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Tanzania Public Expenditure and Financial Accountability Review: Some Insights -----------------------By Philip Mpango (AFTP 2) Tanzania Public Expenditure and Financial Accountability Review: Some Insights -----------------------By Philip Mpango (AFTP 2) PFAM Course - PREM Learning Week May 3, 2006 1

I: TRANSITION FROM PER TO INTEGRATED PEFAR: OPPORTUNITIES & CHALLENGES – Pre-1998: Bank product I: TRANSITION FROM PER TO INTEGRATED PEFAR: OPPORTUNITIES & CHALLENGES – Pre-1998: Bank product by Washington missions => Focus on restoring fiscal equilibrium (introduction of cash budget system). – 1998 to 2000: Introduction of Participatory annual PERs & MTEF; =>Focus on consolidating fiscal prudence; improving budget predictability & Accountability; TTL in country. – 2001 -2004: Participatory annual PERs to support implementation of PRSP => Focus on protecting social sector expenditures. TTL in country – 2005 to date: “One Process One Assessment” = Integrated PEFAR review of PE + PFM + PP. => Focus on aligning the budget to support the growth focus of 2 MKUKUTA. TTL in country

KEY FEATURES OF THE TANZANIA PER PROCESS • Govt-led & Participatory process (PS-Mo. F; KEY FEATURES OF THE TANZANIA PER PROCESS • Govt-led & Participatory process (PS-Mo. F; Secretariat; Broad membership of Macro & Sector PER WGs; Regular meetings); Jointly agreed work program that dovetails with the budget cycle. • Joint External Evaluation: WB, IMF/East AFRITAC, DFID, Kf. W, EU, Finland, Ireland, Canada, NGOs – Haki Elimu, Water Aid, NPF, REPOA + consultancy support (local & international) to feed into the Annual Stakeholders Consultative meeting => Provide feedback to stakeholders + Get feedback of draft budget frame/cross-sector allocations. • Migrating from focus on priority sectors to MKUKUTA clusters (? ) 3

II: DONOR HARMONIZATION Claim: Tanzania is on the frontier of donor harmonization Opportunities: – II: DONOR HARMONIZATION Claim: Tanzania is on the frontier of donor harmonization Opportunities: – Lower transaction costs to Go. T (e. g. Joint review for PRBS/PRSC, PFM, PEFA + analytic work) – Minimized donor overlap & duplication of effort – Leveraged resources (manpower, financial) Success Factors: – Articulate country Devt Program – Strong Go. T leadership & demands (Quite period; shame list; inclusion of NGOs in external evaluation; one process-one assessment; clearance of analytic work) – IMG: Honest broker (select group; ESRF) – Up front consultation with DPs to agree on areas of focus for the year & supportive analytic work + continuous dialogue & regular briefs to DPG – WB leadership in the process (heavy weight champion!) – Continuity provided by national staff 4

HARMONIZATION CHALLENGES • Harmonization is time consuming • Term assignment of DP staff => HARMONIZATION CHALLENGES • Harmonization is time consuming • Term assignment of DP staff => Discontinuity in dialogue (e. g. Change of IMF RR) • Disagreements on right policy sometimes (stabilization Vs growth) e. g. taxation of the informal sector; creating fiscal space. • Integration of the product (scope Vs depth; uneven quality of contributions; Agreement on process & Label for buy in). • How to strengthen domestic accountability in a 5 highly donor-dependent environment

III: STAYING IN LOVE WITH GOVT: SOME TIPS • Identify COMMON OBJECTIVES/INTERESTS • TRUST: III: STAYING IN LOVE WITH GOVT: SOME TIPS • Identify COMMON OBJECTIVES/INTERESTS • TRUST: Give space to Govt to articulate their views; Listen humbly; Use your expertise to engage in constructive dialogue (challenge positions & offer alternatives; Give credit where due; Appreciate genuine difficulties – technical or political. They know the country, political games, allies & adversaries & culture better; Focus on the big picture /overall progress not just to pick the negatives • COLLABORATION: Involve Govt officials in analytic work for substantive contributions & capacity building; Provide support as needed e. g. drafting MKUKUTA, task forces, Technical WGs; Invite Govt officials to WB to talk about key developments/challenges faced e. g. SBAS 6

STAYING IN LOVE WITH GOVT: SOME TIPS • COMMUNICATION: Maintain continuous dialogue on difficult STAYING IN LOVE WITH GOVT: SOME TIPS • COMMUNICATION: Maintain continuous dialogue on difficult reforms (process); Consolidate gains instead of introducing more reforms especially where capacity is weak; Ensure consistency of messages to Govt; Good PR – official & social etc. • Identify and form a COALITION with key reformers in and outside Government. • Existence of the referee (IMG) to guard against the parties going astray. 7