2007年-世界发展银行全球_United_Republic_of_Tanzania_-_Public_Expenditure_and_Financial_Accountability_Review_for_FY07_90页_1mb

Summary of the United Republic of Tanzania Public Expenditure and Financial Accountability Review – FY07

Core Content

This report is part of the FY07 Public Expenditure and Financial Accountability Review (PEFAR) for Tanzania, conducted by a team comprising the World Bank, UN agencies, and other development partners. It aims to provide a comprehensive and candid assessment of Tanzania's public financial management (PFM) system, with a focus on fiscal performance, budget preparation, execution, reporting, and local government expenditure. The report was prepared in the context of the National Strategy for Growth and Reduction of Poverty (MKUKUTA) and the Government of Tanzania's (GoT) commitment to improving accountability and resource allocation.

Main Findings

1. Fiscal Performance

• Domestic Resource Mobilization: Performance remains encouraging, but non-tax revenue needs significant improvement.
• Strategic Resource Allocation: Expenditure plans have not fully reflected MKUKUTA's emphasis on growth, particularly in growth-promoting expenditure and investment priorities.
• External Financing: External financing has grown rapidly, from 6% to 12% of GDP over the past five years. This highlights the need for a medium to long-term aid strategy to address absorption constraints and impact on expenditure composition.
• Wage Bill Management: A robust strategy for pay reform is critical for public service reform and capacity building. Consolidation of allowances within the wage bill is a key element, but it appears the policy commitment has been abandoned in later stages of budget preparation.
• Fiscal Challenges: While short-term fiscal management remains strong, the issues above pose significant challenges for strategic resource allocation in the medium term. Improving the Budget Guidelines and Medium Term Expenditure Framework (MTEF) is essential.

2. Budget Preparation

• Planning Issues: There are significant discrepancies between MDA requests and proposed budget ceilings, with an average ratio of 35% to 45% for 2007/08 to 2009/10. Requests are unrealistic and overly detailed.
• Recommendations:
  • Early guidance on resource constraints to MDAs based on MTEF year 2.
  • Refocusing early budget preparation on strategic allocation, avoiding detailed activity classification.
  • Strengthening the predictability of the MTEF, including more realistic treatment of external financing.
  • Scenario analysis should be the initial stage of future budget preparation, with a finalized work-plan for next year's budget guidelines.
• SBAS and MTEF: Review of SBAS/MTEF expenditure categories should be integrated with budget classification to ensure alignment with national strategic goals.

3. Budget Execution

• Deviation Analysis: The overall index of budget deviation improved from 23.7% in 2004/5 to 14.3% in 2005/6, partly due to the impact of drought and reorganization following the 2005 general elections.
• Within-Year Predictability: Despite some improvement, cash flow plans prepared by MDAs are poor predictors of disbursements, especially in the first quarter. Uncertainty in release timing disrupts program implementation and undermines the case for general budget support.

4. Budget Reporting and Transparency

• Reporting Gaps: There is a lack of reporting on expenditure by MKUKUTA objectives and targets, despite the use of the Strategic Budget Allocation System (SBAS) and Government's commitments.
• Data Collection: Data collection and reconciliation remain challenging, with limited access to budget planning/execution documents and inconsistencies in data.
• Transparency Needs: Routine reporting on MKUKUTA expenditure is critical for accountability. The PEFAR team welcomed the initial draft of the reporting format and will provide detailed feedback.

5. Local Government

• Financial Transfers: Intergovernmental financial transfer schemes are complex and overlapping, making them difficult to monitor. Transparency in documenting flows from the central government budget to local government authorities (LGAs) is lacking.
• Development Transfers: Self-reported data show that sectoral development transfers to LGAs have been significantly lower than budgeted, with large variances between sectors and sources of funding.
• Improvement Needed: The GoT needs to address these challenges through simplification of intergovernmental transfers and better monitoring mechanisms.

6. Supporting Future Reform

• Reform Areas: Identified areas for reform include scenario analysis, strengthening budget preparation, improving cash management, and assessing intergovernmental transfers.
• PFMRP Role: The Public Financial Management Reform Program (PFMRP) should serve as the platform for these reforms. It needs to be restructured to become a comprehensive and credible reform program.
• New Strategy: The MoF has acknowledged the weaknesses of the current PFMRP and is working on a revised strategy, with a first draft expected in September 2007. The new strategy should address findings from key diagnostic reviews and the Controller and Auditor General's reports.

Key Information

• Fiscal Year: July 1 – June 30
• Exchange Rate: US$1 = TSh 1,140
• Main Objectives: Support the budget process and provide an external review of fiscal developments.
• PEFAR Team Members: World Bank, University of Dar es Salaam, IMF, AFRITAC, European Union, KfW, Canada, Finland, Ireland, Sweden, and Haki Elimu.
• Key Stakeholders: GoT, Development Partners (DP), World Bank, UN agencies, bilateral and multilateral donors, research institutions, and NGOs.
• Main Challenges:
  • Inadequate strategic resource allocation.
  • Poor budget preparation and execution predictability.
  • Limited transparency in reporting and intergovernmental transfers.
  • Inconsistent data collection and reconciliation.
• Recommendations:
  • Improve strategic resource allocation through better alignment with MKUKUTA.
  • Enhance budget preparation by providing early guidance and focusing on strategic allocation.
  • Strengthen cash management and budget execution predictability.
  • Simplify intergovernmental transfers and improve transparency.
  • Finalize scenario analysis work-plan and integrate it into the budget process.
  • Revise the PFMRP to make it a comprehensive reform program.

Conclusion

The PEFAR highlights the need for a more strategic and transparent approach to public financial management in Tanzania. While fiscal performance and short-term management have been robust, long-term sustainability and strategic alignment require urgent attention. The review provides a foundation for future reforms, particularly in the areas of budget preparation, execution, and reporting, as well as intergovernmental financial transfers. The PFMRP is expected to play a pivotal role in addressing these issues and improving the overall quality of public financial management in the country.