2002年-世界发展银行全球_United_Republic_of_Tanzania_-_Public_Expenditure_Review_FY02___Report_on_Fiscal_Developments_and_Public_Expenditure_Management_Issues_204页_11mb

Public Expenditure Review of FY02 for the United Republic of Tanzania

Core Content

This report is the result of an external evaluation of Tanzania's fiscal developments and public expenditure management during the fiscal year 2001/02 (FY02). It provides an analysis of the government's fiscal performance, expenditure tracking, fiscal risks, and debt management practices, while offering recommendations to improve the effectiveness of public spending and fiscal sustainability.

Main Findings

I. Overall Fiscal Performance: Key Issues

• Fiscal Stability:

  • The government has maintained fiscal discipline by targeting recurrent deficits.
  • FY00 and FY01 saw deficits of 0.5% and 1.2% of GDP, respectively, with a target of 2.5% for FY02.
  • Despite relaxed deficit targets, fiscal sustainability remains within acceptable thresholds due to economic growth and increased foreign aid.
  • The cash budget system is the main tool for fiscal balance, but the introduction of quarterly budget releases and cash flow planning has improved allocative and operational efficiency.
  • The new Public Finance Act requires intra-vote reallocations to be approved by the Ministry of Finance, which enhances transparency and accountability but reduces flexibility for spending units.
  • The Ministry of Finance is encouraged to monitor reallocation requests and publish a summary report at the end of the fiscal year.

• Government Resources:

  • Revenue collection increased to 12.2% of GDP in FY01 due to VAT on petrol and higher oil prices.
  • However, domestic revenue remains low, with a narrow tax base and high marginal effective tax rates.
  • Revenue to GDP ratio has not improved significantly, but the government's resource base has expanded due to high economic growth.
  • The report recommends that the taxation system should be reformed to be more equitable and supportive of economic growth rather than solely focused on increasing the revenue to GDP ratio.

• Expenditures:

  • Central government expenditure rose from 15% of GDP in FY99 to 17.2% in FY01.
  • The majority of the increase was in non-wage, non-interest expenditures, while wage and interest payments remained relatively stable.
  • The shift from wage to non-wage expenditures has reduced the disequilibrium in public spending, which previously constrained efficiency.
  • The Ministry of Finance is encouraged to prioritize non-wage expenditures and improve service conditions in the public sector.
  • The Medium Term Wage Policy is recommended for implementation as a key fiscal strategy, rather than treating wage increases as a residual decision.
  • Development expenditures are largely donor-funded, with the government providing only limited counterpart funding.
  • Sector-wide approaches in health and education are steps toward better donor integration, but more work is needed in other sectors like agriculture and water.
  • Retrenchment costs from public enterprise restructuring are significant, with an estimated Tsh. 19.9 billion for 21,556 employees in key parastatals.
  • The Ministry of Finance retains a large amount of unallocated funds (Tsh. 232.4 billion in FY02), which could dilute expenditure prioritization.
  • It is recommended that the Ministry of Finance minimize the need for retaining unallocated funds and better integrate wage bill management into the budget process.

• Integration of Donor Resources:

  • Donor integration has improved, with a greater share of support coming through the budget rather than project-based aid.
  • The reporting format for donor assistance has been enhanced, leading to better coverage of project support in the budget.
  • About 80% of project and program aid is reflected in the budget, with 50% captured in appropriation accounts.
  • The report notes that earlier PER reports excluded certain types of external assistance (e.g., NGO, private sector, in-kind aid), which is now included in the analysis.

II. Fiscal Risks

• Sources of Fiscal Risks:
  • Public Enterprise Debts:
    • Parastatals that have been or are being privatized have substantial liabilities, including suppliers' credits, trade credits, staff dues, and commercial loans.
    • These liabilities are estimated at Tsh. 280.47 billion, with 92.6% related to entities still in the privatization pipeline.
    • The domestic debt report recorded a much lower figure (Tsh. 28.3 billion), indicating a significant underestimation.
  • Non-Securitized Liabilities:
    • Non-securitized liabilities, such as suppliers' arrears and compensation claims against nationalized assets, amount to about Tsh. 172 billion.
    • These liabilities are likely to have fiscal implications in the near future.
  • Independent Companies:
    • The government has direct interest in some independent companies, which could expose it to risks in international arbitration.
    • It is recommended that the government obtain legal opinions on potential exposures and apply the same standards for debt contracting as for public debt.
  • Retrenchment Costs:
    • Retrenchment costs for public enterprises are significant, with an estimated Tsh. 19.9 billion for statutory payments alone.
    • Most parastatals lack the financial capacity to meet these costs, so the burden will fall on the government.
  • Commitment Control and Monitoring:
    • The government has made progress in commitment control through the implementation of the Integrated Financial Management System (IFMS).
    • MOF can monitor daily deviations from the budget and generate timely reports for analysis.
    • The government has also improved transparency by disclosing allocations quarterly in the media and on notice boards.
    • The report highlights the need for strict sanctions against accounting officers for extra-budgetary commitments, especially for votes 28, 29, 38, and 39.

Key Recommendations

• Implement quarterly budget releases for all spending units to improve efficiency.
• Develop a strategy to adjust the cash budget system to accommodate cash flow plans while maintaining fiscal sustainability.
• Publish a summary report on reallocations at the end of the fiscal year.
• Reform the taxation system to be more equitable and growth-supportive.
• Strengthen the integration of donor resources into the budget process, especially in sectors like agriculture and water.
• Monitor the implementation of the Medium Term Wage Policy to improve public sector capacity.
• Keep staffing levels and skill mix under review and adjust as necessary.
• Minimize the retention of unallocated funds and better integrate wage bill management into the budget process.
• Obtain legal opinions on potential risks from parastatal liabilities and ensure that all entities with government interest follow the same debt contracting standards.
• Continue to monitor and enforce commitment control, especially for high-risk sectors like police, prisons, defense, and national service.
• Focus on reducing arrears and ensuring compliance with the centralized commitment system.

Summary of Key Data

• Fiscal Deficit (as % of GDP):

  • FY00: 0.5%
  • FY01: 1.2%
  • FY02: Targeted at 2.5%

• Government Revenue (as % of GDP):

  • FY01: 12.2%

• Foreign Aid (as % of GDP):

  • FY99: 5.6%
  • FY01: 6.8%

• Unallocated Funds Retained by Ministry of Finance:

  • FY01: Tsh. 45.5 billion
  • FY02: Tsh. 232.4 billion

• Retrenchment Costs (for 5 key parastatals):

  • Tsh. 19.9 billion

• Arrears Cleared for Payment (as % of total):

  • Goods & Services: 53.1%
  • Utilities: 70.5%
  • Personal Emoluments: 64.4%
  • Total: 61.5%

Conclusion

The report emphasizes the importance of strengthening public expenditure management, improving fiscal transparency, and integrating donor resources more effectively into the budget process. It highlights the need for a balanced approach to fiscal stability and efficiency, with a focus on long-term sustainability and accountability. The government is encouraged to continue its efforts in reforming the budget system, improving revenue collection, and managing the risks associated with public enterprise restructuring and donor integration.