changes in the MOF. Also it appears to be a lengthy process and may cause
delays.
Existing legislation on retention schemes to allow certain institutions to legally
retain internally generated funds needs to be reviewed. As far as we are aware
amendments to the relevant Acts for non-tax revenue have not been made. The
accounting omission of this revenue and the related expenditure results in the
underestimation of the costs of service delivery and its financing and therefore
reduces accountability.
While the Internal Audit (IA) functions in MDAs will not be established by
November 2004 it is proposed that the current PAF action be replaced by the
following achievable action: “Training provided to all IA staff by November
2004 and the new proposed IA structures agreed with CSD by March 2005.”
While a computerisation strategy for the NAO will probably be developed by
November 2004, the procurement and installation of computer equipment and
software will only be partially implemented and phased in over a period of 3 years
with funding from SIDA. As a consequence, IFMS access will therefore not be
achieved and will be carried over to 2005/06.
Following issuance of the Local Government Procurement Regulations in 2003,
the Local Government Authority Tender Boards have been established in
compliance with the Regulations. Draft Manual to assist implementation of
Regulations has been completed and tested to solicit stakeholders comments. The
Manual is now being revised to incorporate stakeholders views.
A. Feasibility of meeting triggers for 2004/05
The target for the CAG was to issue the audit report for fiscal year ending 30 June
2003 within 12 months, to be available by 30 June 2004. The report will most
likely be tabled during the June/July parliamentary session on the budget. Thus
the trigger has been reworded as follows:
During the June/July 2004 parliamentary session on the budget the CAG submits
to parliament the audit report for fiscal year ending 30 June 2003.
Once the Procurement Bill is approved by the Parliament and assented by the
President, the Government could move quickly to implement the law.
Decentralization can be effected immediately after the law is effective. The
Public Procurement Regulatory Authority (PPRA) can also be established by
transforming the existing CTB.
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B. Monitoring indicators
The following indicators (as mentioned in the WB program document) are deemed to be
realistic and achievable by 2005/06.
CAG issues its report on central government for the fiscal year ended 30 June
2003 within a period of 12 months subsequent to year end.
Audit reports for central government MDAs shows an improvement in PAC
recommendations being followed up — fewer cases of audit queries carried
forward from year to year.
Audit reports for local government authorities are submitted in a timely manner
(within the statutory requirements).
AOs confirm in writing that audit committees have been established and are
meeting on a regular basis in 100% of MDAs.
30 percent of all financial management positions in MDAs should be filled with
qualified staff. For NAO the target is proposed at 10 percent (up from the present
level of about 5 percent).
The following changes to the Indicative PAF Actions (Nov 2004/March 2005) have
been agreed during the Mid-term Review of the PRBS/PRSC mission:
a) Current wording
Evidence is provided through annual reports, clean external audit reports, internal
audit reports and minutes of MDA audit committees that AOs are fulfilling their
statutory responsibilities.
Proposed new wording
Accountant General monitors the performance of the audit committees in all
MDAs by reviewing their minutes of meetings which will be submitted.
b) Current wording
NAO issues its report on central government for the fiscal year ended 30 June
2003 within a period of 12 months subsequent to year end.
Proposed new wording
During the June/July 2004 parliamentary session on the budget the CAG submits
to parliament the audit report for fiscal year ending 30 June 2003.
c) Current wording
Assistant Accountant General (Financial Systems & Internal Audit) assesses the
effectiveness of internal audit function in at least 3 ministries.
Proposed new wording
Training provided to all Internal Audit staff by November 2004 and the new
proposed Internal Audit structures agreed with CSD by March 2005.
d) Current wording
Resolution of legal inconsistencies between Financial Regulations (for central
govt.) and Financial Memorandum for Local Govt.
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Proposed new wording
Local Authorities Financial Memorandum amended to reflect PFA, PPA and
amendments to the Local Government Finance Act and passed by the Minister for
Local Government.
Report of the Technical Working Group on Governance
ACTION POINT 1. Quarterly meetings between donors and senior members of the
GoT established with progress on anti-corruption as a standing agenda item. STATUS:
On track
Progress is being made in re-establishing a closer dialogue between government and
development partners. The Good Governance Working Group (GWG) is developing
terms of reference and a work plan that it would wish to discuss with the Chief Secretary
and GGCU as a mean to initiate a closer collaboration. GGCU has responded positively
to this initiative.
ACTION POINT 2: Latest quarterly report available would include more quantitative
and qualitative data in areas of monitoring and controlling public procurement, public
finance and legal and judicial. STATUS: On track
For the last two published quarterly reports (Q3 and Q4 of 2003) quantitative indicators
have been added, which will facilitate the monitoring of progress made in the fight
against corruption. However, the timely printing of the quarterly reports seems to be an
issue. It was suggested that the printing might be contracted out rather than waiting for
the Government Printers who might have other priorities.
It is still not clear what the purpose of these reports is with respect to MDAs. There does
not seem to be any follow-up once the MDAs have submitted their report. It was
recommended that the GGCU should reflect on the following: who are the clients of
these reports, i.e., for whom are they being produced and for what purpose, e.g., should
they be action-orientated? In addition, it would be interesting to know if the reports are
generating public awareness. The way the reports are produced is also an issue, i.e., there
is no full-time focal point for anti-corruption in MDAs, therefore very little commitment.
The selection of the right person as focal point is important. It was recommended that:
GGCU instructs MDAs’chief executive officers (CEOs) to appoint a
permanent employee as focal point other than the ones that could be the
target of corruption issues;
GGCU disseminate a one-page summary to the media therefore generating
more publicity for the reports and the anti-corruption agenda;
GGCU should call focal points to review the report, progress made and
action being taken on the grounds; and
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Highest levels should address the anti-corruption agenda in their high level
meetings.
ACTION POINT 3: The Repeal and Enactment of the Anti-corruption Law be tabled in
Parliament. STATUS: Off track, will not be achieved.
Although a draft bill was prepared by PCB on the anti-corruption law in February 2003, it
appears that it is only recently (in March 2004) that the Law Reform Commission has
been instructed by the Attorney General Chambers (AGC) to initiate the process to
prepare a new anti-corruption law. The LRC informed the mission that it has not yet
initiated the research involved in the preparation of this law. It will make the most of the
work already done by PCB in that context which should help speed up the process.
However, the mission learned that the following steps have to be completed:
Preparation of an issues paper to be approved by the Commissioners by April
2004;
Research and wide consultation throughout Tanzania;
Draft discussion paper to be approved by the Commissioners
Workshop of all stakeholders on the discussion paper in September/October 2004;
Final report and draft bill to be presented to Commissioners;
Final report with recommendations presented to Parliament by 1st quarter 2005;
Cabinet paper by 2nd quarter 2005; and
Instruction from Cabinet regarding final drafting of the legislation.
Therefore the Action Point has been revised to reflect this timeline and the new action
point for November 2004 reads
Broad consultation on the Repeal and Enactment of the Anti-Corruption Law will
be completed and a discussion paper will be available
ACTION POINT 4: The revised NACSAP and 2002 Annual State of Corruption Report
be given a high profile-launch and be widely disseminated through the mass media.
STATUS: On track
The GGCU envisages holding a workshop where the two documents would be launched
officially and discussed by a broad range of stakeholders. This will take place before end
June 2004. It was believed to be more important to focus on the revision of MDAs action
plans. The GGCU will hold a meeting of all focal points for a peer review of the plans to
ensure that proper attention is given to the issue.
It is also planned to undertake a new Annual State of Corruption Report. A stakeholders
meeting has already taken place on recommendations to improve upon the previous
report. Work will continue on this and civil society groups will be asked to tender in the
second quarter.
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ACTION POINT 5: A restructured GGCU in place with new roles and additional
staffing. STATUS: On track
Regarding the strengthening of the GGCU, it now has two additional staff (economist and
accountant). However, as part of the PSRP strategic planning exercises in MDAs and
independent departments, the roles, responsibilities, and need for improving capacity of
the GGCU would be looked at in the context of the State House strategic planning
exercise and not separately. This is still on target.
ACTION POINT 6: Mechanism for complaint and grievance to deal with unethical
conduct is in place. STATUS: On track.
The new code will form part of the regulations. Following the design of the new
mechanism, it will be piloted in some MDAs and by November this will have been
completed. It requires putting in place a Complaint Unit and officer. It was
recommended that the individual would also be the focal point on anti-corruption.
ACTION POINT 7: The formats for anti-corruption action plans are available and
funding to facilitate the production of the LGAs action plans is included in the 2004-05
budget. STATUS: This was a tentative action from December and has been revised.
Although the meeting was informed that a bottom-up approach is envisaged, the TWG
noted that this has the rolling-out of anti-corruption action plans now been on the books
for two years and there was consensus that this was not acceptable. However, the
sequencing of steps and timeline is now clearer.
By end April 2004, the format and explanatory guidelines for the preparation of
the plans will be ready.
The dissemination of the guidelines will be completed by end June and councils
will commence the planning exercise by July 2004.
Focal persons on anti-corruption will be appointed to all councils.
Fourteen trainers will be appointed to train the LGA focal points on how to
develop action plans that should be compatible with MDA action plans.
Funding will be available in the 2004/05 budget to facilitate the development of
the action plans.
Actual implementation of the Anti-Corruption Action Plans at LGA level will
begin in FY05/06.
The TWG will expect to see tangible evidence of progress in this area and to this end
draft Anti-Corruption Action Plans for all councils should be available by November
2004. The action point has been revised as follows
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Draft anti-corruption action plans are available for all LGAs and funding provided
in the 2004/05 budget to facilitate the implementation of the LGAs action plans in
the FY05/06.
Report of the Technical Working Group on External Resource Management
ACTION POINT 1 ‘Consolidate and integrate projections of external resource flows
into budget preparation. MOF to provide to donors through PER (Macro) group the
consolidated external resource projections for re-affirmation’. PROGRESS: On track.
External finance projections for FY04/05 to FY06/07 were shared when the PER Macro
Group met in January 2004 to discuss the Budget Guidelines. Development partners
expressed concern that projections for FY04/05 were very high and quite low for the
outer years. Since that time donors have been requested to firm up their sector and
general budget support (amounts and timing) for the next three years. All development
partners have complied with the request with the exception of Denmark (consultations are
ongoing), UNDP and the World Bank(who have no record of receiving the request). This
however did not include updated projections on donor projects. MoF stated that donor
projects were discussed with relevant sectors after the original external finance
projections sent by development partners in October 2003. It has been agreed that a
revised Table on External Finance Projections will be an agenda item at the next PER
Macro meeting.
TWG10 learnt that the recent IMF Mission revisited the issue of external resource
projections and that another planned visit in May will include the same topic. The
Ministry’s view is that all actors should use the existing database system and not create
parallel systems. The TWG shares this concern and hopes that one common strengthened
process can be found to consolidate projections in a timely basis and that this should be
institutionalised within the PER Macro group.
ACTION POINT 2 ‘Using the existing system, MDAs and LGAs to fully report to MoF
on levels of direct external assistance budgeted and disbursed.’ PROGRESS: Partly
observed, but apparently not on a systematic basis.
As noted in the Annual Review, there are significant problems here particularly with
regard to reporting of LGA expenditures. The 2ndQ BER 03/04 notes that July to
December project grant actuals were 37% of estimates (the comparable figure for 01/02
was 21%) and that this ‘low performance is at least in part due to the continuing problem
of timely capturing of project fund disbursements from benefiting MDAs’.
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In the MoF Budget Review Brief Note to PRBS Partners in January, 03/04 likely outturn
for development projects had been revised down to TSh104bn from TSh241bn in the
budget estimates. However, in the Approved Supplementary the expected outturn is the
original budget estimate of TSh241bn. Budget Department is confident that the problem
appears to be one of capturing the information rather than under-implementation per se.
In the future, the TWG believes that this action point could more usefully be discussed in
TWG6 which covers Budget Formulation and Execution. This latter TWG has greater
oversight on the budget and includes other relevant actors such as the Accountant
General’s Department and the Budget Department of the MoF. In addition, there is a
significant overlap between the TWG10 action point above and the TWG 6 action point
on MDA’s reporting on levels of direct foreign assistance.
The revised action point should be further discussed by the relevant groups. One possible
wording would be
Annual Reports for 2003/04 from MDAs and LGAs on direct foreign assistance
received by donor submitted to MoF. Budget Department and External Finance
Department to reconcile this data with donor reporting the MoF and the
Appropriation Accounts.
ACTION POINT 3 ‘Issued second Annual TAS Implementation Report’ PROGRESS:
On track
This report will cover progress on the four priority areas of the TAS Action Plan:
Improving the predictability of resource flows, increasing aid flows captured in the
Government budget, rationalising and harmonising processes and improving national
capacities in aid coordination and external resource management.
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MINUTES OF THE PRBS MID YEAR REVIEW/ PRSC 2 APPRAISAL
PLENARY SESSION 1
HELD ON MONDAY 5TH APRIL 2004, AT THE MINISTRY OF FINANCE
SCHEDULE
A. Budget formulation and execution (Overall fiscal strategy and performance)
Presentation by Mr. Kamugisha, Commissioner Policy Analysis Department, Ministry
of Finance.
B. Growth – Private Sector Development (BEST and business licensing)
Presentation by Mr. Mrema, Ministry of Industries and Trade
C. Growth – Rural development (Crop boards and rural roads)
Presentation by Mrs. Bitegeko, Ministry of Agriculture and Food Security with Mr.
Musingi (PO-RALG)/ Mr. Lyatuu (Ministry of Works)
A. Budget formulation and execution
The presentation was made by the Ministry of Finance with the following highlights on
developments in the 2003/04 budget and preparations for the 2004/05 budget:
The budget for 2003/04 was prepared and approved in line with priorities in the PRS,
which were identified by GFS codes in order to facilitate monitoring.
The quarterly Budget Execution Reports published on the national website now report
priority expenditure at item level.
In the first six months of 2003/04, there has been a consistent 2 percent over
performance in revenue collections; wage adjustments have been fully made; and there
was an improvement in expenditure efficiency, in PRS sectors and also in Other
Charges of all other MDAs with actual expenditure at 92 percent of estimates
compared to 62 percent in the previous year. This suggests that there is an
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improvement in expenditure planning and implementation and that the initial problems
with understanding of the Procurement Act are lessening.
The supplementary budget was approved by Parliament in February 2004, necessitated
by drought and unforeseen needs, which include: liquidity constraints at TANESCO
and the threat of power rationing; the need to purchase food supplies and transport
them to drought-hit areas; the need to complete work on the Public Voters Registry in
advance of the elections; replacement of the current Government aircraft; and the need
to boost the contingency as the drought situation continues. The supplementary
budget included a total of TSh 87.3 billion of additional resources and TSh 89.5
billion of reallocations within the budget. There was a net increase in allocations to
PRS sectors compared to the original budget, particularly in the agriculture sector due
to allocations made to the Strategic Grain Reserve (SGR). Expenditure cuts were
made in all sectors, including PRS sectors, however cuts were made only in non-
priority items while priority items remain protected. It was noted that requirements of
further funding for TANESCO is being closely monitored by the Ministry of Finance
with the Ministry of Energy and Minerals. It was acknowledged that frontloading of
budget support disbursements during 2003/04 had significantly helped Government in
management of the drought situation.
On the 2004/05 budget preparation, it was stated that revenue forecasting had begun
and policy measures were being firmed up in the Task Force for Tax Reform. The
main target is to increase the revenue yield. Firming up of projections on external
financing was taking place to ensure accuracy, particularly on project aid. An increase
in donor funded projects is expected. On the expenditure side, it was stressed that the
financing for implementation of the PRS remains the priority focus. The original
definitions of priorities in the PRSP will guide allocations in the budget cycle until the
revised PRS is developed. Consistent with the pay reform strategy, pay enhancements
will be provided for.
Government will focus on recommendations from the PER External Evaluation on
promoting consistency between policy commitments, the Budget Guidelines, the
annual budget and outcomes in expenditure.
Development partner representatives commented that there had been positive
developments in budget execution and reporting of expenditures at GFS item level. In
addition, the earlier preparation of PER studies during Budget Guidelines preparation was
an improvement over previous years. The Ministry of Finance answered the following
concerns:
- Large unallocated amount in contingencies in the Budget Guidelines. It was
clarified that this would be reduced by the time the 2004/05 budget is approved.
Most items will be allocated to specific votes, and only a minimal amount would
remain in contingency.
- Expenditure cuts for supplementary budget. The exercise of cutting expenditure
in both PRS and non-PRS priority sectors was clarified to have been done in
consultation with the MDAs themselves. All MDAs were requested to submit
cuts only in non-priority areas such as travel, per diems and seminars. It was
stressed that the Government views the PRS sectors as priorities, but the drought
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was not anticipated and the costs of energy supply and food replenishment are
high. In the face of this emergency and the rest of the Government coming to a
standstill in order to provide financing for these high costs, it was considered to be
imprudent to allow non-priority items in the PRS sectors not to be considered as a
source of financing. Development partners encouraged the Ministry of Finance to
monitor MDAs to ensure that only non-priority items are indeed cut.
- External finance projections. On the high projections of project financing for the
2004/05 budget, it was indicated that more resources are expected given pledges
from the donors, however the approved budget may scale these down depending
on donor history of disbursement through the exchequer system. Furthermore,
MDAs have been requested to produce quarterly reports on goods and services
received, and this is expected to improve capturing of project aid. Donors
encouraged improving the process of confirming pledges during the Budget
Guidelines preparations in order that the resource framework is meaningful. The
Ministry of Finance stressed that accuracy needed to be improved on both sides,
as if funds were not captured in the budget books, then accountability in the
annual audit report is made difficult.
- Budget monitoring indicators. On the proposed indicators (share of PRS sectors
in the entire budget; the share of budgetary votes for which the deviation between
budgeted and actual expenditures is more than five percent; and meeting of
benchmarks in the HIPC expenditure tracking assessment), the Ministry of
Finance indicated that the share of PRS sectors will always be maintained, if not
increased and that this would be guided by the new PRS. It was also noted that in
the context of the supplementary budget there was a net increase to PRS sectors
due to allocations to the SGR. However, using an indicator like the share of
priorities can be misleading in the context of the needs in the entire budget. For
example energy is a crucial sector in the economy and has high costs but is not
considered a priority. Further consideration on the indicators was needed.
- Policy options to deal with external fiscal risks. The Ministry of Finance
acknowledged that the budget is vulnerable to risks such as drought and because
almost half of budget is dependent on foreign aid. It was stated that alternatives
are being considered to avoid the situation again.
- Financing of the Local Government Support Programme (LGSP). The Permanent
Secretary from PO-RALG confirmed that the LGSP is at design stage and until
operationalisation of the Programme in 2005, it is not envisaged that additional
resources will be needed. It is expected that resources currently allocated for the
sectors will be effectively utilised in the formula based allocations to LGAs.
- Budget strategy. Development partners proposed that Government lays down a
strategy on expenditure allocations and external financing projections to be
discussed in a transparent way. This would encourage dialogue in a Government-
led budget process and better align expectations. The Ministry of Finance agreed
that the Budget Guidelines need to be more informative on outward years,
including information on planned capital expenditures. It was acknowledged that
the need for transparency would be taken seriously in the continuing dialogue.
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B. Growth – Private Sector Development
The presentation made by the Ministry of Industries and Trade highlighted the
assessment on completion of PAF actions made in the Private Sector Development (PSD)
Technical Working Group.
Development partners commented that the civil procedure code was an important part of
the private sector development strategy which needs political will to implement. In the
coming budget years, financing of PSD activities would be needed.
On the business licensing system, the delay for submission of the position paper to the
Cabinet Secretariat was explained to be due to the need to consult stakeholders for
example in the Task force for Tax Reform on the revenue loss implications of limiting the
system to regulatory functions. It was clarified that the next steps following Government
approval would be to launch the system with a pilot phase in three districts in Dar es
Salaam before implementation is spread country-wide. The time in which to get a license
will be reduced to two days and procedures will be improved, with the Ministry of
Industries and Trade’s main role being limited to assessing and administering
applications.
Development partners expressed concern on the possibility of the Private Sector
Development (PSD) strategy becoming a document that is not mainstreamed into other
private sector fora such as the Investors Round Table (IRT) and the Tanzania National
Business Council (TNBC) and questioned how Government views the Strategy in these
other fora. It was indicated that consultants have been engaged with the assistance from
DANIDA to provide advice in developing the strategy. In addition, Government
explained that its main role is to create an enabling environment for the private sector to
develop through both local and foreign investment, and that all stakeholders aim to
achieve results through a participative process. Mechanisms are in place to respond to
private sector requests and the IRT being chaired by the President himself indicates
commitment from both Government and the private sector. It was commented that
during the review of the PRS, it would be important to engage the private sector given its
importance in growth.
C. Growth – Rural development
The presentation made by the Ministry of Agriculture and food security highlighted the
following points on crop boards:
Crop boards perform mainly regulatory functions, not marketing, for the main cash
crops: cotton, coffee, cashewnuts, tea, pyrethrum, tobacco, sisal, and sugar.
Studies are being conducted, with World Bank and EU support, on whether the crop
boards are limiting their functions to regulation, whether greater efficiency is being
achieved and agriculture is making a greater contribution to GDP.
Prices that farmers sell products at are currently 70-80 % of world trade prices and
crop boards are meant to support all stakeholders including industries and farmers.
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The Government is providing financial support to the pyrethrum and tea boards and is
looking to support all the boards.
An institutional mapping and financing study is being carried out in phases and
financing sources (from farmers, own funds such as asset rental income or
Government funds) of the crop boards has been researched. The first phase has
included cotton and coffee, for which workshops will be conducted in May 2004 to
discuss the findings. Studies of the remaining crops are being carried out.
Comments from development partners included the importance of looking at the
institutional arrangements governing export of crops as a key element of agricultural
development in order to promote competitiveness of Tanzanian products in world
markets. It was also stressed that it is important to not only look at productivity but also
profitability in the ASDP. The Government confirmed that the ASDS looks at
profitability as a key element, as it is important to ensure that crop boards service the
farmers and that they benefit through profits from their production.
The presentation on roads was conducted by a representative from the Ministry of Works.
It included the following highlights:
The focus of policy on rural roads remains institutional strengthening at local
government level.
A task force has been set up to review the institutional set up, financial issues and
cross-cutting issues such as responsibilities between the Ministry of Works and PO-
RALG and institutional and legal issues surrounding the Road Act.
The report is expected to be ready by end-April 2004 and will be submitted to the
financier for review and implementation.
Development partners commented that rural roads are important at the district level and
community level and finalisation of the Road Act will ensure clearer responsibility of the
relevant Government institutions. It was stressed that implementation following the
passing of the legislation such as capacity building for maintenance and rehabilitation of
roads is also of high importance. Government acknowledged that drafting of regulations
takes as much time as preparation of an Act and this is delayed by low capacity in the
legal sector. It was also acknowledged that there is a need to address capacity to
implement approved legislation.
In addition, it was commented that in order for completion of the PAF action on
preparing a strategic prioritised plan for implementation of the Land and Village Land
Acts, and drafting the Land regulations, sufficient budget allocations would be needed.
In the context of the new Land law and given the technicality of mortgage law,
international consultants need to be hired. On other areas of private sector development,
such as the BEST programme (of which land reform is a part) and the Better Regulation
Unit, the Government confirmed that there are adequate financial and technical resources
(including international consultants).
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MINUTES OF THE PRBS MID YEAR REVIEW/ PRSC 2 APPRAISAL
PLENARY SESSION 2
HELD ON TUESDAY 6TH APRIL 2004, AT THE MINISTRY OF FINANCE
SCHEDULE:
A. Fiduciary issues (PFMRP, procurement)
Presentation by Mrs. B. Nyoni, Accountant General, Ministry of Finance
B. Fiduciary issues (Governance)
Presentation by Mr. Hoseah, Prevention of Corruption Bureau
C. Poverty Reduction Strategy, Poverty Monitoring System (Poverty monitoring
indicators)
Presentation by Dr. Likwelile, Vice President’s Office
A. Fiduciary issues (PFMRP, procurement)
The presentation on progress in public financial management included the following
highlights:
- all MDAs are computerized and the functionality of MDAs in Dar es Salaam and
the sub Treasuries has improved.
- 6 Regional Secretariat Offices have been opened and the exercise is continuing in
other regions.
- The Ministry of Finance is working with Local Governments and has recruited
support team of 25 staff. They will be posted to 6 zonal areas to support the
councils from 1st July 2004. This will then be rolled out to other councils.
- To curtail payment delays arising from power cuts, generators are to be installed
including in the Central payments office in Dar es Salaam.
- Capacity has been built in accounting and IT management.
- Six short term consultants have been contracted as advisors on the budget, internal
audit and IT, and a long term advisor is working on financial management.
- The government has finalized and issued a new accounting procedures manual
and internal audit procedures manual.
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- Improvements in disaster recovery include preparation of documents on systems
security with the support of long term advisors.
- Training of Audit Committees in all MDAs as per the Public Finance Act is
expected to start before end May 2004.
- A proposal for the new internal audit structure for all MDAs to improve internal
controls is ready.
- In the Financial management component, Active Planner has been strengthened
and the training to use the system is underway.
- Regions and MDAs are preparing their budget for 2004/05 using the MTEF
framework.
- With regard to the PFMRP, the action plan and the budget for PFMRP are being
finalized with the assistance of a consultant from DFID. While the PRSC 2 prior
action in the PAF matrix has not yet been realized, it is important to note the
progress made in areas related to this. Efforts have been made to finalise the
launch of this programme by the first week of May 2004 and to hold a meeting for
the PFMRP Steering Committee.
Progress in the area of procurement was presented as follows:
- Appointment has been made of the Secretary and Members of the Public
Procurement Appeals Authority as per the Procurement Act.
- Workshops have been conducted for Permanent Secretaries and Regional
Administration Secretaries.
- The amendment of the Public Procurement Act is in progress and the proposals
will be submitted to stakeholders for discussion before presenting to the
Parliament for approval.
- The proposal to transfer the procurement activities to MDAs and Parastatals will
minimize the workload at the Central Tender Board and will allow more attention
to be placed on the reform process.
On the enquiry of the status on the restructuring of the Ministry of Finance in line with
the new Public Finance Act as recommended by the CFAA, Government noted that the
strengthening of MoF is ongoing.
It was questioned to what extent efforts were being made towards reconciliation of data
on debt between the Bank of Tanzania and the Ministry of Finance. The concern was
why there should be two systems running concurrently, and what the institutional roles
are on debt management. Government explained that these systems are performing
different functions. The Bank of Tanzania database mainly performs the task of
externalisation of foreign debt payments and also manages non-national debt payments.
The Accountant General maintains the records on servicing of all national debt including
payment of domestic debt and the database on outstanding foreign debt. With regard to
the role of the Policy Analysis Department of the Ministry of Finance, it was explained to
provide guidance on policy issues such as bringing of creditors within the HIPC
framework.
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The meeting questioned what efforts are being made so far to empower the staff in the
National Audit Office following the plan to restructure the office which was approved by
the President in 2002. It was clarified that with the help from SIDA, progress has been
made such as provision of a new office building and ongoing training of staff locally as
well as overseas.
Development partners commented that the PFMRP is a broad reform programme across
departments responsible for public financial management. Therefore funds for PFMRP
can be provided to the National Audit Office and other areas through the basket fund. It is
important to have a comprehensive reform programme to mitigate fiduciary risks which
donors consider as a critical factor for budget support. It was welcomed that the meeting
of the Joint Steering Committee would be held soon and that the Terms of Reference for
the programme coordinator were circulated. Key outstanding steps included: the activity
plan and budget for phase 1 of PFMRP; a clear indication of components that need
funding in Ministry of Finance and the National Audit Office which have an oversight
function; and the need to open the basket fund account for PFMRP to support the
launching of the programme.
In view of the long term steps needed for reform, the Government responded that it is
working on the time frame for the implementation of short term as well as long term
objectives.
B. Fiduciary issues (Governance)
The presentation highlighted the assessment of progress made on completion of PAF
actions by the Technical Working Group as follows:
- In the implementation of NACSAP, quarterly reports are published and the latest
one available is for June – August 2003 which includes more quantitative and
qualitative data in areas of monitoring and controlling public procurement, public
finance and legal and judicial.
- The repeal and enactment of the Anti-corruption Law has to be debated by
stakeholders and the Law reform Commission has been commissioned by the
Attorney General’s office to present findings by June 2005.
- The revised NACSAP and 2002 Annual State of Corruption Report will be widely
disseminated through the mass media and a workshop will be conducted before
June 2004.
- With regard to the restructuring of GGCU and new roles and additional staffing,
the Public Service Management office has been advised to look into the matter
and decide accordingly.
- The revised code of conduct for public servants is available including stakeholder
comments.
- On facilitation of preparation of anti-corruption plans for Local Governments,
focal points for all 114 councils are to be appointed. Training of focal points will
be carried out and the 2004/05 budget will cater for the training activities.
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Development partners expressed concern on the delays in publishing the reports and
whether steps were being taken to improve the speed of reporting. It was clarified that
more staff in the Good Governance and Coordination Unit (GGCU) had been hired and
reports for December 2003 are currently at the Government printers. It was suggested that
the printing process could be speeded up by contracting the task to a private printer as the
Government printer has a heavy burden. It was clarified that dissemination of reports is
done through circulation to all Embassies and High Commissions, through the media with
a press conference conducted by GGCU each quarter, and publishing on the Government
website.
Development partners commented that out of 5000 cases of financial and procurement
mismanagement identified by the Controller and Auditor General’s (CAG) report, only 23
convictions were made, indicating that there is little power in the judicial system to deal
with the cases. Government explained that the current legal framework, the Anti-
corruption law, which was enacted in 1991 is weak as it creates loopholes for
embezzlement. From the definition of corruption, it is difficult to identify and convict an
individual who may have engaged in rent seeking. In addition, the current legal process
takes a minimum of two years because of the complex processing of a case between the
CAG and the Director of Public Prosecution. It was noted that the key way forward is to
update the anti-corruption law and ensure that the law facilitates the follow-up process on
corruption cases. It was also confirmed that the annual audit reports will continue to
outline where procurement is weak as this is the main area where large amounts of public
funds flow. It was indicated that it is not clear when the new legislation would be
implemented as it is being dealt with by the Law Reform Commission and is yet to be
passed through the Attorney General’s Office and Cabinet Secretariat before submission to
Parliament.
On the delay of the LGA anti corruption action plans, development partners noted that
progress is likely to be achieved by November 2004. They encouraged a wider
Government ownership of actions in the PAF and institutionalisation of dialogue on
corruption issues. It is expected that with the proposals to review whether the PRS action
plan can be used for budget support assessment, better ownership of reform can be
promoted. Government confirmed that the GGCU would make more efforts and would
welcome dialogue with development partners. It was also indicated that through the
Prevention of Corruption Bureau, a report on the level of graft in the country had been
commissioned and a tender will be floated for the purpose of collecting feedback on the
status of corruption in 2002/03.
C. Poverty Reduction Strategy, Poverty Monitoring System (Poverty monitoring
indicators)
The presentation highlighted the main points assessed by the Technical Working
Group, including the following:
- A medium term strategic plan for the Vice President’s Office (VPO) focuses on
strengthening capacity, particularly in IT.
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- The medium term strategic plan for PO-RALG had been prepared and needs to
pass through further discussions internally before its submission to the Public
Service Management office.
- VPO is coordinating the process of the PRS review. As with the Routine Data
System Working group (RDSW), there is a greater need for prioritisation so as to
identify benchmarks for progress monitoring. The PRS Technical Committee will
provide the general direction during the review process.
It was commented that it is important for VPO to have the ability to attract and retain
staff as this is an indicative PAF action for November 2004. Development partners also
encouraged adequate financing of the medium term strategic plan especially with the
delay of rolling out of the Selected Accelerated Salary Enhancement scheme.
It was also discussed that there is a need to align the PRS process with Government’s
budget cycle and that this needed further discussion, including development partners’ own
expectations of the PRS review. The Routine Data System (RDS) working group was
commended to have completed the position paper on planned actions to improve collection
of routine and administrative data well ahead of time, however work remains to improve
it. Given completion of this indicative action, and no intention by the Technical Working
Group to replace it with another PAF action as the aim is to reduce the number of actions,
the meeting agreed that it should be dropped from the matrix. It was highlighted that the
Poverty Monitoring System is critical in tracking and informing whether budget support is
working and producing results.
The time line for the PRS review was outlined. It is expected that by mid May 2004 the
zero draft will be circulated and one month and half will be provided for stakeholders’
evaluation. In addition, studies have been commissioned on macro-micro linkages and
vulnerability which are expected to be completed by June 2004 and to inform the PRS
review.
On the question of how the third PRS Progress Report would be linked to the new PRS, it
was indicated that a retrospective analytical chapter on the third Progress Report would be
included in the new PRS.
Government responded to the question on Tanzania’s overall strategy on poverty
reduction, highlighting that the current PRS uses a priority sector approach, but ideas for
the revision of the PRS include focussing on outcomes, service delivery, growth and
employment creation. Stakeholders’ views would be incorporated in the participative
process. It was commented that a weakness of the first PRS was measurements of income
poverty. Government indicated that a new Household Budget Survey would be conducted
as planned in the Poverty Monitoring Master Plan. In addition, the Agriculture Survey
would also cover income poverty assessments.
In closing of the two plenary sessions, development partners thanked the Government for
useful preparation and active participation. It was indicated that a donor statement would
be presented at the wrap up session outlining key outstanding issues and the way forward
in the light of a new PRS.
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The Chairman, the Permanent Secretary to the Treasury, thanked all for participation and
assured development partners that the Government will work on the outstanding issues.
Recognising the importance of budget support in the overall government budget, it was
commented that there is a need to work out the way forward through government-donor
partnership which will be continued during the Annual Review in November 2004.
MINUTES OF THE PRBS MID YEAR REVIEW/ PRSC 2 APPRAISAL
WRAP UP MEETING
HELD ON TUESDAY 8TH APRIL 2004, AT THE MINISTRY OF FINANCE
AGENDA:
1. Opening
2. Statement by the Development Partners
- key outstanding issues and the way forward
3. Presentation of the PRSC2 Appraisal Draft Aide Memoire
4. Proposed indicative PAF Actions for November 2004/March 2005
5. A.O.B
1. The meeting was opened by the Permanent Secretary, Ministry of Finance, Mr.
P.M. Lyimo. The Chairman paid recognition to all the hard work carried out by
the participants of the Mid Year Review and Appraisal, particularly in the
Technical Working Groups. It was requested that the wrap up meeting would
provide all with a chance to reflect on the process and how to make transactions
costs for all stakeholders lower.
2. The draft statement from the development partners was presented. (For final
statement, see page 60).
Comments from the participants of the meeting on the donor assessment of PAF
actions made in the draft statement included:
- On budget formulation and execution, Government stressed that the
supplementary budget of 2003/04 did not involve any expenditure cuts in the
priority items of PRS sectors. Only non-priority items were cut. It was
reasserted that the Government remains committed to financing
implementation of the PRS. The supplementary budget was a one-off
occurrence that was necessitated primarily by the drought crisis. The
Government suggested an additional session be held to clearly explain the
effect of the supplementary budget on the PRS sectors and items. In addition,
the final reallocation warrants to be presented to Parliament was agreed to be
shared with partners when approved.
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- The Chairman requested that the wording on the level of commitment on anti-
corruption be reworded. It was explained that Government commitment
towards fighting corruption existed from the top levels of Government down
to all Ministries, Departments and Agencies.
- It was requested that the assessment on the Public Financial Management
Reform Programme be made more positive as although the first phase of the
Programme is delayed, substantial progress to date includes adequate resource
provisions in the Government’s budget for crucial activities that ensure
accountability such as: support to the Accountant General to update IFMS;
roll out of IFMS to MDAs, regions and LGAs; and training of accountants in
finance and information technology.
Additional comments on the issues raised in the statement included:
- Participation from Government. It was questioned whether participation from
the Government during the Mid Year Review should have been higher than
the level of Permanent Secretaries, and whether representation from all key
sector MDAs should have been there. The Chairman confirmed that the
budget support reviews are attended by representatives from only those MDAs
which have specific commitments to complete actions in the PAF matrix.
This is in order to keep transactions costs for Government as low as possible.
- Future development of the PRBS/PRSC modality. Members of the meeting
agreed that further work is needed to develop a more results-focused PAF
matrix with monitorable indicators of progress. Government representatives
stressed the need to reduce the number of PAF actions and to address
Government commitments to complete actions in the relevant policy reform
processes. It was suggested that this further work could take place during a
quiet time in Government’s calendar.
- Overall assessment in draft statement. The development partners stressed that
when making assessments of Government’s progress, they need to
demonstrate concrete examples of progress to prove to head quarters the
completion of actions. It was commented that all parties are learning to
improve the overall process of focusing on priority reforms and assessment of
progress. Partners welcomed the initiative to promote open dialogue on anti-
corruption through quarterly meetings. In addition, it was stated that the
overall message of the Mid Year Review assessment was that progress had
been achieved. It was commended that the dialogue on substantive issues
such as governance and budget formulation was healthy, and issues such as
how to deal with fiscal risks needed to be discussed further. Members of the
meeting requested that the future vision on the budget support modality be
developed together by all stakeholders.
2. A representative from the World Bank presented the draft Aide Memoire to the
meeting. The Government was thanked for its commitment during the review. It was
stated that the level of participation and dialogue in Tanzania is unique. It was
recognised that the Government remained committed to complete the outstanding
three PRSC 2 prior actions.
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On the PRSC 3 prior actions, it was acknowledged that Government requested to
limit the number. The representative requested the Government officials to propose
the best way to limit these.
The Ministry of Finance proposed that the number of PRSC 3 prior actions be cut
down and limited to seven. After discussion amongst participants of the meeting, the
following were agreed upon:
I. Finalised and obtained Government approval of the strategic plan for
operationalisation of the Land and Village Land Acts.
II. New business licensing framework under implementation in a phased strategy
III. Building on the results of the Crop Boards review, Government approval of a
strategy to reform two crop boards consistent with ASDS.
IV. Budget for 2004/05 reflects appropriately PRS priorities and budget execution
for 2003/04, and 2004/05 (FQ 1 and FQ 2) is in line with approved budget and
with PRS priorities, consistently reported as per identified expenditure budget
codes for priority sectors and items.
V. Pay enhancement consistent with the approved budget for 2004/05, and the
overall thrust of the pay reform strategy.
VI. Progress in the implementation of the PFMRP.
VII. The Government establishes the Regulatory Authority for procurement and
decentralises procurement to Procurement Authorities.
The limit was placed in order to be more strategic on the most important policy
reforms in the PAF matrix. Prior actions on environmental sustainability were
therefore dropped and those on budget formulation and execution were merged in
order to be more strategic. In addition, the proposed prior action on putting in place
the Road Act was dropped since it was deemed unachievable by March 2005. The
Government explained that the legislative time frame for approval of the Road Act
would be delayed as the coming Parliament sessions in June would discuss only bills
related to the budget and other bills would have to be submitted for first reading at
later sessions. Development partner representatives supported the Government
proposals to limit the prior actions to those that are most strategic and achievable, and
confirmed that they could defend these proposals at their head quarters.
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Outcome of PRBS Mid Year Review and PRSC 2 Appraisal
The outcome of discussions during the Mid Year Review/ PRSC 2 Appraisal and final
decisions on PAF actions, can be seen in the updated PAF matrix dated 20h April 2004,
where all revisions of Government commitments to complete actions (by November
2004) and PRSC 3 prior actions (by March 2005) are reflected.
On the agreed PRSC 3 prior actions, following the wrap up meeting it was agreed to
maintain two PRSC 3 prior actions on budget formulation and execution, as the budget is
an important area of the PAF matrix for budget support donors. Hence 8 PRSC 3 prior
actions were agreed to as follows:
I. Finalised and obtained Government approval of the strategic plan for
operationalisation of the Land and Village Land Acts.
II. New business licensing framework under implementation in a phased strategy
III. Building on the results of the Crop Boards review, Government approval of a
strategy to reform two crop boards consistent with ASDS.
IV. Approved budget 2004/05 in line with PRS objectives, delineating budget
codes for priority sectors and items.
V. Budget execution for 2003/04, and 2004/05 (FQ 1 and FQ 2), in line with
approved budget and with PRS priorities, consistently reported as per
identified expenditure budget codes for priority sectors and items.
VI. Pay enhancement consistent with the approved budget for 2004/05, and the
overall thrust of the pay reform strategy.
VII. Progress in the implementation of the PFMRP.
VIII. The Government establishes the Regulatory Authority for procurement and
decentralises procurement to Procurement Authorities.
The Review was conducted successfully with active participation from all stakeholders.
Due to delays in completing 3 of the 13 PRSC 2 prior actions, the PRSC 2 negotiations
were agreed to be delayed until June 2004, as Government remains committed to
fulfilling the outstanding actions by that time. This is in order to ensure continued steps
forward on Tanzania’s reform agenda, and to ensure that cooperation with all budget
support development partners remains strong and frontloading of budget support is
ensured for the financial year 2004/05.
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The Review concluded that the PAF matrix for budget support needs to be more
streamlined with Government’s own processes. Hence it was agreed that further work is
needed on the design of the budget support facility and to ensure use of more focused,
results orientated indicators of progress. In this light, following the review period,
stakeholders aim to work towards using monitorable indicators and the objectives in the
revised PRS expected in September 2004 to guide future design of the budget support
facility assessment framework.
FINAL STATEMENT BY DEVELOPMENT PARTNERS
WRAP-UP OF MID-YEAR REVIEW APRIL 2004
1. Overall Assessment of Progress
The Mid-Year Review (MYR) of the PRBS/PRSC was conducted in the period
March 29 – April 8, 2004. The African Development Bank (ADB) is preparing future
budget support through the PRBS/PRSC mechanism and representatives conducting
the identification for ADB joined the MYR – development partners currently
providing assistance through the PRBS/PRSC welcome the ADB and we look
forward to our continued collaboration.
In the assessment of development partners, overall progress in implementing actions
under the performance assessment framework (PAF) is satisfactory and we would like
to commend the GOT for its continued commitment to reform. Technical work in
some areas could not be finalised during the Annual Review but has now been
completed. We commend the Government for progress in strengthening the poverty
monitoring system, which facilitated the preparation of the Poverty and Human
Development Report, the 3rd PRS Progress report, and the guidelines and initial
efforts for the preparation of a new PRS. Furthermore, macroeconomic stability has
been maintained notwithstanding the effects of the drought. Efforts to improve
domestic revenue generation remain broadly on track with tax collection above
targets, and broadening of the tax base and modernisation of the tax administration
progressing largely as planned. Finally, key elements of the reform of public service
remain in line with plans, notably the continued decompression and enhancement of
public service wages while maintaining fiscal prudence, which is critical to improve
performance in the public sector.
Nevertheless, the development partners note that there are concerns in a number of
areas, notably: (i) articulation of PRS priorities through the budget, both in terms of
budget execution for FY2003/04 due to the Supplementary Budget and in terms of the
outlook for the FY2004/05 Budget (based on the Budget Guidelines); (ii) the pace of
reforms in public financial management; (iii) anti-corruption measures; and (iv) in
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some aspects of private sector development. These are dealt with in more detail
below.
We also note that 3 of the 13 prior actions in the PAF have not been completed as
expected by March 2004. While our overall assessment of progress in implementing
PAF actions is satisfactory, we are concerned over delays experienced with
implementing prior actions, including: (i) the business licensing system; (ii)
amendments to the procurement act; and (iii) establishing and starting implementation
of a coherent and comprehensive programme to mitigate fiduciary risks (Public
Financial Management Reform Programme, PFMRP).
We note that the Government has agreed with the World Bank to delay negotiations
and Board presentation of PRSC2 until these 3 prior actions have been completed,
probably by June 2004. We wish to note two things in this context: (i) all
development partners in the PRBS/PRSC are concerned by the delays in
implementing these 3 prior actions, and (ii) it is important to ensure that the delay in
release of PRSC2 funds will not jeopardise budget execution in FY2004/05.
Therefore, we recommend that other disbursements planned for release by the start of
FY 2004/05 should not be withheld – even though all development partners share the
World Bank’s concerns regarding delays in implementing the 3 key prior actions.
Furthermore, several partners are in the process of preparing new agreements for
budget support (with disbursements projected during FY2004/05), including Canada,
Denmark, and Switzerland. We note that operationalisation of the PFMRP – as the
means to mitigate fiduciary risks – would be important for approval of new budget
support agreements.
2. Key Issues Discussed and Agreed Way Forward
Notwithstanding the satisfactory overall implementation of the PAF, there are several
areas of concern, which require more government attention and effort. In this
statement, we will not go through the PAF matrix in detail but rather focus on these
areas of concern and the agreed way forward.
(i) Reduced income poverty: private sector and rural development
We welcome the overall progress that has been made in private sector development
and the continued focus the Government places on this important area. In particular,
we note that Phase I of labour legislation was presented to Parliament for the first
reading in November 2003 and that local government nuisance taxes have been
removed, commencing this fiscal year as specified in the 2003/04 Budget Speech.
When preparing the new PRS, we encourage the Government to undertake a detailed
analysis of the sources of growth that are likely to provide a strong and sustainable
base for reducing poverty.
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However, despite these positive developments we are concerned by the delays
encountered with implementing a new system for business licensing, which would
create a streamlined system of business registration. As the proposed new system
implies that business registration would not be a source of revenue but only recovery
of administrative costs, this has required substantial consultations with ministries and
local authorities on the possible loss of revenue and we recognise the importance of
this consultation. We note that a position paper has been drafted, which would be
presented to the Cabinet Secretariat before the end of April. Development partners
encourage continued strong efforts by the Government to create an enabling
environment for private sector development, which is critical for continued growth
and sustainable reduction of income poverty.
With approval of the Land and Village Land Acts, the next steps are for the Ministry
of Lands to draft the corresponding regulations and to develop strategic and
prioritised plans for implementation of the new Acts. Concerns were raised over the
funding of implementation of the Land and Village Land Acts. We note that funds for
implementation of the Acts are already available – and we expect the Annual Budget
for FY 2004/05 to cover any remaining financing needs for the coming year. For the
future, development partners count on the Government to ensure that reforms agreed
upon in the PAF receive full budgetary funding.
We note progress in studying the role and efficiency of the eight crop boards – and
we underline the importance of moving speedily to establish crop boards as
regulatory functions only. We also note progress towards delineating the roles and
responsibilities for maintenance and rehabilitation of rural roads – this would be
determined in the new Roads Act. The importance of access to markets for
agricultural products cannot be overstated, as the critical means to reduce income
poverty in rural areas.
(ii) Enhanced poverty monitoring system
We welcome the good progress has been made in enhancing the capacity for poverty
monitoring and strategy development. A medium term strategic plan has been
approved for capacity enhancement of PED (the poverty monitoring secretariat) and
immediate needs for the PRS review have been met. Efforts to strengthen PO-
RALG’s capacity to collect and analyse routine data are also underway and stronger
collaboration with key line ministries in rationalising the routine data system is
progressing. A draft position paper has been developed and presented to the PRS
Technical Committee. We encourage further work on this draft in collaboration with
the sectors. We look forward to implementation of the new strategic plan for PO-
RALG, as well as the planned review of the Poverty Monitoring System, which we
stand ready to support.
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We also appreciate the ongoing efforts for the review of the Poverty Reduction
Strategy, ensuring a comprehensive consultation process and incorporating the
lessons learnt from implementation of PRSI. We note with appreciation the intentions
of GOT to articulate more clearly what is meant by priorities in PRSII and to ensure
a clear and transparent translation from PRSII poverty objectives into budget
allocations.
(iii) Macroeconomic stability
We are pleased to note that macroeconomic stability has been maintained, despite the
adverse effects of the drought. Macroeconomic stability remains a fundamental
necessary, albeit not sufficient, condition for enhancing growth led by the private
sector.
On domestic revenue mobilisation, we are pleased to note that tax collection remains
above target and that efforts to modernise the tax administration are progressing
broadly as planned. We welcome the Government’s commitment to broadening the
tax base as an essential element to achieving a sustainable increase in domestic
revenues and reduced dependency on external funding. In this respect we support the
ambitious goals set by GOT in the context of the PRGF agreement, which will require
continued strong efforts to achieve. We also wish to stress the importance of
increasing domestic revenues without reducing substantially the incentives for private
sector growth – establishment of a modern, efficient and effective tax administration
is key to achieving this.
(iv) Effectiveness of public service delivery
During 2002/03 and the first half of fiscal year 2003/04, budget execution was in line
with the approved budget and PRS priorities, as priority sectors have continued to
receive their full quarterly allocations. In the budget for 2003/04, allocations to
priority sectors increased by 25.6 percent compared to actual expenditure in 2002/03.
As noted during the budget review (October) and the annual review (November),
reallocations mainly from energy to health and roads meant that the relative share of
priority sectors in the budget remained constant year on year at 46%. During the first
two quarters of 2003/04, overall execution of Other Charges expenditure in priority
sectors has improved – a positive development, which could indicate that
procurement planning and implementation are improving.
Nevertheless, the status of financing of priority sectors in the current fiscal year
remains uncertain in the light of the Supplementary Budget, which appears to imply
expenditure cuts across the board and may affect financing of priority items. This is
an absolutely fundamental issue for development partners, as our budget support is
intended for enhancing financial resources for PRS priorities. We take note that GOT
is committed to achieving the necessary expenditure cuts on low priority items, both
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within and outside priority sectors. It is, however, not entirely clear how this would be
achieved and we remain concerned about possible expenditure cuts on PRS priority
items, including on HIV/AIDS prevention, the judiciary, and within the health sector.
Therefore, further follow-up on how the necessary expenditure cuts are being
achieved in practice is necessary – during the MYR, it was agreed that the
Ministry of Finance would provide more information on actual expenditures in
non-priority sectors, as well as detailed information (at item level) on allocations
and actual expenditures in priority sectors.
We note that the quarterly budget execution reports now provide full details at item
level (according to GFS codes) of PRS priority sector expenditure. This change of
format greatly improves the usefulness of the execution report as a tool for
monitoring PRS implementation. We note, however, that some year on year changes
in classifications have been introduced, making comparisons over time more difficult
(e.g. the inclusion of health insurance for government employees under priority items
in the health sector). We urge the Ministry of Finance to provide specific information
to stakeholders when such changes occur and to provide detailed information to
allow accurate comparisons over time.
Looking to the formulation of the FY2004/05 budget, we remain concerned about the
Budget Guidelines. The allocations to priorities appear to be at approximately the
same level as last year. In addition, a large amount of TShs 207 billion remains
unallocated in the Budget Guidelines, which makes it impossible to assess
consistency with the PRS priorities. We note that this amount includes allocations for
organisation of the 2005 general elections, transfers to LGAs in relation to the new
formula-based allocation system, and the Treasury voucher system – but we are
concerned about the budget implications for priority sectors and priority items.
Finally, the projections of external financing for the budget – for both FY2004/05 and
the outer years of the MTEF - remain unrealistic. We conclude that the Budget
Guidelines are less effective than in previous years.
We note the importance of ensuring confirmation by development partners on the
projections of external financing for the budget for FY2004/05 and beyond – as
agreed through the PER Macro Group. We stress the need for further dialogue
with GOT on the preparation of the FY 2004/05 budget in the coming months
and underline that we expect the FY2004/05 budget allocations to be fully in line
with the priorities in PRSI.
We also underline the importance of GOT establishing a clear and transparent
budget strategy, based on best projections of resource availability at the time of
preparation, that effectively translates government policies into budget allocations.
This strategy would need to include all planned public expenditures, including
expenditures that development partners consider to be of less importance (such as the
new government aircraft or the National Stadium). The development partners would
then be able to engage in a more fruitful discussion with the Government on budget
allocations. Improving the consistency of the budget process, from policy formulation
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to implementation, is critical and we strongly encourage GOT to elaborate and take
forward recommendations from the PER External Evaluation on this issue.
On public service reform, we are pleased to note that PO-PSM has moved ahead
steadily with the reform agenda. One of the key achievements has been pay
enhancement in line with the approved budget for 2003/04, where salaries have been
increased between 6 and 10 percent. We note that while pay reform is difficult to
implement, it is essential for improved performance in the public sector.
(v) Reduced Resource Leakage
(a) PFMRP
A key area of concern during the review is that there has been slow progress in the
establishment of the new Public Financial Management Programme (PFMRP).
We welcome the positive progress in the implementation of some key areas of PFM,
where projects are already in place. However, while this does improve outputs in
these specific areas of work, it does not result in coordinated nor sequenced progress
and it does not address some of the key components necessary for reducing fiduciary
risk. For these requirements to be met, it is essential that implementation of a
coherent and comprehensive programme for public financial management
commences. Such a programme would go beyond accounting and expenditure
management and would also include budget, procurement, and oversight functions.
The issue of fiduciary risks is gaining increased focus at our Headquarters. Effective
implementation of a comprehensive programme of public financial management
reforms is therefore absolutely essential for our ability to continue to provide budget
support in the longer term.
Recently, there has been some progress, including the appointment of the DPS in the
Ministry of Finance as programme manager for the PFMRP; the decision to hire a
programme coordinator and to establish a secretariat for the PFMRP within Ministry
of Finance; and the decision to have the Computer Services Department manage the
IT component (apart from the accounting and expenditure management modules of
the IFMS software, which will remain managed by the Accountant General’s
Department).
However, despite this progress much still remains to be done before the PFMRP can
be successfully launched. In particular, this includes the following immediate actions:
MOF to confirm the availability of the Programme Coordinator candidate in
order to determine if there is an additional need for interim short term
consultancy (apart from the current 2 week assignment);
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MOF to submit the funding requirements for (1) the Programme Coordinator
and (2) the Secretariat (explicitly indicating the proportion of staff to be drawn
from within and outside the Ministry);
Development partners to confirm to MOF that funding for the above needs is
available until the basket is established. We have already indicated funding
availability to MOF.
In addition the subsequent steps required to move towards implementation of the
programme are:
Submission of a detailed outline of the management structure. This could be
achieved by MOF submitting an updated PFMRP programme document,
reflecting clearly the management structure of the programme, both internally
and with development partners;
Establishment of the Secretariat. This would involve the recruitment of staff,
according to the funding requirements, referred to above;
Development of a more focussed phase one programme, including all key
components of the programme. The revised programme document should
reflect the reduced TA activities, as well as coordinated and sequenced
programme activities, outputs and outcomes over time;
Establishment of basket-funding modalities, which includes (1) a
Memorandum of Understanding and (2) an Operations Manual (covering the
Institutional arrangements, Reporting arrangements, Financial Management &
Procurement arrangements, and Monitoring & Evaluation).
On several occasions, we have offered to Ministry of Finance assistance in order to
achieve the above steps. We remain committed to this offer and await any requests
from MOF. The development partners note that we consider the PFMRP as the
guiding framework for all support for public financial management reforms, whether
this support is provided in the form of projects or financial support through the
proposed basket fund. It is critical that the PFMRP guides all such assistance by
development partners, as this is the only way to ensure coherent, coordinated, and
cost effective progress on public financial management. Should the Ministry of
Finance wish, we stand ready to meet at any time to discuss our expectations as
outlined above.
(b) Corruption
We note with concern that implementing activities on anti-corruption continue to be
delayed. Corruption is a concern to all development partners, as it adversely affects
the efficiency and effectiveness of financial resources made available for poverty
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reduction activities and high levels of corruption may seriously hamper private sector
growth. To demonstrate the Government’s commitment, we note the importance of
visible progress regarding the execution of effective measures to combat corruption.
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We wish to note three key elements discussed during the Plenary:
Regular dialogue on governance. We note that the GGCU will publish the
quarterly reports on MDAs, both by printing these reports and by posting them on
the Government web-site. We wish to highlight the urgency of completing this
task for the most recent report and we urge the government to outsource printing
of quarterly reports, if the Government Printer is over-loaded. We are encouraged
by the intention to establish regular dialogue with development partners on
governance, including corruption – and we look forward to receiving an
invitation from the Chief Secretary for the first such meeting.
Repeal and enactment of Anti-Corruption Law. We understand from our
discussions during the annual and mid-year reviews that revisions to the existing
legal framework are required in order for prosecutions against corrupt
individuals/agents to be a serious deterrent to corrupt behaviour. The apparent
delay of more than one year in submitting the revised Bill to the Law Reform
Commission (LRC) is a concern to us but we are encouraged to learn from the
Attorney General’s Chambers that the LRC has now been asked to prepare the
new law as a matter of priority. We strongly encourage the Government to
continue efforts to speed up submission to Parliament of the revised law.
Preparation and implementation of anti-corruption plans in Local Authorities. We
note that this action has been delayed for more than two years now. We underline
the importance of credible and effective actions to address issues of corruption at
local government level, as well as in central government. We hope that the
Government will encourage all LGAs to make the required budgetary provisions
in FY2004/05 to facilitate the implementation of anti-corruption plans and to
establish strong follow-up mechanisms.
3. Reflections on Format of Review and Development of the PRBS/PRSC Modality
We note that unfortunately it was not possible for the Government to prepare a status
report on progress in implementation of PAF actions, as the starting point for the mid-
year review. In order to raise the efficiency and effectiveness of PRBS reviews, the
Government is kindly requested to prepare such status reports in advance of reviews.
Nevertheless, we have been very encouraged with the process of the MYR itself and
welcome the strong participation of key government representatives in the technical
working groups, which greatly enhanced the quality of the work that these groups
undertook. The technical work prepared the foundations for the plenary sessions on
key issues of strategic importance. We very much appreciate the strong and active
participation of the Government in the plenary sessions, which we consider to have
been effective as a forum for discussion and for jointly agreeing on ways forward. In
particular, we have greatly appreciated the strong leadership by Ministry of Finance
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throughout the plenary sessions and the participation of other key officials in the
sessions of particular relevance to them. As such, it is our view that the format for this
MYR has provided a more effective dialogue with government and has been a more
efficient way of conducting reviews of the PRBS/PRSC than in the past.
Looking to the future, we wish to table a few suggestions for discussion on how to
move forward:
The PRS review offers a unique opportunity to modify the PRBS/PRSC instrument to
achieve closer alignment with the PRS and to harmonise our budget support fully
with the budget process, from policy formulation to budget execution and monitoring
of outcomes. We propose to have a joint session with GOT to reflect on the budget
support modality prior to finalisation of the new PRS. Due to time constraints, this
may require a session to be held during GOT quiet time – we therefore submit this as
a proposal and seek the views of government on whether this would be useful and
possible.
In developing the PRBS/PRSC modality we recognise the need for a more
strategically focused framework for assessing performance. Whether this continues to
be a PAF for PRBS/PRSC or a framework emerging from the new PRS is open to
debate. However, what is clear is the need for a closer alignment of budget support
with the PRS and the poverty monitoring system. In re-designing any framework, it
may be appropriate to consider the use of results-oriented indicators, which could
help to reduce the number of policy actions. We propose that this work is undertaken
prior to the annual review in November 2004. This could be achieved in conjunction
with finalisation of PRSII, as the Government intends to establish a clearer focus on
poverty objectives and results-orientation in the next PRS.
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ANNEX I
PARTICIPANTS OF THE PRBS MID YEAR REVIEW/ PRSC 2 APPRAISAL
NAME INSTITUTION CONTACT EMAIL
1 G.S. Mgonja Ministry of Finance, Permanent gmgonja@mof.go.tz
Secretary – Treasury
2 P.M. Lyimo Ministry of Finance, Permanent plyimo@mof.go.tz
Secretary – Finance
3 R.M. Khijjah Ministry of Finance, Deputy rkhijjah@mof.go.tz
Permanent Secretary. Chairman
4 B.S. Nyoni Ministry of Finance
5 M.G. Kamugisha Ministry of Finance mkamugisha@mof.go.tz
6 N.B.S. Magambo Ministry of Finance nmagambo@mof.go.tz
7 J. Mapunjo Ministry o f Finance jmapunjo@mof.go.tz
8 D.M.S. Mmari President’s Office, Permanent ps@poralg.go.tz
Secretary – Regional
Administration and Local
Government
9 T.M. Kiama National Audit Office
10 Willey A. Lyatuu Ministry of Works willeylyatuu@yahoo.co.uk
11 H.S. Makundi Ministry of Works
12 A. Mwakapugi President’s Office – Planning and mwakapugi@tanzania.go.tz
Privatisation
13 S.C. Msangi Ministry of Finance Smsangi@yahoo.com
14 R.S. Mlinga Ministry of Finance sctb@mof.go.tz
15 P.L. Kadesha Bank of Tanzania plkadesha@hq.bot-tz.org
A. G. K. Mwakapugi President’s Office-Planning and mwakapugi@tanzania.go.tz
16
Privatisation
17 Johnson Kaijage President’s Office-Planning and tehingisak@yahoo.co.uk
Privatisation
18 Cleofa Assey President’s Office-Planning and Cassey40@yahoo.com
Privatisation
19 Christina Sonyi Ministry of Justice and
Constitutional Affairs
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A. N. M. Sumari Ministry of Justice and
20
Constitutional Affairs
21 Richard Musingi President’s Office – Regional musingirc@yahoo.com
Administration and Local
Government
22 Servacius Likwelile Vice President’s Office likwesb@pedvpo.go.tz
23 Bedason Shallanda Ministry of Finance bshallanda@yahoo.co.uk
24 J.J.K. Mwanza Ministry of Finance jmwanza@simbanet.net
25 Kripali Manek Ministry of Finance kmanek@mof.go.tz
26 Sauda Msemo Ministry of Finance smsemo@mof.go.tz
27 Ibrahim Abubakar Ministry of Finance Aidcoordination@mof.go.tz
28 B.M. Elikana Ministry of Finance Aidcoordination@mof.go.tz
29 Miharu Furukawa Ministry of Finance Aidcoordination@mof.go.tz
30 J.G. Mrema Ministry of Industries and Trade Dp@mit.go.tz
31 Bede Lyimo Ministry of Industries and Trade bedelyimo@mit.go.tz
32 Liz Turner Ministry of Industries and Trade lizturner@fastmail.fm
33 J. Bitegeko Ministry of Agriculture and Food dpp@kilimo.go.tz
Security
34 Theresia P. Msaki Ministry of Agriculture and Food msakitp@hotmail.com
Security
35 George Yambesi President’s Office-Public Service yambesi@intafrica.com
Management
36 F.E. Meena President’s Office-Public Service felistam@yahoo.co.uk
Management
37 Adieu Nyondo President’s Office-Public Service nyondo@intafrica.com
Management
38 Mathias Chitunchi President’s Office – State House, chitunchi@hotmail.com
Good Governance Coordination
Unit
39 Mr. Hoseah President’s Office –Prevention of
Corruption Bureau
40 H.M. Kitilya Tanzania Revenue Authority hkitllya@raha.com
41 A.M. Hayuma Ministry of Lands and Human amhayuma@yahoo.com
Settlement Development
42 E.E. Mshanga Ministry of Lands and Human eemshanga@yahoo.com
Settlement Development
43 E.K. Kwelukilwa Ministry of Lands and Human Kek307307@yahoo.co.uk
Settlement Development
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44 Jytte Laursen Danish Embassy jytlau@um.dk
45 Nicolai Ruge Danish Embassy nicrug@um.dk
46 Gerard Considine Embassy of Ireland Ireland@cats-net.com
Brendan Mc Grath Embassy of Ireland Brendan.mcgrath@iveagh.gov.ie
47
48 Allister Moon World Bank amoon@worldbank.org
49 Robert Utz World Bank Rutz1@worldbank.org
50 Indu Hewawasam World Bank ihewawasam@worldbank.org
51 Emmanuel Mungunasi World Bank emungunasi@worldbank.org
52 Wilhelm Ngasamike World Bank ngasamike@yahoo.com
53 P. Mpango World Bank pmpango@worldbank.org
54 Robert Townsend World Bank rtownsend@worldbank.org
55 Rogati Kayami World Bank rkayami@worldbank.org
56 Preeti Ahuja World Bank pahuja@worldbank.org
57 Denyse Morin World Bank dmorin@worldbank.org
58 Vedasto Rwechungura World Bank Vrwechungura@worldbank.org
59 J. Factora World Bank jfactora@worldbank.org
60 Pascal Tegwa World Bank ptegwa@worldbank.org
61 Marius Koen World Bank mkoen@worldbank.org
62 Denis Biseko World Bank dbiseko@worldbank.org
63 Martti Eirola Embassy of Finland Martti.eirola@formin.fi
64 Sari Jormanainen Embassy of Finland Sari.jormanainen@formin.fi
65 Luke Myers CIDA Luke.myers@dfait-maeci.gc.ca
66 Tor Haug Embassy of Norway Tor.haug@norad.no
67 Emmanuel Maliti Embassy of Netherlands Emmanuel.maliti@minbuza.nl
68 Norman Macdonnell CIDA – Canada Norman_macdonnell@acdi-cida.gc.ca
69 Nitti Somaiya CIDA - Canada Nitti.somaiya@ccotz.org
70 Helen Tilley European Commission h.tilley@cec.eu.int
71 Frans Ronsholt European Commisssion fronsholt@yahoo.com
72 Romain Darbellay SDC – Switerzland daressalaam@sdc.net
73 Jacqueline Mahon SDC – Switzerland Jacqueline.mahon@sdc.net
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74 Adolf Evarist SDC – Switzerland Adolf.evarist@sdc.net
75 Monica Rubiolo SECO-Switzerland Monica.rubiolo@seco.admin.ch
76 Martin Saladin SDC – Switzerland Martin.saladin@sdc.net
77 A. de La Maisonneuve European Commission Axel.maisonneuve@cec.eu.int
78 P. Mwanakatwe African Development Bank p.mwanakatwe@afdb.org
79 P. Kariuki African Development Bank p.kariuki@afdb.org
80 M.A. Ojelade African Development Bank m.ojelade@afdb.org
81 Ann Stodberg Embassy of Sweden Ann.stodberg@sida.se
82 Erik Jonsson Swedish Embassy erik.jonsson@sida.se
83 Celine Schmitt French Embassy Celine.schmitt@diplomatie.gouv.fr
84 Tatsuo Hirayama Embassy of Japan t-hirayama@raha.com
85 Takashi Okuyama JICA Okuyama.takashi@jica.go.jp
86 J. Biswaro JICA jicatz@raha.com
87 T. Yamauchi JICA Yamauchi.tamahi@jica.go.jp
88 Mamoru Endo JICA m-endo@raha.com
89 Hiroyuki Kinomoto JICA Kinomoto.hiroyuki@jica.go.jp
100 Hady Riad German Embassy Hady.riad@diplo.de
101 Christian Natusch KfW kfw@cats-net.com
102 Britta Oltmann KfW Oltmann@kfw.co.ke
103 Caroline Sergeant DFID c-seargeant@dfid.gov.uk
104 John Piper DFID j-piper@dfid.gov.uk
105 Liz Ditchburn DFID l-ditchburn@dfid.gov.uk
106 Iain Jones DFID i-jones@dfid.gov.uk
107 Ali Abdi IMF aabdi@imf.org
108 A.A. Tuni IMF aatuni@imf.org
109 W. Bronkhorst Royal Netherlands Embassy Willem.bronkhorst@minbuza.nl
74
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