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General budget support in Tanzania: Learning Assessment
Contact:

Gerster Consulting
27 November 2006
Richard Gerster, Ruta G Mutakyahwa
Gerster Consulting

Acknowledgements: FANRPAN acknowledges the Gerster Consulting website as the source of this report: www.gersterconsulting.ch


Executive Summary

Mandated jointly by the Government of Tanzania (GoT) and Development Partners (DPs) committed to General Budget Support (GBS), the learning assessment (LA) of the Annual Review (AR) 2006 process pursued the overall objective of developing practical recommendations on ways to strengthen the effectiveness and efficiency of GBS-supported programme implementation. The recommendations are based on experience in general and the 2006 AR process in particular. The quality of dialogue, performance and accountability was to be specifically assessed. Methodologically, the LA made use of good practices developed elsewhere, observations of AR sessions, interviews, and written feedback.

BOX1

The AR 2006 was a test case for the new Partnership Framework Memorandum (PFM) machinery that had been put in place in January 2006. Overall, the review was perceived as an overwhelmingly positive experience. It drew on the benefits and virtues of GBS as an aid modality by focusing on a limited number of key issues. GBS is concerned with more than the number of sectors: it is about cross-cutting, core reform issues. There is considerable common ground between GoT and DPs, in terms of content and procedures. The Ministry of Finance (MoF) provided committed and professional leadership of the AR 2006 while GoT presence was weaker during the preparation process. This leadership included innovative steps, such as the inclusion of domestic stakeholders and reaching out to the media.

Approach: DPs have achieved a high degree of like-mindedness in policy orientation that may even go beyond aid modality harmonisation. Harmonising aid modalities does not imply speaking with one voice on all matters. Policy pluralism is an asset. The transparent engagement in argument is supposed to be an engine of social change. An approach that values alternative policy options does not prevent the GoT from choosing coherent policies; rather it offers better informed choices.
  • The principles of policy pluralism should also govern the policy dialogue between the GoT and DPs. The dialogue becomes more mature if divergent views on important issues are made transparent and give the GoT a better choice and ownership.
  • Pre-review meetings and the AR create a heavy schedule of meetings. In order to get more flexibility and preparation time in future events, it is suggested that (1) the prereviews are spread over a period of two or three weeks; (2) there is at least one week between pre-reviews and the AR; (3) MoF and other MDAs reduce other meetings during that period so as to ensure a good GoT participation.
Dialogue: The GoT was very well prepared and represented in the AR week, whereas during the pre-review week GoT technical level presence was varied. Domestic stakeholders participated on a pilot basis. The GBS process builds on, and strongly links to, sector involvement and other underlying processes. Based on the AR 2006 experience and the strengthened GoT leadership, it is suggested that the structure of dialogue within GBS be developed further and consideration be given to:
  • Broadening the scope of stakeholder participation, including selected Local Government Authority (LGAs), CSOs, private sector representatives and members of parliament (MPs);
  • Maintaining a regular dialogue of TWGs throughout the year, with the frequency depending on the quality and results of the underlying processes;
  • Extending the alignment of the GBS AR-related processes to domestic processes by:
    1. Merging TWG4, TWG5 and TWG6 into a new TWG4;
    2. Merging the newTWG4 with the Working Group on the Public Expenditure Review (PER) into one vehicle (“newPER”) including non-state actors; and
    3. Shifting the annual newPER meeting to September.
  • Strengthening sector linkages by analysis and action from GoT’s and DPs’ side.
Performance: GBS is a contractual relationship offering a package of support (funding, dialogue, TA, harmonisation and alignment of procedures) based on an agreement regarding performance. The Tanzanian Performance Assessment Framework (PAF) matrix consists of a useful basic structure of underlying processes, temporary process actions, and outcome indicators. However, its size and the unclear implications of its elements constitute a risk. Improvements can be sought in three ways:
  • Transparency on persisting bilateral rules governing disbursements should be achieved and an inventory of bilateral conditions beyond the PAF established;
  • In order to reduce risks, it is proposed to clarify the relevance and implications of the PAF matrix for DP decision making;
  • The International Monetary Fund’s (IMF) role and its Policy Support Instrument (PSI) should be revisited, securing flexibility in access to GBS funding, avoiding duplication in the dialogue on macroeconomic issues and opening up to domestic stakeholders.
Accountability is understood as the obligation of power holders to account, or take responsibility, for their actions. In addition to the domestic accountability of the GoT and the DPs, partnership with the GBS introduces a mutual accountability of the partners:
  • In order to make reporting to DPs an integral part of domestic accountability processes, it is suggested that the “Economic Survey” and the MKUKUTA Annual Implementation Report (MAIR) be merged into a unique vehicle, “MKUKUTA Economic and Social Survey”, which will report on economic/social progress to parliament in June, prior to the budget. The latest version of the PAF could be added for information as an annex.
  • In the spirit of mutual accountability, a DPs’ PAF should be developed. The same monitoring approach to the DPs’ obligations in relation to the PFM can be used as that agreed upon for monitoring GoT obligations. A DPs’ PAF serves as a monitoring tool and stimulates progress on objectives agreed in the PFM.
  • DPs should continue and intensify demand-driven capacity building of CSOs and media, and the research capacity of parliament.
Sustainability: Tanzania pursues “Vision 2025” as a long-term goal; the Millennium Development Goals (MDGs) have a time frame of 2015, while MKUKUTA is geared to 2010. The volume and the sustainability of Tanzania’s development efforts and DPs’ support is, within any of these projections, a major issue. Mobilisation of own resources is the best remedy against aid dependency. Taxation not only provides revenue but also strengthens domestic accountability.

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