TANZANIA ANNUAL NATIONAL POLICY DIALOGUE (POVERTY/PER/GBS REVIEW) FINAL REPORT

Transcription

1 TANZANIA ANNUAL NATIONAL POLICY DIALOGUE (POVERTY/PER/GBS REVIEW) FINAL REPORT 2 ND 8 TH DECEMBER Page

2 TABLE OF CONTENTS TABLE OF CONTENTS... 2 List of Abbreviations 3 EXECUTIVE SUMMARY INTRODUCTION AND CONTEXT SYNOPSIS OF THE DIALOGUE STRUCTURE, AND HOW THE ANNUAL EVENT FITS IN: OPENING SESSION MKUKUTA AND MKUZA PERFORMANCE REVIEW MKUKUTA I Performance: MKUZA I Performance REVIEW OF RECENT MACROECONOMIC PERFORMANCE DISCUSSION, OVERARCHING CONCLUSIONS AND THE WAY FORWARD: DEMOGRAPHIC AND HEALTH SURVEY (DHS) RESULTS INTRODUCTION RESULTS FROM A STUDY ON SAFETY NETS IN TANZANIA GROWTH AND POVERTY REDUCTION: POLICY IMPLICATIONS FROM QUALITATIVE RESEARCH MKUKUTA II: KEY PRIORITIES AND A FOCUS ON IMPLEMENTATION ARRANGEMENTS MKUKUTA II AND PRIORITIES TO MKUZA II AND ITS IMPLEMENTATION ARRANGEMENTS: RAPID BUDGET ASSESSMENT MEDIUM TERM STRATEGY AND CROSS CLUSTER MTEF SUMMARY OF KEY ISSUES ON MKUKUTA/MKUZA GBS ANNUAL REVIEW INTRODUCTION OFFICIAL LAUNCH OF THE 2010 GBS REVIEW IMPLEMENTATION OF THE 2010 PAF KEY ISSUES FOR 2010 ANNUAL REVIEW: Introduction: Key Issue 1: Accelerating Pro-Poor Growth in the Context of Kilimo Kwanza Key Issue 2: Business Environment Key Issue 3: Equity and Efficiency: Opportunities and Challenges Key Issue 4: Budget Key Issue 5: Financial Management at Central and LGAs Presentation and Discussion THE FIGHT AGAINST CORRUPTION PAF DISCUSSION CLOSING CONCLUSION & WAY FORWARD ANNEXES: Page

3 List of Abbreviations AIVS AMCOS ANPD ASDP BEST BG CAADP CAG CSO CWG CTI DADPs D-by-D DP EPZ GBS GDP GFS GNU HBS HRMSS IFMS IPSAS JAST LGAs LGRP LSRP M&E MDAs MDGs MKUKUTA MKUZA MoF MP MTEF NACSAP NBS NER NGO NSAs NSGRP PCCB PER PFM PFMRP Agricultural Inputs Voucher System Agricultural Marketing Cooperative Societies Annual National Policy Dialogue Agricultural Sector Development Program Business Environment Strengthening in Tanzania Budget Guidelines Comprehensive Africa Agriculture Development Program Controller and Auditor General Civil Society Organization Cluster Working Group Confederation of Tanzania Industries District Agricultural Development Plans Decentralization by Devolution Development Partners Export Processing Zone General Budget Support Gross Domestic Product Government Financial System Government of National Unity Household Budget Survey Human Resources Management Support System Integrated Financial Management System International Public Sector Accounting Standards Joint Assistance Strategy for Tanzania Local Government Authorities Local Government Reform Program Legal Sector Reform Program Monitoring and Evaluation Ministries, Departments, and Agencies Millennium Development Goals Mkakati wa Kukuza Uchumi na Kupunguza Umasikini Tanzania (NSGRP) Mkakati wa Kukuza Uchumi na Kupunguza Umaskini Zanzibar (ZSGRP) Ministry of Finance Member of Parliament Medium Term Expenditure Framework National Anticorruption Strategy and Action Plan National Bureau of Statistics Net Enrolment Rate Non-governmental organization non state actors National Strategy for Growth and Reduction of Poverty Prevention and Combating of Corruption Bureau Public Expenditure Review Public Finance Management Public Financial Management Reform Program 3 Page

4 PFMRP PFMS PMO PMO-RALG PMS PMS PSDID PSRP RGZ TI TISS UNCAC URT VAT WRS ZBC Public Finance Management Reform Program Public Financial Management System Prime Minister s Office Prime Minister s Office Regional Administration and Local Government Poverty Monitoring System Poverty Monitoring Systems Private Sector Development and Investment Division Public Sector Reform Program Revolutionary Government of Zanzibar Transparency International Tanzania Interbank Settlement System United Nations Convention Against Corruption United Republic of Tanzania Value Added Tax Warehouse Receipts System Zanzibar Business Council 4 Page

5 EXECUTIVE SUMMARY The five days Annual National Policy Dialogue (ANPD) for 2010 was held in Dar es Salaam at the Blue Pearl Hotel, Ubungo Plaza on the 2 nd 8 th December, The annual event is a culmination of a year long process involving the Government, Development Partners, Civil Society Organisations, and the Private Sector, covering Public Expenditure Reviews (PER), MKUKUTA monitoring, and the General Budget Support (GBS). The dialogue was organised around two main themes: the first two days discussions focused on MKUKUTA /MKUZA and the PER; and the next three days were on the GBS discussion. The Government was represented by participants drawn from both the Government of the United Republic of Tanzania and the Revolutionary Government of Zanzibar, as well as the Local Government Authorities (LGAs). There was also representation from the Parliament, involving the ruling and opposition parties. The Dialogue was organised around the structure of the national development frameworks, i.e. the National Strategy for Growth and Reduction of Poverty (MKUKUTA) for Mainland Tanzania and the Strategy for Growth and Eradication of poverty (MKUZA) for Zanzibar. This Dialogue structure, adopted in 2008, integrates all major national and sector development interventions into a single structure, and covers four main levels: Sector and Thematic Area Working Groups, Cluster Working Groups, MKUKUTA-PER Main Group and the Joint Coordinating Group. The timing for this year s event was of particular importance as it coincided with (a) entry into office of new Governments for the United Republic of Tanzania and Zanzibar, following democratic general elections held on 31 October, 2010; (b) completion of the implementation period of MKUKUTA I and MKUZA I for Tanzania Mainland and Zanzibar respectively that guided growth and poverty reduction programmes during 2005/ /10; and (c) the launch of new framework strategies, MKUKUTA II and MKUZA II. The 2010 Dialogue provided opportunity for all stakeholders to (i) reflect upon performance of implementation of MKUKUTA I and MKUZA I and agreements reached at a similar event last year as reflected in the 2010 GBS Performance Assessment Framework (PAF); and (ii) look forward towards implementation of MKUKUTA II and MKUZA II, and deliberate on a new PAF for The GBS discussions centred on five key issues agreed in advance by the Government and DPs. It was agreed that the discussion this year would focus on the same themes as last year (2009) in order to provide opportunity for a deeper understanding of the issues and follow up on implementation of the agreements reached. KEY MESSAGES FROM THE MKUKUTA/MKUZA/PER DISCUSSIONS The following were the key messages arising from the presentations and discussions during the discussions on MKUKUTA/MKUZA and Public Expenditure Review: (i) (ii) All stakeholders reaffirmed their commitment to growth and poverty eradication as promulgated in the various Government programmes, and look forward to closely collaborate in their implementation as effectively as possible; Although some successes have been recorded in implementing MKUKUTA I and MKUZA I, a number of challenges persist, including the fact that a significant portion of the population still lives with income poverty and/or faces a risk of hunger. Given the rather high annual population growth rate of 2.8%, higher economic growth than has been attained so far are needed to sustainably and progressively reduce poverty, while some form of education and interventions to promote maternal, child and reproductive 5 Page

6 health will also help to enhance the impact of economic growth on poverty reduction. Therefore there is reason to maintain a comprehensive focus on reducing income poverty as the fulcrum around which public policies revolve; The quality of social services is another challenge that still needs to be addressed. Effective implementation of the core reforms and improving the business environment remain significant challenges. Participants recognised the adverse effect of the global financial crisis and the associated global economic recession on the performance of MKUKUTA/MKUZA implementation, and that the economy is recovering after prompt interventions by the Government and recovery of the global economy. (iii) (iv) (v) The systems that aim at promoting accountability and efficiency in the utilisation of public resources are critical, and should therefore be further supported and strengthened, if maximum mileage is to be gained from the limited resources; MKUKUTA II and MKUZA II bring significant improvements to their predecessors (MKUKUTA I and MKUZA I). Proper Implementation Plans including realistic costing of interventions, prioritizing, sequencing and coordination, and monitoring and evaluation (M&E) framework are key for better results. Going forward, participants emphasised on the importance of: (a) (b) (c) Promoting employment creating activities and sectors in order to broaden the benefits of growth; Taking account of the opportunities and challenges posed by policies, actions, and other developments taking place at the regional and international levels. Translating the strategy into an implementable set of actions appropriately sequenced and clearly costed with much sharper prioritization and sequencing of MKUKUTA II, ultimately reflected in the budget. (d) (e) Streamlining the institutional framework for planning, implementation, and monitoring and evaluation within the Government in order to mitigate the apparent duplication of efforts and multiplicity of development programmes and strategies; A framework for implementation and monitoring and evaluation shall be worked out early in Enforcing good practice, behaviour, and attitude towards work, frugality, and ethics which are the basic prerequisites for success at any level. KEY MESSAGES FROM THE GENERAL BUDGET SUPPORT (GBS) DISCUSSIONS The 2010 GBS review provided opportunity for a reflection on the performance of implementation of the 2010 Performance Assessment Framework (PAF); and deliberate on a new PAF for In addition the GBS sessions took the opportunity to discuss the status of 6 Page

7 implementation for the five key issues agreed in advance by the Government and DPs and, as stated earlier the same themes were discussed last year in (i) 2010 PAF Implementation The status of implementation of the 2010 PAF, based on the Cluster Working Group reports, shows the following: Temporary Process Actions [25] Achieved 10 Partially Achieved 7 Not Achieved 8 Outcome Indicators [37] Fully Met 17 Not Scored 2 Split Decision 1 Off Track 17 Underlying Processes [21] Satisfactory 11 Moderately Satisfactory 4 Split Rating 2 Unsatisfactory 4 Looking forward, the following were proposed: (a) With 17 out of 35 outcome indicators met, and 10 out of 25 temporary process actions fully achieved, the level of achieved results remains a challenge for implementation of the Government s Poverty reduction strategy. Several important actions have not been fully implemented, although some are in progress. A strategic, realistic and ambitious PAF 2011 with high level of expected results will be important. Improved PAF performance will be important to secure continued and strengthened support for GBS as a preferred modality. (b) The need for more effective dialogue was raised. There is therefore a need to reexamine the dialogue structure to improve information sharing, the roles and responsibilities of GoT and DPs and the dialogue conditions in general, and make it less resource intensive (especially human resources). (c) The apparent differences between the Government and development partners on the status of implementation of agreed actions (and quality of the results thereof) suggest a lack of clarity of the assessment criteria. It was proposed to review the assessment criteria for the PAF indicators (Underlying Processes, TPAs and Outcome Indicators) in order to make them clearer. 7 Page

8 (d) Some PAF scores were made very late in the process leading up to the Annual Review. Efforts should be made at all levels in the dialogue structure to finalise assessment well in advance of the Annual Review. Further reflections were made on the five key themes agreed earlier between the Government and Development Partners as follows: (ii) Pro-poor Growth in the Context of Kilimo Kwanza The participants underlined the fact that the focus on agriculture constitutes the right direction for addressing growth and poverty challenges in Tanzania. However, they emphasized the need to do more, do it better, and do it faster by observing the following: (a) (b) (c) (d) (e) (f) Policy reforms and public investments and improving market environment for promoting an enabling business environment and strategic support are necessities for pro-poor agricultural development; Agriculture is a business; it is essential to recognise the role of the private sector, and accelerate improvement of the business environment in order to leverage private sector investment in agriculture; In the context of Tanzania, small holder farmers are key stakeholders in agriculture; addressing productivity challenges for them stand the better chance to generate maximum growth and poverty reduction impacts; The challenge in agriculture is to increase productivity of land and labour. This requires timely access to quality inputs, appropriate technology, extension services, and marketing environment, and most importantly sustainable provision of water through irrigation systems taking into account also the need for sufficient drinking water; To translate productivity gains into increased incomes, market access for farmers, including through more efficient and competitive marketing and trading in an appropriate regulatory framework, improved rural roads; and rural electrification for value addition are critical; and Water is critical for sustainable agricultural development. Therefore, it is important to consider climate change implications, build and spread extensively low cost and easy to maintain irrigation schemes, and exploit opportunities presented by wetlands. (g) Prepare terms of reference and conduct a PER study on the financing of KILIMO KWANZA. (iii) Business Environment: Participants noted mixed low progress as confirmed by various indices such as the Investment Climate Assessment of 2009, the Global Competitiveness Index 2010/11, and the Doing Business Report 2008, 2009, It was appreciated that the Government in collaboration with the Private Sector and Development Partners representative has prepared the Roadmap 8 Page

9 for Improving the Business Climate in the country that provides a adequate framework for improving business environment and investment though at slow pace hence with limited impact at the initial stage. They noted further that the Roadmap provides an important first step toward an improvement of business environment and investment climate in Tanzania particularly given that it commands high level political backing, engaging various MDAs working collectively on finding solutions, appreciating LGA s role in delivery of services, mainstreamed implementation process and coordinated by the Prime Minister s Office which has clear responsibilities for coordination of all government business. They appreciated that implementation of the Roadmap has commenced, but that no critical measure to improve the situation on the ground had been implemented and urged for speeding up implementation of the identified short term measures. Also, it is important to put the implementation of the Roadmap in a larger picture of investment climate reforms including infrastructure. Going forward, the following issues of importance were emphasised: a) Continued implementation of quick-wins and short-term measures; b) Developing a comprehensive action Plan for the Roadmap by the end of March 2011, with a prioritised list of concrete outcomes to be completed within agreed timeframes, indication of required resources, an M&E Plan, and an Information and Communication Plan with the intention to build business buy-in and awareness of the Roadmap action and outcomes; c) Expediting implementation of the medium and long term measures; d) Conduct a Joint GoT-DP stock take of the Roadmap in January 2011; e) Disseminate a prioritised list of concrete outcomes to be completed within a particular period - to build business buy-in and awareness of the reforms; and, f) Timeline towards objective of establishing a sub-national Cost of Doing Business ranking, Investment Climate index and Business Competitiveness index to be agreed. (iv) Anti-corruption: Participants appreciated the effort of the Government in promoting good governance and the fight against corruption, particularly given the complexity arising from the need for visibly prompt action and the challenges in gathering evidence in order to adhere to the principles of human rights and good governance. They noted the importance of maintaining momentum generated by recent investigation and prosecution of petty and grand corruption cases. The following suggestions were therefore made: (a) Expediting both investigation and prosecution of outstanding cases; (b) generating clearly visible results in order to sustain public commitment to participate in the good governance programmes; (c) linking the effort against grand and petty corruption is critical; inadequate action against grand corruption encourages petty corruption; (d) Enhancing international cooperation in the investigation of grand corruption cases, particularly the tracing and recovery of corruption proceeds; 9 Page

10 (e) Publishing the report on the national governance and corruption survey of 2009 and give priority to strong actions to combat corruption the most corrupt government institutions identified; (f) (g) (h) Addressing the conflict of interest, particularly where policy makers, regulators, or members of oversight institutions are involved in the businesses they regulate or oversee; Empowering and encouraging the citizens to play a more active role in the fight against corruption; and Balancing the focus on prevention of corruption on one hand, and investigation and prosecution on the other. (i) Continue to strengthen the legal framework for fighting corruption. (v) Equity and Efficiency: Equitable access to social services remains an important issue for Government and efforts have been made over the past three years to improve this. However indicators in equity have been slower than expected. In order to continue the objectives of equalising expenditure human resources and outcomes the following advice was given: (a) (b) (c) (d) In attracting staff to remote and underserved areas, there is a need to take a holistic approach and consider the possible crowding out effect against private sector and NSA providers of social services; Experience elsewhere shows that financial incentives are essential but not sufficient to attract staff in otherwise underserved areas. Other innovative forms of incentives are needed, particularly those that take into account the local context; Finalize the Implementation Strategy and an M & E System for the recently adopted Public Service Pay and Incentives Policy; The basis for allocation of resources for the provision of services across LGAs was noted to be unclear. Participants called for establishment of clear and transparent criteria for such interventions. This may require a reconsideration of the established service standards. The participants fully support decentralization by devolution as a way of delivering services that are responsive to the needs of the local community. However they also recognize the strategic interventions maybe required from the center in order to achieve equity in the provision of services. Going forward careful consideration will need to be given on how to balance the two inputs for example in recruitment Central Government could provide an advisory role whilst allowing LGAs autonomy in order to recruit and retain their staff in the most effective way. 10 Page

11 (e) (f) Reliable data is important in order to measure changes. The Government was called upon to improve its Human Resources Management Information System by establishing the necessary databases and systems; and Participants called for a gender lens when allocating resources for promoting equity in the provision of social services. (g) Establish objective criteria to determine what are underserved LGAs. (h) Reconsider the minimum staffing norms. (vi) Budget: Participants appreciated the challenges that the country faced during the last two years as a result of the Global Financial Crisis (GFC) and the role that the budget played in ensuring that affected sectors were protected from the downturn. This underscored the importance of the Government budget as an instrument for economic management. Going forward, the participants made the following observations and suggestions: (a) (b) Recently, the share of infrastructure investment appears to be on a decline. The expectation that the trend will be reversed as Tanzania unwinds from the rescue package and effects of the GFC was confirmed by the Government. Specifically, the government would try to reduce recurrent spending, especially on goods and services, in order to create some budget space for infrastructure spending but also allow recurrent spending to be fully covered by domestic revenue; Participants were concerned about the apparent high level of a financing gap during 2010/11, given a possible 12% shortfall in domestic and external resources. Such level of a deficit calls for a clear strategy for dealing with it if ad hoc cuts are to be avoided. Government explained that it was aware of the challenges posed by the deficit. The government will take stock of any possible financing gap during the mid-year review of the budget, and make strategic decisions. (c) (d) (e) Whereas good progress has been made in aligning the budget to MKUKUTA at the macro level, participants were concerned about the capacity of MDAs and LGAs to effect similar alignment at the lower levels. Better alignment of sector budget allocations and MKUKUTA/sector strategic objectives was called for. Hence, building the capacity of MDAs and LGAs was suggested as a prerequisite for aligning micro with macro level intentions, and achieving the intended results; As the stock of physical economic infrastructure increases, there is need to pay more attention to financing for maintenance; and. Continue building the capacity of the oversight institutions (CAG and Parliament) to discharge their public expenditure and financial management functions effectively. (vii) PFM at Central and Local Level: There has been substantial achievement in the last year, including a much improved dialogue atmosphere. However, there is need to build on the achievements, and design 11 Page

12 the next phase of PFM reforms to take Tanzania to even higher ground. Participants offered the following suggestions in this regard: a) The diversity of expectations of the different LGA stakeholders (RALG, MOF, MDAs, DPs, and citizens) complicates operations at the LGA level. Stakeholders need to understand the context in which LGAs operate and adjust as necessary; b) There is a need to rationalise the institutional framework, the flow of funds, information, and reporting to and from LGAs and Central Government. c) Review and streamline the procedures for managing financial resources at the local level, aiming to reduce the number of accounts to the minimum feasible and enhance efficiency at all levels. d) Participants were concerned on the multiplicity of channels for the flow of funds and information to and from LGAs. Participants appreciated the Government s decision to reduce the number of LGA accounts to six (6), and called for further rationalisation of the flow of funds, information, and reporting; and e) Building on the Water Sector SWAP, participants called for a systematic review of Sector Wide Approach programmes (SWAPs) to address the fiduciary risk inherent in such programmes. PERFORMANCE ASSESSMENT FRAMEWORK 2011 The discussion on the 2011 PAF was held in a closed Government DPs session. The meeting was reminded that the Troika Plus meeting held in June 2010 proposed a more strategic PAF should be put in place that reflects Government priorities for growth and poverty reduction. The PAF developed should be SMART and strategic. The subsequent agreement on a set of criteria agreed to focus on results, and be strategic by considering the interplay between underlying processes, temporary process actions and robust outcome indicators. The Government presented a slightly amended Draft 2011 PAF, which was originally prepared jointly through Cluster Working Groups. In general, the DPs appreciated that the draft was a good start for further engagement with Government and numerous comments and ideas were discussed across the different Clusters recorded in the GBS section of this report. The parties agreed to consult, through the receptive Cluster Working Groups and other fora, to finalise the 2011 PAF by end of January, Based on the assessment against the 2010 PAF, the 2010 GBS Annual Review is MODERATELY SATISFACTORY. Participants reaffirmed their commitment to focus on growth and reducing poverty through increased productivity, improving the quality of social services, and strengthening governance institutions. For this purpose, they committed to agreeing a 2011 PAF that will serve as the benchmark for monitoring results.. They recognised the importance of generating clear evidence of positive growth and poverty reduction results linked to GBS for the sustainability of instrument, which is the Government s preferred instrument for aid deliver. They also agreed to negotiate a new PFM in order to continue with the GBS instrument. 12 Page

13 1.0 INTRODUCTION AND CONTEXT 1.1 Synopsis of the Dialogue Structure, and How the Annual Event Fits In: The Annual National Policy Dialogue for 2010 was held in Dar es Salaam on the 2 nd 8 th December, The annual event is a culmination of a year long processes on Public Expenditure Reviews (PER), poverty monitoring systems (PMS), and consultations on the General Budget Support (GBS) instrument, and involves the Government, Development Partners, Private Sector, and Civil Society Organisations. From the Government, participants were drawn from Ministries, Departments, and Agencies (MDAs), Local Government Authorities (LGAs), the Revolutionary Government of Zanzibar (RGZ), and Parliament. The dialogue is organised around the structure of the national development frameworks, i.e. the National Strategy for Growth and Reduction of Poverty (MKUKUTA) for Mainland Tanzania and the Zanzibar Strategy for Growth and Eradication of Poverty (MKUZA) for Zanzibar. The Dialogue Structure guiding the coordination between the government, development partners and domestic stakeholders, which was adopted in 2008, emphasises Government leadership of the development process as well of the stakeholder consultations, integrates all major national and sectoral development interventions into a single structure, and covers four main levels: Sector and Thematic area Working Groups, Cluster Working Groups, MKUKUTA-PER Main group and the Joint Coordinating Group. The timing for the year 2010 annual event was particularly exceptional, as it coincided with (a) entry into office of new Government of the United Republic of Tanzania and the Revolutionary Government of Zanzibar, following the general elections on 31 st October, 2009 that were rated by local and international observers as free, fair, and democratic; (b) completion of the implementation period of the framework national development strategies (MKUKUTA I and MKUZA I for Tanzania Mainland and Zanzibar respectively) that guided growth and poverty reduction programmes during 2005/ /10; and (c) the launch of new framework strategies in the form of MKUKUTA II and MKUZA II. 1.2 Opening Session The opening session was chaired by the Permanent Secretary, Ministry of Finance Mr Ramadhan Mussa Khijjah. In his welcoming remarks, he provided the scope of the forum as encompassing the PER Annual Review, the Poverty Policy Review, and the GBS Annual Review. He noted that the three, which used to lead to different events in the past, had been merged into a single Annual National Policy Dialogue beginning 2009 in order to optimise resource utilisation and reduce transaction costs. The Permanent Secretary invited the participants to use the forum for a candid, open, and constructive dialogue. A statement by the civil society was delivered by Mr Moses Kulaba, the Chairperson of Policy Forum, an umbrella organisation for Civil Society Organisations (CSOs) participating in the related engagement between government and other stakeholders. CSOs appreciated and thanked the Government for the invitation and the cooperation generally extended to the civic society, particularly as regards to continuous engagement on development and poverty reduction strategies. The statement reiterated support for the government, and highlighted the following other points aimed at accelerating progress: (a) Maintain the focus of the need to accelerate growth and reduce poverty, remembering that there are still 33% of Tanzanians living in poverty; (b) There is a need to develop a simple and less resource intensive dialogue structure in which CSOs can participate more effectively; 13 Page

14 (c) (d) The budget and its formulation and implementation processes remain obscure for most citizens, which affects transparency and accountability in the use of public resources; and The capacity building effort for the office of the Controller and Auditor General is yielding commendable results, and it would be useful if similar effort was directed to the other oversight institutions particularly the Parliament; The opening remarks by the Development Partners were delivered by the Resident Coordinator of the United Nations Agencies in Tanzania and Co-Chair of the Development Partners Group, Mr Alberic Kacou. In their statement, the DPs noted that the forum was a sign of the government s openness and willingness to engage all stakeholders on key issues of national development. They congratulated the government for finalising MKUKUTA II and MKUZA II which address the two main issues raised at last year s forum, namely income poverty and efficiency in utilisation of public resources. The DPs reaffirmed their readiness to work with Government in translating the strategic frameworks into policies and action plans. Moving forward, they raised the following issues: (a) (b) (c) (d) more effort is needed to make growth more pro-poor; address the quality of service challenges in the education, health, and water sectors, including their impact on the feasibility of achieving MDG 5; sustain the fight against corruption, and improve the judicious utilisation of public resources; and uphold and support the private sector as the driver of economic growth by, among others, addressing the challenges highlighted in recent assessments of the business environment in Tanzania; The 2010 Annual National Policy Dialogue was officially opened by the Minister for Finance, Hon. Mustafa Haidi Mkulo (MP). He reminded the participants of the many achievements made in implementing MKUKUTA I and MKUZA I, particularly as regards macroeconomic indicators and the expansion of access to social services. He, however, noted that major challenges remain in the way to attaining the National Development Vision 2025, the Millennium Development Goals, and even the medium term strategic objectives contained in MKUKUTA I and MKUZA I, including the following: (a) (b) (c) (d) (e) Unsatisfactory quality of social service, despite substantial increases in access indicators in all social sectors; low productivity in all sectors due to low levels of investment and inadequate application of technology; inadequate prioritisation of public investment and supervision in implementation of national and sectoral policies and strategies; lack of capacity to integrate the private sector and CSOs in the implementation of propoor programmes; Low growth of domestic revenue compared to financing needs, leading to insufficient investment in key economic infrastructure like roads, railways, ports, and energy. 14 Page

15 (f) Low capacity for processing agricultural produce; thereby missing on value addition opportunities; (g) (h) Failure of the private sector to compete regionally and globally; and A high population growth rate. The Minister called on participants to critically examine these challenges, and advise on measures for rationalizing expenditure programmes and the resource available, and improve the capacity for effective implementation of programmes as these are the prerequisites for addressing the listed challenges. 1.3 MKUKUTA AND MKUZA PERFORMANCE REVIEW MKUKUTA I Performance: Mrs Anna Mwasha, the Director for Poverty Eradication and Empowerment in the Ministry of Finance presented a review of the National Strategy for Growth and Reduction of Poverty (MKUKUTA I), including the results obtained from its implementation between 2005/06 and 2009/10. Progress in its implementation was monitored and reported on through several instruments under the MKUKUTA/Poverty Monitoring System, including the bi-annual Poverty and Human Development Reports (PHDRs) independently produced by the Research & Analysis Working Group (RAWG), the Government generated MKUKUTA Annual Implementation Reports (MAIRs), and the routine and survey data reports generated by the National Bureau of Statistics (NSB). Achievements reported for the implementation period include the following: (a) Cluster I: Growth and Reduction of Income Poverty: (i) Satisfactory macroeconomic stability, and a growth rate averaging 7% per annum against the MKUKUTA target of 6% - 8%; (ii) Increased domestic revenue collection, from 12% of GDP in 2005/06 to 16% of GDP in 2009/10; (iii) (iv) (v) (vi) A total of 1,313,561 non agricultural jobs created, 1,185,387 of which were in the private sector and 128,174 public sector jobs. Generally, satisfactory levels of food production in the country; Notable investment in, and improved quality of physical infrastructure including roads and power supply; and There was a rather marginal decline in income and food poverty indicators between 2001 and 2007, with income poverty declining from 35.7% to 33.6% and food poverty from 18.7 % to 16.6% respectively over the period; (b) Cluster II: Quality of Life and Social Wellbeing: 15 Page

16 (i) (ii) Improved raking in the Global Human Development Report, from 163 in 2000 to 151 in 2009; Substantially increased enrolment and completion rates at all levels of the education system (i.e. primary, secondary, tertiary, and technical); (iii) A decline in the under five mortality rate, from 112 (2004/05) to 81 (2009/10), infant mortality from 68 (2004/05), to 51 (2009/10), and maternal deaths from 578 (2004/05) to 454 (2009/10); (iv) Access to clean and safe water increased, from 55% in 2004/05 to 58.7% in 2009; (c) Cluster III: Good Governance and Accountability: (i) Improvement in resource allocation, depicted by increased collection of domestic revenue and allocations to LGAs; (ii) (iii) (iv) Continued devolution of powers from the centre; Continued implementation of the four core reform programmes (PSRP. PFMRP, LGRP, and LSRP); and Deepening of press freedom and democracy, including regular, peaceful, and free civic and general elections. (d) Challenges While many successes have been recorded in implementing MKUKUTA I, a number of challenges persist, including the fact that: (i) (ii) (iii) (iv) A significant portion of the population still lives with income poverty and/or faces a risk of hunger; The quality of social services is still unsatisfactory for most people, and a major challenge in perfecting the otherwise good results of MKUKUTA implementation. There is inadequate coordination and organisation of interventions across sectors and stakeholders, leading to insufficient prioritisation and sequencing of poverty reduction interventions; Agriculture, the source of livelihood for three in every four Tanzanians, continues to suffer from less than half the targeted growth rate (averaging 3.9% against the targeted 10% during ), mainly due to inadequate productivity and limited access to agricultural inputs despite the Agricultural Inputs Voucher System (AIVS); (v) Despite improved food availability, food shortages were reported in 46.9% of districts in 2009, suggesting serious challenges in food distribution; 16 Page

17 (vi) (vii) There is low stock and poor quality of economic infrastructure, impeding the achievement of growth rates high enough to generate a more visible impact on poverty; and Access to financing remains a severe challenge to many, constraining their ability to invest and exploit opportunities for income generation MKUZA I Performance Zanzibar Strategy for Growth and Eradication of Poverty (MKUZA I), the Zanzibar Strategy for the Reduction of poverty, and was implemented over the period 2007 to A review of its implementation and the results thereof was made by Mr Makame, Head of the MKUZA Secretariat, Revolutionary Government of Zanzibar. MKUZA focused on three main clusters, namely: (i) Growth and Reduction of Income Poverty; (ii) Social Services and Wellbeing and (iii) Good Governance and National Unity. (a) Cluster I: Growth and Reduction of Income Poverty Under this Cluster, MKUZA aimed at achieving high and sustained pro-poor growth by creating an enabling environment for growth, promoting sustainable pro-poor and broad-based growth, reducing income poverty, and attainment of overall food security. Achievements include the following: (i) Actual real economic growth reached 6.7% (2009) against a target of 10% in (ii) (iii) Domestic revenue reached 18.2% (2007/08) against a target of 18.5% of GDP by Agriculture, employer to 42% of Zanzibar population, grew by 5.7% in real terms (2008) and 4.4% (2009) against a target of 6% growth in 2010 (b) Cluster 2: Social Services and Wellbeing The broad outcome under this Cluster was improved social well-being and sustainable access to quality social services with emphasis on poor men and women and the most vulnerable groups. Achievements include the following: (i) (ii) Increased the net enrolment ratio (NER) for primary and secondary education to 81.5% (2010) and 38.2% (2010) against the targets of 90% (2010) and 75% (2010) respectively. There was also an 11% increase in the enrolment of University students between 2008 and 2009; Reduced the incidence of malaria to 0.8% (2009) against a target of 35% (2010), Infant Mortality Rate reduced to 33/1000 (2009) against a target of 57/1000 (2010), U5M reduced to 79/1000 (2009) against a target of 71/1000 (2010). (iii) Access to Water increased to 80% (urban) and 60% (rural) by 2009 against a target of 90% (urban), and 65% (rural) by (iv) The 2010 target for access to basic sanitation (83%) was achieved in Page

18 (c) Cluster III: Good Governance (GG) and National Unity: Major achievements under this Cluster include: (i) Participatory budgeting process and implementation ; (ii) (iii) (iv) (v) (vi) Establishment of the Government of National Unity. Civilianization of Prosecutions. Establishment of National Disabled Council. Operationalisation of the Zanzibar Business Council (ZBC).. Increasing number of private TVs and Radio stations. (d) Challenges: Experience from implementation of MKUZA I points to the following challenges: (i) (ii) (iii) (iv) (v) Inadequate prioritization and coordination of interventions, adversely affecting efficiency in the utilisation of the scarce resources available; Poor export competitiveness and weak export competency, compounded by poor service provision in these specific areas by the trade support institutions, diminishes the national capacity to utilise export opportunities; Weak human resources capacity; Low productivity of land, labour and other inputs; and Weak emphasis on harnessing PPP potentials. 1.4 Review of Recent Macroeconomic Performance The presentation on recent macroeconomic developments was made by Mr. Laston Msongole, the Deputy Permanent Secretary in the Ministry of Finance. The presentation noted that Tanzania has continued to enjoy satisfactory macroeconomic performance due to a combination of sound policies and continued recovery of the world economy, particularly during the first half of GDP growth, which had averaged 7.1% between 2001 and 2008, and declined to 6% in 2009 due to the global economic slowdown, was expected to exceed 7% in Other developments reported include the following: (i) (ii) The National Bureau of Statistics (NBS) had completed the reclassification of the consumption baskets to the International Classification of Individual Consumption by Purpose (COICOP), to include both urban and rural prices, and use the geometric mean instead of arithmetic mean in computing indices. Beginning January, 2010, inflation decreased substantially on account of improved food supplies, a decline in international petroleum prices, and prudent fiscal and monetary policies. Mainly on account of shortfalls in the resources envelops, total Government expenditure was 92% of estimates in 2009/10 and 84.0% during the first quarter of 2010/ Page

19 (iii) (iv) The national debt stock, as at end-september 2010 was US$ 8, million, 73% of which is external debt, and 27% domestic debt. The public sector is the largest borrower, accounting for 86% of the total external debt. During the year ending September 2010, overall Balance of Payments recorded a deficit of USD 25.7 million, against a surplus of USD million recorded in the corresponding period in Consequently, and partly due to a significant decline in official current transfers, there was a 13.2% widening of the current account deficit to USD 2,570.9 million during the year. Gross official reserves stood at USD 3,589.6 million compared to USD 3,563.8 million recorded in Sept (v) During the year ending September 2010, credit to the private sector increased by 18.5%, compared to 26.6% for the period ended Sept 2009 mainly due to a cautious stance taken by the banks in the wake of the GFC. Going forward, it was pointed out that, on the assumption of successful implementation of economic policies and continued favourable weather conditions, economic activities are expected to pick up in the medium term, with a real GDP growth bouncing back to 7.0% in 2010 and maintain a trajectory above 7.0% in the medium term. 1.5 Discussion, Overarching Conclusions and the Way Forward: The presentations on MKUKUTA I and MKUZA I Implementation and Recent Macroeconomic Performance were discussed jointly, and the following points were raised. (a) While many successes have been recorded in implementing MKUKUTA I and MKUZA I, a number of challenges persist, including the fact that a significant portion of the population still lives with income poverty and/or faces a risk of hunger. The inadequate quality of social services is another challenge in perfecting the good results of MKUKUTA/MKUZA implementation. (b) Participants recognised the adverse effect of the global financial crisis and the associated global economic recession on the results of the MKUKUTA/MKUZA implementation, and that the economy is recovering thanks to prompt and measured interventions by Government and recovery of the global economy. (c) As we formulate strategies and evaluate results thereof, we must take into account the opportunities and the often adverse effects of policies, actions, and other developments at the international level. For example, the continued unfair architecture of global trade has direct consequences for the incomes of Tanzanian farmers. Unless we change the nature of our agricultural exports from primary commodities to processed, it may be quite difficult to substantially and sustainably improve the level of peasants incomes under the architecture. (d) (e) There may be a need to re-examine the roles of the Ministry of Finance on one hand, and the Planning Commission on the other, as regards the planning function and responsibility over MKUKUTA implementation. There is also a need to avoid a multiplication of development strategies and plans, as suggested by the existence of Vision 2025, MKUKUTA, and the proposed Five Year Development Plans. Moving forward, critical actions for all stakeholders include the following: 19 Page

20 (i) (ii) (iii) (iv) To broadening the social benefits of economic growth, focus should be on broad based, employment creating activities and sectors; Proper prioritisation and sequencing of interventions, cross-sector organisation and coordination, and the consistency and depth of NSA participation in policy dialogues will need to be improved; Emphasise value addition to benefit agricultural producers; Given the rather high population growth rate of 2.8%, higher economic growth than has been attained so far will be needed to sustainably and progressively reduce poverty. 20 Page

21 2.0 DEMOGRAPHIC AND HEALTH SURVEY (DHS) RESULTS 2.1 Introduction The NBS presented the preliminary results from the Demographic and Health Survey undertaken in 2010 and whose data was still being analysed. The survey is a fourth such study undertaken in Tanzania, the last having been conducted in 2004/05. The preliminary results from the data indicate improvements in (a) birth rates, which has declined from 5.7 in 2004 to 5.4 in 2009; (b) infant mortality and under-five mortality which have dropped dramatically from 59 and 147 to 25 and 81 respectively between 1999 and 2009; (c) maternal mortality declined from 578 to 454 deaths for every 100,000 deliveries between 2004/05 and 2009 respectively; (d) the children aged under 5 who received Vitamin A increased from 14% in 1999 to 60% in 2009; and (e) the usage of some form of contraception among women increased from 25% to 34% between 1999 and 2009 respectively. Participants welcomed the preliminary results, and emphasized the need to sustain the education and other forms of interventions to promote maternal, child, and reproductive health to improve further on results. 2.2 Results from a Study on Safety Nets in Tanzania The World Bank informed the forum of a planned study to examine the economic and social feasibility of an expanded system of a safety net through cash transfers to benefit vulnerable members of the society. Results from the study would be broadly discussed by all stakeholders before being used for possible policy decisions and/or implementation. 2.3 Growth and Poverty Reduction: Policy Implications from Qualitative Research Dr Kim Kayunze of the Sokoine University of Agriculture made this presentation on behalf of the Economic and Social Research Foundation (ESRF) of Dar es Salaam and the London-based Chronic Poverty Research Centre who coordinated the study. The presentation postulated that the lack of meaningful reduction in poverty despite impressive economic growth in the past decade could be explained by the following three reasons: (a) poor people are weakly protected against risk; (b) accumulating the assets needed to escape poverty has become more difficult as security of tenure is increasingly proving insufficient to create rental market, smallholders are losing land to investors, and access to critical post-primary education is limited for poor households; and (c) agricultural growth has been hesitant due to inaccessibility of assets required to produce significant volumes for markets for most smallholders, trading monopolies and oligopolies constrain farm-gate prices and some of them deceive farmers, inadequate extension services, and there is an over-supplied labour market. It argues for focused protection of vulnerable households, including against ill health and bereavement. To support low income households improve their asset base, the study proposes policies that: (i) link savings and credit cooperative societies and associations (SACCOSs and SACAs); insurance instruments for loans, programmatic support for small livestock; access to agricultural equipment, enhanced investment in irrigation; review of land laws to enable greater security of tenure to support enhanced rental market and prevent vulnerable women losing access to land. In addition, the study notes that contributions from local communities for social projects may be too much, and the priority hitherto accorded in Kilimo Kwanza may not be enough for accelerating the reduction of income poverty for the most vulnerable households. 21 Page

22 On improving agricultural incomes, the study emphasises adoption of measures to reduce risks for farmers, facilitating (agricultural) asset accumulation and protection, improving output markets including by extending the Warehouse Receipt Scheme to other crops and linking producers to specific value chains. Measures advocated for improving labour markets include diversification and promotion of non-farm activities in rural areas, education and regulation to address labour on credit or non-payment of wages, improve labour conditions wherever possible through standards (e.g. large scale agriculture, rural industry). The recommended long term measures to reduce labour over-supply include allowing children to stay in education longer, anti-child labour regulation, and social assistance to elderly and carers in order to reduce the need for their re-entry into the labour market. 22 Page

23 3.0 MKUKUTA II: KEY PRIORITIES AND A FOCUS ON IMPLEMENTATION ARRANGEMENTS. 3.1 MKUKUTA II and Priorities to 2015 MKUKUTA II was presented by Ms Anna Mwasha, the Director for Poverty Eradication and Empowerment, Ministry of Finance. She observed that preparation of the strategy benefitted from the experience gained during implementation of MKUKUTA I, various researches and studies on poverty dynamics in the country and elsewhere, and broad stakeholder consultations. The key new elements in the strategy include emphasis on a few sectors recognised as drivers of growth and poverty reduction, namely education, agriculture, tourism, energy, transportation infrastructure, health, and financial sector reform; the focus on improving the quality of social services, particularly education, health, and water; human resource development; and private sector development. Like its predecessor, the strategy is organised around three clusters of interventions, which are: (a) (b) (c) Cluster I: Growth and Reduction of Income Poverty focusing on sustainable development through equitable and employment-generating growth, food security, and adequate infrastructures for production purposes including availability of reliable and competitively priced energy. Cluster II: Improvement of Quality of Life and Social Well-Being focusing on quality of life of the poorest and most vulnerable groups, reduced inequalities in access to social services across geographic, income, age, gender and other groups, a safe and sustainable environment, and thereby reduced vulnerability from environmental risk. Cluster III: Governance and Accountability focusing on ensuring the poor have access to and control over natural resources for lawful productive purposes, checking waste and diversion of public financial resources, ensuring democratic participation in the monitoring of public resources, rule of law, human rights and in total, a conducive business environment for encouraging investment. This will encompass continued implementation of the core reforms in the public sector, namely the Public Sector Reform Programme (PSRP), The Local Government Reform Programme (LGRP), The Public Financial Management Reform Programme (PFMRP), and the Legal Sector Reform Programme (LSRP). Mrs. Anna Mwasha concluded by inviting all stakeholders to participate in the next steps i.e. preparation of the Implementation Guide, and the actual implementation of MKUKUTA II. Mr Erick Korsgen, on behalf of the DPs, commended the government for the way it steered the review of MKUKUTA I and drafting of MKUKUTA II, and appreciated the opportunity accorded to DPs to contribute to both processes. He singled out the attempt to address challenges in prioritisation and proper sequencing, ineffective implementation of policies and strategies, and the lack of concrete policies and actions for effectively implementing and monitoring MKUKUTA I as strong points for MKUKUTA II. He reaffirmed DPs support for MKUKUTA II, and there readiness to support the next processes for early commencement of implementation. Mr Erik Korsgen observed that many achievements were made under MKUKUTA I, particularly in terms of economic growth and improvements in education and health fronts, but key poverty and hunger targets have not been met. There are wide disparities in income and access to social services, and an unsatisfactory trend in the quality of social services, particularly education. 23 Page

24 The DPs commentary raised the following issues for action in implementing MKUKUTA II: (a) Maintain focus on reducing poverty, and therefore promote pro-poor growth; (b) Address quality issues in the provision of social services; (c) Clearly spell out the role of non state actors (NSAs) in poverty monitoring; and (d) Integrate the opportunities and challenges from regional economic cooperation in the national plans. Presenting the Monitoring and Evaluation framework for MKUKUTA II, Mr Muddy Cheyo, Senior Economist from the Ministry of Finance, explained that the framework is a continuation of the one used to monitor and evaluate implementation of MKUKUTA I, consisting of about 80 outcome indicators, institutional arrangements, and broad stakeholder participation. The MKUKUTA II M & E system will be broader by involving more stakeholders, particularly the institutional sources of data and be linked to the national dialogue structure involving the Government, DPs, and NSAs. He further reported that the MKUKUTA Secretariat was looking at ways to deepen public education on MKUKUTA and its implementation. In the discussion that followed, the following points were raised: (a) (b) (c) There is a need to streamline the institutional framework for planning, implementation, and monitoring and evaluation within the Government in order to mitigate the apparent duplication of efforts and multiplicity of development programmes and strategies; Public education, and enforcing good practice, behaviour, and attitude towards work, frugality, and ethics are the basic prerequisites for success at any level and should be addressed; A crucial lesson from the implementation of MKUKUTA I is that prioritisation in the allocation of scarce financial and human resources is important. The Government should focus on a few sectors that expand its capacity for broader interventions, and thereby ensure sustainability of its programmes. 3.2 MKUZA II and its Implementation Arrangements: Ms Amina K H Shabaan, the Executive Secretary, Zanzibar Planning Commission, presented MKUZA II. She noted that the MKUZA II has its roots in the Zanzibar Vision 2020, which envisions the (i) eradication of abject poverty, and (ii) establishment of a transformed and diversified economy composed of sustainable tourism, manufacturing, and modern agriculture. In moving from the Vision 2020 to MKUZA II, the stakeholders underscore the importance of economic growth to development, the need for growth to be broad based in order to be socially beneficial and sustainable, and the role of good governance in ensuring an environment conducive for growth-generating economic activity and social harmony. The process of preparing MKUZA II benefitted from experience gained from implementing MKUZA I, and particularly the various studies undertaken as part of the MKUZA Review process. The three pillars of MKUZA II are: 24 Page

25 (a) (b) (c) Cluster I: Sustainable economic Growth: Addresses Zanzibar s growth challenges, including the environment for investment and income generation, means for ensuring that growth is sustainable, pro-poor, avoids unsustainable income inequalities, and captures both income poverty and food security dimensions. The private sector is central to the realisation of the outcomes expected under this Cluster. Cluster II: Human Development: To be meaningful and developmental, increased economic capacity must be transformed into a better quality of life for the people. This requires the actions planned under this Cluster, including improved social service delivery systems, gender responsive policies, and social safety nets to protect the most vulnerable members of the society. Cluster III: Good Governance and National Unity: Interventions under this Cluster aim at putting in place a socioeconomic environment needed for achieving the objectives of the actions under clusters 1 and 2. Interventions under this Cluster include citizens participation in democratic governance, rule of law and respect for human rights, and strong democratic institutions and national unity. The implementation of MKUZAII is to be coordinated under the MKUZA Secretariat, with support from the Technical Working Groups and strategic guidance from the MKUZA Technical Committee. Following the approval of MKUZA II, the MKUZA Monitoring Master Plan is to be reviewed in order to strengthen the M & E Framework for MKUZA II. Ms Amina concluded by observing that the actual financing requirements for MKUZA II implementation will be known after completion of the costing exercise, but warned that it will be substantial. Although the Government is redoubling the effort to attract private sector participation (including through PPPs), substantial external official assistance will be needed to supplement local effort. 3.3 Rapid Budget Assessment A rapid budget assessment constitutes an analysis of development in the planned and executed Government budget as regards consistency with policy intentions, and management of emerging fiscal risks or challenges. The presentation of the Rapid Budget Assessment for 2010 was made by Mr Emmanuel Mungunasi of the World Bank, and covered three thematic areas (aggregate analysis, Local Government analysis, and wage bill analysis), and six sectors i.e. education, health, water, agriculture, transport (Roads), and energy). The report highlighted the following developments in the recent past: (a) Domestic revenue increased from 11.2% of GDP in 2002/03 to 16.2% of GDP in 2008/09, and total government spending increased from 19.3% in 2002/03 to 29.0% in 2009/10, driven mostly by increased development spending; (b) Recurrent spending has grown rather rapidly of late, outpacing recurrent (domestic) revenue which can no longer cover the former; (c) There is an appreciable increase in the utilization of non-concessional borrowing for development projects in infrastructure; 25 Page

26 (d) More and more resources continue to be allocated to MKUKUTA; with cluster 1 (economic growth and reduction of income poverty) now being the top priority. However, infrastructure maintenance is inadequately funded; (e) Key sectors continue to be prioritized in budget allocation (more than 60% of the budget goes to these sectors); education and roads claims the highest shares. However, there are weaknesses in the alignment of sector budgets and sector priority of objectives; (f) Despite a declining trend in the share of overall allowances in the budget, the quantum of allowances remains rather high in some key MKUKUTA sectors; and are becoming an issue in LGAs budgets too; (g) The Government has implemented a number of initiatives to promote equality in budget allocation among LGAs. Nevertheless, attaining equality in the allocation of human resources among districts, and therefore the quality of service delivered across districts, is still a challenge; (h) Execution of the locally funded component of the development budget is generally better than the foreign funded component, apparently because of difference in the disbursement procedures. (i) Regardless of the source of funding, execution of the development budget where the share of capital investment is high (e.g. energy) has significant lags, reflecting challenges in planning and procurement; Mr Emmanuel Mungunasi made the following key recommendations in this area: (a) (b) (c) (d) (e) (f) Given the continuing growth of government expenditure as a share of GDP, it is advisable to determine a desirable limit of overall spending based on sustainable levels of the resource envelope (domestic revenue, aid, and borrowing). Among others, imposing such a ceiling could strengthen prioritisation and efficient resource utilisation; Reduce recurrent spending to sustainable levels while increasing development spending consistent with MKUKUTA objectives; Enhance domestic revenue collection by implementing a comprehensive reduction of tax exemptions; also try to realize foregone revenue potential to enable increase needs in public spending (infrastructure investment needs); Ensure non-concessional borrowing finances viable development projects, especially strategic economic infrastructure; Government needs to improve its revenue forecasting, and DPs to provide credible projection of the aid during the Budget Guidelines exercise, in order to plan expenditure on the basis of a credible resource envelope; Continue to improve MTEF planning in all spending units and for execution of the development budget by improving the credibility of Cash Flow and Procurement Plans. 26 Page

27 (g) (h) starting with the energy sector, improve capacity of MDAs to plan and implement large capital investment projects; and Improve timeliness and completeness of release of development funds (both local and foreign). Mr Mihayo Cheyo, Assistant Commissioner for Budget, Ministry of Finance provided a Government response to Mr Mungunasi s presentation, by providing clarification and the way forward on the issues raised. The response appreciated the good work in analysing budget dynamics, and reaffirmed Government openness to discussing the challenges highlighted therein. Particularly, Mr Cheyo highlighted the following challenges as areas prioritised by Government for redress: (a) Delays in the release of development funds. The pace of development budget releases is subject to both resource availability and pace of implementation of the respective project. Local funding is generally subject to the cash budget system, and foreign funding is subject to approvals by the respective Steering committee and disbursement by DPs. On the other hand, availability of relevant documentation (e.g. contractors certificates and progress reports), both of which reflect the capacity of the implementing agencies and contractors, lead to delays in disbursement of funds. Improved forecasting of the resource envelope and timely disbursement of GBS funds by DPs will provide a lasting solution as regards fund availability. On the other hand, the Government continues building the planning and implementation capacity of all MDAs and LGAs in order to achieve timely delivery of projects. (b) Implementation of large capital investment projects: Sectors with higher share of capital investment continued to experience low execution rates, reflecting challenges in planning and executing such projects. Invariably, the projects involve long gestation periods, multiple consultants and contractors, and approvals from several regulatory bodies. The Government continues to strengthen the capacity of MDAs, Regions and LGAs in planning and execution of such projects including capacity for negotiation of contracts for projects of such magnitude. Mr Cheyo also made the following clarification: (a) (b) (c) Although budgets are prepared on the basis of solid assumptions, it is not unusual for in-year deviations to occur. All that is needed is recognizing the possibility, and having a strategy for dealing with it when it materialises. The Government recognizes the emerging challenges in realizing the projected resource envelope for 2010/11 (domestic revenue and non-concessional borrowing), and will develop a comprehensive strategy for addressing the challenges once its likely magnitude is better understood. The government was confident of addressing it in the course of implementing the budget to June 2011, leading to a balanced outcome of implementing the budget for 2010/11 consistent with the broad policy objectives; The budget for 2010/11 includes estimates for non-concessional borrowing whose processes are at advanced stages to raise the budgeted amount on reasonable terms. Such funds from 27 Page

28 borrowing will be used to finance infrastructure projects approved in the development budget by the Parliament, and implementation of the projects is subject to availability of the financing; (d) (e) (f) (g) The classification of recurrent expenditure versus capital expenditures is fairly subjective, depending on whether one adopts the economic or accounting frameworks. In agriculture, for example, expenditure on training of extension workers could be considered recurrent although the benefits to accrue from these officers are of a long term nature. The procurement of tractors and power-tillers through the District Agricultural Development Plans (DADPs) is a necessary capital investment although it is accounted for as recurrent expenditure. Over 75 percent of funding in DADPs is for irrigation which is capital expenditure, but the fuel and surveying costs included therein are classified as recurrent items. The apparent decline in the share (not value, which increased) of expenditure on primary education in the 2010/11 budget reflects the completion of heavy investments in the construction of educational infrastructure (i.e. classrooms, teachers houses, desks, etc; The slight decline in the share of LGAs allocation reflects the effect of a one-time expenditure for financing Local Government Election in 2009/10 which is not repeated in 2010/11; To address equity issues in resource allocation to LGAs, budget allocation for LGAs is formula based, taking into account things like the population, poverty level, length of road network, and number of villages and approved establishment. Nonetheless, the Government is currently reviewing the formula with a view to improving it further. In tandem with the review, additional resources are allocated to some LGAs to cover requirements not accommodated in the existing formula (e.g. creation of conducive working environment in underserved areas, purchase of boats for island-serving Councils etc.) In the discussion that followed the presentations, the following points were made: (a) Participants appreciated the way the budget was used to mitigate the adverse effects of the global financial crisis and the associated global economic recession on the results of the MKUKUTA/MKUZA implementation. (b) Given the magnitude of the emerging gap in the 2010/11budget due to shortfalls in both domestic revenue and external assistance relative to the budgeted envelope, a clear strategy for filling the gap is critical and would need to be implemented early in the year, if spending in key areas of MKUKUTA II and service delivery are to be protected. (c) The government should address apparent weaknesses in the alignment between sector budgets and sector priority objectives despite, increased share of key sectors in budget allocation e.g. agriculture and infrastructure. 3.4 Medium Term Strategy and Cross Cluster MTEF The presentation on the medium term strategy and cross sector medium term expenditure framework (MTEF) was presented by Mr. Bedason Shallanda, Commissioner for Policy Analysis in the Ministry of Finance. Mr Shallanda started by underscoring the importance of the PER process for strengthening the budget process, and the Government s expectations for the recurrent dialogue to generate meaningful contribution to the 2011/12 budget and beyond. 28 Page

29 Looking back at the 2009/10 budget, he noted that: (a) (b) (c) (d) Domestic revenue collections were 8% lower than budgeted, but 10% above the level in 2008/09. The slower than expected growth is explained by the impact of the GFC that led to slower growth in taxable activities in the economy and postponement of some revenue measures whose implementation would affect adversely some activities including tourism, at the onset of the GFC; The budget implementation continued to be on cash basis, with actual expenditure closing at 92% of estimates; The net domestic financing of the budget during 2009/10 was equivalent to 1.9% of GDP; There has been significant improvement in financial management generally, as depicted by the CAG s audit reports whereby Unqualified Audit Opinions increased from 70% in 2007/08 to 86% in 2008/09, Qualified Audit Opinions decreased from 26% to 11%; and Adverse Opinions decreased from 5% to 3%. Mr Bedason Shallanda pointed out the following as measures recently implemented by the Government in further strengthening of public financial management: (a) (b) (c) (d) (e) (f) Introduction of economic classification of budget in line with GFS 2001 Manual. Henceforth, Annual Accounts are to be prepared using the International Public Sector Accounting Standards (IPSAS) format. Adoption of the functional classification of budget items beginning with the 2010/11 budget. Since July 2010, the Government is using the electronic payment system and the Tanzania Interbank Settlement System (TISS) for all payments by MDAs and Dar es Salaam ; The Public Finance Act, 2004 (CAP 348) has been amended to provided for the establishment of a centralized independent Internal Audit Department and empowered the Treasury, through the Accountant General, to control public funds in LGAs; The Office of Treasury Registrar has become an autonomous authority and will oversee management and operations of public corporations and institutions; Enactment of the Public Private Partnership (PPP) legislation in July 2010 in order to leverage public resources with private sector resources for investment in economic and social infrastructure. On a forward looking note, Mr Bedason Shallanda reaffirmed the Government s continued focus on sustaining macroeconomic stability by implementing prudent monetary and fiscal policies. In addition, the Government strategy includes the following: (a) Consistent with MKUKUTA II it will: (i) strengthen domestic revenue collection to increase domestic saving and finance a share of development spending; 29 Page

30 (ii) continue scaling up investment in agriculture and infrastructure development ; (iii) (iv) Continue to strengthen debt management and investment capacity to tap new financing sources and use them well; and Contain the growth of recurrent spending within sustainable levels and create space for infrastructure investment. (b) (c) In line with the Joint Assistance Strategy for Tanzania (JAST) and the Partnership Framework Memorandum (PFM), the GBS is the Government s preferred aid delivery modality, and DPs are urged to respect their commitments and Government leadership in this regard, and increase their usage of the preferred instrument. The main challenges going forward include finding ways to scaling up resources from both domestic and external sources to adequately fund MKUKUTA II interventions. 3.5 Summary of Key Issues on MKUKUTA/MKUZA The following were the key messages arising from the presentations and discussions during the discussions on MKUKUTA/MKUZA and Public Expenditure Review: (a) (b) (c) (d) (e) (f) (g) All stakeholders reaffirmed their commitment to growth and poverty eradication as promulgated in the various Government programmes, and look forward to collaborate in their implementation under Government leadership; While many successes have been recorded in implementing MKUKUTA I and MKUZA I, a number of challenges persist, including the fact that a significant portion of the population still lives with income poverty and/or faces a risk of hunger. The quality of social services is another challenge that still needs to be addressed going forward. Participants recognised the adverse effect of the global financial crisis and the associated global economic recession on the results of the MKUKUTA/MKUZA implementation, and that the economy is recovering thanks to prompt and measured interventions by Government and recovery of the global economy. With about a third of the population considered to be living in poverty (HBS 2007), there is a need to maintain the focus on growth and poverty reduction as the fulcrum around which all public policies revolve; The systems that aim at promoting accountability and efficiency in the utilisation of public resources are critical, and should therefore be further supported and strengthened, if maximum mileage is to be drawn from the limited resources; MKUKUTA II and MKUZA II bring significant improvements to their predecessors (MKUKUTA I and MKUZA I), and stand to yield better results with proper Implementation Plans including better sequencing and coordination. Moving forward, participants emphasised on the importance of: (i) employment creating activities and sectors in order to broaden the social benefits of growth; 30 Page

31 (ii) (iii) (iv) Taking account of the opportunities and challenges posed by policies, actions, and other developments at the international level. Streamlining the institutional framework for planning, implementation, and monitoring and evaluation within the Government in order to mitigate the apparent duplication of efforts and multiplicity of development programmes and strategies; Enforcing good practice, behaviour, and attitude towards work, frugality, and ethics which are the basic prerequisites for success at any level. 31 Page

32 4.0 GBS ANNUAL REVIEW 4.1 Introduction The final three days of the 5-day event were used to assess progress in the implementation of the Partnership Framework Memorandum (PFM) signed in 2006 under which General Budget Support (GBS) is provided directly to the Government budget by participating DPs. Specifically, the GBS Annual Review assesses the performance of both the Government and Development Partners against jointly agreed actions for the respective year, as outlined in the agreed Performance Assessment Framework (PAF) Matrix. Under the PFM, progress in implementation of the PAF actions forms the basis for GBS partners to make their financial commitments for the following fiscal years and provide indicative commitments for the next two years. The PAF includes a combination of underlying processes, temporary process actions, and outcome indicators drawn from the MKUKUTA Monitoring System. These are organized under the relevant Clusters of the MKUKUTA; (1) Growth and Reduction of Income Poverty, (2) Improved Quality of Life and Social Well-Being, and (3) Good Governance and Accountability. Cross cutting issues are covered by the Macro and Public Financial Management Working Group. The cluster work is undertaken throughout the year by Cluster Working Groups (CWGs) that draw membership from the Government, DPs, and CSOs. CWG 1 on Growth and Reduction of Income Poverty looks at whether broad based economic growth is effectively promoted, and identifies remedial measures where the answer to the principal question is not in the affirmative. CWG 2 works on the theme of Improved Quality of Life and Social Well-Being, seeking to ensure that the quality of life is continually improved for the majority of Tanzanians. CWG 3 works on Governance and Accountability, examining systems that promote good governance and the rule of law, and ensures that the Government is accountable to the people and not vice versa. CWG 4 is charged with ensuring that the budget reflects national growth and poverty reduction policies, that spending reflects the budget, and that budgetary decisions are consistent with policy and value for money considerations. Ahead of the Annual Review event, the Government and DPs agree on a number of Key Issues to be covered in detail at the review. The Key issues will invariably have emerged from the continuous dialogue during the year, under either the PER Working Groups or the MKUKUTA Monitoring Framework. For the 2010 Annual Review, it was agreed that the same key issues from the 2009 review be discussed in order to deepen the discussion and follow up on the implementation of the agreements reached last year. The following were the issues discussed: (a) (b) (c) (d) (e) Key Issue 1: Accelerating Pro-Poor Growth in the Context of Kilimo Kwanza; Key Issue 2: Business Environment; Key Issue 3: Equity and Efficiency - Opportunities And Challenges; Key Issue 4: Budget; and Key Issue 5: Financial Management at Central and Local Government Authorities (LGAs). 32 Page

33 4.2 Official Launch of the 2010 GBS Review The official launch was preceded by the statement by the Chair of GBS Group of DPs, Mr Svein Baera, Minister Counsellor, Embassy of Norway. In the statement, he made the following observations and suggestions: (a) (b) (c) (d) He congratulated the people and Government of Tanzania for the peaceful and fair elections in October, 2010; Congratulated Hon. M. H. Mkulo (MP) for his reappointment to the Office of Minister for Finance; He noted the achievements of Tanzania in some areas areas, including overall economic growth and on target to implement some MDGs but remains concerned about high rates of income poverty and the quality of education; Tanzania has been a pioneer in the use of GBS, and that, following this pioneer status, there was a need to show progressive results, in order to maintain GBS; Important messages to point out at the beginning of the 2010 GBS Annual Review were: (i) There remains the need to work jointly to strengthen the quality of communication and dialogue (e.g. IMF-PSI: 2 budgets, Budget gap); key for building trust; (i) (ii) PAF performance and financial commitments are not as positive as one would have hoped; (iii) The strong fiscal response to the Global Financial Crisis is recognized; (iv) The budget for FY 2010/11 is excessively optimistic and an effective strategy is required to manage the financing gap;; (v) Stressed the importance of agriculture to improve the livelihoods of the majority of Tanzanians; (vi) Progress in core public sector reforms and the fight against corruption continues to be slow; and (vii) GBS remains an effective aid delivery instrument in Tanzania, but at half a billion US dollars per year it must continuously prove its worth.. Officially launching the 2010 GBS Annual Review on 6 th December, 2010, the Minister for Finance, Hon. Mustafa Haidi Mkulo (MP) welcomed the comments by the GBS Chair, and invited him for further discussion on the same. He reiterated the key messages from stakeholders at the previous two days of discussion, particularly emphasising the strong stakeholder support for the Government s strategies and action for promoting growth and reducing poverty, and the emerging consensus that there has been an appreciable progress towards this goal. Nevertheless, the unsatisfactory quality of social services remains a challenge going forward. The Minister reaffirmed GBS as the Government s preferred aid modality, and called on DPs to increase the share of aid delivered as GBS. 4.3 Implementation of the 2010 PAF 33 Page

34 PAF Performance The 2010 PAF performance was presented by Dr. Likwelile, Deputy Permanent Secretary, Ministry of Finance. The 2009 PAF matrix had 21 Underlying Processes, 25 Temporary Process Actions (TPAs), and 37 Outcome Indicators. The overall assessment of implementation of these actions which reflects finalization of some ratings just after the annual review shows that: Temporary Process Actions [25] As per the CWG Reports Achieved 10 Partially Achieved 7 Not Achieved 8 Outcome Indicators [38] Fully Met 17 Not Scored 2 Split Decision 1 Off Track 17 Underlying Processes [21] Satisfactory 11 Moderately Satisfactory 4 Split Rating 2 Unsatisfactory Overall Progress The overall progress for each thematic area may be summarised as follows: (a) CWG 1-1-Growth and Reduction of Income Poverty (i) 3 out of 5 Underlying Processes are Satisfactory. They are the 2010 Joint Infrastructure Sector Review (JISR), the 2010 Agricultural Sector Review, and the Energy Sector Review. 2 out of 5 Underlying Processes (the Best Programme Review 2010 and, the Natural Resources Sector Review) were assessed as Unsatisfactory; (ii) 2 out of 7 TPAs were assessed as achieved ( Draft bill and Regulatory framework for PPP and Government to ensure a construction contract has become effective on additional power generation capacities); One TPA on (GoT to present a time bound ROADMAP to improve the business environment) was assessed as partially achieved; four TPA (Phased elimination of all local crop cess within two fiscal years, and offset by a transfer while the overhaul of local taxation is carried out, Natural Resources actions plans, New Statistics Bill, and an Agricultural Marketing strategy) were not achieved; (iii) 5 out of 12 Outcome Indicators are fully met, 5 are off-track, and 2 are not scored; (b) Cluster 2- Improvement of Quality of Life and Social Well-being (i) 4 out of the 5 Underlying Processes are Satisfactory; this includes Education Sector, Health Sector Review, HIV and AIDs Review and Review of Environment as a cross cutting issue. Split decision on Water Sector Review. 34 Page

35 (ii) (iii) 1 out of 4 TPAs was achieved (Capacity Building Plans based on the water sector capacity development framework); 2 were partially achieved (Education Sector Human Resources Situational Analysis and environmental action plans for at least two of the Agriculture, Health, Infrastructure, Water, Energy and Minerals sectors).establishing an analytical framework related to MTEF and PER to monitor the allocation and disbursement of funds for the Health Sector Strategic Plan) was rated as not achieved. 7 of 13 Outcome Indicators were Fully Met, and 6 were Off-Track (c) Cluster 3 - Governance and Accountability (i) 2 out of 5 Underlying Processes (which included Accountable Governance and LSRP) were assessed as satisfactory. 2 Core reform in the public sector (Public Service Reform Management Program and Local Government Reform Program) were assessed as Moderately, and a split assessment of 1 underlying process (Anticorruption); (ii) 3 out of 9 TPAs were achieved (Legal reform, Core reform indicators, and NACSAP M&E), 4 were partially achieved (Core reform procedures, LGA circular, Incentives in underserved areas and Government shall reduce overall expenditure on duty facilitating allowances) and 2 were not achieved (Local government finance act, Anticorruption) (iii) All 2 Outcome Indicators, (the percentage of outstanding court cases for 2 years or more and the percentage of total government budget allocated directly to LGAs and not through Ministerial votes) were achieved; (d) Cluster 4 - Macroeconomic Management and Public Financial Management (i) (ii) (iii) 2 out of 6 Underlying Processes were Satisfactory implemented, (Annual Audit Cycle, and Macroeconomic Stability). Public Financial Management Reform Program and Assessment of Development Partners Performance) were rated as Moderately Satisfactory and two others (effective PER policy dialogue and DPs and GoT adherence to JAST PFM, and Accra Agenda for Action Principles in terms of reducing funding on project/basket and increasing funding through GBS) were rated as Unsatisfactory 4 out of 5 TPAs were achieved,( Implementation of the agreed time bound by NAO, Adoption of Due Diligence study, Implementation of PFM Action Plan and PEFAR for ZANZIBAR). One on (a comprehensive study on revision of the Public Corporations Act to harmonize the legislation relating to public corporations, and ensure strengthened corporate governance and accountability consistently across parastatals) was Not Achieved. 3 out of 10 Outcome Indicators were on track; 1 had a split decision and 6 were rated off track. 35 Page

36 (e) Assessment of DPs Performance In line with the Government s indication of GBS as the preferred aid delivery modality, DPs performance is assessed with regard to their compliance with the Paris Declaration and with the Government s preference in that regard. In addition, DPs are assessed in relation to the predictability of their support. There are 5 indicators in the PAF that assess DP performance. 4 were rated as satisfactory (Predictability underlying process, and the deviation of actual financing from forecast and disbursement indicators, GBS in the first 2 quarters of the FY), and 1 was rated unsatisfactory (adherence to JAST principles) The volume of DPs GBS commitments has remained more or less constant for the past four years. Disbursement has also been more or less in line with commitments, with actual disbursement consistently slightly below commitment. The government reiterated its call for DPs to increase the share of GBS funding in their portfolios, and for non-gbs DPs to consider joining the GBS modality. (f) Discussion on the PAF Performance: In the discussion that followed the presentation, participants appreciated the Government s effort in implementing the actions agreed last year.. In addition, the following points were raised (i) (ii) (iii) (iv) (v) An issue was raised about the quality of the dialogue at the CWG and sector level, particularly regarding information sharing. The opinion that the dialogue structure was imposing a heavy transaction cost on some stakeholders, particularly Government and CSOs was also raised. Re-examining the dialogue structure to improve information sharing, and making it less resource intensive (especially human resources) was offered as a possible solution to these concerns. As previous years, there were instances of different interpretation of the implementation status of the results thereof, with a different outcome seen by the government and DPs sides. This signifies the need to make the assessment criteria for the PAF indicators (Underlying Processes, TPAs and Outcome Indicators) clearer to avoid a repeat of the same in future. Rather than focusing on the number of indicators achieved or not achieved, it could be helpful if they were assigned weights, as not all processes have the same impact on the overriding objective of engendering growth and reducing poverty; The CAG s audit of the Water Sector Development Programme generated very useful lessons that may be applied to improve the effectiveness of other sector wide programs (SWAPs); Participants congratulated Tanzanians for peacefully concluding recent general elections, and for the formation of a Government of National Unity (GNU) in Zanzibar. The elections accepted as free and fair by international observers, and the GNU, point to the maturity of the country s democracy; and 36 Page

37 (vi) Whatever challenges there may be with GBS, the modality is internationally recognized as a better tool than other aid modalities, which explains its endorsement at international fora and agreements aimed at promoting aid effectiveness. As such, parties need to focus on ways to make GBS more effective in Tanzania rather than considering any other alternative. 4.4 Key Issues for 2010 Annual Review: Introduction: Through the year long dialogue process, it had been agreed that the Key Issues discussed at the 2009 Annual Review be the focus for discussion at this year s review. This was particularly to assess progress in implementing the agreements reached last year, the lessons learned from the implementation process, and charting alternative paths where experience demands so. A Key Issue was identified for the area covered under each Cluster Working Group Key Issue 1: Accelerating Pro-Poor Growth in the Context of Kilimo Kwanza Mr Ezamo S, Maponde Assistant Director Private Sector Development, Prime Ministers Office presented the paper on Accelerating Pro-Poor Growth in the Context of Kilimo Kwanza. He started by highlighting progress attained in implementing the 12 Key Messages from the discussion in 2009, and provide in-depth details on four out of the twelve key messages from the 2009 dialogue which are(i) incentives to farmers and agro-processors; (ii) investment in agro-processing; (iii) investment in agro promoting infrastructure; and (iv) land reform due to immense impact and outcomes to the majority of smallholder producers and the economy. Nevertheless, progress was achieved in all the twelve areas though at different degrees, as follows: (a) Address issues regarding financing Kilimo Kwanza, agriculture productivity, domestic resources mobilization, incentives to farmers, access to markets, the reorganization of agricultural support institutions, and encourage infrastructure investments that support agriculture. The Government has streamed Kilimo Kwanza in the MTEFs of all MDAs, increased financing for agriculture by 35% in 2010/11, to almost 8% of the total budget, allocated Tshs. 20 Billion for creating a special agriculture window at the Tanzania Investment Bank (TIB) pending the take off of an Agricultural Development Bank, increased funding for the National Inputs Voucher Scheme (NAIVS), and provided further tax incentives for agriculture and agro processing. Measures to improve farmers access to markets include drafting of an Agricultural Marketing Strategy to guide implementation of the Agricultural Marketing Policy, 2008 strengthening the Warehouse Receipts System (WRS) under the Agricultural Marketing Cooperative Societies (AMCOS) and the Tanzania Warehouse Licensing Board for coffee, cotton, paddy, and cashew. Although the productivity of maize increased from an average of 0.6 MT/acre in 2006/2007 to 1.9 MT/acre in 2009/2010, and paddy from 0.9MT/acre to 1.2 MT/acre in the same period, these productivity levels are still very low relative to levels elsewhere. Going forward, the Government plans to collaborate with all stakeholders and reform the taxation system for agriculture with the aim of improving business environment, strengthening the WRS by improving transparency in the auction and auditing as well as promoting more 37 Page

38 competition in marketing and roll it out to the marketing of all crops in the country, and finalize the Agricultural Marketing Strategy. (b) Enhance the implementation of the ASDP as one of the key Government programmes to deliver Kilimo Kwanza goals. Kilimo Kwanza and the Agricultural Sector Development Program (ASDP) are taken as important instruments for realization of agricultural growth targets. Agriculture is targeted to grow from 3.2 percent in 2009 to 6.0 percent by 2015, with emphasis on small scale agriculture, with gradual shift to medium and large scale farming. In this regard, the Government continued to strengthen research through the following: (i) Human Resources Capacity Building:- A total of 14 PhD, 4 MSc and 26 BSc were facilitated for capacity building in various areas of studies. 7 PhD and 1 MSc are expected to graduate at the end of the year, (ii) Technology Development:- 27 improved varieties were released and recommended to farmers New pesticides from local herbal trees were developed and recommended for their effectiveness in control of maize and phaseolus beans both in the field and in store. (iii) (iv) Rehabilitation of Research Infrastructure:- Small scale irrigation for on station research Biotechnology laboratories (Mikocheni/Uyole) Soil analysis laboratories (Mlingano, Ukiriguru,Uyole and Selian) Rehabilitation of water system at ARI-Mlingano In year 2009/2010, twenty (20) staff houses were renovated; Acquisition of research facilities In 2009/2010, eight (8) vehicles, 70 computers, and 50 printers were procured Through DADPs, the government continued to support farmers to procure 1,908 processing machines through cost sharing arrangements which require farmers/beneficiaries to contribute 20% of the total costs of acquiring the equipment. Out of these machines, DASIP and PADEP supported the procurement of 20 processing machines. This had resulted into enhancing household income, improving quality of crops such as coffee, minimizing walking distance for women to milling grain etc. During 2009/2010, irrigation infrastructure was developed in 45 small scale irrigation schemes covering a total area of 20,745 hectares; a National Irrigation Policy was prepared and adopted by the Government in February 2010, Comprehensive Guidelines for Irrigation scheme Development under the District Agricultural Development Plans (DADPs) were prepared, and 510 farmers were trained on irrigation technologies, improved water management, rain water harvesting and operation of irrigation schemes. 38 Page

39 (c) Harmonize and align Kilimo Kwanza Strategies into MKUKUTA II strategies for pro-poor growth. This has been achieved, with MKUKUTA II prioritising agriculture as a core growth sector and instrument for employment creation and contributor to the reduction of income poverty. Kilimo Kwanza has also been streamlined in the MTEFs of all MDAs. (d) Ensure involvement of small-scale farmers associations in implementation of Kilimo Kwanza. Small-scale farmers associations are engaged in the development and management of small scale irrigation projects, and in the marketing through the management of the Warehouse Receipts System (WRS) by the Agricultural Marketing Cooperative Societies (AMCOS) (e) Improve investment in agro-processing in partnership with the private sector with a view to increasing value addition in the agriculture sector The Government implemented programmes aimed at strengthening agro-processing industries by encouraging private sector investment in the sector. Nineteen (19) investors have indicated interest to invest in Agro-processing, and have been registered with the Tanzania Investment Centre (TIC). Implementation of the Integrated Leather Sector Development Strategy for reviving leather industries in the country has led to increased processing, from 6,038,000 square feet a few years back to 37,305,215 square feet in In the search for appropriate agro-processing technology, CARMATEC has designed and tested equipment for processing of leather products (i.e. machines for design and manufacture of leather stripping, profile cutting and decorating), and SIDO has established Technology Development Centers in Mbeya, Arusha, Kilimanjaro, Lindi, Iringa, and Kigoma that manufacture agro-processing machines. The effort to increase agro processing capabilities faces a number of challenges, including the following: Inadequate skills in Agro-processing; Inadequate funding in Research and Development Institutions; Poor rural road infrastructure that raises the cost of transportation; Inadequate source of power thus limiting establishment of agro-processing industries; and Absence of surveyed land for industrial area development. Going forward, the Government intends to accomplish the following in order to resolve the above challenges: Design and commercialize agro-processing technology through SIDO Technology Development Centres. ; 39 Page

40 Support use of innovative agro-processing machines that will include machines for processing of maize, sorghum, groundnuts, cassava, cashew nuts, fruits and vegetables and introduction of oil expellers. Continue with efforts to develop infrastructure in investment areas e.g. EPZ and SEZ as well as constructing rural roads, water and energy infrastructure aiming at attracting more investment, and Implement Comprehensive Africa Agriculture Development Program (CAADP) and focus on investing in agro-processing and value addition. (f) (g) (h) Strengthen research and development that supports effective implementation of KILIMO KWANZA Research, development and training was one of the main beneficiaries from the large increase of the sector budget in 2009 and 2010, and now accounts for a substantial 11% of the sector budget. Improve and expand irrigation especially small scale. See (b) above. Speed up implementation of land reforms in agriculture. Measures taken in this area include further decentralization of authority over land decisions, including the appointment of Assistant Commissioners for lands for 5 Zonal Land Offices, the authority for approval of disposition which was centralized in the office of the Commissioner for Lands has now been devolved to the three Municipalities in Dar es Salaam, consultancies have been undertaken on Systems Reform in the Office of the Commissioner for Lands and Needs Assessment study in the Titles Registry have been completed. Also, manual records have been sorted and consolidated in single files in Mbeya and Mtwara and by 90% in other Zonal Offices for easy retrieval and access of land information. Pilot programme aimed at land parcels adjudication and issuance of CCROs is continuing in 4 selected districts. To promote a market for land, a Research Unit has been established with a mandate to investigate the market prices for crops, land value and construction rates with a view to establishing standards market rates for compensation. Perhaps most important, some potential land parcels for KILIMO KWANZA have been identified, verified and recommended for inclusion in the Land Bank. The land reform agenda faces two main challenges, namely: (i) Inadequate funds for establishing Land Bank and associated compensations, and (ii) Inadequate funds to support the ongoing fundamental geodetic network. Going forward, the Government plans to prioritise actions in the following areas: (i) (ii) Generalizing and sustaining agricultural productivity gains, and translating them into increased farmers incomes. This requires continued provision of the input subsidy scheme and pursuit of an appropriate agricultural marketing and trading policy. Encouraging private sector participation in the provision of rural infrastructure through the Public Private Partnerships (PPP), and implementing initiatives to promote the use of appropriate technologies; 40 Page

41 (iii) (iv) Pushing land reform further by computerizing and rolling out the pilot programs with increased budgetary prioritization. Integrating food security, trade and export considerations explicitly into Kilimo Kwanza The DPs commentary on the subject was delivered by Dr. Sisya Lugeye. The DPs congratulated the Government for the impressive progress made over a short period, including the prioritisation of agriculture in both MKUKUTA II and the budget for 2010/11, and the decision to focus on a few areas for maximum impact. They reaffirmed their commitment to continue supporting agriculture through the ASDP framework. He highlighted the following as important prerequisites for quick results in growth and reduction of poverty through agriculture: (i) (ii) (iii) (iv) Increasing productivity on the smallholder farms; Developing rural infrastructure, through PPPs and appropriate technologies; Improved coordination within the 12 agencies over five Ministries in the sector; and Land reform to encourage investment in the sector, particularly identification, mapping, and registration of agricultural land. In the discussion that followed, the following points were raised: (i) The focus on agriculture is in the right direction for addressing poverty challenges in Tanzania. There is now a need to do more, do it better, and do it faster. (ii) Real progress will come from increased productivity, (iii) (iv) (v) (vi) (vii) Incentives to farmers include market access (rural infrastructure and removal of unproductive regulations), and increasing the farmers share of the value of their produce; Experience from India, Far East and China shows that smallholder farmers can be as productive and operate on commercial basis as large farms. In any case, productivity is not dependent on size but more to access to inputs and markets. These will need to be reflected in the Government s facilitation strategy for the sector; Taxation is an important element in the incentives package for agriculture; the current package of fiscal incentives could benefit from further rationalisation, Without unencumbered access to markets, (including stopping the practice of imposing unnecessary trade bans that suit urban consumers at the expense of the poor rural producers), increased productivity may not be quite helpful for farmers. Working for good and stable farmers prices may be more effective for encouraging investment in technology and expansion of acreage. To derive maximum impact from the resources available, prioritisation in terms of the crops and areas to support is needed; 41 Page

42 (viii) Environmental protection in particular focusing on ecological balance through protection and management of the wetlands should be considered while developing agricultural land; Going forward, the following Key Messages: (i) (ii) (iii) (iv) (v) (vi) Agriculture is business, and one needs to recognise the potential, and encourage the role of the private sector for increasing agricultural production in Tanzania. In the context of Tanzania, small holder farmers are key stakeholders in agriculture, and addressing productivity challenges for them stand the better chance to generate maximum poverty reduction impact. While strategic state interventions are recognised as a necessity for pro-poor agricultural development, there is a need to accelerate improvement of the business environment in order to leverage private sector investment in agriculture. For agriculture to be sustainable, water is critical. Therefore, there is need to consider climate change implications, build low cost and easy to maintain irrigation schemes quickly and extensively and exploit opportunities presented by wetlands. The challenge in agriculture is to increase productivity of land and labour. This requires timely access to quality inputs, appropriate technology, and extension services. To translate productivity gains into increased incomes, market access for farmers, including through improved rural roads and rural electrification for value addition are critical Key Issue 2: Business Environment The paper on the Business Environment was presentation by Ms Joyce Mapunjo, Permanent Secretary, Ministry of Industries, Trade, and Marketing. In a background note on recent Government actions in the area, she explained that the Government established a Task Force on the subject following the country s unsatisfactory showing in three international reports, namely (i) the Investment Climate Assessment, (ii) the Doing Business Report, and (iii) the Global Competitiveness Report. The Task Force developed a Roadmap on Improving Tanzania s Performance in Doing Business, which has been adopted by the Government as the guide for addressing current business environment challenges. A Comprehensive Action Plan is being prepared and integrated in the MTEF. Roadmap interventions are organised around Quick Wins (administrative changes implementation of which may start immediately); Medium term reforms (those that require legislative mandate); and Longer Term Reforms (that require longer time span for implementation). Implementation of the quickwin actions has already generated results in the areas of starting and closing business, property registration, trade across borders, and paying taxes The Medium Term Interventions include the following: (i) (ii) (iii) (iv) Starting and business closing simplify registering and licensing procedures Trading across borders- roadblocks and boarder processes, Issuance of permits- building permits Paying taxes process (ICT based), 42 Page

43 (v) Land management- geodetic system, satellite receiving station and registries. On the way forward, Ms Mapunjo explained that the PMO, in close collaboration with stakeholders, will continue to coordinate implementation of the Roadmap through the Comprehensive Action Plan. Implementation of the identified Quick Wins will continue, in tandem with the Finalization of the Comprehensive Implementation Plan and a Comprehensive M&E Framework. In order to secure stakeholder buy in, an Information, Education and Communication Strategy is to be developed. Implementation of the relevant initiatives is streamlined in the MTEF. In his commentary on behalf of the DPG, Mr Darren Welch (Head of DfID Office in Tanzania) reminded participants on the importance of a conducive business climate for the country s growth and poverty reduction agenda, emphasising that a strong private sector is a foundation of a strong and sustainable economy. He cited examples of how Tanzania lags behind its neighbours, including the following: (i) In Tanzania, it takes 12 steps and 29 days to start a business. In Zambia it takes just 6 steps and 18 days. (ii) (iii) In Tanzania, it takes 22 procedures and 328 days to obtain a construction permit. The same process in Kenya requires 11 steps and 120 days. Tanzanian businesses make 48 separate tax payments a year. A comparable firm in Rwanda makes only 26 payments, and uses less time. He noted that the Roadmap has the potential to address many of the adverse features of the business environment, particularly given that it commands high level political backing, it brings together the different institutions that need to work collectively on a solution, It recognises LGA s role in delivery of reform objectives, its implementation is streamlined in the MTEFs of implementing agencies, and coordination rests on a new Private Sector Development and Investment Division (PSDID) within PMO which has clear responsibilities for coordination, M&E, and technical leadership of delivery. To give the roadmap the best chance of success, Mr Welch suggested that the following will be required: (i) (ii) (iii) (iv) First, finalizing the Comprehensive Implementation Plan for all of the Pillars, moving from broad classifications of actions to the detail, and with clear sequencing of the various steps to be taken, by whom, and by when. Second, identifying the human and financial resource requirements for implementation. He emphasised that costing and prioritisation would help to deliver the interventions. Third, finalizing the M&E system with output and outcome indicators and targets against which progress can be measured and communicated. Maintaining the focus on results in order to secure the buy in of the business community and assist in mobilising resources for implementation. Plenary discussion on the presentations started with a contribution from Mr Felix. Mosha, Chairperson of the Confederation of Tanzania Industries (CTI). He commended Government for developing the roadmap and the progress already made in its implementation. He noted, however, that more than is 43 Page

44 provided for in the Roadmap is needed if Tanzania enterprises are to benefit from regional integration. He stated some of the additional points where action is needed as the following: (i) (ii) Roadblocks that frustrate trade; The heavy burden imposed by Regulatory Bodies on businesses. Specifically, he called for the following before instituting any new regulatory requirement or levy: (a) (b) (c) (d) (e) Establish the case for action; Alternatives be examined, and policies with the most benefit and least cost to business be adopted; Provide effective guidance to the regulatory bodies; Institute regular reviews of the regulatory bodies, and consider the desirability of a regulator of regulators; Institute effective consultations between the regulator and the regulated. (iii) (iv) (v) (vi) the pension subsector, where employer s contributions are not capped; benefits are no harmonised, and members may not transfer their savings and benefits from one fund to another; Skills Development Levy which is charged at 6% of the wage bill and therefore punishes formal employment; VAT refund mechanisms; and Changing the public s mindset as regards the private sector. In the discussion that followed, the following points were raised: (i) (ii) (iii) (iv) (v) Broaden the competiveness agenda by including issues like access to electricity, access to finance, and access to national, regional and international markets; Presentation to private sector stakeholders of a prioritised list of concrete short term actions and related outcomes that will be completed within 12 months to build business buy-in and awareness of the reforms. Continue with implementation of the identified quick win actions and short term measures for improving the business climate, and expedite transition to implementation of the medium and long term measures. The Roadmap provides sufficient framework for improvement of business climate in Tanzania, and should therefore be systematically implemented. Develop, by March 2011, a comprehensive Implementation Plan for the Roadmap for Improving the Business Climate. 44 Page

45 (vi) (vii) (viii) (ix) State intervention and regulation is welcome by the private sector where there is market failure, but this should be justified, clear, predictable, consistently applied, and subject to regular consultations. Consider the desirability of establishing a regulator of regulators. Change the public s mindset regarding the role of the private sector, which is a source of frustrating rather than facilitating actions against the latter. Broaden the competitiveness agenda by including, among others, factors like availability, quality, and cost of electricity; access to and cost of financing; and access to domestic, regional, and international markets. Evaluate the cost implication of statutory charges on wages, and develop a strategy for reforming the pension subsector Key Issue 3: Equity and Efficiency: Opportunities and Challenges Mr Mathias Kabunduguru, Director for policy and Development in the President s Office, Public Service Management, presented the paper on Equity and Efficiency in the provision of public services. He started by highlighting the centrality of equitable distribution of human resources in the pursuit of equity in the standard of social services across different geographical areas of the country. A major factor constraining the capability of LGAs to improve service delivery, quality and accessibility in line with the objectives of the MKUKUTA and MDGs is their limited capacity to attract, retain and adequately motivate qualified personnel. Staffing problems in many LGAs are partly related to long-term rural development needs that cannot be alleviated in the short to medium term. While financial incentives will assist in compensating for capacity weaknesses to attract and retain staff, required interventions have to go far beyond this level. He noted that there are important lessons to be drawn from experience elsewhere, including that financial incentives are not sufficient for this purpose and the need to consider social implications of any propose solution. Mr Kabunduguru reported the status of implementation of the commitments reached on the matter at a similar forum last year, as follows: (a) Finalizing and implementing the Medium Term Pay Policy and pay special attention to underserved districts: The government has adopted a new Public Service Pay and Incentive Policy which incorporates the key principles required to address equity issues. Specifically, the Policy includes commitments to design and develop an appropriate incentive scheme to attract and retain staff allocated in underserved areas, and to improve the organisational environment and strengthen human resource management (HRM) practices in LGAs. An administrative decision to limit recruitments and allocation of new employees to the areas considered to be well served is already being implemented, thereby increasing staffing opportunities for underserved areas, (b) Setting and implementing a transparent criteria for selecting districts to benefit from the Additional Development Fund for Underserved Areas: A special budget to fund development projects intended to improve working conditions in 36 LGAs considered to be underserved was launched in 2009/10, and allocated TShs 42 billion. In the 2010/11 budget, TShs Billion was allocated and coverage increased to 126 LGAs with about 54.6% of the budget allocated for construction of Staff 45 Page

46 Quarters (including hostels around community schools), Council Buildings, and special schools. (c) (d) (e) Speeding up the implementation of D by D policy to address challenges of equity and efficiency: While upholding the D by D policy as a basis of its decentralization policy, it is also recognized that it may create challenges for speedy achievement of equity in service delivery across LGAs. The Government continues to collaborate with NSAs for improved health service delivery in relevant areas, and will now contribute to the management of such facilities through special budget subsidies or attaching some of public employees to those health facilities. Reviewing the levels and criteria for use of allowances and applying the rules rigorously: Measures adopted include timely payment of subsistence allowances, and timely entry of new employees into the pay roll to facilitate early commencement of regular salary payments. Several LGAs consulted by POPSM had confirmed implementation of these directives, and had recorded significant improvement in the reporting and retention of new appointees as a result. Payroll management and salary payment have benefitted from a new Human Resources Management Support System (HURISS) which is being rolled out to all LGAs. Giving districts autonomy and flexibility for deciding on the use of Special Budget funds to enhance staff attraction and retention: See (c) above. (f) Improve infrastructure as long term solution to underserved districts: Equity in service delivery is one of the factors driving the level of transfers to LGAs. Participants were requested to consider and address the following issues in their discussion of equity issues: (a) (b) (c) (d) (e) What is an appropriate criterion for classifying a place as underserved? What is the fiscal space available for equity promoting interventions, given the current level of the resource envelope and MKUKUTA II focus? What is the right balance between the Government spending and private sector investment, considering the possibility of crowding out effect against NSA service providers? Supply side issues such as training institutions and their required investment; and How should the measures be sequenced into short term, medium term, and long term initiatives? Responding to the presentation by Mr Kabunduguru on behalf of DPs, Ms. Habel from the Embassy of Germany congratulated Government for its implementation of last year s commitments, particularly the adoption of the Public Service Pay and Incentive Policy. She noted that measures may not be sufficient 46 Page

47 but show commitment, and called for early promulgation of an implementation framework so that implementation may commence forthwith. She observed that clarity on the definition of underserved appears to be a challenge still, as is reliability of data on HR allocation. The following points were raised in the discussion that followed the government s presentation and the DPs formal response: (a) (b) (c) (d) (e) (f) (g) (h) The provision of Special Budget funds to 126 LGAs (about 90% of the total) indicates a lack of focus, insufficient basis for determining underserviced areas; 26 of the Councils applied the Special Budget funds on the construction of Council buildings, which may not generate the intended equity promoting outcomes; Availability of reliable data, on the basis of which changes in the quality of services across LGAs would be monitored, is still a challenge. Although change is likely to be slow, available data suggests that equitable service delivery is not really improving fast enough to make a difference in the medium term; There may be a need to set realistic service level targets (e.g. number of patients per staff), so that well served areas are not perpetually classified as underserved. Consider granting LGA more autonomy to recruit (with support from central government) since recruiting from within districts on non transferable contracts could be a way of getting away from the problem of transfers; The government was advised to expedite the intended partnerships with NSA service providers, particularly for facilities in underserved rural areas, instead of competing with them for the few trained experts; The private sector may be encouraged and facilitated to invest in service delivery in the underserved areas in order to leverage public and other NSA resources; The issue of equity in access to services should be accorded higher priority when considering how to make use of any fiscal space available. For example, the resources used for a 31% general wage increase for all civil servants in 2010 could go a long way if applied for equity promotion. Going forward, the key messages from this session may be summarised as follows: (a) (b) (c) In attracting staff to remote and underserved areas, there is a need to take a holistic approach and consider the possible crowding out effect against private sector and NSA providers of social services Experience elsewhere shows that financial incentives are essential but not sufficient to attract staff in otherwise underserved areas. Other innovative forms of incentives are needed, particularly those that take into account the local context; Finalize the Implementation Strategy and an M & E System for the recently adopted Public Service Pay and Incentives Policy; 47 Page

48 (d) (e) (f) (g) The basis for allocation of resources set aside for addressing equity issues in the provision of social services across LGAs was noted to be unclear. Participants called for establishment of clear and transparent criteria for such interventions; The participants appreciate the merit of decentralisation by devolution as an instrument of deepening democracy and good governance. However, they also recognise that, with the differing endowments among LGAs, attaining equity in the provision of services would require proactive and strategic interventions from the centre. There is therefore a need to review and reconcile the two. Reliable data is important in order to measure changes. The Government was called upon to improve its Human Resources Management Information System by establishing the necessary databases; and Participants called for a gender lens when allocating resources for promoting equity in the provision of social services Key Issue 4: Budget The main paper on budget developments was made by Mr Emmanuel Mungunasi from the World Bank on behalf of CWG 4. He appreciated continued improvement in budget management generally, but pointed out that further improvement is possible. The presentation covered macro-fiscal, budget allocation, and budget execution issues. Issues related to macro-fiscal policy included the challenge of increasing domestic revenue to meet growing investment needs, reducing recurrent spending in order to fully cover recurrent spending and create more fiscal space for investment; and addressing the apparent financing gap in the 2010/11 budget without jeopardizing spending in key areas of MKUKUTA and service delivery. He also noted that infrastructure maintenance appears to be not sufficiently provided for, and the alignment between sector budgets and sector priority of objectives appears to be rather weak. On the execution of the 2009/10 budget, Mr Mungunasi highlighted continued delays in release of development budget funds despite improved overall MDAs budget execution and weak planning and budgeting capacities among MDAs and LGAs, with large capital investment projects suffering the most. The Government response was delivered jointly by Mr Bedason A. Shallanda, the Commissioner for Policy Analysis Department, and Mrs Monica L. Mwamunyange, the Commissioner for Budget. They reminded participants of the participatory nature of the budget process in Tanzania, with the Parliament providing guidance on setting priorities, scrutiny of sector and MDAs budgets, and approval of the budget through legislative action; Councillors debate, approve and oversee the implementation of LGAs budget; CSOs provide input through the CWG/PER process; and DPs provide inputs and advice on the preparation of Guidelines, financing and evaluation through CWGs/PER processes. Through the open process, opportunities for clarifying planning and budgeting assumptions and drivers of budget execution are abound. It was suggested that, rather than budget analysis ending at a point of statistics (sector shares, percentages disbursed or spent, variations, etc), it would be useful to also examine physical results from budget implementation. In this regard, examples of broad achievements during 2009/10 included roads constructed, irrigation schemes built, examples of mechanization of agriculture, teachers houses, progress in the construction of facilities for the University of Dodoma. 48 Page

49 Going forward, the Government will continue allocating budgetary resources on the basis of MKUKUTA II priorities, namely education, agriculture, transport and communication infrastructure, energy, land management, and manufacturing. In discussing the three presentations, participants appreciated the challenges that the country faced during the last two years as a result of the GFC and the role that the budget played in ensuring that the country doesn t go into recession. This underscored the importance of the Government budget as an instrument for economic management. It was emphasised that, although recurrent expenditure seems to have grown rapidly in the past two years, this was partly driven by deliberate action in response to the GFC, and that Tanzania has a strong track record of responding effectively to economic shocks threatening stability of the macro-fiscal fundamentals. A point was also raised regarding the significant element of investment in the so called recurrent expenditure, examples of which include transfers to LGAs for education infrastructure and training of agricultural extension officers. Going forward, the key messages from the session were: (a) (b) (c) (d) (e) Hopefully, the apparent decline in the share of infrastructure investment will be reversed as Tanzania unwinds from the rescue package and effects of the GFC. Concerns were aired on the lack of a clear strategy for dealing with an apparent financing gap in the 2010/11 budget, to which the Government responded that it was aware of the evolving budgetary situation, but was confident of addressing it in the course of implementing the budget to June Improve capacity at MDA and LGA levels in order to enhance prioritisation in the utilisation of budgetary resources for maximum poverty reduction impact. As the stock of physical economic infrastructure increases, there is need to pay more attention to its maintenance. Continue building the capacity of the oversight institutions (CAG and Parliament) to discharge their functions effectively Key Issue 5: Financial Management at Central and LGAs Presentation and Discussion Dr. S. Likwelile, Deputy Permanent Secretary, Ministry of Finance and Mr. Guilliame jointly presented the paper on PFM developments at the central and LGAs level. They traced the history of PFM reforms in the country, whereby Phase I ( ) focused on increasing domestic resource mobilisation, minimizing resources leakages, instituting fiscal discipline, and installation of a computerized Integrated Financial Management System (IFMS), and implementation of the Medium Term Expenditure Framework (MTEF). Phase II (2004 to 2008) focused on sound macro-economic and fiscal management, increasing the predictability of resources, devolution of powers to LGAs, and capacity building to Accounting, Auditing and Procurement functions. The Key Results Areas under Phase III (2007 to 2010) include improvement on IFMS operations through automation, improvement of the budget and cash management, and strengthening the oversight functions and audits. The status of implementation of key messages from the 2009 review was reported as follows: 49 Page

50 (a) A joint assessment of the agreed prioritized PFM Key issues Action Plan covering six (6) main areas showed that, out of 24 short term actions, implementation of 15 has been satisfactory, 1 on track, 5 not done, 2 as split and 1 as not applicable (b) (c) (d) (e) Amendments to the Public Finance Act (2001) were effected in June/July 2010 and a Local Government Finance Act, (1982) and a draft Local Government Finance Bill and being reviewed bt key stakeholders. The Public Finance Act of 2001 has been amended to increase the oversight function of the Accountant General over Local Government Finances; Budget transparency has been enhanced by distributing the Budget Background and Medium Term Framework 2009/ /13, the Plan and Budget Guidelines for 2010/ /13, publication of the Plan and Budget Guidelines for 2010/ /13 among others. Commenced preparation of a new PFM reform agenda. To allow a thorough preparation, the current phase is extended to June, The presenters pointed to other indicators of good progress as the improved quality of the dialogue around PFM issues, undertaking a PEFA study and a Joint Supervision mission in Sept 2010 to interact, assess, learn, build trust and hence fruitful dialogue on PFM. The overall assessment of the PFMRP (an underlying process) was Moderately Satisfactory. Challenges in the PFM area include multiplicity of channels for fund flow and reporting that afflicts LGAs. The discussion that followed the joint presentation raised the following points: (a) (b) (c) A smooth flow of funds to final or intermediary service delivery units is still a challenge, mainly due to the multiplicity of channels and rules for accessing the same, Further attention needs to be kept on planning and budgeting and its financing at all levels, and increasing the transparency of the budget ; There was diversity in expectations of the different stakeholders (including MoF, PMO- RALG, MDAs/LGAs, DPs, and service delivery units) which is affecting service delivery by LGAs. The key messages to take forward from the session are the following: (a) (b) (c) There has been substantial achievement in last year, including a much improved dialogue atmosphere. Now, there is need to build on the achievements, and design the next phase of PFM reforms to take Tanzania to even higher ground. The diversity of expectations of the different LGA stakeholders (RALG, MOF, MDAs, DPs, and citizens) complicates operations at the LGA level. Stakeholders need to try and understand the LGA operations better. There is a need to rationalise the flow of funds, information, and reporting to and from LGAs. 50 Page

51 (d) (e) Review and streamline the procedures for managing financial resources at the LGA level, aiming to reduce the number of accounts to the minimum feasible and enhance efficiency at all levels; and Undertake a systematic review of Sector Wide Approach system (SWAPs) to address inherent fiduciary risk, building on experience in the Water Sector SWAP. 4.5 The Fight Against Corruption The fight against corruption is an important element of any effort towards judicious use of public resources and strengthens good governance generally. It is therefore one of the underlying principles in the PFM, and a permanent feature at GBS Annual Reviews. An update on the Government s effort against corruption was provided by Dr Edward Hoseah, the Director General of the Prevention and Combating of Corruption Bureau (PCCB). He started by reminding the participants that corruption is a global problem and no single country in the whole world can claim to be free from it. The fact that many nations around the world have ratified the United Nations Convention Against Corruption (UNCAC, 2003) is a clear testimony that corruption afflicts all nations, and global and national efforts to curb the vice are imperative. He further pointed out that, according to the Transparency International (TI) s Corruption Perception Index released in October 2010, Tanzania is well ahead of other East African states in fighting corruption as it is the least corrupt. The year 2010 witnesses the enactment and application of the Election Expenses Act of 2010, whereby 10 Cases of Political Corruption were sent to Courts of law and several other investigations are still underway. 28 cases of grand corruption are continuing with prosecution in courts of law, of which 7 relate to local authorities, while petty corruption cases have increased significantly from 223 cases in 2007 to 724 cases by October Convictions have also increased from 44 cases in 2007 to 155 in October Asset recovered (money) by the PCCB as of October, 2010 has reached about TShs 10 Billions. The fight against corruption is guided by the national Anti-corruption Strategy and Action plan (NACSAP II). Following Dr Hoseah s presentation, participants appreciated the effort of the Government in promoting good governance and the fight against corruption, particularly given the complexity arising from the need for visibly prompt action and the challenges in gathering evidence in order to adhere to the principles of human rights and good governance. They noted the importance of maintaining momentum generated by recent investigation and prosecution of petty and grand corruption cases. The following suggestions were therefore made: (a) expediting both investigation and prosecution of outstanding cases (b) generating clearly visible results in order to sustain public commitment to participate in the good governance programmes; (c) Linking the effort against grand and petty corruption is critical; inadequate action against grand corruption encourages petty corruption; (d) Enhancing international cooperation in the investigation of grand corruption cases, particularly the tracing and recovery of corruption proceeds; (e) Publishing the report on the National Governance and Corruption Survey of Page

52 (f) (g) (h) Addressing the conflict of interest, particularly where policy makers, regulators, or members of oversight institutions are involved in the businesses they regulate or oversee; Empowering and encouraging the citizens to play a more active role in the fight against corruption; and Balancing the focus on prevention of corruption on one hand, and investigation and prosecution on the other. 52 Page

53 PAF DISCUSSION The discussion on the 2011 PAF was held in a closed Government DPs session at the end of the three day Annual GBS Review event. The 2011 PAF was guided by the need to be strategic, reduce the number of processes and outcome indicators, and ensure their measurability. The Government presented a slightly amended Draft 2011 PAF, which was originally prepared jointly through Cluster Working Groups. The draft has 53 assessment areas, being thirteen (13 Underlying Processes), eleven (11) Temporary Process Actions, and twenty nine (29) Outcome Indicators. Cluster-wise, the draft provides for nineteen (19) assessment areas for Cluster I, thirteen (13) for Cluster II, eight (8) for Cluster III, and thirteen (13) for Cluster IV. The meeting was reminded that the Troika Plus meeting held in June 2010 proposed a more strategic PAF should be put in place that reflects Government priorities for growth and poverty reduction. The PAF developed should be SMART and strategic. The subsequent agreement on a set of criteria agreed to focus on results, and be strategic by considering the interplay between underlying processes, temporary process actions and robust outcome indicators. The final PAF 2011 is appended hereto as Annex In general, the DPs appreciated that the draft was a good start for further engagement with Government. As a first reaction, the following points were made: It was recognised that it is a positive aspect that the zero draft is tabled by the GoT. As a general comment the DPs emphasised the importance of agreeing on clear calculation methods and data sources for all OIs, and encourage upfront definition of assessment criteria of UPs and TPAs. Cluster I Underlying Process Agriculture Sector Review add "informed also by the external evaluation of the ASDP" Natural Resource Review propose this review be maintained as the sector remains a challenge with only one review having taken place Business Environment Review open up a discussion with the Government of including a UP on business environment, which would be wider than the former BEST Programme Review UP and would capture the wider context of business environment/private sector/trade Temporary Process Action Continued engagement required with GoT to instil ambition across the TPA Build the business TPA on key elements in the business roadmap implementation [in the zero draft presented during the plenary session, GoT proposed "finalisation of MSME baseline survey." as a TPA under this heading is extremely un-ambitious. Urge that this TPA is referred back to the sector for re-discussion Possible TPA relating to job creation is proposed to be translated into an Outcome Indicator. Emphasis is encouraged to be put on "private sector jobs". The proposed TPA to enhance rural electrification reflects very low level of ambition. Refer back to the sector for re-discussion. Outcome Indicator Engage with GoT further regarding the inclusion of an agriculture productivity indicator 53 Page

54 Reinstate the farm gate/export price ration as in PAF 2009 Irrigation indicator is supported by WB having made significant investments into irrigation. Engage with GoT on introduction of an OI related to "number of new businesses registered" Reinstate indicator 7 on the cost of doing business which has been removed from the zero PAF version presented in the plenary session Propose to GoT to replace by the OI already agreed at sector level Income poverty indicator has been removed propose that this is brought back into PAF 2011, and baseline clearly defined. Cluster II Underlying Process Consider removing "environmental action plans" Temporary Process Action Encourage refocusing of the TPA to quality of education related constraints and propose introduction of a TPA related to vocational training; Consider introduction of a TPA related to follow up to water sector special audit recommendations Outcome Indicator Details relating to regional/district level disaggregation have been omitted while it is understood that the details have already been agreed at sector level; The proposed indicator number 4 on HIV prevalence is problematic as data is only available on 3 year intervals and hence is not suitable as a PAF indicator. This indicator continues to be followed at sector level; Indicator number 5 is a new indicator, and in principle relevant as it captures an important element of social protection. However, issues related to data availability and reliability was raised. Discussion is proposed to be referred back to sector level [this indicator was removed from the zero PAF version presented in the plenary session]; The first indicator is preferred by the DPs however it would be more relevant to measure nurses/midwives rather than medical officers/assistant medical officers. There was no agreement whether an indicator setting targets for budget allocations should be included in PAF; A proposal was made to include an OI related to urban planning Cluster III Underlying Process It was proposed that State House would be a more appropriate interlocutor around anticorruption than GGCU as currently indicated [this UP was changed to "NACSAP II Review" in the zero PAF version presented in the plenary session]; It was emphasised that it is important to view the UP on local government more widely than the Local Government Reform Programme review, and questions were raised whether the PMO- RALG is the right interlocutor. 54 Page

55 Raised the potential of reintroducing UPs for Public Sector Reform and Legal Sector Reform. The need for these will be assessed once the TPAs/OIs for these sectors have been concluded. Outcome Indicator Possible additional outcome indicators for legal sector and public sector reforms will be introduced. These are still being discussed at sector/cluster level Cluster IV Underlying Process The sector group is discussing widening the coverage of the annual audit cycle UP The sector group is revising the wording of the PER UP to make it clearer Outcome Indicator Proposal to maintain the "AFROSAI" indicator from PAF 2010, rather than introduce a new one on risk based auditing Follow up to compliance from audit recommendations could be included in the OIs with clear definition and assessment criteria (sector group engaging in a discussion for at least 100 compliance audits to be carried out, of which 50% targeting new procuring entities and 50% follow-up audits) Remove OIs already covered by the PSI review UP such as inflation rate Proposal to maintain the OI related to "credible cash flow and procurement plans". With a cross reference to the comment on following up the water sector audit under Cluster II an OI related to "special audits in major social service sectors, and follow up on all audit recommendations (publication of management responses of audited MDAs in CAG reports)" is being negotiated at sector level. The parties agreed to consult, through the respective Cluster Working Groups and other fora, to finalise the 2011 PAF by end January, Page

56 6.0 CLOSING In the statement at the closing ceremony, the Chair of the GBS Group of DPs, Mr Svein Baera, lauded the Government for organising the valuable event. He emphasised the importance of the PAF as an M & E tool for the GBS instrument, and noted that achieving less than 60% of the indicators and ratings such as moderately satisfactory and partially achieved are not the kind of hard evidence of tangible results that an increasing number of critical voices are demanding. He called for leadership and tough prioritization to provide a final PAF 11 to approve at the high level GBS meeting in January He expressed the hope that more evidence of zero tolerance of corruption will be made public in order to sustain public interest in the fight against the vice. DPs were looking forward to continued engagement with Government at the earliest opportunity on all the issues arising from the annual event. Before closing the Annual National Policy Dialogue, the Minister for Finance, Hon Mustafa Haid. Mkulo (MP) thanked all participants for the valuable contributions and the commitment shown by them towards finding solutions to the country s growth and poverty reduction challenges. He reaffirmed government s desire and commitment to working with all stakeholders, in good faith and an open manner, to increase the pace of inclusive economic growth and reduce poverty. 6.1 Conclusion & Way Forward The 2010 Annual National Policy Dialogue served to strengthen the partnership among all key stakeholders in the development of Tanzania, namely the Government, Parliament, Development Partners, and CSOs. The event helps improve in the quality of the dialogue, and openness was demonstrated by the parties. Coming at the end of implementation periods for MKUKUTA I and MKUZA I, the event provided an opportunity to look back at the results from that implementation. Participants appreciated the effort of the Government, and appreciated the results achieved on several fronts over the MKUKUTA I period including economic management, expansion of social service networks particularly in education and health where improvements have been recorded for a number of indicators.. The Government was commended for its management of the recent general elections, which were rated as free and fair, and resulted in a Government of National Unity in Zanzibar. Nevertheless, challenges in reducing income and food poverty, the quality of social services, especially in education and the few static health indicators, were noted as areas where further and innovative effort is needed. All parties emphasised the need to improve the fight against corruption, and strengthen the capacities for planning, budgeting, and implementation of programmes and projects. 56 Page

57 ANNEXES: 1.1 The ANPD Programme 1.2 Statement by Non - State Actors Representative at the opening the ANPD 1.3 Opening Statement by; Chair of the DPG at the opening of the ANPD 1.4 Cluster Working Group 1 Report 1.5 Cluster Working Group 2 Report 1.6 Cluster Working Group 3 Report 1.7 Cluster Working Group 4 Report 1.8 Statement by H.E. Mkulo at the start of the GBS Annual Review 1.9 Statement by Mr Svein Beara; Chair of the DPG at the start of the GBS Annual Review 1.10 Statement by Mr Svein Beara; Chair of the DPG at the Closing of the ANPD 1.11 Closing Statements by H.E. Mkulo at the Closing of the ANPD performance Assessment Framework (PAF) Annex 1.1 The ANPD Programme 57 Page

58 THE ANNUAL NATIONAL POLICY DIALOGUE PROGRAMME 2 nd 8 th DECEMBER 2010 TIME PROGRAMME CHAIR RESPONSIBLE Day 1: Thursday 2 nd December, Arrival and Registration MoFEA-Secretariat Opening Statements PS- MOFEA Welcoming and Introductory Remarks PS-MOFEA Statement from Non -State Actor Representative NSA Statement from Development Partners Opening Statement by Guest of Honour & Launching of MMS Outputs (MKUKUTA II & MAIR 2010) DPG-Chair Minister Secretary 10:00 10:30 Tea Break All :00 Presentation of MKUKUTA I Performance PS VPO DPEE 11: Presentation of MKUZA I Performance 12: Review of Recent Macroeconomic Performance DSEM Commentary from DPs Representative DPs - PMG Discussion Facilitator Lunch Break All Presentation of DHS Results DG-NBS Discussion Facilitator Study on safety nets WB Growth and Poverty Reduction: Policy implications ESRF from qualitative research 15:30 16:00 Discussion Summary of Day 1 Facilitator Tea & end of Day 1 All MOFEA/Chief Day 2: Friday 3 rd December, Registration MoFEA-Secretariat Forward Looking Presentations: ES- POPC MKUKUTA II and MKUZA II 08:30 08:50 DSEM MKUKUTA II: Key Priorities :50 09:00 Commentary from DPs Representative DPs - PMG 09:00 09:20 BEYOND MKUKUTA FRAMEWORK: Monitoring ADMM and Evaluation, Communication and Implementation Guide Presentation 09:20 10:00 Discussion Facilitator 10:00 10:20 MKUZA II: A focus on Implementation PS-MOFEA MOFEA ZNZ arrangements ZNZ 10:20 10:30 Commentary from DPs Representative DPs - PMG 10:30 11:00 Tea Break 10:30 11:00 Discussions of MKUZA II Facilitator 11:00 11:30 Rapid Budget Assessment PS-MoFEA World Bank/CB 58 Page

59 11:30 12:15 Discussion Facilitator 12:15 14:15 Lunch Break 14:15 14:45 Medium Term Strategy and Cross Cluster MTEF CPAD 14:45 15:30 Discussion Facilitator 15:30-16:00 Summary of the Day 2 Facilitator 16:00-18:00 Cocktail All WEEKEND BREAK Day 3: Monday 6 th December, :00 8:30 Registration MoFEA Secretariat MOFEA 08:30-09:00 Opening Statement GBS Chair, 09:00 09:20 Statement from GBS Partners 09:20 09: PAF Implementation PS-MOFEA DSPFM Presentation 09:50 10:30 Discussions 10:30 11:00 TEA BREAK All 11:00-13:00 Key Issue 1: Accelerating pro-poor growth in the context of Kilimo Kwanza Presentation and Discussion PS-PMO 13:00 14:00 LUNCH 14:00 16:00 Key Issue 2: Business Environment PS-PMO Presentation and Discussion 16:00 17:00 Presentation and Discussions on Anticorruption PS-STATE HOUSE 17:00 17:30 Summary of the Day 3 DAY 4 : Tuesday 7 th December, 2010 PMO & MAFS PS - MITM DG PCCB 07:30 08:00 Registration 08:00 10:00 Key Issue 3: Equity and Efficiency: Opportunities PS POPSM DPD - POPSM and Challenges Presentation and discussion 10:00 10:30 TEA BREAK Key Issue 4: Budget PS MOFEA CB 10:00 12:00 Presentation and discussion 12:00 14:00 LUNCH Key Issue 5: Financial Management at Central PS DSPFM/ACGEN/CAG 14:30 17:00 and LGAs Presentation and discussion PMORALG 17:00 17:30 Summary of the day 4 Facilitator DAY 5: Wednesday 8 th December, :30 09:00 Registration 09:00 11: PAF Discussion 11:00-11:30 TEA BREAK Outcomes of the key issues & Way forward 11:30-12:30 DPs & GoT separate break out sessions FACILITATOR DPs/GoT 59 Page

60 12:30-14:00 Way forward on 2011 PAF DPs/GoT 14:00-15:00 LUNCH 15:00-16:00 Closing Statements 16:00-16:30 Press Conference PS MOFEA Minister MOFEA & GBS Chair DPs/GoT Minister MOFEA & GBS Chair DPs/GoT 60 Page

61 Annex 1.2 Statement by Non State Actors Representatives at the opening of the ANPD STATEMENT OF CSO REPRESENTATIVES AT THE OPENING OF THE ANNUAL NATIONAL POLICY DIALOGUE BLUE PEARL HOTEL, DAR ES SALAAM 2/12/2010 PRESENTED BY MOSES KULABA, CHAIRPERSON POLICY FOUM, ON BEHALF OF CSOS Your Excellency the guest of honour, Hon. Mustapha Mkulo, Minister for Finance and Economic Affairs, Distinguished guests at the high table, Your Excellency representatives of diplomatic missions, Representatives from government, private sector and civil society organizations, Members of the press, Ladies and gentlemen, a very good morning to you all. On behalf of my fellow members from Civil Society Organizations, many of whom have greatly contributed to the content of this speech, I would like to express our sincere gratitude to the government of Tanzania for extending this invitation to participate at this annual policy dialogue. The presence of non state actors in this meeting indicates the recognition of the vital contribution CSOs have to the development agenda of Tanzania. Our greater expectation during the five days of this dialogue is to see our views and recommendations taken onboard by government as it implements policy. This annual policy dialogue is happening at a time when a new cabinet has come in place, a new parliament and successor plans for MKUKUTA and MKUZA. It is, therefore, an opportune time for us and every stakeholder to renew our commitments and to drive the development agenda with new vigor and zeal. We congratulate all those who have been appointed to new posts. We look forward to working with you to fulfill our pledge and commitment in pushing the development agenda forward and ensuring citizen participation and ownership of the development agenda. We will also continue to make sure the voices of the marginalized and the public is heard and strive for accountability to the public in all development processes and governance. 61 Page

62 Mr Guest Honour, I have been requested by my colleagues, to highlight four issues in this statement: These are: - Poverty Eradication and National Statistics - CSO, Government and DP Dialogue Structure and Domestic Accountability - Budget Transparency and Oversight - Constitutional Dispensation and Governance Your Excellency the guest of honour As we deliberate this week, let s think of the 33% of Tanzanians who are still poor[1] with little control over what tomorrow will bring. Let s spare a thought for the children, women and men who die for lack of access to good health facilities and preventable causes. But let s also think of the abundance in potential that Tanzania has and the hope for a better Tanzania. Our main concern is that the poverty eradication, local government and public Finance Management reforms have been moving three steps forward and two steps backward. As a consequence, the quality of social services and social service delivery is slow, perpetually stagnant and worrisome. Our appeal is that in the next five years, let us talk action. Mr Guest of Honour, in reflecting on these figures and focusing on the future, we cannot avoid looking at the quality of our National Statistics, how they are collected and their validity. Our concern as CSOs is that Tanzania has very good statistics that relate to performance but which are challenged by the ordinary citizens. They find it difficult to make sense of this impressive data. In the next five years, our appeal is that when government releases national statistics, they should reflect the reality on the ground. As we are about to engage in discussions around policy issues, we would like to highlight a few key issues which we find crucial. Firstly, this has to do with the importance of having a meaningful relationship between the government, DPs and CSOs. For some time now, CSOs have been late comers in many government processes often due to late invitations and very little information on the agenda ahead, thus affecting our participation on one hand, and limiting the meaningful contributions that CSOs can bring on the table, on the other. We, therefore, urge for broader and timelier engagement of CSOs. CSO participation should not only be considered as a good practice for inclusive decision-making, but rather as a critical source of alternative thinking. In other words, they should be taken as real partners in development. 62 Page

63 Secondly, CSOs find the current MKUKUTA/PER/GBS dialogue structures too heavy and requiring a lot of human and time resources, just to keep up to speed with the agenda, as a result of many meetings organized under the structure. This limits the ability and consistency of CSO participation in the dialogue. We call upon the government to come up with a simpler and less tasking structure that will enable more CSOs to participate consistently and give meaningful contributions. As you will know, most CSOs work with the marginalized and are stretched of these invaluable resources and therefore it is a lot to ask of them. We are organizing ourselves as a sector to achieve a lighter dialogue structure which will make organizing CSOs to engage less costly and less time consuming. In other words, we would like to influence the formation of an improved dialogue structure that is relevant, helpful and productive. Thirdly, as far as the implementation of MKUKUTA, MKUZA and other policy documents are concerned, we emphasize the importance of domestic accountability, budget transparency and tip-top oversight mechanisms. The parliament and the office of CAG continue to be toothless hunting coyotes as they implement their oversight functions. They both have limited authority and mandate in redressing budget discipline and accountability. The parliament has limited powers to reject budgets presented by government (even if they are unacceptable) as this in a worst case scenario may lead to dissolution of the parliament and a call for fresh elections. Our recommendation, made two years ago of having an Established Parliamentary Budget Office and a Citizen budget published by government are still relevant today. We want this to be at the center of discussion and implementation in the next five years The level of budget transparency is still a problem with citizens only receiving limited budget information. The Open Budget Index for 2010 results shows that only 48% of budget information is publicly accessible. Citizens access to this information is still a problem. The results show Tanzania has slipped behind its two key East African neighbours Kenya and Uganda. We also want the Development Partners to be more transparent on the amount of aid committed and disbursed to government. Although there is an Aid Platform which is being created, there are still some limitations on access to this information and therefore making it difficult for citizens to monitor and understand how their government relates with the Development Partners on aid and the challenges involved. On the other hand, the office of CAG is limited in terms of following up on budgets submitted through certificate of emergency and/or supplementary budget and to enforce implementation of the audit recommendations. We find the question of effective management of development financing as a key priority if we are to ensure achievement of the successor strategies that we are about to discuss in this forum. Our recommendation of reviewing the accountability channels of the CAG from the head of the Executive branch of Government to the legislature are still very relevant and we would wish the next five years to see this process is concluded. 63 Page

64 Your Excellency guest of honor On another note, the demand for a new constitution raised by non-state actors just before and after the re-introduction of multiparty system in 1992 is now a burning issue as far as the future of our country is concerned. It is known that the current constitution is one of the hindrances in achieving good governance and accountability. On one hand, it accommodates articles which contradict the role of separation of power among the three organs of the government meanwhile affecting accountability by allowing conflict of interests between the players. On the other hand, it gives absolute power to those at the epitome of authority thus, affecting the autonomy and role of important institutions like the PCCB in dealing with corruptions and fraud, and National Electoral Commission in conducting fair and free elections. The contribution and consideration of every stakeholder on this issue is crucial to the future of this country and to ensure any achievements gained from implementing the MKUKUTA and MKUZA are sustainable. Zanzibar has shown the way, it is time for Tanzania as a whole to do the same. We cannot leave this discussion to be used simply to meet the interests of political parties in their tug-of-war. It is a matter of national interest and requires full citizen engagement. We call upon for the government to take a lead in kick-starting a national dialogue for reviewing and improving our constitution. The CSOs are ready to engage in the process and provide any support which will be required. Your Excellency guest of honor We thank you once again on behalf of the Government of Tanzania for your invitation to this forum. Once again, we pledge our 100+ commitment to work with you in a meaningful way. Our experience in the MKUKUTA review process indicates that it is possible for CSOs to work with the government. We thank our donors (UNDP, EU, SDC, Foundation for Civil Society, Embassy of Finland, CIDA and others), who facilitated the CSO consultation process. We hope you and all participants in this forum shall take these few words under consideration and we look forward to productive and constructive deliberations in this forum. Thank you all for your attention. 64 Page

65 Annex 1.3 Opening Statement by; Chair of the DPG at the Opening of the ANPD DPG Statement at the Occasion of the Annual National Policy Dialogue Thursday, 2 December 2010 Dar es Salaam Address by Mr. Alberic Kacou, Co-Chair of the Development Partners Group (DPG) Honourable Minister of Finance and Economic Affairs, Honourable Ministers, Honourable Members of Parliament, Permanent Secretaries, Excellencies, Ambassadors and High Commissioners, Senior Officials of the Government of Tanzania, Heads of Cooperation and Agencies, Distinguished Guests, Ladies and Gentlemen, This is an important national event for all of us. It is, therefore, an honour and a privilege to share some views on behalf of the Development Partners Group. It is a sign of openness, maturing democracy, and real partnership when government organizes and hosts such a high-level, policy event. This year s Annual National Policy Dialogue provides an opportunity to take stock of the results and development impact of the national efforts towards the Millennium Development Goals and MKUKUTA goals and targets over the last 5 years. I am particularly glad that this event brings together so many stakeholders involved in development, especially newly appointed Ministers, who we congratulate, Honourable Members of Parliament, and NGOs. It is a unique opportunity to discuss challenges observed while implementing MKUKUTA I as well as policy directions and priorities of the recently approved MKUKUTA II. This forum also provides an opportunity to discuss how the actual implementation can be shaped in the coming 5 years. Allow me to begin by congratulating the Government for the recent approval of the MKUKUTA II and MKUZA II. I would like to express appreciation on behalf of the Development Partners for giving us the opportunity to share comments and views throughout the review process and to make contributions to the development of the new national strategies that will form the basis for poverty reduction, development and our future cooperation with Tanzania. Honourable Ministers, Excellencies, Ladies and Gentlemen, During last year s Annual National Policy Dialogue discussions, it emerged that in order for development to effectively take place, increased efforts by the Government are needed to address slow progress in income poverty reduction and inadequacy and inequity in service delivery. Also discussed was how to enhance transparency and accountability for efficient utilization of resources. One year later, Development Partners welcome MKUKUTA II with its increased focus on pro-poor and inclusive growth, co-ordination of implementation, equity and quality of service delivery, business climate, and implementation of the core reform programs. Development Partners also appreciate that MKUKUTA II acknowledges new challenges such as population growth and adaptation for climate change. In addition, the new MKUKUTA reinforces slight progress made in areas such as those seen in the Transparency International CPI index where Tanzania has moved from number 126 to 116 on a global 65 Page

66 scale. However, much needs to be done in improving the business climate as Tanzania s ranking in the global Doing Business Index has dropped from 125 last year to 128 this year. Ladies and Gentlemen, Over the past several years, Tanzania has made noticeable progress in some areas, compared to its peers in the region. Positive achievements have been reached for example in the area of education with an enrolment rate of over 97% in primary schools, maternal mortality with a reduction to 454 in 2010 from 578 in 2005, extension of the national road network and overall macro-economic stability. But there is still much to be done. While the forthcoming joint World Bank/IMF Staff Assessment of the MKUKUTA II and MKUZA II Strategies might provide further insights, we as your partners believe that the following critical issues need additional attention in the coming years: 1. While poverty in Tanzania has slightly decreased (from 36% in 2001 to 34% in 2007), the MKUKUTA Implementation Report 2009/10 shows that poverty has been reduced mainly in cities, particularly in Dar es Salaam. More efforts will therefore be needed to make economic growth more pro-poor and inclusive, and to ensure that benefits are shared by all Tanzanians. In this regard, the sustainable provision of social services - which currently leaves large parts of the rural population unattended - will need our attention. 2. Despite the considerable progress in achieving universal primary education enrolment spread evenly between girls and boys, there are still many challenges in the education sector, such as ensuring the quality of learning as well as retention. 3. We share the government s concern about Maternal Health. Progress toward MDG 5 has been slow. We need to ensure that mothers are able to deliver in a safe environment, attended by skilled staff that treat their patients with care, dedication and have the appropriate obstetric equipment. As your partners we are committed to supporting an acceleration of efforts towards the realization of the MDG 5, particularly through improving delivery in underserved areas. 4. Challenges remain in terms of providing a conducive environment for the private sector to act as a main driver in national development. The deterioration in the business climate is a hindrance for realizing such potential; and in this regard, strong Government leadership is required. Development Partners look forward to discussing ways in which to further support the role of the private sector. 5. Reflected in the government s own priorities and as noted in the wide-spread public debate, continued efforts in the fight against corruption will be of key importance. It was especially gratifying to hear the encouraging remarks made by President Kikwete in his inaugural speech in Dodoma last month about the Government s will to ensure that public funds are spent judiciously. In light of the global financial crisis and the increasing focus on value for money in development cooperation, the President s zero tolerance approach to inefficiency, theft and misuse of public funds is highly appreciated. Development Partners are ready to discuss how we can be of further assistance in this key area of public policy and service to citizens. 6. Similarly, joint attention is needed in securing sustainable access to clean water and energy as well as in improving public-private partnerships and the investment climate. Furthermore, building on the Kilimo Kwanza initiative, more efforts are needed to ensure that the roll-out of agriculture initiatives are strongly linked with national production, export and processing policies. We are aware that the government faces a significant challenge in the near future in translating the MKUKUTA II strategy into concrete policies and prioritized actions, especially in view of the expected financing gap of 1.1 trillion 66 Page

67 Tsh. In this regard, Development Partners look forward to engaging with Government on the Implementation Plan that will guide the realization of the MKUKUTA II. This will include a solid monitoring and evaluation system and a clear costing of key programs linked to the priority areas of the MKUKUTA II as well as ensuring adequate support to the National Bureau of Statistics and to the Bunge Foundation. Excellencies, Honourable Ministers, Ladies and Gentlemen, As in the National Consultative Meetings on MKUKUTA II and MKUZA II earlier this year, it is encouraging to see this national event organised in an inclusive manner bringing together different stakeholders from Government, Private Sector, Civil Society and Development Partners. It fosters substantive dialogue focussing on results, achievements, and challenges. This open and frank discussion is of key importance in strengthening the quality and substance of our dialogue. We believe that Tanzania has enormous potentials to reach the objectives it has set in MKUKUTA II. An important step has already been made by agreeing to invest in the drivers of agricultural growth and to engage with the private sector as the primary agent of this growth, as mentioned by the president in his inaugural speech in the Bunge session. Let me conclude by saying that, with the new Government in place and with the new MKUKUTA approved, we have a unique opportunity to give the poverty reduction agenda a special push. We, the Development Partners, are committed to further supporting the national efforts to bring welfare and prosperity to all Tanzanians. In this spirit, we are looking forward to further engagement for the purpose of achieving MKUKUTA II and MKUZA II targets as well as the Millennium Development Goals. Asanteni sana! 67 Page

68 Annex 1.4 Cluster Group Working One Growth and Reduction of Income Poverty Report UNITED REPUBLIC OF TANZANIA Progress Report of PER CWG 1: Growth and Reduction of Income Poverty Against the Performance Assessment Framework (PAF) for GBS Annual Review 2010 Contributors MOID, MAoFS, MEM, MITM, BEST, NBS, MLDF, MNRT Japan, DFID, Ireland, Denmark, Sweden, EC, UNDP, WB CWG 1 Summary The year 2009/10 posed a policy challenge for the Government of Tanzania under the global recession and imported price inflation. The Government steered the economy with an expansionary expenditure policy and extra ordinary rescue measures for the affected sectors. As a result the dip in the rate of growth was minimal compared with other Sub Sahara African Countries. Against this background, Tanzania has made some progress in implementation of Cluster one reforms. However, the overall performance in the light of 2010 P AF performance was less favorable than last years. This reflects the degree of challenge facing the cluster in the areas of agriculture, business environment, and natural resources.however there was considerable improvement in quality of dialogue, which hopefully will bearer fruits in the PAF 2011 performance. Of the five Underlying processes, three were rated satisfactory (Infrastructure, Agriculture and Energy) and two unsatisfactory, which are BEST and Natural Resources. Of the seven TPA s two were achieved (Energy and PPP), are partial achieved (Agriculture Marketing strategy, NBS), and two not achieved (Cess tax and Natural resources), and one split decision (Business Environment). Of the 12 Outcome Indicators, seven were achieved and five were not achieved. MINISTRY OF INFRASTRUCTURE DEVELOPMENT 68 Page

69 1. DETAILED ASSESSMENT 1.1. Areas of good and weak performance Main Sources of Information Infrastructure: Joint Infrastructure Sector Review, Aide Memoire. Key areas of good performance i) Efforts to decongest DSM Port: time taken for a container from offloading until clearing from port (import) has been reduced to 12.5 days in June 2010 from 21.8 days in June This has surpassed the target of 16 days for 2010 ii) Implementation of the time bound action plan to move to Landlord status is in progress and timeframe is set for the Authority to operate full landlord by 2020 iii) Continued improvement of budget execution (expenditure against estimates) iv) Quality of the policy dialogue two Joint Technical Committee (JTC) meetings was conducted successfully in March and August, 2010 respectively, the 4th JISR has been conducted on 15th 16th September, Key areas of weak performance i) Lack of full and sustainable funding for the LGTP based on alignment of the MKUKUTA II targets to the TSIP (planning) and MTEF (funding) GoT supposed to secure full and sustainable funding for local roads ii) Underperformances of railways sub-sector with no sound remedy plans to revive TRL and pursue restructuring of TAZARA, as well as to recapitalize railways by establishing the Railway Infrastructure Fund (RIF). iii) Insufficient coverage of road maintenance needs resulting in increasing backlog and rehabilitation expenditure GoT to pursue additional sources of revenues to widen the Roads Fund base and secure adequate funds to cover full maintenance needs and the backlog in the short and medium term. iv) Improper budget management in the road sector lack of oversight resulting in over commitment on development projects managed by TANROADS Overall Assessment 2.1 (a) Underlying Process : Joint Infrastructure Sector Review 2010 Assessment: SATISFACTORY Main Sources of Information: Joint Infrastructure Sector Review and Aide Memoire The 4 th JISR was conducted on 15th - 16 th September, 2010 by involving Government, Development Partners, Private Sector and Civil Society Organizations (CSOs) 69 Page

70 The Aide Memoire contains the outcome of the 4 th JISR. Currently, MoID received comments from DPs and the Ministry is scrutinizing all comments prior to signing. Overall, it has been agreed that the sector has progressed satisfactorily since in all areas identified as priorities for action some steps forward and positive results have been reported. Notably, the process of necessary regulatory reforms has continued, though at a lower pace than initially planned, further developments in budget planning and execution practices have been confirmed and visible operational improvements occurred in the port of DSM. Moreover, since the 2009 Joint Infrastructure Sector Review, further capacity improvements have been made (new units or sector bodies with implementation tasks established or in view, database integrating sector performance indicators operational) and some other activities aiming at better coordination and monitoring of sector performance are under preparation (guidelines for M&E, guidelines for strategic planning, performance contracts between MOID and agencies). Nevertheless, notwithstanding the legislative and institutional improvements mentioned above, MOID and Development Partners agree that there are still considerable challenges that need to be urgently addressed and closely monitored. Among key eight priority areas for action, the following areas have been identified as matters of significant concern that need to be tackled promptly: Insufficient funding allocated to local roads, Continuous budget mismanagement practices by TANROADS (commitments not linked to (exceeding) the budget approved), Deteriorating condition of railways. For all those areas remedy plans with clear timelines have been discussed and agreed upon Outcome Indicator 1: % of Trunk and Regional Roads Network in Good and Fair Condition. Assessment: Source: OFF TRACK TANROADS Quarterly Report The abnormal rains experienced in FY 2009/10 negatively affected the road condition especially on the unpaved roads. In addition, the condition in FY 2009/10 for fair and good roads has decreased due to expansion of the network with a total of 3,316 km of district roads reclassified into national roads in July These roads are mostly in fair and poor condition. Baseline 2005 :82% Status2009 :95% Status 2010 :89% Target 2010 :93% 2.3.Outcome Indicator 2: % of rural roads that are passable (good and fair conditions) Assessment: OFF TRACK Source: Local Government Transport Programme (LGTP) Annual Report Under funding of the Local Government Transport Programme (LGTP) has negatively affected 70 Page

71 attainment of MKUKUTA targets. Based on five years (FY 2008/ /13) estimates in the Roads Fund Board s Concept Paper of February 2010, the maintenance needs for the maintainable district network is Tshs billion in FY2009/10. The actual funding provided for FY 2009/10 was Tshs 84,505 million (49.5% of needs). Based on the same estimates the actual performance in FYs 2007/08 and 2008/09 was 57% each compared to the target of 89% for FY 2008/09. The budget allocation for FY 2010/11 has remained at the same level as in FY 2009/10 (45% of needs).with the current financial trend it is unlikely that MKUKUTA target will ever be achieved Baseline 2010 :50% Status 2009 :58.5% Status 2010 :56.2% Target 2010 :60% 2.6 Outcome Indicator 3: Time Taken for Container from offloading until clearing from port Assessment: ACHIEVED Source: TPA Quarterly Report This commendable achievement is associated with various measures undertaken, including; increasing use of Inland Container Depots (ICDs), sensitization of port users to clear their cargo timely, increase in the tariff charges for the overstayed containers and increasing working hours. Also a close monitoring of dwell time by port improvement committee. Baseline 2005 :20.1 days Status 2009 : 21.8 days Status 2010 :12.5 days Target 2010 :16 days MINISTRY OF AGRICULTURE FOOD SECURITY AND COOPERATIVES 1.1. Areas of good and weak performance Main Sources of Information FIFTH ASDP JIR AND ASR/PER REPORTS Key areas of Good Progress I. ASR/PER FY 2010 completed with increased stakeholder consultations on the process; II. ASR/PER conducted and findings and recommendations to be taken on board in the FY 2011/2012 budget process; III. Increased sector dialogues and meetings; IV. Joint ASDP Implementation Review was carried out in August, 2010 and report presented to stakeholders on 2 September, Agreed actions from the ASDP Joint Implementation review will be implemented as per integrated work plan and budget. Overall, the findings of the review show that progress of implementation is satisfactory. Notable outputs and outcomes have been realized from the key programme sub-components, leading to increased productivity, farm incomes and access to technologies, infrastructures and marketing systems. Review findings indicated the following: 71 Page

72 a. Irrigation packaged with input supply, extension services and value addition generates optimum results; b. Production and productivity of crops and livestock increased as a result of adoption of improved technologies, agricultural inputs (improved seeds, fertilizers) and improved livestock breeds. For example, average yield of maize in Maswa, Bariadi, Karagwe and Muleba districts increased from 0.4 tons/hectare in 2006/2007 to 4 tons/hectare in 2009/2010 while paddy yields in the same areas increased from 2.5 tons/hectare in 2006/2007 to 7.5 tons in 2009/2010. Likewise milk yield increased from 1 litre to 10 litres per cow per day in the same areas; V. Ratio of processed exported agricultural products to total exported agricultural products increased from 18.7 in 2005/2006 to 23.3 in 2009/2010; VI. Improved delivery of agricultural services through establishment of Zonal Information Extension Liaison Units in the 7 agricultural zones. Efforts were made in building the capacity of extension agents and farmers on use and dissemination of improved agricultural technologies. It was noted that shortage of extension officers remains a constraint to technology dissemination and that the involvement of agricultural Service Providers in service delivery is still minimal. However, the use of Farmer Field Schools approach was observed to reach many farmers at a low cost albeit the shortage of extension workers Key areas of weak performance i. Untimely disbursement of funds; ii. Low level of investment from both public and private sector; Overall Assessment SATISFACTORY 1.1: Underlying Process: Agricultural Sector Review 2010 (including PER and Joint Implementation Review of ASDP) Assessment SATISFACTORY Main Sources of Information FIFTH ASDP JIR AND ASR/PER REPORTS Underlying processes Agricultural Sector Review & Public Expenditure Review carried out focusing on issues related to Public Expenditure and evaluation of progress made in the implementation of previous year ASR/PER recommendations. Status Consultants for undertaking ASR/PER were procured in August, 2010 after which field visits were carried out in various study areas. A draft report was submitted for stakeholder consultations on 8 th October, Comments from the meeting are being incorporated in the report prior to submission by end October, Key issues emanating from the ASR/PER i) Inadequate Private Sector Investment in Agriculture. Limited investment in medium and large scale farming in agriculture significantly explains the low productivity and growth of the 72 Page

73 country s rural sector. Current government efforts through ASDP, KILIMO KWANZA, CAADP and SAGCOT aims at enhancing private sector participation in the development of agriculture which is crucial towards fulfilment of the country s medium-term development goals as expressed in the MKUKUTA II and TDV With the Public Private Partnership policy in place, there is need to continue providing a more conducive environment to operationalize the PPP in the agricultural sector focusing on policies, legislation, financing and incentives. Some of the issues that need immediate actions include: Encourage private sector investment in irrigated agriculture through construction of irrigation infrastructure; Identification and demarcation of potential agricultural lands for investments; Reforming legal and regulatory framework to guide agricultural marketing systems; Provision of conducive policy environment for private sector investment e.g. promoting contract farming and out-grower schemes; Providing non-tariff incentives through well regulated business Minimizing transaction costs that are associated with value chains; Strengthening agricultural financing through the establishment of an Agricultural Development Bank and TIB agricultural window; Review land tenure System; and Promote investments in agricultural marketing infrastructure and agro-processing. ii) Inadequate sector budget allocation and timely disbursement to users. It is recommended to increase sector budget gradually to 10 percent from 7.8 percent in 2010/2011 according to the Maputo Declaration (Assembly/AU/Decl. 7(II) of July 2003) in order to stimulate sustainable growth in the sector. This will facilitate the provision of public goods like research, extension, training, information dissemination that will support the private sector in investing into the sector. 1.2:Temporary Process Action Finalize an Agricultural Marketing Strategy by July 2010 on basis of Terms of Reference agreed by Cluster by the first week of March, and implement key measures to improve the marketing environment for private sector by December, 2010 Assessment: NOT ACHIEVED Main Sources of Information Agricultural Marketing Strategy - MITM Status: Three consultants two local and one international contracted by JICA and the World Bank started work on 31 st May, A draft of Agricultural Marketing Strategy was submitted and discussed during the Sector Consultative Group meeting held on 30 th September, The stakeholders of the Sector Consultative meeting raised some comments for improving the document in conformity with the ToR. It was therefore recommended that MITM liaise with the World Bank and JICA to ask the consultant to complete the work by end of October, It was furthermore stressed that MITM be actively involved in the finalization of the strategy. The Ministry of Industry Trade and Marketing consulted World Bank and JICA and agreed to improve and complete the Agricultural Marketing Strategy by end of October, MTIM is liaising with JICA/WB and other stakeholders to finalize the marketing strategy. It is 73 Page

74 planned that the Agricultural Marketing Strategy will be presented to the Agriculture Sector Consultative Group meeting on 16 th December, :Temporary Process Action Phased elimination of all local crop cess taxes from 5% to 3% to 0% within two fiscal years to be included in the Finance Bills FY2010/11, and 2011/12, and offset by a transfer while the overhaul of local taxation is carried out(pmo-ralg) Assessment: NOT ACHIEVED Main Sources of Information Minutes of Meeting of CWG1 joint meeting As per June 2010 Budget Speech (Paragraph 64ii) Produce Cess that is charged on agricultural products will be between 3% and 5% of the farm gate prices; the aim is to enable the LGAs to impose rates based on available resources without compromising productivity. The government has therefore approved the produce cess to be charged by LGAs to range between 3-5%. In addition a total of Tshs billion has been allocated by GoT for compensation. 1.4 Outcome Indicator : Hectares of Land under irrigation Assessment: ACHIEVED Baseline 2005: 249,992 Status 2009: 317,245 Status2010: 380,888 Target 2010: 340,445 Sources MoWI Annual Performance Reports of Information: 1.5 Outcome Indicator : Fertilizer Consumption Assessment: ACHIEVED Baseline 2005: 119,211 Status 2009: 275,219 Status2010: 283,390 Target 2010: 280,000 Sources of Information: MAFC Annual Performance Reports 1.6 Outcome Indicator: Increased ratio of farm gate to export price from the 2009 baseline as established by the Tanzania Coffee and Cashew Board Assessment: NOT MEASURED Cashew Baseline 2005: 69.9 Status 2009: 73 Status2010: Target 2010: Page

75 Arabica Coffee (North) Baseline 2005: 49 Status 2009: 82 Status2010: Target 2010: 83 Arabica Coffee (South) Baseline 2005: 56 Status 2009: 82 Status2010: Target 2010: 83 Robusta Baseline 2005: 37 Status 2009: 96 Status2010: Target 2010: 82 MINISTRY OF LANDS, HOUSING AND HUMAN SETTLEMENTS DEVELOPMENT 1. DETAILED ASSESSMENT 1.1. Areas of good and weak performance Key areas of good performance i. Assistant Commissioners for lands have been appointed and stationed at 5 Zonal Land Offices as a measure to decentralize registration processes. ii. Consultancies on Systems Reform in the Office of the Commissioner for Lands and Needs Assessment study in the Titles Registry have been completed. Draft TOR for recruitment of a consultant to guide the implementation of recommendations in place. iii. The work of sorting and consolidating manual records in a single file for easy retrieval and access of land information have been completed in Mbeya and Mtwara and by 90% in other Zonal Offices. iv. Approval of Disposition formally done by Commissioner for Land to Dar es Salaam Municipalities has been decentralized. v. Research unit established to investigate the market prices for crops, land value and construction rates with a view to establishing standards market rates for compensation. vi. Agreement has been reached between TRA and MLHHSD that the valuation authorized by the Government Chief Valuer will be honoured. vii. The Ministry has been able to establish fundamental geodetic networks. These includes 12 point of 0 Order, 72 points of 1st Order, and 600 points of 2nd Order Points. viii. The Operating Manual and Project Document for implementation of systematic adjudication have been reviewed basing on the experience gain from the pilot projects undertaken in 4 Districts. Key areas of weak performance 75 Page

76 2.1.Outcome Indicator: The number of days taken by the commissioner of lands to approve a transfer of a certificate of rights occupancy and the lands registry to register the transfer reduced from 28 to 14 by 2011 Assessment: ACHIEVED Baseline: 2005: 28 Status: 2009: Status: 2010: Target: Main Sources of Information Internal evaluation (after omission of some steps to the said indicator processes). PRIME MINISTER S OFFICE 1.1. Areas of good and weak performance Main Sources of Information Detailed assessments of Progress achieved under the Roadmap development and BEST programme implementation are contained within the World Bank Doing Business Unit report and Aide Memoire for the March/April 2010 Implementation Support Mission. Key areas of Good Progress i. Time bound Roadmap for improvement of Tanzania s Business Environment Climate finalized and approved for implementation. ii. A comprehensive BEST II action plan for the implementation of the Roadmap has been finalized and ready for review iii. Short term measures identified under the Roadmap have been implemented iv. Public-Private Partnership (PPP) Policy completed and approved v. Public- Private Partnership Act Act. No. 18 of 2010 enacted on 15 th July Key areas of Weak Progress i. Procurement of Consultant for developing PPP strategy Overall Assessment 2.1 Underlying Process : Best Programme Review 2010 Assessment Main Sources of Information UNSATISFACTORY Time bound Roadmap 2010; Aide Memoire for the April 2010 BEST Implementation Support Mission BEST is rated marginally unsatisfactory. Substantial efforts have gone into the mainstreaming process and development of the Road map. It is anticipated that the Roadmap will enable the Government to be more focused on the objective of reducing the costs of doing business and linking investments in MDAs with tangible improvements in the services that MDAs provide the private sector. BEST Review will take place in December 2010.A comprehensive action plan (CAS) was not ready before the GBS Page

77 2.2 Temporary Process Action: GoT will present a time bound ROADMAP to improve the Business Environment in Tanzania by March 2010 and implement selected critical short term priority actions detailed in this plan by October Assessment: PARTIALLY ACHIEVED Main Sources of Information: Time bound Road map, PPP Policy The Government launched the Roadmap in March 2010 and approved its implementation in July The Roadmap consists of three components which are immediate quick wins; short term and medium term interventions that will be implemented in order to improve business environment and investment climate and enhance transformation of the informal sector towards formalization. Miscellaneous Amendment Bill will be tabled in the expected April 2011 Parliamentary session for supporting reform process. A Comprehensive Action Plan to Implement the Roadmap is being finalized. Actions already implemented include: 1. Companies and business names data capture process has been completed and search for companies / business names now available on BRELA s website. Taxonomy of acceptable names also on website; 2. To facilitate easy implementation of policies at local level (D by D policy), MITM is strengthening working relationship with Local Authorities and is implementing all industry and trade sector policies at LGA level in collaboration with PMO-RALG. 3. Draft regulations for combining TIN and PAYE registration has been submitted to the Minister for Finance for gazetting. 4. Standard format for Memorandum and Articles of Association (MEMARTS) for incorporation of a company without recourse to lawyers is now available on BRELA s website. 5. PMO-RALG has instructed all LGAs to appoint a Senior Officer to face-vet all building plans to ensure that they meet specifications on the date of lodging. All sub-standard maps will be returned to the applicant on the same day with clarification on issues to be addressed before re-submission. 6. The Principal Act Cap 366 (Part IV), Section 38 has been amended by deleting subsection (3) and substituting in its place the following provision... Where the mediation has failed, the dispute shall be referred for arbitration which shall be concluded within 60 days during which period no retrenchment shall take effect and where the employees are dissatisfied with the award and are desirous to proceed with revision to Labour Court under Section 91(2), the employer may proceed with their retrenchment. 7. The Ministry of Land, Housing and Human Settlement Development has decentralized the Office of Commissioner for Land to 5 zonal Offices 77 Page

78 8. Approval of disposition formally done by Commission for Land to DSM Municipalities has been decentralized 9. TRA is using Government Value s report to assess capital gains taxation and has dropped own valuation. Proposal to amend S. 35 of Income tax 2004 which deals with tax avoidance to formalize this arrangement sent to AGC in May Income Tax Cap 332(General Electronic Filling and Payment) regulation, 2009 have been completed and submitted to MOFEA for on ward transmission to AG Chamber for approval and published. The regulation will compel traders to submit returns/ documents through electronic system 11. Exercise of eliminating permanent roadblocks has started. Up to 30 th June 2010 only 16 permanent roadblocks remaining on the road from Dar es Salaam to Rusumo 2.3 Temporary Process Action: Draft bill and regulatory framework for PPP submitted to the Parliament by April 2010 and implementation of PPP policy including operational PPP Agency by November 2010 Assessment: ACHIEVED Main Sources of Information: PPP ACT, Time bound Roadmap The PPP policy was approved by Cabinet in November 2009 and finalized; subsequently, PPP law enacted in July The PPP Act No.18 of 2010 provides an adequate legal framework for the active private sector participation in all sectors of the economy. Regulations necessary to operationalize the Law are being finalized. The quality and capacity of the Coordinators and staff of the proposed Coordination and Finance Units are being handled with utmost care. The institutional arrangements will be key to the success of the Tanzanian PPP initiative, i.e. how the coordination and finance units operate and cooperate with each other. All these issues will be detailed in the Regulations 2.4 Outcome Indicator 1: Enabling environment for private sector lead growth improved as reflected in Doing Business ranking Assessment: NOT ACHIEVED Baseline 2005: 150 Status 2009: 131 Status 2010: 128 Target 2010: 120 Main Sources of Information Doing Business Report 2011 NATIONAL BUREAU OF STATISTICS 1. DETAILED ASSESSMENT 1.1. Areas of good and weak performance 78 Page

79 Main Sources of Information Censuses and Surveys, Ministries, Agencies and Departments (MDAs) through Routine Data System, and the Statistical Act Key areas of good performance i. Tanzania Statistical Master Plan (TSMP) design for strengthening the National Statistical System was completed successfully, thereafter the Cabinet Paper was jointly prepared by NBS,OCGS Zanzibar and Ministry of Finance and Economic Affairs. It was endorsed by Cabinet Secretariat and Inter-Ministerial Technical Committee, then finally submitted to the Cabinet and the Government Approved the TSMP on 24 th June The TSMP Implementation Plan was updated and most activities are expected to be executed from 2011/12. ii. Draft Zero of Statistical Bill for enhancing the autonomy of the NBS has been discussed thoroughly within the NBS and the Ministry of Justice and Constitutional Affairs, later on to be shared by Stakeholders from the National Statistical System on 21 st October 2010 for further iii. action. It is anticipated that the Bill will be sent to the Cabinet in December National Panel Survey data processing and report writing expected to be completed by the end of October iv. Demographic and Health survey 2009 report was released in October 2010 v. Revised and rebased consumer price index was released on 15 November vi. The National Data Archive Application (NADA) was launched on 30 November vii. The NADA will provide users with easy, free of charge online access to micro-data. Key areas of weak performance i. Inadequate and unsustainable funding for resources needed to support various statistical activities in MDAs within the National Statistical System. ii. TSMP Activities scheduled for 2009/10 were not executed due to lengthy procedures in securing consultancies, hence agreement was reached between the Government of Tanzania and the World Bank such that the Project Preparatory Advance (PPA) duration was extended for 18 months and will end in December Temporary Process Action: Draft new Statistics Bill Enhancing autonomy of the NBS is submitted to Cabinet by December Assessment: NOT ACHIEVED Main Sources of Information: Ministries, Agencies and Departments(MDAs) through Routine Data System, The TSMP was officially launched in October 2006 with a high political support so as to develop a harmonized and fully coordinated National Statistical System (NSS). As a result, the Statistical Needs Assessment was conducted in 2007 by using a Standard Questionnaires in Ministries Agencies and Departments in Tanzania Mainland and Zanzibar. i. Since then (2006), the TSMP Development process was coordinated on behalf of the Government by the NBS, PMORALG and OCGS Zanzibar in Tanzania Mainland and Zanzibar respectively. ii. Official consultations were made with stakeholders including Users and Producers of Statistics in order to reveal their Strengths, Weaknesses, Opportunities and Challenges (SWOC) in MDAs so as to assess their Statistical production capacities and variations within the National Statistical System (NSS). 79 Page

80 iii. iv. Technical support was received from National Consultants (Daima Associates) and International Consultants the financial assistance for various consultancies was received from Development Partners. Components of the TSMP within the NSS due for change are Institutional Development, Human Resources Development, Statistical Infrastructure Development, Data Development and Dissemination as well as Physical Infrastructure and Equipment MOCAJ &MOFEA drafting of a new statistical bill was not be possible to submit the draft to Parliament within the deadline set out in PAF 2010 due to the fact that, statistics is a union matter which requires consultations consensus between the two statistical offices to harmonize their respective statistical Legislation i.e. Statistics Act National Bureau of Statistics and statistics Act 2007 Office of chief Government statistician of Zanzibar. 1. DETAILED ASSESSMENT 1.1. Areas of good and weak performance MINISTRY OF ENERGY AND MINERALS Main Sources of Information Energy: Joint Energy Sector Review (JESR) Report 2010 Key areas of good performance i. Participatory and transparent budgeting process. ii. Progress in the implementation of rural electrification projects, particularly districts Head Quarters townships where 8 out of 13 were electrified. iii. Adoption of Standardized Power Purchased Agreements (SPPAs) and associated tariff for small projects. iv. Decline in the use of diesel as fuel for electricity. v. Increase in exploration activities. Key areas of weak performance i. Low rate of budget release and budget execution. ii. Monitoring and evaluation feedback to policy and planning. iii. Delays in procurement process. iv. Restoration of adequate power reserve margin. v. Curbing fuel adulteration. vi. Accessibility of loans/funds from commercial banks to small scale developers on renewable energy projects Overall Assessment 2.1 (a) Underlying Process : Joint Energy Sector Review 2010 Assessment: SATISFACTORY Main Sources of Information: Joint Energy Sector Review Report Page

81 The 4 th JESR Stakeholders workshop was conducted on 23 rd September, 2010 by involving Government, Development Partners, Private Sector and Civil Society Organizations (CSOs). The final report for JESR 2010 was completed in October 2010 after incorporating comments from Government, DPs and stakeholders. All relevant reports has already been submitted to MoFEA Temporary Process Action 1: Government to ensure a construction contract has become effective and the contractor has mobilized by August 2010 which ensures that additional power generation capacities of at least 160 MW will be operational by December Assessment: ACHIEVED Source: TANESCO All contracts were signed (100MW & 60MW ), therefore indicates that 100 MW gas based plant at Ubungo and 60 MW Heavy Fuel based at Mwanza will be procured as per schedule. Outcome Indicator: Total electricity installation capacity and utilization, MW and %) Outcome Indicator 1a: Total electricity installation capacity equals 1137MW Baseline 2005: 889 MW Status 2009: 1,092 MW Status 2010: 1,077 MW Target 2010: 1,137 MW Assessment: NOT ACHIEVED Source: TANESCO Quarterly Report The target was not achieved. Reported installed capacity as at November 2010 is 1077 MW target was set taking into consideration private installations which are actually not qualifying Outcome Indicator 1b: Electricity capacity utilization equals 71% Baseline 2005: 62% Status 2009: 70% Status 2010: 85% Target 2010: 71% Assessment: ACHIEVED 81 Page

82 Source: TANESCO Quarterly Report The target was achieved taking into account availability of IPTL and Songas. Overall Assessment on outcome indicator (Total electricity installation capacity and utilization, MW and %). Assessment: NOT ACHIEVED 2.4.Outcome Indicator 2: 14.5% of the population has access to electricity Assessment: Source: ACHIEVED MEM Annual Report, TANESCO Report The electrification was achieved by implementation of rural electrification projects, particularly districts Head Quarters townships and other principal centers. Baseline 2005: 8.2% Target 2009: 10.9% Status 2009: 14% Target 2010: 14.5% Status 2010: 14.5% MINISTRY OF NATURAL RESOURCES AND TOURISM, MINISTRY OF LIVESTOCK DEVELOPMENT AND FISHERIES AND MINISTRY OF ENERGY AND MINERALS MINISTRY OF NATURAL RESOURCES AND TOURISM 1.1. Areas of good and weak performance Main Sources of Information Ministry Annual Implementation Progress Report July, June, 2010 Key areas of Good Progress i. The Ministry total annual revenue collection increased surpassing the annual target by 109% i.e from baseline of Tsh 47.5 billion to Tsh billion. This was largely due to enhanced law enforcement, improved resources allocations and revenue collection campaigns especially in the Forestry and beekeeping sub sectors, ii. New Wildlife Act No.5 of 2009 approved by Parliament and Regulations are being reviewed, iii. Draft revenue enhancement strategy and draft financial management strategy are in place, (under preparation) iv. The Ministry has studied modern technologies on revenue collection and plans are under way to computerize revenue collection to minimize leakages associated with manual system, obtain various statistics for decision making and bring more transparency in the process, v. Revised Client Service Charter is in place. The Charter provides terms, conditions and guidelines on how the Ministry engage or conduct business with its stakeholders,(customers) vi. The Ministry is carrying out study on retention scheme with the objective to establish optimal operational charges and retention guidelines, 82 Page

83 Key areas of Weak Progress i. In adequate measures to improve participatory forest Management at the district and village levels due to lack of benefit sharing arrangements particularly revenue sharing, ii. In adequate measures to improve of patrols and anti-poaching measures in around forest and Game Reserves due to low number of game wardens, lack of forest guards, forest managers and limited budget allocation, iii. In adequate measures to operationalize the National Forest and Beekeeping database 2.2 Underlying Process Action: Natural Resources sector review focusing in Forestry and Wildlife Assessment: UNSATISFACTORY Main Sources of Information Natural Resources Sector Annual Review Report October 18 th 2009 Key issues from the Natural Resource Annual sector Review (i) (ii) (iii) (iv) (v) (vi) Joint Forest Management (JFM) approach is being frustrated at District level due to lack of incentives or benefit sharing arrangement for revenue from forest resources between central and LGA s. However, a plan is underway to enter into agreement with Ministry of Finance and Economic Affairs to allocated fund in the next budget to support JFM activities at District level, The benefit sharing arrangement for revenue from forest resources including revenue from REDD program will be developed and integrated within the Tanzania Forest Service (TFS) once it is operational and shared with Communities, Forest resources are being depleted at an alarming rate mainly due to increased demand for fuel wood, timber, charcoal and arable land which is driven by population growth and urbanization. Therefore to mitigate the existing negative impact it was proposed that; (a) (b) Ministry should effectively involve, Districts and Villages to participate in the forest management, The Ministry to collaborate with the Ministry of Energy and Minerals to develop a strategy for alternatives energy sources, It was clarified that, FBD and Wildlife Division have informer network system in place. However, the challenge is the modality of rewarding informers once offenders are apprehended due to inadequate budget allocation for standing impress, The Ministry will improve its data collection systems including National Forest and Beekeeping Database (NAFOBEDA). Also, under the on going National Forest Resources Assessment and Management (NAFORMA) experts will look into NAFOBEDA and propose ways to improve it including integration of Geographical Information System and Carbon Trading Databases within the system, Controlling and monitoring transportation of forest products is still a major challenge. Most transporters of Forest Products don t own vehicles so it is difficult to institute a regulation that requires transporters of forest products to register their vehicles. Substantial amount of forest products are illegally transported at night. The fact that the Ministry is constrained in terms of resources (human, financial and technological) exastabate the situation. To mitigate the impact, the Ministry has entered into agreement with Tanzania Police Defence Force to strengthen patrols and inspection of various natural resources products in check points, weighing areas, major roads, Ports, Airports and regional bus stop stations. The efforts will be intensified through the deployment of forest guards once the TFS becomes operational, 83 Page

84 (vii) (viii) It was recommended that the Ministry in collaboration with the Ministry and Energy and Minerals should jointly develop a strategy to reduce and ensure sustainable charcoal production, identify specific areas for charcoal and fuel wood production and encourage use of alternative energy sources such as Gas, Solar panels, bio-gas and Wind power, That the Ministry will allocated hunting blocks based on administrative procedures. Also, blocks will be categorized based on a number of parameters including species diversity and abundance. MINISTRY OF NATURAL RESOURCE DEVELOPMENT 2.3 Temporary Process Action: Government to implement key actions of Natural Resources (forestry and wildlife) accountability and transparency action plans following the timetable specified in the M&E framework Assessment: NOT ACHIEVED Main Sources of Information Ministry Annual Implementation Progress Report July, June, 2010 The Ministry implemented some actions of the action plan and the assessment is as follows. In order to improve accountability and law enforcement through: (i) (ii) (iii) (iv) Informing citizens of the natural resources and their management through Participatory Forest Management (PFM) i.e. Joint Forest Management (JFM) and Community Based Forest Management (CBFM), moderately satisfactory, To provide a breakdown of revenue collection by legal and illegal activities, satisfactory, To improve informer system not satisfactory, To improve information under PFM scheme, not satisfactory, To improve transparency in contract procedures, licenses and concessions through: (i) (ii) (iii) (iv) (v) (vi) Improved data collection and analysis (NAFOBEDA), Not satisfactory, Establish a system of acting and tracking action taken on Internal Audit reports; Satisfactory, Complaint procedures be made clear upon receipt of applications, satisfactory Operationalize the revised Ministerial Client Service Charter; Satisfactory Review regulations to improve issuance of licenses and allocation of resources; not satisfactory. Review Wildlife Regulations, Not Satisfactory. To improve financial management the following actions were taken (i) (ii) (iii) (iv) To train accountants in 30 revenue collection centers to assist in the improved revenue collection; Moderately satisfactory, To consider outsourcing revenue collection from FY 2010/11 using a commercial banking arrangement upon the recommendations of Task Force study; not satisfactory. Transporters of forest products should register their vehicles/vessels, not satisfactory. To equip Charcoal bags with identity tags to allow identification of legally and illegally charcoal; not satisfactory. 84 Page

85 To improve retention arrangement the following key actions were taken, (i) (ii) Conduct study on retention scheme; satisfactory, To include the Local Government Authorities in the design of new revenue collection system; not satisfactory. Overall assessment: out of sixteen planned actions, seven were assessed as satisfactory and nine as unsatisfactory. The underlying reasons for unsatisfactory performance are as shown in the minutes of the sector review workshop held on 18 th October The outcome indicator for Forestry was achieved while one for Wildlife not achieved due to adverse effect of global economic melt down on Tourism particularly Hunting Industry as hunting bookings were cancelled and hence hunting quota allocation for 2009 was underutilized. MINISTRY OF LIVESTOCK DEVELOPMENT AND FISHERIES 1.1. Areas of good and weak performance Main Sources of Information Ministry of Livestock Development and Fisheries Annual Report Finance Act of 1982 Fisheries Act No 22 of 2003 Fisheries Regulations of 2005, 2009 Deep Sea Fishing Authority (DSFA) Act of 2009 Key areas of Good Progress: i. Establishment of Deep Sea Fishing Authority (DSFA), a body which will over see fishing operations in the Deep sea fishery. ii. Development of the Deep Sea Fishing Authority (DSFA) Act of 2009 and Fisheries Regulations of iii. iv. Four hundred (400) copies of the DSFA Regulations were circulated to stakeholders. Translation of Fisheries Regulations in Kiswahili is in progress as the copy has been taken to BAKITA for translation and the task is expected to be accomplished on October v. The Operationalization of the DSFA has started by appointing the Director General and nomination of an interim team comprising of four staff (2 from Tanzania Mainland and 2 from Zanzibar. vi. Meeting with Fisheries Stakeholders in December 2009 whereby the Prime Minister met them in Mwanza to discuss fisheries related issues. vii. Strengthening and Monitoring of revenue collections whereby training has been conducted to 67 revenue collectors viii. The reviewing of National Fisheries Policy of 1997 and developing of Fisheries Sector Development Strategy is ongoing. ix. Developing a five years Fisheries Development Programme that is focusing on effective resource management and utilization for their sustainability and therefore increased revenues x. Launching of The National Aquaculture Development Strategy to guide aquaculture xi. xii. development in the country Strengthening of fisheries resources conservation through establishing Marine Park in Kigombe, Tanga which is aimed at conserving the Syilicant fish which is an attraction to tourists and can increase revenue from eco-tourism. The Tanzania Fisheries Research Institute (TAFIRI) Act No. 6 of 1980 and the Marine Parks and Reserve Act No. 29 of 1994 (MPRU) are being reviewed. 85 Page

86 xiii. xiv. Fish stock has been conducted in Lake Victoria in March 2010 which results showed that there are 367,819 tones of Nile perch, 1,176,372 tones of Dagaa, and 528,169 tones of other fish species. Revenues from confiscated items resulting from illegal activities are reported separately. Key areas of Weak Progress i. Lack of funds to enable the Ministry to implement some of the action areas outlined in the Action Plan to improve transparency and accountability in the management of licenses and concessions of natural resources. ii. Provision of adequate funds to enable effective and efficient control of illegal fishing, cross boarder trade and fishing practices that are detrimental to the resource base and its environment. iii. Weak community involvement in fisheries resources conservation and management through effective co-management iv. Lack of vigorous investment of nationals in the deep sea fishing and value addition for maximizing resources utilization and therefore increasing revenues from the sector. MINISTRY OF LIVESTOCK DEVELOPMENT AND FISHERIES 2.0 Temporary Process Action : Government to implement key actions of Natural Resources fisheries accountability and transparency action plans following the timetable specified in the M&E framework Assessment: Main Sources of Information NOT ACHIEVED Annual Performance Report Status: The action plan to improve transparency and accountability in the management of licenses and concessions of natural resources for Ministry of Livestock Development and Fisheries covers the period 2009/10 to 2011/2012. Almost, the actions outlined in the Action Plan during 2009/2010 were implemented as planned. The Ministry will be having annual meetings whereby LGAs will be the main stakeholders and issues pertaining to resource management and conservation, resource utilization and revenue collection will be discussed. LGAs are advised to use BMUs to be agencies for revenue collection where applicable. For those actions that have been planned to be implemented during the 2010/2011 financial year; provision budget has been budgeted for. Main Source: Ministry Annual Implementation Progress Report July, June, 2010 Overall Assessment of the Temporary Process Action (Government to implement key actions of Natural Resources ( forestry, wildlife and fisheries accountability and transparency action plans following the timetable specified in the M&E framework. Assessment: NOT ACHIEVED MINISTRY OF NATURAL RESOURCES AND TOURISM 3.0 Outcome Indicator: Total value of revenue received from concessions and licenses (if any) for forestry (Tsh billion) 86 Page

87 Assessment: ACHIEVED Baseline 2005: Tshs 21, 558,275,181 Status 2009: Tshs 18,426,759,276 Status 2010: Tshs 34,000,000,000 Target 2010: Tshs 23,800,000,000 Main Sources of Information 3.1Outcome Indicator: Total value of revenue received from concessions and licenses (if any) for wildlife (Tsh billion) Assessment: NOT ACHIEVED Baseline 2005: TSh. 11, 558,501,001 Status 2009: Tshs. 14,752,663,553 Status 2010: Tshs. 15,545,000,000 Target 2010: Tshs 21,400,000,000 The outcome indicators was not achieved due to adverse effect of global economic meltdown on Tourism particularly Hunting Industry as hunting bookings were cancelled and hence hunting quota allocation for 2009 was underutilized. MINISTRY OF LIVESTOCK DEVELOPMENT AND FISHERIES 3.0 Outcome Indicator : Total value of Revenue received from concessions and licenses for fishing Assessment:, NOT ACHIEVED Baseline 2005: Tshs. 2, 205,519, Status 2009: Tshs. 6,172,276, Status 2010: Tshs. 7,138,643, Target 2010: Tshs 8,500,000, Main Sources of Information MLDF Accounts and Finance Unit. Annual Revenue Collection Report 2009/2010 and 1st Quarter Revenue Collection Report 2010/2011. The outcome indicator was not adequately achieved due to the world economic crises from which importation of fish from Lake Victoria was affected thus export royalty declined, increased use of illegal fishing gears and methods; illegal trafficking of fish and fisheries products across the border; and depletion of certain key fish species with commercial value, such as prawns and declining of Nile perch fish; and lack of a fishing harbor in the country denies the country revenue which could otherwise be realized from especially the Deep sea fishery. 87 Page

88 MINISTRY OF ENERGY AND MINERALS 3.0 Outcome Indicator: Total value of revenue received from concessions and licenses (if any) for minerals (Tsh billion) Assessment: ACHIEVED Baseline 2005: Tshs 777, 448,000 Status 2010: Tshs 65,574,363,272 Target 2010: Tshs 40,512,000,000 Main Sources of Information MEM Accounts and Finance Unit. Annual Financial Statement for the Year Ended 30 th June Outcome Indicator: Total value of revenue received from concessions and licenses (if any) for oil gas (Tsh billion) Assessment: ACHIEVED Baseline 2005: Tshs 6.7 Billion Status 2010: Tshs 16.7 Billion Target 2010: Tshs 15.6 Billion Overall Assessment on outcome indicator (Total value of revenue received from concessions and licenses (if any) for forestry, fishing, wildlife and minerals (Tshs billion) ( MLD,MEM and MNRT) Assessment: NOT ACHIEVED 88 Page

89 Annex 1.5 Cluster Group Working Two Improvement of Quality of Life and Social Well-being Report UNITED REPUBLIC OF TANZANIA Progress Report of MKUKUTA/PER CWG 2: Improvement of Quality of Life and Social Well-being Against the Performance Assessment Framework (PAF) for GBS Annual Review 2010 Contributors PMO, VPO-Environment Division, MoHSW, MoWI, MoEVT, TACAIDS, MoFEA MINISTRY OF EDUCATION AND VOCATIONAL TRAINING Education Sector Progress Report Against the Performance Assessment Framework (PAF) for GBS Annual Review 2010 Contributors MoEVT, PMO-RALG, MCDGC, Education DPs Date: 2 November, 2010 SUMMARY ASSESSMENT - EDUCATION SECTOR Overall Assessment SATISFACTORY 1.1. Underlying Processes Education Sector Review The Annual Joint Education Sector Review (JESR) Technical Working Session was held from 28 th -30 th September, The JESR technical working session is not the only element by which the sector is assessed. It forms a part of the entire education sector review, which also includes Joint Monitoring Visits, sector performance rating, and a High Level Meeting, which is chaired by the Honourable Minister for Education and Vocational Training and ratifies the findings of the Review process. To determine the rating for the Education sector, all relevant documentations are reviewed and a jointly agreed rating framework is utilized to finalise the 89 Page

90 assessment. For FY 2009/10, the joint rating exercise for the sector has been completed, with an agreed GOT/DPs rating of SATISFACTORY Temporary process actions The Education sector TPA for 2009/10 was Education Sector Human Resources Situational Analysis carried out according to the agreed TOR with the data collection initiated by August, 2010 and first draft finalized by February Assessment: Partly Achieved The Human Resource Situational Analysis is underway, but delays have been encountered. In fact, the original timelines for the TPA were: initiation of data collection by June 2010; and, finalization of the first draft of the report by November, These timelines were revised by mutual agreement by GoT and DPs when procurement of consultants could not be finalized by June, Consultants were contracted in August, 2010, and the inception report was received in October, However, there have been delays in the procurement of the enumeration firm, which is required to conduct data collection. This procurement process is now expected to be completed by December 2010, so that data collection can begin in January Therefore the TPA can not be fully completed according to the agreed timeline. GoT and DPs, therefore, jointly propose to carry this TPA forward to be included in the PAF The likelihood of successfully achieving this TPA by June 2011 is very high Outcome indicators. All of the data for the seven agreed outcome indicators come from the BEST 2010 data of MOEVT. Four out of seven indicators are on-track, and 3 are off track/at risk. 1. % of cohort completing Standard VII ON TRACK/TARGET SURPASSED 2. % of cohort completing Secondary Education (Form IV) OFF TRACK/AT RISK 3. % of cohort completing Secondary Education (Form VI) OFF TRACK/AT RISK 4. Transition rate from Standard VII to Form I OFF TRACK/AT RISK 5. Gross (Total) enrolment in Higher Education ON TRACK/TARGET SURPASSED 6. Qualified Teacher/Pupil Ratio in Primary School ON TRACK/TARGET SURPASSED 7. Qualified Teacher/Pupil Ratio in Secondary School ON TRACK/TARGET SURPASSED 90 Page

91 Details on the specific actions that the sector (including MOEVT, PMO-RALG, and MCDGC) is taking to mitigate for those targets at risk are included in the Outcome indicators section below Key areas of good performance Resource Allocation to the Education Sector remains a national priority. The share of public spending in the education sector remains higher than any other economic sector and the budget execution rate is good at 92%. Implementation Progress remains strong: i. Increased enrolment of both girls and boys at all levels of education, particularly at secondary and tertiary levels. The sustained enrolment of primary students (above 95%) has been an internationally acknowledged success, for which Tanzania received an award during the UN MDG summit. ii. Improvements in qualified teacher-pupil ratios at both primary and secondary level in 2009/10 also demonstrate GoT s commitment to improving the quality of education. iii. Management of Secondary Education has been fully decentralized to LGAs. iv. New development programmes were finalized in the higher and secondary education sub-sectors 2009/10 and are ready for implementation in 2010/11. v. Four new strategies were approved for implementation of cross-cutting issues and new guidelines are in place for improved supervision, monitoring and inspection. vi. Better cross-sector coordination is evident, with the signing of the multi-sector School Water, Sanitation and Hygiene (SWASH) Memorandum of Understanding between MOEVT, MOHSW and MOWI, to improve learning environment in schools. vii. Conducted impact assessment of 53 Folk Development Colleges. Public Expenditure Tracking Survey has been finalized, approved, disseminated. Three key recommendations have been taken forward for implementation in 2010/11. Sector Coordination and Dialogue continues well. Whereas in previous years the specific steps of the dialogue process have been treated as a milestone for the sector, in 2010/11 this process has been graduated from the milestones, as it is agreed to be well established and integrated in the regular GOT and sector processes. i. The Sector Review has been successfully conducted as the underlying process for GBS Review. ii. Milestones and specific actions for 2010/11 have been reflected in the budget, which will have a significant positive impact on achievement, and new milestones have been agreed for 2011/12 in time for budget allocation. 91 Page

92 iii. Civil Society Organisations have increased national engagement on performance issues Key areas of weak performance Inadequate resource allocations remain a concern overall, with inadequate resources to fulfill MKUKUTA target of allocating 25% of the national budget to the education sector by Implementation progress against agreed indicators shows some downward trends in key areas, including completion rate and pass rate for primary and secondary education, as well as transition rate from primary to secondary. Human resources remain inadequate to improve the quality of education in the sector particularly in the rural and remote areas of the country. Sector Coordination and Dialogue continues well, however, specific actions related to five out of eight milestones for 2009/10 had to be carried over to 2010/11 for completion. In addition, there is a need to further strengthen participation of key education stakeholders, including PMO-RALG and LGAs, in the dialogue process. 2. DETAILED ASSESSMENT EDUCATION SECTOR 2.1. Areas of good and weak performance A. Areas of good performance over the year 2009/10: Resource Allocation Investment in education remains an important national priority. The share of public spending on the education sector remains higher than any other economic sector and had a slight increase over last year. The high budget execution rate of 92% is better than most sectors, reflecting the high absorptive capacity in the education sector. Implementation Progress Increased enrolment of both girls and boys at all levels of education has continued, particularly at secondary and tertiary levels. The sustained enrolment over the last five years for primary students above 95% has been a success acknowledged internationally and Tanzania was awarded a prize during the 2010 UN summit for achieving this MDG. Improvements in qualified teacher-pupil ratios at both primary and secondary level in 2009/10 also demonstrate GoT s commitment to improving the quality of education. Management of Secondary Education has been fully decentralized to LGAs, and funds for secondary activities have been transferred to LGAs and consequently disbursed to respective secondary schools in 92 Page

93 2009/10. Policy documents were finalized including the Higher Education Development Programme and the Secondary Education Development Programme II. In addition, Basic Standards for Pre-primary and Primary Education and an Inspectors Handbook were developed, as well as strategies for In-service Training, Inclusive Education, Gender, Environmental Education, and HIV and AIDS. Implementation of these strategies is included in the 2010/11 budget. A multi-sector School Water, Sanitation and Hygiene (SWASH) Memorandum of Understanding was signed by the Ministry of Education and Vocational Training, Ministry of Health and Social Welfare and Ministry of Water and Irrigation. This should facilitate better coordination across MDAs and will provide clearer responsibility of implementation and budgeting of SWASH related activities in the coming year, in order to improve the learning environments in schools. Conducted impact assessment of 53 Folk Development Colleges. Public Expenditure Tracking Survey The PETS Report for primary and secondary education on mainland Tanzania was approved in March 2010.Dissemination has been conducted as part of regular government meetings and has included presentations to GoT officials from 132 Councils (including Executive Directors, Council Treasurers, Planning and Procurement Officers, and Secondary Education Officers), as well as GoT, DP and CSO representatives in Cluster Working Group II. Three key recommendations from the PETS, to be implemented in 2010/11, were jointly agreed with relevant MDAs (MOFEA, MCDGC, PMO-RALG and MOEVT). These include: enforcement of the circular on teacher absenteeism to improve performance; revision of the database to have a single registry for primary schools; and, clarification of the education resource allocation formulae and systems for LGAs. Sector Coordination and Dialogue The Sector Review has been successfully conducted as the underlying process for GBS Review. Joint assessment of the education sector continues to be an effective method of performance assessment and remains based on an agreed rating framework with indicators adjusted for FY 2009/10; Documentation, including the annual performance report, roadmap/gantt chart, field monitoring reporting and Aide memoire, continues to improve each year. All of these documents provide improved data, which is now available through the Education Sector Management Information System (ESMIS). Civil Society Organisations have increased their national engagement on critical issues of performance through TWG participation and through the presentation of their Performance Report at the JESR Milestones and specific actions have been agreed for 2010/11, and new milestones have been agreed for 93 Page

94 2011/12 against which budgets will be assigned to ensure implementation in FY 2011/12. Sector dialogue, which has been a milestone for the last four years, has graduated to be part of regular business. Three other milestones from 2009/10 have also been graduated in 2010/11, leaving space for more substantive technical discussions and focus on improved sector performance and improving quality of service provision. B. Areas of weak performance/challenge over the year 2009/10: Inadequate resource allocations This remains an overall concern with inadequate resources to fulfill MKUKUTA target of allocating 25% of the national budget to the education sector by This means that: Education Sector Programmes (PEDP, SEDP, FEDP, HEDP, ESDP), Strategies, and Strategic Plans of the relevant MDAs are not fully funded hence cannot be fully implemented. In addition sub-sector allocations have decreased in primary education (from 55.8% to 47.6% in the last 5 years) and significantly increased in University Education (which increased from 16.9% to 23.7% over the same period). This presents a challenge for the GoT s priority of improving equity and NER for primary education. There are insufficient funds to meet the increased demand for Higher Education Students Loans for the needy students. Concern persists on inequality in allocation of resources between Councils caused by the use of mixed formulas. Capitation grant allocation is not fully released, making it difficult to have adequate availability of teaching and learning materials, including textbooks, laboratories supplies,, workshop equipment and assistive devices for learners with special needs. Development grants are inadequate to provide adequate infrastructure, including of teachers houses and adequate water and sanitation facilities, particularly in rural and remote areas. Implementation progress Measured against agreed indicators, some indications of downward trends in key areas affecting the quality of education being provided by the relevant MDAs. o Declining completion rates and pass rates for primary and secondary o Low performance in Science, Mathematics and Languages across all levels of Education and particularly at primary and secondary level o Declining Transition rate from Standard VII to Form 1; o Small number of Form 6 graduates, particularly girls, to feed into Tertiary and Higher Education Institutions, 94 Page

95 o High pupil/qualified Teacher Ratios at all levels, particularly at secondary. In particular, there are new challenges related to secondary education, with the rapid expansion of enrolment, and insufficient human and capital resources to maintain quality in the sub-sector. Human resources Human Resources remain inadequate to improve the quality of education in the sector. There is a need for improved retention and continuous professional development for teaching staff and to address the inequalities of deployment, particularly to the more rural and remote areas of the country. Completion of the Human Resources Situational Analysis will be the first step toward addressing this issue. Sector Coordination and Dialogue Sector dialogue continues well. However, specific actions related to five out of eight milestones for 2009/10 had to be carried over to 2010/11 for completion. Key milestones still to be prioritized and achieved include: o Development of a sector-wide, three-year, costed, operational plan for the sector; o Conducting a unit cost analysis for Higher Education; and, o Development of a sector-wide strategic plan for Human Rights Education. In addition, there is a need to further strengthen participation of key education stakeholders, including PMO-RALG and LGAs, in the dialogue process UNDERLYING PROCESS EDUCATION SECTOR Assessment Main Sources of Information for Education Sector SATISFACTORY 2010 JESR Aide-Memoire; Annual Education Sector Performance Report 2009/2010; JESR Technical Working Session Report 2010: Joint Education Sector Monitoring Report 2010; CSOs Performance in Delivering Quality Education in Tanzania Report 2009; Rating Framework for Education Sector 2009/10; Basic Education Statistics (BEST) 2010; Thematic papers on Relevance of Technical and Vocational Education and Training (TVET) to Market Demands: Skills for Employability and Management, Inspection and Supervision for Effective Delivery of Quality Education (prepared for JESR 2010); and MOEVT, PMORALG and MCDGC Budget Speeches for Education Sector, Page

96 The Annual Joint Education Sector Review (JESR) has four main components. These are: (1) joint monitoring visits to councils; (2) a three day technical working session; (3) a performance rating assessment; and (4) a high level meeting, chaired by the Honourable Minister. 1. Joint Monitoring visits were carried out to collect views on the implementation of education policies from education stakeholders at council level and other learning institutions, with the view to availing the JESR participants the opportunity to see for themselves the critical education issues and challenges that are pertinent to education development. The specific objectives included reviewing implementation status in relation to quality, management and governance and cross cutting issues, and reviewing district and school account for revenue and expenditure data. In 2010, the Monitoring visit was conducted in 11 Councils from 19 th April to 8 th May, 2010 and included one Local Government Authority for each Education Zones. Last year, it was agreed to hold the joint monitoring visits twice a year (in February and August) to enable some comparison of performance, and to have sufficient time to spend on discussion of key issues in the field. However, since 2010 is an election year, it was agreed that only one joint monitoring visit would be conducted. 2. The JESR technical working session was held from 28 th - 30 th September, The meeting was opened by the Permanent Secretary (PS) - PMO, and chaired by PSs for MOEVT and MCDGC and DPSs for PMORALG and MCDGC. There was very active participation and discussion which included representatives from key education stakeholders; namely the three education-related Ministries (MOEVT, PMO-RALG, MCDGC) Civil Society Organizations (CSOs), Faith Based Organizations, Non-State Actors, Development Partners (DPs) and the community at large. This included Directors, Heads of Institutions, Councilors, School Committees/Boards members, Teachers, pupils, Regional and Administrative Secretaries, District Executive Directors and DEOs, Heads of Schools/Colleges, Research Institutions and Publishers. Substantive education issues were discussed in both plenary and group work over the three days, contributing to positive engagement and participation by stakeholders. These discussions are centered around presentations topics and by education sub-sectors. In addition, a session was held to discuss prioritization of recommendations contributing to review of milestones for 2010/11, some of which were carried over from 2009/10, as well as the identification of new milestones for 2011/ Performance Assessment was conducted in mid-october, To determine the assessment for the Education sector, all of the documentation listed in the area of Main Source of Information, including the 96 Page

97 Education Sector Performance Report 2009/10, were reviewed and discussed. An agreed rating framework, of which the indicators for the education sector are reviewed and modified each year, is used as the basis for sector performance assessment. This rating framework is based on the GBS guidelines and is scored, based on three key areas: financing/budget; progress on targets and implementation results; and accountability and sector dialogue. DPs and GoT do separate assessments, and then the assessment score is jointly reviewed and agreed. For 2009/10, the score was 77.5 out of 100 and the education sector performance is rated as SATISFACTORY. 4. High Level Meeting ratifies the findings and recommendations on the way forward from the entire review process. This meeting is to be held in mid-december and will finalise the underlying process within the education sector. The outcomes of the JESR are recorded in an Aide Memoire, which highlights agreed priorities and milestones for 2010/11 and 2011/12. For 2010/11, the overall priorities for the Education Sector in 2010/11 will be: Improving the quality of Basic Education; Addressing geographic inequalities in allocation of resources in support of education service delivery; Expanding access and enrolment in Higher, Technical and Vocational Education; Strengthening science and technology education at all levels; and, Strengthening sector-wide planning, management, monitoring and evaluation. These priorities are reflected in the agreed milestones, and related actions for each sub-sector are outlined in the Education Sector Performance Report 2009/ OUTCOME INDICATORS EDUCATION SECTOR a) Outcome Indicator 1: Percentage of cohort completing Standard VII Assessment ON TRACK Indicator Values Baseline 2000: 70% Status 2007/8: 65% (m=64.5% f=66.2%) Status 2008/9: 62.4% (m=61.2% f=63.6%) Status 2009/10: 69.3% (m=66.6% f=72.1%) Target 2010: 63% Indicator target of 63% in 2010 was surpassed; however, MKUKUTA target of 90% has not been met. 97 Page

98 b) Outcome Indicator 2: Percentage of cohort completing Ordinary - Level Secondary Education (Form IV) Assessment OFF TRACK/AT RISK Indicator Values Baseline 2003: 91% Status 2007/8: 94.4% Status 2008/9: 84.9% (m=93.3% f=76.5%) Status 2009/10: 72.9% (m=75.2% f=70.3%) Target 2010: 86% Indicator target of 86% in 2010 has not been met. There has been a significant reduction over the last three years. To reverse this trend, the Ministry has planned for the current financial year (2010/11) to: (a) enforce remedial class policy and sensitize teachers to carry out remedial class; (b) increase teacher incentives for underserved areas; (c) improve school environments including urging communities to provide meals; (d) ensure full amount of capitation grant allocated is provided to each secondary school. c) Outcome Indicator 3: Percentage of cohort completing Advanced - Level Secondary Education (Form VI) Assessment OFF TRACK/AT RISK Indicator Values Baseline 2004: 90.1% Status 2007/8: 73.3% Status 2008/9: 103.4% (m=111.2% f=92.6%) Status 2009/10: 78.2% (m= 80.9% f=74.4%) Target 2010: 95% Indicator target of 95% in 2010 has not been met. There has been some fluctuation in this indicator over the last three years. The figure in 2008/9 shows a percentage over 100% because of students who were not included in Form 5 admissions, as they had insufficient credits to qualify them to be admitted. However, these students were then able to re-sit Form 4 Examinations and then admitted into Form 5 private secondary schools. After attaining the required credits while in Form 5 they then qualified to write the Form 6 Examinations. This lead to the increased percentage of completion rates for that year. Generally, to improve the completion rate the Government has planned for the FY 2010/11 to improve incentive package, including establishment of pay policy, as mechanism to retain teachers, especially in rural and hard-to-reach areas. d) Outcome Indicator 4: Transition Rate from Standard VII to Form I Assessment OFF TRACK/AT RISK Indicator Values Baseline 2000: 21% Status 2007/8: 56.7% (m=63.5%, f=49.6%) Status 2008/9: 51.6% (m=56.5%, f=46.5%) 98 Page

99 Status 2009/10: 43.9% (m=48.3% f=39.6%) Target 2010: 54% Indicator target of 54% in 2010 has not been met. The downward trend over the last three years may be due in part to (short term) tradeoffs between increased enrolment and maintenance of quality standards at primary level. The Ministry is taking this reduction into account in the mitigation activities and is continuing to: (a) provide in-service teacher training; (b) provide teaching and learning materials; (c) enhance training and recruitment of qualified teachers; (d) conduct regular monitoring and quality assurance (Inspection) of primary schools and ensure implementation of monitoring and inspection recommendations. e) Outcome Indicator 5: Gross (Total) Enrolment in Higher Education Assessment ON TRACK Indicator Values Baseline 2005/06: 40,993 (f=32.5%) Status 2007/8: 82,428 (1.23%) (f=32.0%) Status 2008/9: 95,525 (2.5%) (f=33.3%) Status 2009/10: 118,951 (5.3%) (f=35.3%) Target 2010: 2.8% Indicator target of 2.8% in 2010 has been met. There has been a significant increase in enrolment and the MKUKUTA target of 2% in 2010 had been surpassed and has almost doubled from last year. f) Outcome Indicator 6: Qualified Teacher/Pupil Ratio in Primary Schools Assessment ON TRACK 1 Indicator Values Baseline 2003: 1:106 Status 2007/8: 1: 63 Status 2008/9: 1: 60 Status 2009/10: 1: 54 Target 2010: 1: 60 Indicator target of 1:60 for 2010 has been met and was surpassed. If this trend continues national requirements to attain the required primary school qualified teacher-pupil ratio of 1:45 will be attained. However, national average covers significant variations at Council and Regional levels. Regional disaggregation of this data will be part of the sector dialogue in g) Outcome Indicator 7: Qualified Teacher/Pupil Ratio in Secondary Schools Assessment ON TRACK 2 Indicator Values Baseline 2006: 1:33 1 No gender disaggregation of this indicator is required. 2 No gender disaggregation of this indicator is required. 99 Page

100 Status 2007/8: 1:50 Status 2008/9: 1:57 Status 2009/10: 1:51 Target 2010: 1:55 Indicator target of 1:55 for 2010 has been met. The progress shows a positive trend. However, national average covers significant variations at Council and Regional levels. Regional disaggregation of this data will be part of the sector dialogue in MINISTRY OF WATER AND IRRIGATION Water Sector Progress Report Against the Performance Assessment Framework (PAF) for GBS Annual Review 2010 Contributors MoWI, Water Sector DPs SUMMARY ASSESSMENT Overall Assessment MODERATLY SATISFACTORY 2. DETAILED ASSESSMENT 2.1. Areas of good and weak performance WATER SECTOR A: Areas of Good Performance Sector Coordination The agreed principles and terms of partnership between the Government and Development Partners, which is a basis for steering sector coordination and dialogue, works within the Joint Assistance Strategy (JAS) implementation framework and its annual Performance Assessment Framework (PAF). The structure of the water sector dialogue comprises an Annual Joint Water Sector Review that is held once a year, the Water Sector Working Group that meets quarterly and four Thematic Working Groups, which meet bimonthly, each; all responding to the hierarchal forward linkages for reporting and backward linkages for feedback and guidance, which define working relationships at each level. Each level has a specific role with regard to monitoring and evaluation of water sector progress and in drawing the future action plans for implementation. 100 Page

101 During 2009/2010, stakeholder consultations were held through three meetings of Thematic Working Groups; three Water Sector Working Group (WSWG). The fourth Joint Water Sector Review (JWSR) meeting that was held from 29 th 30 th September Furthermore, with an exception of few, almost all quarterly progress reports were prepared and shared. Communication, Education and Information During 2009/2010, a simplified or popular version of the National Water Policy in Kiswahili for both print media and other educational material was disseminated to the public. Publicity of the policy and other strategic documents has been intensified as a result of this undertaking. The sector now experiences a higher sense of extra communication amongst stakeholders and the public in general. Institutional Strengthening and Capacity building: i) Most of the rehabilitation works on office at Maji Ubungo have been completed; ii) New offices have been constructed in 65 LGAs and office rehabilitation has been carried out in 63 LGAs. Two hundred twenty-eight (228) motor vehicles, 407 motor cycles, 132 printers, 132 scanners; office communication and networking equipment have been delivered to MoWI, PMO- RALG, Urban Water Supply and Sewerage Authorities and Basin Water Offices; iii) The management and development of the water sector follows the establishment institutional framework for effective management and development of water sector spanning from basin water boards, catchments committee, water user associations, local government authorities, village water committees, and urban authorities. Except for 109 small towns, 5 national projects, 7 UWSAs; all other implementing agencies (IAs) have completed and integrated Capacity Development (CD) Plans into the respective planning and budgeting systems for 2010/2011 by July 30, 2010; iv) Two water laws that provides implementation, monitoring and sector oversight mandates were enacted by parliament in April, 2009; preparations of regulations to enforce the laws are underway. Management Information System: i) The web based Module of the WSDP MIS with planning and budgeting; procurement management; contract management; and expenditure management has been developed and now is in place, what is being done now is loading the system with data and information, ready for starting production of reports by January The system will be finally integrated with Water Point Mapping and other specialized sub component M&E systems to make it the overall Sector MIS. ii) Training for use of the MIS system at MoWI HQ has been done and a plan to start training for other 101 Page

102 implementers in a phased approach (piloting) by selecting pilot areas in each zone is being prepared. The successful implementation in pilot areas will lead to roll-out to all implementing agencies. B: Areas of Weak Performance Launching of the National Water Board: This was planned to be done by August 2010 but it was hampered by no response from the public to apply for the position of the board chairperson. The Regulation for nomination of members for all WBs was gazetted on May 21, A stakeholder forum was held on July 22, Nominations from the forum are in final approval stages, after which nominations of the National Water Board chairperson and members will follow. The first NWB meeting is now planned for end of Capacity of the Private sector: The private sector which is expected to execute various contractual obligations in implementation of the WSDP is still at infant stage in the water sector, they are few, not found in some LGAs and lack adequate capacity to produce value for money outputs. There is low capacity of the private sector to execute contractual obligations of project design, feasibility studies, detailed design, and preparation of tender documents, project supervision, and works. Using some of the contractors is a risk because of their low capacity both in technical and financial terms. Major risks include risking on quality outputs and delays. Capacity building and technical support to the private sector has been included in the institutional strengthening and capacity development framework for the whole sector. Fiduciary management capacity and accountability: There has been remarkable improvement in procurement processing during 2009/2010. The procurement capacity of MOWI has substantially improved but is generally still inadequate to accommodate effectively the volume and processes of procurement that needs to be executed. Weak financial and procurement management capacity in other Implementing Agencies such as Basin Water Offices, UWSAs and LGAs has created serious accounting and procurement issues including delays in financial reporting. The key findings and recommendations of a Special Audit Report prepared as a follow up to the WSDP s FY08/09 financial audit and MTR findings, highlights weak areas that need to be addressed UNDERLYING PROCESS WATER a) Water Sector Review Assessment (GoT) MODERATLY SATISFACTORY/ MODERATLY UNSATISFACTORY (DPs) Main Sources of Information Water Sector Status Report 2009/2010, MoWI; CSOs report on Monitoring Equity in Water and Sanitation, September 2010, 102 Page

103 TAWASANET; Agreed Undertakings of the Joint Water Sector Review Meeting, 29-30/09/2010. Over 180 participants attended the Annual Joint Water Sector Review Meeting that was held at the Ubungo Plaza from 29 th to 30 th September The stakeholder representation was from the MoWI, PMO-RALG, MoHSW, MoEVT, Development Partners (DPs), Civil Society Organizations (CSOs), Regional Secretariats, Local Government authorities, Urban Water Supply and Sewerage Authorities, District Urban Water Supply and Sanitation Authorities, National Projects and the Energy and Water Utilities Regulatory Authority (EWURA). The review discussed the Water Sector Status Report, the Water Sector Equity Report and Key Issues raised during the Joint Supervision Mission held from 13 th to 28 th September The meeting came out with eight main issues of concern that led to agreeing on next sector main undertakings for FY 2010/2011. The main issues of concern include: i) Finalization of the WSDP restructuring, especially on priority activities, revised targets and revised monitoring indicators up to 2012, basing on the programme financing envelope; including the new dialogue mechanism, new coordination structure, strengthening the M& E framework and strengthening the physical and financial reporting (including reviewing reporting formats to be user friendly and aligning future transfers on reporting obligation); ii) The need to draft the key elements of WSDP phase II (2012/ /17) on the basis of lessons learnt from WSDP phase I and activities identified in the NWSDS logical framework (Linking with other sectors, irrigation, mining, lands, environment); iii) The need for a thorough quarterly monitoring of the implementation of Capacity Development Plans that have been prepared by all WSDP implementing agencies; iv) The need to make the new sector MIS operational to all implementing agencies; v) Execution of the Program s Technical Audit for the period of July 2007 to June 2010 by December 2010 and Water Point Mapping country wide to b done by November 2011; vi) Communication plans in all Water Basins to raise awareness on WRMA among stakeholders, especially on the registration of WUAs and processes for granting water permits; vii) The issue of strategies for ensuring availability of spare parts in rural areas for sustainability of water schemes; viii) Clustering of small towns for economies of scale and efficiency; The review agreed on 19 undertakings for 2009/2010 arising from these key issues, which will effectively guide implementation during 2010/ Temporary Process Actions Capacity Development Plans based on Water Sector Capacity Development Framework are in place by March 103 Page

104 2010; and on budget by June 2010 for all MoWI Departments, minimum of 75% of LGAs; and Minimum 90% of all other Implementing Agencies. Assessment Achieved. Main Sources of Information WSDP Draft Restructuring Plan, September 2010; Joint Supervision Mission Draft Aide Memoir Capacity Development Plans have been prepared in all WSDP Implementing Agencies (MoWI HQ 100%; RS 100%; LGAs 100%; 12 UWSAs, DAWASA and DAWASCO 67% out of 21 authorities; and 2 out of 7 National Projects 29%. Preparations of CD plans are underway in 7 regional urban centers, 61 Small Towns and 5 National Projects. This is equivalent to over 90% performance over the planned TPA. 2.4 Outcome Indicators a) Percentage of the population that has access to clean and safe water from a piped or protected source Assessment OFF TRACK Indicator Values Baseline 2003: Rural 53% (2003) and Urban 73% (2003) Status 2009:Rural 58.7% (Dec. 2009) and Urban 84% (Jun.2010) Target 2010: Rural 65% and Urban 90% Main Sources Speech of the Minister of Water and Irrigation, Hon. Prof. Mark Mwandosya (MP) Presenting Budget Estimates to the Parliament in June of Information 2010, and Draft Restructuring Plan Water sector routine data annual progress reports indicate that rural water supply coverage has increased from 53% in 2003 to 58.7% in 2009, which is a 5.7% increase in 6 years. The proportion of people in urban areas who use drinking water from improved sources has increased from 73% in 2003 to 84% in June 2010 for the 19 UWSAs, which is equivalent to 11% increase during a period of 6 years. With the start of MKUKUTA II in July 2010, the sector now concedes that it did not achieve MKUKUTA I targets of attaining 65% water supply service coverage for rural areas and 90% water supply service coverage for urban areas, due to various reasons. These include: A one Year delay in the start of WSDP implementation, instead of starting in July 2006, it commenced in July 2007; Excessive delays in the procurement processes, especially for supervision consultancies and civil works; Lower than expected contributions to the water basket (both from the GoT and DPs); 104 Page

105 Higher than expected unit costs for goods, consultancy services and civil works; The selection of higher cost technologies by communities; and The general capacity constraint across the water sector. MINISTRY OF HEALTH AND SOCIAL WELFARE Health Sector Progress Report Against the Performance Assessment Framework (PAF) for GBS Annual Review UNDERLYING PROCESS 2.2.1: HEALTH SECTOR Health Sector Review Assessment JAHSR processes concluded on September 30, The overall performance was rated: SATISFACTORY. About milestones were agreed upon as well as one Temporary Process Action, and these are to be finalized at an upcoming TC SWAP later in October. These represent the key areas for the implementation of the Health Sector Strategic Plan III Main Sources of Information MoHSW website: DPGH website: OUTCOME INDICATOR HEALTH a) Vaccine against Diphtheria, Pertussis, Tetanus and Hep B (DPT_HB3) coverage by age 12 months. Assessment ACHIEVED Indicator Values Baseline 2005: 81% Status 2007: 83% Status 2008: 85% Status 2010: 85.7% (Performance Profile Report) Target 2012: 85% (maintenance) Main Sources of Expanded Programme of Immunization (EPI) Unit + TDHS Preliminary Report Information Page

106 The target of more than 85% of coverage is achieved. This good result has been confirmed by the Demographic and Health Survey 2010, which gives a coverage of 88% for children between 12 and 23 months. The difference of coverage between male (88.2%) and female (87.8%) isn t significant. Two zones achieve lower than national average coverage and would deserve special attention: Western (74.9%) and Southern Highlands (81.9%). All other zones are well above 90% b) Proportion of births attended by skilled health workers. Assessment OFF TRACK Indicator Values Baseline 2004/05 (TDHS): 46% (actual) Status 2007: 51% (HMIS proxy, see hereunder) Target 2009: 55% Status 2009: 54% (HMIS proxy) Target 2010: 60% TDHS 2010: 51% (actual) Target 2012: 65% Target 2015: 80% (HSSP III + One plan) Main Sources of TDHS Preliminary Report 2010 and Reproductive and Child Health Annual Zonal Information Report Pregnant women who delivered at a health facility is used as a proxy indicator. The TDHS 2010 preliminary report (based on births ) showed that 51% of expected births were delivered by a health professional and almost the same proportion (50%) were delivered in a health facility. The Western (37.5%), the Lake (43.9%) and Central (46.9%) zones are below the national average and will require special efforts (details by regions are available in the DHS preliminary report). There is only a slight difference between the proxy (delivery in a health facility) and the actual (delivery attended by a health professional) indicator. The facility based data is ~8% higher than the population based data. Renewed and concerted efforts will be needed to achieve the 2012 target, especially in the regions with low performance. c) TB Treatment Completion Rate. Assessment ACHIEVED Indicator Values Baseline 2005: 82.6% Status 2007: 84.8% Status 2009: 87.4 % Target 2012: 85 (maintenance) Main Sources of National TB & Leprosy Programme 106 Page

107 Information This is measured as number of patients who successfully completed treatment as a proportion of tuberculosis cases diagnosed. The program has surpassed the global target set at 85%. Maintaining these high rates will continue to be a challenge to the program. The HIV is fueling the TB burden and increasing susceptibility of the HIV infected population to HIV/TB co-infection. Two regions (Iringa 82% and Kilimanjaro 84%) are below the national maintenance target and will require special attention. d) Number of People with Advanced HIV Infection Receiving Antiretroviral Combination Therapy (ARVs) Assessment OFF TRACK Indicator Values Baseline 2006: 60,000 Status May 2009: 248,280 Target 2010: 440,000 Status May 2010: 342,981 (Performance Profile Report 2010) Status March 2010: 264,063 (Pepfar Progress Report) Target 2012: To be revised Main Sources of National AIDS/HIV Control Programme + PEPFAR Tanzania Semi-Annual Information Progress Report (October 2009-March 2010) By the end of May 2010 a total of 342,981 people had received ARVs (Performance Profile Report update 2010). Despite this 38% increase, the number falls short of the 440,000 target to be achieved by the end of 2010, all the more that the reported figure is a cumulative figure including all persons who have ever been put under ARV treatment. It represents a proxy of the persons currently receiving ARVs. The figure of persons currently under treatment is well below, which makes the attainment of the target impossible. According to the PEPFAR Tanzania Semi-Annual Progress Report (October 2009-March 2010), the number of persons currently under treatment is , female and males (these figure will undergo verification later this year). The NACP target beyond 2010 will need to be revised, taking into consideration the achievements so far, evolution of the epidemic as well as the possible introduction of new WHO guidelines. VICE PRESIDENT S OFFICE-DIVISION OF ENVIRONMENT GBS-PAF ANNUAL REPORT FOR 2010 Contributors Environmental Working Group; Vice President s Office and Danish Embassy. 107 Page

108 Date 26/10/ SUMMARY ASSESSMENT Overall Assessment: SATISFACTORY 1.1 Underlying processes Review of the Environment as a cross-cutting issue focusing on the Strategy for Urgent Actions on Land Degradation and Water Catchments. The joint Government-Development Partners review meeting on Environment was held on 21 and 25 October 2010 to discuss and assess the implementation of the Strategy for Urgent Actions on Land Degradation and Water Catchments. The implementation of the strategy was generally rated SATISFACTORY in the light of funds that were availed. 1.2 Temporary process actions At least 3 out of 5 MDAs (Agriculture, Health, Infrastructure, Water, Energy and Minerals) have finalized their environmental action plans in line with Environmental Management Act Cap.191. Assessment: Partly Achieved The Terms of Reference and budgets for preparation of the 5 MDAs action plans were prepared and agreed by Government and the DPs. MDAs did not have budgets for this activity in Financial Year 2009/2010. DANIDA has agreed to fund the activity. The Government and DPs have jointly agreed to postpone the completion of the action to December Apparently, all the 5 MDAs have received funds and are in the process of preparing the action plans. 1.3 Outcome indicators Number of district councils allocating budget to Environmental Management Act (EMA) (Annualized Indicator). Assessment: The stipulated outcome indicator is on track/ Target Surpassed. 1.4 Key areas of good performance (i) Three key Environmental Management Act Regulations were prepared: Biosafety Regulations; Hazardous Waste Regulations; and Solid Waste Regulations. (ii) The Guidelines for preparation of Sectors and Local Government Authorities Environmental Action Plans have been prepared. This will enable sectors and Local Government Authorities to prepare their environmental action plans which is a requirement in the Environmental Management Act and GBS-PAF (iii) The Presidential Award on Conservation of Water Catchments, Planting and Conservation of trees was conducted for the first time in 2010 whereby 16 mainland Tanzania regions participated. The award was issued to the winners on 5th June 2010 during the comemorations of the World Environmental Day. The objective of this award is to motivate people to participate in tree planting in order to rescue the country from drought and desertification. (iv) All Local Government Authorities are allocating budget for environmental management in their areas. However, due to budget constraints the funds allocated cannot cater for many ever-growing demands of environment management. (v) Environment has been mainstreamed in the 2 nd National Strategy for Growth and Reduction of Poverty (MKUKUTA II). 1.5 Key areas of weak performance 108 Page

109 (i) The implementation of the Regulation for Prohibition of Production, Importation and Use of Plastic Bags with less than 30 microns has not been very successful since there are still few of such bags in the streets. (ii) Wildfires in various areas of the country have continued being a problem despite efforts by the Government to control the behavior of setting wildfires. (iii)majority of people in the country continue relying on biomass energy leading to increasing forest degradation. (iv)due to many competing needs in the Local Government Authorities, inadequate funds are allocated for environment management leading to failure to achieve various national environmental management objectives at that level. 2. DETAILED ASSESSMENT 2.1. Areas of good and weak performance Main Sources of Information A. Areas of Good Performance Vice President s Office Budget Speech 2010/2011 and Synthesis Report of Implementation of the Strategy for Urgent Actions on Land Degradation and Water Catchments. (i) Three key Environmental Management Act Regulations were prepared: Biosafety Regulations; Hazardous Waste Regulations; and Solid Waste Regulations. (ii) The Guidelines for preparation of Sectors and Local Government Authorities Environmental Action Plans have been prepared. This will enable sectors and LGAs to prepare their environmental action plans which is a requirement in the Environmental Management Act and GBS-PAF (iii) The government has prepared the National Strategy and Action Plan for Waste Management. Implementation of this strategy will improve management of wastes in the country. (iv) The Environment Working Group which is a mult-sector working group on environment managed to meet more frequently than last year to discuss various environmental issues facing the country. This forum facilitates environmental mainstreaming which is key in achieving sustainable development. (v) The Presidential Award on Conservation of Water Catchments, Tree Planting and Conservation was conducted for the first time in 2010 whereby 19 mainland Tanzania regions participated. The award was issued to the winners on 5th June 2010 in the comemoration of the World Environmental Day. The objective of this award is to motivate people to participate in tree planting in order to rescue the country from desertification. (vi) The Strategy for Conservation of Marine and Freshwater Bodies Environment was inaugurated in July this year. The objective of the strategy is to improve management of marine, coastal and fresh-water bodies environment. (vii)all Local Government Authorities are allocating budget for environmental management in their areas. However, due to budget constraints, the funds allocated cannot cater for many ever-growing demands of environmental management. (viii) Environment has been mainstreamed in the 2 nd National Strategy for Growth and Reduction of Poverty (MKUKUTA II). B. Areas of Weak Performance (i) The implementation of the Regulation for Prohibition of Production Importation and Use of Plastic Bags with less than 30 microns has not been very successful since there are still few of such bags in the streets. (ii) Wildfires in various areas of the country have continued being a problem despite efforts by the Government to control the behavior of setting wildfires. (iii)majority of people in the country continue relying on biomass energy leading to increasing forest 109 Page

110 degradation. (iv)due to many competing needs in the Local Government Authorities, inadequate funds are allocated for environmental management leading to failure to achieve various national environmental management objectives at that level OUTCOME INDICATORS Outcome Indicator: Number of Districts Councils Allocating Budget for EMA Implementation (annualized indicator) Assessment On Track/ Target surpassed Indicator Values Baseline 2008: 11 Status 2009: 50 Status 2009: 121 Target 2010: 132 Actual 2010: 133 Main Sources of Information PMO-RALG Indicator target of 132 councils allocating budget for EMA implementation has been met and surpassed. The target has also been achieved. However, due to budget constraints, very little funds are allocated leading to failure to meet ever-growing needs of environmental management at that level. 110 Page

111 HIV and AIDS Progress Report Against the Performance Assessment Framework (PAF) for GBS Annual Review 2010 SUMMARY ASSESSMENT Overall Assessment SATISFACTORY 1.1 Underlying processes The 4 th Joint Biennial HIV and AIDS Thematic area Review took place from 27 th - 28 th of September The review drew upon the results of a Technical Review Meeting (September 22 nd to 24 th h ) where a number of technical issues related to the Programmatic review assessment, Rapidly district assessment on decentralized level, Epidemiology situation and Universal Access assessment reports were discussed in more depth. Several key documents were presented and discussed in the Review process. The Honourable Minister of State, Prime Minister s Office, Regional Administration and Local Government formally opened the meeting and underscored the importance of dialogues as a prerequisite for the development and Resources Mobilization. The results of the Public Expenditure Review 2010 were discussed. Some alternative sources of funding and financing to sustain HIV and AIDS interventions were discussed, including the proposal for the establishment of AIDS Trust Fund which was given emphasis as mean for financing the national response for HIV and AIDS in the country. The Technical and Main Review fully devoted to a thorough discussion of the priorities for the remaining period of the implementation of the NMSF The discussion focused on Thematic areas of the NMSF namely Prevention, Care, Treatment and Support, Impact Mitigation, Enabling Environment, Monitoring, Evaluation and Research and Finance and Audit. The last day of the Main Review was used to re-define the milestones for 2010/12 and 22 milestones were approved. The criteria for successfully undertaking the underlying process was presented to the stakeholders and unanimously stakeholders agreed that the underlying process was satisfactory based on the criteria set. 1.2 Temporary process actions None for Outcome indicators None for Page

112 1.4 Key areas of good performance Declining HIV and AIDs Prevalence among young people Expanded Programs on mainstreaming of HIV and AIDS in Public Private and informal sector Good dialogue mechanism with the stakeholders New HIV and AIDS Prevention strategy which will guide HIV and AIDS implementers Strengthened national networks of non-state actors particularly for PLWAS and CSOs A total of 11,741,480 million people have been tested for HIV in the country to date. VCT sites have increased from 521in 2004 to 2,314 by March 2010 in both Health Facility based and stand alone (inclusive of Public, FBOs and Private for profit facilities) 78.4 % (345,006/440,000) of eligible for ART were on treatment by June 2010 of which 7.5 % (25,794/345,006) of all on ART were children below 15 years age by June % of Health Facilities are providing care and treatment services by June Key areas of weak performance Weak and sporadic interventions, particularly at community level Low national funding and high dependence on external funding which challenge sustainable prevention, care and treatment Weak coordination and oversight at regional and local government level Challenges in effectively planning for, managing and executing resources from Global Fund to Fight AIDS, TB and Malaria Shortage of human resources in the health sector is a major obstacle to responding to the need of service delivery for HIV/AIDS treatment and prevention. Behaviour change Limited interventions targeting key population groups (MSM, IDUs and Sex workers) No clear way forward on supporting vulnerable children Limited multi-sectoral engagement in HIV/AIDS, particularly in public sector 2. DETAILED ASSESSMENT 2.1. Areas of good and weak performance Main Sources of Information HIV and AIDS Policy 2001, National Health Policy 2007; Joint Biennial Review reports, minutes of the Joint thematic working Group meetings; Report of the desk programmatic, report on desk review District rapidly assessment, Report on Universal access, milestone for HIV and AIDs , Annual TACAIDS Report 2009, PER 112 Page

113 2009, PMO Budget speech July, 2009 &TACAIDS quarterly and Midyear and Annual Reports Areas of good performance Declined in HIV and AIDS prevalence from 7 % during population survey to 5.7% in 2007/08 survey result. Tanzania HIV and malaria Indicator survey of 2007/08 showed that the prevalence in age group years is 2.4. This value is lower than the targeted prevalence in MKUKUTA I of 4%. The Declines in HIV prevalence were also observed among antenatal women and blood donors. The prevalence trends correlate to trends in some HIV transmission risk behaviours as well. For example, within the year old age group, casual sex with non-marital, non-cohabiting partners declined from 46% to 29% among men, and from 23% to 16% among women There is a notable Progress as far as mainstreaming of HIV and AIDS in Private Sector. AIDS Business Coalition Tanzania (ABCT) is supporting private enterprises with prevention and care measures for their employees. The membership of the ABCT has grown from 23 members in 2004, to around 70 members in However, the coverage of workplace interventions among the local private sector is still very limited. not convinced membership is ABCT is a true measure of actual effective mainstreaming in the private sector The dialogue arrangement between HIV and AIDS stakeholders (DPG -AIDS, GoT and NSA has improved. The dialogue is frequent, transparency, honest and productive. The new dialogue structure is implemented and the work is now taking place in 6 Thematic Working technical committees namely Prevention, Care Treatment and Support, Impact Mitigation, Monitoring, Evaluation and Research, Finance and Auditing and Enabling Environment respectively and one Joint Thematic Working Group (JTWG) The HIV and AIDS Prevention and Control Act 2008 is in place. The development of regulations to operationalise the law is under way. This is another added milestone in the national response for HIV and AIDS epidemic as it will provides a clarification legal issues pertaining HIV and AIDS TACAIDS in the final stage of operationalization of AIDS Trust funds. The Government technical team has produced a report, which recommends the modalities for the Fund establishment. Cabinet paper has been developed for further steps TACAIDS led the development of the national Multisectoral HIV prevention strategy and that this has been disseminated to the 8 regions with highest HIV prevalence (above 5%) and each region has developed regional prevention strategies aligned to the national strategy and to the regional drivers of the HIV epidemic:- The signing of the USG/URT Partnership Framework Establishment of NMSF Grant pooled fund to support implementation of NMSF at central, regional and 113 Page

114 district level Establishment of TACAIDS regional coordinators Approved UN joint programme on HIV and AIDS as part of the UN Delivering As One in Tanzania In terms of health sector response for HIV ad AIDs the followings are notable achievements:- A total of 11,741,480 million people have been tested for HIV in the country to date. VCT sites have increased from 521in 2004 to 2,314 by March 2010 in both Health Facility based and stand alone (inclusive of Public, FBOs and Private for profit facilities) 78.4 % (345,006/440,000) of eligible for ART were on treatment by June 2010 of which 7.5 % (25,794/345,006) of all on ART were children below 15 years age by June % of Health Facilities are providing care and treatment services by June 2010 Area of weak performance Inadequate internal financial resource leading to high external dependence on funding HIV and AIDS that challenge the sustainability of the interventions Weak coordination and oversight at regional and local government level Shortage of human resources in the health sector is a major obstacle to responding to the need of service delivery for HIV and AIDS treatment and prevention. Delays in meeting GFATM grant requirements has resulted in lengthy periods between disbursements and in some cases loss of GFATM funding, each of which impacts program implementation and planning Planning, managing, implementation of GFATM resources have affected the proper functioning of the TNCM Lack of funding/support for Vulnerable children Lack of targeted interventions for young people living with HIV/ AIDS, disabled people living with HIV/AIDS Limited interventions targeting key population groups (MSM, IDUs & sex workers and their clients) Weak and irregular interventions, particularly at community level The continued low comprehensive knowledge on HIV which is matched with slow progression of behaviour change, health seeking behaviours and stigma Limited support for local civil society organizations Way forward To strengthen Regional Offices to be able to coordinate and, provide technical support on Monitoring, evaluating and review of HIV and AIDS programs at council level. To continue to strengthen the national M&E system Improve planning for and management of Global Fund resources and adapt to changing Global Fund 114 Page

115 Architecture To intensify efforts for mobilization of HIV and AIDS resources from both externally and internal sources so as to fill a national response financing gap Undertake to effectively prioritize use of available resources To scale up promotion of HIV and AIDs mainstreaming in both public, private and informal sector Strengthen the national M&E system and research so that timely and accurate data is available to monitor progress along the NMSF III set of indicators. Increase capacity to develop and effectively implement comprehensive HIV/AIDS programmes at all level Translation of the NMSF II strategies and priorities at regional, district and facility level including better linkages of SRHR and HIV/AIDS Intensify efforts in the mobilization of internal resources to finance HIV and AIDS interventions Development of NMSF III Develop and implement interventions targeting key population groups (MSM, IDUs, Sex Workers and clients), including addressing stigma and discrimination and other human rights concerns 2.2. UNDERLYING PROCESS HIV and AIDS Thematic area Review Assessment Fourth HIV and AIDS Biennial Review processes concluded in September 28, The overall performance was rated: satisfactory 22 milestones were agreed upon. These represent the key areas for the implementation of the NMSF Main Sources of Information 2. 4 OUTCOME INDICATOR NONE. 115 Page

116 Annex 1.6 Cluster Working Group Three Governance and Accountability Report UNITED REPUBLIC OF TANZANIA Progress Report of PER CWG III: Governance and Accountability Against the Performance Assessment Framework (PAF) for GBS Annual Review 2010 CLUSTER WORKING GROUP THREE REPORT OVERALL CWG 3 SUMMARY This CWG3 Report is a joint GoT and DP product. The Co-Chairs would like to thank those who have contributed and those who have engaged in the Cluster throughout the year for their efforts in advancing the good governance agenda. The report will provide a summary of annual performance against the CWG3 PAF and, more generally will seek to address the governance issues that fall within broad outcomes identified in this Mkukuta I Cluster, namely that: Good governance and the rule of law are ensured; leaders and public servants are accountable to the people; democracy, political and social tolerance are deepened; and Peace, political stability, national unity and social cohesion are cultivated and sustained. National elections are regarded as the most important single governance event in most countries. The recent elections and preceding campaigns were therefore followed closely by the Cluster. Overall the elections were welcomed by both international and domestic observers as being free and 116 Page

117 generally orderly and were regarded as a step forward in Tanzania s democratic development. The much improved political environment on Zanzibar was particularly noteworthy which, complemented by improved policing and security, led to a conducive environment for the formation of the GNU. Observers commended the NEC and ZEC for generally guaranteeing universal suffrage notwithstanding the significant logistical challenges they faced. Polling and the counting, with isolated exceptions, were regarded as orderly and transparent. Observers nonetheless noted weaknesses both with the technical delivery of elections (especially the aggregation and announcement of results) and challenges relating to the wider electoral environment. The President in his inaugural remarks called for the post election review to correct the challenges that arose in the administration of the election. Electoral reform is also included in Mkukuta II. The impact of the elections has yet to be reflected in Tanzania s showing in international governance reporting during the year. The latest indices available show that Tanzania remains stable with respect to critical aspects of governance. International reporting notes generally positive reporting on political stability, political freedom and rights and political participation. The Open Budget Index reports improvements since 2008 in budget transparency although the Index and the assessment of the accountable governance sector suggests that there is significant room for improvement in this area. Important processes that have significance for Cluster III have been advanced during the year. Most significantly Mkukuta II, approved by the President in July 2010, sets out specific governance priories that will form an important agenda going into next year. The APRM process has remained at the self assessment phase, the first draft of which was completed in July 2009; the draft requires revision before the external review mission can take place and is progressing. Although in this respect, as with the EITI, delays have been experienced and it is hoped that these important processes can be brought back on track in Tanzania s human rights record has remained consistent and solid. The CHRAGG continues to investigate and conclude cases brought forward. The National Human Rights Action Plan being coordinated by CHRAGG is intended to incorporate all types of rights in one strategy to improve all these aspects of human life in the country. To date, and following stakeholder consultant, the concept note has been drafted. Although some advancement has been made, the overall action plan has been significantly delayed. It should also be noted that steps at the local level have been taken in some specific areas where land conflicts have arisen in the past. These actions include demarcation of villages and a consultative land use planning exercise, the official outcomes of which are both pending. Progress on the 2009 key issue on equity has been recorded. The MTPP, an important policy that can advance equity has been approved by Cabinet on the 13 th of July In addition, the GoT has frozen recruitment to better served areas and some LGAs are using their powers to improve retention rates. 117 Page

118 However the identification of equity again as a key issue for the Cluster in this year s annual review underlines that further progress is needed in this area. Tackling corruption remained high profile in the Cluster in 2010 and the area of most ongoing concern for DPs. Tanzania recorded its first ever conviction for grand corruption in May this year, a notable milestone. 171 cases of petty corruption have been filed between January and September making a total of 540 cases of corruption being currently prosecuted. 41 cases of petty corruption have been convicted from January to September NACSAPII implementation has progressed with a wide range of activities being implemented including the finalisation of an M&E framework (TPA achieved). On this basis, Government has assessed the underlying process as satisfactory. However, development partners assessed the underlying process as unsatisfactory due to non-achievement of the agreed assessment criteria. Overall DPs continue to voice concern that progress on key aspects of grand corruption has not been fast or comprehensive enough and that dialogue has not been sufficient to meet the agreed criteria of the related TPA. Donors have cited in particular a failure to progress substantively key corruption cases, to tackle adequately high levels of petty corruption (as evidenced in the East African Bribery Index), to address outstanding commitments relating to the EPA Action Plan, to publish the National Governance and Corruption Survey and to present to parliament revised legislation on key areas for tackling corruption. Of the 5 thematic areas that have been formally assessed as part of the cluster, 4 have jointly been rated by Government and DPs as satisfactory or as moderately satisfactory, with a split assessment on one underlying process. Of the 8 TPAs assessed in this cluster, 4 were rated as achieved by the GoT & DPs (Core Reform, LGRP, LSRP and Anti-Corruption), 3 TPAs have been rated as partially achieved by DPs (Core Reform, PSRP, LGRP) and 1 TPA is not achieved (Anti-Corruption). The detailed assessments indicate that important reform processes continue to progress although their pace and results are variable. DPs and GoT have welcomed some fruitful dialogue in recent months leading to agreed assessments in most sectors. However in some cases agreement could not be reached. In these cases, ongoing dialogue beyond the AR will be vital to arrive at a mutual understanding of the challenges and to develop prioritised plans to address them. There have been improvements in the dialogue in the local government and legal sector. In addition, a reduction in the backlog of existing cases has been made under the LSRP and DPs are encouraged that this improved momentum be sustained. Dialogue on the core reforms has also been productive. This is particularly important as policy coherence across government and results based planning is essential to enable effective implementation. The challenges in progressing the core reforms have been an area of increasing focus and commitment for both the GoT and DPs. The work of the Reform Coordination Unit has 118 Page

119 contributed to positive developments in the legal sector and in supporting the comprehensive restructuring of the public sector reform programme. Nonetheless much remains to be done and challenges relating to work plan quality, monitoring and evaluation, disbursements, procurement have jointly been identified as priority areas to address. Underlying Process 1: Accountable Governance (including Executive s accountability to Parliament and Consultation of Domestic Stakeholders) Assessment Main Sources of Information SATISFACTORY Consultants report (based on desk research, consultations and a dedicated stakeholders meeting). Summary Accountable governance is a broad thematic area with a range of components and multitude of stakeholders views to consider. This makes it a challenging area to assess. The development of specific, assessment criteria is a notable achievement and has strengthened the structure and quality of dialogue during this year s GBS cycle. Building on the criteria and assessment recommendations from 2009, DPs and GoT jointly agreed on the following assessment criteria during 2010: 1) Follow up on recommendations of the assessment of accountable governance included in the Annual Review 2009 (mainly covering issues around budget transparency); (40%) 2) Access to information and media freedom; (20%) 3) Quality of consultations between government and domestic stakeholders on the MKUKUTA and other key national processes; (20%) 4) Executive s accountability to Parliament. (20%) Government and Development Partners agreed to outsource the preliminary assessment of this Underlying Process to independent consultants and have noted the value in using a third party to facilitate this process and capture a wider spectrum of sources. The conclusions drawn by the consultant were derived from a desk study, including analysis of websites and documents; interviews with key stakeholders such as MDAs, DPs, civil society organizations and the media council of Tanzania; and concluded with a stakeholders meeting to present the draft report and incorporate comments. Unfortunately, given the National General Election the inclusion of parliamentarians views was not possible. However, the Clerk to Parliament did provide insights. The analysis provides a good foundation for forward planning. DPs look forward to building on these process-level accomplishments in the coming year and acknowledge 119 Page

120 positive movement in the area of domestic stakeholder consultation. However, improvements can also be made: (i) the external assessment, including the formal stakeholder consultation was significantly delayed and implemented hastily (ii) the stakeholder consultation offered a positive space for open and frank dialogue but the lead-in time did not allow for stakeholders beyond CWGIII to be invited nor allow for adequate preparation. In recent years, stakeholders have repeatedly requested that they be given proper notice and advance information in order to strengthen the dialogue. This remains a challenge on the side of GoT. Domestic accountability is a cross cutting issue that is not confined to cluster III and the 2011 assessment should widen the scope of opinions and stakeholders engaged whilst retaining clear and specific criteria. DPs and GoT have jointly agreed that this year s Underlying process is rated Satisfactory 1. Follow up on recommendations of the assessment of accountable governance included in the Annual Review 2009 Three recommendations from the 2009 GBS annual review on increased budget transparency were included under this criteria: 1): key documents related to the budget process continue to be made publicly available in a timely and systemic manner; 2) development of a template for Swahili citizens guide to the budget for the financial year 2011/12 budget; 3) MoFEA and PMO-RALG websites to be duly and systematically updated to include individual reports of MDAs and LGAs. Progress in this area has been mixed and in need of further improvement. Timely availability of budget documentation through MOFEA and PMORALG websites - is highly variable, despite being assessed as an unsatisfactory TPA in The Budget Guidelines should be made available as soon as they are released in order for stakeholders to be able to influence budget priorities. However, in 2010 they were only made public on the MOFEA website in May. The MTEF for 09/10 was only posted in March Quarterly execution reports are available but an annual implementation report is not produced or published. All four volumes of the budget books are not available. Only the CAG reports are accessible in a timely and systemic manner. The review of logintanzania.net showed that local level budget documentation is even harder to access and the information that is available is extremely outdated. Budget information for individual LGAs was out of date and only cumulative data was available rather than quarterly breakdowns, as intended. This makes budget tracking very difficult. LGA budget guidelines, LGDG annual assessments and LG fiscal reviews were also out of date. It is imperative that a decision on the future use of this website be made, or alternative mechanisms for tracking budget at local level developed. 120 Page

121 Tanzania has improved its international rating on budget transparency and should be commended for the progresses made. According to the Open Budget Index, Tanzania s score on budget transparency increased from 36 in 2008 to 45 out of 100 in The present score indicates that the government provides the public with only some information on the central government budget and financial activities, making it difficult for citizens to hold the government accountable for its management of public money. Beyond improving the availability and comprehensiveness of key budget documents, there are other ways in which Tanzania s budget process can be made more open. This includes strengthening oversight mechanisms in providing more effective budget oversight, as well as providing greater opportunities for public engagement in the budget process. In the year under review, the government has not developed a template for a citizens guide to the budget. However, Policy Forum (a network of CSOs) independently produced a citizens budget for FY 10/11. Good practice states that it is a government s responsibility to publish a citizens guide. Hence, it was recommended that a partnership be formed and that the Policy Forum guide should be formally adopted by the government and form the template for future versions. In December 2010, MOFEA formally accepted this proposal. Policy Forum has requested that the Budget Department now assigns a team to work with it to jointly produce the FY11/12 Citizens budget, to be disseminated to citizens a month after approval of the national budget. The following are recommended: 1) Budget documentation should be made public in a more timely manner. Government should improve the timely and systematic updating of MOFEA and logintanzania websites with budget information and documentation. Heavy files such as the budget books should be made available on CD. 2) A broader range of LGA information should be made public on logintanzania (e.g. LGA strategic plans, financial circulars etc.). PMORALG should meet with local stakeholders to agree a specific set of documentation that can be made available through this website\government to formalise its partnership with Policy Forum on the Swahili Citizens Budget and to produce and publish this within one month of the approval of the national budget for FY11/12 3) MOFEA should publish a list of the budget documents that are publically available and how these can be accessed to avoid confusion. 4) Government to publish a Year-End Budget Report 2. Access to information and freedom of the media 121 Page

122 Free access to information and a free media are important pillars of good governance in any country. It was jointly agreed to assess this component through the following sub criteria: 1) Concrete evidence of progress on actions from AR 2008, namely GoT further developing transparency through legislation, incl. Right to Information Act, Public Leadership Code of Ethics Act, Election Expenses Act; 2) Rating in Freedom House indicator (from 50 to at least 48), 3) % of obligatory village assembly meetings held, and 4) Percentage of Citizens requests for information that were met by Government. Freedom of speech in the media is generally respected in Tanzania; however a few legislative gaps remain. The Minister for Information, Culture and Sports, during his budget speech for the 2009/10 stated to Parliament that the process to develop the Right to Information Bill is ongoing. Stakeholders agree that is a need for such an Act as its absence has continued to deny citizens their Constitutional right of access to information and media rights to retrieve information. The Ministry has communicated during this review process that it will no longer continue with the process of developing the Right to Information Act but rather will proceed with the preparation of the Media Services Act; this should be officially communicated with stakeholders if it is in fact the case. The consultant found that the Newspaper Registration Act of 1976 which allows authorities to register or ban newspapers and the Broadcasting Services Act impede free media operations in Tanzania. The Public Leadership Code of Ethics is still pending approval and during the year 2010 the Ethics Secretariat prepared a paper which is still awaiting approval by the government. During the year 2009/10, the Government formulated the Election Expenses Bill and this was enacted by the Parliament on February 11, DPs view this as a sign of deepening democratic practices. However, some stakeholders reported that the Act provides little room for transparency and accountability. The implications of the law should be reviewed after the first experience with its implementation during the recent election. The Freedom House index is widely recognized as a definitive source of information on the state of media freedom around the globe and has been at the forefront in monitoring media independence since In Tanzania the analysis indicates that media freedom for 2010 has not seen any progress in the last year (nor 122 Page

123 reached the target of 48 agreed in this criteria) but maintained its position as partly free with an overall score of 50. With respect to village assemblies, PMORALG has not provided updated data for Evidence currently shows that 71 percent of the Citizens requests for information from public offices were met, which is a positive achievement. This compares well against the set target of 62.2% for 2010 as agreed in the last Annual Review. However there are instances when citizens are denied access to information. A study commissioned by the GoT has recommended a policy statement be issued indicating what and the extent of information each MDA should reveal. Recommendations for improvement under this area include the following. 1. The Government needs to clarify its position on the enactment of the Right to Information Act and the Media Services Bill 2. Government to finalise the amendment of the Public Leadership Code of Ethics Act as requested by the Parliament 3. The Government to clarify the roles and functions of the Regional and District Consultative Committees with a view of giving them clearer mandate to address issues of access to information by the public 4. The Government to facilitate a process of regular surveys to measure and validate trends in access to information at various levels and different sectors 3. Quality of consultations between government and domestic stakeholders on the MKUKUTA and other key national processes This criteria includes three sub criteria 1) quality of dialogue and consultation with domestic stakeholders on Mkukuta/Mkuza review as assessed by CSOs, 2) quality of consultation with NSAs in anti-corruption forums and 3) new legislation listed under criteria no. 2 subject to consultation process as per legal requirement before tabling in Parliament, incl. being publicized on GoT website and in the national media. During the year 2009/10, the GoT has reviewed the implementation of MKUKUTA I and started developing the MKUKUTA II. CSOs were heavily engaged in the second part of this process where they, in agreement with the GoT, organized a series of consultations across the country to consolidate views and inputs. Civil Society has therefore, for the first time, felt closely involved in the process. The preparation of MKUKUTA II also included consultation with Members of Parliament. During the regional consultative discussions, 123 Page

124 Members of Parliament were invited and at least some attended. However, the final MKUKUTA II draft was not endorsed by Parliament. The consultation in Anti-Corruption fora, the NACSAP steering committee, has been more inclusive than before. An anti-corruption forum was held in May 2010 bringing together close to 200 participants from all sectors in the government and non-state actors. The Forum provided an opportunity for key stakeholders to present and discuss progress they have made in fighting corruption in their sectors. This was a high level event that gave people an opportunity to openly discuss progress and challenges on the fight against corruption. Feedback during this assessment process has been positive with respect to the inclusion of stakeholders at both the NACSAP Steering Committee and during the Anti-Corruption Forum. In addition, the PCCB facilitated the formation of an Anti Corruption Network of CSOs and hence Tanzania Anti- Corruption Network of Civil Society Organisations has been formed and registered. The Network currently has 32 member organisations. The aim of this network is to mobilise and coordinate the efforts of civil society organisations in the fight against corruption. This criteria also requires DPs and GoT to assess the quality of consultations between the government and domestic stakeholders in the formulation of the three legislation mentioned in the previous section, namely, right to information act, public leadership code of ethic act and the election expenses act. As noted in the earlier section, no progress has been made during the year 2010 towards formulating the first two acts, and hence no consultations made during this year. Government procedures require that consultations be made with key stakeholders and the draft bill be published in the Government Gazette before it is tabled in the parliament for first reading. Stakeholders have the opportunity to input into the bill during the stakeholder consultations conducted by the Government and also during public hearing conducted by the respective parliamentary committees. As for the election expenses act, the Government through the Office of the Registrar of Political Parties made consultations with key stakeholders in November 2009, first with political parties and civil society organisations in a meeting conducted in Dar es Salaam, and then in a seminar with Members of Parliament held in Dodoma. Whilst there have been achievements with regards to the quality of consultations between government and domestic stakeholders on the development of MKUKUTA II and that space for civil society to engage in some sector policy debates is growing, there are still certain fundamental issues that CSOs feel need to be addressed. The following are recommended: 1. Government to enhance consultations with stakeholders by clarifying the role of CSO within the 124 Page

125 dialogue structure and by providing adequate advance notice and documentation for the consultations. 2. There should be a stakeholder consultations on the election expenses act to reflect on the experiences from the recent general election. 3. Civil Society Organisations should be given an opportunity to appoint their own two representatives to sit on the National Anti Corruption Steering Committee. Currently only one CSO representative selected by the PCCB sits on the committee. 4. Executive s Accountability to Parliament The Parliament, the oversight body for the government, consists of the National Assembly on one side and the President of the United Republic of Tanzania on the other. In this section, however, reference to the Parliament will refer mostly to the work conducted by the National Assembly. This component is expected to assess whether or not the Government is accountable to the Parliament. Three sub-criteria have been used to assess accountability of the Executive to the Parliament: 1) implementation Report on Government Commitments in Parliament on time 2) GoT to table reports as exemplified by the following four selected reports: Richmond, TICT, Kiwira and TRL, and 3) funding disbursed to the Parliament per budget year not decreasing (comparison last three years). The GoT tabled the implementation report on Government Commitment on July 15, 2010 for the FY 2009/10 and the report was therefore submitted on time. The report provides an account by the Government on the implementation of the various commitments made during the sessions. Though MPs do get time to question on some of the reported items, it was noted that the time is not enough for detailed discussions on the issues. On February 10, 2010 Kiwira and Richmond Reports were discussed in the Parliament with the Permanent Parliamentary Committee on Energy and Minerals providing their general satisfaction with the way the Government had dealt with the issues raised in the two reports. On the same date, the Permanent Parliamentary Committee on Infrastructure submitted its report following its deliberations on the Government Implementation Reports on TICTS and TRL. Under this subcomponent, the consultants were required to analyse the funding disbursed to the Parliament over the last three financial years and see whether the funding has been increasing or decreasing. Information obtained from the Clerk to the Parliament and supported by the relevant CAG Reports indicate that there has been an increasing trend in disbursements to the Parliament over the last three financial 125 Page

126 years, 2007/ /10. Disbursements to the Parliament per year over the three year period have been increasing from about TZS 48bn during the year 2007/08 to TZS 69bn during the year 2009/10. The Government has been successful in providing increasing levels of funding to the Parliament and hence enhancing its operational ability. However, whether the budgets themselves were adequate in the first place it is something that was not assessed. For accountable governance to be strengthened there is a need to further strengthen the capacity of the parliament, especially to build competencies of the members, revisit the number of members in each committee, increase transparency of their deliberations. Some recommendations include: 1. Increase transparency of the deliberations of the Parliamentary Committees; 2. Examine opportunities for the public to testify at legislature hearings on the budget and on CAG Reports; 3. Cluster Working Group to further assess the recommendation to establish a Parliamentary Budget Office that specifically interfaces with MPs and the public on budgetary information (as in Ghana, Kenya, Uganda, etc.); 4. It is recommended that the Government prepares the regulations and gazettes the National Assembly Fund. Underlying Process 2: Legal Sector Reform Programme (LSRP) Assessment Main Sources of Information SATISFACTORY LSRP Progress Report 2009/10, LSRP Annual Operational Plans 2009/10, the ATIP Mid Term Review Aide Memoire of February 2010, and the ATIP Review Aide Memoire of May 2010 Background The Legal Sector Reform Programme (LSRP) is one of the cross-cutting reform programmes in the public sector geared to achieving the National Strategy for Growth and Reduction of Poverty (NSGRP) referred to as MKUKUTA. The aspiration and vision of the LSRP is Timely Justice for All built around the core characteristics of: speedy dispensation of justice; affordability and access to justice for all social groups; integrity and 126 Page

127 professionalism of legal officers; independence of the judiciary; and a legal framework and jurisprudence of high standards responsive to social, political, economic and technological trends at both national and international levels. Overview The ATIP Mid Term Review Aide Memoire of February 2010, the ATIP Review Aide Memoire of May 2010, and the LSRP Progress Reports for FY 09/10 are the main sources used to assess progress in LSRP. During the year under review, the Programme continues to show a very welcomed positive implementation trend. During 2009/10, the LSRP was implemented by 16 institutions. Measures undertaken during the financial year to integrate the Medium Term Strategy (MTS) into the government s planning process and the MTEF have recorded positive results. As a result, twelve of the sixteen LSIs accessed LSRP funding through their respective MTEF votes. Four LSIs were still receiving funds through MoCAJ. The integration, with the use of the newly acquired PLANREP tool, has simplified the planning work and has cut down the approval time of the Programme s Work Plans and Procurement Plans. The budget was approved on 1 st October 2009, almost three months earlier than in previous years. The annual plan and budget consolidated the achievements registered through the linking of MTS terminologies with the MTEF by increasing the pace of activity implementation processes especially in areas of procurement. Reporting on progress made by the LSIs in the course of implementing the approved activities is of great importance for the Programme management to make informed decisions. This is to be assisted with the functioning of the revised monitoring and evaluation framework, which is also the main focus of the Work Plan. The 2009/10 Annual Physical Progress Report indicates that more than 70% of activities in the approved Annual Work plan were implemented or are in the process of being implemented. At the same time spending capacity of LSIs continues to improve. From FY 06/07 TSH430,088,000 > FY 07/08 TSH1,808,390,640 > FY 08/09 6,085,385,636 > to FY 09/10 5,083,738,942. Furthermore, the year under review saw a comprehensive restructuring process which was very well managed and coordinated by the Ministry of Constitutional Affairs and Justice. As a result of the measures identified in the October 2009 Mid-Term Review to improve performance and as there are limited financial resources remaining in the Programme, a stakeholder meeting (Pre MTEF meeting) was held in January 2010 to discuss options to refocus the Programme. A joint restructuring mission in February 2010 reached agreement on LSRP priorities for the remaining time of the Programme (as outlined in the ATIP Aide- Mémoire). In May 2010, a second joint mission took place to finalize the restructuring discussion. The 127 Page

128 Programme now focuses on 4 outcomes with clearly defined objectives, targets and indicators to ensure that the expected results (given time and resources) are achievable. Nevertheless, challenges remain which will have to be addressed in the coming year. 1. Key achievements Realized During the Year a) Streamlining Planning Process: The Legal Sector Reform Programme planning process was aligned with the regular MTEF planning and budgeting process which enabled timely approval by relevant organs. The MOCAJ was able to present the LSRP annual work plans and budgets to the JPIRC for approval well before the Ministry s budget was tabled in Parliament. Activities for the next financial year were set out for the whole year as per plan. As a result, the implementation lag experienced in the previous years will soon be history. b) Refocusing the LSRP: In consultation with Development Partners, the government refocused LSRP priorities based on the remaining lifespan and financial resources of the Programme. The revised work plan seeks to achieve the following intermediate outcomes: (i) increased efficiency in the administration of justice, (ii) improved knowledge and skills of legal professionals, (iii) increased equal access to justice for the poor; and (iv) effective project management. The sub-components have been reduced from seven to four. Furthermore, the institutions involved in the basket fund have been cut from 15 to 8. Following this refocusing, the LSRP M&E Framework was also revised to 4 outcome indicators and 19 output indicators. Arrangements to extend implementation of the LSRP to June 2013 have been initiated. Implementation progress on agreed next steps is good and some steps have already been accomplished. c) Accessing new Funding: The LSRP had witnessed a diminishing number of funding partners. GTZ, SIDA and UNDP could not extend their contributions and participation in the LSRP due to, among other things, minimal implementation progress recorded during the initial years of implementation and their institutional requirements to focus their programs. However, following continued improved performance, especially as was depicted during the year under review, two new funding partners were attracted to the LSRP. UNICEF is in the final stages of communicating with Government its formal commitment. The European Union is also finalizing its internal requirements to join the Programme. It is expected that the two new funding partners will join LSRP with effect from 2010/11 and 2011 /12 respectively. 128 Page

129 d) Enhancing capacity of the Law School of Tanzania (LST): The Programme continued to support capacity building initiatives of the Law School of Tanzania. LSRP was involved in the development of its training programme; Students Assessment and Awards Regulations; and 3 sets of training manuals, tutor notes and handouts. The Programme also facilitated a training of trainers programme for the School s 16 instructors on learning-by-doing methods. Through these capacity building efforts, the LST was able to enrol 385 students during the year, bringing cumulative student enrolment to In the review year, 53 graduates were admitted to the Roll of Advocates. The LSRP also continued to support the development of infrastructure for the School. This will be a major area of focus during FY 2010/11. e) Decongestion of Retention Facilities: The Programme provided the Prisons Department with support for: training in human rights and good governance; expansion and improvement of the prison system; increased use of alternative sentencing; review of custodial limits; revamping of case flow committees; reference materials for the legal library at Ukonga Prisons College; and 5 buses for the transportation of inmates (which improved the Department s capacity to handle inmates). The Programme also supported regular inspections by watchdog institutions such as CHRAGG and independent NSAs of retention facilities to monitor the observance of human rights and good governance principles. These initiatives contributed to the reduction of inmates in retention facilities. The overcrowding status of retention facilities stood at 34% as of the end of 2009/10 (compared to 40.7% at the end of 2008/09). f) Improving the capacity of the Police: Through Programme support, Police trained 480 investigators in modern investigation skills and procured additional investigation tools. Cumulatively, 825 police investigators have been trained in modern investigation skills, 195 police officers have been trained in human rights observance and good governance, and 45 officers have been trained as trainers in various areas. Cascading of training using the in-house trained trainers will commence during FY 2010/11. The Police have also installed juvenile facilities in 3 stations in DSM and introduced gender based violence desks. These initiatives have significantly contributed to enhancing Police capacity to undertake quality investigation including such issues as arriving on time at the scene of crime, handling of accused persons in accordance to human rights requirements, and handling of gender based violence cases. g) Enhancing prosecution services: The LSRP supported efforts to expand prosecution services to 129 Page

130 regions and districts towards the implementation of the civilianization programme. New offices were acquired; office furniture and equipment for newly acquired offices procured; new state attorneys recruited, inducted and deployed; preparation of Prosecution General Instructions finalized; and DPP library further stocked with reference books and statutes. The results of these initiatives have been significant. First, by May 2010, more than 12,132 criminal cases at District Courts and Courts of Resident Magistrates were being prosecuted by State Attorneys. Of these, 5,776 criminal cases were completed and 6,356 cases were still pending. Secondly, cases were being more thoroughly scrutinized to ensure that cases entering the court system were those with sufficient evidence for a successful prosecution. This has resulted in the reduction of complaints from the general public on framed up cases and the unclogging of the court system with backlog of cases. It will be possible to capture data on this aspect once the case docket management system currently being developed is operational. Thirdly, prosecuting cases in subordinate courts has helped in the development of the law, both substantive and procedural. Weak areas of the law were identified and rectify through the courts. Issues such as how to conduct preliminary hearings, how to conduct preliminary inquiries, trial within trial, cases that need consent of the DPP and issues of bail have all been improved. h) Increased participation of NSAs in the LSRP: During FY 2009/10, the LSRP continued to support participation of NSAs in legal sector reforms. The Programme supported 10 NGOs to participate in Legal Aid Day which provided legal aid services to needy citizens in 10 regions. LSRP also supported: awareness raising on laws impeding women s and children s rights; finalization of a baseline survey on paralegals; translation of basic statutes and legal information; provision of simplified and Brailed laws. These efforts have expanded the involvement of NSA (15), volunteers (87), advocates (254) and paralegals (53) in the provision of legal aid. As a result, 1,426 citizens accessed legal aid. Of these citizens, 718 have had their cases pursued further. A system has been instituted to track the progress of these 718 cases. 2. Challenges ahead: a) Timely preparation and submission of quality progress and financial reports The LSRP MoU foresees quarterly progress and expenditure reports. In FY 09/10, DPs received the first quarterly progress and expenditure report on March 15 th A third quarterly report was submitted on July 9 th There was no report submitted in the second or fourth quarters. Moreover, the quarterly reports that were received lacked information on progress, results and expenditure by approved activity. However, the end of the fiscal year annual progress and 130 Page

131 expenditure report of high quality. Quality reporting on a regular and timely basis is essential to monitor progress and implementation throughout the year in order to be able to identify risks and mitigate problems in a timely manner. b) LSIs financial utilization capacity Although there was significant improvement in the level of resource utilization compared to previous years (see first page), the Programme s financial utilization capacity continues to be low compared to approved work plans and budget estimates. Planning needs to be more focused and adapted according to absorption and implementation capacities of the LSIs. c) Capacity to coordinate LSRP and to boost implementation levels MoCAJ did a very good job coordinating the restructuring of the Programme. Ongoing communication with DPs is good. Meetings take place regularly and follow-up is satisfactory. Senior leadership in MoCAJ make concerted efforts to ensure that senior leadership of participating LSI is also on board. However, challenges on the technical level remain, including: - Slow procurement due, at least in part, to prolonged procurement processes and delays at the Ministerial Tender Board. - M&E capacity and coordination. There is a need to improve data collection and enhance LSI s capacities to M&E. The M&E indicator handbook needs to be updated to ensure a common understanding of the meaning of each indicator, how it will be measured and who will be responsible. A long term M&E Advisor has yet to be hired and efforts to secure an experienced short term M&E Advisor have not yet been successful. - Coordination between BEST and LSRP particularly vis-à-vis work with the Judiciary on case backlog. - Authority of middle management to coordinate LSIs. d) Integration of TA The capacity of MoCAJ is expected to be further strengthened as a result of the recruitment of additional technical advisors in: financial management; procurement; gender equality; and legal administration. TA supported MoCAJ and LSIs to improve planning processes and reporting in the past year. Ongoing challenges include the fact that: structures, division of labour and reporting relationships of TA are not yet clear; and TA is used to troubleshoot. In order to ensure improved TA utilization, there is a need to agree on: clear deliverables and timelines; performance review mechanisms; 131 Page

132 management relationships; roles, mandates and linkages with LSIs; and how TA will build LSI capacities on an on-going basis (beyond workshops and seminars). M&E capacity building is essential. 3. Opportunities: This section refers to opportunities which will help to maintain the positive trend the LSRP experienced during the last year and to impact on the overall objective of timely access to justice for all: a) Refocusing & Extension of Programme timeframe to 2013: Refocusing and extending LSRP will provide an opportunity to address the implementation lag of the past to ensure further improved performance and realization of LSRP objectives. b) Strong commitment of the Government and DPs: Government and Development Partner continued commitment and support of the LSRP; increased level of openness between Government and Development Partners; and coming on board of UNICEF and the European Union into the LSRP present opportunities for the Programme. c) Strategic leadership by MOCAJ: The MOCAJ PS s strong managerial direction and strategic leadership will continue to contribute to the realization of LSRP objectives. 4. Way Forward: a) Implementing institutions will be encouraged to be realistic during planning stages. b) Procurement processes will be triggered early enough to allow adequate time for implementation. c) Capacity building initiatives will be undertaken to increase the sharing of information, conduct regular visits to implementing agencies, and provide supply driven services in areas of procurement and financial management. d) LSRP is considering establishing a mechanism to allow CEO s of Implementing Institutions to make quarterly presentations on progress in an All-LSIs Forum. This will encourage performance; the sharing of lessons learned; and ownership of Programme results. MOCAJ PS will continue one-onone meetings with implementing institutions to the same end. e) Operationalization of the LSRP revised M&E framework will also catalyze timely reporting. f) Continued efforts to ensure that the management and coordination of the Programme is mainstreamed into Government structures. g) Emphasis on results and impact. Further operationalization of the M&E system as a tool to measure 132 Page

133 impact and steer the Programme. Indicators need to be SMART : S - Specific M - Measurable A - Achievable R - Relevant T - Time-bound h) Focus on strategies beyond the duration of the current LSRP including undertaking a broad legal sector assessment. Temporary Process Action: The Government implements the approved LSRP M&E framework with annual data collection on all LSRP relevant MKUKUTA indicators and 50% of LSRP outcome indicators. Assessment: ACHIEVED MOCAJ and DPs identified 20 outcome indicators to monitor LSRP progress and agreed on modalities of data collection and frequency of data reporting per Legal Sector Institution (LSI). LSIs and DPs also agreed on a subset of 12 MKUKUTA legal sector indicators to track progress in the sector. Data on these indicators was collected and reported. LSIs and DPs will continue to work to ensure that there is a common understanding of indicator definitions and collection methods. Outcome Indicator: Percentage of court cases outstanding for 2 years or more Assessment Indicator Values ACHIEVED A study was carried out in January 2009 to, among other things; establish the status of cases outstanding for two years or more. This study revealed that the percentage of cases outstanding for 2 years or more was 25.9% in This became the baseline and year. The annual targets were subsequently set at: 25% in 2010, 24% in 2011, 22% in 2012, and 20% in Under the auspices of its Statistics Committee, the Judiciary undertook a study in 2010 to establish the current status of this indicator. Some very preliminary data is now available. It suggests that, as of December 2009, 12.9% of court cases were outstanding for more than two years (note: confirmation pending that more than two 133 Page

134 years = two year or more). Court of Appeal had 11.6%; High Court 25.54%; RM & District Courts 10.75%; and Primary Courts 9.2%. Note that the baseline study of 2008, undertaken by the Judiciary and the NBS, looked at 100% of High Court cases, 50% of Magistrates Resident Courts, 25% of District Courts and 10% of Primary Courts. In 2010 data was collected for all levels of courts. The High Court comparison (where 100% data was collected in both studies) is worth noting: in 2008 it was 31.7%; and 2010 it was 25.54%. DPs and Government look forward to ongoing dialogue to better understand the raw data from the 2010 study. GoT and DPs agree that this outcome indicator should be retained for the purposes of the next GBS review. Underlying Process 3: Public Service Reform Program (PSRP II) Assessment: MODERATLY SATISFACTORY Main Sources of Information (i) PSRP II Supply Led Annual Report (July 2009 June 2010) (ii) Monitoring Report: Summary Results of the Supervision Visits Undertaken to 66 MDAs, July 2010 (iii) Mid Term Review of PSRP, June 2010 (Aide Memoir of the mission May 24 to June 7, 2010) (iv) Aide Memoire of the PSRP II Restructuring Mission October 18-29, 2010, and (v) PO-PSM Work plan (October 5, 2010) Background The Public Service Reform Program Phase II is a successor program continuing the reforms that was started by the Civil Service Reform Program ( ) under which restructuring and cost containment were undertaken and the Public Service Reform Program Phase I ( ). In addition, during Phase I institutionalization of performance management processes begun. The focus of PSRP Phase II is on enhancing performance particularly with emphasis on service delivery and accountability of the Executive both within and outside the government. It is expected that the tools and instruments created under this program would be further adopted and rolled out, including by sector projects, so as to achieve the critical mass of change necessary within government processes and functionaries reflected as improvements in public service delivery. The program became effective on January 16, 2008 and closes on December 31, Although was a first full operational year, implementations began at a slower pace. The demand led approach was continued in under which 66 MDAs benefited after due facilitation by POPSM and identification of 134 Page

135 the priority actions by the MDAs themselves out of a menu of interventions as proposed by POPSM. This was a significant increase from the 25 MDAs covered in the previous year. The supply led interventions were continued and implemented by POPSM against the approved work plan and budget. Implementation of the demand led components, which is done by the MDAs themselves, was done against the budget allocation to each MDA by the POPSM. Areas of good performance/key achievements 1. Satisfactory achievement of agreed milestones (60% met and 15% partially met). However, 10 of the 20 milestones, including 7 of the 12 which were met, were incomplete milestones from the previous year which were rolled over. 2. Relatively high levels of expenditure; against the total budget of Tsh billion, Tsh billion or 56% was set aside for supply led activities. Expenditure against the supply side budget was Tsh billion or 74% while the remainder was committed but not spent for various interventions. Out of the budget of Tsh 16.1 billion for demand led interventions only Tsh 10.5 billion was released to MDAs which spent Tsh 8.2 billion or 78% of the released amount. Lower than expected utilization resulted in a balance of Tsh 8.5 billion in the holding account at the end of the year. 3. The Pay and Incentive Policy was approved by the Cabinet in July 2010 though it has still to be made public. Although DPs remain unaware of the specific interventions GoT will undertake in line with the policy principles, it should be noted that the Budget incorporated a capping of allowances. 4. Policy Development Capacity Plan has been developed in five central Ministries. 5. Three out of four studies which will provide data for establishing base lines have been completed. 6. Guidelines for the collaboration of MDAs with non state actors are in place and two discussion forums with non state actors on service delivery have been convened. 7. The program of executive agency (EA) formulation for enhancing performance and accountability was continued with two EAs established (Tanzania Mineral Audit Agency and Water Development Management Institute) while framework documents for two more EAs (Tanzania Forest service and e-governance agency) were ready for approval. 8. Reports for Business Process Improvement in five MDAs were developed. 9. Staff inspection was completed in the judicial sector in 21 regions. 135 Page

136 10. Staffs in 44 MDAs were trained to manage the Complaints Handling System. 11. A baseline survey of leadership competency in the public service was completed. 12. Diversity management guidelines were disseminated in five regions (Tanga, Dar es Salaam, Dodoma, Morogoro and coast Region). 13. Key word classification system was installed in the offices of 10 District Commissioners. 14. In the demand led component the following were the achievements: a. 24 out of 29 MDAs accessed funds and implemented Client Service Charters. Of these 13 MDAs were rated by MDAs as achieving very good or excellent quality of implementation. b. 31 MDAs implemented OPRAs (training of staff, TOT, customization or management awareness). Of these 14 were rated as having a very good or excellent quality of implementation. c. 33 of the 40 MDAs selecting Strategic Planning accessed funds while only 30 implemented the program, mainly to review their Strategic Plans and/or share it with stakeholders. Similarly, 18 MDAs were assessed as having a very good or excellent quality of implementation. d. 18 out of 28 MDAs selecting M&E and Reporting managed to access funds while only 16 implemented the program. 8 MDAs were assessed as having a very good or excellent quality of implementation. e. 3 out of 6 MDAs opting for Private sector participation were able to access funds and implemented the programs. f. 2 out of 4 MDAs opting for Business Process Improvement accessed funds and implemented the programs. g. 25 out of 33 MDAs opting for Subject Records Management accessed funds and 21 implemented the program, including variously review of record management system, staff training on records, procurement of records keeping equipment and installation of electronic filing systems. 9 MDAs were assessed as having a very good or excellent quality of implementation. 136 Page

137 h. 31 out of 44 MDAs opting for e-governance accessed funds while 28 MDAs implemented the programs, including such activities as staff training on ICT and database establishment, upgrading/establishing of LAN and WAN, procurement of ICT facilities and website development. 17 MDAs were assessed as having a very good or excellent quality of implementation. i. Only the Ministry of Livestock Development and Fisheries opted for Policy Development and it developed the draft Fisheries Strategy. j. 14 of the 28 MDAs opting for IEC interventions accessed funds while 12 implemented the program. 4 MDAS were assessed as having a very good or excellent quality of implementation. k. 13 of the 17 MDAs opting for Complaints Handling Systems accessed funds while 11 implemented the program which focused on capacity building of staff, establishment/retooling of offices and/or computerization of the complaints handling system. 5 MDAs were assessed as having a very good or excellent quality of implementation. l. 2 of the 5 MDAs opting for HIV/AIDS interventions accessed funds while only Iringa Region Implemented the program. m. 22 of the 32 MDAs opting for Medium Term Training and Development plans accessed funds while 20 implemented the program, which mainly concerned itself with training needs assessments, obtaining stakeholder views, developing plans and implementing training. It is not clear how many MDAs actually have functioning medium term training and development plans as a result of these interventions. 10 MDAs were assessed as having a very good or excellent quality of implementation. Areas of weak performance/challenges 1. The project is behind schedule in terms of achievement of results. Many of the outputs achieved during were plans, guidelines, studies and reports which have not yet been implemented. Project implementation does not seem to have a results orientation since the expenditure far exceeds the achievements. 2. The PSRP Results Framework and M&E Strategy was not reported against this year at either the Executive Log frame (31 indicators) or the Outcome (50 indicators) levels. Reporting against outputs 137 Page

138 has not been comprehensive and baseline data for indicators is not complete. 3. While acknowledging the setback in the progress made on restructuring due to elections, the process is now behind the Government s schedule and should be completed within December Tools and Instruments (like Strategic Planning, OPRAs and Complaints Handling Systems), which were supposed to have been institutionalized in Phase I of the program continue to require attention for actual adoption and implementation in user MDAs. 5. Implementation of the upgraded HCMIS has been slow as at the same time other MDAs continue to pioneer several stand alone MIS. 6. Utilization of the data from staff inspections for planning purposes in the sectors has been neglected and alternative surveys done internally by sectors are being developed. 7. Implementation of the National Records Center is lagging with the contract yet to be awarded. 8. The implementation of demand side measures to ensure accountability has been slow. 9. The implementation strategy for the demand led component has significantly enhanced the monitoring load, encouraged the use of a range of tools and instruments without ensuring that within each MDA, interventions address the highest priority area blocking the achievement of results in service delivery. 10. Program management continues to be less than satisfactory and governance arrangements (schedule of meetings) for the program are not being adhered to. 11. There has been reported use of funds for other than authorized use by selected MDAs. It is recognized that a major factor explaining problematic implementation was the tremendous expansion in the number of MDAs, from 25 to 90, which PO-PSM had to facilitate, assist, monitor and help to report. This proved to be unworkable and neither the MDAs could be sufficiently supported and it diluted the concentration and focus of PO-PSM s own rate of progress. Opportunities: 1. The ongoing process of restructuring offers the greatest opportunity to address the shortcomings in the implementation strategy of the program and extend the program to the LGAs and the service delivery facilities. 138 Page

139 2. Provide a results orientation to each intervention by reformulating the Results Framework and linking each MDA activities to it. 3. Increase the focus on the IEC, Ethics and Accountability segments, which it was agreed is the distinctive and key feature of the second phase. This will bring rewards particularly by enhancing public awareness of the program and harnessing the positive effect of demand side accountability. Way Forward 1. Finalize the restructured Programme Implementation Strategy and implement it within an agreed time period for immediate and positive impact on project implementation. 2. Revamp and strengthen the association of POPSM with monitoring of the demand led segment to allow higher levels of direct association with the implementation of the segments as advisors. 3. Further strengthening the Project Management Team to enhance the implementation quality of the program. Temporary Process Action: The government shall put in place measures, including incentives, to ensure adequate staffing in persistently understaffed areas by June 2010 to be implemented by FY 2010/11. Assessment: GoT PARTIALLY ACHIEVED A comprehensive report identifying the measures to be implemented in FY 2010/2011 is still pending. The government had issued a circular stressing that for fresh staff appointments, well served areas should receive a lower priority than underserved areas however the evidence of the impact of the circular and/or the circular itself have not been made public to DPs. Over time there has also been a shift away from staffing at the MDA level to the LGAs in compliance with the demands of D by D. However it is not yet clear if LGAs in turn are following the principle of giving priority to understaffed service delivery facilities while allocating new staff. The need to put in place a comprehensive incentive package for those serving in underserved areas has yet to be addressed though isolated decisions like the building of hostels, provision of solar power instruments in remote areas, time bound payment of subsistence allowance and time bound refund of transport charges for joining at the duty station, which benefit new staff in all locations, have been taken. In planning forward there is a greater need for a commonly agreed definition of underserved areas and a comprehensive measure for evaluating if an area is well served or under served. There would also need to 139 Page

140 be an agreed baseline for staffing which is able to measure improvements and changes in the distribution of human resources. Meanwhile, questionable coordination of assessing staff numbers by PMO-RALG, PO-PSM (staff inspection) and sector ministries risks making consensus difficult. The Pay and Incentive Policy, formulation of which was a TPA the previous year, is still not public. Until the strategy for implementing the policy with identified targets is formulated the key milestones for this TPA have not been achieved. Temporary Process Action: The government shall reduce overall expenditure on duty facilitating allowances and honoraria in Ministries, Departments and Agencies and promote the positive use of allowances in underserved areas in line with the principles of the MTPP by June Assessment: GoT PARTIALLY ACHIEVED The Budget guidelines for had required that MDAs limit expenditure on honoraria and duty facilitating allowances to 50% of the previous year s budget and limit expenditure on travel to 75% of the previous year s budget. However to-date there has been no evidence as to the use of allowances as a demand driven incentive for staff placement in remote and underserved areas and the Pay and Incentive Policy is yet to be made public. Underlying Process 4: Local Government Reform Assessment MODERATLY SATISFACTORY Main source Local Government Reform Programme II (Decentralisation By Devolution), Vision, of information Goals and Strategy, July 2009 June 2014; LGDG Progress Report July December 2009 and Update Report on the LGDG System January - April 2010; LGRP II APB January June 2010, LGRP II APB 2010/11, LGRP II Progress Reports July December 2009 and January June 2010 (draft), LGRP/LGDG Audit Report 2008/09, LGAs Assessment Report 2010/11, LGR M&E Framework, LGRP II MoU & FMM, Way Forward Matrix LGR AR 2010 Local Government Reform is a key process in the drive for a more efficient public service and enhanced service delivery. As LGAs are responsible for most services to the people, the success of the reform is also a key to the success of many sector reforms, local economic development and poverty reduction in general. However, decentralisation reforms go always together with challenges in translating policies in effective implementation and resistance as not all actors have the same agenda. Thus, the factual autonomy of LGAs to set their own priorities is currently still very limited. Many things have 140 Page

141 improved over the years (e.g. increased funding, upward accountability, capacities of LGAs, service delivery), but equitable distribution of scarce resources (funds, HR) remains a challenge as are the capacities of central government institutions (i.e. PMO-RALG, Regional Administration) to oversee and coordinate the implementation of the D by D policy. Also LG planning and budgeting has improved, but the quality of monitoring and reporting by LGAs is wanting in some respects an aspect that puts at risk the support required from the sectors to the decentralisation agenda. Most of these and other challenges will be addressed in the LGRP II. It is however observed that many of the bottlenecks, such as HR autonomy, setting the right incentives for public servants or adjusting grant allocations to LGAs according to the functions and responsibilities that have been devolved to them cannot be solved by PMO-RALG alone, but will require the full involvement of and participation by other institutions such as PO-PSM, MoFEA, Attorney General s Chambers, and sector ministries. Full backing of the D-by-D agenda by the whole government is generally acknowledged to be a prerequisite for the successful implementation of the LGRP II and the reform of the local government system in general. In the Annual Review 2010 of the Local Government Reform PMO-RALG has shown a very positive approach and its willingness to tackle some of the mentioned longstanding challenges such as HR autonomy, functional assignments of the different levels of administration, equity in people s access to public services, and strengthening of planning, monitoring and reporting. It is therefore expected that the progress of the LGRP, that had been slower than expected and planned after the long transition period since LGRP I ended in June 2008 will gain new momentum in the coming few months. Contractual arrangements (MoU to which the LGRP Financial Management Manual was annexed) between GoT and DPs were finally concluded beginning of February 2010 and mid of August 2010 the first full Annual Plan and Budget under the LGRP II was approved by the CBFSC. Full implementation was, among other reasons, - hindered by somewhat protracted contract negotiations with the consortium that was procured to provide the TA team to support PMO-RALG in the execution of the LGRP II. The contract process took much longer than it was envisaged. However, the contract was signed at the beginning of October 2010 and the TA for Monitoring and Evaluation has already started work and the rest of the TA team will start work in January Some preparatory support is already ongoing. Areas of Good Performance/Key Achievements Areas of Weak Performance/Challenges Dialogue Dialogue The LGRP II MoU (including the annexed FMM) was Due to late submission of acceptable plans and agreed between GoT and DPs in February 2010 reports some committee meetings (CBFSC, TC LGDG system) as per MoUs have been delayed. The quality and quantity of regular dialogue and day to day cooperation between PMO-RALG and DPs has Not all fora (e.g. some inter-ministerial task forces, PICC, local central dialogue platform) that are 141 Page

142 significantly improved during the last year. Committee meetings (CBFSC, TC LGDG) as required per MoUs have largely been conducted as foreseen. The Annual Sector Review of the LGR held on 4 th and 5 th of October 2010 was conducted in a commendable and constructive atmosphere of mutual learning and listening. A list of actions was agreed for the way forward and this is envisaged to unleash progress in some of the key challenges. Participation in the AR was good (representation of PMO-RALG, DPs, and LGAs) and participation of Civil Society was also commendable, though there was still room for improvement on the side of other central and sector ministries. LGRP / LGDG Budget and Planning: There have been no funding problems in LGRP and LGDG. GoT and DPs largely lived up to their commitments regarding contributions for financing LGRP / LGDG system. GoT continued to demonstrate strong commitment to fulfil the agreed funding level for the LGDG. In the FY 2010/11 budget GoT contributions for the first time are exceeding DP contributions. This is a strong signal that GoT owns the LGDG transfer system. Steps to improve the format of work plans and reports have been agreed and it is expected that with support of the incoming TA team, quality and timeliness of LGRP plans and reports as stipulated in the MoU will further improve. The approval of the APB 2010/11 by mid of August can still be considered acceptable in the current situation. foreseen in the LGRP II architecture have already started to work Level of representation of other central and sector ministries in the LGR AR and TC meetings can be improved LGRP / LGDG Budget and Planning: Timeliness of disbursements has sometimes been a concern, partly because disbursement requirements agreed in the MoUs for LGRP and LGDG and in bilateral agreements have not been met, partly because available DP contributions were waiting for the required procedural processing by PMO-RALG and MoFEA. The quality of LGRP work plans has still left room for improvement, leading to delayed approvals. LGRP / LGDG Implementation & Monitoring: 142 Page

143 LGDG implementation continues to be largely satisfactory Though taking long, the contract for TA to support implementation of LGRP II was finally signed in early October 2010 Reporting LGDG implementation reports have been improved compared to earlier years. As indicated above, for LGRP II, steps have been agreed that are expected to improve the quality and timeliness in the coming months. LGRP CBF Audit for FY 08/09 was endorsed by the CBFSC LGRP / LGDG Implementation & Monitoring: Due to the slow start of the LGRP II implementation, many expected outputs have not been achieved as planned and led to deviations of the expenditure from the agreed LGRP plans and budgets. Monitoring of results and the availability and management of quality data is still a big challenge and needs urgent attention. Reporting Timeliness and quality of progress and implementation reports as agreed per LGRP and LGDG MoUs still leaves much to be desired. The LGDG system audit for the FY 08/09 by KPMG left some questions open. In the initial report the auditor did not cover funds from all DPs and also not all LGAs were listed. Furthermore the KPMG report had no information on the funds actually received by LGAs. KPMG has therefore been tasked to prepare an addendum report. It is expected that this report can be endorsed by the Audit Sub-Committee in November Page

144 Temporary process action: Review and develop proposals for the amendment of the Local Government Finance Act, 1982 attendant memorandum, regulations and manuals to provide for enhanced autonomy in budgeting and planning as well as ensuring more efficient, accountable and transparent financial management shared with key stakeholders by June Assessment: NOT ACHIEVED First proposals for amending the Local Government Finance Act have been drafted and shared with key stakeholders including the Local Government Development Partners Group already in March However, later GoT decided that the opportune time for further action, especially the proposals for introduction of some local taxes and levies, is not yet up in the light of the general elections this year. Proposed amendments to the LG Finances Act were shared and discussed with key stakeholders as agreed. However, PMO-RALG is committed to implement and complete this activity during the year 2011 after further stakeholder consultations for input and after the new Government has settled down. Temporary Process Action: The Government will, by December 2010, issue to LGAs a circular which will inform them about Government's decision to fold the recurrent grants into one for personal emoluments (PE) and one for other charges (OC) for each LGA effective from the financial year 2011/12. Assessment: PARTIALLY ACHIEVED The plan to fold the recurrent grant into one for personal emoluments (PE) and one for other charges (OC) has been explained to key staff of LGAs i.e. Council Directors, Treasurers and Internal Auditors during recent training and working sessions to prepare them for that development. A circular letter which calls for reduction of LGAs bank accounts to only six has been issued to Regional Administrative Secretaries requiring them to inform and enforce compliance to the instructions contained in that circular. Prior to issuance of the Circular letter its draft was shared with MOFEA (ACGEN s Department), National Audit Office and Bank of Tanzania all of which provided useful comments that were considered in improving the Circular. Copies of the Circular letter were sent to all the RASs in Tanzania Mainland and have also been availed to the LGDP Group co-chairs for distribution to Development Partners. 144 Page

145 Outcome Indicator: Percentage of total government budget allocated directly to LGAs, which does not go through ministerial votes and is calculated on a formula basis, identifying separately the contribution of CDCF funds. Target FY 2010/11: 25% Assessment: ACHIEVED The question of how much of the allocations to LGAs are actually formula based has been a matter of contentious discussions between GoT and DPs over the last few years, especially in regard to the application of the formula to the PE allocations. Both sides have therefore agreed to move one step further and to introduce a new Outcome Indicator from the coming year that will no longer measure the means to achieve more equity of service delivery and the distribution of public resources between LGAs, but will measure the move towards equity directly by using the ratios of equity in the distribution of qualified staff in the health and education sectors as proxies. Furthermore, the appropriate share of the national budget that will be allocated to LGAs will be analysed through a short-term study (TPA for PAF 2011) so that an informed decision on applicable targets for the consecutive years from 2012 onwards can be done. This agreement is seen as a major positive step forward. CORE REFORMS TPAs Temporary Process Action 1 Government to strengthen governance reform implementation by Sept by: i. Operationalising Common Procedure for implementation of core Government reforms based on the recommendation adopted by the JCC of 13th November 2009 Assessment: PARTIALLY ACHIEVED Based on the adoption of JCC on 13 th November, 2009, a meeting of all Reform Coordinators was held on 17 th March, 2010 and 7 th September, 2010 to deliberate and internalised the principles endorsed by the JCC. This was followed with the Coordination meetings of Permanent Secretaries held on 18 December, 2009 and 14 th September, 2010 respectively to formally endorse the same. Following these meetings the principles were forwarded to all implementing ministries for application. In addition, RCU has visited implementing MDAs during planning and budgeting process to ensure that the principles are applied and incorporated in reform programme plans and budgets for FY 2010/11 and monitoring is now continuing under the Reform Coordination Framework. Given the need to have the principles elaborated and put together in a single document a procurement process 145

146 was initiated in May, 2010 to get a Consultant to Develop Common Operational Procedures for Core Reforms. This tender procedure has been completed whereby KPMG (T) was awarded the tender on 15 th November, The CONTRACT for the assignment between KPMG (T) and Permanent Secretary, PO-PSM was signed on 1 st December, The Technical proposal indicates that the assignment will be conducted in three 3 phases; Phase I: Inception Report by 15 th December,2010; Phase II: Implementation will take two weeks and Phase III will be finalised within one week where the main report will be presented. Temporary Process Action 2 Identifying for each reform programme, based on current institutional practice, at least 2 measurable indicators that are result (impact) instead of process (input) based, to be used for annual reporting on progress on core reforms by 1 October 2010 Assessment: ACHIEVED The indicators list was identified and was shared with key stakeholders. Underlying Process 5: Anti-corruption (incl.nacsap and agreed anti-corruption reporting frameworks) [GGCU/PCCB] Assessment GOT Satisfactory/DPs: Unsatisfactory Main Sources of NACSAP II Implementation report 2010, Good Governance Coordination Unit and Information PCCB. The National Anti-Corruption Strategy and Action Plan, Phase 2 (NACSAP II) is the main vehicle for carrying out the intent of the National Anti-corruption Policy which is zero tolerance. NACSAP II is therefore a preventive tool that seeks to foster transparency, integrity and accountability in the conduct of public affairs. Measures on fighting corruption in Tanzania are being realized through the NACSAP II. The methodology of the strategy is to involve all stakeholders (private sector, public sector, civil society, media and development partners (DPs) to understand their respective role and own the process towards reduction of corruption at all levels. NACSAP II provides an opportunity for all stakeholders to translate the governments anti-corruption policies, aspirations and perspectives into practical and actionable programmes. A National Steering Committee (NSC) meets on quarterly basis. It has been able to meet twice this year to oversee the implementation of NACSAP II. Representatives from all key stakeholders form part of the Steering Committee and has proven to be a very useful platform to share experiences and the way forward. We conducted an Annual 146

147 Anti-Corruption Forum in May 2010 where all stakeholders presented to the public their achievements, challenges and the way forward in the fight against corruption. This is a milestone achievement to bring all stakeholders together and account to the general public on their interventions against corruption. Key Achievements under NACSAP II: NACSAP II has promoted to the implementation of new Act in the fight against corruption which is now operational (the Election Expenses Act no. 6 of 2010). Through public education on the Election Expenses Act no. 6, 2010 were provided for the purpose of dealing with Political corruption during National Election The following are the training/workshops or seminars conducted: senior police officers from Mainland Tanzania and Zanzibar were trained on implementing the Election Expenses Act no. 6, District Executive Directors of the Mainland Tanzania (who are representatives of the National Election Council in their districts) were trained on implementing the Elections Expenses Act no. 6, Managing Editors from Electronic and Print Media Houses were trained on Political Corruption in Elections Youths from different political parties were trained on Election Campaign, corruption and Ethics Infrastructure Faith based organizations Leaders were given seminars on the Election Expenses Act no. 6, 2010 and Political Corruption, they have acted upon it with their parishioners and they denounce corruption in prayer houses which has sensitized the parishioners on what corruption is all about. As a result of these trainings/workshops; Peace, Political Stability, National Unit and Social Cohesion have been cultivated and sustained, furthermore Democracy, political and social tolerance have been deepened. Serious measures have been taken by the Government of Tanzania in confronting corruption by increasing the number of cases (Petty and Grand Corruption cases) that are being prosecuted in the courts of law. 171 cases of petty corruption have been filed in courts of law from January to September 2010 making a total 540 cases of corruption being prosecuted by the Government of Tanzania. 41 cases of petty corruption have been convicted from January to September In the area of grand corruption, a high profile case (Twin Tower) registered a conviction of the former Director with the Bank of Tanzania for the offence of abuse of office and landed him to prison for two years. 28 cases of grand corruption are continuing with prosecution in courts of law, of which 7 relate to local authorities. The implementation of NACSAP II was done through the involvement of the Media whereby editors and 147

148 other senior journalists were trained in investigative journalism and the Election Expenses Act. As a result the Media are now reporting on corruption and expanding the awareness of the public on corruption during Elections and the Election Expenses Act no. 6, The general public is now more aware on what is a corruption offence, where to report and more education through advertisements which are now on play through non-state actor such HAKIELIMU, Agenda 2000, Policy forum and others. Media houses have introduced Peer Oversight Mechanism as a system to control unethical behaviour of their employees in which formation of Integrity Committees in each media house is one of the components of the system. Also a total of 32 Journalists from different media houses were trained on Investigative Journalism. Building ethical knowledge about corruption to the younger generation in secondary schools by forming anti corruption clubs and so far more than 3965 anti corruption clubs are in existence and more are still under formation. This has so far affected and brought even more clubs to the university level Enhancement of the capacities of Integrity Committees at Ministries, Departments and Agencies of Governments (MDAs) and Local Government Authorities (LGAs) through capacity building as well as raising awareness on the Election Expenses Act. NACSAP II was able to conduct workshop with District Executive Directors and Council Chairpersons of all 133 LGAs who are very important in ensuring the functionality of Integrity Committees in their respective councils. Engagement and mainstreaming the private sector by training business associations and corporate entities in corporate good governance so as to ensure that there is reduction in conflict of interest and enhanced transparency in financial transactions in collaboration with the Tanzania Private Sector Foundation (TPSF). A joint committee between TPSF and PCCB formed to solve corruption issues, as an example the port congestion problem resolved through the committee and now the problem has taken a different direction with less congestion. Through NACSAP II budgets of Anti Corruption activities has been mainstreamed into the MDAs and LGAs to help on implementations of anti-corruption action plans such as seminars, workshops and dealing with all unethical acts. Good examples are implementation of the UNIVERSITY OF DAR ES SALAAM RESEARCH ETHICS POLICY and PIRI (Public Integrity Restoration Initiative) 148

149 Another milestone achieved is the formation of the Civil Society Anti-corruption Coalition on January The coalition is a registered as the Tanzania Anti-corruption Network and has a board comprising of members from various organisations. There has also been election awareness and capacity building workshops conducted, with special focus on youth and women. Coalition meeting has been held twice, where by a total of 81 identified NGOs involved on issues of good government national wide met to discuss on how to join efforts in the fight against corruption. The PCCB website ( ) has been instrumental in sending out messages to those with internet access. It is very resourceful as it carries current issues, media reviews on corruption, newsletters, photo gallery, publications, reports, as well as useful website links. Development of NACSAP II monitoring and evaluation framework and the existing implementation structure that is the PCCB/NACSAP II Zones coordinators and PETS agents forming a joint venture to monitor public/government funds for more effective monitoring and evaluation of corruption issues. The Prevention and Combating of Corruption Bureau, National Audit Office and the Public Procurement Regulatory Authority have signed agreement and the memorandum of understanding on the fighting against corruption. This kind of collaboration will complement each other and therefore strengthen and sustain the fight against corruption in the country. The relationship among Law enforcement agencies (DPP, Judiciary and PCCB) was strengthened as all are members of the NACSAP II National Steering Committee. Challenges: Cooperation from stakeholders. Mutual Legal Assistance on matters that are over and beyond domestic jurisdiction. Timely disbursement of funds for implementation of NACSAP II activities. Capacity of watchdogs, oversight institutions and NSAs to fully participate in NACSAP II implementation. Development of whistleblowers protection and Right to Information mechanisms. Opportunities: Political Commitment on efforts for preventing and combating of corruption. Presence of Integrity Committees in all public institutions. 149

150 Support of Development Partners in the fight against corruption. Existing of oversight and watchdog institutions to enhance accountability and transparency. Existence of Government structure. Government commitment to continued process to formally join the Extractive Industries Transparency Initiative. Open debate about corruption through Anti-Corruption Forum. Election Expenses Act presented to Parliament and was passed which provides an opportunity to curb corruption in elections. The Way forward The willingness of citizens to reject and abandon the culture of corruption tolerance and fear to expose the corrupt elements in society. Simplified MLA and UNCAC application Strengthening of watchdog and oversight institutions to enhance their capacity in prevention and combating of corruption. Capacity building of integrity committees members to enhance implementation of NACSAP II and closely monitoring and evaluation of the Integrity Committees. Dialogue between PS of State House and DPs on anti-corruption on a quarterly basis. Strategic response and action plan to address findings of National Governance and Corruption Survey regarding the four most corrupt public institutions. Continued progress on legislation relating to corruption, notably Public Leadership Code of Ethics Act, Right to Information Act, Whistleblowers Act. Temporary Process Action 1: The Government to maintain efforts to fight both petty and grand corruption at all levels and provide quarterly updates in line with PCCA, 2007 Assessment NOT ACHIEVED GOT REPORT 171 cases of petty corruption have been filed in courts of law from January to September 2010 making a total 540 cases of corruption being prosecuted by the Government of Tanzania. 41 cases of petty corruption have been convicted from January to August In the area of grand corruption, a high profile case (Twin Tower) registered a conviction of the former Director with the Bank of Tanzania for the offence of abuse of office and landed him to prison for two years. 28 cases of grand corruption are continuing with prosecution in courts of law. 150

151 DPs REPORT Quarterly high level meetings were not held. Many recommendations remaining to implement of the EPA Action Plan including i) the BOT corporate plan that supports the refocusing of the BOT on its core activities ii) agreement between MOFEA and the BOT on the management of any remaining EPA claims and iii) completion of the ongoing investigations/audits involving BOT. Mutual legal assistance has received weak responses. Indicators regarding establishment of Integrity Committees at MDAs and LGAs and complaints handling mechanisms at MDAs and LGAs have been achieved. The National Governance and Corruption Survey not published and thus no strategic response. No information on actions to speed up the process of bringing corruption cases to trial. Temporary Process Action 2: NACSAP M&E framework to be in place by June 2010 Assessment ACHIEVED - Monitoring and Evaluation (M & E) Framework has been finalised and mainstreamed into the M & E implementation system of NACSAP. A final Report has been published on the PCCB website ( 19 staffs have been trained on M & E framework at the level of NACSAP II Zone coordinators and Zone Inspectors. 151

152 Annex 1.7 Cluster Working Group Four Macro and Public Financial Management Report UNITED REPUBLIC OF TANZANIA Progress Report of PER CWG IV: Macro and Public Financial Management against the Performance Assessment Framework (PAF) for GBS Annual Review 2010 UNDERLYING PROCESS Underlying Process 1: Public Financial Management Reform Program Assessment Main Sources of Information MODERALTY SATISFACTORY Based on the following points; 1. The Programme had 7 milestones out of which 4 (57%) milestone were achieved and the remaining were on track 2. Performance assessment rating on GBS PFM Key issues during Joint Supervision Mission 20 th September 1 st October 2010 assessed 15 out of 24 satisfactory (62%), 4 were assessed fairly done (17%), 4 not done (17%) and 1 was non PFM issue thus considered non applicable (4%) 3. Out of 136 annual planned activities for PFMRP components for FY 2009/10, 87 were achieved (64%). 1. Annual Progress Report 2. Joint Supervision Mission Report A: Background The Government has been implementing Public Financial Management (PFM) reform since 1998 in series of phases within the framework of platform approach that guide the thrust of efforts at every stage. The objectives of PFMRP phase III, while building on achievements of previous phases, is to improve predictability and availability of resources to MDA and LGAs by operationalizing best practices in PFM and strengthening oversight bodies. Components (MDAs/Departments) are the key players in identifying, planning and implementing PFM reform interventions based on their mandate. 152

153 The main planned targets in FY 2009/10 were geared to addresses improvement on seven Key Result Areas (KRA) namely; Budget process and management, Accounting system and tools, Audit function and oversight functions, Public Procurement Process and Management, Non-tax domestic revenue collections, Institutional Support to PFM training institutes and Programme coordination and communication. At the GBS Annual review meeting in November, 2009, six PFM priority issues were identified and action plan drawn for implementation within the programme resource envelope approved for FY 2009/10. These issues included improvement on IFMS (scope, coverage and performance), cash management, flow of funds, budget management and preparation of the next phase of the programme (PFMRP phase IV). B: Major Achievements The major achievement realized during the period fiscal year 2009/10 under the respective seven Key Result Areas (KRAs) includes; KRA 1: Improvement of the budget process and management: i. Linking of the macroeconomic modeling (MACMOD) with Financial Programming (FP) ii. Staff training on Project and Programme Management and budget preparation based on the Classification by Function of Government (CoFoG). KRA 2: Improvement on the accounting system and tools i. Enactment of miscellaneous amendments to the PFA for the establishment of an independent Internal Audit Department and give ACGEN authority to oversee public finance management finances in LGAs. ii. iii. Amendment of the Treasury Registrar (Powers and Functions) Act Cap. 370 and the Public Corporations Act Cap. 257 so as to give the office of the Treasury Registrar more regulatory authority. Linking IFMS to Electronic Fund Transfer through TISS for payments for 46 MDAs. KRA 3: Improvement of Audit functions i. Construction of office buildings in Lindi and Morogoro. ii. iii. Capacity building to auditors by training on Team Mate (140), risk based auditing (100) and couching on performance auditing techniques. Exposure study visit to members of Public Organization Accounts Committee (POAC). iv. Physical verification of development projects to LGAs and Central Governments by parliamentary oversight committees. v. Re-tooling of NAO offices with vehicles and ICT equipments. 153

154 KRA 4: Improvement on Public Procurement Process and Management i. Capacity building to 1904 PEs staff conducted in 28 sessions. ii. Audited 99 Procuring Entities (PEs); iii. Rolled out of Procurement Management Information System (PMIS) to 69 PEs and registered 122 new users into the system; iv. Made weekly publication of Tanzania Procurement Journal Supplement and v. Conducted a feasibility study on e-procurement. KRA 5: Improvement of non-tax domestic revenue collections; i. A first study on Non-Tax Domestic Revenue Collections completed. KRA 6: Institutional Support to PFM Service Providers; i. Procured training materials and ICT facilities. C: Accomplishment on Milestones. The programme had a total of seven milestones, two under Budget Management, three under Public Procurement Regulatory Authority (PPRA) and two under the National Audit Office (NAO). During the period, five milestones were achieved and the rest two were on track. D: Procurement Achievement on procurement of goods and services in FY 2009/2010 was undertaken as follows (see details in annex 1): i. Prepared a procurement Plan for 2009/2010, ii. Prepared and distributed checklist and format for the preparation of Terms of References to Components Managers and Procurement Management Units; iii. Reviewed and provided technical advice on the preparation of four (4) Bidding Documents, Terms of References for eleven (11) contracts, and seven (7) adverts of Specific Procurement Notice and Request for Expression of Interest; iv. Arranged and conducted one working meetings for Head of Procurement Units and their deputies to discuss on how to expedite the procurement processes and the challenges encountered; v. Communicated with DPs to review and provide no objections for TORs and Bidding Documents; vi. As part of capacity building, provided templates for Evaluation Report and Recommendations to Procurement Management Units; 154

155 vii. Made follow-ups to Procurement Management Units and Component Managers and advise them accordingly; viii. Prepared draft Annual Procurement Plan for 2010/11. As at 30 th June, 2010, the overall procurement status for programme goods and services stood as follows: Table 4: Status on Procurement as at 30 th June, S.No. Description of Assignment No. of Items Amount in Tzs. 1 Completed contracts 9 1,415,920,000 2 Procurement proceedings on progress 8 971,530,600 3 Activities not done 16 1,116,725,000 4 Grand total 33 3,504,175,600 Procurement activities that were not done includes some of those had no responsive consultants and others were awaiting approval by parliament on amendment to PFA The programme cumulative actual expenditure and commitments by 30 th June, 2010 was Tsh.22.0 billion out of Tshs. 33,789,684,360 approved budget FY 2009/10. The expenditure on annual budget represented 65% of the approved budget. Absorption on approved budget by funding sources was 75% on Government Funds, 64% on Project Funds and 53% on Basket Funds. E: Challenges/ Constraints. During the year under review, some of the major challenges encountered were in the areas of; i. Capacity to implementation the programme by the components. ii. Delays in approving amendments to PFA 2004, and iii. Dialogue and communication mechanisms. F: The way forward i. Extension of PFMRP phase III implementation to June, ii. Restructuring of ACGENs department following amendment to PFA 2004 iii. Development of a comprehensive PFMRP IV strategic plan. iv. Carry out change management programmes for effective coordination and implementation of PFM issues. v. Enhancing capacity for programme implementation. Underlying Process 2: Annual Audit Cycle (MOFEA NAO) 3 Assessment: SATISFACTORY 3 As stipulated in the Public Audit Act, CAG reports for central and local government and public bodies submitted to Parliament within 9 months from end of financial year and PMG provides a structured response 155

156 CAG audit report for FY 2008/09 was submitted to the President on 30 th March 2010 as per statutory due date (i.e. 9 months from end of financial year), Structured response was submitted to CAG by PMG in July Underlying Process 3: Macroeconomic Stability Assessment SATISFACTORY Main Sources of Information PSI Review October 2010; MOFEA 1. Tanzania, like many other economies in the world, suffered from the effects of the global financial crisis (GFC). The impact was manifested in a number of areas including foreign direct investment, export of goods, growth of credit to private sector and government revenue collection. In addition, the economy was affected by drought and floods that occurred in some parts of the country in However, strong monetary and fiscal policies in recent years had created significant fiscal space. The government used that space to cushion the economy from the impacts of the global financial crisis. As a result, the overall macroeconomic performance remained strong during 2009, with real GDP growing at 6.0 percent, slightly higher than the revised projection of 5.5 percent. The growth in 2009 was nonetheless somewhat lower than the 7.4 percent recorded in 2008, resulting from slowdown in all economic activities except communication, education and electricity and gas. The growth of GDP in Tanzania was much faster than the average growth of 2.2 percent in Sub-Saharan Africa economies in The economy continued to experience inflationary pressures in 2009, primarily due to food supply shortages and a rebound in world oil prices. The average annual headline inflation rate rose to 12.1 percent in 2009, from 10.3 percent recorded in 2008, driven mostly by food inflation that increased to an average of 17.5 percent from 12.7 percent in the same period. The food supply shortages were caused by, among other reasons, drought in some parts of the country and neighbouring countries exacerbated by transport bottlenecks from some food surplus areas that caused higher distribution costs. Following favourable weather conditions in the 2009/10 crop season, the food supply improved, leading to a downward trend in inflation from 12.7 percent in October 2009 to 4.5 percent in September 2010 and the target is 5.5 percent by June Central Government Operations for financial year 2009/10 experienced a shortfall in domestic revenue collections against targets. Total domestic revenue collection excluding revenue generated by LGAs in 2009/10 was 91.5 percent of budget estimates. This was partly due to the impact of the GFC that led to a slower growth in taxable production activities in the economy. In addition, non-tax revenue was further affected by postponement of the implementation of some revenue measures that were announced in the budget, including new charges in residency permits, visas, immigration fees and fire service charges. The budget for FY 2009/10 had for the first time included projection from revenue generated by local government authorities (LGAs) amounting to TShs 138 billion. Efforts are being made to obtain data on LGAs budgetary operations and it is expected that the strengthening of the Public Financial Management (PFM) at LGAs will facilitate collection of data from that level. 4. The 2010/11 budget included plans to scale up spending to build up infrastructure as well as maintaining social gains, particularly in education and health. This spending was to be financed by a rebound in domestic revenue, continued program and project assistance, access to external non-concessional borrowing, and domestic borrowing. The process is at advanced stage towards accessing the budgeted non-concessional borrowing from external sources on reasonable terms. Domestic borrowing will be made 156

157 carefully to avoid crowding out of private sector and pushing interest rates. Domestic revenue collection in the first quarter of FY2010/11 has performed below the budget s estimates. The Government is currently implementing measures to strengthen tax administration and limit tax leakages in an effort to reduce the tax revenue shortfall relative to the approved budget. These measures include: (i) strengthening block management; (ii) implementation of electronic fiscal devices for VAT registered taxpayer; (iii) strengthening and intensifying audit; (iv) strengthen large taxpayers units in the Domestic Revenue Department; (vi) monitoring of declarations and physical examination of goods in Customs; (vii) revenue tracking; (viii) enforcement in collection of tax arrears; and (ix) managing performance in order to improve operational efficiency. 5. The implementation of the budget will continue to be on a cash basis, helping to ensure that recurrent expenditure execution is aligned with the resource availability. The government is committed to protect spending in key priority areas, in particular development expenditures and will reduce and reschedule expenditure in goods and services as needed and in a manner that will not compromise service delivery. Areas of good performance The overall macroeconomic performance remained strong during 2009 with real GDP growing at 6.0 percent, slightly higher than the revised projection of 5.5 percent. This reflects the resilience of Tanzania s economy, which is partly attributed to the sustained economic reforms that have increased efficiency in economic activities over the past two decades, coupled with policy measures taken to mitigate the impact of the GFC. The Government continued to implement the economic rescue plan in FY 2009/10, which was targeted at protecting employment and income, food security and investment in key infrastructural and social services, from the adverse effects of the global financial crisis. The provisions for loan rescheduling, loss compensation and enhancement of the SMEs and Export Credit Guarantee schemes helped to leverage banks confidence in lending, which kept credit to the private sector growing, albeit at a slower rate. The plan also helped to maintain smooth implementation of power projects, while additional domestic borrowing helped fill the Government revenue gap for smooth execution of Government commitments in 2008/09 and 2009/10. The monetary policy for 2009/10 was designed to accommodate the countercyclical fiscal measures adopted to address the adverse effects of the GFC. Monetary targets were revised upwards in line with the program agreed under the PSI arrangement. In addition, the Bank rate and Lombard rate were reviewed downwards with a view to making them more active instruments of monetary policy and to enhance flexibility in provision of liquidity to the economy. Performance against PSI targets remained on track with all quantitative assessment criteria for June 2010 being met, some with comfortable margins. Meanwhile, good progress was made in implementing the structural reform program. The benchmarks which were achieved include: adoption of MKUKUTA II; appointment of the Head of Social Security Regulatory Agency; introduction of data collection and reporting system for pension funds; submit of Financial Stability Report to the BoT Board; notification to banks to increase contributions to the Deposit Insurance Fund; establishing a PPP unit within the MoFEA; and collection of data on payment claims outstanding over 30, 60, and 90 days as of end June 2010 in Ministries of Infrastructure, Health, and Home Affairs. Other reforms which are in progress include: establishing framework for emergency liquidity assistance beyond day-to-day liquidity management and tools; preparation of a Medium-Term Debt Strategy consistent with resource needs under MKUKUTA II and reflecting contingent liabilities; developing an index for monitoring priority social spending; and developing core inflation index. The two benchmarks that were not met are: Government approval of a new National Social Protection Framework and issuance of investment guidelines for pension funds. Areas of weak performance 157

158 Revenues declined as a percentage of GDP in FY2009/10, falling below budgeted levels. This trend is likely to continue in FY2010/11, with revenues in the first quarter of the fiscal year falling below the estimated level. The government is taking measures for 2010/11 and over the medium term to broaden the tax base and increase revenues. Measures to be implemented in the medium term include: (i) harmonization of taxpayers registration database; (ii) implementation of properties and businesses formalization programme; (MKURABITA); (iii) implementation of the national identity cards project; and (iv) implementation of physical postal codes in the block management system (BMS). In addition policy measures and administrative efforts will be considered to manage and control tax exemptions to bring tax efficiency rates in line with the region. Further, measures will be implemented to improve non-tax revenue collection over the medium term. The administrative measures being implemented in 2010/11 will not bring revenues fully in line with the budget target levels. The Government remains committed to protect spending in key priority areas, in particular development expenditures and will reduce and reschedule expenditure in goods and services as needed and in a manner that will not compromise service delivery. Over the medium term, the government will implement policy measures to enhance revenues collections. The procedures involved in verifying and settling claims from development projects lead to carrying outstanding unverified claims to the following fiscal year without adequate budgetary provisions. This required the Government to reallocate funds from other expenditure items to pay the subsequently verified claims. The government recognises the challenge and is strengthening commitment control and expenditure tracking and monitoring. Further, the Government is currently compiling the schedule of outstanding payment claims from MDAs as at end June This exercise will be carried out on quarterly basis and it is expected to facilitate monitoring of expenditure development to enable a more accurate projection of cash flow needs and smooth implementation of monetary policy. Underlying process 4: Assessment of Development Partners Performance (Predictability of General Budget Support) Assessment: MODERATLY SATISFACTORY Paragraph 7 (b) of the Partnership Framework Memorandum (PFM) states that DPs will provide timely GBS in the first quarter of the Government financial year whenever possible, in accordance with prior commitments. Annex III shows 83 percent of the GBS commitments in 2009/10 were disbursed by the end of the first half of FY. This was lower than the targeted actual disbursement of 90 percent of total commitments. By the end of FY 87 percent of the committed GBS funds were disbursed. The early disbursement of GBS funds is necessary to ensure that spending and implementing agencies have required funds early enough to allow for smooth provision of services and implementation of key programs and projects. Underlying process 5: Effective PER policy dialogue to inform the budget process Assessment UNSATISFACTORY The PER dialogue is a year-long exercise, involving setting agenda and keeping pace in its implementation. The clusters have been conducting meetings and sharing relevant information/documentations with respective stakeholders. Each cluster has agreed and operationalized a rolling work plan, consistent with the approved dialogue structure. Efforts have been made to strengthen PER process under Government leadership. However, the PER has not been able to fulfil its core objectives of informing the budget process and general public, as the basis of a jointly carried out work/research program. During the year under review there was limited substantive discussion on the PER issues which were relevant for preparation of the 2010/11 budget, including the Planning and Budget Guidelines and the Macroeconomic Framework as well as budget execution in 2009/10. It is expected that PER process will better inform fiscal year 2010/11 budget implementation, the budget cycle for 2011/12 and the medium term as a result of measures being taken by the Government to strengthen the PER process. Underlying process 6: DPs and GoT on adhere to JAST Principles, PFM, Accra Agenda for Action in terms of 158

159 reducing funding on project/basket and increasing funding on GBS Assessment: UNSATISFACTORY According to JAST Principles General Budget Support (GBS) is the Government s preferred modality. Basket funds to be used where appropriate. Projects to be used for large scale infrastructure investment, piloting and emergency assistance. Moreover, the Partnership Framework Memorandum (PFM) states that Development partners should be delivering more aid through GBS modality. In this respect, JAST expects that DPs will increasingly move to GBS from other modalities and adhere to criteria of good practice for using basket funds and direct project funds as the Government continue to improve public financial management, budget preparation and implementation, good progress in anti-corruption and other policy reforms. There are significant advantages of adhering on JAST Principles and PFM on delivering more aid through GBS are: Reducing transaction costs in management of basket and project funds; Increasing predictability of development partners funding, hence improving planning and budgeting process. Reduce delays in implementation of some programs and projects. TEMPORARY PROCESS ACTIONS Temporary Process Action 1: Implementation of the agreed time-bound action plan derived from the NAO audit of IFMS. (only actions implementable in 1 year) Assessment: ACHIEVED The CAG Final Report on IFMS was received in June 2010 and replied and action plans on the recommendations for implementation have been classified into short, medium and long term. Most of the short term issues have already been acted upon and closed and others are at different stage of implementations while some of these recommendations will be dealt with upon upgrading of the Epicor from version 7.2 to version Enhancing the Capacity of the System Development Unit(SDU) (Achieved) 12 new staff have been recruited and three staff have gone for masters degree on Information Technology (IT). The process is underway to engage 3 local consultants for Database and Software, Networking and Business Development. 2. Review of the Public Finance Act (PFA) 2001 The Miscellaneous amendments to the Public Finance Act (PFA 2001) were approved and passed by the Parliament in June 2010 Session. The amendments include provisions to increase oversight functions of the Accountant General over the Management of Public Funds at the LGAs and establishment of an Internal Audit Department. 3. Bank Reconciliation Bank Reconciliation was one of the challenging areas. However, efforts have been made and most of the outstanding items in the system have been reconciled. The reconciliation/matching of the current transactions ranging between 95% to 97% is automatically done. 4. Electronic Payment System 159

160 (which includes Electronic Funds Transfer-EFT and TISS) is operational since July 2010 for MDAs and Dar es Salaam Region whose payments are made through the Central Payment Office using Tanzania Inter-bank Settlement System (TISS). The system will facilitate timely payment; reduce transaction costs and expenditure float. 5. Operationalization of the Data warehouse The New Servers to cater for the IFMS Data Warehouse have already been procured and configuration of Servers is in progress. 6. Connectivity: At the Central Government Level, all 21 Regions and 20 Sub-Treasuries have already been connected to the main server at the Treasury Headquarter. This has facilitated generation and consolidation of reports from the IFMS. Financial statements for the financial year 2009/2010 have been generated through the IFMS and submitted to NAO on 30 th September Temporary Process Action 2: Adoption of the Due Diligence study, including recommendation to transform the Office of the Treasury Registrar into an Autonomous Body, and relevant steps taken to start implementing said recommendation. This involves the following processes Assessment: ACHIEVED This involved the following processes: organising a stakeholders meeting and incorporating comments and recommendations; adoption of the final report by the government and preparation of the roadmap for the implementation of the recommendations. The roadmap was to include: submission to PO-PSM of proposals for restructuring MoFEA to establish TR as an autonomous body and PO-PSM respond to the proposals. The report was adopted by the government and in April 2010 the amendments to the Public Corporations Act, CAP 257 and Treasury Registrar (Powers and Functions Act) CAP 370 were passed by Parliament to empower the Office of the Treasury Registrar to be an autonomous authority. This will enable the Treasury Registrar to oversee management and operations of public corporations and institutions. Relevant steps have been taken including developing the institutional framework (organizational structure), which has already been approved. Currently regulations are being developed and other institutional arrangements will follow to operationalize the authority. Temporary Process Action 3: Implementation of PFM action plan based on agreed assessment criteria Assessment: ACHIEVED The PFM action plans on implementation of GBS PFM key issues is attached as appendix I. Out of 24 actions, 15 were assessed satisfactory (62%), 4 were assessed fairly done (17%), 4 not done (17%) and 1 was non PFM issue thus considered non applicable (4%). Temporary process action 4: PEFA for Zanzibar carried out and results shared with key stakeholders by September

161 Assessment: ACHIEVED PEFA analysis was undertaken in April/May PEFA is now being finalized as was presented and reviewed by well attended stakeholders meeting in August. The Government of Zanzibar may come back with final comments but this process is now assessed as completed. Temporary process action 5: Complete a comprehensive study on revisions of the Public Corporations Act to harmonize the legislation relating to public corporations, and ensure strengthened corporate governance and accountability consistently across parastatals by January Assessment: NOT ACHIEVED The process of undertaking the study has not been initiated. The study is now expected to start in January This is retained as a TPA for next year. OUTCOME INDICATORS Outcome indicator 1: NAO reaches level 3 of AFROSAI-E 4 capability model by 2010 Assessment: OFF TRACK Main sources of information: External report from peer review by SAI from Netherlands and Norway Good progress has been made in relation to compliance with AFROSAI-E level 3, but there are areas that need to be addressed in order to reach AFROSAI-E level 3. Level three of AFROSAI-E capability Model has ten conditions. So far NAO has achieved nine out of the ten conditions. The conditions and status are as stipulated below: Level 3 The Established level (Legal provisions for independence and independent resources are in place) At this level the focus is on ensuring that adequate resources are available and that audit reports are issued timely in accordance with internationally accepted auditing standards. The following situation exists at the SAI: 1. An appropriate and effective constitutional/statutory framework exists. (Achieved-PAA No. 11 of 2008 and Constitution of the URT of 1977) 2. Strong political will exist and the Auditor-General has full support in exercising his/her mandate (Achieved- Support from the President of URT and the Parliament through Parliamentary accounts Committees). 3. The conditions for appointment to, terms in and removal from the Office of the Auditor-General are 4 African Organization of Supreme Audit Institutions English speaking 161

162 constitutionalised and entrenched. (Achieved- PAA No. 11 of 2008 and Constitution of the URT of 1977 clearly stipulates appointment and removal of the CAG in office). 4. All audit reports are issued within one year after financial year end. (Achieved - reports are timely issued for five consecutive years) 5. Audit reports are issued on the sole discretion of the Auditor-General. (Achieved there is no interferences to the CAG reports) 6. An effective internal audit approach based on internationally accepted auditing standards, guidelines and procedures is in place. (Achieved there is application of Regularity Audit Manual and TeamMate) 7. An internal quality control process is in place. (Achieved there is quality review process which is well documented) 8. Financial resources are appropriated by Parliament without any involvement of the executive, including auditees. The recovering of audit fees is regarded as an involvement of auditees. (Achieved annual budget for NAO is discussed at a Consultative meeting between the CAG, the Minister for Finance and PAC) 9. Human, administrative and other resources to execute the mandate are independently managed (staff are not public servants) by the Auditor-General and his/her Office. (Not achieved ) 10. An independent parliamentary process exists to oversee the activities of the SAI. The SAI or its governing body determines key policies and practices. (Achieved The Parliamentary Accounts Committee PAC appoints external auditor for NAO) Outcome indicator 2: Average level of compliance of procuring entities with the Procurement Act 2004 to reach 80% by 2011 Assessment: ON TRACK Main sources of information: PPRA - Procurement Audit Reports and Annual Performance Reports. The Public Procurement Regulatory Authority (PPRA) carried out procurement audits in 100 and 99 Procuring Entities (PEs) during the financial years 2007/08 and 2008/09 respectively. Generally, the audits sought to determine whether the procedures, processes and documentations for procurement and contracting were in accordance with the provisions of the Public Procurement Act 2004 (PPA 2004), its regulations and the standard documents prepared by PPRA and that procurement carried out achieved the expected economy and efficiency (value for money for the allocated resources), and the implementation of contracts conformed to the terms there of. The outcome of the audits for the procurements in financial year 2007/08 and 2008/09 indicated average levels of compliance of 50% and 55% respectively. After the audits, all audited procuring entities were provided with the audit reports including specific improvement recommendations as directed by the Board of Directors of PPRA. During the financial year 2009/10, follow-up audits in 91 procuring entities which were audited in FY 2007/08 and 2008/09 were carried out to ascertain whether the observed weaknesses in previous audits have been addressed by implementing the recommended measures. The audited procuring entities were 24% of all procuring entities and they included 26 MDAs, 25 Public Authorities (PAs) and 40 LGAs. The main purpose of the audit follow-up was to; ascertain whether, or to what extent, recommendations or observations made by PPRA have been implemented by the audited entity; evaluate the adequacy of the plans in improving compliance; assess problems that might have arisen in implementing the recommendations; determine the impact of the audit by assessing the level of compliance using the same performance indicators which were used in the audits, and; provide professional advice on areas which need further improvement. 162

163 The follow-up audits indicated a remarkable compliance improvement from average levels of compliance of 50% and 55% in the financial years 2007/2008 and 2008/09 respectively, to an average level of compliance of 73% which is above the targeted average level of compliance of 65%. The average levels of compliance in the MDAs, PAs and LGAs have increased from 65% to 79%, 58% to 75% and 46% to 67% respectively. On the basis of our assessment as reflected in the performance indicators, the following areas need a special attention in order to meet the target of attaining an average compliance level of 80% and above by the end of the FY 2010/11; a) Preparation of Annual Procurement Plan The review indicated an average level of compliance in this area of 61%; 68% for MDAs, 70% for PAs, and 51% for LGAs. Specific weaknesses in the assessed procurement plans and their implementation included: Not using appropriate templates issued by PPRA; not indicating processing times for different stages of tendering process; not aggregating requirements from user departments causing extensive use of quotations under minor value procurement method; not including all procurable items in the plans; excessive tender board meetings due to inappropriate scheduling; and unrealistic plans. b) Contracts Management The assessment indicated average levels of compliance of 64% and 58% for contracts management, and quality assurance and control respectively. The average compliance in the two areas is 77% and 66% for MDAs, 68% and 62% for PAs, and 54% and 50% for LGAs. When encountered, areas of weaknesses pertained the following issues: Contracts were not properly signed in some cases; Some of the contracts lacked important contract documents such as conditions of contract, drawings and specifications, and some contained non-contract documents such as invitation for bids/quotations and instructions to bidders; Liquidated damages were not applied for delayed contracts; Site meetings were not conducted for most of the reviewed contracts; There were no adequate quality assurance and control plans, completed works were not tested to ascertain whether they have attained the specifications as provided in the contract documents; Progress reports for works contracts were not prepared; Site supervision reports were not prepared; Extension of time were issued without justifiable analysis and without following appropriate procedures; Payment certificates were not attached with necessary information such as measurement sheets and working/ take-off sheets to justify the quantities paid; and Goods inspection and acceptance committees were not appointed to ascertain the quality and quantity of the supplied goods. c) Records Keeping The review indicated an average compliance level of 55% on procurement records management; 59% for MDAs, 57% for PAs, and 51% for LGAs. The major weaknesses included lack of a comprehensive list of tenders, quotations and contracts, procurement records scattered in different departments, lack of records on contracts management, inadequate space and shelves for records storage, and inappropriate filing. In some cases it was difficult for the review teams to ascertain the exact number of tenders floated and the retrieval of information was time consuming as records could not be obtained from one point. 163

164 The above were the same issues that had problems as established in the procurement audits carried out in the FY 2008/09. PPRA, working together with PEs, will put special efforts to ensure that problems in those areas are tackled. Indicator values Baseline 2007: 39% Target 2010: 65% Actual 2010: 73% Outcome indicator 3: Credible cash flow and procurement plans in 9 MDAs (Health, Education, Infrastructure Development, Water, MoFEA, Agriculture, Energy and Minerals, Livestock Development and PMORALG) agreed with MoFEA for the FY 2010/11 budget and execution monitored 5 Assessment: OFF TRACK Cash flow and procurement plans are important operational tools for effective budget implementation. MDAs, Regional Secretariats (RSs) and LGAs prepare these tools and submit to MoFEA soon after budget has been approved by the Parliament. However, monthly disbursement of resources is determined by several factors including: monthly resources available compared to requirements (including exogenous factors/ shocks), pace of executed works accompanied by interim payment certificates for development projects, progress report (physical and financial) and pace of procurement process. Therefore the Ceiling Committee evaluates and re-prioritises monthly allocations by considering the variables above. However, this indicator has proven difficult to assess since the initial submissions of cash flow plans are normally adjusted based on above factors. Thus, it is proposed to base future assessment on execution vis a viz cash releases. Outcome indicator 4: Approved budget broadly in line with policy objectives (MKUKUTA and sector policy priorities) as measured by percentage of total resources net of debt service allocated to MKUKUTA interventions. Assessment: On track (Government) based on the criteria set in the original indicator and Off track (DPs) based on the criteria in the original indicator and the alignment of the budget and sector priorities The approved budget for 2010/11 shows that MKUKUTA allocation is 73.2 percent of the total budget with cluster allocations receiving 32.8%, 29.1% and 10.2% for Cluster 1,2 and 3 respectively. The balance (1.1%) is allocated for cross cutting issues. In addition, the 2010/11 budget shows some increase in resources allocated to public capital investment, up to 18.5 percent from 15 in 2009/10. Additional assessment criteria by DPs: The 2010/11 budget remains significantly underfunded due overestimation of domestic revenue. Under funding of the budget would require adjustments in resource allocations to various implementing agencies which do not guarantee whether the above allocated shares would remain the same at the end of the year. Moreover there is weak alignment between sector budgets and sector policy priorities, especially in roads, water, and health. Indicator values: 5 (i) Assessment will be based on quarterly releases, and (ii) releases will consider implementation status and standard requirements such as certificates in Infrastructure 164

165 MKUKUTA Baseline 2005: 68% Target 2010: 68% Actual 2010: 73.2% Public capital investment Baseline 2008: 25% Target 2011: >15 Actual 2011: 18.5% Outcome indicator 5: Expenditure outturns deviation compared to original approved budget (recurrent MDA onlyvote level), excluding salary adjustments, contingency and debt service Assessment: ON TRACK Indicator values: Baseline 2005: 18% Target 2010: 12.9% Actual 2010: 12.7% Outcome indicator 6: Fiscal Deficit (after grants) as % of GDP consistent with PSI targets Assessment: OFF TRACK The fiscal deficit after grants for 2009/10 was 6.4% of GDP compared to 5.7% targeted. This was primarily due to the shortfall in domestic revenues and overall program grants leading to a higher than projected deficit. The shortfall was partly met through domestic borrowing which provided additional support to uninterrupted implementation of policies set in MKUKUTA. The deficit for 2010/11 is projected at 7.0 percent. Indicator values: Baseline 2007: 5.0% Actual 2010: 6.4% Target 2010: 5.7% Outcome indicator 7: Inflation rate consistent with PSI targets Assessment: OFF TRACK The 2009/10 target of 8% - 10% has been met. The average annual headline inflation rate for 2009/10 rose to 10.6 percent, owing to food supply shortages and a rebound in world oil prices during Food inflation increased to an average of 17.5 percent from 12.7 percent in the same period. Food supply shortages were caused by, among other reasons, drought in some parts of the country and neighbouring countries exacerbated by transport bottlenecks that caused higher distribution costs. Following favourable weather conditions in the 2009/10 crop season, food supply improved, leading to a downward trend in inflation from 12.7 percent in October 2009 to 4.5 percent in September It is projected that average inflation for 2010/11 will be 5.8%. Indicator values 2010: 10.6% 165

166 Baseline 2005: 4.5% Target 2010: 8-10% Outcome indicator 8: Deviation of actual disbursed budget support from the forecast provided by budget support partners at least six weeks after receiving the report from the annual review of budget support 6 Assessment OFF TRACK Actual disbursed budget support funds were 13% lower than the commitments provided by general budget support partners. Considering also exceptional additional financing (especially from the WB) to compliment Government efforts to mitigate the adverse impact of the global financial crisis, the actual disbursement of budget support was 32.9% higher than commitments. Nonetheless, there was one DP who did not disburse at all. Outcome indicator 9: Percentage of total GBS flow disbursed within the first and second quarter of the Government fiscal year 7 Assessment OFF TRACK About 86 percent of total GBS funds were disbursed during the first quarter and the rest in third quarter. Additional budget support (beyond the initial commitment and part of frontloading) was disbursed in fourth quarter and one DP who did not disburse at all. PFM states that all disbursement should be made in the first half of the financial year, preferably during the first quarter. Outcome indicator 10: Quarterly GBS disbursement estimates have been agreed with donors before the beginning of the fiscal year Assessment ON TRACK General Budget Support estimates were agreed with Development Partners before the beginning of the fiscal year. Annex II Composition of Aid as per Budget Estimates, 2002/ /11 TYPE FY 2002/03 FY 2003/0 4 FY 004/05 FY 2005/06 FY 2006/0 7 FY 2007/08 FY 2008/09 FY 2009/10 FY 2010/11 GBS 30% 38% 34% 38% 42.4% 34.57% 35.4% 37.5% 25% Basket 16% 18% 21% 20% 16.2% 10.72% 18.2% 18.0% 15% Project s 54% 44% 45% 42% 41.4% 54.71% 46.4% 44.5% 60% Source: External Finance Database 6 Excluding variable tranches 7 Except for DP s entering into a new bilateral agreement 166

167 Annex III The proportion of Budget Support Frontloaded, 2007/ /10 Quarter 2007/08 Projected 2007/08 Actual 2008/09 Projected 2008/09 Actual 2009/10 Projected 2009/10 Actual Quarter 1 95% 50% 38% 28% 75% 86% Quarter 2 5% 42% 62% 44% 7% 0% Quarter 3 0% 0% 0% 22% 3% 14% Quarter 4 0% 8% 0% 7% 14% 0% Source: External Finance Database Annex IV General Budget Support Estimates and actual disbursement for 2009/10 Schedule of Commitments for GBS FY 2009/10 as at July (In USD) QUARTER 1 QUARTER 2 QUARTER 3 QUARTER 4 DONOR TYPE USD Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Total ADB L CANADA G CANADA-Education G - DENMARK G EU G EU-education G - EU-Road - FINLAND G IRELAND G JAPAN L KFW G NERTHERLAND G NORWAY G SWEDEN G SDC G UK G WB L Total

168 DONOR TYPE Tshs Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Total Actual Disbursements ADB L CANADA G CANADA G - DENMARK G EU G EU-education EU-Food Criss G G Actual Disbursements of Budget Support FY 2009/10 as in USD. FINLAND G IRELAND G JAPAN L KFW G NERTHERLAND G - NORWAY G SWEDEN G Switzerland G UK G WB L TOTAL

169 Annex 1.8 Statement by H.E Mkulo at the start of the GBS Annual Review HOTUBA YA WAZIRI WA FEDHA, MHE. MUSTAFA HAIDI MKULO (MB), WAKATI WA KUFUNGUA MKUTANO WA MASHAURIANO NA WADAU JUU YA WIKI YA SERA ZA KUONDOA UMASKINI NA MCHAKATO WA MAPITIO YA UTEKELEZAJI NA MATUMIZI YA FEDHA ZA UMMA TAREHE DESEMBA, 2010, UBUNGO PLAZA DSM Bwana Mwenyekiti; Waheshimiwa Mawaziri; Waheshimiwa Naibu Mawaziri; Waheshimiwa Wawakilishi wa Wabunge wa Tanzania; Makatibu Wakuu; Wakuu wa Mikoa na Wilaya; Wawakilishi wa Vyama vya Siasa; Waheshimiwa Mabalozi na Washirika wa Maendeleo; Watumishi wa Serikali na Taasisi mbalimbali; Wawakilishi wa Asasi Zisizo za Kiserikali; Wawakilishi wa Vyombo vya Habari; Wawezeshaji; Wageni Waalikwa, Mabibi na Mabwana: 1. Awali ya yote, napenda kuchukua fursa hii kuwakaribisha waalikwa wote katika Mkutano huu muhimu. Nachukua fursa ya pekee kumpongeza Mheshimiwa Dkt. Jakaya Mrisho Kikwete, Rais wa Jamhuri ya Muungano wa Tanzania na Mheshimiwa Dkt. Mohamed Shein, Rais wa Zanzibar kwa ushindi walioupata katika uchaguzi uliofanyika hivi karibuni uliowapa nafasi ya kuendelea kuiongoza Serikali ya Jamhuri ya Muungano wa Tanzania na Serikali ya Mapinduzi Zanzibar katika kipindi kipya cha miaka mitano. Aidha, nawapongeza Waheshimiwa Dr. Mohamed Ghalib Billal kwa kuteuliwa kuwa Makamu wa Rais wa Serikali ya Jamhuri ya Muungano wa Tanzania, Waheshimiwa Bwana Seif Shariff Hamad na Bwana Seif Ali Iddi kwa kuteuliwa kuwa Makamu wa Kwanza na wa Pili wa Rais katika Serikali ya Mapinduzi Zanzibar. Pongezi nyingi pia ni kwa Mawaziri na Manaibu Mawaziri wote kwa kuteuliwa kushika nafasi hizo katika Wizara mbalimbali. Pia, napenda kumshukuru Mwenyezi Mungu na wananchi wangu wa Jimbo la Kilosa kwa kunichagua kuwa Mbunge wao tena na zaidi namshukuru Mheshimiwa Rais kwa 169

170 kuniteua tena kuiongoza Wizara ya Fedha. Nawashukuruni nyote kwa kutenga muda wenu ili sote kwa pamoja tuweze kushiriki katika mkutano huu unaohusu uchambuzi wa sera, mafanikio na changamoto zinazotukabili katika utekelezaji wa Mpango wa Taifa wa Kukuza Uchumi na Kupunguza Umaskini, na hatimaye kukubaliana mikakati ya kukabiliana na changamoto zilizopo. Napenda pia kuwapongeza Makatibu Wakuu na Sekretarieti ya maandalizi ya mkutano huu kwa kufanya kazi kwa juhudi bila kuchoka na kuwezesha mkutano huu kufanyika leo. 2. Bwana Mwenyekiti, Nachukua nafasi hii pia kumshukuru mwakilishi mkazi wa Umoja wa Mataifa na Mwenyekiti wa Kikundi cha Washirika wa Maendeleo nchini (Development Partners Group) Bwana Alberic Kacou kwa kuongoza vyema majadiliano ya karibu kati ya Serikali na Washirika wa Maendeleo katika ngazi zote kuanzia ngazi ya watendaji mpaka ngazi ya maamuzi. Haya ni mafanikio makubwa ambayo tungependa kuyataja na kuyadumisha. Pia napenda kuchukua fursa hii kuipongeza Serikali ya Norway kwa kuchaguliwa kuwa Mwenyekiti wa masuala ya Misaada ya kibajeti (GBS Chair) upande wa Washirika wa Maendeleo kwa mwaka huu. Natoa shukrani za dhati kwa mwakilishi mkazi wa Benki ya Maendeleo ya Afrika (ADB) kwa kumaliza kipindi chake cha uongozi mzuri na kukabidhi nafasi hiyo kwa Serikali ya Norway. Shukrani za pekee zimfikie Balozi wa Norway nchini na timu yake kwa uongozi mahiri na uratibu mzuri kwa kipindi chote cha maandalizi ya mapitio ya misaada ya kibajeti mwaka huu. 3. Bwana Mwenyekiti, kama wengi wetu mtakavyokumbuka, Serikali kwa kushirikiana na wadau, ilifanya mapitio ya Mkakati wa Kukuza Uchumi na Kupunguza Umaskini (MKUKUTA) uliotekelezwa katika kipindi cha miaka mitano (2005/ /10) na MKUZA (2006/ /10 na kuandaa mikakati mipya (MKUKUTA II na MKUZA II) itakayotekelezwa kwa kipindi cha miaka mitano (2010/ /15). Katika maandalizi ya mikakati hii mipya tulipata ushirikiano mkubwa wa wadau mbalimbali hasa Asasi zisizo za Kiserikali, Washirika wa Maendeleo, vyama vya kisiasa, vyombo vya habari na jamii kwa ujumla. Napenda kutoa shukrani za dhati kwa viongozi wa Taasisi hizo na Mwenyekiti wa Kikundi cha Washirika wa Maendeleo (DPG-Chair) na Mkurugenzi Mtendaji wa Asasi za Kiraia (Foundation For Civil Society) kwa kusaidia kuratibu michakato ya mapitio ya MKUKUTA I na MKUZA I na maandalizi ya mikakati mipya. Shukrani za dhati pia ziwafikie Sekretariat ya MKUKUTA na Vikundi Ufundi vilivyoandaa MKUKUTA II na MKUZA II. 4. Bwana Mwenyekiti, vipaumbele vya mikakati hii mipya ni miongoni mwa agenda kuu katika Mdahalo huu wa Kitaifa nitakoufungua rasmi muda mfupi ujao. Aidha, nitatumia fursa hii kuzindua rasmi MKUKUTA II, ili usambazwe kwa wadau mbalimbali kwa utekelezaji. Taarifa nyingine 170

171 itakayozinduliwa ni Ripoti ya utekelezaji ya mwaka 2009/10, inayolenga kuelimisha jamii mafanikio ya jitihada za kupambana na umaskini. Kama alivyoeleza Katibu Mkuu, Wizara ya Fedha, katika siku mbili za mwanzo, majadiliano yatalenga katika utekelezaji wa MKUKUTA na MKUZA na Mapitio ya Matumizi ya Fedha za Umma, na siku tatu za mwisho majadiliano yatahusu zaidi mapitio ya misaada ya kibajeti na changamoto zinazotukabili katika kuleta maendeleo ya Tanzania. 5. Bwana Mwenyekiti, Serikali ya Jamhuri ya Muungano wa Tanzania na Serikali ya Mapinduzi ya Zanzibar zilidhamiria kufanya mapitio ya MKUKUTA I na MKUZA I na kuandaa mikakati mipya pamoja. Napenda kuwajulisha washiriki wa mkutano huu kuwa kazi hii ilifanyika kwa ushirikiano mkubwa na maoni ya wadau yamejumuishwa kwenye MKUKUTA II na MKUZA II ambayo tayari imekwishapitishwa na Serikali zote mbili kwa utekelezaji. Ni matarajio yetu kuwa mashirikiano kati ya Serikali ya Jamhuri ya Muungano wa Tanzania na Serikali ya Mapinduzi Zanzibar yataboreka zaidi katika kusimamia utekelezaji wa mikakati yetu mipya. 6. Bwana Mwenyekiti, kabla sijazungumzia vipaumbele vya mikakati mipya, napenda kueleza kwa kifupi mafanikio ya utekelezaji katika kipindi kilichopita. Maelezo ya kina yatatolewa na wataalamu wakati wakiwakilisha mada zao. Kwa ujumla matokeo ya utekelezaji wa MKUKUTA I/MKUZA I yanaonesha kuwa tumefanya vizuri katika maeneo mengi, lakini pia maeneo mengine hatukuweza kufikia malengo tuliyojiwekea. Kwa mfano, tangu mwaka 2005 ukuaji wa pato la taifa kwa kila mwaka ulifikia asilimia 7 ambayo inawiana na malengo ya MKUKUTA I ya ukuaji wa pato la taifa wa asilimia kati ya 6 mpaka 8 kwa mwaka 7. Bwana Mwenyekiti, mafanikio makubwa yamepatikana katika kuongezeka kwa huduma za kijamii hasa katika elimu, afya, maji safi na kinga ya jamii. Utekelezaji wa jitihada za kuboresha huduma za elimu na afya zimefanikiwa na kuifanya Tanzania kupanda katika upimaji wa maendeleo ya binadamu yaani Human Development Index kutoka nafasi ya 163 mwaka 2000 hadi kushika nafasi ya 151 mwaka 2009, hivyo kutoka kwenye kundi la nchi za chini na kuingina katika nchi za kati kwa mujibu wa vigezo vya upimaji wa maendeleo ya binadamu. Aidha, katika Mkutano wa viongozi wa Nchi kuhusu Maendeleo ya Malengo ya Milenia (MDGs Summit) uliofanyika New York mwezi Septemba 2010, Tanzania ilizawadiwa cheti cha kufanya vizuri kwenye uandikishwaji wa wanafunzi elimu ya msingi, ambayo imeonekana maendeleo ni mazuri na uwezekano wa kufikia malengo ya MDGs 2015 ni makubwa. 171

172 8. Bwana Mwenyekiti, matokeo ya Savei ya Watu na Afya (Demographic and Health Survey) ya mwaka 2009/10 yanaonyesha kuwa tumeendelea kufanya vizuri katika eneo la afya ya mama na mtoto. Mathalani kwa upande wa Tanzania Bara, vifo vya watoto wachanga vimepungua kufikia watoto 51 kwa kila watoto 1000 wanaozaliwa hai, na vifo vya watoto wenye umri chini ya miaka mitano imefikia 81 kati ya 1000 waliozaliwa hai. Hatua hii ni zaidi ya lengo la MKUKUTA la vifo 98. Kwa upande wa vifo vya kina mama vinavyotokana na uzazi vimeshuka kutoka 578 hadi 454 kwa kina mama 100,000 waliojifungua watoto hai. Kasi ndogo ya kupungua kwa vifo vya kina mama vinavyotokana na uzazi, bado ni changamoto kubwa, na Serikali inaendelea kukabiliana na changamoto hii chini ya Mpango Mkakati wa Sekta ya Afya. 9. Bwana Mwenyekiti, utekelezaji wa maboresho ya kisiasa, kiuchumi, kisheria na kijamii ambayo yamejikita katika nguzo ya tatu ya MKUKUTA yameonesha kuwa Tanzania inaendelea kuimarika kidemokrasia na hasa katika siasa, amani, kuheshimu haki za binadamu na kuwa na utawala wa kisheria. Hii imesababisha Tanzania kupata hati ya kuridhisha kwa mujibu wa wataalam na mashirika mbalimbali ya kimataifa ikiwemo Benki ya Dunia. 10. Bwana Mwenyekiti, katika maeneo ambayo hatukufanikiwa kama ilivyotarajiwa ni pamoja na kupunguza umaskini wa kipato, suala ambalo jitihada binafsi zinahitajika kwa kiwango cha juu. Zipo sababu nyingi zinazosababisha watu wengi kushindwa kupiga hatua za maendeleo kwa haraka, na hivyo kusababisha wengi kubaki kwenye umaskini. Baadhi ya sababu hizo ni:- (i) Viwango vya elimu visiyo na tija ya kutosha kupata ajira ya uhakika; (ii) Tija ndogo katika uzalishaji (low productivity) inayosababishwa na uwekezaji mdogo pamoja na matumizi ya teknolojia duni kwa walio wengi; (iii) Mapungufu katika kuibua vipaumbele vichache na usimamizi katika utekelezaji wa sera na mikakati ya kitaifa na kisekta, (iv) Uwezo mdogo katika kushirikisha sekta binafsi na asasi za kijamii katika utekelezaji. (v) Ukuaji mdogo wa mapato ya Serikali ukilinganisha na mahitaji yetu. Hali hii imesababisha uwekezaji hasa katika miradi ya miundombinu kama vile barabara, reli, bandari, nishati kuwa mdogo; (vi) Uhaba wa Viwanda vya kusindika mazao ya kilimo; (vii) Sekta binafsi kushindwa kuhimili ushindani wa kimataifa, na hivyo kusababisha kasi ndogo ya kupungua kwa umaskini; (viii) Ongezeko kubwa la idadi ya watu lisiloenda sambamba na uwezo. 172

173 11. Bwana Mwenyekiti, moja ya changamoto kubwa katika MKUKUTA I ni matukio yaliyokuwa nje ya uwezo wetu na vipaumbele vingi. MKUKUTA II unalenga kuwa na vipaumbele vichache katika misingi mikuu minne: (i) kuendeleza na kuhakikisha matumizi bora ya njia kuu za uzalishaji ikiwemo rasilimali watu, ardhi, na mtaji (capital); (ii) kujenga na kuimarisha mifumo ya kiuchumi, hii ikiwa inalenga katika kujenga taasisi muhimu za kujenga na kusimamia uchumi na ustawi wa jamii kama vile Mfumo wa utambuzi na usajili wa raia (National Identification and Registration of Persons) ambao baadhi ya malengo yake ni kutambua raia, kutoa kipaumbele kuendeleza wenye vipato vya chini, kuboresha ukusanyaji wa mapato ya Serikali na kuimarisha hifadhi ya jamii; mikakati ya kuthibiti ongezeko la watu n.k. (iii) kujenga na kuimarisha miundombinu ya uchumi ikijumuisha nishati (hasa umeme), maji, barabara, reli, bandari na viwanja vya ndege; na (iv) kuimarisha usimamizi wa uchumi, hasa katika kujenga uwezo wa Serikali katika kuwezesha sekta binafsi na sekta nyingine ili zishiriki kikamilifu katika shughuli za uzalishaji na ustawi wa jamii. 12. Bwana Mwenyekiti, Mheshimiwa Dkt. Jakaya Mrisho Kikwete, Rais wa Serikali ya Jamhuri ya Muungano wa Tanzania alipozindua rasmi Bunge la Kumi katika kipindi cha awamu yake ya pili tarehe 18 Novemba 2010, alifafanua vizuri vipaumbele katika kipindi chake cha pili cha miaka mitano ( ), na kuweka bayana mifumo ya usimamizi. Ni muhimu sote kuzingatia yaliyofafanuliwa kwenye hotuba hiyo ambayo masuala mengi yameainishwa kwenye vipaumbele vya MKUKUTA II, na kuhakikisha kila sekta inayajumuisha kwenye mipango na bajeti ya kila mwaka. 13. Bwana Mwenyekiti, MKUKUTA II ni mwendelezo wa MKUKUTA I na umejengwa katika misingi ya matokeo tarajiwa (outcome based) katika nguzo kuu tatu kama ilivyo kwenye MKUKUTA I. Nguzo hizo ni: Kukuza uchumi na kupunguza umaskini wa kipato; kuboresha hali ya maisha na ustawi wa jamii; na utawala bora na uwajibikaji. Msisitizo ukiwa katika kukuza na kusimamia uchumi. 14. Bwana Mwenyekiti, katika nguzo ya kwanza msisitizo utawekwa kwenye maeneo yatakayochochea kukua kwa uchumi. Maeneo hayo ni: kilimo, viwanda, Nishati, utalii, madini, miundombinu ya barabara na njia za usafirishaji na mawasiliano. Kilimo kitabakia kuwa tegemeo kubwa kwa watanzania wengi kwani asilimia takriban 70 hadi 80, wako vijijini na wanategemea kilimo. Azma hii ipo sambamba na utekelezaji wa Kilimo Kwanza. 173

174 15. Bwana Mwenyekiti, ajira ndiyo kiungo muhimu kati ya ukuaji wa uchumi na kupunguza umaskini. Kwa hiyo msisitizo mkubwa upo katika kutengeneza ajira na ukuzaji wa ujuzi hasa kwa vijana ili kuboresha hali ya maisha ya watu. Matokeo yanayotarajiwa katika nguzo ya kwanza yatafikiwa kupitia utekelezaji wa mikakati na programu inayoratibiwa na kutekelezwa na sekta mbalimbali. 16. Bwana Mwenyekiti, MKUKUTA wa Pili utaendelea kupanua mikakati inayolenga kuongeza upatikanaji wa huduma bora za jamii. Hii ni pamoja na kuongeza ubora wa huduma za jamii. Mathalani, kwa upande wa Elimu, msisitizo umewekwa kwenye kufundisha walimu wengi, upatikanaji wa vifaa vya kufundishia pamoja na kuboresha mazingira ya kujifunzia. Masuala ya idadi ya watu yamejitokeza katika maeneo mengi yakiwemo ya ukuaji wa miji na makazi ya watu. Msisitizo mkubwa pia umewekwa kwenye kuboresha huduma za afya, maji, mazingira na kinga ya jamii. Mikakati iliyoainishwa katika nguzo ya pili imeoanishwa na ukuaji wa uchumi na hasa katika kukuza ujuzi na kuboresha ajira na kuwaandaa vijana wanaoweza kuwa na ujuzi wa kuweza kuajiriwa na kujiajiri. Kauli mbiu ya mwaka huu ambayo ni Kukuza Uchumi Uletao Ajira na Kupunguza Umaskini kwa Maendeleo Endelevu, imebuniwa kwa makusudi ya kuamsha ari ya kuchochea upatikanaji wa ajira kwa lengo kubwa la kukuza uchumi na kupunguza umaskini. Hivyo ni muhimu majadiliano katika mkutano wa mwaka huu kuhusu MKUKUTA, PER na GBS yalenge kwenye masuala yatakayosaidia kupanua fursa za ajira za uhakika ili kuongeza kasi katika kuboresha maisha ya watanzania kwa ujumla. 17. Bwana Mwenyekiti, Utawala bora na Uwajibikaji ni kiungo kikubwa katika nguzo za MKUKUTA na muhimu katika kufanikisha usimamizi wa utekelezaji wa MKUKUTA II. Kufikiwa kwa malengo ya MKUKUTA kutategemea sana uadilifu katika usimamizi, matumizi bora ya rasilimali, mashirikiano na kujituma. MKUKUTA II utaendelea kuboresha maeneo yanayohusu utawala bora na uwajibikaji ambayo ni pamoja na utawala wa kiuchumi, kupambana na rushwa na kuhakikisha utoaji wa haki kwa wakati, kudumisha demokrasia na kuhimiza utamaduni wa kufanya kazi kwa bidii. Yote haya ni muhimu kwa ajili ya uwekezaji, uzalishaji, na utengenezaji wa ajira na hatimaye kupunguza umaskini. 18. Mheshimiwa Mwenyekiti, ili kufanikisha malengo yetu, yanahitajika maamuzi na juhudi za pamoja katika (i) kupanga vipaumbele katika malengo na mikakati muhimu ya utekelezaji ili kufikia matokeo tarajiwa; (ii) mipango ya pamoja na usimamizi katika utekelezaji wa vipaumbele miongoni mwa Wizara na Idara na Taasisi za Kiserekali pamoja na wadau wengine; (iii) upitiaji mahiri wa maeneo yanayohitaji mabadiliko (mifumo, rasilimali watu na kadhalika) ili kuyaweka katika masuala muhimu ya 174

175 ukuaji uchumi na upunguzaji umaskini na kutoa ushirikiano wenye mwelekeo tarajiwa; (iv) kuhimiza maamuzi ya pamoja ya kuelekeza rasilimali fedha kwenye vipaumbele vitakavyotoa matokeo; (v) maamuzi ya kuongeza mapato ya ndani na ufuatiliaji wa mapato na matumizi. 19. Bwana Mwenyekiti, hotuba yangu haitakamilika kama sitawakumbusha wajumbe wa mkutano huu kuangalia kwa kina na kujadili matumizi ya fedha za serikali kwa kuoanisha upatikanaji wa fedha, matumizi na changamoto zilizopo. Hivyo ninajua ya kuwa mada mbalimbali zitawasilishwa ili kuibua majadiliano katika eneo hili hivyo ninaomba kila mmoja ashiriki kikamilifu katika kuchambua na kuchangia kwa uwazi. 20. Bwana Mwenyekiti, nitashukuru zaidi kama majadiliano yataelekezwa katika kuboresha utekelezaji. Baada ya MKUKUTA II na MKUZA II kuandaliwa, kinachoendelea sasa ni maandalizi ya miongozo ya utekelezaji, ufuatiliaji na tathmini. Aidha, mkakati wa mawasiliano unaandaliwa na utatumika kama mwongozo katika kuelimisha na kuhamasisha jamii juu ya vipaumbele vya kitaifa, na kuchochea ari ya watanzania kuuchukia umaskini na kupambana nao. Kwa kuwa mada itawasilishwa kuhusu masuala haya, tunategemea kupata maoni yenu kwa ajili ya kuboresha zaidi hatua hii ya kujipanga katika kutekeleza MKUKUTA II na MKUZA II. 21. Bwana Mwenyekiti, baada ya kusema hayo, naomba kumalizia kwa kusema kuwa, MKUKUTA II na MKUZA II programu/miradi ya kisekta ya kuutekeleza ni vyetu sote, hivyo tunawajibika kujipanga vizuri na kuongeza mashirikiano katika utekelezaji. Ushirikiano wetu katika maamuzi ya vipaumbele, mgawanyo wa rasilimali, na usimamizi bora wakati wa utekelezaji ndio utakaofanikisha azma za Serikali zote mbili ya kupunguza umaskini na kuboresha hali ya maisha ya walio wengi na hasa waishio vijijini. 23. Bwana Mwenyekiti, baada ya kusema hayo, naomba kuwashukuru wote kwa ushirikiano wenu katika jitihada za kuleta maendeleo ya nchi yetu. Sasa napenda kuchukua fursa hii kutamka rasmi kuwa mkutano wa mashauriano na wadau juu ya wiki ya sera za kuondoa umaskini, mchakato wa mapitio ya utekelezaji na matumizi ya fedha za umma na mapitio ya misaada ya kibajeti umezinduliwa rasmi. Aidha, napenda kutangaza kuwa MKUKUTA II na Ripoti ya mwaka ya Utekelezaji wa MKUKUTA I 2009/10 vimezinduliwa rasmi.nawatakia majadiliano mema. Ahsanteni sana kwa kunisikiliza. 175

176 Annex 1.9 Statement by Mr. Svein Baera; Chair of the PRBS DPs Group at the Start of the GBS Annual Review Opening Statement at the GBS Annual Review 2010 by Svein Baera, minister counselor, Chair of the GBS Group of Development Partners in Tanzania [Protocols] Mhe Waziri wa Fedha na Uchumi Mustafa Haidi Mkulo, Ma Katibu Wakuu, Ma Balozi, Viongozi na washirika wa Maendeleo, WaBunge, Viongozi wa sekta Binafsi, Asasi zisi zokuwa za kiserikali, waandishi wa habari, Mabibi na Mabwana. Karibuni Sana. Nitaendelea kwa kiengereza [Context] Let me start by congratulating the newly formed government following the general elections held in October. It has not gone unnoticed that peace and unity were maintained throughout the elections, Zanzibar formed its first unity Government, strong participation by women in politics and the first female speaker of the parliament was elected. These are all achievements worthy of a mature democracy. In the past decade Tanzania has achieved high rates of growth, macroeconomic stability, increased domestic revenue collection, increased access to social services such as education and health, improved infrastructure and more than one million jobs created in the private sector. Tanzania is on track to achieve about half of the Millennium Development Goals. Tanzania is one of the frontrunners in the use of General Budget Support (GBS) in Africa. Based on the implementation of comprehensive reforms and a strong economic transition from the mid 1990s to date, Tanzania has earned a reputation as a country where harmonized and streamlined aid modalities building on national plans, systems and institutions, are effective. But, GBS is increasingly under scrutiny as an aid modality to support development. North and South, citizens and governments are demanding results and improved accountability. In this environment, we need to continually demonstrate that GBS works, that it works more effectively than alternative aid modalities and that strong and increasing levels of transparency and accountability are in place. 176

177 [Main messages] Let me highlight 6 core messages to set the stage for our conversations during this annual review: 1. Communication and dialogue The quality of dialogue is essential for GBS to be effective. Both development partners and Government have made efforts in 2010 to improve the channels of communication and overall levels of trust.there has been a resuscitation of the dialogue around public expenditure reviews, cluster meetings have started to improve, and an agreement to work towards more regular meetings and the habitual sharing of information. But still we need to work jointly to strengthen the dialogue further. 2. The performance of PAF 2010 and financial commitments The preliminary results of the joint review of the Performance Assessment Framework by Government and the development partners will be presented just after the opening statements. Even though some numbers indicate improvement compared with 2009, the total picture of results achieved is not as positive as we had hoped for. The results suggest that the efforts to make the public sector more efficient and productive still need serious attention. Connecting this performance with the increasing scrutiny of GBS as a preferred aid modality is important. In a situation where aid is coming under increased criticism in many developed countries for the lack of clear results, only strong and convincing performance in the most important areas will help stabilize the support for GBS. 3. A strong fiscal response to the global financial crisis Development partners recognize the determined response by the Government to the challenges of the global financial crisis. The Government of Tanzania implemented a comprehensive package of fiscal measures to cushion the effects of the financial crisis. The measures represent the equivalent of 2% of GDP, and included loan guarantees, temporary price support for the agricultural sector, and increased investment support in selected areas. This package of measures was supported by several development partners through a combination of additional aid and frontloading of aid. 177

178 4. Increasing financing gap and reduced development expenditure The last fiscal year saw a revenue shortfall of about 10% of total estimates, half caused by declining domestic revenues, the other half by reduced aid. Challenges with such a fiscal gap are continuing into the current budget. There are differences between the budget presented to the IMF Executive Board, and the one approved by Parliament in July 2010, with much more optimistic revenue forecasts and a higher level of domestic financing used to justify sharply higher expenditures. The excessive optimism of this budget, and the lack of a clear strategy for expenditure prioritization in the likely event of revenue and financing shortfalls, could undermine the credibility of the budget as an effective policy and planning tool. In addition, the fact that this significantly different budget was approved without early communication with the development partners calls into question the quality of our policy dialogue and partnership. We look forward to discussing this matter in the key issue session on the budget. Furthermore, the executed budget from last year continued the trend of recent years where recurrent expenditures are rising more rapidly than development expenditure. Revenues covered only 84 percent of the recurrent expenditures last financial year. Linked to the fiscal gap, development partners would like to urge the Government to carefully consider a comprehensive rationalization of tax exemptions to bring tax efficiency rates in line with that of comparable countries. This could contribute significantly to increased domestic revenues and close the fiscal gap over the medium to longer term. 5. Agricultural development, food security and poverty reduction Development partners and domestic stakeholders are concerned that despite steady high economic growth and positive progress in a number of areas of the Mkukuta and Mkuza, there is limited poverty reduction and limited improvement of livelihoods for the majority of Tanzanians. To accelerate pro poor growth and to achieve any economic transformation process and movement out of poverty in Tanzania, the importance of agriculture must be emphasized. 178

179 As highlighted by his Excellency President JAKAYA KIKWETE last week at the EAC Heads of State meeting, there is also a clear connection between climate change, food security and agricultural development. Bearing this in mind, we would emphasize the following: - Increased use of appropriate agricultural practices such as conservation farming and sustainable irrigation. - Increased access to efficient input and output markets and appropriate incentives. 6. Slow progress in core public reforms and anti corruption Development partners welcome and support the Government public sector core reform initiatives. The challenge now is to focus on the effective implementation of the agreed actions with regards to public financial management, public service management and decentralization by devolution. This applies both to the central and local government level. Improved public service delivery to all Tanzanians will require improved efficiency in the relations between the central and local Government. In the fight against both petty and grand corruption there is not enough evidence of real progress. A problem here is the lack of continuous dialogue between partners involved in this area and information exchange as agreed during last year s GBS review. We wish to state that poverty reduction hinges critically on major improvements in this area. Promising trends in the Auditor General s office, the work of the PCCB, and an increase in judges hired to the court system all provide an effective starting point for addressing key challenges. Finally it is important to balance the focus on controls and enforcement in the fight against corruption with prevention efforts. An area of particular importance is public procurement and we encourage attention on this. [Looking forward] Honorable Ministers, Ladies and Gentlemen, my speech has been an attempt to provide an overview of some of the achievements and challenges linked to the provision of GBS in Tanzania. Forgive me if, perhaps inevitably, I have focused on the challenges. We know that many of these challenges have been recognized by the Government. Now we need your leadership and commitment to establish the new strategic PAF and continue to improve the way we interact. Getting this right will strengthen our partnership and help achieve more development results under the Mkukuta II and Mkuza II. 179

180 It is our sincere belief that GBS remains an effective aid instrument in Tanzania. That it helps strengthen national and local institutions, and delivers development results. But continued General Budget Support in excess of half a billion US dollars per year must prove its continuous worth. We sincerely hope and expect the coming 3 days will contribute to this through insightful presentations, focused interventions from a wide range of stakeholders that we see here today, and constructive, open discussions. I thank you, Ahsanteni Sana. 180

181 Annex 1.10 Statement by Mr. Svein Baera; Chair of the GBS Group at the Closing of the GBS Annual Review Closing Statement at the GBS Annual Review 2010 by Svein Bæra, Chair of the GBS Group of Development Partners in Tanzania Honorable minister(s) Ladies and gentlemen We have had some busy and constructive days together here at Ubungo plaza. We have reviewed progress made during the past year and set the agenda for the year ahead. I wish to extend my gratitude to all those who have contributed. We have experienced insightful presentations and focused competent and honest interventions from a wide range of stakeholders: Members of parliament, private sector and civil society representatives, local and central Government representatives and of course my fellow development partners. Thank you for devoting the past three days to making this GBS annual review valuable. In particular I would like to thank the Ministry of Finance for their professional organisation of the event. Why has this annual review been valuable? - It has been valuable because open and well-informed presentations and discussions are core elements of what we call dialogue contributing to accountability and mutual trust. - It has been valuable because our discussions have been both difficult and rewarding. Acknowledging problems and challenges is always the first step towards finding solutions. - It has been valuable because the contents and participation will help us as partners of development in Tanzania to move towards a common goal: - To reduce poverty and enhance economic growth. GBS is a substantial contribution to this goal: More than 530 million US dollars this financial year directly injected into the national budget. We all agree that GBS is an aid modality with high predictability and low transaction costs. 181