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TANZANIA

ANNUAL NATIONAL POLICY DIALOGUE(POVERTY/PER/GBS REVIEW)

FINAL REPORT

2ND – 8TH DECEMBER 2010

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TABLE OF CONTENTS

TABLE OF CONTENTS ..................................................................................................................... 2List of Abbreviations 3EXECUTIVE SUMMARY .................................................................................................................... 51.0 INTRODUCTION AND CONTEXT ........................................................................................ 13

1.1 SYNOPSIS OF THE DIALOGUE STRUCTURE, AND HOW THE ANNUAL EVENT FITS IN: ....................... 131.2 OPENING SESSION .............................................................................................................. 131.3 MKUKUTA AND MKUZA PERFORMANCE REVIEW ......................................................... 15

1.3.1 MKUKUTA I Performance: ............................................................................................ 151.3.2 MKUZA I Performance .................................................................................................. 17

1.4 REVIEW OF RECENT MACROECONOMIC PERFORMANCE ............................................................ 181.5 DISCUSSION, OVERARCHING CONCLUSIONS AND THE WAY FORWARD: ....................................... 19

2.0 DEMOGRAPHIC AND HEALTH SURVEY (DHS) RESULTS ................................................. 212.1 INTRODUCTION ................................................................................................................... 212.2 RESULTS FROM A STUDY ON SAFETY NETS IN TANZANIA ........................................................... 212.3 GROWTH AND POVERTY REDUCTION: POLICY IMPLICATIONS FROM QUALITATIVE RESEARCH ......... 21

3.0 MKUKUTA II: KEY PRIORITIES AND A FOCUS ON IMPLEMENTATION ARRANGEMENTS. 23

3.1 MKUKUTA II AND PRIORITIES TO 2015 ................................................................................. 233.2 MKUZA II AND ITS IMPLEMENTATION ARRANGEMENTS: ............................................................ 243.3 RAPID BUDGET ASSESSMENT ............................................................................................... 253.4 MEDIUM TERM STRATEGY AND CROSS CLUSTER MTEF ........................................................... 283.5 SUMMARY OF KEY ISSUES ON MKUKUTA/MKUZA ................................................................. 30

4.0 GBS ANNUAL REVIEW ....................................................................................................... 324.1 INTRODUCTION ................................................................................................................... 324.2 OFFICIAL LAUNCH OF THE 2010 GBS REVIEW ........................................................................ 334.3 IMPLEMENTATION OF THE 2010 PAF ...................................................................................... 334.4 KEY ISSUES FOR 2010 ANNUAL REVIEW: ................................................................................ 37

4.4.1 Introduction: .................................................................................................................. 374.4.2. Key Issue 1: Accelerating Pro-Poor Growth in the Context of Kilimo Kwanza .................. 374.4.3 Key Issue 2: Business Environment ............................................................................... 424.4.4 Key Issue 3: Equity and Efficiency: Opportunities and Challenges .................................. 454.4.5 Key Issue 4: Budget ...................................................................................................... 484.4.6 Key Issue 5: Financial Management at Central and LGAs Presentation and Discussion .. 49

4.5 THE FIGHT AGAINST CORRUPTION ......................................................................................... 515.0 2011 PAF DISCUSSION ...................................................................................................... 536.0 CLOSING ............................................................................................................................ 56

6.1 CONCLUSION & WAY FORWARD ............................................................................................ 56ANNEXES: ...................................................................................................................................... 57

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List of Abbreviations

AIVS Agricultural Inputs Voucher SystemAMCOS Agricultural Marketing Cooperative SocietiesANPD Annual National Policy DialogueASDP Agricultural Sector Development ProgramBEST Business Environment Strengthening in TanzaniaBG Budget GuidelinesCAADP Comprehensive Africa Agriculture Development ProgramCAG Controller and Auditor GeneralCSO Civil Society OrganizationCWG Cluster Working GroupCTI Confederation of Tanzania IndustriesDADPs District Agricultural Development PlansD-by-D Decentralization by DevolutionDP Development PartnersEPZ Export Processing ZoneGBS General Budget SupportGDP Gross Domestic ProductGFS Government Financial SystemGNU Government of National UnityHBS Household Budget SurveyHRMSS Human Resources Management Support SystemIFMS Integrated Financial Management SystemIPSAS International Public Sector Accounting StandardsJAST Joint Assistance Strategy for TanzaniaLGAs Local Government AuthoritiesLGRP Local Government Reform ProgramLSRP Legal Sector Reform ProgramM&E Monitoring and EvaluationMDAs Ministries, Departments, and AgenciesMDGs Millennium Development Goals

MKUKUTAMkakati wa Kukuza Uchumi na Kupunguza UmasikiniTanzania (NSGRP)

MKUZAMkakati wa Kukuza Uchumi na Kupunguza UmaskiniZanzibar (ZSGRP)

MoF Ministry of FinanceMP Member of ParliamentMTEF Medium Term Expenditure FrameworkNACSAP National Anticorruption Strategy and Action PlanNBS National Bureau of StatisticsNER Net Enrolment RateNGO Non-governmental organizationNSAs non state actorsNSGRP National Strategy for Growth and Reduction of PovertyPCCB Prevention and Combating of Corruption BureauPER Public Expenditure ReviewPFM Public Finance ManagementPFMRP Public Financial Management Reform Program

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PFMRP Public Finance Management Reform ProgramPFMS Public Financial Management SystemPMO Prime Minister’s Office

PMO-RALGPrime Minister’s Office – Regional Administration and LocalGovernment

PMS Poverty Monitoring SystemPMS Poverty Monitoring SystemsPSDID Private Sector Development and Investment DivisionPSRP Public Sector Reform ProgramRGZ Revolutionary Government of ZanzibarTI Transparency InternationalTISS Tanzania Interbank Settlement SystemUNCAC United Nations Convention Against CorruptionURT United Republic of TanzaniaVAT Value Added TaxWRS Warehouse Receipts SystemZBC Zanzibar Business Council

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EXECUTIVE SUMMARY

The five days Annual National Policy Dialogue (ANPD) for 2010 was held in Dar es Salaam at the BluePearl Hotel, Ubungo Plaza on the 2nd – 8th December, 2010. The annual event is a culmination of ayear long process involving the Government, Development Partners, Civil Society Organisations, andthe Private Sector, covering Public Expenditure Reviews (PER), MKUKUTA monitoring, and theGeneral Budget Support (GBS). The dialogue was organised around two main themes: the first twodays’ discussions focused on MKUKUTA /MKUZA and the PER; and the next three days were on theGBS discussion. The Government was represented by participants drawn from both the Government ofthe United Republic of Tanzania and the Revolutionary Government of Zanzibar, as well as the LocalGovernment Authorities (LGAs). There was also representation from the Parliament, involving the rulingand opposition parties.

The Dialogue was organised around the structure of the national development frameworks, i.e. theNational Strategy for Growth and Reduction of Poverty (MKUKUTA) for Mainland Tanzania and theStrategy for Growth and Eradication of poverty (MKUZA) for Zanzibar. This Dialogue structure, adoptedin 2008, integrates all major national and sector development interventions into a single structure, andcovers 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 ofnew Governments for the United Republic of Tanzania and Zanzibar, following democratic generalelections held on 31 October, 2010; (b) completion of the implementation period of MKUKUTA I andMKUZA I for Tanzania Mainland and Zanzibar respectively that guided growth and poverty reductionprogrammes during 2005/06 – 2009/10; and (c) the launch of new framework strategies, MKUKUTA IIand MKUZA II.

The 2010 Dialogue provided opportunity for all stakeholders to (i) reflect upon performance ofimplementation of MKUKUTA I and MKUZA I and agreements reached at a similar event last year asreflected in the 2010 GBS Performance Assessment Framework (PAF); and (ii) look forward towardsimplementation of MKUKUTA II and MKUZA II, and deliberate on a new PAF for 2011. The GBSdiscussions centred on five key issues agreed in advance by the Government and DPs. It was agreedthat the discussion this year would focus on the same themes as last year (2009) in order to provideopportunity for a deeper understanding of the issues and follow up on implementation of theagreements reached.

KEY MESSAGES FROM THE MKUKUTA/MKUZA/PER DISCUSSIONSThe following were the key messages arising from the presentations and discussions during thediscussions on MKUKUTA/MKUZA and Public Expenditure Review:

(i) All stakeholders reaffirmed their commitment to growth and poverty eradication aspromulgated in the various Government programmes, and look forward to closelycollaborate in their implementation as effectively as possible;

(ii) Although some successes have been recorded in implementing MKUKUTA I andMKUZA I, a number of challenges persist, including the fact that a significant portion ofthe population still lives with income poverty and/or faces a risk of hunger. Given therather high annual population growth rate of 2.8%, higher economic growth than hasbeen attained so far are needed to sustainably and progressively reduce poverty, whilesome form of education and interventions to promote maternal, child and reproductive

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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 incomepoverty 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 environmentremain significant challenges.

Participants recognised the adverse effect of the global financial crisis and the associatedglobal economic recession on the performance of MKUKUTA/MKUZA implementation, andthat the economy is recovering after prompt interventions by the Government and recovery ofthe global economy.

(iii) The systems that aim at promoting accountability and efficiency in the utilisation ofpublic resources are critical, and should therefore be further supported andstrengthened, if maximum mileage is to be gained from the limited resources;

(iv) MKUKUTA II and MKUZA II bring significant improvements to their predecessors(MKUKUTA I and MKUZA I). Proper Implementation Plans including realistic costing ofinterventions, prioritizing, sequencing and coordination, and monitoring and evaluation(M&E) framework are key for better results.

(v) Going forward, participants emphasised on the importance of:

(a) Promoting employment creating activities and sectors in order to broaden thebenefits of growth;

(b) Taking account of the opportunities and challenges posed by policies, actions,and other developments taking place at the regional and international levels.

(c) Translating the strategy into an implementable set of actions appropriatelysequenced and clearly costed with much sharper prioritization and sequencingof MKUKUTA II, ultimately reflected in the budget.

(d) Streamlining the institutional framework for planning, implementation, andmonitoring and evaluation within the Government in order to mitigate theapparent duplication of efforts and multiplicity of development programmes andstrategies; A framework for implementation and monitoring and evaluation shallbe worked out early in 2011.

(e) Enforcing good practice, behaviour, and attitude towards work, frugality, andethics which are the basic prerequisites for success at any level.

KEY MESSAGES FROM THE GENERAL BUDGET SUPPORT (GBS) DISCUSSIONSThe 2010 GBS review provided opportunity for a reflection on the performance ofimplementation of the 2010 Performance Assessment Framework (PAF); and deliberate on anew PAF for 2011. In addition the GBS sessions took the opportunity to discuss the status of

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implementation for the five key issues agreed in advance by the Government and DPs and, asstated earlier the same themes were discussed last year in 2009.

(i) 2010 PAF ImplementationThe status of implementation of the 2010 PAF, based on the Cluster Working Group reports,shows the following:

Temporary Process Actions [25]

Achieved 10Partially Achieved 7Not Achieved 8

Outcome Indicators [37]

Fully Met 17Not Scored 2Split Decision 1Off Track 17

Underlying Processes [21]

Satisfactory 11Moderately Satisfactory 4Split Rating 2Unsatisfactory 4

Looking forward, the following were proposed:

(a) With 17 out of 35 outcome indicators met, and 10 out of 25 temporary process actionsfully achieved, the level of achieved results remains a challenge for implementation ofthe Government’s Poverty reduction strategy. Several important actions have not beenfully implemented, although some are in progress. A strategic, realistic and ambitiousPAF 2011 with high level of expected results will be important. Improved PAFperformance will be important to secure continued and strengthened support for GBSas a preferred modality.

(b) The need for more effective dialogue was raised. There is therefore a need to re-examine the dialogue structure to improve information sharing, the roles andresponsibilities of GoT and DPs and the dialogue conditions in general, and make itless resource intensive (especially human resources).

(c) The apparent differences between the Government and development partners on thestatus of implementation of agreed actions (and quality of the results thereof) suggesta lack of clarity of the assessment criteria. It was proposed to review the assessmentcriteria for the PAF indicators (Underlying Processes, TPAs and Outcome Indicators) inorder to make them clearer.

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(d) Some PAF scores were made very late in the process leading up to the AnnualReview. Efforts should be made at all levels in the dialogue structure to finaliseassessment well in advance of the Annual Review.

Further reflections were made on the five key themes agreed earlier between the Governmentand Development Partners as follows:

(ii) Pro-poor Growth in the Context of Kilimo KwanzaThe participants underlined the fact that the focus on agriculture constitutes the rightdirection for addressing growth and poverty challenges in Tanzania. However, theyemphasized the need to do more, do it better, and do it faster by observing thefollowing:

(a) Policy reforms and public investments and improving market environment forpromoting an enabling business environment and strategic support are necessitiesfor pro-poor agricultural development;

(b) 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 leverageprivate sector investment in agriculture;

(c) In the context of Tanzania, small holder farmers are key stakeholders inagriculture; addressing productivity challenges for them stand the better chance togenerate maximum growth and poverty reduction impacts;

(d) The challenge in agriculture is to increase productivity of land and labour. Thisrequires timely access to quality inputs, appropriate technology, extensionservices, and marketing environment, and most importantly sustainable provisionof water through irrigation systems taking into account also the need for sufficientdrinking water;

(e) To translate productivity gains into increased incomes, market access for farmers,including through more efficient and competitive marketing and trading in anappropriate regulatory framework, improved rural roads; and rural electrification forvalue addition are critical; and

(f) Water is critical for sustainable agricultural development. Therefore, it is importantto consider climate change implications, build and spread extensively low cost andeasy to maintain irrigation schemes, and exploit opportunities presented bywetlands.

(g) Prepare terms of reference and conduct a PER study on the financing of KILIMOKWANZA.

(iii) Business Environment:Participants noted mixed low progress as confirmed by various indices such as the InvestmentClimate Assessment of 2009, the Global Competitiveness Index 2010/11, and the DoingBusiness Report 2008, 2009, 2010. It was appreciated that the Government in collaborationwith the Private Sector and Development Partners representative has prepared the Roadmap

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for Improving the Business Climate in the country that provides a adequate framework forimproving business environment and investment though at slow pace hence with limited impactat the initial stage. They noted further that the Roadmap provides an important first step towardan improvement of business environment and investment climate in Tanzania particularly giventhat it commands high–level political backing, engaging various MDAs working collectively onfinding solutions, appreciating LGA’s role in delivery of services, mainstreamed implementationprocess and coordinated by the Prime Minister’s Office which has clear responsibilities forcoordination of all government business. They appreciated that implementation of theRoadmap has commenced, but that no critical measure to improve the situation on the groundhad been implemented and urged for speeding up implementation of the identified short termmeasures. Also, it is important to put the implementation of the Roadmap in a larger picture ofinvestment climate reforms including infrastructure. Going forward, the following issues ofimportance 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 CommunicationPlan with the intention to build business buy-in and awareness of the Roadmap actionand 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 particularperiod - to build business buy-in and awareness of the reforms; and,

f) Timeline towards objective of establishing a sub-national Cost of Doing Businessranking, Investment Climate index and Business Competitiveness index to be agreed.

(iv) Anti-corruption:Participants appreciated the effort of the Government in promoting good governanceand the fight against corruption, particularly given the complexity arising from the needfor visibly prompt action and the challenges in gathering evidence in order to adhere tothe principles of human rights and good governance. They noted the importance ofmaintaining momentum generated by recent investigation and prosecution of petty andgrand 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 toparticipate in the good governance programmes;

(c) linking the effort against grand and petty corruption is critical; inadequate actionagainst grand corruption encourages petty corruption;

(d) Enhancing international cooperation in the investigation of grand corruption cases,particularly the tracing and recovery of corruption proceeds;

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(e) Publishing the report on the national governance and corruption survey of 2009and give priority to strong actions to combat corruption the most corruptgovernment institutions identified;

(f) Addressing the conflict of interest, particularly where policy makers, regulators, ormembers of oversight institutions are involved in the businesses they regulate oroversee;

(g) Empowering and encouraging the citizens to play a more active role in the fightagainst corruption; and

(h) Balancing the focus on prevention of corruption on one hand, and investigationand 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 andefforts have been made over the past three years to improve this. However indicatorsin equity have been slower than expected. In order to continue the objectives ofequalising expenditure human resources and outcomes the following advice wasgiven:

(a) In attracting staff to remote and underserved areas, there is a need to take aholistic approach and consider the possible ‘crowding out effect’ against privatesector and NSA providers of social services;

(b) Experience elsewhere shows that financial incentives are essential but notsufficient to attract staff in otherwise underserved areas. Other innovative forms ofincentives are needed, particularly those that take into account the local context;

(c) Finalize the Implementation Strategy and an M & E System for the recentlyadopted Public Service Pay and Incentives Policy;

(d) The basis for allocation of resources for the provision of services across LGAs wasnoted to be unclear. Participants called for establishment of clear and transparentcriteria for such interventions. This may require a reconsideration of theestablished service standards. The participants fully support decentralization bydevolution as a way of delivering services that are responsive to the needs of thelocal community. However they also recognize the strategic interventions mayberequired 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 thetwo inputs for example in recruitment Central Government could provide anadvisory role whilst allowing LGAs autonomy in order to recruit and retain theirstaff in the most effective way.

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(e) Reliable data is important in order to measure changes. The Government wascalled upon to improve its Human Resources Management Information System byestablishing the necessary databases and systems; and

(f) Participants called for a gender lens when allocating resources for promotingequity 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 yearsas a result of the Global Financial Crisis (GFC) and the role that the budget played inensuring that affected sectors were protected from the downturn. This underscored theimportance of the Government budget as an instrument for economic management.Going forward, the participants made the following observations and suggestions:

(a) Recently, the share of infrastructure investment appears to be on a decline. Theexpectation that the trend will be reversed as Tanzania unwinds from the rescuepackage and effects of the GFC was confirmed by the Government. Specifically,the government would try to reduce recurrent spending, especially on goods andservices, in order to create some budget space for infrastructure spending but alsoallow recurrent spending to be fully covered by domestic revenue;

(b) Participants were concerned about the apparent high level of a financing gapduring 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 areto be avoided. Government explained that it was aware of the challenges posed bythe deficit. The government will take stock of any possible financing gap during themid-year review of the budget, and make strategic decisions.

(c) Whereas good progress has been made in aligning the budget to MKUKUTA at themacro level, participants were concerned about the capacity of MDAs and LGAs toeffect similar alignment at the lower levels. Better alignment of sector budgetallocations and MKUKUTA/sector strategic objectives was called for. Hence,building the capacity of MDAs and LGAs was suggested as a prerequisite foraligning micro with macro level intentions, and achieving the intended results;

(d) As the stock of physical economic infrastructure increases, there is need to paymore attention to financing for maintenance; and.

(e) Continue building the capacity of the oversight institutions (CAG and Parliament) todischarge 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 improveddialogue atmosphere. However, there is need to build on the achievements, and design

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the next phase of PFM reforms to take Tanzania to even higher ground. Participantsoffered 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 adjustas 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 thelocal level, aiming to reduce the number of accounts to the minimum feasibleand enhance efficiency at all levels.

d) Participants were concerned on the multiplicity of channels for the flow of fundsand information to and from LGAs. Participants appreciated the Government’sdecision to reduce the number of LGA accounts to six (6), and called for furtherrationalisation of the flow of funds, information, and reporting; and

e) Building on the Water Sector SWAP, participants called for a systematic reviewof Sector Wide Approach programmes (SWAPs) to address the fiduciary riskinherent in such programmes.

PERFORMANCE ASSESSMENT FRAMEWORK 2011

The discussion on the 2011 PAF was held in a closed Government – DPs session. The meeting wasreminded that the Troika Plus meeting held in June 2010 proposed a more strategic PAF should be putin place that reflects Government priorities for growth and poverty reduction. The PAF developedshould be SMART and strategic. The subsequent agreement on a set of criteria agreed to focus onresults, and be strategic by considering the interplay between underlying processes, temporary processactions 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 appreciatedthat the draft was a good start for further engagement with Government and numerous comments andideas were discussed across the different Clusters recorded in the GBS section of this report. Theparties agreed to consult, through the receptive Cluster Working Groups and other fora, to finalise the2011 PAF by end of January, 2011.

Based on the assessment against the 2010 PAF, the 2010 GBS Annual Review is MODERATELYSATISFACTORY. Participants reaffirmed their commitment to focus on growth and reducing povertythrough increased productivity, improving the quality of social services, and strengthening governanceinstitutions. For this purpose, they committed to agreeing a 2011 PAF that will serve as the benchmarkfor monitoring results.. They recognised the importance of generating clear evidence of positive growthand poverty reduction results linked to GBS for the sustainability of instrument, which is theGovernment’s preferred instrument for aid deliver. They also agreed to negotiate a new PFM in order tocontinue with the GBS instrument.

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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 2nd – 8th December,2010. 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 SocietyOrganisations. From the Government, participants were drawn from Ministries, Departments, andAgencies (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. theNational Strategy for Growth and Reduction of Poverty (MKUKUTA) for Mainland Tanzania and theZanzibar Strategy for Growth and Eradication of Poverty (MKUZA) for Zanzibar. The Dialogue Structureguiding the coordination between the government, development partners and domestic stakeholders,which was adopted in 2008, emphasises Government leadership of the development process as well ofthe stakeholder consultations, integrates all major national and sectoral development interventions intoa single structure, and covers four main levels: Sector and Thematic area Working Groups, ClusterWorking 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) entryinto office of new Government of the United Republic of Tanzania and the Revolutionary Government ofZanzibar, following the general elections on 31st October, 2009 that were rated by local andinternational observers as free, fair, and democratic; (b) completion of the implementation period of theframework national development strategies (MKUKUTA I and MKUZA I for Tanzania Mainland andZanzibar respectively) that guided growth and poverty reduction programmes during 2005/06 –2009/10; and (c) the launch of new framework strategies in the form of MKUKUTA II and MKUZA II.

1.2 Opening SessionThe opening session was chaired by the Permanent Secretary, Ministry of Finance Mr RamadhanMussa Khijjah. In his welcoming remarks, he provided the scope of the forum as encompassing thePER 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 PolicyDialogue beginning 2009 in order to optimise resource utilisation and reduce transaction costs. ThePermanent Secretary invited the participants to use the forum for a candid, open, and constructivedialogue.

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 engagementbetween government and other stakeholders. CSOs appreciated and thanked the Government for theinvitation and the cooperation generally extended to the civic society, particularly as regards tocontinuous engagement on development and poverty reduction strategies. The statement reiteratedsupport 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, rememberingthat there are still 33% of Tanzanians living in poverty;

(b) There is a need to develop a simple and less resource intensive dialogue structure inwhich CSOs can participate more effectively;

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(c) The budget and its formulation and implementation processes remain obscure for mostcitizens, which affects transparency and accountability in the use of public resources;and

(d) The capacity building effort for the office of the Controller and Auditor General isyielding commendable results, and it would be useful if similar effort was directed tothe other oversight institutions particularly the Parliament;

The opening remarks by the Development Partners were delivered by the Resident Coordinator of theUnited Nations Agencies in Tanzania and Co-Chair of the Development Partners’ Group, Mr AlbericKacou. In their statement, the DPs noted that the forum was a sign of the government’s openness andwillingness to engage all stakeholders on key issues of national development. They congratulated thegovernment for finalising MKUKUTA II and MKUZA II which address the two main issues raised at lastyear’s forum, namely income poverty and efficiency in utilisation of public resources. The DPsreaffirmed their readiness to work with Government in translating the strategic frameworks into policiesand action plans. Moving forward, they raised the following issues:

(a) more effort is needed to make growth more pro-poor;

(b) address the quality of service challenges in the education, health, and water sectors,including their impact on the feasibility of achieving MDG 5;

(c) sustain the fight against corruption, and improve the judicious utilisation of publicresources; and

(d) uphold and support the private sector as the driver of economic growth by, amongothers, addressing the challenges highlighted in recent assessments of the businessenvironment 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 inimplementing MKUKUTA I and MKUZA I, particularly as regards macroeconomic indicators and theexpansion of access to social services. He, however, noted that major challenges remain in the way toattaining the National Development Vision 2025, the Millennium Development Goals, and even themedium term strategic objectives contained in MKUKUTA I and MKUZA I, including the following:

(a) Unsatisfactory quality of social service, despite substantial increases in accessindicators in all social sectors;

(b) low productivity in all sectors due to low levels of investment and inadequateapplication of technology;

(c) inadequate prioritisation of public investment and supervision in implementation ofnational and sectoral policies and strategies;

(d) lack of capacity to integrate the private sector and CSOs in the implementation of pro-poor programmes;

(e) Low growth of domestic revenue compared to financing needs, leading to insufficientinvestment in key economic infrastructure like roads, railways, ports, and energy.

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(f) Low capacity for processing agricultural produce; thereby missing on value additionopportunities;

(g) Failure of the private sector to compete regionally and globally; and

(h) A high population growth rate.

The Minister called on participants to critically examine these challenges, and advise onmeasures for rationalizing expenditure programmes and the resource available, and improvethe capacity for effective implementation of programmes as these are the prerequisites foraddressing the listed challenges.

1.3 MKUKUTA AND MKUZA PERFORMANCE REVIEW

1.3.1 MKUKUTA I Performance:Mrs Anna Mwasha, the Director for Poverty Eradication and Empowerment in the Ministry ofFinance 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 and2009/10. Progress in its implementation was monitored and reported on through severalinstruments under the MKUKUTA/Poverty Monitoring System, including the bi-annual Povertyand Human Development Reports (PHDRs) independently produced by the Research &Analysis Working Group (RAWG), the Government generated MKUKUTA AnnualImplementation Reports (MAIRs), and the routine and survey data reports generated by theNational 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) A total of 1,313,561 non agricultural jobs created, 1,185,387 of which were inthe private sector and 128,174 public sector jobs.

(iv) Generally, satisfactory levels of food production in the country;

(v) Notable investment in, and improved quality of physical infrastructureincluding roads and power supply; and

(vi) There was a rather marginal decline in income and food poverty indicatorsbetween 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:

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(i) Improved raking in the Global Human Development Report, from 163 in2000 to 151 in 2009;

(ii) Substantially increased enrolment and completion rates at all levels of theeducation 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 maternaldeaths from 578 (2004/05) to 454 (2009/10);

(iv) Access to clean and safe water increased, from 55% in 2004/05 to 58.7% in2009;

(c) Cluster III: Good Governance and Accountability:(i) Improvement in resource allocation, depicted by increased collection of

domestic revenue and allocations to LGAs;

(ii) Continued devolution of powers from the centre;

(iii) Continued implementation of the four core reform programmes (PSRP.PFMRP, LGRP, and LSRP); and

(iv) Deepening of press freedom and democracy, including regular, peaceful,and free civic and general elections.

(d) ChallengesWhile many successes have been recorded in implementing MKUKUTA I, a numberof challenges persist, including the fact that:

(i) A significant portion of the population still lives with income poverty and/orfaces a risk of hunger;

(ii) The quality of social services is still unsatisfactory for most people, and amajor challenge in perfecting the otherwise good results of MKUKUTAimplementation.

(iii) There is inadequate coordination and organisation of interventions acrosssectors and stakeholders, leading to insufficient prioritisation andsequencing of poverty reduction interventions;

(iv) Agriculture, the source of livelihood for three in every four Tanzanians,continues to suffer from less than half the targeted growth rate (averaging3.9% against the targeted 10% during 2005 – 2009), mainly due toinadequate productivity and limited access to agricultural inputs despite theAgricultural 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;

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(vi) There is low stock and poor quality of economic infrastructure, impeding theachievement of growth rates high enough to generate a more visible impacton poverty; and

(vii) Access to financing remains a severe challenge to many, constraining theirability to invest and exploit opportunities for income generation.

1.3.2 MKUZA I PerformanceZanzibar Strategy for Growth and Eradication of Poverty (MKUZA I), the Zanzibar Strategy for theReduction of poverty, and was implemented over the period 2007 to 2010. A review of itsimplementation 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 andReduction of Income Poverty; (ii) Social Services and Wellbeing and (iii) Good Governance andNational Unity.

(a) Cluster I: Growth and Reduction of Income PovertyUnder this Cluster, MKUZA aimed at achieving high and sustained pro-poorgrowth by creating an enabling environment for growth, promoting sustainablepro-poor and broad-based growth, reducing income poverty, and attainment ofoverall food security. Achievements include the following:

(i) Actual real economic growth reached 6.7% (2009) against a target of 10%in 2010.

(ii) Domestic revenue reached 18.2% (2007/08) against a target of 18.5% ofGDP by 2010.

(iii) Agriculture, employer to 42% of Zanzibar population, grew by 5.7% in realterms (2008) and 4.4% (2009) against a target of 6% growth in 2010

(b) Cluster 2: Social Services and WellbeingThe broad outcome under this Cluster was improved social well-being andsustainable access to quality social services with emphasis on poor men andwomen and the most vulnerable groups. Achievements include the following:

(i) Increased the net enrolment ratio (NER) for primary and secondaryeducation to 81.5% (2010) and 38.2% (2010) against the targets of 90%(2010) and 75% (2010) respectively. There was also an 11% increase inthe enrolment of University students between 2008 and 2009;

(ii) Reduced the incidence of malaria to 0.8% (2009) against a target of35% (2010), Infant Mortality Rate reduced to 33/1000 (2009) against atarget of 57/1000 (2010), U5M reduced to 79/1000 (2009) against atarget of 71/1000 (2010).

(iii) Access to Water increased to 80% (urban) and 60% (rural) by 2009against a target of 90% (urban), and 65% (rural) by 2010.

(iv) The 2010 target for access to basic sanitation (83%) was achieved in2009.

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(c) Cluster III: Good Governance (GG) and National Unity:Major achievements under this Cluster include:

(i) Participatory budgeting process and implementation ;

(ii) Establishment of the Government of National Unity.

(iii) Civilianization of Prosecutions.

(iv) Establishment of National Disabled Council.

(v) Operationalisation of the Zanzibar Business Council (ZBC)..

(vi) Increasing number of private TVs and Radio stations.

(d) Challenges:Experience from implementation of MKUZA I points to the following challenges:

(i) Inadequate prioritization and coordination of interventions, adverselyaffecting efficiency in the utilisation of the scarce resources available;

(ii) Poor export competitiveness and weak export competency, compoundedby poor service provision in these specific areas by the trade supportinstitutions, diminishes the national capacity to utilise export opportunities;

(iii) Weak human resources capacity;

(iv) Low productivity of land, labour and other inputs; and

(v) Weak emphasis on harnessing PPP potentials.

1.4 Review of Recent Macroeconomic PerformanceThe presentation on recent macroeconomic developments was made by Mr. Laston Msongole, theDeputy Permanent Secretary in the Ministry of Finance. The presentation noted that Tanzania hascontinued to enjoy satisfactory macroeconomic performance due to a combination of sound policiesand continued recovery of the world economy, particularly during the first half of 2010. GDP growth,which had averaged 7.1% between 2001 and 2008, and declined to 6% in 2009 due to the globaleconomic slowdown, was expected to exceed 7% in 2010. Other developments reported include thefollowing:

(i) The National Bureau of Statistics (NBS) had completed the reclassification of theconsumption baskets to the International Classification of Individual Consumption byPurpose (COICOP), to include both urban and rural prices, and use the geometric meaninstead of arithmetic mean in computing indices. Beginning January, 2010, inflationdecreased substantially on account of improved food supplies, a decline in internationalpetroleum prices, and prudent fiscal and monetary policies.

(ii) Mainly on account of shortfalls in the resources envelops, total Government expenditurewas 92% of estimates in 2009/10 and 84.0% during the first quarter of 2010/11.

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(iii) The national debt stock, as at end-September 2010 was US$ 8,498.07 million, 73% ofwhich is external debt, and 27% domestic debt. The public sector is the largest borrower,accounting for 86% of the total external debt.

(iv) During the year ending September 2010, overall Balance of Payments recorded a deficitof USD 25.7 million, against a surplus of USD 619.8 million recorded in thecorresponding period in 2009. Consequently, and partly due to a significant decline inofficial current transfers, there was a 13.2% widening of the current account deficit toUSD 2,570.9 million during the year. Gross official reserves stood at USD 3,589.6 millioncompared to USD 3,563.8 million recorded in Sept. 2009.

(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 stancetaken by the banks in the wake of the GFC.

Going forward, it was pointed out that, on the assumption of successful implementation ofeconomic policies and continued favourable weather conditions, economic activities areexpected to pick up in the medium term, with a real GDP growth bouncing back to 7.0% in2010 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 MacroeconomicPerformance 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 thepopulation still lives with income poverty and/or faces a risk of hunger. The inadequatequality of social services is another challenge in perfecting the good results ofMKUKUTA/MKUZA implementation.

(b) Participants recognised the adverse effect of the global financial crisis and theassociated global economic recession on the results of the MKUKUTA/MKUZAimplementation, and that the economy is recovering thanks to prompt and measuredinterventions by Government and recovery of the global economy.

(c) As we formulate strategies and evaluate results thereof, we must take into account theopportunities and the often adverse effects of policies, actions, and other developmentsat the international level. For example, the continued unfair architecture of global tradehas direct consequences for the incomes of Tanzanian farmers. Unless we change thenature of our agricultural exports from primary commodities to processed, it may bequite difficult to substantially and sustainably improve the level of peasants’ incomesunder the architecture.

(d) 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 andresponsibility over MKUKUTA implementation. There is also a need to avoid amultiplication of development strategies and plans, as suggested by the existence ofVision 2025, MKUKUTA, and the proposed Five Year Development Plans.

(e) Moving forward, critical actions for all stakeholders include the following:

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(i) To broadening the social benefits of economic growth, focus should be on broadbased, employment creating activities and sectors;

(ii) Proper prioritisation and sequencing of interventions, cross-sector organisationand coordination, and the consistency and depth of NSA participation in policydialogues will need to be improved;

(iii) Emphasise value addition to benefit agricultural producers;

(iv) Given the rather high population growth rate of 2.8%, higher economic growththan has been attained so far will be needed to sustainably and progressivelyreduce poverty.

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2.0 DEMOGRAPHIC AND HEALTH SURVEY (DHS) RESULTS

2.1 IntroductionThe NBS presented the preliminary results from the Demographic and Health Survey undertaken in2010 and whose data was still being analysed. The survey is a fourth such study undertaken inTanzania, the last having been conducted in 2004/05. The preliminary results from the data indicateimprovements in (a) birth rates, which has declined from 5.7 in 2004 to 5.4 in 2009; (b) infant mortalityand under-five mortality which have dropped dramatically from 59 and 147 to 25 and 81 respectivelybetween 1999 and 2009; (c) maternal mortality declined from 578 to 454 deaths for every 100,000deliveries between 2004/05 and 2009 respectively; (d) the children aged under 5 who received VitaminA increased from 14% in 1999 to 60% in 2009; and (e) the usage of some form of contraception amongwomen increased from 25% to 34% between 1999 and 2009 respectively.

Participants welcomed the preliminary results, and emphasized the need to sustain the education andother forms of interventions to promote maternal, child, and reproductive health to improve further onresults.

2.2 Results from a Study on Safety Nets in TanzaniaThe World Bank informed the forum of a planned study to examine the economic and social feasibilityof an expanded system of a safety net through cash transfers to benefit vulnerable members of thesociety. Results from the study would be broadly discussed by all stakeholders before being used forpossible policy decisions and/or implementation.

2.3 Growth and Poverty Reduction: Policy Implications from Qualitative ResearchDr Kim Kayunze of the Sokoine University of Agriculture made this presentation on behalf of theEconomic and Social Research Foundation (ESRF) of Dar es Salaam and the London-based ChronicPoverty Research Centre who coordinated the study.

The presentation postulated that the lack of meaningful reduction in poverty despite impressiveeconomic growth in the past decade could be explained by the following three reasons: (a) poor peopleare weakly protected against risk; (b) accumulating the assets needed to escape poverty has becomemore 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 forpoor households; and (c) agricultural growth has been hesitant due to inaccessibility of assets requiredto produce significant volumes for markets for most smallholders, trading monopolies and oligopoliesconstrain farm-gate prices and some of them deceive farmers, inadequate extension services, andthere 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) linksavings and credit cooperative societies and associations (SACCOSs and SACAs); insuranceinstruments 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 supportenhanced rental market and prevent vulnerable women losing access to land. In addition, the studynotes that contributions from local communities for social projects may be too much, and the priorityhitherto accorded in Kilimo Kwanza may not be enough for accelerating the reduction of income povertyfor the most vulnerable households.

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On improving agricultural incomes, the study emphasises adoption of measures to reduce risks forfarmers, facilitating (agricultural) asset accumulation and protection, improving output markets includingby extending the Warehouse Receipt Scheme to other crops and linking producers to specific valuechains.

Measures advocated for improving labour markets include diversification and promotion of non-farmactivities in rural areas, education and regulation to address ‘labour on credit’ or non-payment ofwages, 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 allowingchildren to stay in education longer, anti-child labour regulation, and social assistance to elderly andcarers in order to reduce the need for their re-entry into the labour market.

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3.0 MKUKUTA II: KEY PRIORITIES AND A FOCUS ON IMPLEMENTATION ARRANGEMENTS.

3.1 MKUKUTA II and Priorities to 2015MKUKUTA II was presented by Ms Anna Mwasha, the Director for Poverty Eradication andEmpowerment, Ministry of Finance. She observed that preparation of the strategy benefitted from theexperience gained during implementation of MKUKUTA I, various researches and studies on povertydynamics in the country and elsewhere, and broad stakeholder consultations. The key new elements inthe 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 sectorreform; 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 isorganised around three clusters of interventions, which are:

(a) Cluster I: Growth and Reduction of Income Poverty focusing on sustainable developmentthrough equitable and employment-generating growth, food security, andadequate infrastructures for production purposes including availability of reliableand competitively priced energy.

(b) Cluster II: Improvement of Quality of Life and Social Well-Being focusing on quality oflife of the poorest and most vulnerable groups, reduced inequalities in access tosocial services across geographic, income, age, gender and other groups, a safeand sustainable environment, and thereby reduced vulnerability fromenvironmental risk.

(c) Cluster III: Governance and Accountability – focusing on ensuring the poor have accessto and control over natural resources for lawful productive purposes, checkingwaste and diversion of public financial resources, ensuring democraticparticipation in the monitoring of public resources, rule of law, human rights and intotal, a conducive business environment for encouraging investment. This willencompass continued implementation of the core reforms in the public sector,namely the Public Sector Reform Programme (PSRP), The Local GovernmentReform Programme (LGRP), The Public Financial Management ReformProgramme (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 reviewof MKUKUTA I and drafting of MKUKUTA II, and appreciated the opportunity accorded to DPs tocontribute to both processes. He singled out the attempt to address challenges in prioritisation andproper sequencing, ineffective implementation of policies and strategies, and the lack of concretepolicies and actions for effectively implementing and monitoring MKUKUTA I as strong points forMKUKUTA II. He reaffirmed DPs support for MKUKUTA II, and there readiness to support the nextprocesses for early commencement of implementation.

Mr Erik Korsgen observed that many achievements were made under MKUKUTA I, particularly in termsof economic growth and improvements in education and health fronts, but key poverty and hungertargets have not been met. There are wide disparities in income and access to social services, and anunsatisfactory trend in the quality of social services, particularly education.

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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 nationalplans.

Presenting the Monitoring and Evaluation framework for MKUKUTA II, Mr Muddy Cheyo, SeniorEconomist from the Ministry of Finance, explained that the framework is a continuation of the one usedto 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 bebroader by involving more stakeholders, particularly the institutional sources of data and be linked tothe national dialogue structure involving the Government, DPs, and NSAs. He further reported that theMKUKUTA Secretariat was looking at ways to deepen public education on MKUKUTA and itsimplementation.

In the discussion that followed, the following points were raised:

(a) There is a need to streamline the institutional framework for planning, implementation, andmonitoring and evaluation within the Government in order to mitigate the apparent duplication ofefforts and multiplicity of development programmes and strategies;

(b) 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;

(c) A crucial lesson from the implementation of MKUKUTA I is that prioritisation in the allocation ofscarce financial and human resources is important. The Government should focus on a fewsectors that expand its capacity for broader interventions, and thereby ensure sustainability of itsprogrammes.

3.2 MKUZA II and its Implementation Arrangements:Ms Amina K H Shabaan, the Executive Secretary, Zanzibar Planning Commission, presented MKUZAII. 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 economycomposed of sustainable tourism, manufacturing, and modern agriculture. In moving from the Vision2020 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 ofgood governance in ensuring an environment conducive for growth-generating economic activity andsocial harmony. The process of preparing MKUZA II benefitted from experience gained fromimplementing MKUZA I, and particularly the various studies undertaken as part of the MKUZA Reviewprocess.

The three pillars of MKUZA II are:

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(a) Cluster I: Sustainable economic Growth:Addresses Zanzibar’s growth challenges, including the environment for investmentand income generation, means for ensuring that growth is sustainable, pro-poor,avoids unsustainable income inequalities, and captures both income poverty andfood security dimensions. The private sector is central to the realisation of theoutcomes expected under this Cluster.

(b) Cluster II: Human Development:To be meaningful and developmental, increased economic capacity must betransformed into a better quality of life for the people. This requires the actionsplanned under this Cluster, including improved social service delivery systems,gender responsive policies, and social safety nets to protect the most vulnerablemembers of the society.

(c) Cluster III: Good Governance and National Unity:Interventions under this Cluster aim at putting in place a socioeconomicenvironment needed for achieving the objectives of the actions under clusters 1and 2. Interventions under this Cluster include citizens’ participation in democraticgovernance, rule of law and respect for human rights, and strong democraticinstitutions and national unity.

The implementation of MKUZAII is to be coordinated under the MKUZA Secretariat, with support fromthe 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 tostrengthen the M & E Framework for MKUZA II.

Ms Amina concluded by observing that the actual financing requirements for MKUZA II implementationwill be known after completion of the costing exercise, but warned that it will be substantial. Althoughthe 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 AssessmentA rapid budget assessment constitutes an analysis of development in the planned and executedGovernment budget as regards consistency with policy intentions, and management of emerging fiscalrisks or challenges. The presentation of the Rapid Budget Assessment for 2010 was made by MrEmmanuel Mungunasi of the World Bank, and covered three thematic areas (aggregate analysis, LocalGovernment 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, andtotal government spending increased from 19.3% in 2002/03 to 29.0% in 2009/10, drivenmostly by increased development spending;

(b) Recurrent spending has grown rather rapidly of late, outpacing recurrent (domestic) revenuewhich can no longer cover the former;

(c) There is an appreciable increase in the utilization of non-concessional borrowing fordevelopment projects in infrastructure;

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(d) More and more resources continue to be allocated to MKUKUTA; with cluster 1 (economicgrowth and reduction of income poverty) now being the top priority. However, infrastructuremaintenance is inadequately funded;

(e) Key sectors continue to be prioritized in budget allocation (more than 60% of the budget goesto these sectors); education and roads claims the highest shares. However, there areweaknesses 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 ofallowances remains rather high in some key MKUKUTA sectors; and are becoming an issue inLGAs budgets too;

(g) The Government has implemented a number of initiatives to promote equality in budgetallocation among LGAs. Nevertheless, attaining equality in the allocation of human resourcesamong districts, and therefore the quality of service delivered across districts, is still achallenge;

(h) Execution of the locally funded component of the development budget is generally better thanthe foreign funded component, apparently because of difference in the disbursementprocedures.

(i) Regardless of the source of funding, execution of the development budget where the share ofcapital investment is high (e.g. energy) has significant lags, reflecting challenges in planningand procurement;

Mr Emmanuel Mungunasi made the following key recommendations in this area:

(a) Given the continuing growth of government expenditure as a share of GDP, it is advisable todetermine a desirable limit of overall spending based on sustainable levels of the resourceenvelope (domestic revenue, aid, and borrowing). Among others, imposing such a ceiling couldstrengthen prioritisation and efficient resource utilisation;

(b) Reduce recurrent spending to sustainable levels while increasing development spendingconsistent with MKUKUTA objectives;

(c) Enhance domestic revenue collection by implementing a comprehensive reduction of taxexemptions; also try to realize foregone revenue potential to enable increase needs in publicspending (infrastructure investment needs);

(d) Ensure non-concessional borrowing finances viable development projects, especially strategiceconomic infrastructure;

(e) Government needs to improve its revenue forecasting, and DPs to provide credible projectionof the aid during the Budget Guidelines exercise, in order to plan expenditure on the basis of acredible resource envelope;

(f) Continue to improve MTEF planning in all spending units and for execution of the developmentbudget by improving the credibility of Cash Flow and Procurement Plans.

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(g) starting with the energy sector, improve capacity of MDAs to plan and implement large capitalinvestment projects; and

(h) 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 Governmentresponse to Mr Mungunasi’s presentation, by providing clarification and the way forward on the issuesraised. The response appreciated the good work in analysing budget dynamics, and reaffirmedGovernment openness to discussing the challenges highlighted therein. Particularly, Mr Cheyohighlighted 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 ofimplementation of the respective project. Local funding is generally subject to the cash budgetsystem, and foreign funding is subject to approvals by the respective Steering committee anddisbursement by DPs. On the other hand, availability of relevant documentation (e.g.contractors’ certificates and progress reports), both of which reflect the capacity of theimplementing agencies and contractors, lead to delays in disbursement of funds.

Improved forecasting of the resource envelope and timely disbursement of GBS funds by DPswill provide a lasting solution as regards fund availability. On the other hand, the Governmentcontinues building the planning and implementation capacity of all MDAs and LGAs in order toachieve 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 involvelong gestation periods, multiple consultants and contractors, and approvals from severalregulatory bodies.

The Government continues to strengthen the capacity of MDAs, Regions and LGAs in planningand execution of such projects including capacity for negotiation of contracts for projects ofsuch magnitude.

Mr Cheyo also made the following clarification:

(a) Although budgets are prepared on the basis of solid assumptions, it is not unusual for in-yeardeviations to occur. All that is needed is recognizing the possibility, and having a strategy fordealing with it when it materialises.

(b) The Government recognizes the emerging challenges in realizing the projected resourceenvelope for 2010/11 (domestic revenue and non-concessional borrowing), and will develop acomprehensive strategy for addressing the challenges once its likely magnitude is betterunderstood. The government was confident of addressing it in the course of implementing thebudget to June 2011, leading to a balanced outcome of implementing the budget for 2010/11consistent with the broad policy objectives;

(c) The budget for 2010/11 includes estimates for non-concessional borrowing whose processesare at advanced stages to raise the budgeted amount on reasonable terms. Such funds from

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borrowing will be used to finance infrastructure projects approved in the development budgetby the Parliament, and implementation of the projects is subject to availability of the financing;

(d) The classification of recurrent expenditure versus capital expenditures is fairly subjective,depending on whether one adopts the economic or accounting frameworks. In agriculture, forexample, expenditure on training of extension workers could be considered recurrent althoughthe benefits to accrue from these officers are of a long term nature. The procurement of tractorsand power-tillers through the District Agricultural Development Plans (DADPs) is a necessarycapital investment although it is accounted for as recurrent expenditure. Over 75 percent offunding in DADPs is for irrigation which is capital expenditure, but the fuel and surveying costsincluded therein are classified as recurrent items.

(e) The apparent decline in the share (not value, which increased) of expenditure on primaryeducation in the 2010/11 budget reflects the completion of heavy investments in theconstruction of educational infrastructure (i.e. classrooms, teachers’ houses, desks, etc;

(f) The slight decline in the share of LGAs allocation reflects the effect of a one-time expenditurefor financing Local Government Election in 2009/10 which is not repeated in 2010/11;

(g) To address equity issues in resource allocation to LGAs, budget allocation for LGAs is formulabased, taking into account things like the population, poverty level, length of road network, andnumber of villages and approved establishment. Nonetheless, the Government is currentlyreviewing the formula with a view to improving it further. In tandem with the review, additionalresources are allocated to some LGAs to cover requirements not accommodated in the existingformula (e.g. creation of conducive working environment in underserved areas, purchase ofboats 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 theglobal financial crisis and the associated global economic recession on the results of theMKUKUTA/MKUZA implementation.

(b) Given the magnitude of the emerging gap in the 2010/11budget due to shortfalls in bothdomestic revenue and external assistance relative to the budgeted envelope, a clear strategyfor filling the gap is critical and would need to be implemented early in the year, if spending inkey areas of MKUKUTA II and service delivery are to be protected.

(c) The government should address apparent weaknesses in the alignment between sectorbudgets and sector priority objectives despite, increased share of key sectors in budgetallocation e.g. agriculture and infrastructure.

3.4 Medium Term Strategy and Cross Cluster MTEFThe 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 ofFinance. Mr Shallanda started by underscoring the importance of the PER process for strengtheningthe budget process, and the Government’s expectations for the recurrent dialogue to generatemeaningful contribution to the 2011/12 budget and beyond.

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Looking back at the 2009/10 budget, he noted that:

(a) Domestic revenue collections were 8% lower than budgeted, but 10% above the level in2008/09. The slower than expected growth is explained by the impact of the GFC that led toslower growth in taxable activities in the economy and postponement of some revenuemeasures whose implementation would affect adversely some activities including tourism, atthe onset of the GFC;

(b) The budget implementation continued to be on cash basis, with actual expenditure closing at92% of estimates;

(c) The net domestic financing of the budget during 2009/10 was equivalent to 1.9% of GDP;

(d) There has been significant improvement in financial management generally, as depicted bythe CAG’s audit reports whereby Unqualified Audit Opinions increased from 70% in 2007/08to 86% in 2008/09, Qualified Audit Opinions decreased from 26% to 11%; and AdverseOpinions decreased from 5% to 3%.

Mr Bedason Shallanda pointed out the following as measures recently implemented by the Governmentin further strengthening of public financial management:

(a) Introduction of economic classification of budget in line with GFS 2001 Manual. Henceforth,Annual Accounts are to be prepared using the International Public Sector AccountingStandards (IPSAS) format.

(b) Adoption of the functional classification of budget items beginning with the 2010/11 budget.

(c) Since July 2010, the Government is using the electronic payment system and the TanzaniaInterbank Settlement System (TISS) for all payments by MDAs and Dar es Salaam ;

(d) The Public Finance Act, 2004 (CAP 348) has been amended to provided for theestablishment of a centralized independent Internal Audit Department and empowered theTreasury, through the Accountant General, to control public funds in LGAs;

(e) The Office of Treasury Registrar has become an autonomous authority and will overseemanagement and operations of public corporations and institutions;

(f) Enactment of the Public Private Partnership (PPP) legislation in July 2010 in order toleverage public resources with private sector resources for investment in economic andsocial infrastructure.

On a forward looking note, Mr Bedason Shallanda reaffirmed the Government’s continued focus onsustaining 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;

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(ii) continue scaling up investment in agriculture and infrastructure development ;

(iii) Continue to strengthen debt management and investment capacity to tap newfinancing sources and use them well; and

(iv) Contain the growth of recurrent spending within sustainable levels and create spacefor infrastructure investment.

(b) In line with the Joint Assistance Strategy for Tanzania (JAST) and the PartnershipFramework Memorandum (PFM), the GBS is the Government’s preferred aid deliverymodality, and DPs are urged to respect their commitments and Government leadership inthis regard, and increase their usage of the preferred instrument.

(c) The main challenges going forward include finding ways to scaling up resources from bothdomestic and external sources to adequately fund MKUKUTA II interventions.

3.5 Summary of Key Issues on MKUKUTA/MKUZAThe following were the key messages arising from the presentations and discussions during thediscussions on MKUKUTA/MKUZA and Public Expenditure Review:

(a) All stakeholders reaffirmed their commitment to growth and poverty eradication aspromulgated in the various Government programmes, and look forward to collaborate intheir implementation under Government leadership;

(b) While many successes have been recorded in implementing MKUKUTA I and MKUZA I, anumber of challenges persist, including the fact that a significant portion of the populationstill lives with income poverty and/or faces a risk of hunger. The quality of social services isanother challenge that still needs to be addressed going forward.

(c) Participants recognised the adverse effect of the global financial crisis and the associatedglobal economic recession on the results of the MKUKUTA/MKUZA implementation, andthat the economy is recovering thanks to prompt and measured interventions byGovernment and recovery of the global economy.

(d) With about a third of the population considered to be living in poverty (HBS 2007), there isa need to maintain the focus on growth and poverty reduction as the fulcrum around whichall public policies revolve;

(e) The systems that aim at promoting accountability and efficiency in the utilisation of publicresources are critical, and should therefore be further supported and strengthened, ifmaximum mileage is to be drawn from the limited resources;

(f) MKUKUTA II and MKUZA II bring significant improvements to their predecessors(MKUKUTA I and MKUZA I), and stand to yield better results with proper ImplementationPlans including better sequencing and coordination.

(g) Moving forward, participants emphasised on the importance of:

(i) employment creating activities and sectors in order to broaden the social benefitsof growth;

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(ii) Taking account of the opportunities and challenges posed by policies, actions, andother developments at the international level.

(iii) Streamlining the institutional framework for planning, implementation, andmonitoring and evaluation within the Government in order to mitigate the apparentduplication of efforts and multiplicity of development programmes and strategies;

(iv) Enforcing good practice, behaviour, and attitude towards work, frugality, and ethicswhich are the basic prerequisites for success at any level.

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4.0 GBS ANNUAL REVIEW

4.1 IntroductionThe final three days of the 5-day event were used to assess progress in the implementation of thePartnership 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 AnnualReview assesses the performance of both the Government and Development Partners’ against jointlyagreed 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 GBSpartners to make their financial commitments for the following fiscal years and provide indicativecommitments for the next two years.

The PAF includes a combination of underlying processes, temporary process actions, and outcomeindicators drawn from the MKUKUTA Monitoring System. These are organized under the relevantClusters of the MKUKUTA; (1) Growth and Reduction of Income Poverty, (2) Improved Quality of Lifeand Social Well-Being, and (3) Good Governance and Accountability. Cross cutting issues are coveredby the Macro and Public Financial Management Working Group. The cluster work is undertakenthroughout 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 basedeconomic growth is effectively promoted, and identifies remedial measures where the answer to theprincipal question is not in the affirmative. CWG 2 works on the theme of Improved Quality of Life andSocial Well-Being, seeking to ensure that the quality of life is continually improved for the majority ofTanzanians. CWG 3 works on Governance and Accountability, examining systems that promote goodgovernance and the rule of law, and ensures that the Government is accountable to the people and notvice versa. CWG 4 is charged with ensuring that the budget reflects national growth and povertyreduction policies, that spending reflects the budget, and that budgetary decisions are consistent withpolicy and value for money considerations.

Ahead of the Annual Review event, the Government and DPs agree on a number of Key Issues to becovered in detail at the review. The Key issues will invariably have emerged from the continuousdialogue during the year, under either the PER Working Groups or the MKUKUTA MonitoringFramework. For the 2010 Annual Review, it was agreed that the same key issues from the 2009 reviewbe discussed in order to deepen the discussion and follow up on the implementation of the agreementsreached last year. The following were the issues discussed:

(a) Key Issue 1: Accelerating Pro-Poor Growth in the Context of Kilimo Kwanza;(b) Key Issue 2: Business Environment;(c) Key Issue 3: Equity and Efficiency - Opportunities And Challenges;(d) Key Issue 4: Budget; and(e) Key Issue 5: Financial Management at Central and Local Government Authorities

(LGAs).

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4.2 Official Launch of the 2010 GBS ReviewThe 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 andsuggestions:

(a) He congratulated the people and Government of Tanzania for the peaceful and fairelections in October, 2010;

(b) Congratulated Hon. M. H. Mkulo (MP) for his reappointment to the Office of Ministerfor Finance;

(c) He noted the achievements of Tanzania in some areas areas, including overalleconomic growth and on target to implement some MDGs but remains concernedabout high rates of income poverty and the quality of education; Tanzania has been apioneer in the use of GBS, and that, following this pioneer status, there was a need toshow progressive results, in order to maintain GBS;

(d) Important messages to point out at the beginning of the 2010 GBS Annual Reviewwere:

(i) There remains the need to work jointly to strengthen the quality ofcommunication and dialogue (e.g. IMF-PSI: 2 budgets, Budget gap); key forbuilding 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 6th December, 2010, the Minister for Finance,Hon. Mustafa Haidi Mkulo (MP) welcomed the comments by the GBS Chair, and invited him for furtherdiscussion on the same. He reiterated the key messages from stakeholders at the previous two days ofdiscussion, particularly emphasising the strong stakeholder support for the Government’s strategiesand action for promoting growth and reducing poverty, and the emerging consensus that there hasbeen an appreciable progress towards this goal. Nevertheless, the unsatisfactory quality of socialservices remains a challenge going forward. The Minister reaffirmed GBS as the Government’spreferred aid modality, and called on DPs to increase the share of aid delivered as GBS.

4.3 Implementation of the 2010 PAF

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4.3.1 2010 PAF PerformanceThe 2010 PAF performance was presented by Dr. Likwelile, Deputy Permanent Secretary, Ministry ofFinance. 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 reflectsfinalization of some ratings just after the annual review shows that:

Temporary Process Actions [25] As per the CWG Reports

Achieved 10Partially Achieved 7Not Achieved 8

Outcome Indicators [38]

Fully Met 17Not Scored 2Split Decision 1Off Track 17

Underlying Processes [21]

Satisfactory 11Moderately Satisfactory 4Split Rating 2Unsatisfactory 4

4.3.2 Overall ProgressThe 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 theEnergy Sector Review. 2 out of 5 Underlying Processes (the Best Programme Review2010 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 forPPP and Government to ensure a construction contract has become effective onadditional power generation capacities); One TPA on (GoT to present a time boundROADMAP 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 bya transfer while the overhaul of local taxation is carried out, Natural Resources actionsplans, 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 crosscutting issue. Split decision on Water Sector Review.

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(ii) 1 out of 4 TPAs was achieved (Capacity Building Plans based on the water sectorcapacity development framework); 2 were partially achieved (Education Sector HumanResources Situational Analysis and environmental action plans for at least two of theAgriculture, Health, Infrastructure, Water, Energy and Minerals sectors).Establishing ananalytical framework related to MTEF and PER to monitor the allocation anddisbursement of funds for the Health Sector Strategic Plan) was rated as notachieved.

(iii) 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 ServiceReform Management Program and Local Government Reform Program) wereassessed as Moderately, and a split assessment of 1 underlying process (Anti-corruption);

(ii) 3 out of 9 TPAs were achieved (Legal reform, Core reform indicators, and NACSAPM&E), 4 were partially achieved (Core reform procedures, LGA circular, Incentives inunderserved areas and Government shall reduce overall expenditure on dutyfacilitating allowances) and 2 were not achieved (Local government finance act, Anti-corruption)

(iii) All 2 Outcome Indicators, (the percentage of outstanding court cases for 2 years ormore and the percentage of total government budget allocated directly to LGAs andnot through Ministerial votes) were achieved;

(d) Cluster 4 - Macroeconomic Management and Public Financial Management

(i) 2 out of 6 Underlying Processes were Satisfactory implemented, (Annual Audit Cycle,and Macroeconomic Stability). Public Financial Management Reform Program andAssessment of Development Partners Performance) were rated as ModeratelySatisfactory and two others (effective PER policy dialogue and DPs and GoTadherence to JAST PFM, and Accra Agenda for Action Principles in terms of reducingfunding on project/basket and increasing funding through GBS) were rated asUnsatisfactory

(ii) 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 forZANZIBAR). One on (a comprehensive study on revision of the Public CorporationsAct to harmonize the legislation relating to public corporations, and ensurestrengthened corporate governance and accountability consistently across parastatals)was Not Achieved.

(iii) 3 out of 10 Outcome Indicators were on track; 1 had a split decision and 6 were ratedoff track.

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(e) Assessment of DPs PerformanceIn 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 withthe Government’s preference in that regard. In addition, DPs are assessed in relation to thepredictability 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 anddisbursement indicators, GBS in the first 2 quarters of the FY), and 1 was ratedunsatisfactory (adherence to JAST principles)

The volume of DPs’ GBS commitments has remained more or less constant for the past fouryears. Disbursement has also been more or less in line with commitments, with actualdisbursement consistently slightly below commitment.

The government reiterated its call for DPs to increase the share of GBS funding in theirportfolios, 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’seffort in implementing the actions agreed last year.. In addition, the following points wereraised

(i) 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 structurewas imposing a heavy transaction cost on some stakeholders, particularlyGovernment and CSOs was also raised. Re-examining the dialogue structure toimprove information sharing, and making it less resource intensive (especiallyhuman resources) was offered as a possible solution to these concerns.

(ii) As previous years, there were instances of different interpretation of theimplementation status of the results thereof, with a different outcome seen by thegovernment and DPs sides. This signifies the need to make the assessmentcriteria for the PAF indicators (Underlying Processes, TPAs and OutcomeIndicators) clearer to avoid a repeat of the same in future.

(iii) Rather than focusing on the number of indicators achieved or not achieved, itcould be helpful if they were assigned weights, as not all processes have the sameimpact on the overriding objective of engendering growth and reducing poverty;

(iv) The CAG’s audit of the Water Sector Development Programme generated veryuseful lessons that may be applied to improve the effectiveness of other sectorwide programs (SWAPs);

(v) Participants congratulated Tanzanians for peacefully concluding recent generalelections, and for the formation of a Government of National Unity (GNU) inZanzibar. The elections accepted as free and fair by international observers, andthe GNU, point to the maturity of the country’s democracy; and

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(vi) Whatever challenges there may be with GBS, the modality is internationallyrecognized as a better tool than other aid modalities, which explains itsendorsement at international fora and agreements aimed at promoting aideffectiveness. As such, parties need to focus on ways to make GBS more effectivein Tanzania rather than considering any other alternative.

4.4 Key Issues for 2010 Annual Review:

4.4.1 Introduction:Through the year long dialogue process, it had been agreed that the Key Issues discussed at the 2009Annual Review be the focus for discussion at this year’s review. This was particularly to assessprogress in implementing the agreements reached last year, the lessons learned from theimplementation process, and charting alternative paths where experience demands so. A Key Issuewas identified for the area covered under each Cluster Working Group.

4.4.2. Key Issue 1: Accelerating Pro-Poor Growth in the Context of Kilimo KwanzaMr Ezamo S, Maponde Assistant Director Private Sector Development, Prime Ministers’ Officepresented the paper on Accelerating Pro-Poor Growth in the Context of Kilimo Kwanza. He started byhighlighting progress attained in implementing the 12 Key Messages from the discussion in 2009, andprovide 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 agropromoting infrastructure; and (iv) land reform due to immense impact and outcomes to the majority ofsmallholder producers and the economy. Nevertheless, progress was achieved in all the twelve areasthough at different degrees, as follows:

(a) Address issues regarding financing Kilimo Kwanza, agriculture productivity, domesticresources mobilization, incentives to farmers, access to markets, the reorganization ofagricultural support institutions, and encourage infrastructure investments that supportagriculture.

The Government has streamed Kilimo Kwanza in the MTEFs of all MDAs, increased financingfor agriculture by 35% in 2010/11, to almost 8% of the total budget, allocated Tshs. 20 Billionfor creating a special agriculture window at the Tanzania Investment Bank (TIB) pending thetake off of an Agricultural Development Bank, increased funding for the National InputsVoucher Scheme (NAIVS), and provided further tax incentives for agriculture and agroprocessing. Measures to improve farmers’ access to markets include drafting of an AgriculturalMarketing Strategy to guide implementation of the Agricultural Marketing Policy, 2008strengthening the Warehouse Receipts System (WRS) under the Agricultural MarketingCooperative 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 to1.9 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 thetaxation system for agriculture with the aim of improving business environment, strengtheningthe WRS by improving transparency in the auction and auditing as well as promoting more

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competition in marketing and roll it out to the marketing of all crops in the country, and finalizethe Agricultural Marketing Strategy.

(b) Enhance the implementation of the ASDP as one of the key Government programmes todeliver Kilimo Kwanza goals.Kilimo Kwanza and the Agricultural Sector Development Program (ASDP) are taken asimportant instruments for realization of agricultural growth targets. Agriculture is targeted togrow from 3.2 percent in 2009 to 6.0 percent by 2015, with emphasis on small scaleagriculture, 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 variousareas of studies. 7 PhD and 1 MSc are expected to graduate at the end of the year,2010.

(ii) Technology Development:-§ 27 improved varieties were released and recommended to farmers

§ New pesticides from local herbal trees were developed and recommended fortheir effectiveness in control of maize and phaseolus beans both in the field andin store.

(iii) 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;

(iv) 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 procure1,908 processing machines through cost sharing arrangements which requirefarmers/beneficiaries to contribute 20% of the total costs of acquiring theequipment. Out of these machines, DASIP and PADEP supported theprocurement of 20 processing machines. This had resulted into enhancinghousehold income, improving quality of crops such as coffee, minimizingwalking distance for women to milling grain etc.

• During 2009/2010, irrigation infrastructure was developed in 45 small scaleirrigation schemes covering a total area of 20,745 hectares; a National IrrigationPolicy was prepared and adopted by the Government in February 2010,Comprehensive Guidelines for Irrigation scheme Development under theDistrict Agricultural Development Plans (DADPs) were prepared, and 510farmers were trained on irrigation technologies, improved water management,rain water harvesting and operation of irrigation schemes.

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(c) Harmonize and align Kilimo Kwanza Strategies into MKUKUTA II strategies for pro-poorgrowth.

This has been achieved, with MKUKUTA II prioritising agriculture as a core growth sector andinstrument for employment creation and contributor to the reduction of income poverty. KilimoKwanza has also been streamlined in the MTEFs of all MDAs.

(d) Ensure involvement of small-scale farmers’ associations in implementation of KilimoKwanza.

Small-scale farmers’ associations are engaged in the development and management of smallscale irrigation projects, and in the marketing through the management of the WarehouseReceipts System (WRS) by the Agricultural Marketing Cooperative Societies (AMCOS)

(e) Improve investment in agro-processing in partnership with the private sector with a viewto increasing value addition in the agriculture sector

The Government implemented programmes aimed at strengthening agro-Processing industriesby encouraging private sector investment in the sector. Nineteen (19) investors have indicatedinterest to invest in Agro-processing, and have been registered with the Tanzania InvestmentCentre (TIC). Implementation of the Integrated Leather Sector Development Strategy forreviving leather industries in the country has led to increased processing, from 6,038,000square feet a few years back to 37,305,215 square feet in 2009. In the search for appropriateagro-processing technology, CARMATEC has designed and tested equipment for processingof leather products (i.e. machines for design and manufacture of leather stripping, profilecutting and decorating), and SIDO has established Technology Development Centers inMbeya, Arusha, Kilimanjaro, Lindi, Iringa, and Kigoma that manufacture agro-processingmachines.

The effort to increase agro processing capabilities faces a number of challenges, including thefollowing:

• 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-processingindustries; and

• Absence of surveyed land for industrial area development.

Going forward, the Government intends to accomplish the following in order to resolve theabove challenges:

• Design and commercialize agro-processing technology through SIDO TechnologyDevelopment Centres. ;

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• Support use of innovative agro-processing machines that will include machines forprocessing of maize, sorghum, groundnuts, cassava, cashew nuts, fruits andvegetables and introduction of oil expellers.

• Continue with efforts to develop infrastructure in investment areas e.g. EPZ andSEZ as well as constructing rural roads, water and energy infrastructure aiming atattracting more investment, and

• Implement Comprehensive Africa Agriculture Development Program (CAADP) andfocus on investing in agro-processing and value addition.

(f) Strengthen research and development that supports effective implementation of KILIMOKWANZAResearch, development and training was one of the main beneficiaries from the large increaseof the sector budget in 2009 and 2010, and now accounts for a substantial 11% of the sectorbudget.

(g) Improve and expand irrigation especially small scale. See (b) above.

(h) 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, theauthority for approval of disposition which was centralized in the office of the Commissioner forLands has now been devolved to the three Municipalities in Dar es Salaam, consultancies havebeen undertaken on Systems Reform in the Office of the Commissioner for Lands and NeedsAssessment study in the Titles Registry have been completed. Also, manual records have beensorted and consolidated in single files in Mbeya and Mtwara and by 90% in other Zonal Officesfor easy retrieval and access of land information. Pilot programme aimed at land parcelsadjudication and issuance of CCROs is continuing in 4 selected districts. To promote a marketfor land, a Research Unit has been established with a mandate to investigate the market pricesfor crops, land value and construction rates with a view to establishing standards market ratesfor compensation. Perhaps most important, some potential land parcels for KILIMO KWANZAhave been identified, verified and recommended for inclusion in the Land Bank.

The land reform agenda faces two main challenges, namely: (i) Inadequate funds forestablishing Land Bank and associated compensations, and (ii) Inadequate funds to supportthe ongoing fundamental geodetic network.

Going forward, the Government plans to prioritise actions in the following areas:

(i) Generalizing and sustaining agricultural productivity gains, and translating them into increasedfarmers’ incomes. This requires continued provision of the input subsidy scheme and pursuit ofan appropriate agricultural marketing and trading policy.

(ii) Encouraging private sector participation in the provision of rural infrastructure through thePublic Private Partnerships (PPP), and implementing initiatives to promote the use ofappropriate technologies;

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(iii) Pushing land reform further by computerizing and rolling out the pilot programs with increasedbudgetary prioritization.

(iv) 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 theGovernment for the impressive progress made over a short period, including the prioritisation ofagriculture in both MKUKUTA II and the budget for 2010/11, and the decision to focus on a few areasfor maximum impact. They reaffirmed their commitment to continue supporting agriculture through theASDP framework. He highlighted the following as important prerequisites for quick results in growth andreduction of poverty through agriculture:

(i) Increasing productivity on the smallholder farms;

(ii) Developing rural infrastructure, through PPPs and appropriate technologies;

(iii) Improved coordination within the 12 agencies over five Ministries in the sector; and

(iv) 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 inTanzania. There is now a need to do more, do it better, and do it faster.

(ii) Real progress will come from increased productivity,

(iii) Incentives to farmers include market access (rural infrastructure and removal ofunproductive regulations), and increasing the farmers’ share of the value of theirproduce;

(iv) Experience from India, Far East and China shows that smallholder farmers can be asproductive and operate on commercial basis as large farms. In any case, productivityis not dependent on size but more to access to inputs and markets. These will need tobe reflected in the Government’s facilitation strategy for the sector;

(v) Taxation is an important element in the incentives package for agriculture; the currentpackage of fiscal incentives could benefit from further rationalisation,

(vi) Without unencumbered access to markets, (including stopping the practice of imposingunnecessary trade bans that suit urban consumers at the expense of the poor ruralproducers), increased productivity may not be quite helpful for farmers. Working forgood and stable farmers’ prices may be more effective for encouraging investment intechnology and expansion of acreage.

(vii) To derive maximum impact from the resources available, prioritisation in terms of thecrops and areas to support is needed;

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(viii) Environmental protection in particular focusing on ecological balance throughprotection and management of the wetlands should be considered while developingagricultural land;

Going forward, the following Key Messages:

(i) Agriculture is business, and one needs to recognise the potential, and encourage therole of the private sector for increasing agricultural production in Tanzania.

(ii) In the context of Tanzania, small holder farmers are key stakeholders in agriculture,and addressing productivity challenges for them stand the better chance to generatemaximum poverty reduction impact.

(iii) While strategic state interventions are recognised as a necessity for pro-pooragricultural development, there is a need to accelerate improvement of the businessenvironment in order to leverage private sector investment in agriculture.

(iv) For agriculture to be sustainable, water is critical. Therefore, there is need to considerclimate change implications, build low cost and easy to maintain irrigation schemesquickly and extensively and exploit opportunities presented by wetlands.

(v) The challenge in agriculture is to increase productivity of land and labour. This requirestimely access to quality inputs, appropriate technology, and extension services.

(vi) To translate productivity gains into increased incomes, market access for farmers,including through improved rural roads and rural electrification for value addition arecritical.

4.4.3 Key Issue 2: Business EnvironmentThe paper on the Business Environment was presentation by Ms Joyce Mapunjo, PermanentSecretary, Ministry of Industries, Trade, and Marketing. In a background note on recent Governmentactions in the area, she explained that the Government established a Task Force on the subjectfollowing the country’s unsatisfactory showing in three international reports, namely (i) the InvestmentClimate Assessment, (ii) the Doing Business Report, and (iii) the Global Competitiveness Report. TheTask Force developed a Roadmap on Improving Tanzania’s Performance in Doing Business, which hasbeen adopted by the Government as the guide for addressing current business environmentchallenges. A Comprehensive Action Plan is being prepared and integrated in the MTEF.

Roadmap interventions are organised around Quick Wins (administrative changes implementation ofwhich may start immediately); Medium term reforms (those that require legislative mandate); andLonger Term Reforms (that require longer time span for implementation). Implementation of the quick-win actions has already generated results in the areas of starting and closing business, propertyregistration, trade across borders, and paying taxes

The Medium Term Interventions include the following:

(i) Starting and business closing– simplify registering and licensing procedures(ii) Trading across borders- roadblocks and boarder processes,(iii) Issuance of permits- building permits(iv) Paying taxes – process (ICT based),

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(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, willcontinue 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 theComprehensive Implementation Plan and a Comprehensive M&E Framework. In order to securestakeholder 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) remindedparticipants on the importance of a conducive business climate for the country’s growth and povertyreduction agenda, emphasising that a strong private sector is a foundation of a strong and sustainableeconomy. 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 6steps and 18 days.

(ii) In Tanzania, it takes 22 procedures and 328 days to obtain a construction permit. Thesame process in Kenya requires 11 steps and 120 days.

(iii) Tanzanian businesses make 48 separate tax payments a year. A comparable firm inRwanda makes only 26 payments, and uses less time.

He noted that the Roadmap has the potential to address many of the adverse features of thebusiness environment, particularly given that it commands high–level political backing, it bringstogether the different institutions that need to work collectively on a solution, It recognisesLGA’s role in delivery of reform objectives, its implementation is streamlined in the MTEFs ofimplementing agencies, and coordination rests on a new Private Sector Development andInvestment 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 berequired:

(i) First, finalizing the Comprehensive Implementation Plan for all of the Pillars, movingfrom broad classifications of actions to the detail, and with clear sequencing of thevarious steps to be taken, by whom, and by when.

(ii) Second, identifying the human and financial resource requirements for implementation.He emphasised that costing and prioritisation would help to deliver the interventions.

(iii) Third, finalizing the M&E system with output and outcome indicators and targetsagainst which progress can be measured and communicated.

(iv) Maintaining the focus on results in order to secure the buy in of the businesscommunity and assist in mobilising resources for implementation.

Plenary discussion on the presentations started with a contribution from Mr Felix. Mosha, Chairpersonof the Confederation of Tanzania Industries (CTI). He commended Government for developing theroadmap and the progress already made in its implementation. He noted, however, that more than is

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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) Roadblocks that frustrate trade;

(ii) The heavy burden imposed by Regulatory Bodies on businesses. Specifically, hecalled for the following before instituting any new regulatory requirement or levy:

(a) Establish the case for action;

(b) Alternatives be examined, and policies with the most benefit and least cost tobusiness be adopted;

(c) Provide effective guidance to the regulatory bodies;

(d) Institute regular reviews of the regulatory bodies, and consider the desirability ofa regulator of regulators;

(e) Institute effective consultations between the regulator and the regulated.

(iii) the pension subsector, where employer’s contributions are not capped; benefits are noharmonised, and members may not transfer their savings and benefits from one fundto another;

(iv) Skills Development Levy which is charged at 6% of the wage bill and thereforepunishes formal employment;

(v) VAT refund mechanisms; and

(vi) Changing the public’s mindset as regards the private sector.

In the discussion that followed, the following points were raised:

(i) Broaden the competiveness agenda by including issues like access to electricity, accessto finance, and access to national, regional and international markets;

(ii) Presentation to private sector stakeholders of a prioritised list of concrete short termactions and related outcomes that will be completed within 12 months to build businessbuy-in and awareness of the reforms.

(iii) Continue with implementation of the identified quick win actions and short termmeasures for improving the business climate, and expedite transition to implementationof the medium and long term measures.

(iv) The Roadmap provides sufficient framework for improvement of business climate inTanzania, and should therefore be systematically implemented.

(v) Develop, by March 2011, a comprehensive Implementation Plan for the Roadmap forImproving the Business Climate.

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(vi) State intervention and regulation is welcome by the private sector where there is marketfailure, but this should be justified, clear, predictable, consistently applied, and subjectto regular consultations. Consider the desirability of establishing a regulator ofregulators.

(vii) Change the public’s mindset regarding the role of the private sector, which is a source offrustrating rather than facilitating actions against the latter.

(viii) Broaden the competitiveness agenda by including, among others, factors likeavailability, quality, and cost of electricity; access to and cost of financing; and access todomestic, regional, and international markets.

(ix) Evaluate the cost implication of statutory charges on wages, and develop a strategy forreforming the pension subsector.

4.4.4 Key Issue 3: Equity and Efficiency: Opportunities and ChallengesMr Mathias Kabunduguru, Director for policy and Development in the President’s Office, Public ServiceManagement, presented the paper on Equity and Efficiency in the provision of public services. Hestarted by highlighting the centrality of equitable distribution of human resources in the pursuit of equityin the standard of social services across different geographical areas of the country. A major factorconstraining the capability of LGAs to improve service delivery, quality and accessibility in line with theobjectives of the MKUKUTA and MDGs is their limited capacity to attract, retain and adequatelymotivate qualified personnel. Staffing problems in many LGAs are partly related to long-term ruraldevelopment needs that cannot be alleviated in the short to medium term. While financial incentives willassist in compensating for capacity weaknesses to attract and retain staff, required interventions haveto go far beyond this level. He noted that there are important lessons to be drawn from experienceelsewhere, including that financial incentives are not sufficient for this purpose and the need to considersocial implications of any propose solution.

Mr Kabunduguru reported the status of implementation of the commitments reached on the matter at asimilar forum last year, as follows:

(a) Finalizing and implementing the Medium Term Pay Policy and pay specialattention to underserved districts:The government has adopted a new Public Service Pay and Incentive Policy whichincorporates the key principles required to address equity issues. Specifically, the Policyincludes commitments to design and develop an appropriate incentive scheme to attractand retain staff allocated in underserved areas, and to improve the organisationalenvironment and strengthen human resource management (HRM) practices in LGAs. Anadministrative decision to limit recruitments and allocation of new employees to the areasconsidered to be well served is already being implemented, thereby increasing staffingopportunities for underserved areas,

(b) Setting and implementing a transparent criteria for selecting districts to benefitfrom the Additional Development Fund for Underserved Areas: A special budget to fund development projects intended to improve working conditions in36 LGAs considered to be underserved was launched in 2009/10, and allocated TShs 42billion. In the 2010/11 budget, TShs. 45.280 Billion was allocated and coverageincreased to 126 LGAs with about 54.6% of the budget allocated for construction of Staff

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Quarters (including hostels around community schools), Council Buildings, and specialschools.

(c) Speeding up the implementation of D by D policy to address challenges of equityand efficiency:While upholding the D by D policy as a basis of its decentralization policy, it is alsorecognized that it may create challenges for speedy achievement of equity in servicedelivery across LGAs. The Government continues to collaborate with NSAs for improvedhealth service delivery in relevant areas, and will now contribute to the management ofsuch facilities through special budget subsidies or attaching some of public employees tothose health facilities.

(d) Reviewing the levels and criteria for use of allowances and applying the rulesrigorously:Measures adopted include timely payment of subsistence allowances, and timely entry ofnew employees into the pay roll to facilitate early commencement of regular salarypayments. Several LGAs consulted by POPSM had confirmed implementation of thesedirectives, and had recorded significant improvement in the reporting and retention ofnew appointees as a result. Payroll management and salary payment have benefittedfrom a new Human Resources Management Support System (HURISS) which is beingrolled out to all LGAs.

(e) Giving districts autonomy and flexibility for deciding on the use of Special Budgetfunds 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 theirdiscussion of equity issues:

(a) What is an appropriate criterion for classifying a place as underserved?

(b) What is the fiscal space available for equity promoting interventions, given thecurrent level of the resource envelope and MKUKUTA II focus?

(c) What is the right balance between the Government spending and private sectorinvestment, considering the possibility of crowding out effect against NSA serviceproviders?

(d) Supply side issues such as training institutions and their required investment; and

(e) How should the measures be sequenced into short term, medium term, and longterm initiatives?

Responding to the presentation by Mr Kabunduguru on behalf of DPs, Ms. Habel from the Embassy ofGermany congratulated Government for its implementation of last year’s commitments, particularly theadoption of the Public Service Pay and Incentive Policy. She noted that measures may not be sufficient

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but show commitment, and called for early promulgation of an implementation framework so thatimplementation 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 theDPs’ formal response:

(a) The provision of “Special Budget” funds to 126 LGAs (about 90% of the total) indicates alack of focus, insufficient basis for determining underserviced areas;

(b) 26 of the Councils applied the “Special Budget” funds on the construction of Councilbuildings, which may not generate the intended equity promoting outcomes;

(c) Availability of reliable data, on the basis of which changes in the quality of servicesacross LGAs would be monitored, is still a challenge. Although change is likely to beslow, available data suggests that equitable service delivery is not really improving fastenough to make a difference in the medium term;

(d) There may be a need to set realistic service level targets (e.g. number of patients perstaff), so that ‘well served’ areas are not perpetually classified as ‘underserved’.

(e) 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 ofgetting away from the problem of transfers;

(f) The government was advised to expedite the intended partnerships with NSA serviceproviders, particularly for facilities in underserved rural areas, instead of competing withthem for the few trained experts;

(g) The private sector may be encouraged and facilitated to invest in service delivery in theunderserved areas in order to leverage public and other NSA resources;

(h) The issue of equity in access to services should be accorded higher priority whenconsidering how to make use of any fiscal space available. For example, the resourcesused for a 31% general wage increase for all civil servants in 2010 could go a long way ifapplied for equity promotion.

Going forward, the key messages from this session may be summarised as follows:

(a) In attracting staff to remote and underserved areas, there is a need to take a holisticapproach and consider the possible ‘crowding out effect’ against private sector and NSAproviders of social services

(b) Experience elsewhere shows that financial incentives are essential but not sufficient toattract staff in otherwise underserved areas. Other innovative forms of incentives areneeded, particularly those that take into account the local context;

(c) Finalize the Implementation Strategy and an M & E System for the recently adoptedPublic Service Pay and Incentives Policy;

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(d) The basis for allocation of resources set aside for addressing equity issues in theprovision of social services across LGAs was noted to be unclear. Participants called forestablishment of clear and transparent criteria for such interventions;

(e) The participants appreciate the merit of decentralisation by devolution as an instrumentof deepening democracy and good governance. However, they also recognise that, withthe differing endowments among LGAs, attaining equity in the provision of serviceswould require proactive and strategic interventions from the centre. There is therefore aneed to review and reconcile the two.

(f) Reliable data is important in order to measure changes. The Government was calledupon to improve its Human Resources Management Information System by establishingthe necessary databases; and

(g) Participants called for a gender lens when allocating resources for promoting equity inthe provision of social services.

4.4.5 Key Issue 4: BudgetThe main paper on budget developments was made by Mr Emmanuel Mungunasi from the WorldBank 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, budgetallocation, and budget execution issues.

Issues related to macro-fiscal policy included the challenge of increasing domestic revenue to meetgrowing investment needs, reducing recurrent spending in order to fully cover recurrent spending andcreate more fiscal space for investment; and addressing the apparent financing gap in the 2010/11budget 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 thealignment 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 ofdevelopment budget funds despite improved overall MDAs budget execution and weak planning andbudgeting 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 forPolicy Analysis Department, and Mrs Monica L. Mwamunyange, the Commissioner for Budget. Theyreminded participants of the participatory nature of the budget process in Tanzania, with the Parliamentproviding guidance on setting priorities, scrutiny of sector and MDAs’ budgets, and approval of thebudget through legislative action; Councillors debate, approve and oversee the implementation ofLGAs’ budget; CSOs provide input through the CWG/PER process; and DPs provide inputs and adviceon the preparation of Guidelines, financing and evaluation through CWGs/PER processes. Through theopen process, opportunities for clarifying planning and budgeting assumptions and drivers of budgetexecution 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 resultsfrom budget implementation. In this regard, examples of broad achievements during 2009/10 includedroads constructed, irrigation schemes built, examples of mechanization of agriculture, teachers’houses, progress in the construction of facilities for the University of Dodoma.

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Going forward, the Government will continue allocating budgetary resources on the basis of MKUKUTAII priorities, namely education, agriculture, transport and communication infrastructure, energy, landmanagement, and manufacturing.

In discussing the three presentations, participants appreciated the challenges that the country facedduring the last two years as a result of the GFC and the role that the budget played in ensuring that thecountry doesn’t go into recession. This underscored the importance of the Government budget as aninstrument for economic management. It was emphasised that, although recurrent expenditure seemsto have grown rapidly in the past two years, this was partly driven by deliberate action in response tothe GFC, and that Tanzania has a strong track record of responding effectively to economic shocksthreatening stability of the macro-fiscal fundamentals. A point was also raised regarding the significantelement of investment in the so called recurrent expenditure, examples of which include transfers toLGAs for education infrastructure and training of agricultural extension officers.

Going forward, the key messages from the session were:

(a) Hopefully, the apparent decline in the share of infrastructure investment will be reversed asTanzania unwinds from the rescue package and effects of the GFC.

(b) Concerns were aired on the lack of a clear strategy for dealing with an apparent financinggap in the 2010/11 budget, to which the Government responded that it was aware of theevolving budgetary situation, but was confident of addressing it in the course ofimplementing the budget to June 2011.

(c) Improve capacity at MDA and LGA levels in order to enhance prioritisation in the utilisationof budgetary resources for maximum poverty reduction impact.

(d) As the stock of physical economic infrastructure increases, there is need to pay moreattention to its maintenance.

(e) Continue building the capacity of the oversight institutions (CAG and Parliament) todischarge their functions effectively.

4.4.6 Key Issue 5: Financial Management at Central and LGAs Presentation and DiscussionDr. S. Likwelile, Deputy Permanent Secretary, Ministry of Finance and Mr. Guilliame jointly presentedthe paper on PFM developments at the central and LGAs’ level. They traced the history of PFMreforms in the country, whereby Phase I (1996 – 2003) focused on increasing domestic resourcemobilisation, minimizing resources leakages, instituting fiscal discipline, and installation of acomputerized Integrated Financial Management System (IFMS), and implementation of the MediumTerm Expenditure Framework (MTEF). Phase II (2004 to 2008) focused on sound macro-economic andfiscal management, increasing the predictability of resources, devolution of powers to LGAs, andcapacity building to Accounting , Auditing and Procurement functions. The Key Results Areas underPhase III (2007 to 2010) include improvement on IFMS operations through automation, improvement ofthe 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:

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(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 beensatisfactory, 1 on track, 5 not done, 2 as split and 1 as not applicable

(b) Amendments to the Public Finance Act (2001) were effected in June/July 2010 and a LocalGovernment Finance Act, (1982) and a draft Local Government Finance Bill and beingreviewed bt key stakeholders.

(c) The Public Finance Act of 2001 has been amended to increase the oversight function ofthe Accountant General over Local Government Finances;

(d) Budget transparency has been enhanced by distributing the Budget Background andMedium Term Framework 2009/2010-2012/13, the Plan and Budget Guidelines for2010/11-2012/13, publication of the Plan and Budget Guidelines for 2010/11-2012/13among others.

(e) Commenced preparation of a new PFM reform agenda. To allow a thorough preparation,the current phase is extended to June, 2011.

The presenters pointed to other indicators of good progress as the improved quality of the dialoguearound PFM issues, undertaking a PEFA study and a Joint Supervision mission in Sept 2010 tointeract, assess, learn, build trust and hence fruitful dialogue on PFM. The overall assessment of thePFMRP (an underlying process) was Moderately Satisfactory. Challenges in the PFM area includemultiplicity of channels for fund flow and reporting that afflicts LGAs.

The discussion that followed the joint presentation raised the following points:

(a) 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,

(b) Further attention needs to be kept on planning and budgeting and its financing at alllevels, and increasing the transparency of the budget ;

(c) There was diversity in expectations of the different stakeholders (including MoF, PMO-RALG, MDAs/LGAs, DPs, and service delivery units) which is affecting service deliveryby LGAs.

The key messages to take forward from the session are the following:

(a) There has been substantial achievement in last year, including a much improveddialogue atmosphere. Now, there is need to build on the achievements, and design thenext phase of PFM reforms to take Tanzania to even higher ground.

(b) 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 andunderstand the LGA operations better.

(c) There is a need to rationalise the flow of funds, information, and reporting to and fromLGAs.

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(d) Review and streamline the procedures for managing financial resources at the LGAlevel, aiming to reduce the number of accounts to the minimum feasible and enhanceefficiency at all levels; and

(e) Undertake a systematic review of Sector Wide Approach system (SWAPs) to addressinherent fiduciary risk, building on experience in the Water Sector SWAP.

4.5 The Fight Against CorruptionThe fight against corruption is an important element of any effort towards judicious use of publicresources and strengthens good governance generally. It is therefore one of the underlying principles inthe PFM, and a permanent feature at GBS Annual Reviews.

An update on the Government’s effort against corruption was provided by Dr Edward Hoseah, theDirector General of the Prevention and Combating of Corruption Bureau (PCCB). He started byreminding the participants that corruption is a global problem and no single country in the whole worldcan claim to be free from it. The fact that many nations around the world have ratified the UnitedNations Convention Against Corruption (UNCAC, 2003) is a clear testimony that corruption afflicts allnations, 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 October2010, 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, whereby10 Cases of Political Corruption were sent to Courts of law and several other investigations are stillunderway. 28 cases of grand corruption are continuing with prosecution in courts of law, of which 7relate to local authorities, while petty corruption cases have increased significantly from 223 cases in2007 to 724 cases by October 2010. Convictions have also increased from 44 cases in 2007 to 155 inOctober 2010. Asset recovered (money) by the PCCB as of October, 2010 has reached about TShs 10Billions. 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 promotinggood governance and the fight against corruption, particularly given the complexity arising from theneed for visibly prompt action and the challenges in gathering evidence in order to adhere to theprinciples of human rights and good governance. They noted the importance of maintaining momentumgenerated by recent investigation and prosecution of petty and grand corruption cases. The followingsuggestions 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 inthe good governance programmes;

(c) Linking the effort against grand and petty corruption is critical; inadequate action againstgrand 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 2009

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(f) Addressing the conflict of interest, particularly where policy makers, regulators, ormembers of oversight institutions are involved in the businesses they regulate or oversee;

(g) Empowering and encouraging the citizens to play a more active role in the fight againstcorruption; and

(h) Balancing the focus on prevention of corruption on one hand, and investigation andprosecution on the other.

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5.0 2011 PAF DISCUSSION

The discussion on the 2011 PAF was held in a closed Government – DPs session at the end of thethree day Annual GBS Review event. The 2011 PAF was guided by the need to be strategic, reducethe number of processes and outcome indicators, and ensure their measurability. The Governmentpresented a slightly amended Draft 2011 PAF, which was originally prepared jointly through ClusterWorking 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 draftprovides for nineteen (19) assessment areas for Cluster I, thirteen (13) for Cluster II, eight (8) forCluster III, and thirteen (13) for Cluster IV.

The meeting was reminded that the Troika Plus meeting held in June 2010 proposed a more strategicPAF should be put in place that reflects Government priorities for growth and poverty reduction. ThePAF developed should be SMART and strategic. The subsequent agreement on a set of criteria agreedto 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 asAnnex 1.12.

In general, the DPs appreciated that the draft was a good start for further engagement withGovernment. 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 generalcomment the DPs emphasised the importance of agreeing on clear calculation methods and datasources 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 UPand 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 baselinesurvey…." as a TPA under this heading is extremely un-ambitious. Urge that this TPA isreferred 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. Referback to the sector for re-discussion.

Outcome Indicator

• Engage with GoT further regarding the inclusion of an agriculture productivity indicator

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• 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 IIUnderlying Process

• Consider removing "environmental action plans"

Temporary Process Action

• Encourage refocusing of the TPA to quality of education related constraints and proposeintroduction of a TPA related to vocational training;

• Consider introduction of a TPA related to follow up to water sector special auditrecommendations

Outcome Indicator

• Details relating to regional/district level disaggregation have been omitted while it is understoodthat the details have already been agreed at sector level;

• The proposed indicator number 4 on HIV prevalence is problematic as data is only available on3 year intervals and hence is not suitable as a PAF indicator. This indicator continues to befollowed at sector level;

• Indicator number 5 is a new indicator, and in principle relevant as it captures an importantelement of social protection. However, issues related to data availability and reliability wasraised. Discussion is proposed to be referred back to sector level [this indicator was removedfrom the zero PAF version presented in the plenary session];

• The first indicator is preferred by the DPs – however – it would be more relevant to measurenurses/midwives rather than medical officers/assistant medical officers.

• There was no agreement whether an indicator setting targets for budget allocations should beincluded in PAF;

• A proposal was made to include an OI related to urban planning

Cluster IIIUnderlying Process

• It was proposed that State House would be a more appropriate interlocutor around anti-corruption than GGCU as currently indicated [this UP was changed to "NACSAP II Review" inthe 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 theLocal Government Reform Programme review, and questions were raised whether the PMO-RALG is the right interlocutor.

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• 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 beenconcluded.

Outcome Indicator

• Possible additional outcome indicators for legal sector and public sector reforms will beintroduced. These are still being discussed at sector/cluster level

Cluster IVUnderlying 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 oneon risk based auditing

• Follow up to compliance from audit recommendations could be included in the OIs with cleardefinition and assessment criteria (sector group engaging in a discussion for at least 100compliance 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 auditrecommendations (publication of management responses of audited MDAs in CAG reports)" isbeing negotiated at sector level.

The parties agreed to consult, through the respective Cluster Working Groups and other fora, to finalisethe 2011 PAF by end January, 2011.

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6.0 CLOSING

In the statement at the closing ceremony, the Chair of the GBS Group of DPs, Mr Svein Baera, laudedthe 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 ratingssuch as “moderately satisfactory” and “partially achieved” are not the kind of hard evidence of tangibleresults that an increasing number of critical voices are demanding. He called for leadership and toughprioritization to provide a final PAF 11 to approve at the high level GBS meeting in January 2011. Heexpressed the hope that more evidence of zero tolerance of corruption will be made public in order tosustain public interest in the fight against the vice. DPs were looking forward to continued engagementwith 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 towardsfinding solutions to the country’s growth and poverty reduction challenges. He reaffirmed government’sdesire and commitment to working with all stakeholders, in good faith and an open manner, to increasethe pace of inclusive economic growth and reduce poverty.

6.1 Conclusion & Way ForwardThe 2010 Annual National Policy Dialogue served to strengthen the partnership among all keystakeholders in the development of Tanzania, namely the Government, Parliament, DevelopmentPartners, and CSOs. The event helps improve in the quality of the dialogue, and openness wasdemonstrated by the parties.

Coming at the end of implementation periods for MKUKUTA I and MKUZA I, the event provided anopportunity to look back at the results from that implementation. Participants appreciated the effort ofthe Government, and appreciated the results achieved on several fronts over the MKUKUTA I periodincluding economic management, expansion of social service networks particularly in education andhealth where improvements have been recorded for a number of indicators.. The Government wascommended for its management of the recent general elections, which were rated as free and fair, andresulted in a Government of National Unity in Zanzibar. Nevertheless, challenges in reducing incomeand food poverty, the quality of social services, especially in education and the few static healthindicators, were noted as areas where further and innovative effort is needed. All parties emphasisedthe need to improve the fight against corruption, and strengthen the capacities for planning, budgeting,and implementation of programmes and projects.

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ANNEXES:

1.1 The ANPD Programme1.2 Statement by Non - State Actors’ Representative at the opening the ANPD1.3 Opening Statement by; Chair of the DPG at the opening of the ANPD1.4 Cluster Working Group 1 Report1.5 Cluster Working Group 2 Report1.6 Cluster Working Group 3 Report1.7 Cluster Working Group 4 Report1.8 Statement by H.E. Mkulo at the start of the GBS Annual Review1.9 Statement by Mr Svein Beara; Chair of the DPG at the start of the GBS Annual Review1.10 Statement by Mr Svein Beara; Chair of the DPG at the Closing of the ANPD1.11 Closing Statements by H.E. Mkulo at the Closing of the ANPD1.12 2011 performance Assessment Framework (PAF)

Annex 1.1 The ANPD Programme

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THE ANNUAL NATIONAL POLICY DIALOGUE

PROGRAMME2nd – 8th DECEMBER 2010

TIME PROGRAMME CHAIR RESPONSIBLE

Day 1: Thursday 2nd December, 201008.00-09.00 Arrival and Registration MoFEA-Secretariat09.00-09.30 Opening Statements PS- MOFEA

Welcoming and Introductory RemarksPS-MOFEA

Statement from Non -State Actor Representative NSAStatement from Development Partners DPG-Chair

09.30-10.00 Opening Statement by Guest of Honour & Launching of MMS Outputs (MKUKUTA II & MAIR2010)

Minister MOFEA/ChiefSecretary

10:00 – 10:30 Tea Break All10.30-11:00 Presentation of MKUKUTA I Performance PS VPO DPEE11:00-11.30 Presentation of MKUZA I Performance12:00-12.30 Review of Recent Macroeconomic Performance DSEM12.30-12.45 Commentary from DPs Representative DPs - PMG12.45-13.15 Discussion Facilitator13.15-14.30 Lunch Break All

Presentation of DHS Results DG-NBS14.15-14.45 Discussion Facilitator15.45-15.00 Study on safety nets WB15.15-15.30 Growth and Poverty Reduction: Policy implications

from qualitative researchESRF

15:30 – 16:00 Discussion16.00-16.30 Summary of Day 1 Facilitator16.30-16.45 Tea & end of Day 1 All

Day 2: Friday 3rd December, 201008.00-08.30 Registration MoFEA-Secretariat

Forward Looking Presentations: ES- POPC MKUKUTA II and MKUZA II

08:30 – 08:50MKUKUTA II: Key Priorities 2011-2015

DSEM

08:50 – 09:00 Commentary from DPs Representative DPs - PMG09:00 – 09:20 BEYOND MKUKUTA FRAMEWORK: Monitoring

and Evaluation, Communication andImplementation Guide Presentation

ADMM

09:20 – 10:00 Discussion Facilitator10:00 – 10:20 MKUZA II: A focus on Implementation

arrangementsPS-MOFEAZNZ

MOFEA ZNZ

10:20 – 10:30 Commentary from DPs Representative DPs - PMG10:30 – 11:00 Tea Break10:30 – 11:00 Discussions of MKUZA II Facilitator11:00 – 11:30 Rapid Budget Assessment PS-MoFEA World Bank/CB

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11:30 – 12:15 Discussion Facilitator12:15 – 14:15 Lunch Break14:15 – 14:45 Medium Term Strategy and Cross Cluster MTEF CPAD14:45 – 15:30 Discussion Facilitator15:30- 16:00 Summary of the Day 2 Facilitator16:00 -18:00 Cocktail All

WEEKEND BREAK

Day 3: Monday 6th December, 2010

08:00 – 8:30 Registration MoFEA Secretariat

08:30-09:00 Opening StatementMOFEA

09:00 – 09:20 Statement from GBS PartnersGBS Chair,

09:20 – 09:50 2010 PAF ImplementationPresentation

PS-MOFEA DSPFM

09:50 – 10:30 Discussions 10:30 – 11:00 TEA BREAK All

11:00 -13:00 Key Issue 1: Accelerating pro-poor growth in thecontext of Kilimo KwanzaPresentation and Discussion

PS-PMO PMO & MAFS

13:00 – 14:00 LUNCH 14:00 – 16:00 Key Issue 2: Business Environment

Presentation and DiscussionPS-PMO PS - MITM

16:00 – 17:00 Presentation and Discussions on Anticorruption PS-STATEHOUSE

DG PCCB

17:00 – 17:30 Summary of the Day 3

DAY 4 : Tuesday 7th December, 2010

07:30 – 08:00 Registration08:00 – 10:00 Key Issue 3: Equity and Efficiency: Opportunities

and ChallengesPresentation and discussion

PS POPSM DPD - POPSM

10:00 –10:30 TEA BREAK

10:00 – 12:00Key Issue 4: BudgetPresentation and discussion

PS MOFEA CB

12:00 – 14:00 LUNCH

14:30 – 17:00Key Issue 5: Financial Management at Centraland LGAs Presentation and discussion

PSPMORALG

DSPFM/ACGEN/CAG

17:00 – 17:30 Summary of the day 4 Facilitator

DAY 5: Wednesday 8th December, 2010

08:30 – 09:00 Registration

09:00 –11:00 2011 PAF DiscussionDPs & GoT separatebreak out sessions

11:00-11:30 TEA BREAK

11:30 - 12:30Outcomes of the key issues & Way forward FACILITATOR

DPs/GoT

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12:30-14:00 Way forward on 2011 PAF DPs/GoT14:00-15:00 LUNCH

15:00-16:00 Closing StatementsPS MOFEA Minister MOFEA & GBS

Chair DPs/GoT

16:00 -16:30 Press Conference Minister MOFEA & GBSChair DPs/GoT

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Annex 1.2 Statement by Non – State Actors’ Representatives at the opening of theANPD

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 EconomicAffairs,

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 greatlycontributed to the content of this speech, I would like to express our sincere gratitude to thegovernment of Tanzania for extending this invitation to participate at this annual policy dialogue. Thepresence of non state actors in this meeting indicates the recognition of the vital contribution CSOshave to the development agenda of Tanzania. Our greater expectation during the five days of thisdialogue is to see our views and recommendations taken onboard by government as it implementspolicy.

This annual policy dialogue is happening at a time when a new cabinet has come in place, a newparliament and successor plans for MKUKUTA and MKUZA. It is, therefore, an opportune time for usand every stakeholder to renew our commitments and to drive the development agenda with new vigorand zeal. We congratulate all those who have been appointed to new posts. We look forward toworking with you to fulfill our pledge and commitment in pushing the development agenda forward andensuring citizen participation and ownership of the development agenda. We will also continue to makesure the voices of the marginalized and the public is heard and strive for accountability to the public inall development processes and governance.

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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 controlover what tomorrow will bring. Let’s spare a thought for the children, women and men who die for lackof access to good health facilities and preventable causes. But let’s also think of the abundance inpotential that Tanzania has and the hope for a better Tanzania. Our main concern is that the povertyeradication, local government and public Finance Management reforms have been moving three stepsforward and two steps backward. As a consequence, the quality of social services and social servicedelivery is slow, perpetually stagnant and worrisome. Our appeal is that in the next five years, let us talkaction.

Mr Guest of Honour, in reflecting on these figures and focusing on the future, we cannot avoid lookingat the quality of our National Statistics, how they are collected and their validity. Our concern as CSOsis that Tanzania has very good statistics that relate to performance but which are challenged by theordinary citizens. They find it difficult to make sense of this impressive data. In the next five years, ourappeal is that when government releases national statistics, they should reflect the reality on theground.

As we are about to engage in discussions around policy issues, we would like to highlight a few keyissues which we find crucial.

Firstly, this has to do with the importance of having a meaningful relationship between thegovernment, DPs and CSOs. For some time now, CSOs have been late comers in many governmentprocesses often due to late invitations and very little information on the agenda ahead, thus affectingour participation on one hand, and limiting the meaningful contributions that CSOs can bring on thetable, on the other. We, therefore, urge for broader and timelier engagement of CSOs. CSOparticipation should not only be considered as a good practice for inclusive decision-making, but ratheras a critical source of alternative thinking. In other words, they should be taken as real partners indevelopment.

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Secondly, CSOs find the current MKUKUTA/PER/GBS dialogue structures too heavy andrequiring a lot of human and time resources, just to keep up to speed with the agenda, as aresult of many meetings organized under the structure. This limits the ability and consistency ofCSO participation in the dialogue. We call upon the government to come up with a simpler and lesstasking structure that will enable more CSOs to participate consistently and give meaningfulcontributions. As you will know, most CSOs work with the marginalized and are stretched of theseinvaluable resources and therefore it is a lot to ask of them. We are organizing ourselves as a sector toachieve a lighter dialogue structure which will make organizing CSOs to engage less costly and lesstime consuming. In other words, we would like to influence the formation of an improved dialoguestructure that is relevant, helpful and productive.

Thirdly, as far as the implementation of MKUKUTA, MKUZA and other policy documents areconcerned, we emphasize the importance of domestic accountability, budget transparency andtip-top oversight mechanisms. The parliament and the office of CAG continue to be toothless huntingcoyotes as they implement their oversight functions. They both have limited authority and mandate inredressing budget discipline and accountability. The parliament has limited powers to reject budgetspresented by government (even if they are unacceptable) as this in a worst case scenario may lead todissolution of the parliament and a call for fresh elections. Our recommendation, made two years agoof having an Established Parliamentary Budget Office and a Citizen budget published bygovernment are still relevant today. We want this to be at the center of discussion and implementationin the next five years

The level of budget transparency is still a problem with citizens only receiving limited budgetinformation. The Open Budget Index for 2010 results shows that only 48% of budget information ispublicly accessible. Citizens’ access to this information is still a problem. The results show Tanzaniahas 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 anddisbursed to government. Although there is an Aid Platform which is being created, there are still somelimitations on access to this information and therefore making it difficult for citizens to monitor andunderstand how their government relates with the Development Partners on aid and the challengesinvolved.

On the other hand, the office of CAG is limited in terms of following up on budgets submitted throughcertificate of emergency and/or supplementary budget and to enforce implementation of the auditrecommendations. We find the question of effective management of development financing as a keypriority if we are to ensure achievement of the successor strategies that we are about to discuss in thisforum. Our recommendation of reviewing the accountability channels of the CAG from the head of theExecutive branch of Government to the legislature are still very relevant and we would wish the nextfive years to see this process is concluded.

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Your Excellency guest of honor

On another note, the demand for a new constitution raised by non-state actors just before and afterthe re-introduction of multiparty system in 1992 is now a burning issue as far as the future of ourcountry is concerned. It is known that the current constitution is one of the hindrances in achieving goodgovernance and accountability. On one hand, it accommodates articles which contradict the role ofseparation of power among the three organs of the government meanwhile affecting accountability byallowing conflict of interests between the players. On the other hand, it gives absolute power to those atthe epitome of authority thus, affecting the autonomy and role of important institutions like the PCCB indealing with corruptions and fraud, and National Electoral Commission in conducting fair and freeelections.

The contribution and consideration of every stakeholder on this issue is crucial to the future of thiscountry and to ensure any achievements gained from implementing the MKUKUTA and MKUZA aresustainable. Zanzibar has shown the way, it is time for Tanzania as a whole to do the same. We cannotleave this discussion to be used simply to meet the interests of political parties in their tug-of-war. It is amatter of national interest and requires full citizen engagement. We call upon for the government totake a lead in kick-starting a national dialogue for reviewing and improving our constitution. The CSOsare 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 inthe MKUKUTA review process indicates that it is possible for CSOs to work with the government. Wethank our donors (UNDP, EU, SDC, Foundation for Civil Society, Embassy of Finland, CIDA andothers), who facilitated the CSO consultation process. We hope you and all participants in this forumshall take these few words under consideration and we look forward to productive and constructivedeliberations in this forum.

Thank you all for your attention.

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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 DialogueThursday, 2 December 2010

Dar es SalaamAddress 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 someviews on behalf of the Development Partners Group. It is a sign of openness, maturing democracy, andreal partnership when government organizes and hosts such a high-level, policy event. This year’sAnnual National Policy Dialogue provides an opportunity to take stock of the results and developmentimpact of the national efforts towards the Millennium Development Goals and MKUKUTA goals andtargets over the last 5 years. I am particularly glad that this event brings together so many stakeholdersinvolved in development, especially newly appointed Ministers, who we congratulate, HonourableMembers of Parliament, and NGOs. It is a unique opportunity to discuss challenges observed whileimplementing MKUKUTA I as well as policy directions and priorities of the recently approvedMKUKUTA II. This forum also provides an opportunity to discuss how the actual implementation can beshaped in the coming 5 years.

Allow me to begin by congratulating the Government for the recent approval of the MKUKUTA II andMKUZA II. I would like to express appreciation on behalf of the Development Partners for giving us theopportunity to share comments and views throughout the review process and to make contributions tothe 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 fordevelopment to effectively take place, increased efforts by the Government are needed to address slowprogress in income poverty reduction and inadequacy and inequity in service delivery. Also discussedwas 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 andinclusive growth, co-ordination of implementation, equity and quality of service delivery, businessclimate, and implementation of the core reform programs. Development Partners also appreciate thatMKUKUTA II acknowledges new challenges such as population growth and adaptation for climatechange.

In addition, the new MKUKUTA reinforces slight progress made in areas such as those seen in theTransparency International CPI index where Tanzania has moved from number 126 to 116 on a global

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scale. However, much needs to be done in improving the business climate as Tanzania’s ranking in theglobal “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 itspeers in the region. Positive achievements have been reached for example in the area of educationwith an enrolment rate of over 97% in primary schools, maternal mortality with a reduction to 454 in2010 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 theMKUKUTA II and MKUZA II Strategies might provide further insights, we as your partners believe thatthe 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 MKUKUTAImplementation Report 2009/10 shows that poverty has been reduced mainly in cities, particularly inDar es Salaam. More efforts will therefore be needed to make economic growth more pro-poor andinclusive, and to ensure that benefits are shared by all Tanzanians. In this regard, the sustainableprovision of social services - which currently leaves large parts of the rural population unattended - willneed our attention.

2. Despite the considerable progress in achieving universal primary education enrolment spread evenlybetween girls and boys, there are still many challenges in the education sector, such as ensuring thequality 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 thattreat their patients with care, dedication and have the appropriate obstetric equipment. As your partnerswe 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 amain driver in national development. The deterioration in the business climate is a hindrance forrealizing such potential; and in this regard, strong Government leadership is required. DevelopmentPartners 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 tohear the encouraging remarks made by President Kikwete in his inaugural speech in Dodoma lastmonth about the Government’s will to ensure that public funds are spent judiciously. In light of theglobal financial crisis and the increasing focus on value for money in development cooperation, thePresident’s zero tolerance approach to inefficiency, theft and misuse of public funds is highlyappreciated. Development Partners are ready to discuss how we can be of further assistance in thiskey area of public policy and service to citizens.

6. Similarly, joint attention is needed in securing sustainable access to clean water and energy as wellas in improving public-private partnerships and the investment climate. Furthermore, building on theKilimo Kwanza initiative, more efforts are needed to ensure that the roll-out of agriculture initiatives arestrongly linked with national production, export and processing policies. We are aware that thegovernment faces a significant challenge in the near future in translating the MKUKUTA II strategy intoconcrete policies and prioritized actions, especially in view of the expected financing gap of 1.1 trillion

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Tsh. In this regard, Development Partners look forward to engaging with Government on theImplementation Plan that will guide the realization of the MKUKUTA II. This will include a solidmonitoring and evaluation system and a clear costing of key programs linked to the priority areas of theMKUKUTA II as well as ensuring adequate support to the National Bureau of Statistics and to theBunge Foundation.

Excellencies, Honourable Ministers, Ladies and Gentlemen,As in the National Consultative Meetings on MKUKUTA II and MKUZA II earlier this year, it isencouraging to see this national event organised in an inclusive manner bringing together differentstakeholders from Government, Private Sector, Civil Society and Development Partners. It fosterssubstantive dialogue focussing on results, achievements, and challenges. This open and frankdiscussion 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 andto engage with the private sector as the primary agent of this growth, as mentioned by the president inhis inaugural speech in the Bunge session.

Let me conclude by saying that, with the new Government in place and with the new MKUKUTAapproved, we have a unique opportunity to give the poverty reduction agenda a special push. We, theDevelopment Partners, are committed to further supporting the national efforts to bring welfare andprosperity to all Tanzanians. In this spirit, we are looking forward to further engagement for the purposeof achieving MKUKUTA II and MKUZA II targets as well as the Millennium Development Goals.

Asanteni sana!

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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 recessionand imported price inflation. The Government steered the economy with an expansionary expenditurepolicy and extra ordinary rescue measures for the affected sectors. As a result the dip in the rate ofgrowth 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 overallperformance in the light of 2010 P AF performance was less favorable than last years. This reflects thedegree of challenge facing the cluster in the areas of agriculture, business environment, and naturalresources .However there was considerable improvement in quality of dialogue, which hopefully willbearer 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 wereachieved (Energy and PPP), are partial achieved (Agriculture Marketing strategy, NBS), and two notachieved (Cess tax and Natural resources), and one split decision (Business Environment). Of the 12Outcome Indicators, seven were achieved and five were not achieved.

MINISTRY OF INFRASTRUCTURE DEVELOPMENT

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1. DETAILED ASSESSMENT

1.1. Areas of good and weak performance

Main Sources ofInformation

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 fromport (import) has been reduced to 12.5 days in June 2010 from 21.8 days in June 2009. Thishas surpassed the target of 16 days for 2010

ii) Implementation of the time bound action plan to move to Landlord status is in progress andtimeframe 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, 2010.

Key areas of weak performancei) 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 andsustainable funding for local roads

ii) Underperformances of railways sub-sector with no sound remedy plans to revive TRL andpursue restructuring of TAZARA, as well as to recapitalize railways by establishing the RailwayInfrastructure Fund (RIF).

iii) Insufficient coverage of road maintenance needs resulting in increasing backlog andrehabilitation expenditure – GoT to pursue additional sources of revenues to widen the RoadsFund base and secure adequate funds to cover full maintenance needs and the backlog in theshort and medium term.

iv) Improper budget management in the road sector – lack of oversight resulting in overcommitment on development projects managed by TANROADS.

2.0. Overall Assessment

2.1 (a) Underlying Process : Joint Infrastructure Sector Review 2010Assessment: SATISFACTORY

Main Sources of Information: Joint Infrastructure Sector Review and Aide Memoire

The 4th JISR was conducted on 15th - 16th September, 2010 by involving Government, DevelopmentPartners, Private Sector and Civil Society Organizations (CSOs)

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The Aide Memoire contains the outcome of the 4th JISR.Currently, MoID received comments from DPs and the Ministry is scrutinizing all comments prior tosigning. Overall, it has been agreed that the sector has progressed satisfactorily since in all areasidentified 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 initiallyplanned, further developments in budget planning and execution practices have been confirmed andvisible operational improvements occurred in the port of DSM.

Moreover, since the 2009 Joint Infrastructure Sector Review, further capacity improvements have beenmade (new units or sector bodies with implementation tasks established or in view, databaseintegrating sector performance indicators operational) and some other activities aiming at bettercoordination 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 andDevelopment Partners agree that there are still considerable challenges that need to be urgentlyaddressed and closely monitored. Among key eight priority areas for action, the following areas havebeen 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.

2.2. Outcome Indicator 1: % of Trunk and Regional Roads Network in Good and Fair Condition.

Assessment: OFF TRACK

Source: TANROADS Quarterly Report

The abnormal rains experienced in FY 2009/10 negatively affected the road condition especially onthe unpaved roads. In addition, the condition in FY 2009/10 for fair and good roads has decreaseddue to expansion of the network with a total of 3,316 km of district roads reclassified into nationalroads in July 2009. 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) AnnualReport

Under funding of the Local Government Transport Programme (LGTP) has negatively affected

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attainment of MKUKUTA targets. Based on five years (FY 2008/09 - 2012/13) estimates in the RoadsFund Board’s Concept Paper of February 2010, the maintenance needs for the maintainable districtnetwork is Tshs 170.77 billion in FY2009/10. The actual funding provided for FY 2009/10 was Tshs84,505 million (49.5% of needs). Based on the same estimates the actual performance in FYs 2007/08and 2008/09 was 57% each compared to the target of 89% for FY 2008/09. The budget allocation forFY 2010/11 has remained at the same level as in FY 2009/10 (45% of needs).With the current financialtrend it is unlikely that MKUKUTA target will ever be achievedBaseline 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 portAssessment: 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 cargotimely, increase in the tariff charges for the overstayed containers and increasing working hours. Alsoa close monitoring of dwell time by port improvement committee.Baseline 2005 :20.1 daysStatus 2009 : 21.8 daysStatus 2010 :12.5 daysTarget 2010 :16 days

MINISTRY OF AGRICULTURE FOOD SECURITY AND COOPERATIVES

1.1. Areas of good and weak performance

Main Sources ofInformation

FIFTH ASDP JIR AND ASR/PER REPORTS

Key areas of Good ProgressI. 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, 2010. Agreed actions from the ASDP Joint Implementationreview will be implemented as per integrated work plan and budget. Overall, the findings of thereview show that progress of implementation is satisfactory. Notable outputs and outcomeshave been realized from the key programme sub-components, leading to increasedproductivity, farm incomes and access to technologies, infrastructures and marketing systems.Review findings indicated the following:

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a. Irrigation packaged with input supply, extension services and value addition generatesoptimum results;

b. Production and productivity of crops and livestock increased as a result of adoption ofimproved technologies, agricultural inputs (improved seeds, fertilizers) and improvedlivestock breeds. For example, average yield of maize in Maswa, Bariadi, Karagweand Muleba districts increased from 0.4 tons/hectare in 2006/2007 to 4 tons/hectare in2009/2010 while paddy yields in the same areas increased from 2.5 tons/hectare in2006/2007 to 7.5 tons in 2009/2010. Likewise milk yield increased from 1 litre to 10litres per cow per day in the same areas;

V. Ratio of processed exported agricultural products to total exported agricultural productsincreased from 18.7 in 2005/2006 to 23.3 in 2009/2010;

VI. Improved delivery of agricultural services through establishment of Zonal Information ExtensionLiaison Units in the 7 agricultural zones. Efforts were made in building the capacity ofextension agents and farmers on use and dissemination of improved agricultural technologies.It was noted that shortage of extension officers remains a constraint to technologydissemination and that the involvement of agricultural Service Providers in service delivery isstill minimal. However, the use of Farmer Field Schools approach was observed to reach manyfarmers at a low cost albeit the shortage of extension workers

Key areas of weak performancei. Untimely disbursement of funds;ii. Low level of investment from both public and private sector;

.1.0. Overall Assessment SATISFACTORY

1.1: Underlying Process: Agricultural Sector Review 2010 (including PER and Joint ImplementationReview of ASDP)Assessment SATISFACTORY

Main Sources

of InformationFIFTH ASDP JIR AND ASR/PER REPORTS

Underlying processesAgricultural Sector Review & Public Expenditure Review carried out focusing on issues related to PublicExpenditure and evaluation of progress made in the implementation of previous year ASR/PERrecommendations.

StatusConsultants for undertaking ASR/PER were procured in August, 2010 after which field visits werecarried out in various study areas. A draft report was submitted for stakeholder consultations on 8th

October, 2010. Comments from the meeting are being incorporated in the report prior to submissionby end October, 2010.

Key issues emanating from the ASR/PERi) 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

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country’s rural sector. Current government efforts through ASDP, KILIMO KWANZA, CAADPand SAGCOT aims at enhancing private sector participation in the development of agriculturewhich is crucial towards fulfilment of the country’s medium-term development goals asexpressed in the MKUKUTA II and TDV 2025. With the Public Private Partnership policy inplace, there is need to continue providing a more conducive environment to operationalize thePPP in the agricultural sector focusing on policies, legislation, financing and incentives. Someof the issues that need immediate actions include:

• Encourage private sector investment in irrigated agriculture through construction ofirrigation 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 isrecommended to increase sector budget gradually to 10 percent from 7.8 percent in 2010/2011according to the Maputo Declaration (Assembly/AU/Decl. 7(II) of July 2003) in order tostimulate sustainable growth in the sector. This will facilitate the provision of public goods likeresearch, extension, training, information dissemination that will support the private sector ininvesting into the sector.

1.2:Temporary Process ActionFinalize an Agricultural Marketing Strategy by July 2010 on basis of Terms of Reference agreed byCluster by the first week of March, and implement key measures to improve the marketingenvironment for private sector by December, 2010

Assessment: NOT ACHIEVED

Main Sources ofInformation

Agricultural Marketing Strategy - MITM

Status:Three consultants two local and one international contracted by JICA and the World Bank started workon 31st May, 2010. A draft of Agricultural Marketing Strategy was submitted and discussed during theSector Consultative Group meeting held on 30th September, 2010. The stakeholders of the SectorConsultative meeting raised some comments for improving the document in conformity with the ToR. Itwas therefore recommended that MITM liaise with the World Bank and JICA to ask the consultant tocomplete the work by end of October, 2010. It was furthermore stressed that MITM be actively involvedin the finalization of the strategy. The Ministry of Industry Trade and Marketing consulted World Bankand JICA and agreed to improve and complete the Agricultural Marketing Strategy by end of October,2010. MTIM is liaising with JICA/WB and other stakeholders to finalize the marketing strategy. It is

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planned that the Agricultural Marketing Strategy will be presented to the Agriculture Sector ConsultativeGroup meeting on 16th December, 2010.

1.3:Temporary Process ActionPhased elimination of all local crop cess taxes from 5% to 3% to 0% within two fiscal years to beincluded in the Finance Bills FY2010/11, and 2011/12, and offset by a transfer while the overhaul oflocal taxation is carried out(PMO-RALG)

Assessment: NOT ACHIEVED

Main Sources ofInformation

Minutes of Meeting of CWG1 joint meeting

As per June 2010 Budget Speech (Paragraph 64ii) Produce Cess that is charged on agriculturalproducts will be between 3% and 5% of the farm gate prices; the aim is to enable the LGAs to imposerates based on available resources without compromising productivity. The government has thereforeapproved the produce cess to be charged by LGAs to range between 3-5%. In addition a total of Tshs.17.7 billion has been allocated by GoT for compensation.

1.4 Outcome Indicator : Hectares of Land under irrigationAssessment: ACHIEVED

Baseline 2005: 249,992Status 2009: 317,245Status2010: 380,888Target 2010: 340,445 Sources

of Information:

MoWI Annual Performance Reports

1.5 Outcome Indicator : Fertilizer ConsumptionAssessment: ACHIEVED

Baseline 2005: 119,211Status 2009: 275,219Status2010: 283,390Target 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 asestablished by the Tanzania Coffee and Cashew Board

Assessment: NOT MEASUREDCashewBaseline 2005: 69.9Status 2009: 73Status2010:Target 2010: 73.7

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Arabica Coffee (North)

Baseline 2005: 49Status 2009: 82Status2010:Target 2010: 83

Arabica Coffee (South)

Baseline 2005: 56Status 2009: 82Status2010:Target 2010: 83

RobustaBaseline 2005: 37Status 2009: 96Status2010: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 Officesas a measure to decentralize registration processes.

ii. Consultancies on Systems Reform in the Office of the Commissioner for Lands and NeedsAssessment study in the Titles Registry have been completed. Draft TOR for recruitment of aconsultant to guide the implementation of recommendations in place.

iii. The work of sorting and consolidating manual records in a single file for easy retrieval andaccess of land information have been completed in Mbeya and Mtwara and by 90% in otherZonal Offices.

iv. Approval of Disposition formally done by Commissioner for Land to Dar es SalaamMunicipalities has been decentralized.

v. Research unit established to investigate the market prices for crops, land value andconstruction 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 theGovernment Chief Valuer will be honoured.

vii. The Ministry has been able to establish fundamental geodetic networks. These includes 12point 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 adjudicationhave been reviewed basing on the experience gain from the pilot projects undertaken in 4Districts.

Key areas of weak performance

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2.1.Outcome Indicator: The number of days taken by the commissioner of lands to approve a transferof a certificate of rights occupancy and the lands registry to register the transfer reduced from 28 to 14by 2011Assessment: ACHIEVED

Baseline: 2005: 28Status: 2009: 14 – 21Status: 2010: 11 - 18Target: 2010 19

Main Sources ofInformation

Internal evaluation (after omission of some steps to the said indicator processes).

PRIME MINISTER’S OFFICE1.1. Areas of good and weak performance

Main Sources ofInformation

Detailed assessments of Progress achieved under the Roadmap developmentand BEST programme implementation are contained within the World BankDoing Business Unit report and Aide Memoire for the March/April 2010Implementation Support Mission.

Key areas of Good Progressi. 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 reviewiii. Short term measures identified under the Roadmap have been implementediv. Public-Private Partnership (PPP) Policy completed and approvedv. Public- Private Partnership Act Act. No. 18 of 2010 –enacted on 15th July 2010.

Key areas of Weak Progressi. Procurement of Consultant for developing PPP strategy.

2. 0 Overall Assessment

2.1 Underlying Process : Best Programme Review 2010

Assessment UNSATISFACTORY

Main Sources ofInformation

Time bound Roadmap 2010; Aide Memoire for the April 2010 BESTImplementation Support Mission

BEST is rated “marginally unsatisfactory”. Substantial efforts have gone into the mainstreaming processand development of the Road map. It is anticipated that the Roadmap will enable the Government to bemore focused on the objective of reducing the costs of doing business and linking investments in MDAswith tangible improvements in the services that MDAs provide the private sector. BEST Review will takeplace in December 2010.A comprehensive action plan (CAS) was not ready before the GBS 2010.

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2.2 Temporary Process Action:GoT will present a time bound ROADMAP to improve the Business Environment in Tanzania by March2010 and implement selected critical short term priority actions detailed in this plan by October 2010.

Assessment: PARTIALLY ACHIEVED

Main SourcesofInformation:

Time bound Road map, PPP Policy

The Government launched the Roadmap in March 2010 and approved its implementation in July 2010.The Roadmap consists of three components which are immediate quick wins; short term and mediumterm interventions that will be implemented in order to improve business environment and investmentclimate and enhance transformation of the informal sector towards formalization. MiscellaneousAmendment Bill will be tabled in the expected April 2011 Parliamentary session for supporting reformprocess. 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 acceptablenames also on website;

2. To facilitate easy implementation of policies at local level (D by D policy), MITM isstrengthening working relationship with Local Authorities and is implementing all industry andtrade sector policies at LGA level in collaboration with PMO-RALG.

3. Draft regulations for combining TIN and PAYE registration has been submitted to the Ministerfor Finance for gazetting.

4. Standard format for Memorandum and Articles of Association (MEMARTS) for incorporation ofa 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 toensure that they meet specifications on the date of lodging. All sub-standard maps will bereturned to the applicant on the same day with clarification on issues to be addressed beforere-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, thedispute shall be referred for arbitration which shall be concluded within 60 days during whichperiod no retrenchment shall take effect and where the employees are dissatisfied with theaward and are desirous to proceed with revision to Labour Court under Section 91(2), theemployer may proceed with their retrenchment.

7. The Ministry of Land, Housing and Human Settlement Development has decentralized theOffice of Commissioner for Land to 5 zonal Offices

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8. Approval of disposition formally done by Commission for Land to DSM Municipalities has beendecentralized

9. TRA is using Government Value’s report to assess capital gains taxation and has dropped ownvaluation. Proposal to amend S. 35 of Income tax 2004 which deals with tax avoidance toformalize this arrangement sent to AGC in May 2010.

10. Income Tax Cap 332(General Electronic Filling and Payment) regulation, 2009 have beencompleted and submitted to MOFEA for on ward transmission to AG Chamber for approval andpublished. The regulation will compel traders to submit returns/ documents through electronicsystem

11. Exercise of eliminating permanent roadblocks has started. Up to 30th June 2010 only 16permanent 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 theParliament by April 2010 and implementation of PPP policy including operational PPP Agency byNovember 2010Assessment: ACHIEVED

Main Sources ofInformation:

PPP ACT, Time bound Roadmap

The PPP policy was approved by Cabinet in November 2009 and finalized; subsequently, PPP lawenacted in July 2010. The PPP Act No.18 of 2010 provides an adequate legal framework for the activeprivate sector participation in all sectors of the economy. Regulations necessary to operationalize theLaw are being finalized. The quality and capacity of the Coordinators and staff of the proposedCoordination and Finance Units are being handled with utmost care. The institutional arrangements willbe key to the success of the Tanzanian PPP initiative, i.e. how the coordination and finance unitsoperate 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: 150Status 2009: 131Status 2010: 128Target 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

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Main Sources ofInformation

Censuses and Surveys, Ministries, Agencies and Departments (MDAs) throughRoutine Data System, and the Statistical Act 2002.

Key areas of good performancei. Tanzania Statistical Master Plan (TSMP) design for strengthening the National Statistical

System was completed successfully, thereafter the Cabinet Paper was jointly prepared byNBS,OCGS Zanzibar and Ministry of Finance and Economic Affairs. It was endorsed byCabinet Secretariat and Inter-Ministerial Technical Committee, then finally submitted to theCabinet and the Government Approved the TSMP on 24th June 2010. The TSMPImplementation Plan was updated and most activities are expected to be executed from2011/12.

ii. Draft Zero of Statistical Bill for enhancing the autonomy of the NBS has been discussedthoroughly within the NBS and the Ministry of Justice and Constitutional Affairs, later on to beshared by Stakeholders from the National Statistical System on 21st October 2010 for furtheraction. It is anticipated that the Bill will be sent to the Cabinet in December 2010.

iii. National Panel Survey data processing and report writing expected to be completed by the endof October 2010.

iv. Demographic and Health survey 2009 report was released in October 2010v. Revised and rebased consumer price index was released on 15 November 2010.vi. The National Data Archive Application (NADA) was launched on 30 November 2010.vii. The NADA will provide users with easy, free of charge online access to micro-data.

Key areas of weak performancei. 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 Tanzaniaand the World Bank such that the Project Preparatory Advance (PPA) duration was extendedfor 18 months and will end in December 2011.

2.1 Temporary Process Action: Draft new Statistics BillEnhancing autonomy of the NBS is submitted to Cabinet by December 2010.

Assessment: NOT ACHIEVED

Main Sources of Information: Ministries, Agencies and Departments(MDAs) through Routine DataSystem,

The TSMP was officially launched in October 2006 with a high political support so as to develop aharmonized and fully coordinated National Statistical System (NSS). As a result, the Statistical NeedsAssessment was conducted in 2007 by using a Standard Questionnaires in Ministries Agencies andDepartments in Tanzania Mainland and Zanzibar.

i. Since then (2006), the TSMP Development process was coordinated on behalf of theGovernment by the NBS, PMORALG and OCGS Zanzibar in Tanzania Mainland and Zanzibarrespectively.

ii. Official consultations were made with stakeholders including Users and Producers of Statisticsin order to reveal their Strengths, Weaknesses, Opportunities and Challenges (SWOC) inMDAs so as to assess their Statistical production capacities and variations within the NationalStatistical System (NSS).

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iii. Technical support was received from National Consultants (Daima Associates) andInternational Consultants the financial assistance for various consultancies was received fromDevelopment Partners.

iv. Components of the TSMP within the NSS due for change are Institutional Development,Human Resources Development, Statistical Infrastructure Development, Data Developmentand 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 Parliamentwithin the deadline set out in PAF 2010 due to the fact that, statistics is a union matter which requiresconsultations consensus between the two statistical offices to harmonize their respective statisticalLegislation i.e. Statistics Act 2002- National Bureau of Statistics and statistics Act 2007 –Office of chiefGovernment statistician of Zanzibar.

MINISTRY OF ENERGY AND MINERALS

1. DETAILED ASSESSMENT

1.1. Areas of good and weak performance

Main Sources ofInformation Energy: Joint Energy Sector Review (JESR) Report 2010

Key areas of good performancei. 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 performancei. 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.

2.0. Overall Assessment

2.1 (a) Underlying Process : Joint Energy Sector Review 2010Assessment: SATISFACTORY

Main Sources of Information: Joint Energy Sector Review Report 2010

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The 4th JESR Stakeholders’ workshop was conducted on 23rd September, 2010 by involvingGovernment, Development Partners, Private Sector and Civil Society Organizations (CSOs).

The final report for JESR 2010 was completed in October 2010 after incorporating comments fromGovernment, DPs and stakeholders. All relevant reports has already been submitted to MoFEA.

2.2. Temporary Process Action 1: Government to ensure a construction contract has become effectiveand the contractor has mobilized by August 2010 which ensures that additional power generationcapacities of at least 160 MW will be operational by December 2011.

Assessment: ACHIEVED

Source: TANESCO

All contracts were signed (100MW-28.8.2010 & 60MW-15.9.2010), therefore indicates that 100 MWgas based plant at Ubungo and 60 MW Heavy Fuel based at Mwanza will be procured as perschedule.

Outcome Indicator: Total electricity installation capacity and utilization, MW and %).

2.3. Outcome Indicator 1a: Total electricity installation capacity equals 1137MW

Baseline 2005: 889 MWStatus 2009: 1,092 MWStatus 2010: 1,077 MWTarget 2010: 1,137 MWAssessment: NOT ACHIEVED

Source: TANESCO Quarterly Report

The target was not achieved. Reported installed capacity as at November 2010 is 1077 MW. 2010target was set taking into consideration private installations which are actually not qualifying.

2.3. Outcome Indicator 1b: Electricity capacity utilization equals 71%

Baseline 2005: 62%Status 2009: 70%Status 2010: 85%Target 2010: 71%

Assessment:ACHIEVED

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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, MWand %).Assessment: NOT ACHIEVED

2.4 .Outcome Indicator 2: 14.5% of the population has access to electricity

Assessment: ACHIEVED

Source: MEM Annual Report , TANESCO Report

The electrification was achieved by implementation of rural electrification projects, particularly districtsHead 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 LIVESTOCKDEVELOPMENT AND FISHERIES AND MINISTRY OF ENERGY AND MINERALS

MINISTRY OF NATURAL RESOURCES AND TOURISM1.1. Areas of good and weak performance

Main Sources ofInformation

Ministry Annual Implementation Progress Report July, 2009- June, 2010

Key areas of Good Progressi. The Ministry total annual revenue collection increased surpassing the annual target by 109% i.e

from baseline of Tsh 47.5 billion to Tsh. 51.9 billion. This was largely due to enhanced lawenforcement, improved resources allocations and revenue collection campaigns especially in theForestry 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, obtainvarious 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 guidelineson 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 optimaloperational charges and retention guidelines,

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Key areas of Weak Progressi. 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 andlimited 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 ofInformation

Natural Resources Sector Annual Review Report October 18th 2009

Key issues from the Natural Resource Annual sector Review(i) 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 centraland LGA’s. However, a plan is underway to enter into agreement with Ministry of Finance andEconomic Affairs to allocated fund in the next budget to support JFM activities at District level,

(ii) The benefit sharing arrangement for revenue from forest resources including revenue fromREDD program will be developed and integrated within the Tanzania Forest Service (TFS)once it is operational and shared with Communities,

(iii) Forest resources are being depleted at an alarming rate mainly due to increased demand forfuel wood, timber, charcoal and arable land which is driven by population growth andurbanization. Therefore to mitigate the existing negative impact it was proposed that;

(a) Ministry should effectively involve, Districts and Villages to participate in theforest management,

(b) The Ministry to collaborate with the Ministry of Energy and Minerals to developa strategy for alternatives energy sources,

(iv) 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 toinadequate budget allocation for standing impress,

(v) The Ministry will improve its data collection systems including National Forest and BeekeepingDatabase (NAFOBEDA). Also, under the on going National Forest Resources Assessment andManagement (NAFORMA) experts will look into NAFOBEDA and propose ways to improve itincluding integration of Geographical Information System and Carbon Trading Databases withinthe system,

(vi) Controlling and monitoring transportation of forest products is still a major challenge. Mosttransporters of Forest Products don’t own vehicles so it is difficult to institute a regulation thatrequires transporters of forest products to register their vehicles. Substantial amount of forestproducts are illegally transported at night. The fact that the Ministry is constrained in terms ofresources (human, financial and technological) exastabate the situation. To mitigate the impact,the Ministry has entered into agreement with Tanzania Police Defence Force to strengthenpatrols 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 intensifiedthrough the deployment of forest guards once the TFS becomes operational,

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(vii) It was recommended that the Ministry in collaboration with the Ministry and Energy andMinerals should jointly develop a strategy to reduce and ensure sustainable charcoalproduction, identify specific areas for charcoal and fuel wood production and encourage use ofalternative energy sources such as Gas, Solar panels, bio-gas and Wind power,

(viii) That the Ministry will allocated hunting blocks based on administrative procedures. Also, blockswill be categorized based on a number of parameters including species diversity andabundance.

MINISTRY OF NATURAL RESOURCE DEVELOPMENT2.3 Temporary Process Action: Government to implement key actions of Natural Resources (forestryand wildlife) accountability and transparency action plans following the timetable specified in the M&EframeworkAssessment: NOT ACHIEVED

Main Sources of Information Ministry Annual Implementation Progress Report July, 2009-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) Informing citizens of the natural resources and their management through Participatory Forest

Management (PFM) i.e. Joint Forest Management (JFM) and Community Based ForestManagement (CBFM), moderately satisfactory,

(ii) To provide a breakdown of revenue collection by legal and illegal activities, satisfactory,(iii) To improve informer system not satisfactory,(iv) To improve information under PFM scheme, not satisfactory,To improve transparency in contract procedures, licenses and concessions through:(i) Improved data collection and analysis (NAFOBEDA), Not satisfactory,(ii) Establish a system of acting and tracking action taken on Internal Audit reports; Satisfactory,(iii) Complaint procedures be made clear upon receipt of applications, satisfactory(iv) Operationalize the revised Ministerial Client Service Charter; Satisfactory(v) Review regulations to improve issuance of licenses and allocation of resources; not

satisfactory.(vi) Review Wildlife Regulations, Not Satisfactory.To improve financial management the following actions were taken(i) To train accountants in 30 revenue collection centers to assist in the improved revenue

collection; Moderately satisfactory,(ii) To consider outsourcing revenue collection from FY 2010/11 using a commercial banking

arrangement upon the recommendations of Task Force study; not satisfactory.(iii) Transporters of forest products should register their vehicles/vessels, not satisfactory.(iv) To equip Charcoal bags with identity tags to allow identification of legally and illegally charcoal;

not satisfactory.

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To improve retention arrangement the following key actions were taken,(i) Conduct study on retention scheme; satisfactory,(ii) 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 asunsatisfactory. The underlying reasons for unsatisfactory performance are as shown in the minutes ofthe sector review workshop held on 18th October 2010. The outcome indicator for Forestry wasachieved while one for Wildlife not achieved due to adverse effect of global economic melt down onTourism particularly Hunting Industry as hunting bookings were cancelled and hence hunting quotaallocation for 2009 was underutilized.

MINISTRY OF LIVESTOCK DEVELOPMENT AND FISHERIES

1.1. Areas of good and weak performance

Main Sources ofInformation

Ministry of Livestock Development and Fisheries Annual ReportFinance Act of 1982Fisheries Act No 22 of 2003Fisheries Regulations of 2005, 2009Deep 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 2009.iii. Four hundred (400) copies of the DSFA Regulations were circulated to stakeholders.iv. 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 2010.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 fromZanzibar.

vi. Meeting with Fisheries Stakeholders in December 2009 whereby the Prime Minister met themin Mwanza to discuss fisheries related issues.

vii. Strengthening and Monitoring of revenue collections whereby training has been conducted to67 revenue collectors

viii. The reviewing of National Fisheries Policy of 1997 and developing of Fisheries SectorDevelopment Strategy is ongoing.

ix. Developing a five years Fisheries Development Programme that is focusing on effectiveresource management and utilization for their sustainability and therefore increased revenues

x. Launching of The National Aquaculture Development Strategy to guide aquaculturedevelopment in the country

xi. Strengthening of fisheries resources conservation through establishing Marine Park inKigombe, Tanga which is aimed at conserving the Syilicant fish which is an attraction to touristsand can increase revenue from eco-tourism.

xii. The Tanzania Fisheries Research Institute (TAFIRI) Act No. 6 of 1980 and the Marine Parksand Reserve Act No. 29 of 1994 (MPRU) are being reviewed.

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xiii. Fish stock has been conducted in Lake Victoria in March 2010 which results showed that thereare 367,819 tones of Nile perch, 1,176,372 tones of Dagaa, and 528,169 tones of other fishspecies.

xiv. Revenues from confiscated items resulting from illegal activities are reported separately.

Key areas of Weak Progressi. 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 andconcessions of natural resources.

ii. Provision of adequate funds to enable effective and efficient control of illegal fishing, crossboarder trade and fishing practices that are detrimental to the resource base and itsenvironment.

iii. Weak community involvement in fisheries resources conservation and management througheffective co-management

iv. Lack of vigorous investment of nationals in the deep sea fishing and value addition formaximizing 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 Resourcesfisheries accountability and transparency action plans following the timetable specified in the M&Eframework

Assessment: NOT ACHIEVED

Main Sources ofInformation

Annual Performance Report

Status: The action plan to improve transparency and accountability in the management of licensesand concessions of natural resources for Ministry of Livestock Development and Fisheries covers theperiod 2009/10 to 2011/2012. Almost, the actions outlined in the Action Plan during 2009/2010 wereimplemented as planned. The Ministry will be having annual meetings whereby LGAs will be the mainstakeholders and issues pertaining to resource management and conservation, resource utilization andrevenue collection will be discussed. LGAs are advised to use BMUs to be agencies for revenuecollection where applicable. For those actions that have been planned to be implemented during the2010/2011 financial year; provision budget has been budgeted for.

Main Source: Ministry Annual Implementation Progress Report July, 2009- June, 2010

Overall Assessment of the Temporary Process Action (Government to implement key actions ofNatural Resources ( forestry, wildlife and fisheries accountability and transparency action plansfollowing 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) forforestry (Tsh billion)

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Assessment: ACHIEVED

Baseline 2005: Tshs 21, 558,275,181Status 2009: Tshs 18,426,759,276Status 2010: Tshs 34,000,000,000Target 2010: Tshs 23,800,000,000

Main Sources ofInformation

3.1Outcome Indicator: Total value of revenue received from concessions and licenses (if any) forwildlife (Tsh billion)Assessment: NOT ACHIEVED

Baseline 2005: TSh. 11, 558,501,001Status 2009: Tshs. 14,752,663,553Status 2010: Tshs. 15,545,000,000Target 2010: Tshs 21,400,000,000

The outcome indicators was not achieved due to adverse effect of global economic meltdown onTourism particularly Hunting Industry as hunting bookings were cancelled and hence hunting quotaallocation 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, 205,519,210.65Status 2009: Tshs. 6,172,276,616.25Status 2010: Tshs. 7,138,643,210.20Target 2010: Tshs 8,500,000,000.00

Main Sources ofInformation

MLDF Accounts and Finance Unit. Annual Revenue Collection Report 2009/2010and 1st Quarter Revenue Collection Report 2010/2011.

The outcome indicator was not adequately achieved due to the world economic crises from whichimportation of fish from Lake Victoria was affected thus export royalty declined, increased use of illegalfishing gears and methods; illegal trafficking of fish and fisheries products across the border; anddepletion of certain key fish species with commercial value, such as prawns and declining of Nile perchfish; and lack of a fishing harbor in the country denies the country revenue which could otherwise berealized from especially the Deep sea fishery.

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MINISTRY OF ENERGY AND MINERALS

3.0 Outcome Indicator: Total value of revenue received from concessions and licenses (if any) forminerals (Tsh billion)Assessment: ACHIEVED

Baseline 2005: Tshs 777, 448,000Status 2010: Tshs 65,574,363,272Target 2010: Tshs 40,512,000,000

Main Sources ofInformation

MEM Accounts and Finance Unit. Annual Financial Statement for the Year Ended30th June 2010

1.1 Outcome Indicator: Total value of revenue received from concessions and licenses (if any) for oilgas (Tsh billion)Assessment: ACHIEVED

Baseline 2005: Tshs 6.7 BillionStatus 2010: Tshs 16.7 BillionTarget 2010: Tshs 15.6 Billion

Overall Assessment on outcome indicator (Total value of revenue received from concessions andlicenses (if any) for forestry, fishing, wildlife and minerals (Tshs billion) ( MLD,MEM and MNRT)Assessment: NOT ACHIEVED

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Annex 1.5 Cluster Group Working Two Improvement of Quality of Life and Social Well-beingReport

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

ContributorsPMO, 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 GBSAnnual Review 2010

Contributors MoEVT, PMO-RALG, MCDGC, Education DPs Date: 2 November, 2010

SUMMARY ASSESSMENT - EDUCATION SECTOROverall Assessment SATISFACTORY

1.1. Underlying Processes – Education Sector ReviewThe Annual Joint Education Sector Review (JESR) Technical Working Session was held from 28th-30th

September, 2010. 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, sectorperformance rating, and a High Level Meeting, which is chaired by the Honourable Minister for Education andVocational Training and ratifies the findings of the Review process. To determine the rating for the Educationsector, all relevant documentations are reviewed and a jointly agreed rating framework is utilized to finalise the

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assessment. For FY 2009/10, the joint rating exercise for the sector has been completed, with an agreedGOT/DPs rating of SATISFACTORY.

1.2. Temporary process actionsThe Education sector TPA for 2009/10 was “Education Sector Human Resources Situational Analysiscarried out according to the agreed TOR with the data collection initiated by August, 2010 and first draftfinalized by February 2011”.

Assessment: Partly Achieved

The Human Resource Situational Analysis is underway, but delays have been encountered. In fact, the originaltimelines for the TPA were: initiation of data collection by June 2010; and, finalization of the first draft of thereport by November, 2010. These timelines were revised by mutual agreement by GoT and DPs whenprocurement of consultants could not be finalized by June, 2010.

Consultants were contracted in August, 2010, and the inception report was received in October, 2010. 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 canbegin in January 2011. 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 2011. The likelihoodof successfully achieving this TPA by June 2011 is very high.

1.3. 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 SURPASSED2. % of cohort completing Secondary Education (Form IV) – OFF TRACK/AT RISK3. % of cohort completing Secondary Education (Form VI) – OFF TRACK/AT RISK4. Transition rate from Standard VII to Form I – OFF TRACK/AT RISK5. Gross (Total) enrolment in Higher Education – ON TRACK/TARGET SURPASSED6. Qualified Teacher/Pupil Ratio in Primary School – ON TRACK/TARGET SURPASSED7. Qualified Teacher/Pupil Ratio in Secondary School – ON TRACK/TARGET SURPASSED

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Details on the specific actions that the sector (including MOEVT, PMO-RALG, and MCDGC) is taking to mitigatefor those targets at risk are included in the Outcome indicators section below.

1.4. 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 isgood 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 UNMDG summit.

ii. Improvements in qualified teacher-pupil ratios at both primary and secondary level in 2009/10also 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, MOHSWand 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 thedialogue process have been treated as a milestone for the sector, in 2010/11 this process has beengraduated from the milestones, as it is agreed to be well established and integrated in the regular GOTand 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 intime for budget allocation.

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iii. Civil Society Organisations have increased national engagement on performance issues.1.5. Key areas of weak performance

• Inadequate resource allocations remain a concern overall, with inadequate resources to fulfillMKUKUTA target of allocating 25% of the national budget to the education sector by 2015.

• 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 ratefrom 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 ofeight milestones for 2009/10 had to be carried over to 2010/11 for completion. In addition, there is aneed to further strengthen participation of key education stakeholders, including PMO-RALG and LGAs,in the dialogue process.

2. DETAILED ASSESSMENT – EDUCATION SECTOR2.1. 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 theeducation sector remains higher than any other economic sector and had a slight increase over lastyear.

The high budget execution rate of 92% is better than most sectors, reflecting the high absorptive capacity inthe education sector.

Implementation Progress

• Increased enrolment of both girls and boys at all levels of education has continued, particularly atsecondary and tertiary levels. The sustained enrolment over the last five years for primary students above95% has been a success acknowledged internationally and Tanzania was awarded a prize during the2010 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 secondaryactivities have been transferred to LGAs and consequently disbursed to respective secondary schools in

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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 andPrimary Education and an Inspectors Handbook were developed, as well as strategies for In-serviceTraining, Inclusive Education, Gender, Environmental Education, and HIV and AIDS. Implementation ofthese strategies is included in the 2010/11 budget.

• A multi-sector School Water, Sanitation and Hygiene (SWASH) Memorandum of Understanding wassigned by the Ministry of Education and Vocational Training, Ministry of Health and Social Welfare andMinistry of Water and Irrigation. This should facilitate better coordination across MDAs and will provideclearer responsibility of implementation and budgeting of SWASH related activities in the coming year, inorder 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 March2010.Dissemination has been conducted as part of regular government meetings and has includedpresentations 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 CSOrepresentatives 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 circularon teacher absenteeism to improve performance; revision of the database to have a single registry forprimary 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 assessmentand 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, whichis now available through the Education Sector Management Information System (ESMIS).

• Civil Society Organisations have increased their national engagement on critical issues of performancethrough TWG participation and through the presentation of their Performance Report at the JESR 2010.

• Milestones and specific actions have been agreed for 2010/11, and new milestones have been agreed for

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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 formore substantive technical discussions and focus on improved sector performance and improving qualityof 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 2015. 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-sectorallocations have decreased in primary education (from 55.8% to 47.6% in the last 5 years) andsignificantly increased in University Education (which increased from 16.9% to 23.7% over the sameperiod). This presents a challenge for the GoT’s priority of improving equity and NER for primaryeducation.

• There are insufficient funds to meet the increased demand for Higher Education Students Loans for theneedy students.

• Concern persists on inequality in allocation of resources between Councils caused by the use of mixedformulas.

• Capitation grant allocation is not fully released, making it difficult to have adequate availability ofteaching and learning materials, including textbooks, laboratories supplies,, workshop equipment andassistive 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 thequality of education being provided by the relevant MDAs.

o Declining completion rates and pass rates for primary and secondaryo Low performance in Science, Mathematics and Languages across all levels of Education and

particularly at primary and secondary levelo 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,

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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 needfor improved retention and continuous professional development for teaching staff and to address theinequalities of deployment, particularly to the more rural and remote areas of the country. Completion ofthe 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 for2009/10 had to be carried over to 2010/11 for completion. Key milestones still to be prioritized andachieved 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.

2.2. UNDERLYING PROCESS – EDUCATION SECTOR

Assessment SATISFACTORYMain Sources of Information forEducation Sector

2010 JESR Aide-Memoire; Annual Education Sector PerformanceReport 2009/2010; JESR Technical Working Session Report 2010:Joint Education Sector Monitoring Report 2010; CSOs Performancein Delivering Quality Education in Tanzania Report 2009; RatingFramework for Education Sector 2009/10; Basic EducationStatistics (BEST) 2010; Thematic papers on Relevance ofTechnical and Vocational Education and Training (TVET) to MarketDemands: Skills for Employability and Management, Inspection andSupervision for Effective Delivery of Quality Education (prepared for

JESR 2010); and MOEVT, PMORALG and MCDGC BudgetSpeeches for Education Sector, 2010.

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The Annual Joint Education Sector Review (JESR) has four main components. These are: (1) joint monitoringvisits to councils; (2) a three day technical working session; (3) a performance rating assessment; and (4) a highlevel meeting, chaired by the Honourable Minister.

1. Joint Monitoring visits were carried out to collect views on the implementation of education policies fromeducation stakeholders at council level and other learning institutions, with the view to availing the JESRparticipants the opportunity to see for themselves the critical education issues and challenges that arepertinent to education development. The specific objectives included reviewing implementation status in

relation to quality, management and governance and cross cutting issues, and reviewing district andschool account for revenue and expenditure data. In 2010, the Monitoring visit was conducted in 11Councils from 19th April to 8th May, 2010 and included one Local Government Authority for each EducationZones. Last year, it was agreed to hold the joint monitoring visits twice a year (in February and August) toenable some comparison of performance, and to have sufficient time to spend on discussion of key issuesin the field. However, since 2010 is an election year, it was agreed that only one joint monitoring visitwould be conducted.

2. The JESR technical working session was held from 28th - 30th September, 2010. The meeting wasopened by the Permanent Secretary (PS) - PMO, and chaired by PSs for MOEVT and MCDGC and DPSsfor PMORALG and MCDGC. There was very active participation and discussion which includedrepresentatives 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 AdministrativeSecretaries, District Executive Directors and DEOs, Heads of Schools/Colleges, Research Institutions andPublishers.

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 centeredaround presentations topics and by education sub-sectors. In addition, a session was held to discussprioritization of recommendations contributing to review of milestones for 2010/11, some of which werecarried over from 2009/10, as well as the identification of new milestones for 2011/12.

3. Performance Assessment was conducted in mid-October, 2010. To determine the assessment for theEducation sector, all of the documentation listed in the area of Main Source of Information, including the

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Education Sector Performance Report 2009/10, were reviewed and discussed. An agreed ratingframework, of which the indicators for the education sector are reviewed and modified each year, is usedas the basis for sector performance assessment. This rating framework is based on the GBS guidelinesand is scored, based on three key areas: financing/budget; progress on targets and implementationresults; and accountability and sector dialogue. DPs and GoT do separate assessments, and then theassessment score is jointly reviewed and agreed. For 2009/10, the score was 77.5 out of 100 and theeducation sector performance is rated as SATISFACTORY.

4. High Level Meeting ratifies the findings and recommendations on the way forward from the entire reviewprocess. This meeting is to be held in mid-December and will finalise the underlying process within theeducation sector.

The outcomes of the JESR are recorded in an Aide Memoire, which highlights agreed priorities and milestonesfor 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 inthe Education Sector Performance Report 2009/10.

2.4.3 OUTCOME INDICATORS – EDUCATION SECTORa) 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.

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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 threeyears. To reverse this trend, the Ministry has planned for the current financial year (2010/11) to: (a) enforceremedial class policy and sensitize teachers to carry out remedial class; (b) increase teacher incentives forunderserved areas; (c) improve school environments including urging communities to provide meals; (d) ensurefull 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 inForm 5 admissions, as they had insufficient credits to qualify them to be admitted. However, these studentswere then able to re-sit Form 4 Examinations and then admitted into Form 5 private secondary schools. Afterattaining the required credits while in Form 5 they then qualified to write the Form 6 Examinations. This lead tothe increased percentage of completion rates for that year. Generally, to improve the completion rate theGovernment has planned for the FY 2010/11 to improve incentive package, including establishment of paypolicy, 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%)

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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 inpart to (short term) tradeoffs between increased enrolment and maintenance of quality standards at primarylevel. The Ministry is taking this reduction into account in the mitigation activities and is continuing to: (a) providein-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 andensure implementation of monitoring and inspection recommendations.

e) Outcome Indicator 5: Gross (Total) Enrolment in Higher Education

Assessment ON TRACKIndicator 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 theMKUKUTA 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 TRACK1

Indicator Values Baseline 2003: 1:106Status 2007/8: 1: 63Status 2008/9: 1: 60Status 2009/10: 1: 54Target 2010: 1: 60

Indicator target of 1:60 for 2010 has been met and was surpassed. If this trend continues national requirementsto attain the required primary school qualified teacher-pupil ratio of 1:45 will be attained. However, nationalaverage covers significant variations at Council and Regional levels. Regional disaggregation of this data will bepart of the sector dialogue in 2011.

g) Outcome Indicator 7: Qualified Teacher/Pupil Ratio in Secondary Schools

Assessment ON TRACK2

Indicator Values Baseline 2006: 1:33

1 No gender disaggregation of this indicator is required.2 No gender disaggregation of this indicator is required.

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Status 2007/8: 1:50Status 2008/9: 1:57Status 2009/10: 1:51Target 2010: 1:55

Indicator target of 1:55 for 2010 has been met. The progress shows a positive trend. However, national averagecovers significant variations at Council and Regional levels. Regional disaggregation of this data will be part of

the sector dialogue in 2011.

MINISTRY OF WATER AND IRRIGATION

Water Sector Progress Report Against the Performance Assessment Framework (PAF) for GBS AnnualReview 2010

Contributors MoWI, Water Sector DPs

SUMMARY ASSESSMENT

Overall Assessment MODERATLY SATISFACTORY

2. DETAILED ASSESSMENT

2.1. Areas of good and weak performanceWATER SECTORA: Areas of Good PerformanceSector CoordinationThe agreed principles and terms of partnership between the Government and Development Partners, which is abasis 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 watersector dialogue comprises an Annual Joint Water Sector Review that is held once a year, the Water SectorWorking Group that meets quarterly and four Thematic Working Groups, which meet bimonthly, each; allresponding 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 andevaluation of water sector progress and in drawing the future action plans for implementation.

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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 washeld from 29th – 30th September 2010. Furthermore, with an exception of few, almost all quarterly progressreports were prepared and shared.

Communication, Education and InformationDuring 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 strategicdocuments has been intensified as a result of this undertaking. The sector now experiences a higher sense ofextra 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; officecommunication and networking equipment have been delivered to MoWI, PMO- RALG, Urban WaterSupply and Sewerage Authorities and Basin Water Offices;

iii) The management and development of the water sector follows the establishment institutional frameworkfor 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 implementingagencies (IAs) have completed and integrated Capacity Development (CD) Plans into the respectiveplanning and budgeting systems for 2010/2011 by July 30, 2010;

iv) Two water laws that provides implementation, monitoring and sector oversight mandates were enactedby 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 isbeing done now is loading the system with data and information, ready for starting production of reportsby January 2011. The system will be finally integrated with Water Point Mapping and other specializedsub 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

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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 PerformanceLaunching of the National Water Board: This was planned to be done by August 2010 but it was hampered byno response from the public to apply for the position of the board chairperson. The Regulation for nomination ofmembers for all WBs was gazetted on May 21, 2010. A stakeholder forum was held on July 22, 2010.Nominations from the forum are in final approval stages, after which nominations of the National Water Boardchairperson and members will follow. The first NWB meeting is now planned for end of 2010.

Capacity of the Private sector: The private sector which is expected to execute various contractual obligationsin implementation of the WSDP is still at infant stage in the water sector, they are few, not found in some LGAsand lack adequate capacity to produce value for money outputs. There is low capacity of the private sector toexecute contractual obligations of project design, feasibility studies, detailed design, and preparation of tenderdocuments, project supervision, and works. Using some of the contractors is a risk because of their low capacityboth in technical and financial terms. Major risks include risking on quality outputs and delays. Capacity buildingand technical support to the private sector has been included in the institutional strengthening and capacitydevelopment framework for the whole sector.

Fiduciary management capacity and accountability: There has been remarkable improvement in procurementprocessing during 2009/2010. The procurement capacity of MOWI has substantially improved but is generally stillinadequate 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 WaterOffices, UWSAs and LGAs has created serious accounting and procurement issues including delays in financialreporting. The key findings and recommendations of a Special Audit Report prepared as a follow up to theWSDP’s FY08/09 financial audit and MTR findings, highlights weak areas that need to be addressed.

2.2. UNDERLYING PROCESS

2.2.2 WATER

a) Water Sector ReviewAssessment (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,

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TAWASANET; Agreed Undertakings of the Joint Water Sector ReviewMeeting, 29-30/09/2010.

Over 180 participants attended the Annual Joint Water Sector Review Meeting that was held at the UbungoPlaza from 29th to 30th September 2010. The stakeholder representation was from the MoWI, PMO-RALG,MoHSW, MoEVT, Development Partners (DPs), Civil Society Organizations (CSOs), Regional Secretariats, LocalGovernment 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 raisedduring the Joint Supervision Mission held from 13th to 28th September 2010. The meeting came out with eightmain issues of concern that led to agreeing on next sector main undertakings for FY 2010/2011. The main issuesof concern include:

i) Finalization of the WSDP restructuring, especially on priority activities, revised targets and revisedmonitoring indicators up to 2012, basing on the programme financing envelope; including the newdialogue mechanism, new coordination structure, strengthening the M& E framework and strengtheningthe physical and financial reporting (including reviewing reporting formats to be user friendly and aligningfuture transfers on reporting obligation);

ii) The need to draft the key elements of WSDP phase II (2012/13 – 2016/17) on the basis of lessons learntfrom 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 thathave 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 guideimplementation during 2010/2011.

2.3. Temporary Process ActionsCapacity Development Plans based on Water Sector Capacity Development Framework are in place by March

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2010; and on budget by June 2010 for all MoWI Departments, minimum of 75% of LGAs; and Minimum 90% ofall 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 NationalProjects – 29%. Preparations of CD plans are underway in 7 regional urban centers, 61 Small Towns and 5National Projects. This is equivalent to over 90% performance over the planned TPA.

2.4 Outcome Indicatorsa) 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

of Information

Speech of the Minister of Water and Irrigation, Hon. Prof. MarkMwandosya (MP) Presenting Budget Estimates to the Parliament in June2010, and Draft Restructuring Plan 2010.

Water sector routine data annual progress reports indicate that rural water supply coverage has increased from53% in 2003 to 58.7% in 2009, which is a 5.7% increase in 6 years. The proportion of people in urban areaswho use drinking water from improved sources has increased from 73% in 2003 to 84% in June 2010 for the 19UWSAs, 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 targetsof attaining 65% water supply service coverage for rural areas and 90% water supply service coverage for urbanareas, 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 civilworks;

• Lower than expected contributions to the water basket (both from the GoT and DPs);

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• 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 AnnualReview 2010

2.2. UNDERLYING PROCESS

2.2.1: HEALTH SECTORHealth Sector ReviewAssessment JAHSR processes concluded on September 30, 2010. 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. Theserepresent the key areas for the implementation of the Health Sector Strategic PlanIII 2009.

Main Sourcesof Information

MoHSW website: http://www.moh.go.tz/DPGH website: http://hdptz.esealtd.com/

2. 4 OUTCOME INDICATOR2.4.1 HEALTHa) 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 ofInformation

Expanded Programme of Immunization (EPI) Unit + TDHS Preliminary Report2010

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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 differenceof coverage between male (88.2%) and female (87.8%) isn’t significant. Two zones achieve lower than nationalaverage coverage and would deserve special attention: Western (74.9%) and Southern Highlands (81.9%). Allother zones are well above 90%

b) Proportion of births attended by skilled health workers.

Assessment OFF TRACKIndicator 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 ofInformation

TDHS Preliminary Report 2010 and Reproductive and Child Health Annual ZonalReport

Pregnant women who delivered at a health facility is used as a proxy indicator.The TDHS 2010 preliminary report (based on births 2005-2010) showed that 51% of expected births weredelivered by a health professional and almost the same proportion (50%) were delivered in a health facility. TheWestern (37.5%), the Lake (43.9%) and Central (46.9%) zones are below the national average and will requirespecial 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 attendedby 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 lowperformance.

c) TB Treatment Completion Rate.Assessment ACHIEVEDIndicator Values Baseline 2005: 82.6%

Status 2007: 84.8%

Status 2009: 87.4 %Target 2012: 85 (maintenance)

Main Sources of National TB & Leprosy Programme

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InformationThis is measured as number of patients who successfully completed treatment as a proportion of tuberculosiscases diagnosed. The program has surpassed the global target set at 85%. Maintaining these high rates willcontinue to be a challenge to the program. The HIV is fueling the TB burden and increasing susceptibility of theHIV infected population to HIV/TB co-infection. Two regions (Iringa 82% and Kilimanjaro 84%) are below thenational maintenance target and will require special attention.

d) Number of People with Advanced HIV Infection Receiving Antiretroviral Combination Therapy (ARVs)

Assessment OFF TRACKIndicator Values Baseline 2006: 60,000

Status May 2009: 248,280Target 2010: 440,000Status May 2010: 342,981 (Performance Profile Report 2010)Status March 2010: 264,063 (Pepfar Progress Report)Target 2012: To be revised

Main Sources ofInformation

National AIDS/HIV Control Programme + PEPFAR Tanzania Semi-AnnualProgress 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 themore that the reported figure is a cumulative figure including all persons who have ever been put under ARVtreatment. 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 targetimpossible. According to the PEPFAR Tanzania Semi-Annual Progress Report (October 2009-March 2010), thenumber of persons currently under treatment is 264’063, 171’691 female and 93’372 males (these figure willundergo 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 ENVIRONMENTGBS-PAF ANNUAL REPORT FOR 2010

Contributors Environmental Working Group; Vice President’s Office and DanishEmbassy.

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Date 26/10/2010

1. SUMMARY ASSESSMENT

Overall Assessment: SATISFACTORY1.1 Underlying processesReview of the Environment as a cross-cutting issue focusing on the Strategy for Urgent Actions on LandDegradation and Water Catchments.

The joint Government-Development Partners review meeting on Environment was held on 21 and 25 October2010 to discuss and assess the implementation of the Strategy for Urgent Actions on Land Degradation andWater Catchments. The implementation of the strategy was generally rated SATISFACTORY in the light of fundsthat were availed.

1.2 Temporary process actionsAt least 3 out of 5 MDAs (Agriculture, Health, Infrastructure, Water, Energy and Minerals) have finalized theirenvironmental 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 byGovernment and the DPs. MDAs did not have budgets for this activity in Financial Year 2009/2010. DANIDA hasagreed to fund the activity. The Government and DPs have jointly agreed to postpone the completion of theaction to December 2010. Apparently, all the 5 MDAs have received funds and are in the process of preparingthe action plans.

1.3 Outcome indicatorsNumber 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 theirenvironmental action plans which is a requirement in the Environmental Management Act and GBS-PAF2010.

(iii) The Presidential Award on Conservation of Water Catchments, Planting and Conservation oftrees was conducted for the first time in 2010 whereby 16 mainland Tanzania regions participated. Theaward was issued to the winners on 5th June 2010 during the comemorations of the WorldEnvironmental Day. The objective of this award is to motivate people to participate in tree planting inorder to rescue the country from drought and desertification.

(iv) All Local Government Authorities are allocating budget for environmental management in theirareas. However, due to budget constraints the funds allocated cannot cater for many ever-growingdemands of environment management.

(v) Environment has been mainstreamed in the 2nd National Strategy for Growth and Reduction of Poverty(MKUKUTA II).

1.5 Key areas of weak performance

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(i) The implementation of the Regulation for Prohibition of Production, Importation and Use of Plastic Bagswith less than 30 microns has not been very successful since there are still few of such bags in thestreets.

(ii) Wildfires in various areas of the country have continued being a problem despite efforts by theGovernment to control the behavior of setting wildfires.

(iii)Majority of people in the country continue relying on biomass energy leading to increasing forestdegradation.

(iv)Due to many competing needs in the Local Government Authorities, inadequate funds are allocated forenvironment management leading to failure to achieve various national environmental managementobjectives at that level.

2. DETAILED ASSESSMENT2.1. Areas of good and weak performanceMain Sources of Information Vice President’s Office Budget Speech 2010/2011 and Synthesis Report of

Implementation of the Strategy for Urgent Actions on Land Degradation andWater Catchments.

A. 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 ActionPlans have been prepared. This will enable sectors and LGAs to prepare their environmental actionplans which is a requirement in the Environmental Management Act and GBS-PAF 2010.

(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 tomeet more frequently than last year to discuss various environmental issues facing the country. Thisforum facilitates environmental mainstreaming which is key in achieving sustainable development.

(v) The Presidential Award on Conservation of Water Catchments, Tree Planting and Conservation wasconducted for the first time in 2010 whereby 19 mainland Tanzania regions participated. The award wasissued to the winners on 5th June 2010 in the comemoration of the World Environmental Day. Theobjective of this award is to motivate people to participate in tree planting in order to rescue the countryfrom desertification.

(vi) The Strategy for Conservation of Marine and Freshwater Bodies Environment was inaugurated in Julythis year. The objective of the strategy is to improve management of marine, coastal and fresh-waterbodies 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 ofenvironmental management.

(viii) Environment has been mainstreamed in the 2nd National Strategy for Growth and Reduction ofPoverty (MKUKUTA II).

B. Areas of Weak Performance

(i) The implementation of the Regulation for Prohibition of Production Importation and Use of Plastic Bagswith less than 30 microns has not been very successful since there are still few of such bags in thestreets.

(ii) Wildfires in various areas of the country have continued being a problem despite efforts by theGovernment to control the behavior of setting wildfires.

(iii)Majority of people in the country continue relying on biomass energy leading to increasing forest

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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 managementobjectives at that level.

2.4. OUTCOME INDICATORSOutcome Indicator: Number of Districts Councils Allocating Budget for EMA Implementation (annualizedindicator)Assessment On Track/ Target surpassedIndicator Values Baseline 2008: 11

Status 2009: 50Status 2009: 121Target 2010: 132Actual 2010: 133

Main Sources of Information PMO-RALGIndicator target of 132 councils allocating budget for EMA implementation has been met and surpassed. Thetarget has also been achieved. However, due to budget constraints, very little funds are allocated leading tofailure to meet ever-growing needs of environmental management at that level.

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HIV and AIDS Progress Report Against the Performance Assessment Framework (PAF)for GBS Annual Review 2010

SUMMARY ASSESSMENT

Overall Assessment SATISFACTORY

1.1 Underlying processesThe 4th Joint Biennial HIV and AIDS Thematic area Review took place from 27th- 28th of September 2010. The reviewdrew upon the results of a Technical Review Meeting (September 22nd to 24th h ) where a number of technical issuesrelated to the Programmatic review assessment, Rapidly district assessment on decentralized level, Epidemiologysituation and Universal Access assessment reports were discussed in more depth. Several key documents werepresented and discussed in the Review process.

The Honourable Minister of State, Prime Minister’s Office, Regional Administration and Local Government formallyopened the meeting and underscored the importance of dialogues as a prerequisite for the development andResources Mobilization.

The results of the Public Expenditure Review 2010 were discussed. Some alternative sources of funding andfinancing to sustain HIV and AIDS interventions were discussed, including the proposal for the establishment of AIDSTrust 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 ofthe implementation of the NMSF 2010-2012. The discussion focused on Thematic areas of the NMSF 2008-2012namely Prevention, Care, Treatment and Support, Impact Mitigation, Enabling Environment, Monitoring, Evaluationand Research and Finance and Audit. The last day of the Main Review was used to re-define the milestones for2010/12 and 22 milestones were approved. The criteria for successfully undertaking the underlying process waspresented to the stakeholders and unanimously stakeholders agreed that the underlying process was satisfactorybased on the criteria set.

1.2 Temporary process actionsNone for 2009 -10

1.3 Outcome indicatorsNone for 2009 -10

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2. DETAILED ASSESSMENT2.1. Areas of good and weak performance

Main Sources ofInformation

HIV and AIDS Policy 2001, National Health Policy 2007; Joint Biennial Review reports,minutes of the Joint thematic working Group meetings; Report of the deskprogrammatic, report on desk review District rapidly assessment, Report on Universalaccess, milestone for HIV and AIDs 2010- 2012, Annual TACAIDS Report 2009, PER

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 standalone (inclusive of Public, FBOs and Private for profit facilities) 78.4 % (345,006/440,000) of eligible for ARTwere on treatment by June 2010 of which 7.5 % (25,794/345,006) of all on ART were children below 15 yearsage by June 2010. 17% of Health Facilities are providing care and treatment services by June 2010

1.5 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, careand 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

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2009, PMO Budget speech July, 2009 &TACAIDS quarterly and Midyear and AnnualReports 2009.

Areas of good performanceDeclined in HIV and AIDS prevalence from 7 % during 2003- 04 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 15-24 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 HIVtransmission risk behaviours as well. For example, within the 15-49 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 CoalitionTanzania (ABCT) is supporting private enterprises with prevention and care measures for their employees. Themembership of the ABCT has grown from 23 members in 2004, to around 70 members in 2010. However, the

coverage of workplace interventions among the local private sector is still very limited. – not convinced membershipis 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. Thedialogue is frequent, transparency, honest and productive. The new dialogue structure is implemented and thework 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 Environmentrespectively 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 thelaw is under way. This is another added milestone in the national response for HIV and AIDS epidemic as it willprovides a clarification legal issues pertaining HIV and AIDS –

TACAIDS in the final stage of operationalization of AIDS Trust funds. The Government technical team has produceda report, which recommends the modalities for the Fund establishment. Cabinet paper has been developed forfurther steps

TACAIDS led the development of the national Multisectoral HIV prevention strategy and that this has beendisseminated to the 8 regions with highest HIV prevalence (above 5%) and each region has developed regionalprevention 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

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district level

• Establishment of TACAIDS regional coordinators

• Approved UN joint programme on HIV and AIDS as part of the UN Delivering As One in TanzaniaIn 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 standalone (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 2010.

• 17% 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 insome 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 behaviourchange, 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

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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 monitorprogress 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 betterlinkages 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

2.2.1 HIV and AIDS Thematic area Review

Assessment Fourth HIV and AIDS Biennial Review processes concluded in September 28,2010. The overall performance was rated: satisfactory22 milestones were agreed upon. These represent the key areas for theimplementation of the NMSF 2008 -2012.

Main Sources of Information

2. 4 OUTCOME INDICATOR

NONE.

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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 havecontributed 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 PAFand, more generally will seek to address the governance issues that fall within broad outcomes identified inthis 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. Therecent 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

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generally orderly and were regarded as a step forward in Tanzania’s democratic development. The muchimproved political environment on Zanzibar was particularly noteworthy which, complemented by improvedpolicing and security, led to a conducive environment for the formation of the GNU. Observers commendedthe NEC and ZEC for generally guaranteeing universal suffrage notwithstanding the significant logisticalchallenges they faced. Polling and the counting, with isolated exceptions, were regarded as orderly andtransparent. 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 thechallenges 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 governancereporting during the year. The latest indices available show that Tanzania remains stable with respect tocritical 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 since2008 in budget transparency although the Index and the assessment of the accountable governance sectorsuggests that there is significant room for improvement in this area.

Important processes that have significance for Cluster III have been advanced during the year. Mostsignificantly Mkukuta II, approved by the President in July 2010, sets out specific governance priories that willform an important agenda going into next year. The APRM process has remained at the self assessmentphase, the first draft of which was completed in July 2009; the draft requires revision before the externalreview mission can take place and is progressing. Although in this respect, as with the EITI, delays havebeen experienced and it is hoped that these important processes can be brought back on track in 2011.

Tanzania’s human rights record has remained consistent and solid. The CHRAGG continues to investigateand conclude cases brought forward. The National Human Rights Action Plan being coordinated byCHRAGG 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. Itshould also be noted that steps at the local level have been taken in some specific areas where land conflictshave arisen in the past. These actions include demarcation of villages and a consultative land use planningexercise, 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 canadvance equity has been approved by Cabinet on the 13th of July 2010. In addition, the GoT has frozenrecruitment to better served areas and some LGAs are using their powers to improve retention rates.

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However the identification of equity again as a key issue for the Cluster in this year’s annual reviewunderlines 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 forDPs. 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 casesof corruption being currently prosecuted. 41 cases of petty corruption have been convicted from January toSeptember 2010. NACSAPII implementation has progressed with a wide range of activities beingimplemented including the finalisation of an M&E framework (TPA achieved). On this basis, Government hasassessed the underlying process as satisfactory. However, development partners assessed the underlyingprocess as unsatisfactory due to non-achievement of the agreed assessment criteria. Overall DPs continueto voice concern that progress on key aspects of grand corruption has not been fast or comprehensiveenough and that dialogue has not been sufficient to meet the agreed criteria of the related TPA. Donorshave cited in particular a failure to progress substantively key corruption cases, to tackle adequately highlevels of petty corruption (as evidenced in the East African Bribery Index), to address outstandingcommitments relating to the EPA Action Plan, to publish the National Governance and Corruption Surveyand 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 byGovernment and DPs as satisfactory or as moderately satisfactory, with a split assessment on oneunderlying 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 paceand results are variable. DPs and GoT have welcomed some fruitful dialogue in recent months leading toagreed 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 challengesand to develop prioritised plans to address them.

There have been improvements in the dialogue in the local government and legal sector. In addition, areduction in the backlog of existing cases has been made under the LSRP and DPs are encouraged that thisimproved momentum be sustained. Dialogue on the core reforms has also been productive. This isparticularly important as policy coherence across government and results based planning is essential toenable effective implementation. The challenges in progressing the core reforms have been an area ofincreasing focus and commitment for both the GoT and DPs. The work of the Reform Coordination Unit has

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contributed to positive developments in the legal sector and in supporting the comprehensive restructuring ofthe public sector reform programme. Nonetheless much remains to be done and challenges relating to workplan quality, monitoring and evaluation, disbursements, procurement have jointly been identified as priorityareas to address.

Underlying Process 1: Accountable Governance (including Executive’s accountability to Parliamentand Consultation of Domestic Stakeholders)

Assessment SATISFACTORY

Main Sourcesof Information

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, assessmentcriteria is a notable achievement and has strengthened the structure and quality of dialogue during this year’sGBS cycle. Building on the criteria and assessment recommendations from 2009, DPs and GoT jointlyagreed on the following assessment criteria during 2010:

1) Follow up on recommendations of the assessment of accountable governance included in theAnnual 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 UnderlyingProcess to independent consultants and have noted the value in using a third party to facilitate this processand capture a wider spectrum of sources. The conclusions drawn by the consultant were derived from a deskstudy, 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 topresent the draft report and incorporate comments. Unfortunately, given the National General Election theinclusion 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

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positive movement in the area of domestic stakeholder consultation. However, improvements can also bemade: (i) the external assessment, including the formal stakeholder consultation was significantly delayedand implemented hastily (ii) the stakeholder consultation offered a positive space for open and frank dialoguebut the lead-in time did not allow for stakeholders beyond CWGIII to be invited nor allow for adequatepreparation. In recent years, stakeholders have repeatedly requested that they be given proper notice andadvance 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 theAnnual Review 2009

Three recommendations from the 2009 GBS annual review on increased budget transparency were includedunder this criteria: 1): key documents related to the budget process continue to be made publicly available ina timely and systemic manner; 2) development of a template for Swahili citizens guide to the budget for thefinancial year 2011/12 budget; 3) MoFEA and PMO-RALG websites to be duly and systematically updated toinclude individual reports of MDAs and LGAs.

Progress in this area has been mixed and in need of further improvement. Timely availability of budgetdocumentation – through MOFEA and PMORALG websites - is highly variable, despite being assessed asan unsatisfactory TPA in 2009. The Budget Guidelines should be made available as soon as they arereleased in order for stakeholders to be able to influence budget priorities. However, in 2010 they were onlymade public on the MOFEA website in May. The MTEF for 09/10 was only posted in March 2010. Quarterlyexecution reports are available but an annual implementation report is not produced or published. All fourvolumes 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 andthe information that is available is extremely outdated. Budget information for individual LGAs was out of dateand only cumulative data was available rather than quarterly breakdowns, as intended. This makes budgettracking very difficult. LGA budget guidelines, LGDG annual assessments and LG fiscal reviews were alsoout of date. It is imperative that a decision on the future use of this website be made, or alternativemechanisms for tracking budget at local level developed.

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Tanzania has improved its international rating on budget transparency and should be commended for theprogresses made. According to the Open Budget Index, Tanzania’s score on budget transparency increasedfrom 36 in 2008 to 45 out of 100 in 2010. The present score indicates that the government provides thepublic with only some information on the central government budget and financial activities, making it difficultfor citizens to hold the government accountable for its management of public money. Beyond improving theavailability 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 providingmore effective budget oversight, as well as providing greater opportunities for public engagement in thebudget 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. Goodpractice states that it is a government’s responsibility to publish a citizens’ guide. Hence, it wasrecommended that a partnership be formed and that the Policy Forum guide should be formally adopted bythe government and form the template for future versions. In December 2010, MOFEA formally accepted thisproposal. Policy Forum has requested that the Budget Department now assigns a team to work with it tojointly produce the FY11/12 Citizens’ budget, to be disseminated to citizens a month after approval of thenational budget.The following are recommended:

1) Budget documentation should be made public in a more timely manner. Government shouldimprove the timely and systematic updating of MOFEA and logintanzania websites with budgetinformation and documentation. Heavy files such as the budget books should be made available onCD.

2) A broader range of LGA information should be made public on logintanzania (e.g. LGAstrategic plans, financial circulars etc.). PMORALG should meet with local stakeholders to agree aspecific set of documentation that can be made available through this website\Government toformalise its partnership with Policy Forum on the Swahili Citizens’ Budget and to produce andpublish 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 howthese can be accessed to avoid confusion.

4) Government to publish a Year-End Budget Report

2. Access to information and freedom of the media

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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 transparencythrough legislation, incl. Right to Information Act, Public Leadership Code of Ethics Act, Election ExpensesAct;

2) Rating in Freedom House indicator (from 50 to at least 48), 3) % of obligatory village assembly meetingsheld, 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 toParliament that the process to develop the Right to Information Bill is ongoing. Stakeholders agree that is aneed for such an Act as its absence has continued to deny citizens their Constitutional right of access toinformation and media rights to retrieve information. The Ministry has communicated during this reviewprocess that it will no longer continue with the process of developing the Right to Information Act but ratherwill proceed with the preparation of the Media Services Act; this should be officially communicated withstakeholders if it is in fact the case. The consultant found that the Newspaper Registration Act of 1976 whichallows authorities to register or ban newspapers and the Broadcasting Services Act impede free mediaoperations in Tanzania.

The Public Leadership Code of Ethics is still pending approval and during the year 2010 the EthicsSecretariat 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 theParliament on February 11, 2010. DPs view this as a sign of deepening democratic practices. However,some stakeholders reported that the Act provides little room for transparency and accountability. Theimplications of the law should be reviewed after the first experience with its implementation during the recentelection.

The Freedom House index is widely recognized as a definitive source of information on the state of mediafreedom around the globe and has been at the forefront in monitoring media independence since 1980. InTanzania the analysis indicates that media freedom for 2010 has not seen any progress in the last year (nor

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reached the target of 48 agreed in this criteria) but maintained its position as partly free with an overall scoreof 50.

With respect to village assemblies, PMORALG has not provided updated data for 2010.

Evidence currently shows that 71 percent of the Citizens requests for information from public offices weremet, 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. Astudy commissioned by the GoT has recommended a policy statement be issued indicating what and theextent 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 andthe Media Services Bill

2. Government to finalise the amendment of the Public Leadership Code of Ethics Act as requested bythe Parliament

3. The Government to clarify the roles and functions of the Regional and District ConsultativeCommittees with a view of giving them clearer mandate to address issues of access to informationby the public

4. The Government to facilitate a process of regular surveys to measure and validate trends in accessto information at various levels and different sectors

3. Quality of consultations between government and domestic stakeholders on the MKUKUTAand other key national processes

This criteria includes three sub criteria 1) quality of dialogue and consultation with domestic stakeholders onMkukuta/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 requirementbefore 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 developingthe MKUKUTA II. CSOs were heavily engaged in the second part of this process where they, in agreementwith the GoT, organized a series of consultations across the country to consolidate views and inputs. CivilSociety has therefore, for the first time, felt closely involved in the process. The preparation of MKUKUTA IIalso included consultation with Members of Parliament. During the regional consultative discussions,

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Members of Parliament were invited and at least some attended. However, the final MKUKUTA II draft wasnot endorsed by Parliament.

The consultation in Anti-Corruption fora, the NACSAP steering committee, has been more inclusive thanbefore. An anti-corruption forum was held in May 2010 bringing together close to 200 participants from allsectors in the government and non-state actors. The Forum provided an opportunity for key stakeholders topresent 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 againstcorruption. Feedback during this assessment process has been positive with respect to the inclusion ofstakeholders 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 currentlyhas 32 member organisations. The aim of this network is to mobilise and coordinate the efforts of civil societyorganisations in the fight against corruption.

This criteria also requires DPs and GoT to assess the quality of consultations between the government anddomestic 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 theearlier section, no progress has been made during the year 2010 towards formulating the first two acts, andhence no consultations made during this year. Government procedures require that consultations be madewith key stakeholders and the draft bill be published in the Government Gazette before it is tabled in theparliament for first reading. Stakeholders have the opportunity to input into the bill during the stakeholderconsultations conducted by the Government and also during public hearing conducted by the respectiveparliamentary 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 politicalparties and civil society organisations in a meeting conducted in Dar es Salaam, and then in a seminar withMembers of Parliament held in Dodoma.

Whilst there have been achievements with regards to the quality of consultations between government anddomestic stakeholders on the development of MKUKUTA II and that space for civil society to engage in somesector policy debates is growing, there are still certain fundamental issues that CSOs feel need to beaddressed. The following are recommended:

1. Government to enhance consultations with stakeholders by clarifying the role of CSO within the

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dialogue structure and by providing adequate advance notice and documentation for theconsultations.

2. There should be a stakeholder consultations on the election expenses act to reflect on theexperiences from the recent general election.

3. Civil Society Organisations should be given an opportunity to appoint their own two representativesto sit on the National Anti Corruption Steering Committee. Currently only one CSO representativeselected 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 andthe President of the United Republic of Tanzania on the other. In this section, however, reference to theParliament will refer mostly to the work conducted by the National Assembly. This component is expected toassess 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 asexemplified by the following four selected reports: Richmond, TICT, Kiwira and TRL, and 3) fundingdisbursed 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 2009/10and the report was therefore submitted on time. The report provides an account by the Government on theimplementation of the various commitments made during the sessions. Though MPs do get time to questionon some of the reported items, it was noted that the time is not enough for detailed discussions on theissues.

On February 10, 2010 Kiwira and Richmond Reports were discussed in the Parliament with the PermanentParliamentary Committee on Energy and Minerals providing their general satisfaction with the way theGovernment had dealt with the issues raised in the two reports. On the same date, the PermanentParliamentary Committee on Infrastructure submitted its report following its deliberations on the GovernmentImplementation Reports on TICTS and TRL.Under this subcomponent, the consultants were required to analyse the funding disbursed to the Parliamentover 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 indicatethat there has been an increasing trend in disbursements to the Parliament over the last three financial

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years, 2007/08 – 2009/10. Disbursements to the Parliament per year over the three year period have beenincreasing from about TZS 48bn during the year 2007/08 to TZS 69bn during the year 2009/10. TheGovernment has been successful in providing increasing levels of funding to the Parliament and henceenhancing its operational ability. However, whether the budgets themselves were adequate in the first placeit 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 eachcommittee, 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 NationalAssembly Fund.

Underlying Process 2: Legal Sector Reform Programme (LSRP)

Assessment SATISFACTORY

Main Sources ofInformation

LSRP Progress Report 2009/10, LSRP Annual Operational Plans 2009/10, the ATIPMid Term Review Aide Memoire of February 2010, and the ATIP Review AideMemoire of May 2010

Background

The Legal Sector Reform Programme (LSRP) is one of the cross-cutting reform programmes in the publicsector geared to achieving the National Strategy for Growth and Reduction of Poverty (NSGRP) referred toas 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

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professionalism of legal officers; independence of the judiciary; and a legal framework and jurisprudence ofhigh standards responsive to social, political, economic and technological trends at both national andinternational 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. Duringthe 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 2008-09financial year to integrate the Medium Term Strategy (MTS) into the government’s planning process and theMTEF have recorded positive results. As a result, twelve of the sixteen LSIs accessed LSRP funding throughtheir respective MTEF votes. Four LSIs were still receiving funds through MoCAJ. The integration, with theuse of the newly acquired PLANREP tool, has simplified the planning work and has cut down the approvaltime of the Programme’s Work Plans and Procurement Plans. The 2009-10 budget was approved on 1st

October 2009, almost three months earlier than in previous years.

The 2009-10 annual plan and budget consolidated the achievements registered through the linking of MTSterminologies with the MTEF by increasing the pace of activity implementation processes especially in areasof procurement. Reporting on progress made by the LSIs in the course of implementing the approvedactivities is of great importance for the Programme management to make informed decisions. This is to beassisted with the functioning of the revised monitoring and evaluation framework, which is also the mainfocus of the Work Plan.

The 2009/10 Annual Physical Progress Report indicates that more than 70% of activities in the approvedAnnual Work plan were implemented or are in the process of being implemented. At the same time spendingcapacity of LSIs continues to improve. From FY 06/07 TSH430,088,000 > FY 07/08 TSH1,808,390,640 > FY08/09 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 wellmanaged and coordinated by the Ministry of Constitutional Affairs and Justice. As a result of the measuresidentified in the October 2009 Mid-Term Review to improve performance and as there are limited financialresources remaining in the Programme, a stakeholder meeting (Pre MTEF meeting) was held in January2010 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

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Programme now focuses on 4 outcomes with clearly defined objectives, targets and indicators to ensure thatthe 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 wasaligned with the regular MTEF planning and budgeting process which enabled timely approval byrelevant 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 nextfinancial year were set out for the whole year as per plan. As a result, the implementation lagexperienced in the previous years will soon be history.

b) Refocusing the LSRP: In consultation with Development Partners, the government refocusedLSRP priorities based on the remaining lifespan and financial resources of the Programme. Therevised work plan seeks to achieve the following intermediate outcomes: (i) increased efficiency inthe administration of justice, (ii) improved knowledge and skills of legal professionals, (iii) increasedequal access to justice for the poor; and (iv) effective project management. The sub-componentshave been reduced from seven to four. Furthermore, the institutions involved in the basket fundhave been cut from 15 to 8. Following this refocusing, the LSRP M&E Framework was also revisedto 4 outcome indicators and 19 output indicators. Arrangements to extend implementation of theLSRP to June 2013 have been initiated. Implementation progress on agreed next steps is good andsome 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 implementationand their institutional requirements to focus their programs. However, following continued improvedperformance, especially as was depicted during the year under review, two new funding partnerswere attracted to the LSRP. UNICEF is in the final stages of communicating with Government itsformal commitment. The European Union is also finalizing its internal requirements to join theProgramme. It is expected that the two new funding partners will join LSRP with effect from 2010/11and 2011 /12 respectively.

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d) Enhancing capacity of the Law School of Tanzania (LST): The Programme continued to supportcapacity building initiatives of the Law School of Tanzania. LSRP was involved in the development ofits training programme; Students Assessment and Awards Regulations; and 3 sets of trainingmanuals, tutor notes and handouts. The Programme also facilitated a training of trainers programmefor the School’s 16 instructors on learning-by-doing methods. Through these capacity buildingefforts, the LST was able to enrol 385 students during the year, bringing cumulative studentenrolment to 1458. 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 majorarea of focus during FY 2010/11.

e) Decongestion of Retention Facilities: The Programme provided the Prisons Department withsupport for: training in human rights and good governance; expansion and improvement of the prisonsystem; increased use of alternative sentencing; review of custodial limits; revamping of case flowcommittees; reference materials for the legal library at Ukonga Prisons College; and 5 buses for thetransportation of inmates (which improved the Department’s capacity to handle inmates). TheProgramme also supported regular inspections by watchdog institutions such as CHRAGG andindependent NSAs of retention facilities to monitor the observance of human rights and goodgovernance 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 to40.7% at the end of 2008/09).

f) Improving the capacity of the Police: Through Programme support, Police trained 480investigators 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 trainedas trainers in various areas. Cascading of training using the in-house trained trainers will commenceduring FY 2010/11. The Police have also installed juvenile facilities in 3 stations in DSM andintroduced gender based violence desks. These initiatives have significantly contributed toenhancing Police capacity to undertake quality investigation including such issues as arriving on timeat the scene of crime, handling of accused persons in accordance to human rights requirements, andhandling of gender based violence cases.

g) Enhancing prosecution services: The LSRP supported efforts to expand prosecution services to

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regions and districts towards the implementation of the civilianization programme. New offices wereacquired; office furniture and equipment for newly acquired offices procured; new state attorneysrecruited, inducted and deployed; preparation of Prosecution General Instructions finalized; and DPPlibrary further stocked with reference books and statutes. The results of these initiatives have beensignificant. First, by May 2010, more than 12,132 criminal cases at District Courts and Courts ofResident Magistrates were being prosecuted by State Attorneys. Of these, 5,776 criminal caseswere 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 asuccessful prosecution. This has resulted in the reduction of complaints from the general public onframed up cases and the unclogging of the court system with backlog of cases. It will be possible tocapture data on this aspect once the case docket management system currently being developed isoperational. Thirdly, prosecuting cases in subordinate courts has helped in the development of thelaw, both substantive and procedural. Weak areas of the law were identified and rectify through thecourts. 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 supportparticipation of NSAs in legal sector reforms. The Programme supported 10 NGOs to participate inLegal Aid Day which provided legal aid services to needy citizens in 10 regions. LSRP alsosupported: awareness raising on laws impeding women’s and children’s rights; finalization of abaseline survey on paralegals; translation of basic statutes and legal information; provision ofsimplified 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 citizensaccessed 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 reportsThe LSRP MoU foresees quarterly progress and expenditure reports. In FY 09/10, DPs received thefirst quarterly progress and expenditure report on March 15th 2010. A third quarterly report wassubmitted on July 9th 2010. There was no report submitted in the second or fourth quarters.Moreover, the quarterly reports that were received lacked information on progress, results andexpenditure by approved activity. However, the end of the fiscal year annual progress and

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expenditure report of high quality. Quality reporting on a regular and timely basis is essential tomonitor progress and implementation throughout the year in order to be able to identify risks andmitigate problems in a timely manner.

b) LSIs’ financial utilization capacityAlthough there was significant improvement in the level of resource utilization compared to previousyears (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 adaptedaccording to absorption and implementation capacities of the LSIs.

c) Capacity to coordinate LSRP and to boost implementation levelsMoCAJ did a very good job coordinating the restructuring of the Programme. Ongoingcommunication with DPs is good. Meetings take place regularly and follow-up is satisfactory. Seniorleadership in MoCAJ make concerted efforts to ensure that senior leadership of participating LSI isalso 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 commonunderstanding of the meaning of each indicator, how it will be measured and who will beresponsible. A long term M&E Advisor has yet to be hired and efforts to secure an experiencedshort 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 TAThe capacity of MoCAJ is expected to be further strengthened as a result of the recruitment ofadditional technical advisors in: financial management; procurement; gender equality; and legaladministration. TA supported MoCAJ and LSIs to improve planning processes and reporting in thepast year.

Ongoing challenges include the fact that: structures, division of labour and reporting relationships ofTA 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;

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management relationships; roles, mandates and linkages with LSIs; and how TA will build LSIcapacities on an on-going basis (beyond workshops and seminars). M&E capacity building isessential.

3. Opportunities:

This section refers to opportunities which will help to maintain the positive trend the LSRP experiencedduring 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 LSRPwill provide an opportunity to address the implementation lag of the past to ensure furtherimproved performance and realization of LSRP objectives.

b) Strong commitment of the Government and DPs: Government and Development Partnercontinued commitment and support of the LSRP; increased level of openness betweenGovernment and Development Partners; and coming on board of UNICEF and the EuropeanUnion into the LSRP present opportunities for the Programme.

c) Strategic leadership by MOCAJ: The MOCAJ PS’s strong managerial direction and strategicleadership 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; thesharing of lessons learned; and ownership of Programme results. MOCAJ PS will continue one-on-one 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

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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 legalsector assessment.

Temporary Process Action: The Government implements the approved LSRP M&E framework withannual data collection on all LSRP relevant MKUKUTA indicators and 50% of LSRP outcomeindicators.

Assessment: ACHIEVED

MOCAJ and DPs identified 20 outcome indicators to monitor LSRP progress and agreed on modalities ofdata collection and frequency of data reporting per Legal Sector Institution (LSI). LSIs and DPs also agreedon a subset of 12 MKUKUTA legal sector indicators to track progress in the sector. Data on theseindicators was collected and reported. LSIs and DPs will continue to work to ensure that there is a commonunderstanding of indicator definitions and collection methods.

Outcome Indicator: Percentage of court cases outstanding for 2 years or more

Assessment ACHIEVED

Indicator Values A study was carried out in January 2009 to, among other things; establish the statusof cases outstanding for two years or more. This study revealed that the percentageof cases outstanding for 2 years or more was 25.9% in 2008. This became thebaseline and year. The annual targets were subsequently set at: 25% in 2010, 24% in2011, 22% in 2012, and 20% in 2013.

Under the auspices of its Statistics Committee, the Judiciary undertook a study in2010 to establish the current status of this indicator. Some very preliminary data isnow available. It suggests that, as of December 2009, 12.9% of court cases wereoutstanding for more than two years (note: confirmation pending that more than two

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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% ofDistrict Courts and 10% of Primary Courts. In 2010 data was collected for all levels ofcourts. 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 rawdata from the 2010 study.

GoT and DPs agree that this outcome indicator should be retained for thepurposes of the next GBS review.

Underlying Process 3: Public Service Reform Program (PSRP II)

Assessment: MODERATLY SATISFACTORYMain Sources of Information(i) PSRP II Supply Led Annual Report (July 2009 –June 2010) (ii) Monitoring Report: Summary Results of theSupervision Visits Undertaken to 66 MDAs, July 2010 (iii) Mid Term Review of PSRP, June 2010 (AideMemoir of the mission May 24 to June 7, 2010) (iv) Aide Memoire of the PSRP II Restructuring MissionOctober 18 - 29, 2010, and (v) PO-PSM 2010-2011 Work plan (October 5, 2010)

BackgroundThe Public Service Reform Program Phase II is a successor program continuing the reforms that was startedby the Civil Service Reform Program (1991-1999) under which restructuring and cost containment wereundertaken and the Public Service Reform Program Phase I (2000-2007). In addition, during Phase Iinstitutionalization of performance management processes begun.

The focus of PSRP Phase II is on enhancing performance particularly with emphasis on service delivery andaccountability of the Executive both within and outside the government. It is expected that the tools andinstruments 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 functionariesreflected as improvements in public service delivery.

The program became effective on January 16, 2008 and closes on December 31, 2012. Although 2008-09was a first full operational year, implementations began at a slower pace. The demand led approach wascontinued in 2009-10 under which 66 MDAs benefited after due facilitation by POPSM and identification of

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the priority actions by the MDAs themselves out of a menu of interventions as proposed by POPSM. Thiswas a significant increase from the 25 MDAs covered in the previous year. The supply led interventions werecontinued and implemented by POPSM against the approved work plan and budget. Implementation of thedemand led components, which is done by the MDAs themselves, was done against the budget allocation toeach MDA by the POPSM.

Areas of good performance/key achievements1. 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 previousyear which were rolled over.

2. Relatively high levels of expenditure; against the total budget of Tsh 36.85 billion, Tsh 20.754 billionor 56% was set aside for supply led activities. Expenditure against the supply side budget was Tsh15.54 billion or 74% while the remainder was committed but not spent for various interventions. Outof 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 utilizationresulted 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 bemade public. Although DPs remain unaware of the specific interventions GoT will undertake in linewith the policy principles, it should be noted that the 2010-2011 Budget incorporated a capping ofallowances.

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 discussionforums 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 DevelopmentManagement Institute) while framework documents for two more EAs (Tanzania Forest service ande-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.

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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 13MDAs were rated by MDAs as achieving “very good” or “excellent quality” of implementation.

b. 31 MDAs implemented OPRAs (training of staff, TOT, customization or managementawareness). Of these 14 were rated as having a “very good” or “excellent” quality ofimplementation.

c. 33 of the 40 MDAs selecting Strategic Planning accessed funds while only 30 implementedthe 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 ofimplementation.

d. 18 out of 28 MDAs selecting M&E and Reporting managed to access funds while only 16implemented 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 andimplemented the programs.

f. 2 out of 4 MDAs opting for Business Process Improvement accessed funds andimplemented the programs.

g. 25 out of 33 MDAs opting for Subject Records Management accessed funds and 21implemented the program, including variously review of record management system, stafftraining on records, procurement of records keeping equipment and installation of electronicfiling systems. 9 MDAs were assessed as having a “very good” or “excellent” quality ofimplementation.

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h. 31 out of 44 MDAs opting for e-governance accessed funds while 28 MDAs implemented theprograms, including such activities as staff training on ICT and database establishment,upgrading/establishing of LAN and WAN, procurement of ICT facilities and websitedevelopment. 17 MDAs were assessed as having a “very good” or “excellent” quality ofimplementation.

i. Only the Ministry of Livestock Development and Fisheries opted for Policy Development andit developed the draft Fisheries Strategy.

j. 14 of the 28 MDAs opting for IEC interventions accessed funds while 12 implemented theprogram. 4 MDAS were assessed as having a “very good” or “excellent” quality ofimplementation.

k. 13 of the 17 MDAs opting for Complaints Handling Systems accessed funds while 11implemented 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 RegionImplemented the program.

m. 22 of the 32 MDAs opting for Medium Term Training and Development plans accessedfunds while 20 implemented the program, which mainly concerned itself with training needsassessments, obtaining stakeholder views, developing plans and implementing training. It is

not clear how many MDAs actually have functioning medium term training and developmentplans as a result of these interventions. 10 MDAs were assessed as having a “very good” or“excellent” quality of implementation.

Areas of weak performance/challenges1. The project is behind schedule in terms of achievement of results. Many of the outputs achieved

during 2009-2010 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 farexceeds the achievements.

2. The PSRP Results Framework and M&E Strategy was not reported against this year at either theExecutive Log frame (31 indicators) or the Outcome (50 indicators) levels. Reporting against outputs

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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, theprocess is now behind the Government’s schedule and should be completed within December 2010.

4. Tools and Instruments (like Strategic Planning, OPRAs and Complaints Handling Systems), whichwere supposed to have been institutionalized in Phase I of the program continue to require attentionfor actual adoption and implementation in user MDAs.

5. Implementation of the upgraded HCMIS has been slow as at the same time other MDAs continue topioneer several stand alone MIS.

6. Utilization of the data from staff inspections for planning purposes in the sectors has been neglectedand 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 themonitoring load, encouraged the use of a range of tools and instruments without ensuring that withineach MDA, interventions address the highest priority area blocking the achievement of results inservice 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 inthe number of MDAs, from 25 to 90, which PO-PSM had to facilitate, assist, monitor and help to report. Thisproved to be unworkable and neither the MDAs could be sufficiently supported and it diluted theconcentration 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 servicedelivery facilities.

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2. Provide a results orientation to each intervention by reformulating the Results Framework and linkingeach MDA activities to it.

3. Increase the focus on the IEC, Ethics and Accountability segments, which it was agreed is thedistinctive and key feature of the second phase. This will bring rewards particularly by enhancingpublic awareness of the program and harnessing the positive effect of demand side accountability.

Way Forward1. 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 toallow 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 theprogram.

Temporary Process Action: The government shall put in place measures, including incentives, to ensureadequate 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. Thegovernment had issued a circular stressing that for fresh staff appointments, well served areas shouldreceive a lower priority than underserved areas however the evidence of the impact of the circular and/or thecircular 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 thedemands of D by D. However it is not yet clear if LGAs in turn are following the principle of giving priority tounderstaffed service delivery facilities while allocating new staff. The need to put in place a comprehensiveincentive package for those serving in underserved areas has yet to be addressed though isolated decisionslike the building of hostels, provision of solar power instruments in remote areas, time bound payment ofsubsistence allowance and time bound refund of transport charges for joining at the duty station, whichbenefit 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 acomprehensive measure for evaluating if an area is well served or under served. There would also need to

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be an agreed baseline for staffing which is able to measure improvements and changes in the distribution ofhuman 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 whichwas a TPA the previous year, is still not public. Until the strategy for implementing the policy with identifiedtargets is formulated the key milestones for this TPA have not been achieved.

Temporary Process Action: The government shall reduce overall expenditure on duty facilitatingallowances and honoraria in Ministries, Departments and Agencies and promote the positive use ofallowances in underserved areas in line with the principles of the MTPP by June 2010.

Assessment: GoT – PARTIALLY ACHIEVED

The Budget guidelines for 2010-11 had required that MDAs limit expenditure on honoraria and dutyfacilitating allowances to 50% of the previous year’s budget and limit expenditure on travel to 75% of theprevious year’s budget. However to-date there has been no evidence as to the use of allowances as ademand driven incentive for staff placement in remote and underserved areas and the Pay and IncentivePolicy is yet to be made public.

Underlying Process 4: Local Government Reform

Assessment MODERATLY SATISFACTORYMain sourceof information

Local Government Reform Programme II (Decentralisation By Devolution), Vision,Goals and Strategy, July 2009 – June 2014; LGDG Progress Report July – December2009 and Update Report on the LGDG System January - April 2010; LGRP II APBJanuary – 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 enhancedservice delivery. As LGAs are responsible for most services to the people, the success of the reform is also akey 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

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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 centralgovernment institutions (i.e. PMO-RALG, Regional Administration) to oversee and coordinate theimplementation of the D by D policy. Also LG planning and budgeting has improved, but the quality ofmonitoring and reporting by LGAs is wanting in some respects an aspect that puts at risk the support requiredfrom 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 thebottlenecks, such as HR autonomy, setting the right incentives for public servants or adjusting grantallocations to LGAs according to the functions and responsibilities that have been devolved to them cannot besolved by PMO-RALG alone, but will require the full involvement of and participation by other institutions suchas PO-PSM, MoFEA, Attorney General’s Chambers, and sector ministries. Full backing of the D-by-D agendaby the whole government is generally acknowledged to be a prerequisite for the successful implementation ofthe 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 approachand its willingness to tackle some of the mentioned longstanding challenges such as HR autonomy, functionalassignments of the different levels of administration, equity in people’s access to public services, andstrengthening 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 June2008 will gain new momentum in the coming few months. Contractual arrangements (MoU to which the LGRPFinancial Management Manual was annexed) between GoT and DPs were finally concluded beginning ofFebruary 2010 and mid of August 2010 the first full Annual Plan and Budget under the LGRP II was approvedby the CBFSC. Full implementation was, among other reasons, - hindered by somewhat protracted contractnegotiations with the consortium that was procured to provide the TA team to support PMO-RALG in theexecution of the LGRP II. The contract process took much longer than it was envisaged. However, thecontract was signed at the beginning of October 2010 and the TA for Monitoring and Evaluation has alreadystarted work and the rest of the TA team will start work in January 2011. Some preparatory support is alreadyongoing.

Areas of Good Performance/Key AchievementsDialogue

• The LGRP II MoU (including the annexed FMM) wasagreed between GoT and DPs in February 2010

• The quality and quantity of regular dialogue and day today cooperation between PMO-RALG and DPs has

Areas of Weak Performance/ChallengesDialogue

• Due to late submission of acceptable plans andreports some committee meetings (CBFSC, TCLGDG system) as per MoUs have been delayed.

• Not all fora (e.g. some inter-ministerial task forces,PICC, local–central dialogue platform) that are

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significantly improved during the last year.

• Committee meetings (CBFSC, TC LGDG) as requiredper MoUs have largely been conducted as foreseen.

• The Annual Sector Review of the LGR held on 4th and5th of October 2010 was conducted in a commendableand constructive atmosphere of mutual learning andlistening. A list of actions was agreed for the wayforward and this is envisaged to unleash progress insome of the key challenges. Participation in the AR wasgood (representation of PMO-RALG, DPs, and LGAs)and participation of Civil Society was alsocommendable, though there was still room for

improvement on the side of other central and sectorministries.

LGRP / LGDG Budget and Planning:• There have been no funding problems in LGRP and

LGDG. GoT and DPs largely lived up to theircommitments regarding contributions for financing LGRP/ LGDG system.

• GoT continued to demonstrate strong commitment tofulfil the agreed funding level for the LGDG. In the FY2010/11 budget GoT contributions for the first time areexceeding DP contributions. This is a strong signal thatGoT owns the LGDG transfer system.

• Steps to improve the format of work plans and reportshave been agreed and it is expected that with support ofthe incoming TA team, quality and timeliness of LGRPplans and reports as stipulated in the MoU will furtherimprove. The approval of the APB 2010/11 by mid ofAugust can still be considered acceptable in the currentsituation.

LGRP / LGDG Implementation & Monitoring:

foreseen in the LGRP II architecture have alreadystarted to work

• Level of representation of other central and sector

ministries in the LGR AR and TC meetings can beimproved

LGRP / LGDG Budget and Planning:

• Timeliness of disbursements has sometimes been a

concern, partly because disbursement requirementsagreed in the MoUs for LGRP and LGDG and inbilateral agreements have not been met, partlybecause available DP contributions were waiting forthe required procedural processing by PMO-RALGand MoFEA.

• The quality of LGRP work plans has still left room forimprovement, leading to delayed approvals.

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• LGDG implementation continues to be largelysatisfactory

• Though taking long, the contract for TA to supportimplementation of LGRP II was finally signed in earlyOctober 2010

Reporting

• LGDG implementation reports have been improved

compared to earlier years. As indicated above, for LGRPII, steps have been agreed that are expected to improvethe quality and timeliness in the coming months.

• LGRP CBF Audit for FY 08/09 was endorsed by theCBFSC

LGRP / LGDG Implementation & Monitoring:• Due to the slow start of the LGRP II implementation,

many expected outputs have not been achieved asplanned and led to deviations of the expenditure fromthe agreed LGRP plans and budgets.

• Monitoring of results and the availability and

management of quality data is still a big challengeand needs urgent attention.

Reporting

• Timeliness and quality of progress andimplementation reports as agreed per LGRP andLGDG MoUs still leaves much to be desired.

• The LGDG system audit for the FY 08/09 by KPMGleft some questions open. In the initial report theauditor did not cover funds from all DPs and also notall LGAs were listed. Furthermore the KPMG reporthad no information on the funds actually received byLGAs. KPMG has therefore been tasked to preparean addendum report. It is expected that this report

can be endorsed by the Audit Sub-Committee inNovember 2010.

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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 aswell as ensuring more efficient, accountable and transparent financial management shared with key stakeholders by June2010.

Assessment: NOT ACHIEVED

First proposals for amending the Local Government Finance Act have been drafted and shared with key stakeholdersincluding the Local Government Development Partners Group already in March 2010. However, later GoT decided thatthe opportune time for further action, especially the proposals for introduction of some local taxes and levies, is not yet upin the light of the general elections this year. Proposed amendments to the LG Finances Act were shared and discussedwith key stakeholders as agreed. However, PMO-RALG is committed to implement and complete this activity during theyear 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 themabout Government's decision to fold the recurrent grants into one for personal emoluments (PE) and one for othercharges (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 beenexplained to key staff of LGAs i.e. Council Directors, Treasurers and Internal Auditors during recent training and workingsessions to prepare them for that development. A circular letter which calls for reduction of LGAs’ bank accounts to onlysix has been issued to Regional Administrative Secretaries requiring them to inform and enforce compliance to theinstructions contained in that circular. Prior to issuance of the Circular letter its draft was shared with MOFEA (ACGEN’sDepartment), National Audit Office and Bank of Tanzania all of which provided useful comments that were considered inimproving the Circular. Copies of the Circular letter were sent to all the RASs in Tanzania Mainland and have also beenavailed to the LGDP Group co-chairs for distribution to Development Partners.

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CORE REFORMS TPAs

Temporary Process Action 1 Government to strengthen governance reform implementation by Sept. 2010 by:

i. Operationalising Common Procedure for implementation of core Government reforms based on therecommendation adopted by the JCC of 13th November 2009

Assessment: PARTIALLY ACHIEVED

Based on the adoption of JCC on 13th November, 2009, a meeting of all Reform Coordinators was held on 17th

March, 2010 and 7th September, 2010 to deliberate and internalised the principles endorsed by the JCC. This wasfollowed with the Coordination meetings of Permanent Secretaries held on 18 December, 2009 and 14th

September, 2010 respectively to formally endorse the same. Following these meetings the principles wereforwarded to all implementing ministries for application. In addition, RCU has visited implementing MDAs duringplanning and budgeting process to ensure that the principles are applied and incorporated in reform programmeplans 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

Outcome Indicator: Percentage of total government budget allocated directly to LGAs, which does not go throughministerial 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 tothe PE allocations. Both sides have therefore agreed to move one step further and to introduce a new OutcomeIndicator from the coming year that will no longer measure the means to achieve more equity of service deliveryand the distribution of public resources between LGAs, but will measure the move towards equity directly by usingthe 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-termstudy (TPA for PAF 2011) so that an informed decision on applicable targets for the consecutive years from 2012onwards can be done. This agreement is seen as a major positive step forward.

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was initiated in May, 2010 to get a Consultant to Develop Common Operational Procedures for Core Reforms. Thistender procedure has been completed whereby KPMG (T) was awarded the tender on 15th November, 2010. TheCONTRACT for the assignment between KPMG (T) and Permanent Secretary, PO-PSM was signed on 1st

December, 2010. The Technical proposal indicates that the assignment will be conducted in three 3 phases; PhaseI: Inception Report by 15th December,2010; Phase II: Implementation will take two weeks and Phase III will befinalised within one week where the main report will be presented.

Temporary Process Action 2Identifying for each reform programme, based on current institutional practice, at least 2 measurable indicators thatare result (impact) instead of process (input) based, to be used for annual reporting on progress on core reforms by1 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: UnsatisfactoryMain Sources ofInformation

NACSAP II Implementation report 2010, Good Governance Coordination Unit andPCCB.

The National Anti-Corruption Strategy and Action Plan, Phase 2 (NACSAP II) is the main vehicle for carrying outthe intent of the National Anti-corruption Policy which is zero tolerance. NACSAP II is therefore a preventive toolthat 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 thestrategy 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 overseethe implementation of NACSAP II. Representatives from all key stakeholders form part of the Steering Committeeand has proven to be a very useful platform to share experiences and the way forward. We conducted an Annual

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Anti-Corruption Forum in May 2010 where all stakeholders presented to the public their achievements, challengesand the way forward in the fight against corruption. This is a milestone achievement to bring all stakeholderstogether 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, 2010were provided for the purpose of dealing with Political corruption during National Election 2010. The following arethe training/workshops or seminars conducted:

1. 131 senior police officers from Mainland Tanzania and Zanzibar were trained on implementing the ElectionExpenses Act no. 6, 2010.

2. 133 District Executive Directors of the Mainland Tanzania (who are representatives of the National ElectionCouncil in their districts) were trained on implementing the Elections Expenses Act no. 6, 2010.

3. 33 Managing Editors from Electronic and Print Media Houses were trained on Political Corruption inElections.

4. 29 Youths from different political parties were trained on Election Campaign, corruption and EthicsInfrastructure.

5. 62 Faith based organizations Leaders were given seminars on the Election Expenses Act no. 6, 2010 andPolitical Corruption, they have acted upon it with their parishioners and they denounce corruption in prayerhouses 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 havebeen 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 thenumber of cases (Petty and Grand Corruption cases) that are being prosecuted in the courts of law. 171 cases ofpetty corruption have been filed in courts of law from January to September 2010 making a total 540 cases ofcorruption being prosecuted by the Government of Tanzania. 41 cases of petty corruption have been convictedfrom January to September 2010. In the area of grand corruption, a high profile case (Twin Tower) registered aconviction of the former Director with the Bank of Tanzania for the offence of abuse of office and landed him toprison for two years. 28 cases of grand corruption are continuing with prosecution in courts of law, of which 7 relateto local authorities.

• The implementation of NACSAP II was done through the involvement of the Media whereby editors and

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other senior journalists were trained in investigative journalism and the Election Expenses Act. As a resultthe Media are now reporting on corruption and expanding the awareness of the public on corruption duringElections and the Election Expenses Act no. 6, 2010. The general public is now more aware on what is acorruption offence, where to report and more education through advertisements which are now on playthrough 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 componentsof the system. Also a total of 32 Journalists from different media houses were trained on InvestigativeJournalism.

• 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 stillunder 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 ofGovernments (MDAs) and Local Government Authorities (LGAs) through capacity building as well asraising awareness on the Election Expenses Act. NACSAP II was able to conduct workshop with DistrictExecutive Directors and Council Chairpersons of all 133 LGAs who are very important in ensuring thefunctionality of Integrity Committees in their respective councils.

• Engagement and mainstreaming the private sector by training business associations and corporate entitiesin corporate good governance so as to ensure that there is reduction in conflict of interest and enhancedtransparency 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 portcongestion problem resolved through the committee and now the problem has taken a different directionwith less congestion.

• Through NACSAP II budgets of Anti Corruption activities has been mainstreamed into the MDAs and LGAsto help on implementations of anti-corruption action plans such as seminars, workshops and dealing withall unethical acts. Good examples are implementation of the UNIVERSITY OF DAR ES SALAAMRESEARCH ETHICS POLICY and PIRI (Public Integrity Restoration Initiative)

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• Another milestone achieved is the formation of the “Civil Society Anti-corruption Coalition” on January

2010. The coalition is a registered as the Tanzania Anti-corruption Network and has a board comprising ofmembers from various organisations. There has also been election awareness and capacity buildingworkshops 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 discusson how to join efforts in the fight against corruption.

• The PCCB website (www.pccb.go.tz ) has been instrumental in sending out messages to those withinternet 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 implementationstructure that is the PCCB/NACSAP II Zones coordinators and PETS agents forming a joint venture tomonitor 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 fightingagainst corruption. This kind of collaboration will complement each other and therefore strengthen andsustain the fight against corruption in the country.

• The relationship among Law enforcement agencies (DPP, Judiciary and PCCB) was strengthened as allare 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.

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• 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 TransparencyInitiative.

• Open debate about corruption through Anti-Corruption Forum.

• Election Expenses Act presented to Parliament and was passed which provides an opportunity to curbcorruption 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 closelymonitoring 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 Surveyregarding 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 alllevels and provide quarterly updates in line with PCCA, 2007

Assessment NOT ACHIEVEDGOT REPORT171 cases of petty corruption have been filed in courts of law from January to September 2010 making a total 540cases of corruption being prosecuted by the Government of Tanzania. 41 cases of petty corruption have beenconvicted from January to August 2010. In the area of grand corruption, a high profile case (Twin Tower) registereda 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.

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DPs REPORT

• Quarterly high level meetings were not held.

• Many recommendations remaining to implement of the EPA Action Plan including i) the BOT corporateplan that supports the refocusing of the BOT on its core activities ii) agreement between MOFEA andthe BOT on the management of any remaining EPA claims and iii) completion of the ongoinginvestigations/audits involving BOT.

• Mutual legal assistance has received weak responses.

• Indicators regarding establishment of Integrity Committees at MDAs and LGAs and complaintshandling 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 & Eimplementation system of NACSAP. A final Report has been published on the PCCB website (www.pccb.go.tz). 19staffs have been trained on M & E framework at the level of NACSAP II Zone coordinators and Zone Inspectors.

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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 MODERALTY SATISFACTORYBased on the following points;

1. The Programme had 7 milestones out of which 4 (57%) milestone were achievedand the remaining were on track

2. Performance assessment rating on GBS PFM Key issues during Joint SupervisionMission 20th September – 1st October 2010 assessed 15 out of 24 satisfactory(62%), 4 were assessed fairly done (17%), 4 not done (17%) and 1 was non PFMissue thus considered non applicable (4%)

3. Out of 136 annual planned activities for PFMRP components for FY 2009/10, 87were achieved (64%).

Main Sources ofInformation

1. Annual Progress Report2. 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 PFMRPphase III, while building on achievements of previous phases, is to improve predictability and availability ofresources 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 reforminterventions based on their mandate.

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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 PFMtraining institutes and Programme coordination and communication. At the GBS Annual review meeting inNovember, 2009, six PFM priority issues were identified and action plan drawn for implementation within theprogramme 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 nextphase of the programme (PFMRP phase IV).

B: Major AchievementsThe 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 theClassification 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 InternalAudit Department and give ACGEN authority to oversee public finance management finances in LGAs.

ii. Amendment of the Treasury Registrar (Powers and Functions) Act Cap. 370 and the PublicCorporations Act Cap. 257 so as to give the office of the Treasury Registrar more regulatory authority.

iii. 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. Capacity building to auditors by training on Team Mate (140), risk based auditing (100) and couching onperformance auditing techniques.

iii. Exposure study visit to members of Public Organization Accounts Committee (POAC).

iv. Physical verification of development projects to LGAs and Central Governments by parliamentaryoversight committees.

v. Re-tooling of NAO offices with vehicles and ICT equipments.

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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 newusers 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 ProcurementRegulatory Authority (PPRA) and two under the National Audit Office (NAO). During the period, five milestones wereachieved and the rest two were on track.

D: ProcurementAchievement on procurement of goods and services in FY 2009/2010 was undertaken as follows (see details inannex 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 forExpression of Interest;

iv. Arranged and conducted one working meetings for Head of Procurement Units and their deputies to discusson 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;

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vii. Made follow-ups to Procurement Management Units and Component Managers and advise themaccordingly;

viii. Prepared draft Annual Procurement Plan for 2010/11.

As at 30th June, 2010, the overall procurement status for programme goods and services stood as follows:

Table 4: Status on Procurement as at 30th June, 2010.S.No. Description of Assignment No. of Items Amount in Tzs.1 Completed contracts 9 1,415,920,0002 Procurement proceedings on progress 8 971,530,6003 Activities not done 16 1,116,725,0004 Grand total 33 3,504,175,600

Procurement activities that were not done includes some of those had no responsive consultants and others wereawaiting approval by parliament on amendment to PFA 2004.

The programme cumulative actual expenditure and commitments by 30th June, 2010 was Tsh.22.0 billion out ofTshs. 33,789,684,360 approved budget FY 2009/10. The expenditure on annual budget represented 65% of theapproved budget. Absorption on approved budget by funding sources was 75% on Government Funds, 64% onProject 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, andiii. Dialogue and communication mechanisms.

F: The way forward

i. Extension of PFMRP phase III implementation to June, 2011.ii. Restructuring of ACGENs department following amendment to PFA 2004iii. 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 bodiessubmitted to Parliament within 9 months from end of financial year and PMG provides a structured response

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CAG audit report for FY 2008/09 was submitted to the President on 30th March 2010 as per statutory due date (i.e. 9months from end of financial year), Structured response was submitted to CAG by PMG in July 2010.

Underlying Process 3: Macroeconomic Stability

Assessment SATISFACTORY

Main Sources ofInformation

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 ofgoods, growth of credit to private sector and government revenue collection. In addition, the economy wasaffected by drought and floods that occurred in some parts of the country in 2008-2009. However, strongmonetary and fiscal policies in recent years had created significant fiscal space. The government used thatspace to cushion the economy from the impacts of the global financial crisis. As a result, the overallmacroeconomic performance remained strong during 2009, with real GDP growing at 6.0 percent, slightlyhigher than the revised projection of 5.5 percent. The growth in 2009 was nonetheless somewhat lower thanthe 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 growthof 2.2 percent in Sub-Saharan Africa economies in 2009.

2. The economy continued to experience inflationary pressures in 2009, primarily due to food supply shortagesand 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 17.5percent from 12.7 percent in the same period. The food supply shortages were caused by, among otherreasons, drought in some parts of the country and neighbouring countries exacerbated by transportbottlenecks from some food surplus areas that caused higher distribution costs. Following favourableweather conditions in the 2009/10 crop season, the food supply improved, leading to a downward trend ininflation from 12.7 percent in October 2009 to 4.5 percent in September 2010 and the target is 5.5 percentby June 2011.

3. Central Government Operations for financial year 2009/10 experienced a shortfall in domestic revenuecollections against targets. Total domestic revenue collection excluding revenue generated by LGAs in2009/10 was 91.5 percent of budget estimates. This was partly due to the impact of the GFC that led to aslower growth in taxable production activities in the economy. In addition, non-tax revenue was furtheraffected by postponement of the implementation of some revenue measures that were announced in thebudget, including new charges in residency permits, visas, immigration fees and fire service charges. Thebudget for FY 2009/10 had for the first time included projection from revenue generated by localgovernment authorities (LGAs) amounting to TShs 138 billion. Efforts are being made to obtain data onLGAs’ 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 maintainingsocial gains, particularly in education and health. This spending was to be financed by a rebound indomestic revenue, continued program and project assistance, access to external non-concessionalborrowing, and domestic borrowing. The process is at advanced stage towards accessing the budgetednon-concessional borrowing from external sources on reasonable terms. Domestic borrowing will be made

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carefully to avoid crowding out of private sector and pushing interest rates. Domestic revenue collection inthe first quarter of FY2010/11 has performed below the budget’s estimates. The Government is currentlyimplementing measures to strengthen tax administration and limit tax leakages in an effort to reduce the taxrevenue shortfall relative to the approved budget. These measures include: (i) strengthening blockmanagement; (ii) implementation of electronic fiscal devices for VAT registered taxpayer; (iii) strengtheningand 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 operationalefficiency.

5. The implementation of the budget will continue to be on a cash basis, helping to ensure that recurrentexpenditure execution is aligned with the resource availability. The government is committed to protectspending in key priority areas, in particular development expenditures and will reduce and rescheduleexpenditure 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, slightlyhigher than the revised projection of 5.5 percent. This reflects the resilience of Tanzania’s economy, which is partlyattributed to the sustained economic reforms that have increased efficiency in economic activities over the past twodecades, 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 protectingemployment and income, food security and investment in key infrastructural and social services, from the adverseeffects of the global financial crisis. The provisions for loan rescheduling, loss compensation and enhancement ofthe SMEs and Export Credit Guarantee schemes helped to leverage banks’ confidence in lending, which kept creditto the private sector growing, albeit at a slower rate. The plan also helped to maintain smooth implementation ofpower projects, while additional domestic borrowing helped fill the Government revenue gap for smooth execution ofGovernment commitments in 2008/09 and 2009/10.

The monetary policy for 2009/10 was designed to accommodate the countercyclical fiscal measures adopted toaddress the adverse effects of the GFC. Monetary targets were revised upwards in line with the program agreedunder the PSI arrangement. In addition, the Bank rate and Lombard rate were reviewed downwards with a view tomaking them more active instruments of monetary policy and to enhance flexibility in provision of liquidity to theeconomy.

Performance against PSI targets remained on track with all quantitative assessment criteria for June 2010 beingmet, some with comfortable margins. Meanwhile, good progress was made in implementing the structural reformprogram. The benchmarks which were achieved include: adoption of MKUKUTA II; appointment of the Head ofSocial Security Regulatory Agency; introduction of data collection and reporting system for pension funds; submit ofFinancial Stability Report to the BoT Board; notification to banks to increase contributions to the Deposit InsuranceFund; 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 arein progress include: establishing framework for emergency liquidity assistance beyond day-to-day liquiditymanagement and tools; preparation of a Medium-Term Debt Strategy consistent with resource needs underMKUKUTA II and reflecting contingent liabilities; developing an index for monitoring priority social spending; anddeveloping core inflation index. The two benchmarks that were not met are: Government approval of a new NationalSocial Protection Framework and issuance of investment guidelines for pension funds.

Areas of weak performance

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Revenues declined as a percentage of GDP in FY2009/10, falling below budgeted levels. This trend is likely tocontinue in FY2010/11, with revenues in the first quarter of the fiscal year falling below the estimated level. Thegovernment is taking measures for 2010/11 and over the medium term to broaden the tax base and increaserevenues. Measures to be implemented in the medium term include: (i) harmonization of taxpayers’ registrationdatabase; (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 blockmanagement system (BMS). In addition policy measures and administrative efforts will be considered to manageand control tax exemptions to bring tax efficiency rates in line with the region. Further, measures will beimplemented 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 budgettarget levels. The Government remains committed to protect spending in key priority areas, in particulardevelopment expenditures and will reduce and reschedule expenditure in goods and services as needed and in amanner that will not compromise service delivery. Over the medium term, the government will implement policymeasures to enhance revenues collections.

The procedures involved in verifying and settling claims from development projects lead to carrying outstandingunverified claims to the following fiscal year without adequate budgetary provisions. This required the Governmentto reallocate funds from other expenditure items to pay the subsequently verified claims. The governmentrecognises 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 endJune 2010. This exercise will be carried out on quarterly basis and it is expected to facilitate monitoring ofexpenditure development to enable a more accurate projection of cash flow needs and smooth implementation ofmonetary policy.

Underlying process 4: Assessment of Development Partners Performance (Predictability of General BudgetSupport)Assessment: MODERATLY SATISFACTORYParagraph 7 (b) of the Partnership Framework Memorandum (PFM) states that DPs will provide timely GBS in thefirst quarter of the Government financial year whenever possible, in accordance with prior commitments. Annex IIIshows 83 percent of the GBS commitments in 2009/10 were disbursed by the end of the first half of FY. This waslower than the targeted actual disbursement of 90 percent of total commitments. By the end of FY 87 percent of thecommitted GBS funds were disbursed. The early disbursement of GBS funds is necessary to ensure that spendingand implementing agencies have required funds early enough to allow for smooth provision of services andimplementation 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. Theclusters have been conducting meetings and sharing relevant information/documentations with respectivestakeholders. Each cluster has agreed and operationalized a rolling work plan, consistent with the approveddialogue structure. Efforts have been made to strengthen PER process under Government leadership. However, thePER has not been able to fulfil its core objectives of informing the budget process and general public, as the basis ofa jointly carried out work/research program. During the year under review there was limited substantive discussionon the PER issues which were relevant for preparation of the 2010/11 budget, including the Planning and BudgetGuidelines and the Macroeconomic Framework as well as budget execution in 2009/10. It is expected that PERprocess will better inform fiscal year 2010/11 budget implementation, the budget cycle for 2011/12 and the mediumterm 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

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reducing funding on project/basket and increasing funding on GBS

Assessment: UNSATISFACTORYAccording to JAST Principles General Budget Support (GBS) is the Government’s preferred modality. Basket fundsto be used where appropriate. Projects to be used for large scale infrastructure investment, piloting and emergencyassistance. Moreover, the Partnership Framework Memorandum (PFM) states that Development partners should bedelivering more aid through GBS modality. In this respect, JAST expects that DPs will increasingly move to GBSfrom other modalities and adhere to criteria of ‘good practice’ for using basket funds and direct project funds as theGovernment continue to improve public financial management, budget preparation and implementation, goodprogress 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 ofIFMS. (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 recommendationsfor implementation have been classified into short, medium and long term. Most of the short term issues havealready been acted upon and closed and others are at different stage of implementations while some of theserecommendations will be dealt with upon upgrading of the Epicor from version 7.2 to version 9.0.

1. 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). Theprocess is underway to engage 3 local consultants for Database and Software, Networking and BusinessDevelopment.

2. Review of the Public Finance Act (PFA) 2001

The Miscellaneous amendments to the Public Finance Act (PFA 2001) were approved and passed by theParliament in June 2010 Session. The amendments include provisions to increase oversight functions of theAccountant General over the Management of Public Funds at the LGAs and establishment of an Internal AuditDepartment.

3. Bank ReconciliationBank Reconciliation was one of the challenging areas. However, efforts have been made and most of theoutstanding items in the system have been reconciled. The reconciliation/matching of the current transactionsranging between 95% to 97% is automatically done.

4. Electronic Payment System

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(which includes Electronic Funds Transfer-EFT and TISS) is operational since July 2010 for MDAs and Dar esSalaam Region whose payments are made through the Central Payment Office using Tanzania Inter-bankSettlement 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 isin progress.

6. Connectivity:

At the Central Government Level, all 21 Regions and 20 Sub-Treasuries have already been connected to the mainserver 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 NAOon 30th September 2010.

Temporary Process Action 2: Adoption of the Due Diligence study, including recommendation to transform theOffice of the Treasury Registrar into an Autonomous Body, and relevant steps taken to start implementing saidrecommendation’. This involves the following processes

Assessment: ACHIEVED

This involved the following processes: organising a stakeholders meeting and incorporating comments andrecommendations; adoption of the final report by the government and preparation of the roadmap for theimplementation of the recommendations. The roadmap was to include: submission to PO-PSM of proposals forrestructuring 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, CAP257 and Treasury Registrar (Powers and Functions Act) CAP 370 were passed by Parliament to empower the Officeof the Treasury Registrar to be an autonomous authority. This will enable the Treasury Registrar to overseemanagement and operations of public corporations and institutions. Relevant steps have been taken includingdeveloping the institutional framework (organizational structure), which has already been approved. Currentlyregulations 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, 15were assessed satisfactory (62%), 4 were assessed fairly done (17%), 4 not done (17%) and 1 was non PFM issuethus considered non applicable (4%).

Temporary process action 4: PEFA for Zanzibar carried out and results shared with key stakeholders bySeptember 2010

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Assessment: ACHIEVED

PEFA analysis was undertaken in April/May 2010. PEFA is now being finalized as was presented and reviewed bywell attended stakeholders meeting in August. The Government of Zanzibar may come back with final comments butthis process is now assessed as completed.

Temporary process action 5: Complete a comprehensive study on revisions of the Public Corporations Act toharmonize the legislation relating to public corporations, and ensure strengthened corporate governance andaccountability consistently across parastatals by January 2011.

Assessment: NOT ACHIEVED

The process of undertaking the study has not been initiated. The study is now expected to start in January 2011.This is retained as a TPA for next year.

OUTCOME INDICATORS

Outcome indicator 1: NAO reaches level 3 of AFROSAI-E4 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 thatneed 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 tenconditions.

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 timelyin 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 andConstitution 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 accountsCommittees).

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

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constitutionalised and entrenched. (Achieved- PAA No. 11 of 2008 and Constitution of the URT of 1977clearly 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 issuedfor five consecutive years)

5. Audit reports are issued on the sole discretion of the Auditor-General. (Achieved – there is nointerferences to the CAG reports)

6. An effective internal audit approach based on internationally accepted auditing standards, guidelines andprocedures 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 welldocumented)

8. Financial resources are appropriated by Parliament without any involvement of the executive, includingauditees. The recovering of audit fees is regarded as an involvement of auditees. (Achieved – annualbudget for NAO is discussed at a Consultative meeting between the CAG, the Minister for Financeand PAC)

9. Human, administrative and other resources to execute the mandate are independently managed (staff arenot 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 governingbody determines key policies and practices. (Achieved – The Parliamentary Accounts Committee –PACappoints external auditor for NAO)

Outcome indicator 2: Average level of compliance of procuring entities with the Procurement Act 2004 to reach80% 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 ProcuringEntities (PEs) during the financial years 2007/08 and 2008/09 respectively. Generally, the audits sought todetermine whether the procedures, processes and documentations for procurement and contracting were inaccordance with the provisions of the Public Procurement Act 2004 (PPA 2004), its regulations and the standarddocuments 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 ofcompliance of 50% and 55% respectively. After the audits, all audited procuring entities were provided with the auditreports 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 and2008/09 were carried out to ascertain whether the observed weaknesses in previous audits have been addressed byimplementing the recommended measures. The audited procuring entities were 24% of all procuring entities andthey 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 bythe audited entity; evaluate the adequacy of the plans in improving compliance; assess problems that might havearisen in implementing the recommendations; determine the impact of the audit by assessing the level ofcompliance using the same performance indicators which were used in the audits, and; provide professional adviceon areas which need further improvement.

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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% whichis above the targeted average level of compliance of 65%. The average levels of compliance in the MDAs, PAs andLGAs 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 specialattention in order to meet the target of attaining an average compliance level of 80% and above by the end of the FY2010/11;

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, and51% 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 oftendering process; not aggregating requirements from user departments causing extensive use ofquotations 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, andquality assurance and control respectively. The average compliance in the two areas is 77% and 66% forMDAs, 68% and 62% for PAs, and 54% and 50% for LGAs.

When encountered, areas of weaknesses pertained the following issues: Contracts were not properlysigned in some cases; Some of the contracts lacked important contract documents such as conditions ofcontract, drawings and specifications, and some contained non-contract documents such as invitation forbids/quotations and instructions to bidders; Liquidated damages were not applied for delayed contracts; Sitemeetings were not conducted for most of the reviewed contracts; There were no adequate qualityassurance and control plans, completed works were not tested to ascertain whether they have attained thespecifications as provided in the contract documents; Progress reports for works contracts were notprepared; Site supervision reports were not prepared; Extension of time were issued without justifiableanalysis and without following appropriate procedures; Payment certificates were not attached withnecessary information such as measurement sheets and working/ take-off sheets to justify the quantitiespaid; and Goods inspection and acceptance committees were not appointed to ascertain the quality andquantity 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 oftenders, quotations and contracts, procurement records scattered in different departments, lack of recordson contracts management, inadequate space and shelves for records storage, and inappropriate filing. Insome cases it was difficult for the review teams to ascertain the exact number of tenders floated and theretrieval of information was time consuming as records could not be obtained from one point.

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The above were the same issues that had problems as established in the procurement audits carried out in the FY2008/09. PPRA, working together with PEs, will put special efforts to ensure that problems in those areas aretackled.

Indicator valuesBaseline 2007: 39%

Target 2010: 65%

Actual 2010: 73%

Outcome indicator 3: Credible cash flow and procurement plans in 9 MDAs (Health, Education, InfrastructureDevelopment, Water, MoFEA, Agriculture, Energy and Minerals, Livestock Development and PMORALG) agreedwith MoFEA for the FY 2010/11 budget and execution monitored5

Assessment: OFF TRACKCash 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 beenapproved by the Parliament. However, monthly disbursement of resources is determined by several factorsincluding: monthly resources available compared to requirements (including exogenous factors/ shocks), pace ofexecuted works accompanied by interim payment certificates for development projects, progress report (physicaland financial) and pace of procurement process. Therefore the Ceiling Committee evaluates and re-prioritisesmonthly allocations by considering the variables above.

However, this indicator has proven difficult to assess since the initial submissions of cash flow plans are normallyadjusted based on above factors. Thus, it is proposed to base future assessment on execution vis a viz cashreleases.Outcome indicator 4: Approved budget broadly in line with policy objectives (MKUKUTA and sector policypriorities) 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 prioritiesThe approved budget for 2010/11 shows that MKUKUTA allocation is 73.2 percent of the total budget with clusterallocations receiving 32.8%, 29.1% and 10.2% for Cluster 1,2 and 3 respectively. The balance (1.1%) is allocated forcross cutting issues. In addition, the 2010/11 budget shows some increase in resources allocated to public capitalinvestment, up to 18.5 percent from 15 in 2009/10.

Additional assessment criteria by DPs: The 2010/11 budget remains significantly underfunded due overestimation ofdomestic revenue. Under funding of the budget would require adjustments in resource allocations to variousimplementing agencies which do not guarantee whether the above allocated shares would remain the same at theend of the year. Moreover there is weak alignment between sector budgets and sector policy priorities, especially inroads, water, and health.

Indicator values:

5 (i) Assessment will be based on quarterly releases, and (ii) releases will consider implementation status andstandard requirements such as certificates in Infrastructure

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MKUKUTA

Baseline 2005: 68%

Target 2010: 68%

Actual 2010: 73.2%

Public capital investmentBaseline 2008: 25%Target 2011: >15Actual 2011: 18.5%Outcome indicator 5: Expenditure outturns deviation compared to original approved budget (recurrent MDA only-vote level), excluding salary adjustments, contingency and debt serviceAssessment: ON TRACKIndicator 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 targetsAssessment: OFF TRACKThe fiscal deficit after grants for 2009/10 was 6.4% of GDP compared to 5.7% targeted. This was primarily due tothe shortfall in domestic revenues and overall program grants leading to a higher than projected deficit. The shortfallwas partly met through domestic borrowing which provided additional support to uninterrupted implementation ofpolicies 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 TRACKThe 2009/10 target of 8% - 10% has been met. The average annual headline inflation rate for 2009/10 rose to 10.6percent, owing to food supply shortages and a rebound in world oil prices during 2009. Food inflation increased toan average of 17.5 percent from 12.7 percent in the same period. Food supply shortages were caused by, amongother reasons, drought in some parts of the country and neighbouring countries exacerbated by transportbottlenecks that caused higher distribution costs. Following favourable weather conditions in the 2009/10 cropseason, food supply improved, leading to a downward trend in inflation from 12.7 percent in October 2009 to 4.5percent in September 2010. It is projected that average inflation for 2010/11 will be 5.8%.

Indicator values 2010: 10.6%

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Baseline 2005: 4.5%

Target 2010: 8-10%

Outcome indicator 8: Deviation of actual disbursed budget support from the forecast provided by budget supportpartners 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 supportpartners. Considering also exceptional additional financing (especially from the WB) to compliment Governmentefforts to mitigate the adverse impact of the global financial crisis, the actual disbursement of budget support was32.9% 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 theGovernment fiscal year7

Assessment OFF TRACK

About 86 percent of total GBS funds were disbursed during the first quarter and the rest in third quarter. Additionalbudget support (beyond the initial commitment and part of frontloading) was disbursed in fourth quarter and one DPwho 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 beginningof 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, 2002/03 – 2010/11

TYPE FY2002/03

FY2003/04

FY 004/05

FY2005/06

FY2006/07

FY2007/08

FY2008/09

FY2009/10

FY2010/11

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%Projects

54% 44% 45% 42% 41.4% 54.71% 46.4% 44.5% 60%

Source: External Finance Database

6 Excluding variable tranches7 Except for DP s entering into a new bilateral agreement

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Annex III

The proportion of Budget Support Frontloaded, 2007/08 - 2009/10Quarter 2007/08

Projected2007/08Actual

2008/09Projected

2008/09Actual

2009/10Projected

2009/10Actual

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

DONOR TYPE USD Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun TotalADB L 62 62 62CANADA G 19 19 19CANADA-Education G -DENMARK G 19 19 19EU G 65 65 65EU-education G -EU-Road -FINLAND G 22 22 22IRELAND G 20 20 20JAPAN L 19 19 19KFW G 15 15 15NERTHERLAND G 44 44 44NORWAY G 47 47 47SWEDEN G 58 59 58SDC G 6 6 6UK G 210 210 210WB L 190 190 190Total 796 439 196 19 - - 65 - - - 77 - 796

Schedule of Commitments for GBS FY 2009/10 as at July (In USD)QUARTER 1 QUARTER 2 QUARTER 3 QUARTER 4

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DONOR TYPE Tshs Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Total

ADB L 62 62 62CANADA G 16 16 16CANADA G -DENMARK G 18 18 18EU G 64 64 64EU-education G -EU-Food Criss G -FINLAND G 21 21 21IRELAND G 17 17 17JAPAN L 21 21 21KFW G 13 13 13NERTHERLAND G -NORWAY G 35 35 35SWEDEN G 51 51 51Switzerland G 6 6 6UK G 170 170 170WB L 199 199 199TOTAL 695 311 78 206 - - - 86 - 13 - - - 695

Actual Disbursements of Budget Support FY 2009/10 as in USD.

Actual Disbursements

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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 MASHAURIANONA WADAU JUU YA WIKI YA SERA ZA KUONDOA UMASKINI NA MCHAKATO WA MAPITIO YA

UTEKELEZAJI NA MATUMIZI YA FEDHA ZA UMMATAREHE 02 – 08 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 huumuhimu. Nachukua fursa ya pekee kumpongeza Mheshimiwa Dkt. Jakaya Mrisho Kikwete, Rais waJamhuri ya Muungano wa Tanzania na Mheshimiwa Dkt. Mohamed Shein, Rais wa Zanzibar kwaushindi walioupata katika uchaguzi uliofanyika hivi karibuni uliowapa nafasi ya kuendelea kuiongozaSerikali ya Jamhuri ya Muungano wa Tanzania na Serikali ya Mapinduzi Zanzibar katika kipindi kipyacha miaka mitano.

Aidha, nawapongeza Waheshimiwa Dr. Mohamed Ghalib Billal kwa kuteuliwa kuwa Makamu wa Raiswa Serikali ya Jamhuri ya Muungano wa Tanzania, Waheshimiwa Bwana Seif Shariff Hamad na BwanaSeif Ali Iddi kwa kuteuliwa kuwa Makamu wa Kwanza na wa Pili wa Rais katika Serikali ya MapinduziZanzibar. Pongezi nyingi pia ni kwa Mawaziri na Manaibu Mawaziri wote kwa kuteuliwa kushika nafasihizo katika Wizara mbalimbali. Pia, napenda kumshukuru Mwenyezi Mungu na wananchi wangu waJimbo la Kilosa kwa kunichagua kuwa Mbunge wao tena na zaidi namshukuru Mheshimiwa Rais kwa

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kuniteua tena kuiongoza Wizara ya Fedha. Nawashukuruni nyote kwa kutenga muda wenu ili sote kwapamoja tuweze kushiriki katika mkutano huu unaohusu uchambuzi wa sera, mafanikio na changamotozinazotukabili katika utekelezaji wa Mpango wa Taifa wa Kukuza Uchumi na Kupunguza Umaskini, nahatimaye kukubaliana mikakati ya kukabiliana na changamoto zilizopo. Napenda pia kuwapongezaMakatibu Wakuu na Sekretarieti ya maandalizi ya mkutano huu kwa kufanya kazi kwa juhudi bilakuchoka na kuwezesha mkutano huu kufanyika leo.

2. Bwana Mwenyekiti, Nachukua nafasi hii pia kumshukuru mwakilishi mkazi wa Umoja waMataifa 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 waMaendeleo katika ngazi zote kuanzia ngazi ya watendaji mpaka ngazi ya maamuzi. Haya ni mafanikiomakubwa ambayo tungependa kuyataja na kuyadumisha. Pia napenda kuchukua fursa hii kuipongezaSerikali 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 mkaziwa Benki ya Maendeleo ya Afrika (ADB) kwa kumaliza kipindi chake cha uongozi mzuri na kukabidhinafasi hiyo kwa Serikali ya Norway. Shukrani za pekee zimfikie Balozi wa Norway nchini na timu yakekwa uongozi mahiri na uratibu mzuri kwa kipindi chote cha maandalizi ya mapitio ya misaada ya kibajetimwaka huu.

3. Bwana Mwenyekiti, kama wengi wetu mtakavyokumbuka, Serikali kwa kushirikiana na wadau,ilifanya mapitio ya Mkakati wa Kukuza Uchumi na Kupunguza Umaskini (MKUKUTA) uliotekelezwakatika kipindi cha miaka mitano (2005/06 - 2009/10) na MKUZA (2006/07 - 2009/10 na kuandaamikakati mipya (MKUKUTA II na MKUZA II) itakayotekelezwa kwa kipindi cha miaka mitano (2010/11-2014/15). Katika maandalizi ya mikakati hii mipya tulipata ushirikiano mkubwa wa wadau mbalimbalihasa Asasi zisizo za Kiserikali, Washirika wa Maendeleo, vyama vya kisiasa, vyombo vya habari najamii 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 Ina maandalizi ya mikakati mipya. Shukrani za dhati pia ziwafikie Sekretariat ya MKUKUTA na VikundiUfundi vilivyoandaa MKUKUTA II na MKUZA II.

4. Bwana Mwenyekiti, vipaumbele vya mikakati hii mipya ni miongoni mwa agenda kuu katikaMdahalo huu wa Kitaifa nitakoufungua rasmi muda mfupi ujao. Aidha, nitatumia fursa hii kuzinduarasmi MKUKUTA II, ili usambazwe kwa wadau mbalimbali kwa utekelezaji. Taarifa nyingine

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itakayozinduliwa ni Ripoti ya utekelezaji ya mwaka 2009/10, inayolenga kuelimisha jamii mafanikio yajitihada za kupambana na umaskini. Kama alivyoeleza Katibu Mkuu, Wizara ya Fedha, katika siku mbiliza mwanzo, majadiliano yatalenga katika utekelezaji wa MKUKUTA na MKUZA na Mapitio ya Matumiziya Fedha za Umma, na siku tatu za mwisho majadiliano yatahusu zaidi mapitio ya misaada ya kibajetina changamoto zinazotukabili katika kuleta maendeleo ya Tanzania.

5. Bwana Mwenyekiti, Serikali ya Jamhuri ya Muungano wa Tanzania na Serikali ya Mapinduziya Zanzibar zilidhamiria kufanya mapitio ya MKUKUTA I na MKUZA I na kuandaa mikakati mipyapamoja. 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 tayariimekwishapitishwa na Serikali zote mbili kwa utekelezaji. Ni matarajio yetu kuwa mashirikiano kati yaSerikali ya Jamhuri ya Muungano wa Tanzania na Serikali ya Mapinduzi Zanzibar yataboreka zaidikatika kusimamia utekelezaji wa mikakati yetu mipya.

6. Bwana Mwenyekiti, kabla sijazungumzia vipaumbele vya mikakati mipya, napenda kuelezakwa kifupi mafanikio ya utekelezaji katika kipindi kilichopita. Maelezo ya kina yatatolewa na wataalamuwakati wakiwakilisha mada zao. Kwa ujumla matokeo ya utekelezaji wa MKUKUTA I/MKUZA Iyanaonesha kuwa tumefanya vizuri katika maeneo mengi, lakini pia maeneo mengine hatukuwezakufikia malengo tuliyojiwekea. Kwa mfano, tangu mwaka 2005 ukuaji wa pato la taifa kwa kila mwakaulifikia asilimia 7 ambayo inawiana na malengo ya MKUKUTA I ya ukuaji wa pato la taifa wa asilimiakati ya 6 mpaka 8 kwa mwaka

7. Bwana Mwenyekiti, mafanikio makubwa yamepatikana katika kuongezeka kwa huduma zakijamii hasa katika elimu, afya, maji safi na kinga ya jamii. Utekelezaji wa jitihada za kuboresha hudumaza elimu na afya zimefanikiwa na kuifanya Tanzania kupanda katika upimaji wa maendeleo yabinadamu 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 mujibuwa vigezo vya upimaji wa maendeleo ya binadamu. Aidha, katika Mkutano wa viongozi wa Nchi kuhusuMaendeleo 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 nimakubwa.

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8. Bwana Mwenyekiti, matokeo ya Savei ya Watu na Afya (Demographic and Health Survey) yamwaka 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 51kwa kila watoto 1000 wanaozaliwa hai, na vifo vya watoto wenye umri chini ya miaka mitano imefikia 81kati ya 1000 waliozaliwa hai. Hatua hii ni zaidi ya lengo la MKUKUTA la vifo 98. Kwa upande wa vifovya kina mama vinavyotokana na uzazi vimeshuka kutoka 578 hadi 454 kwa kina mama 100,000waliojifungua 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 MpangoMkakati wa Sekta ya Afya.

9. Bwana Mwenyekiti, utekelezaji wa maboresho ya kisiasa, kiuchumi, kisheria na kijamiiambayo yamejikita katika nguzo ya tatu ya MKUKUTA yameonesha kuwa Tanzania inaendeleakuimarika kidemokrasia na hasa katika siasa, amani, kuheshimu haki za binadamu na kuwa na utawalawa kisheria. Hii imesababisha Tanzania kupata hati ya kuridhisha kwa mujibu wa wataalam namashirika mbalimbali ya kimataifa ikiwemo Benki ya Dunia.

10. Bwana Mwenyekiti, katika maeneo ambayo hatukufanikiwa kama ilivyotarajiwa ni pamoja nakupunguza umaskini wa kipato, suala ambalo jitihada binafsi zinahitajika kwa kiwango cha juu. Ziposababu nyingi zinazosababisha watu wengi kushindwa kupiga hatua za maendeleo kwa haraka, nahivyo 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 imesababishauwekezaji hasa katika miradi ya miundombinu kama vile barabara, reli, bandari, nishatikuwa 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.

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11. Bwana Mwenyekiti, moja ya changamoto kubwa katika MKUKUTA I ni matukio yaliyokuwa njeya uwezo wetu na vipaumbele vingi. MKUKUTA II unalenga kuwa na vipaumbele vichache katikamisingi mikuu minne: (i) kuendeleza na kuhakikisha matumizi bora ya njia kuu za uzalishaji ikiwemorasilimali watu, ardhi, na mtaji (capital); (ii) kujenga na kuimarisha mifumo ya kiuchumi, hii ikiwainalenga katika kujenga taasisi muhimu za kujenga na kusimamia uchumi na ustawi wa jamii kama vileMfumo wa utambuzi na usajili wa raia (National Identification and Registration of Persons) ambaobaadhi 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 kuthibitiongezeko 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 zishirikikikamilifu katika shughuli za uzalishaji na ustawi wa jamii.

12. Bwana Mwenyekiti, Mheshimiwa Dkt. Jakaya Mrisho Kikwete, Rais wa Serikali ya Jamhuri yaMuungano wa Tanzania alipozindua rasmi Bunge la Kumi katika kipindi cha awamu yake ya pili tarehe18 Novemba 2010, alifafanua vizuri vipaumbele katika kipindi chake cha pili cha miaka mitano (2010-2015), na kuweka bayana mifumo ya usimamizi. Ni muhimu sote kuzingatia yaliyofafanuliwa kwenyehotuba hiyo ambayo masuala mengi yameainishwa kwenye vipaumbele vya MKUKUTA II, nakuhakikisha kila sekta inayajumuisha kwenye mipango na bajeti ya kila mwaka.

13. Bwana Mwenyekiti, MKUKUTA II ni mwendelezo wa MKUKUTA I na umejengwa katikamisingi 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 naustawi wa jamii; na utawala bora na uwajibikaji. Msisitizo ukiwa katika kukuza na kusimamiauchumi.

14. Bwana Mwenyekiti, katika nguzo ya kwanza msisitizo utawekwa kwenye maeneoyatakayochochea kukua kwa uchumi. Maeneo hayo ni: kilimo, viwanda, Nishati, utalii, madini,miundombinu ya barabara na njia za usafirishaji na mawasiliano. Kilimo kitabakia kuwa tegemeokubwa kwa watanzania wengi kwani asilimia takriban 70 hadi 80, wako vijijini na wanategemea kilimo.Azma hii ipo sambamba na utekelezaji wa Kilimo Kwanza.

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15. Bwana Mwenyekiti, ajira ndiyo kiungo muhimu kati ya ukuaji wa uchumi na kupunguzaumaskini. Kwa hiyo msisitizo mkubwa upo katika kutengeneza ajira na ukuzaji wa ujuzi hasa kwa vijanaili kuboresha hali ya maisha ya watu. Matokeo yanayotarajiwa katika nguzo ya kwanza yatafikiwakupitia utekelezaji wa mikakati na programu inayoratibiwa na kutekelezwa na sekta mbalimbali.

16. Bwana Mwenyekiti, MKUKUTA wa Pili utaendelea kupanua mikakati inayolenga kuongezaupatikanaji 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 vyakufundishia 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 umewekwakwenye kuboresha huduma za afya, maji, mazingira na kinga ya jamii. Mikakati iliyoainishwa katikanguzo ya pili imeoanishwa na ukuaji wa uchumi na hasa katika kukuza ujuzi na kuboresha ajira nakuwaandaa vijana wanaoweza kuwa na ujuzi wa kuweza kuajiriwa na kujiajiri. Kauli mbiu ya mwakahuu 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 lakukuza uchumi na kupunguza umaskini. Hivyo ni muhimu majadiliano katika mkutano wa mwaka huukuhusu MKUKUTA, PER na GBS yalenge kwenye masuala yatakayosaidia kupanua fursa za ajira zauhakika ili kuongeza kasi katika kuboresha maisha ya watanzania kwa ujumla.

17. Bwana Mwenyekiti, Utawala bora na Uwajibikaji ni kiungo kikubwa katika nguzo zaMKUKUTA na muhimu katika kufanikisha usimamizi wa utekelezaji wa MKUKUTA II. Kufikiwa kwamalengo ya MKUKUTA kutategemea sana uadilifu katika usimamizi, matumizi bora ya rasilimali,mashirikiano na kujituma. MKUKUTA II utaendelea kuboresha maeneo yanayohusu utawala bora nauwajibikaji ambayo ni pamoja na utawala wa kiuchumi, kupambana na rushwa na kuhakikishautoaji wa haki kwa wakati, kudumisha demokrasia na kuhimiza utamaduni wa kufanya kazi kwabidii. Yote haya ni muhimu kwa ajili ya uwekezaji, uzalishaji, na utengenezaji wa ajira nahatimaye kupunguza umaskini.

18. Mheshimiwa Mwenyekiti, ili kufanikisha malengo yetu, yanahitajika maamuzi na juhudi zapamoja 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 miongonimwa Wizara na Idara na Taasisi za Kiserekali pamoja na wadau wengine; (iii) upitiaji mahiri wa maeneoyanayohitaji mabadiliko (mifumo, rasilimali watu na kadhalika) ili kuyaweka katika masuala muhimu ya

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ukuaji uchumi na upunguzaji umaskini na kutoa ushirikiano wenye mwelekeo tarajiwa; (iv) kuhimizamaamuzi 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 mkutanohuu 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 kuibuamajadiliano katika eneo hili hivyo ninaomba kila mmoja ashiriki kikamilifu katika kuchambua nakuchangia kwa uwazi.

20. Bwana Mwenyekiti, nitashukuru zaidi kama majadiliano yataelekezwa katika kuboreshautekelezaji. Baada ya MKUKUTA II na MKUZA II kuandaliwa, kinachoendelea sasa ni maandalizi yamiongozo ya utekelezaji, ufuatiliaji na tathmini. Aidha, mkakati wa mawasiliano unaandaliwa nautatumika kama mwongozo katika kuelimisha na kuhamasisha jamii juu ya vipaumbele vya kitaifa, nakuchochea ari ya watanzania kuuchukia umaskini na kupambana nao. Kwa kuwa mada itawasilishwakuhusu masuala haya, tunategemea kupata maoni yenu kwa ajili ya kuboresha zaidi hatua hii yakujipanga 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 tunawajibikakujipanga vizuri na kuongeza mashirikiano katika utekelezaji. Ushirikiano wetu katika maamuzi yavipaumbele, mgawanyo wa rasilimali, na usimamizi bora wakati wa utekelezaji ndio utakaofanikishaazma za Serikali zote mbili ya kupunguza umaskini na kuboresha hali ya maisha ya walio wengi nahasa waishio vijijini.

23. Bwana Mwenyekiti, baada ya kusema hayo, naomba kuwashukuru wote kwa ushirikianowenu katika jitihada za kuleta maendeleo ya nchi yetu. Sasa napenda kuchukua fursa hii kutamkarasmi 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 yakibajeti umezinduliwa rasmi. Aidha, napenda kutangaza kuwa MKUKUTA II na Ripoti ya mwakaya Utekelezaji wa MKUKUTA I 2009/10 vimezinduliwa rasmi.Nawatakia majadiliano mema.

Ahsanteni sana kwa kunisikiliza.

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Annex 1.9 Statement by Mr. Svein Baera; Chair of the PRBS DPs Group at the Start of theGBS Annual Review

Opening Statement at the GBS Annual Review 2010 by Svein Baera, minister counselor, Chair ofthe 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 inOctober. 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 femalespeaker 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, increaseddomestic 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 onthe implementation of comprehensive reforms and a strong economic transition from the mid 1990s todate, Tanzania has earned a reputation as a country where harmonized and streamlined aid modalitiesbuilding 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, weneed to continually demonstrate that GBS works, that it works more effectively than alternative aidmodalities and that strong and increasing levels of transparency and accountability are in place.

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[Main messages]

Let me highlight 6 core messages to set the stage for our conversations during this annual review:

1. Communication and dialogueThe quality of dialogue is essential for GBS to be effective. Both development partners andGovernment have made efforts in 2010 to improve the channels of communication and overall levels oftrust.There has been a resuscitation of the dialogue around public expenditure reviews, clustermeetings have started to improve, and an agreement to work towards more regular meetings and thehabitual sharing of information. But still we need to work jointly to strengthen the dialogue further.

2. The performance of PAF 2010 and financial commitmentsThe preliminary results of the joint review of the Performance Assessment Framework by Governmentand the development partners will be presented just after the opening statements. Even though somenumbers indicate improvement compared with 2009, the total picture of results achieved is not aspositive as we had hoped for. The results suggest that the efforts to make the public sector moreefficient and productive still need serious attention.

Connecting this performance with the increasing scrutiny of GBS as a preferred aid modality isimportant. In a situation where aid is coming under increased criticism in many developed countries forthe lack of clear results, only strong and convincing performance in the most important areas will helpstabilize the support for GBS.

3. A strong fiscal response to the global financial crisisDevelopment partners recognize the determined response by the Government to the challenges of theglobal financial crisis. The Government of Tanzania implemented a comprehensive package of fiscalmeasures to cushion the effects of the financial crisis.

The measures represent the equivalent of 2% of GDP, and included loan guarantees, temporary pricesupport for the agricultural sector, and increased investment support in selected areas. This package ofmeasures was supported by several development partners through a combination of additional aid andfrontloading of aid.

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4. Increasing financing gap and reduced development expenditureThe last fiscal year saw a revenue shortfall of about 10% of total estimates, half caused by decliningdomestic revenues, the other half by reduced aid. Challenges with such a fiscal gap are continuing intothe current budget.

There are differences between the budget presented to the IMF Executive Board, and the oneapproved by Parliament in July 2010, with much more optimistic revenue forecasts and a higher level ofdomestic financing used to justify sharply higher expenditures.

The excessive optimism of this budget, and the lack of a clear strategy for expenditure prioritization inthe likely event of revenue and financing shortfalls, could undermine the credibility of the budget as aneffective policy and planning tool. In addition, the fact that this significantly different budget wasapproved without early communication with the development partners calls into question the quality ofour policy dialogue and partnership. We look forward to discussing this matter in the key issue sessionon the budget.

Furthermore, the executed budget from last year continued the trend of recent years where recurrentexpenditures are rising more rapidly than development expenditure. Revenues covered only 84 percentof the recurrent expenditures last financial year.

Linked to the fiscal gap, development partners would like to urge the Government to carefully considera comprehensive rationalization of tax exemptions to bring tax efficiency rates in line with that ofcomparable countries. This could contribute significantly to increased domestic revenues and close thefiscal gap over the medium to longer term.

5. Agricultural development, food security and poverty reductionDevelopment partners and domestic stakeholders are concerned that despite steady high economicgrowth and positive progress in a number of areas of the Mkukuta and Mkuza, there is limited povertyreduction and limited improvement of livelihoods for the majority of Tanzanians.

To accelerate pro poor growth and to achieve any economic transformation process and movement outof poverty in Tanzania, the importance of agriculture must be emphasized.

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As highlighted by his Excellency President JAKAYA KIKWETE last week at the EAC Heads of Statemeeting, there is also a clear connection between climate change, food security and agriculturaldevelopment. Bearing this in mind, we would emphasize the following:

- Increased use of appropriate agricultural practices such as conservation farming andsustainable irrigation.

- Increased access to efficient input and output markets and appropriate incentives.

6. Slow progress in core public reforms and anti corruptionDevelopment partners welcome and support the Government public sector core reform initiatives. Thechallenge now is to focus on the effective implementation of the agreed actions with regards to publicfinancial management, public service management and decentralization by devolution. This appliesboth to the central and local government level. Improved public service delivery to all Tanzanians willrequire 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. Aproblem here is the lack of continuous dialogue between partners involved in this area and informationexchange as agreed during last year’s GBS review. We wish to state that poverty reduction hingescritically on major improvements in this area. Promising trends in the Auditor General’s office, the workof the PCCB, and an increase in judges hired to the court system all provide an effective starting pointfor addressing key challenges. Finally it is important to balance the focus on controls and enforcementin 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 ofsome 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 toimprove the way we interact. Getting this right will strengthen our partnership and help achieve more

development results under the Mkukuta II and Mkuza II.

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It is our sincere belief that GBS remains an effective aid instrument in Tanzania. That it helpsstrengthen 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 itscontinuous worth. We sincerely hope and expect the coming 3 days will contribute to this throughinsightful presentations, focused interventions from a wide range of stakeholders that we see heretoday, and constructive, open discussions.I thank you, Ahsanteni Sana.

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Annex 1.10 Statement by Mr. Svein Baera; Chair of the GBS Group at the Closing of the GBSAnnual Review

Closing Statement at the GBS Annual Review 2010 by Svein Bæra, Chair of the GBS Group ofDevelopment Partners in Tanzania

Honorable minister(s)

Ladies and gentlemen

We have had some busy and constructive days together here at Ubungo plaza. We have reviewedprogress 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 insightfulpresentations 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 Iwould 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 coreelements 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 ofdevelopment 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 yeardirectly injected into the national budget. We all agree that GBS is an aid modality with highpredictability and low transaction costs.

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But it is still a challenge to demonstrate evidence of solid results linked to GBS. The Performance

Assessment Framework is our most important tool to review and draw conclusions on results. Andclearly: This meeting has provided many examples of targets met, processes accomplished andprogress made.

However, less than 60 % of Outcome Indicators on track and ratings such as moderately satisfactory

and partially achieved are not the kind of hard evidence of tangible results an increasing number ofcritical voices are demanding.

I hope and expect that our efforts earlier today are giving momentum to the final work of creating arobust PAF 11 that is more strategic, has a better rating system and is ambitious enough for continuedhigh levels of GBS.

The effective implementation of such a PAF will provide more evidence of results, and help stabilizesupport for GBS. This work started months ago with a broad bottom-up process. Now it is time forleadership and tough prioritization to give us a final product that can be approved at our high-level GBSmeeting in late January next year.

Dr Hoseah also spoke about evidence being hard to find in his frank presentation on anti-corruption.We understand this. Evidence of guilt is the very basis for the rule of law. And progress has been madein addressing grand and petty corruption supported by both prevention and control mechanisms andnot least the important role of the media.

Still, the discussion after Dr Hoseahs presentation made it clear that the Government is expected to doeven more to display and enforce zero tolerance for corruption or any other misuse of public funds.Tanzanian citizen’ direct experience of corruption risks leading to a culture that becomes a viciouscircle.

We hear that the calls to address corruption are strong from the Tanzanian public. Providing publicevidence of real progress is obviously crucial for GBS.

The five key issues we have discussed at this meeting are more or less identical to the issuesdiscussed last year. Some of us were perhaps a bit sceptical about this absence of creativity, but I thinkthe past days have proven the benefit of this repetition.

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We have been able to jointly assess whether action has been taken according to the key messages wejointly produced one year ago. And obviously; all these five issues are still highly relevant to povertyreduction and economic growth.

The refining of the key messages from this year’s meeting will be carried out in the coming days andweeks. It is important that the analytical papers, presentations and discussions lead to concrete actionsthat are implemented. This meeting has highlighted the importance of being realistic about the timeframe of various kinds of actions: Quick-wins as well as short- medium- and long term.

High quality dialogue is vital for GBS, and during our meeting the importance of consistent and strongdialogue throughout the year has been emphasized.

We acknowledge that the preparations of the key issue sessions provided valuable venues for dialogueas DPs and government aimed at producing joint papers and presentations. It is clear to us that thiswork has been easier in some working groups than in others. I would particularly like to mention howthe dialogue on public financial management has improved this year.

In my opening statement I recognised the determined response by the Government to the challenges ofthe global financial crisis, but expressed concern over the large financing gap in the current budget. Oursession on the budget provided more in-depth debate on the issue, but left us unclear as to theGovernment’s strategy for addressing this gap.

There are also concerns that despite steady high economic growth and positive progress in manyareas, there is limited evidence of poverty reduction and improvement of livelihoods for the majority ofTanzanians. Finding viable solutions to progress here is our joint mission as we embark on a new

Mkukuta and Mkuza, as partners of a new Government, finalising a new PAF in the New Year.Thank you, Asanteni Sana.

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Annex 1.11 Closing Statements by H.E Mkulo at the Closing of the ANPD

OPENING REMARKS BY THE MINISTER FOR FINANCEHON. MUSTAFA HAIDI MKULO (MP), AT THE SECOND SESSION OF THE 2010 ANNUAL

NATIONAL POLICY DIALOGUE 6TH DECEMBER, 2010 AT UBUNGO PLAZA CONFERENCECENTRE,

DAR ES SALAAM

Hon. Ministers;Hon. Regional Commissioners;Hon. Members of Parliament;Permanent Secretaries;Regional Administrative Secretaries;Excellencies Ambassadors and High Commissioners;Heads of Development Cooperation;Representatives of the Private Sector;Representatives of the Civil Society;Members of the Media;Invited Guests;Ladies and Gentlemen:

Let me take this opportunity to once again welcome you to the second session of the 2010 AnnualNational Policy Dialogue whereby we will focus on GBS issues.

Session one of the Annual National Policy Dialogue was held last week on 2nd and 3rd December 2010,where the discussions focused on MKUKUTA, MKUZA and Public Expenditure Review. I would like tothank all participants in that session for their valuable contributions.

Chairperson, Let me reflect on some of the key messages from the session held on December 2nd and3rd 2010.

1. All stakeholders were noted as being behind the Government and its vision and roadmap forpoverty eradication as promulgated in MKUKUTA II and MKUZA II, and that we look forward tocontinued cooperation during implementation.

2. While many successes have been recorded in implementing MKUKUTA I and MKUZA I, anumber of challenges persist, including the fact that a significant portion of the population stilllives with income poverty and/or faces a risk of hunger. The unsatisfactory quality of social

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services is another challenge in perfecting the good results of MKUKUTA/MKUZAimplementation.

3. With about 33% of the population considered to be living in abject poverty (HBS 2007), there isa need to maintain the focus on reducing poverty as the fulcrum around which all public policyrevolves.

4. The systems that aim at promoting accountability and efficiency in the utilisation of publicresources are critical, and should therefore be further supported and strengthened, if we are todraw maximum mileage from what we have.

5. MKUKUTA II and MKUZA II bring significant improvements to their forebears (MKUKUTA I andMKUZA I), and stand to yield better results if proper Implementation Plans including betterprioritisation, sequencing, and coordination are observed.

6. Moving forward, critical actions for all stakeholders include the following:

(f) To broaden the social benefits of economic growth, focus should be on broad based,employment creating activities and sectors;

(g) Proper prioritisation and sequencing of interventions, cross-sector organisation andcoordination, and the consistency and depth of NSA participation in policy dialogues willneed to be improved.

7. Having suffered from the 2008 global financial crisis and the associated global economicrecession, the economy is recovering, thanks to prompt and measured interventions byGovernment and recovery of the global economy.

8. As we formulate strategies and evaluate results thereof, we must take into account theopportunities and the often adverse effects of policies, actions, and other developments at theinternational level. For example, the continued unfair architecture of global trade has direct

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consequences for the incomes of Tanzanian farmers. Unless we change the nature of ouragricultural exports from primary commodities to value addition, it may be quite difficult tosubstantially and sustainably improve the level of peasants’ incomes under the architecture.

9. The need to re-examine the roles of the Ministry of Finance on one hand, and the PlanningCommission on the other, as regards the planning function and responsibility overMKUKUTA/MKUZA implementation was also noted. Also important is the need to avoid amultiplication of development strategies and plans, as suggested by the existence of Vision2025, MKUKUTA, and the proposed Five Year Development Plans.

10. In addition to the planned interventions, the need for civic education was noted to address thepublic’s attitude towards work, frugality, and ethical behaviour as significant resources arewasted through the absence of such values.

Chairperson, Let me now focus on the discussions you will have for the next three days. As alreadyindicated during the first session, this second session will review implementation of PAF 2010 anddiscuss Tanzania's efforts towards combating corruption as well as discuss five key issues. These are:Accelerating pro-poor growth in the context of Kilimo Kwanza; Business Environment; Equity andEfficiency: Opportunities and Challenges; and Budget Execution and Financial Management at Centraland LGAs. The key messages from the discussion on the key issues will be used by the government indeveloping steps for their implementation in order to address constraints experienced in these areas.

Chairperson, Allow me at this juncture to reiterate the Government’s position that General BudgetSupport is and continues to be the Government’s preferred modality for delivering Official DevelopmentAssistance (ODA) to Tanzania. This is on account of a number of factors. First, it is the only modalitythat complies with the country’s legal system. Second, GBS gives the Government full ownership andenhances flexibility over public resource allocation in line with national priorities for the implementationof the MKUKUTA/MKUZA as outlined in JAST. Third, GBS is fully integrated in the national budgetprocess and it is subjected to the same degree of scrutiny in the national budget process as domesticresources, and therefore contributes to strengthening domestic accountability of the Government inpublic financial management. By making full use of the national budget process for resource allocation

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and spending, including use of national systems and procedures for procurement, accounting andauditing, GBS contributes to strengthening national capacities.

Fourth, GBS also helps to reduce transaction costs and facilitates harmonization among DevelopmentPartners, as all GBS Partners use the Partnership Framework Memorandum to guide their GBS supportand the Performance Assessment Framework that draws indicators from the MKUKUTA/MKUZA forjoint assessment of progress.

Lastly, GBS allows for strategic policy dialogue between the Government and Development Partners

and other stakeholders, as demonstrated by this Annual National Policy Dialogue. GBS Partners haveincreasingly front loaded their GBS disbursements in the first half and even in the first quarter of thefinancial year, which has allowed for a smooth execution of the national budget.

The experience of this financial year demonstrates this, in that by the end of September 2010, 16percent of the total amounts of GBS commitments were disbursed, and 75 percent has been disbursedby the end of November 2010.

Chairperson, Let me take this opportunity to thank the GBS Partners for their continuous support,which demonstrates the confidence that our Partners have in the Government. We thank them for theircommitments to support Government efforts to promote growth and reduce poverty. DPs supportthrough GBS and other modalities has been quite instrumental in this effort. The Government expectstherefore, the share of GBS in official development assistance to rise, as we move towardsimplementation of MKUKUTA II and MKUZA II. It is, therefore, my hope that this year’s GBS AnnualReview will encourage GBS Development Partners to increase their contributions to GBS, and nonGBS DPs to join GBS Partners.

I thank you all for your kind attention and wish you fruitful deliberations during this second session.

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Annex 1.12 2011 Performance Assessment Framework (PAF)

PAF 2011

CLUSTER WORKING GROUP ONEUNDERLYING PROCESS

1 Agriculture Sector Review (MAFS)1

2 Infrastructure Sector Review (MoT & MoW)3 Energy Sector Review (MEM)4 Natural Resource Review (MNRT)

TEMPORARY PROCESS ACTIONS1 Construction of 100 MW gas fired power plant in Dar-Es-Salaam to reach overall completion of 50 percent and

Heavy Fuel Oil (HFO) fired 60 MW in Mwanza to reach overall completion of 50 percent by October 31, 2011(MEM)

2 The Government will submit to the June 2011 Parliamentary Session miscellaneous amendment bill for thelegislation listed in the roadmap for review on key strategic and priority sectors mainly; agriculture, lands, industryand trade in order to simplify and streamline business regulatory environment. (PMO)

3 Finalize Agriculture Marketing strategy and implement by October 2011 some key measures selected by allstakeholders at the sector level in order to materially improve the marketing environment for private participation inline with principles enshrined in Kilimo Kwanza. (MIT)

OUTCOME INDICATORS1 Head Count Ratio for basic needs poverty line by rural/urban (MKUKUTA II)8 (NBS)2 Total electricity installed capacity and availability in MW and % (MEM)3 % of population with access to electricity (MEM)4 % of trunk and regional roads network in good and fair condition (MOW)5 % of rural roads that are passable (good and fair) (PMO-RALG)6 Time taken for a container from off-loading until clearing from port (import data) (MOT)7 Number of Households using irrigation infrastructure (MAFC)8 Time taken by the (Registrar of Titles to approve a transfer of a certificate of rights of occupancy (based on sample

survey of actual transfers) (MLH)9 Number of days taken by BRELA to register company(MIT)10 Productivity of irrigated paddy increased in tons/ha.

11Increased ratio of farm gate to export price from the 2011 baseline as established by GOT and DP’s9 on thefollowing crops (MAFC)

Cashew Arabica Coffee (North) Arabica coffee (South) Robusta

8 Analytical work will take place during 2011 to reconfirm the baselines and set the targets for 2012. Poverty will be discussed as a key issue inthe ANPD/AR 2011. Base line will come out through using the National Panel survey data.9 Government and Development Partner s to undertake a joint study by June 2011 to agree on baselines data and form targets in 2012.Terms ofreference will be developed by World bank ready for sharing with GoT. JICA will fund the study. Therefore this indicator will not be rated in 2011.

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10All targets for 2013 will be inserted on completion of the Mkukuta and Mkuza 2 monitoring system

11 Source: National Panel Survey

OUTCOME INDICATOR DATABaseline

2005Actual2009

Actual 2010 Target2011

Target2012

Target201310

1 Head Count Ratio for basicneeds poverty line byrural/urban (Mkukuta II) (NBS)

33.6% (HBS2007) 34%11

Datanot available

PreliminaryNPS data

to beavailableOct, 2011

2 Total electricity installedcapacity and availability in MWand % (MEM)

889 MW62%

1,091 MW70%

1,077 MW85%

1,087 MW85%

1,247MW85%

3 % of population with access toelectricity (MEM)

8.2% 10.9% 14.5% 15% 15.5%

4 % of trunk and regional roadsnetwork in good and faircondition (MOW)

82% 92% 89% 91% 92%

5 % of rural roads that arepassable (good and fair)(PMO-RALG)

50% 58.5% 56.2% 58% 60%

6 Time taken for a containerfrom off-loading until clearingfrom port (import data) (MOT)

20.1 days 18 days 12.5 days 12 days 10 days

7 Number of Households usingirrigation infrastructure(MAFC)

313,786 342,700 397,500 440,500 505,500

8 Time taken by the (Registrarof Titles to approve a transferof a certificate of rights ofoccupancy (based on samplesurvey of actualtransfers)(MLH)

28 (2007) 24 12-18 7 7

9 Number of days taken byBRELA to registercompany(MIT)

6.9 (2009) 4 3

10Productivity of irrigated paddyincreased in tons/ha.

1.4 3.00 4.5 5.0 5.5

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CLUSTER WORKING GROUP II (CWG 2)UNDERLYING PROCESS

1 Education Sector Review (MOEVT)2 Health Sector Review (MOHSW)3 Water Sector Review (MOWI)

TEMPORARY PROCESS ACTIONS1 Accomplish operationalisation of the Water Sector Management Information System where data and

progress information from all MoW HQ departments and units, 9 water basin offices, 19 regional centreUWSAs, DAWASA/DAWASCO, 100 small towns UWSAs, all regional secretariats and all LGAs will betracked into sector MIS by June 2011 for production of consolidated sector reports. (MOW)

2 Environmental Action Plans developed and ready for implementation by 5 MDAs (Agriculture, Health,Infrastructure, Water and Energy & Minerals) by October 2011 (VPO)

3 Delivery of annual capitation grants of Tshs 25,000 per student to all government secondary schools tofacilitate purchase of textbooks and other learning materials by June 2011 (MoEVT)

OUTCOME INDICATORS1 Standard VII exam pass rate

A. National average for the previous year, disaggregated by gender (MoEVT)B. Proportion of districts in which less than 40 % of Standard VII pupils passed the PSLE in the previousyear (MoEVT)

2 Form 4 examination pass rates (Division I-III) national average for the previous year, disaggregated bygender (MoEVT)

3 Total enrolment in Degree Programmes (% females) (MoEVT)4 A. Proportion of births at Health facilities, national average

B. Proportion of districts in which 60% of births taking place at health facilities (MoHSW)5 Persons with advanced HIV disease (CD4<200 or <350) currently receiving ARV combination treatment

(disaggregated under 15 and over 15 and by sex) (MoHSW)6 Nurses and Nurse midwives per 10,000 population by region (MoHSW)7 Total number of enrolment in health institutes (MoHSW)8 Percentage of the population that has access to clean and safe water from a piped or protected source

(MOWI)OUTCOME INDICATOR DATA

Baseline 2005

2008 Actual2009

Actual2010

Target2011

Target2012

Target2013

1 Standard VII exam pass rate

A. National average for theprevious year, disaggregatedby gender (MoEVT)

B. Proportion of councils inwhich less than 40 % ofStandard VII pupils passedthe PSLE in theprevious year (MoEVT)

T=48.7%

M=55.5%

F=41.8%

18.3%

T=54.2%

M=62.5%

F=45.5%

14.6%

T=52.7%

M=59.8%

F=45.6%

17.3%

T=49.4%M=55.6%F=43.2%

(examresults2009)

23.3%(examresults2009)

Improvedperformance

(Actualexamresults2010:

T=53.5%M=59%

F=48.3%)

Improvedperformanc

55%

9%

56%

6%

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e

(Actualexamresults2010:

12.1%)

2 Form 4 examination passrates (Division I-III) nationalaverage for the previousyear, disaggregated bygender (MoEVT)

T=37.8%

M=44.6%

F=30.4%

T=35.7%

M=39.9%

F= 28%

T=24.8%

M=29.6%

F=18.8%

T=17.9%M=

21.5%F= 12.1%

(examresults2009)

Improvedperformanc

e

(Actualexamresults2010:

T=11.5%M= 14.6%F= 7.8%

14% 17%

3 Total enrolment in DegreeProgrammes (% females)(MoEVT)

N/A N/A T =82,227Percentage of

Female=

32.5%

T =106,602Percenta

ge ofFemale=35.1%(actual

enrolment2009/10)

109,500 112,000 113,000

4 A. Proportion of births atHealth facilities, nationalaverage

B. Proportion of districts inwhich 60% of births takingplace at health facilities(MoHSW)

47%

49%(2009)

52% 54% 51% 64%

51%

70%

55%

75%

60%

5 Persons with advanced HIVdisease (CD4<200 or <350)currently receiving ARVcombination treatment(disaggregated under 15 andover 15 and by sex)(MoHSW)

285,000

(2010)

285,000 302,000 319,000

6 Nurses and Nurse midwivesper 10,000 population byregion (MoHSW)

3.9 3.3 3.6 4.0 4.4

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7 Total number of enrolment inhealth institutes (MoHSW)

1,496 4,92549%

5,77558%

6,62566%

7,47575%

8,32583%

8 Percentage of the populationthat has access to clean andsafe water from a piped orprotected source (MOWI)

Rural/Urban53%/73%

Rural/Urban57.1%/79.9%

Rural/Urban

58.7% /83%

Rural/Urban

57.8% /86%

December 2010

Rural/Urban59%88%

Rural/Urban60.5%90%

MKUKUTA 2015TargetRural –65%Urban-95%

CLUSTER WORKING GROUP III (CWG 3)UNDERLYING PROCESS

1 Accountable governance (POPSM)2 Anticorruption (GGCU)3 Local Government Reform (PMORALG)

TEMPORARY PROCESS ACTIONS1 Approve Pay and Incentives Strategy that provides a total rewards package to enhance performance and facilitate

deployment of staff resources equitably. (POPSM)

2 All uncommitted funds of the core reforms of the FY 10/11 are returned according to Government FinancialRegulations to the Holding Account before October 1, 2011. (RCU)

3 The Judiciary initiates implementation of the key recommendations aiming to improve transparency of judiciaryprocedure emanating from case flow analysis by October 2011 (MOCAJ)

4 Government to set the criteria for budgetary allocation to LGAs by October 2011 (PMORALG)OUTCOME INDICATORS

1 Share of LGAs budgets of the total government budget (PMORALG)2 Increased equity among LGAs measured by ratio of equity in the distribution of:

A. Trained nurses in health facilities across LGAsB. Teachers against the school aged going population in primary schools across LGAs (PMORALG)

3 Percentage number of cases pending for two or more years (MOCAJ)4 Citizen satisfaction with their government services (POPSM)5 Number of MDAs implementing five Performance Management Tools (OPRAS, Client Service Charters, Strategic

Plans and M&E, Complaints Handling System). Baseline data for this indicates that 62% of the MDAS were incompliance for four of these tools in 2009-10 (POPSM)

6 Percentage of public who encounter corruption situation. (PCCB)7 Percentage of children registered and issued with birth certificates within 90 days after birth

(MOCAJ)OUTCOME INDICATOR DATA

Baseline2005

Actual2009

Actual2010

Target2011

Target2012

Target2013

1 Share of LGAs budgets of thetotal government budget12

16.1% N/A 25.12% 25% 25%Tbc onbasis of TPA

outcome

2 Increased equity among LGAs

12 Target of actual disbursement to LGAs as share of executed budget to be included in PAF 2012

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(PMORALG) measured by ratioof equity in the distribution of

A. Trained nurses in healthfacilities across LGAs

B. Teachers against the schoolaged going population inprimary schools across LGAs

(2009)

0.16

0.56

0.313

0.7

0.4

0.8

3 Percentage number of casespending for two or more years(MOCAJ)

27.9% 25.9% 12.9%14 24% 22%

4 Citizen satisfaction with theirgovernment services (POPSM)

CentralGovt: 75%Local Govt:

25%

CentralGovt 80%

Local Govt:30%

5 Number of MDAs implementingfive Performance ManagementTools (OPRAS, Client ServiceCharters, Strategic Plans andM&E, Complaints HandlingSystem). Baseline data for thisindicates that 62% of the MDASwere in compliance for four ofthese tools in 2009-10 (POPSM)

62% (2009) 62% 65%

6 Percentage of public whoencounter corruption situation.

39%(2009)

37% 35%

7 Percentage of childrenregistered and issued with birthcertificates within 90 days afterbirth (MOCAJ)

8%(2009/10)

10% 12% 16%

13 PMORALG to confirm targets with MoHSW and MoEVT by April 2011.14 Preliminary Data

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CLUSTER WORKING GROUP IV (CWG 4)UNDERLYING PROCESS

1 Public Financial Management- Implementation of PFMRP action plan based on agreed assessment criteria (MOF)2 Adherence to Annual Audit Cycle (MOF, NAO)15

3 Macroeconomic Stability (Latest PSI review) (MOF)4 Effective PER to inform the budget process (MOF)

TEMPORARY PROCESS ACTIONS1 Implementation of the agreed time-bound action plan derived from the NAO audit of IFMS. (only actions

implementable in 1 year) by October 2011 (ACGEN)2 PPP Finance Unit operational within MOF (MOF)

OUTCOME INDICATORS1 GoT’s follow up of CAG’s annual reports outstanding matters within the annual audit cycle (NAO)2 Average level of compliance of procuring entities with the Procurement Act 2004 to reach 80% by 2011 (PPRA)3 Approved budget broadly in line with policy objectives (MKUKUTA II, Sector policy priorities) (MOF)4 Expenditure outturn deviation compared to original approved budget (recurrent - MDA only at vote level), excluding

salary adjustments, contingency and debt service (MOF)5 Fiscal Deficit (after grants) as % of GDP consistent with PSI targets (MOF)6 Inflation rate consistent with PSI targets (MOF)

OUTCOME INDICATOR FOR DP’s1 Percentage of total GBS funds disbursed within the first and second quarter of the GoT fiscal year (MOF)

OUTCOME INDICATOR DATABaseline

2005Actual2008

Actual2009

Actual2010

Target2011

Target2012

Target2013

1 GoT's follow up of CAG'sannual reports outstandingmatters within the annualaudit cycle (NAO)

Baselineunder

preparation

2 Average level of complianceof procuring entities with theProcurement Act 2004 toreach 80% by 2011 (PPRA)

39%(2006/2007)

43% 50% 73% 80% 80% 80%

3 Approved budget broadly inline with policy objectives(MKUKUTA, Sector policypriorities) (MOF)

68%

(08/09)

70%

(09/10)

73.2% (10/11)

68% 70%

4 Expenditure outturndeviation compared tooriginal approved budget(recurrent - MDA only atvote level), excluding salaryadjustments, contingencyand debt service (MOF)

18% 16.7% 13.1% 12.7% 11.9% 10.9%

5 Fiscal Deficit (after grants)as % of GDP consistent

6% 0.0% 4.7% 6.4 % 6.0% 4.3% 3%

15 As stipulated in the Public Audit Act, CAG reports for central and local government and public bodies submitted to Parliament within 9 monthsfrom end of financial year and PMG provides a structured response

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with PSI targets (MOF)6 Inflation rate consistent with

PSI targets (MOF)4.5% 9.3% 10.7% 10.6% 7.5% 5% 4%

OUTCOME INDICATOR FOR DP’sBaseline

20052008 Actual

2009Actual2010

Target2011

Target2012

MKUKUTATarget

7 Percentage of total GBSfunds disbursed within thefirst and second quarter ofthe GoT fiscal year(MOF)

80% 80% 86% 95% 95% 95%

Summary of PAF 2011

Underlying Process 14 (max. 14)Temporary Process Actions 12 (max. 12)Outcome Indicators 3316 (max. 30)

16Only 30 out of the 33 indicators will be rated this calendar year 2011(farm gate ratio, poverty rate, and CAG will not formally be rated) and

2013 targets might change based on MMS II

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