2001年-世界发展银行全球_The_United_Republic_of_Tanzania___Public_Expenditure_Review_127页_7mb

Tanzania Public Expenditure Review (FY01) Summary

Core Content

This report presents the findings of the FY01 Public Expenditure Review (PER) process in Tanzania, which is part of a broader effort to improve fiscal management and support the government's budget process. The review is conducted annually by the Tanzania PER Working Group, comprising government representatives, the World Bank, and other international and local stakeholders.

The report focuses on the challenges and opportunities in public expenditure management, particularly in relation to budget performance, fiscal sustainability, and the impact of the cash budget system on service delivery and financial discipline.

Main Objectives and Methodology

• Objectives:

  • Support the budget process in Tanzania.
  • Provide an external review of fiscal developments for the Government of Tanzania.
  • Share findings with a wide range of stakeholders.

• Methodology:

  • Based on findings from a joint donor mission in 2000 and a follow-up in 2001.
  • Analyzes macroeconomic performance, budget execution, and fiscal sustainability.
  • Includes input from the PER macro sub-group and sectoral working groups.
  • Reviews the impact of the cash budget system on public expenditure management.

Key Findings

Budget Performance (FY00 and First Eight Months of FY01)

• Domestic Revenue:

  • Remained at 11.5% of GDP in FY00, but increased slightly to 12% in the first eight months of FY01.
  • Increase was driven by higher VAT revenue on petrol and income tax.

• Aid Inflows:

  • Rose to 4.8% of GDP in FY00 and further to 5.5% in the first eight months of FY01.

• Government Expenditures:

  • Increased to 15.9% of GDP in FY00.
  • Slightly reduced in the first eight months of FY01 due to lower development expenditure.

• Sectoral Expenditures:

  • Social sectors (education, health, water, etc.) saw a rise in recurrent expenditures from 3.5% to 4.1% of GDP in FY01.
  • Administration expenditures increased significantly, from 1.4% to 2.1% of GDP.
  • Defence and security expenditures declined from 2.5% to 2.0% of GDP.

• Under-spending on OC (Other Charges):

  • Despite increased spending, OC expenditures were below budgeted amounts, highlighting a disconnect between budgets and actual spending.

Fiscal Sustainability and Budget Management Challenges

• Contingency Funds:

  • The Ministry of Finance retained significant contingency funds, which are used for "special expenditures" and unexpected needs.
  • These funds often result in reallocations that alter the sectoral allocations approved by Parliament, leading to budget deviations.

• Cash Flow Issues:

  • The cash budget system often leads to under-funding of non-priority sectors.
  • Monthly exchequer releases are delayed, causing uncertainty in expenditure planning.

• Payment Arrears:

  • Accumulated arrears are a major issue, especially in local governments.
  • Central government arrears were initially estimated at 60-80 billion T Sh but reached 120 billion T Sh under SASP IV.
  • Local governments have accumulated arrears up to 8.65 billion T Sh as of 1998, with some authorities facing over 50% of their revenue in arrears.

• Moral Hazard and Collusion:

  • Arrears are often linked to over-pricing and collusion between officials and suppliers.
  • A separate initiative is being considered to address the debt of poor local authorities (HIPLA).

Recommendations

Recommendation 1: Improve Funding of First Charge Expenditures

• Action:
  • Review the classification of first charge expenditures to ensure completeness.
  • Require spending units to submit cash flow plans with their MTEF and budget submissions.
  • Prioritize: (i) statutory and first charge sub-items, (ii) priority sectors, (iii) other sectors.

Recommendation 2: Implement Cash Flow Smoothing Instruments

• Action:
  • Consider a cash reserve or a prudent credit line with the Bank of Tanzania (BOT) to smooth cash flow gaps.
  • Ensure that these instruments respect the overall budget ceiling.
  • Include projected domestic revenue in the smoothing mechanism with safeguards to prevent abuse.

Recommendation 3: Address Payment Arrears and Debt Relief

• Action:
  • Integrate new payment arrears into the following year's budgets as first charge.
  • Strengthen the centralized system for issuing Local Purchase Orders (LPOs).
  • Enhance financial discipline by accounting officers and internal audit functions.
  • Prevent abuse of extra-budgetary commitments by making it clear that LPOs issued outside the central system will not be honored.

Way Forward

• Integrated Financial Management System (IFMS):

  • The government has introduced IFMS to improve transparency and control through centralized payments and procurement.
  • The system is currently being rolled out to all 19 sub-treasuries, with manual operations in place until automation is completed.

• Need for Improvement:

  • The report emphasizes the need for better budget projections and financing options to manage resource shocks.
  • It highlights the importance of aligning government scope with medium-term resource availability to meet poverty reduction targets.

• Transparency and Accountability:

  • Enhancing access and transparency of fiscal information is crucial for improving public sector accountability and management.

Conclusion

The FY01 PER report outlines the challenges in Tanzania's public expenditure management, particularly the mismatch between available resources and government activities, the accumulation of arrears, and the inefficiencies of the cash budget system. It recommends measures to improve funding, cash flow management, and financial discipline, with a focus on aligning spending with the Poverty Reduction Strategy Paper (PRSP) and enhancing transparency and accountability. The introduction of IFMS is seen as a key step towards modernizing financial management and improving fiscal sustainability.