2003年-世界发展银行全球_Zanzibar_Public_Expenditure_Review_2003___Laying_the_Foundations_for_Improved_Public_Expenditure_Management_154页_9mb

Zanzibar Public Expenditure Review 2003 Summary

Core Content

This report, Zanzibar Public Expenditure Review 2003, is a comprehensive analysis of Zanzibar's fiscal and public expenditure management systems. It was prepared in collaboration between the Revolutionary Government of Zanzibar (RGoZ) and the World Bank, with the objective of diagnosing public expenditure issues and providing a basis for reform. The report is divided into three parts: Country Background, Public Resource Availability, and Public Expenditures.

Main Points

1. Fiscal Situation and Economic Context

• Zanzibar is facing a severely precarious fiscal situation due to a dramatic decline in government revenue from 25% of GDP in FY98 to 16% in FY02.
• The decline is attributed to tax harmonization with Mainland Tanzania and the closure of the "Zanzibar Route," which shifted economic activity to the mainland.
• This revenue decline is likely to be permanent, and increasing revenue will require significant improvements in tax policy and administration.

2. Public Expenditure Structure

• Recurrent expenditures make up the majority of total government spending, reaching 97% of total expenditures in FY02, compared to 80% in Mainland Tanzania.
• Wage and salary expenditures account for 62% of recurrent expenditures, which is much higher than Mainland Tanzania (35%).
• This high wage bill creates structural imbalances, limiting the capacity of the government to deliver services due to staff shortages and overstaffing in different levels of the civil service.
• The integrity of the wage bill is weak, creating potential for leakages.

3. Public Sector Structure

• The public sector in Zanzibar includes central and local governments and the parastatal sector.
• Zanzibar's government is large in terms of resource use and employment, especially when considering Union services.
• The demarcation of responsibilities between the Union Government and RGoZ is defined by the constitution, but financial relations are not clearly outlined.
• There is reluctance to fund Union services such as police and defense, and overlapping functions in the vertical structure of the central government create inefficiencies.

4. Key Challenges in Public Expenditure Management

• The budget process has become less transparent, with decisions increasingly made by the Ministry of Finance and the budget ceiling committee.
• Revenues are volatile, primarily due to reliance on indirect taxes and the clove industry.
• Tax exemptions and arbitrary resource withdrawals from parastatals have masked fiscal deficits and are often tied to political cycles.
• The tax administration system is weak, with poor revenue base capture and reliance on indirect taxes.

5. Public Sector Reform and Investment

• The Zanzibar Poverty Reduction Plan (ZPRP) was launched in May 2002 and has become the basis for renewed development efforts.
• The Zanzibar State Trading Corporation (ZSTC) holds a monopoly on clove exports, which is questionable and should be liberalized to improve poverty reduction.
• A study on the clove sector suggests a gradual liberalization over a three to five-year period.
• Tax base expansion is needed, especially through economic reforms to promote sustainable growth and investment.
• Infrastructure development, land lease reforms, improvement in labor quality, and reduction of bureaucratic red tape are key to creating a favorable investment climate.

6. Recommendations

• Improve tax policy and administration to increase revenue and reduce variability.
• Rationalize the public sector structure by eliminating overlapping functions and clearly defining responsibilities at each level.
• Reform the civil service to address overstaffing, compressed salary structures, and leakages in the wage bill.
• Enhance coordination among institutions responsible for fiscal incentives and investment promotion.
• Revise revenue sharing arrangements with Mainland Tanzania to reflect fair distribution of taxes, seignorage, and grants.
• Revisit the role of ZSTC and consider liberalizing the clove export sector.
• Improve data collection and transparency in the tourism sector to better manage taxation and service delivery.
• Reform the budget process to make it more realistic and transparent, aligning revenue and expenditure estimates with actual resource availability.

Key Information

• Currency: Dominican Peso (DR$), with an exchange rate of US$1.00 = DR$16.35 (as of March 22, 2000).
• Fiscal Year: January 1 to December 31.
• Key Institutions:
  • Zanzibar Revenue Board (ZRB)
  • Tanzania Revenue Authority (TRA-Zanzibar)
  • Zanzibar State Trading Corporation (ZSTC)
  • People's Bank of Zanzibar (PBZ)
  • Joint Finance Commission (JFC), established in June 2003 to oversee revenue sharing.
• Critical Issues:
  • High wage bill (62% of recurrent expenditures).
  • Weak tax administration and volatile revenue.
  • Monopolies in the parastatal sector, especially ZSTC.
  • Unclear financial relationships between Zanzibar and Mainland Tanzania.
  • Need for civil service reform to improve efficiency and reduce leakages.

Conclusion

The report highlights the urgent need for public expenditure reform in Zanzibar, emphasizing the importance of revenue diversification, budget transparency, and civil service restructuring. It also underscores the role of the private sector in driving economic growth and the importance of donor coordination in supporting development. The findings serve as a foundation for future fiscal and development strategies in Zanzibar.