Report No. 22078-TA
The United Republic of Tanzania Public Disclosure Authorized Public Expenditure Review FY00 (In Two Volumes)
Volume I:
Public Disclosure Authorized Main Report
January 2001 Public Disclosure Authorized
Government of Tanzania and The World Bank Macrocconomics 2, Africa Region Public Disclosure Authorized FIELC ZT Ci 'VERNMTENTFISCAL. YEAR
July 1 - June 30 (FY00 or 1999/00 = July 1, 1999 to June 30, 2000)
CURRENCYEQUIVALENTS
Currency Unit = Tanzanian Shilling (T Sh) Interbank Maiket mid-rate: US$1.00 = T Sh 8/7.0 (April 16, 2001)
ABBREVIATIONS AND ACRONYNIS
ADT average daily traffic N1ECTANational ExamiinationsCouncil of AfDB African Development Bank T.anzarfia AIDS Acquired Immune Deficiency Syndrome NBC National Bank of Commerce AITF Agricultural Lnputs Trust Fund NGO non governmental ofganization ASYCUDA Computerized Customs Reporting and O&E organizational and efficiency (reviews) Recording System (IJNCTAD) O&M operations and maintenance BEMP Basic Education Master Plan OC other charges BOP Balance of Payment OECD Organization for Economic Cooperation BOT Bank of Tanzania and Development CBMS Cash Budget Management Systems OUT Open University of Tanzania CG Consultative Group PAYE pal as yon ear CSRP Civil Service Reform Programme PE personnel emoluments DANIDA Danish International Development PER Public Expenditure Review Agency PFP Policy Framework Paper DEO District Education Officer PHC Primarv HealtlhCare DMO District Medical Officer PSWB Public Sector Wage Bill DMT District, Municipal and Town Councils PT.R pupil teacher ratio ESAF Enhanced Structural AdjustmentFacility REO Regional Engineer's Office ESP Education Sector Programme REPFB Rolling Plan and Forward Budget FAO Food and Agriculture Organization SAC Structural Adjustment Credit GDP gross domestic product SAL Structural Adjustment Lending GNP gross national product SGR Strategic Grain Resenre GOT Government of Tanzania SIP Sector Investment Program HIPC Highly Indebted Poor Countries Debt SPA Special Program of Assistance Initiative SSA Sub-SaharanAfrica HIV Human Immuno-deficiencv Virus STD SexuallyTransmitted Disease IDA International Development Association TAC Tanzania Audit Corporation IMF International Monetary Fund TANESCO Tanzania Electric Supply Company IRP Integrated Roads Project TAZARA Tanzania Zambia Harbours Authority MAC Ministry of Agriculture and Cooperatives TB Tuberculosis MANTEP Educational Management Training THA Tanzania Harbours Authority Institute TRA Tanzania Revenue Authority MOEC Ministry of Education and Culture TRC Tanzania Railways Corporation MOF Ministry of Finance TTC Teacher Training Colleges MOH Ministry of Health UDSM University of Dar es Salaam MSTHE Ministry of Science, Teclmology and UNDP United Nations Development Program Higher Education UPE Uriversal Primary Education MTEF Medium Term Expenditure Framework VAT Value Added Tax
Vice President CallistoMadavo Director: James W. Adams SectorManager: FrederickKilbv Task Team Leader: BelmoNdulu CONTENTS
1. PER PROCESS FOR FY00...... 1. 1.1 AN OVERVIEWOF PER FY00 ...... 1... 1.2 TECHNICAL STUDIES IN SUPPORT OF IMPROVED BUDGET MANAGEMENT ...... 2 1.3 IMPLEMENTATIONOF PER FY00 ...... 4.. 1.4 LESSONSAND PROSPECTUS OF WORKFOR PERFYOI F...... 5 . 2. REVIEW OF FISCAL PERFORMANCE ...... 9 2.1 INTRODUCTION...... 9...... 9 2.2 AGGREGATEFISCAL DEVELOPMENTS ...... 9 Domestic Revenue and Foreign Inflows ...... 9.. Government Expenditures...... 1.. Deficit Financing ...... 13.. Budget Implementation ...... 1. 2.3 SECTORALALLOCATIONS AND PRIORITIZATION ...... 15 2.4 OPERATIONALEFFICIENCY ...... 19. Public Sector Reform Program ...... 2D. Availabilitv of Resourcesfor Operations and Maintenance ...... 2.0 Predictabilitv ofResource Availability ...... 22 2.5. OPERATIONAL EFFICIENCY - FINDINGS OF THE COMPTROLLER AND AUDITOR GENERAL ... 26 Introduction..226. Main Findings.. 27.. 2.6 ASSESSMENT OF INSTITUTIONS FOR IMPROVED BUDGET PERFORMANCE .9 2.7 ROAD FUND MANAGEMENT. 34. Background .. 34.. Key Issueson Road Fund Management .. 34 3. SYSTEMIC FISCAL ISSUES. 3
3.1 THE PLIGHT OF THE DEVELOPMENT BUDGET...... 3.8 3.2 DESIRABLELEVEL OF REVENUEMOBILIZATION ...... 41 3.3 FISCALRESTRAINT AND CASH BUDGETMANAGEMENT SYSTEM ...... 43 3.4 MACROECONOMICSTABILITY AND DEBT SUSTAINABILITY...... 45 3.5 CO-EXISTENCE OF OVERALL FISCAL SURPLUS SIDE BY SIDE WRITHUNDER-FUNDING OF PRIORITY SECTORS .. 46.. 3.6 CONCERN ON ABSORPTIVE CAPACITY CONSTRAINT WITH INCREASING RESOURCES .46 3.7 EARMARKINGOF REVENUEAND THEEFFECTIVENESS OF BUDGETMANAGEMENT .47 3.8 PREDICTABILITYOF DONOR RESOURCES. 47 4. FISCAL POLICY AND THE MACROECONOMIC CONTEXT .49
4.1 INTRODUCTION...... 49. 4.2 LINKS BETWEEN PUBLIC AND PRIVATE ACTIVITIES...... 50 4.3 RESOIJRCESLIKELY TO BE AVAILABLETO THE GOVERNMENT FY01 - FY03 ...... 51 4.4 THE GUIDELINESDOCUMENT ...... 53. 4.5 ASPECTSOF DOMESTICCREDIT...... 54. 4.6 FISCALOPTIONS ...... 56.. 4.7 CONCLIJSION ...... 5 5. EDUCATION SECTOR .6. 5.1 BASICEDUCATION ...... 6.. 5.1.1. Scope of the PER FY00 ...... 60. 5.1.2 Recent Development&...... 6D. 5.1.3 Expenditure Trends...... 61. 5.1.4 Performance Trends ...... 62. 5.1.5 Regional Variation...... 63. 5.1.6 Budget and Expenditure Projections ...... 6.4 5.1.7 Next Steps...... 4. 5.2 HIGHER AND TECHNICALEDUCATION ...... 66 5.2.1 Recent Developments and Education Policy Context...... 66 5.2.2 Sub-Sector Performance 1994-2000 ...... A6 5.2.3 Financing of Higher Education ...... 68 5.2.4 Analysis of Efficiency and Effectiveness of Higher and Technical Education ...... 72 5.2.5 Review of Higher and Technical Education Sub-Sector Expenditure .:...... 75 5.2.6 Policy Recommendations ...... 78 6. HEALTH SECTOR ...... 6.1 INTRODUCTION.D Background..80. Health Sector Reforms . 6.2 HEALTH POLICY OBJECTIVES.. . 6.3 STATUS OF THE HEALTH SYSTEM . L 6.4 PUBLIC EXPENDITURE PERFORMANCE .82 Background .. 82. Analysis of Expenditure Trends in the Health Sector .. 82 Sub-Sector Budget Allocations .. 83. Analysis ofHealth Sector Funding Requirement ... 84 Priority Areas .. 84.. Proposals for the FYO Budget .. 86. 7. WATER SECTOR ...... K 7.1 INTRODUCTION...... 8 Water Sector PER Objectives for FY01...... 827 PER Study Approach and Methodology ...... 7 7.2 ISSUES RELATED TO BUDGET PERFORMANCE FOR FY98-FYOO ...... 87 Total Budget ...... 87 Capital Budget Issues ...... 8 . Recurrent Budget Issues ...... 8. Budget Ceiling ...... 89.. Impact oJfExpenditure on Water Sector Development ...... 89 7.3 INSTITUTIONAL FRAMEWORK AND CAPACITY BUILDING ...... 9.0 Main Institutional Administrative Issues and Concerns...... 91 7.4 CURRENT STATUS OF WATER SECTOR PERFORMANCE ...... 91 Surface Water ...... 91 Groundwater ...... 92.. Rainfall ...... 92.. Rural Water Supply ...... 92. Urban Water Supplv and Sewerage .. 93. Irrigation .. 9.9...... Hydropower Generation ...... 94. Conflicts in JaterUses ...... 95. 7.5 WATER SECTOR POLICY OBJECTIVES AND PRIORITIES FOR THE FY01I ...... _ ...... 95 The Development and Water Sector Vision ...... 95 Ministry of Water Mission and Water Sector Policy Objectives ...... 96 Water Sector Priorities for FY01...... 9.6. Optionsfor Imiproving the Impact of the Budget on the Water Sector ...... 9 7 Reforms NtotWell Captured in the Current Budgeting...... 97 Ongoing Resource Deployment Reform ...... 98 Measures to Reduce Aid Dependency and Enhance Optimal Utilization ofResources ...... 98 Water Sector Budget Outlook for FY01 ...... 98 8. ROADS SECTOR ...... DD 8.1 THERoAD NETWORKIN TANZANIA. lO 8.2 GOVERNMENTVISION FOR THE ROADSDEVELOPMENT .100 8.3 ROLE OF PARENTMINISTRIES . 101 8.4 THE ROAD FUND.101 8.5 THE "NEW" MOW AND TANROADS .102 8.6 MOW OVERALL EXPENDITUREPERFORMANCE FY98-FY00 .102 8.7 MOW EXPENDITUREON ROADS. 1.03 8.8 LOCAL AUTHORITIESEXPENDITURE ON ROADS. 104 8.9 DONOR COMMUNITYRESOURCES FOR ROADS .105 8.10 RECOMMENDATIONS.SW *e***...... 106 9. AGRICULTURE ...... 1.D 9.1 OBJECTIVESOF THE FY0 I AGRICULTURALSECTOR PER ...... 108 9.2 PERFORMANCEOF THE AGRICULTURALSECTOR .108 9.3 BUDGETPERFORMANCE FY98-FYOO .110 9.4 CONSTRAINTSAND FUTUREPROSPECTS OF THE AGRICULTURESECTOR. 1.1 9.5 RESOURCESAVAILABLE TO THE AGRICULTURALSECTOR. 1.12 9.6 PRIORITYAREAS FOR UTILIZINGMEAGER RESOURCES.113 9.7 POLICYRECOMMENDATIONS .113 10. JUSTICE.US... 1 10.1 INTRODUCTION. 1.15
10.3 MAJOR ISSUES.1.15 10.4 GOVERNMENTEXPENDITURE ON MJCA .116 10.5 ALLOCATIONSWITHIN THE MJCA .117 10.6 ACTUALRECURRENT EXPENDITURE BY DEPARTMENTS AND ZONES.1 117 10.7 RECOMMENDATIONS.120
ANNEXES: ANNEX 1: MINUTES OF CONSULTATIVE PER MEETING ANNEX 2: DATA TABLES:
Table 2.1: GovemnmentRevenue and ExtemnalGrants, FY95 - FY00 ...... 10 Table 2.2: Foreign Inflows - Grants and Loans, FY95 - FY00 ...... 11 Table 2.3: Government Expenditures, FY95 - FY99...... 1.1 Table 2.4: Civil Service Employment, FY97-FY99 (December of each year) ...... 12 Table 2.5: Civil Service Average Salaries, FY97-FY99 ...... 12 Table 2.6: Financing of the Fiscal Deficit, FY95 - FY00 ...... 13 Table 2.7: Sources of Budget Shocks ...... 14. Table 2.8: Sectoral Shares in Total Recurrent Expenditures - Actual ...... 15 Table 2.9: Sectoral Growth Rates of Recurrent Expenditures - Actual ...... 16 Table 2.10: Sectoral Shares in Total Development Expenditures - Actual ...... -16 Table 2.11: Recur Expenditurerent in the Priority Sectors. 1997/99-FYOO...... 18 Table 2.12: Change in Allocations and Exchequer Releases to Priority Sectors. FY00 (July-February).... 18 Table 2.13: Development Expenditure in the Priority Sectors (as % of total recurrent expenditure), 1997/98-FYO ...... 19.. Table 2.14: Sectoral expenditures on OC and PE, FY99-FYOO...... 21 Table 2.15: Key Institutional Arrangement and Expenditure Outcome&...... 29 Table 2.16: Revenue Collected by Treasury but not included hi the Road Fund (Tsh. million).35 Table 2.17: Road Fund (fuel levy) Collection, FY97 - FY00 (Tsh. Million) ...... 35 Table 3.1: Marginal Effective Tax Rate on Capital for Foreign Firms (Applying Uganda's Non-Tax Parameters to Kenya and Tanzania) ...... 42 Table 3.2: Marginal Effective Tax Rate Cost of Production for Foreign Finms (Applying Uganda's Non- Tax Parameters to Kenya and Tanzania) ...... 42 Table 4.1: Budget allocation as share of requirement for priority activities in various sectors (%) ...... 53 Table 4.2: Financial variables in % of GDP ...... 55 Table 5.1: Share of Actual Recurrent Budget Expenditure, 1992/93 - FY99 ...... 61 Table 5.2: Performance Indicators in Primary Education ...... 62 Table 5.3: Perfonnance Indicators in Secondary Education ...... 63 Table 5.4: Performance Indicators in the Teacher Training Sub-Sector ...... 63 Table 5.5: Regional Variation on Selected Performance Indicators...... 64 Table 5.6: Main Problem Areas and Suggested Remedies for Higher Education and Technical Development in Tanzania ...... 7.1. Table 5.7: Teacher-Student Ratios in Selected Higher and Technical Education ...... 73 Table 5.8: Proportion of Funds Allocated to Various Expenditure Items for Universities in Africa, Europe and UDSM ...... 74.. Table 5.9: Main Efficiency Problem Areas and Suggested Remedies for Higher and Technical Education in Tanzania ...... 74.. Table 5.10: Trends in Higher and Technical Education Funding in Tanzania 1993-1999(%)...... 75 Table 5.11: : Tanzania: Higher and Technical Education Expenditure By Purpose: 1993-1999 Percent of Sub-Vote (Actual, %) ...... 7.6.. Table 5.12: Trends in Government Development Expenditure in Higher and Technical ...... 77 Table 5.13: Predictability of Resource Flows to Higher and Technical Education in Tanzania (°/O)1994- 1999* ...... 78 Table 6.1: Government Budgets and Actual Expenditures for Health Sector in Billion Tanzania Shillings...... 83. Table 6.2: Sub-services/Functions Breakdown of Government Recurrent Budget for Health - FY99 ...... 84 Table 6.3: Funds Requirements and Proposed Allocation of Funds for Priority and Activities in the Health Sector. (Millions of Tshs)...... 85. Table 7.1: Projected Total Budget Outlook for FY01 - 2003/04 ...... 9.8 Table 7.2: Breakdown of Capital Budget Outlook for FY01 ...... 99 Table 7.3: Breakdown of Recurrent Budget Outlook for FY0O1...... 99 Table 8.1: Road Network by Type Surface and Condition (in km)...... 1.00 Table 8.2: Government allocation of resources to the road sector (in mill. Tsh.) ...... 103 Table 8.3: Resources allocation for road maintenance and rehabilitation (mil. Tsh.) ...... 104 Table 8.4: Road Fund collection and allocation to MOW and PMO/MRALG (in mill. Tsh.) ...... 105 Table 8.5: Flow of resource form donors (in mil. Tsh.) ...... 105 Table 9.1: Agriculture GDP and Growth Rates (in constant 1992 prices) ...... 1 08 Table 9.2: Cash Crops Production (in metric tons) ...... l09 Table 9.3: Recurrent Budget for FY98-FYOO (Mil. Tsh) ...... llI Table 10.1: Actual Government Expenditure on MJCA, FY98 and FY99 (Million Tsh. and Percentages) ...... 116. Table 10.2: Distribution of MJCA Expenditure by Departments (million Tshs) ...... 1 17 Table 10.3: Actual Recurrent Expenditure in the Judiciary Department in terms of PE and OC (in percentage) ...... 118 Table 10.4: Development Expenditure on MCJA (TShs. Million and %) ...... 119 PREFACE
As in previousyears, the FY00Public Expenditure Review (PER) process had the twin objectivesof (a) providingsupport to the Governmentof Tanzaniain the preparationof its budget and MediumTerm ExpenditureFramework (MTEF) and (b) undertakingan external evaluationof Tanzania'sbudget performance. The process was led by the Ministryof Finance.The program of work for PER FY00was carriedout with financial and technicalsupport from various donors, including the WorldBank, European Union, UNDP, DFID,Denmark, Sweden, Switzerland, and Finland. This report presents the mainoutputs of the FY00PER processin Tanzaniain two volumes. VolumeI consistsof three major parts: Part 1 describesthe main featuresof the PER processas implementedduring FY00. Part 2 presentsthe mainfindings emerging from a review of fiscal performanceand public expendituremanagement in Tanzania. In addition, part 2 containsa discussionof systemicfiscal issues that are critical to enhancingthe efficiencyand effectivenessof public expendituresin Tanzania. Part 3 contains summaries of the updates of sectoral expenditurereviews which were undertakenby the prioritysector ministries with the supportof local and international consultants. The sectorscovered include education, health, water, agriculture,works, lands and justice. The volume also containsa data annex and the minutes of the consultativePER meetingheld in May2000. VolumeII presentsthe Government'sMTEF for FY01 - FY03,which was discussedat the consultativemeeting in May 2000. The MTEF consistsof a descriptionof the macroeconomiccontext, a cross sectoralMTEF which providesthe resourceenvelopes for individualsectors, and sectorMTEFs of the priority sectors,i.e., education,health, water, works, agriculture,justice and lands. In addition,the MTEF also containsa detaileddiscussion of the public sectorreform program and the HIV/AIDSpandemic, which is clearlyidentified as a key challengefor Tanzania'sdevelopment efforts which requiresa multi-sectoralapproach to containits spread.
Thisreport is a joint effortof the Governmentof Tanzaniaand a teamconsisting of a WorkingGroup drawnfrom the WorldBank, other UN agencies,bilateral donors, research/academicinstitutions and NGOs. The joint-donormission in November! December1999 consisted of: BennoNdulu (mission leader, AFMTZ), Philip Mpango, Ben Tarimo(AFMTZ); Sumana Dhar, RobertUtz (AFTM2);Hamisi Mwinyimvua (Universityof Dar es Salaam);Frans van Rijn (NetherlandsEmbassy), Charlotta Norrby (SwedishEmbassy), Torben Lindqvist(Danish Embassy) and Stevan Lee (DFID). A follow-upmission in March-April,2000 was launched to assist the Governmentto preparethe cross-sectorMTEF and sectorMTEFs. The report was writtenunder the supervisionof FrederickKilby, Sector Manager, AFTM2 and Peniel Lyimo, Deputy Permanent Secretary,Ministry of Finance, Governmentof Tanzania. Allister Moon, Senior Economist,ECSPE, and Anand Rajaram,Senior Economist,PRMPS, provided valuable comments and directionas peer reviewers.
The documentwas producedby Patrick Mamboleounder the guidance of Roboid Covington(AFTM2).
PART I
THE PER PROCESS
1. PER PROCESSFOR FY0O
1.1 AN OVERVIEW OF PER FY00
1.1 The PER Working Group (PER WG), led by the Ministry of Finance, met in August 1999 to agree on the prospectus for the FYOO PER. The group involves sector ministries, donor representatives, academic and research organizations, the private sector, and representatives of civic organizations. The main activities of the PER process for FYOO were focused on three main objectives: (i) to provide direct support to the Government budgeting process, with particular emphasis on the preparation of the budget guidelines and the Medium Term Expenditure Framework (MTEF), (ii) to monitor the composition of expenditure allocation and effectiveness vis-a-vis what was agreed in the previous budget and MTEF, and (iii) to support the development of budget management systems and address key systemic issues in fiscal management. 1.2 The PER activities were organized in two phases. In the first phase (August December) the focus was on undertaking analysis which would provide advice to the Budget Guidelines Committee and guide the updating of sector MTEFs. In the latter, studies were commissioned to obtain updated cost estimates for priority sectors' activities and project financial requirements for the delivery of desirable packages of services. The priority sectors included education, health, water, agriculture, rural roads and for the first time judiciary and lands. As in the previous years, the final activity in the first phase is the assessment of the effectiveness of public spending, which also feeds into the preparation of the budget guidelines. This was carried out by an independent mission led by the Bank with emphasis on assessing aggregate fiscal balance, allocative efficiency and equity in the composition of spending, and technical efficiency in the use of budgeted resources. In addition, the mission also identified some of the critical systemic issues which impinge on the efficacy of budget management. 1.3 The Working Group organized itself into a Macro Group and several sector groups. The macro group focused on ensuring that expenditure plans are consistent with a prudently projected resource envelope and overall macroeconomic stability. It was also charged with the task to provide on advice how resources availed through budget support and HIPC debt relief can be properly reflected in the financing of pro-poor expenditures. Furthermore, the group provided advice to the BG Committee on cross sector prioritization of expenditure allocation based on a variety of Government of Tanzania (GoT) documents. projections of the resource envelope and analysis. 1.4 In the second phase the focus was on preparation of the sector MTEFs and a broadened dialogue amongst all stakeholders on past performance, the next budget frame and the medium term public spending framework. The PER Working Group organized its
I support around priority sector working groups, which also interacted with the macro group to ensure consistency with the cross sector allocations and the projected aggregate resource envelope. Since simultaneously the GoT continued to hold consultations with the IMF on the macroeconomic frame projections, the macro group took this information into account to advise on any further revisions to the guidelines. 1.5 The second phase ended with a PER consultative meeting, which is an open forum to review the previous and current spending programs; review prioritization in expenditure allocation across sectors in the next budget year as well as the coming three years; and identify critical issues for further improvement of the budget process. Like in the past the participation was very broad and open as the detailed report on the meeting in this volume shows. The meeting also drew lessons from the just ending PER process and proposed improvements of the process for the following year. 1.6 The PER process closed with the last meeting of the PER Working Group in June 2000, after finalization of the budget and revisions to the MTEF. This meeting reviewed inputs from the consultative PER deliberations and discussed a preliminary PER agenda for the next fiscal year.
1.2 TECHNICAL STUDIES IN SUPPORT OF IMPROVED BUDGET MANAGEMENT
1.7 The PER WG commissioned and funded several studies to address selected issues in budget preparation and management, and in medium term strategic resource allocation. (i) Assessment of Aggregate Fiscal Sustainability: Analysis of aggregate fiscal sustainability, carried out by a consultant from Oxford University, helped underpin the resource envelope projections for FYOI-03. Particular attention was paid to the effects of projected expenditure expansion with additional resources from HIPC debt relief and continued expansion of new flows. A key issue was to what extent can the relief and new flows finance increased spending sustainably. T he analysis also assessed the debt sustainability requirements of a new borrowing program after relief has been secured so as to avoid a relapse to unsustainable debt levels. (ii) Analysis of Development Budget and Counterpart Funding: A major weakness of the development budget is that actual disbursements have tended to fall far short of donor commitments. One of the critical constraints to the disbursement of project funding, the dominant donor financing modality of the development budget is non-availability or delayed release of counterpart funding for projects supported by multilateral institutions. A study carried out by a local research institution, ESRF, reviewed the procedures and donor practices as well as the Government budget and planning processes to identify the main problems behind low out-turn of the development budget and the place of counterpart funding in this problem (iii) Review of Program - Project Support Balance: The overall objective of this analysis was to collect information on the past and current composition of external assistance between program and project support, and to identify the imperatives for shifting it in favor of program support. More specifically to (i)
2 document current policies and practices of the main donors in the allocation of external assistance, (ii) to identify the main requirements (e.g. prudent accountability and management systems) to induce the desired shift from project to programnsupport, (iii) to analyze the magnitude of development spending overheads, such as the cost of project management units (PMUs) and technical assistance (TA) (iv) to gather perceptions on the issue of fungibility of project support. This task was done by bilateral donors as part of a joint World Bank- bilateral donors PER mission. (iv) Poverty Monitoring Indicators and International Development Targets (IDTs): The development of poverty monitoring indicators is crucial for monitoring effectiveness of poverty reduction programs and tracking progress in achieving government commitments to IDTs. Furthermore, under the Local government Reform Program (LGRP) performance indicatorsare necessary for adopting result orientation in the operation of district block grants and for needs assessment in block grant allocation. The PER process provides an opportunity to mainstream this approach through sector MTEFs and subsequent assessmentof achievements in each sector. It was agreed that this work be done by a local consultant (REPOA) partly based on related work on the achievability of the IDTs in Tanzania undertaken by OPM and REPOA as part of a wider DFID- commissionedstudy to feed into the World DevelopmentReport 2000. (v) Tracking of the Road Fund: The aim was to examine the entire process governing the operation of the Road Fund, and more generally, the management of road maintenance in Tanzania at a time when new institutions responsible for these are being set up. The study analyzed the collection and utilization of the Road Fund resources over the last three fiscal years and the capacity and management procedures which were applied for those in order to identify the problems which need to be addressed under the new structures and procedures. (vi) PER FY99 update work: The broad objectives of the exercise included doing a review of recent developments in each of the priority sectors by sub-sectoral components and institutional arrangements as well as roles of other stakeholders (private and public). Other considerations included making an assessment of how the sector in question performed relative to installed capacity; making an objective professional assessment of the quality of service delivery from the perspective of users of the service or product; defining needs and priorities for the sector; providing an update of what is a reasonable package of service and what it takes to deliver this package (come out with strategic costing over the medium term constrained by the resource envelope) and recommend available options. (vii) Update of Cross-sector and Sector MTEFs: The work program for PER FY00 included updating the cross-sector and sector MTEFs. The work of developingthe cross-sector MTEF was led by the macro sub-group of the PER working group focusing on projecting the resource envelope (including resources expected to be freed from debt service obligation under HIPC debt relief initiative) for MTEF. This entailed an analysis of Tanzania's revenue effort and checking for consistency of the resource envelope with the agreed medium term macroeconomic frame and soliciting data on projected disbursements by donors over the medium term. The macro group also examining expenditure prioritization to ensure that it is consistent with the agreed macroeconomic objectives as well as economic infrastructure and social service improvements for poverty reduction. The exercise of developing sector MTEFs was confined to the priority sectors including education, health, water, agriculture, roads as in the previous year and two additional priority sectors - Judiciary and Lands. The strategy of gradually extending the MTEF coverage is guided by the objective of ensuring quality of the MTEFs in an environment of limited human capacities in this area. The sector MTEFs were put together by the sector groups from the sector ministries as was the case during PER FY99. However, prior hands-on- training of Government staff involved was conducted. The training focused on reviewing existing planning and budget processes and developing detailed steps to be followed in the preparation of MTEF based budgets. The Ministry of Finance also issued a common format to be followed by all priority sector ministries in preparing the sector MTEF and budget for FY01. The MTEF training was organized by the Economic and Social Research Foundation (ESRF) under IDF support for capacity building with the help of a foreign consultant. 1.8 The program of work for PER FY00 was carried out with the help of financial and technical support from various donors, including The World Bank, European Union, L,NDP, DFID, Denrnark, Sweden, Switzerland, and Finland.
1.3 IMPLEMENTATION OF PER FY00
1.9 The strategy adopted to implement PER FY00 was to consolidate and deepen the approach adopted since PER FY98. The principal idea was to build on strengthened collaboration and partnership invigorated under the PER process for FY99. The implementation process was steered by a broadened PER working group under the chairmanship of the Deputy Permanent Secretary, Ministry of Finance. In addition to the original members of the working group from the priority sectors (health, education, water, roads, and agriculture), Planning Commission, Ministry of Regional Administration and Local Governments, research and academic institutions (ESRF, REPOA, University of Dar es Salaam) and donors, participation in the broadened PER working group included representatives of the judiciary, private sector, and civil society organizations. The aim of broadening the participatory PER process was to open up the budget process to stakeholders outside the Government. However, since it is not possible to have all stakeholders participating in the PER working group, the PER FY00 process also targeted to initiate more consultations, especially broad based consultations, with particular focus at the lower levels - regional, district, etc. involving grass-root representation, to discuss key public expenditure policies and programs and discuss on how to improve the effectiveness of public expenditure. Regular briefings on the PER work were also carried out during the DAC donors quarterly meetings. 1.10 Learning from the experience of PER FY99 the PER process for FY00 was implemented in two phases. Phase I focused on providing direct support to the Government budgeting process particularly by providing inputs into the preparation of the Budget Guidelines and the development of the medium term expenditure frame for
4 FY01-03. A significant part of the effort in implementingPER during FY00 was directed at updating expenditure plans for the priority sectors covered by the PER for FY99. The main aim of these activities was to prepare more comprehensive Budget Guidelines which integrate sector plans and checks these for overall consistency with the aggregate projections of resource envelopes and macroeconomicstability. These were then used to update the sector MTEFs and donor financingplans. The updating of sector MTEFs were preceded by training of budget officers from the priority sectors and the central ministries so as to improve on the quality of the MTEFs. Specific studies were also commissioned under PER FY00 and included (i) an in-depth analysis of the development budget and counterpart funding requirement (ii) as survey of donor attitudes towards program and project aid support, and (iii) tracking the Road Fund. The PER working group also served to peer review the outputs of the PER FY99 update work and the specific technical studies. 1.11 The second phase began by fielding a joint World Bank-bilateral donors mission during November-December 1999 to focus on the traditional evaluative function of the PER. This subsequently formed the basis of broader PER consultations in May 2000 during which the GoT presented an MTEF for FY01 to FY03, and a draft budget frame for FY01 for review by donors and other stakeholders. The purpose of the review was to solicit agreement to the two frames and commitment of donor support in the context of these frames. The meeting also reviewed budget performance since the last PER, discussed fiscal issues emerging from both the evaluation of budget performance and from the set of technical studies.
1.4 LESSONS AND PROSPECTUS OF WORK FOR PER FY01
(1) There were delays in issuing the Budget Guidelines (The Budget Guidelines for FY01-03 were issued in April 2000) partly due to slippage in completing some of the PER FY99 update work but more fundamentally due to late re-constitution of the Budget Guidelines Committee. It is therefore important for the future to have a clearly set PER timetable that dovetails well with the budget cycle and also to ensure that such a timetable is adhered to. In principle the target should be to undertake the technical studies quite early (August to December), then mount the PER main mission during November -December so as to feed into the preparation of the Budget Guidelines to be issues in early January and finally hold the PER consultative meeting with all stakeholders during early May. (2) All stakeholders continued to attach high significance to the PER process and initiatives both in terms of active participation in the PER working group and financing the technical studies. The enthusiasm with the PER exercise is good for consensus building and coordination on budget issues and needs to be nurtured. (3) MoF did send the right signals to the line ministries on the significance to be attached to PER process as a whole and MTEF initiative in particular. Sector ministries responded very well and actually produced much
5 improved sector MTEFs compared to the previous ones. Supervision and coordination of the sector groups by senior officials preferably in the sector ministries will continue to be necessary to entrench the MTEF as part of the GoT reform program. To guarantee sustainabilityof the process and GoT taking the lead it will be important to ensure continued active involvement of both the Budget and Policy Analysis Divisions of MoF, Planning Commission, Tanzania Revenue Authority (TRA), BoT, IMF and major bilateral donors in the PER working group. Equally, more visible participation by the private sector and NGOs will be key to improvingthe process further. (4) Although a lot of useful documents are generated by the PER process, it is generally the case that the contents and findings are not fully exploited and disseminated.Thus for the next PER it might be useful to consider holding one or two stakeholder dissemination workshops prior to the main PER consultative meeting. (5) Finally, the next cycle of the PER should consider initiating studies in the following areas: (i) fiscal decentralizationfocusing on the process and its substantive link to the budget management system (ii) sector specific expenditure tracking down to the service delivery units, and (iii) evaluation of public expenditure on a quarterly basis. Particularly to track poverty related expenditure in relation to PRSP and HIPC.
6 PER FY00 SUPPORTINGACTIVITIES
S/N STUDY / ACTIVITY i SUPPORTTO GoT FINANCIER PROVIDED BY 01 Aggregate Fiscal Sustainability * Mr. David Bevan, * DFID University of Oxford
02 Analysis of the Development * ESRF + Denmark Budget & Counter-part Funding
03 Poverty Monitoring Indicators * REPOA * UNDP
04 Road Fund Tracking Study * Louis Berger S.A. Paris * EU
05 PER FY99 Update work: * Education * Oxford Policy Management * Sweden & World Bank & University of DSM
* Health * Beatrice Aswiena (Kenya) * DFID
* Water * ESRF * Finland
* Agriculture * ESRF 4 World Bank
* Trunk & Regional Roads * COWI Consult + Norway
* District Roads * REPOA * SDC
* Justice & Constitutional * ERB- University of DSM * Denmark Affairs
06 MTEF FYOO-FY03: * Development of Macro- * PER Macro Group MTEF
* Developmentof Sector * PER Sector Groups MTEFs
* MTEF Training * Elizabeth Muggeridge, * DFID Africa Consulting
07 External Evaluationof Budget World Bank, DFID, Netherlands Performance Embassy, Swedish Embassy, ____ Danish Embassy
7
PART II
REVIEW OF FISCAL PERFORMANCE, FISCAL POLICY AND SYSTEMIC FISCAL ISSUES
8
2. REVIEW OF FISCAL PERFORMANCE
2.1 INTRODUCTION
2.1 This chapter provides a review of fiscal developments and expenditure management issues and covers the fiscal year FY99 and the first eight months of fiscal year FY00. The first four sections focus mainly on fiscal performance. The analysis is broken down into three distinct areas of fiscal performance - aggregate fiscal discipline, strategic allocation, and technical efficiency. This is followed by a review of the main findings of the Report of the Controller and Auditor General for the financial year ended 30th June, 1998. 2.2 The analysis of fiscal performance is followed by a review of the institutional setup for expenditure management. The analysis is guided by a frarnework which suggests which institutional factors are important for good expenditure performance and we assess to what extent these factors are present in the Tanzanian system and whether they are yielding the expected results. Particular attention is also paid to recent reforms that took place in the area of expenditure management. 2.3 The paper concludes by presenting the main results of a tracking study of road funds that was undertaken as part of the PER process. Recent work on poverty and growth in Tanzania has highlighted the crucial importance of road infrastructure to enable rural communities, which are home to the majority of Tanzania's population and have the highest incidence of poverty, to enhance their income earning capability through expanded access to regional markets and trade. The establishment of the Roads Fund was designed as an important instrument to support road maintenance and the purpose of the tracking study was to identify whether the availability of funds for the road sector has indeed increased and contributes to improved maintenance of the road network.
2.2 AGGREGATE FISCAL DEVELOPMENTS
Domestic Revenue and Foreign Inflows
2.4 Total revenue as a percentage of GDP continued its decline from the peak of 13.5% of GDP reached in FY97 to 12.0% in FY98 and to 11.5% in FY99. In FY00, revenue declined further to 11.2 percent of GDP. In FY99 tax revenue was only 10.3 percent of GDP and non-tax revenue was 1.2 percent of GDP. Underlying the decline in tax revenue over the past few years are substantial reductions in external taxes, relatively large tax incentives for new investments, the continued downsizing of the parastatal sector, and sluggish private sector growth which has not yet yielded enough revenue to compensate for lost revenue from the shrinking parastatal sector. In FY99, the bulk of
9 the revenue shortfall was accounted for by a sharp decline in revenue from other taxes, which declined from 1.8 percent of GDP in FY98 to only 1.2 percent of GDP in FY99. This is mainly the result of the streamlining of the tax system and the elimination of a number of nuisance taxes. Increasing tax revenue is the key challenge in the area of fiscal management,given the substantialexpenditure requirementsthat arise in connection with Government's role of providing infrastructure services and basic social services in support of economic growth and poverty reduction. The medium-term program of strengtheningtax administration is ongoing and expected to yield tangible results in the near future. In addition to administrative improvements, the streamlining of tax exemptionsis another potential source for additional revenue generation.
Table 2.1: GovernmentRevenue and External Grants, FY95 - FYOO CentralGovernment rtiokn s, 5FY95FY96 FY97 FY98" FY99 FYOO
Total Revenue 12.5% 13.2% 13.5% 12.0% 11.5% 11.2% Tax Revenue 11.3% 113% 11.9% 11.0% 10.3% 9.9% Taxes on importsand exports 3.6% 3.8% 3.5% 3.6% Sales and excise taxes on local 2.7% 2.8% 3.1% 2.7% 2.7% goods Income taxes 3.3% 3.1% 3.0% 2.9% 2.7% Other taxes 1.9% 1.9% 2.1% 1.8% 1.2% Non tax revenue 1.2% 1.9% 1.6% 1.0% 1.2% 1.2% /1 Likely Outturn Source: IMF, Tanzanianauthorities
2.5 The decline in domestic revenue was only partly offset by increases in official development assistance in the form of grants and concessional loans (net of amortization).During fiscal year FY99 these inflows increased to 4.4 percent from 4.0 percent of GDP in FY98 and further to 4.8 percent in FYOO.The increase in FY99 is due to a recovery of grants from 3.0 percent of GDP in FY98 to 4.0 percent of GDP in FY99 and which are expected to remain at that level in FYOO.Net inflows from foreign loans on the other hand declined from 1 percent of GDP in FY98 to 0.4 percent in FY99, mainly because of a drop in disbursementsof program lending.
10 Table 2.2: Foreign Inflows - Grants and Loans, FY95 - FYOO
_Y5 Y9m6 - FY97 FY98; Y-9 FYOO/1
Grants and Loans 2.9% 1.0% 3.1% 4.0% 4.4% 4.8% Grants 2.0% 2.2% 3.6% 3.0% 4.0% 4.0% Program 0.8% 1.0% 1.8% 0.7% 1.2% 1.9 Project 1.2% 1.2% 1.8% 2.3% 2.8% 2.2
Foreign loans (net) 0.9% -1.2% -0.5% 1.0% 0.4% 0.8% Foreign loans (loan 2.4% 0.2% 0.8% 2.1% 1.6% disbursements) Program loans (import 1.2% 0.0% 0.5% 1.3% 0.6% support) Developmentproject loans 1.3o 0.1% 0.3% 0.8% 1.1/ Amortization -1.6% -1.4% -1.3% -1.1% -1.2% /I Likely Outturn Source: IMF, Tanzanianauthorities
Government Expenditures 2.6 Government spending stabilized in FY98, claiming 14.9% of GDP, after declining steadily in previous years from 18.3 percent in FY95. In FYOO,expenditures increased by 1 percent of GDP. Although there was little change in recurrent expenditures between FY98 and 1998/99, there was a significant shift from wages and salaries to expenditures on other goods and services.
Table 2.3: Government Expenditures, FY95 - FY99 Central GovemmentOperations FY95 FY96 FY97 FY98 FY99 FYOOI/
Total expenditureand net lending 18.3% 17.6% 15.1% 14.8% 14.9% 15.9% 15.1% 14.0% 12.5% 11.0% 10.9% 12.0% Recurrent expenditure Wagesand salaries 4.2% 4.6% 4.7% 4.2% 3.7% 4.2% 3.4% 3.3% 2.6% 2.2% 1.6% 1.6% Interest payments Domestic 2.2% 2.3% 1.7% 1.0% 0.6% 1.1% Foreign 1.2% 1.0% 0.9% 1.3% 1.0% 0.5% Other goods and services and transfers 7.5% 6.1% 5.1% 4.5% 5.7% 6.2% 3.2% 3.6% 2.6% 3.8% 4.0% 3.9% Developmentexpenditure and net lending o/w Expenditure financed domestically 0.8% 0.2/ 0.5% 0.5/ 0.3% 0.30 /I Likely Outturn Source: IMF, Tanzanian authorities 2.7 Since average salaries increased in nominal terms only by 1.3 percent in FY99 and the number of civil servants was reduced by another 2.7%, expenditures on wages and salaries remained more or less constant in nominal terms, implying a decline in
I1 expenditureson wages and salaries as a percentage of GDP from 4.2 percent in FY98 to only 3.7 percent in FY99. Salary increases below the rate of inflation have led to real income losses for civil servants of up to 35 percent since FY96. However, after further real wage losses in FY99, in FYOOGovernment started the implementationof its Medium Term Pay Policy by granting salary increases ranging between 16 and 65 percent, with the higher increases being accorded to technical personnel and middle and upper management. In addition, the reduction in staff numbers was only 1.3 %, significantly less than in previous years. These large pay increases combined with only small reductions in the staffing levels led to a projected increase in the wage bill in FYOOby more than 30 percent and an increase in expenditures on salaries and wages from 3.7 percent of GDP in FY99 to 4.3 percent of GDP in FY99.
Table 2.4: Civil Service Employment,FY97-FY99 (December of each year) Salarv Scale FY97 FY98 FY99 FY99 FY98 FY99 FY99 Staff in absolute numbers Percentagechange TGOS 39216 35651 34806 35001 -9.1% -2.4% 0.6% TGS 189720 63787 63310 59994 -0.7% -5.2% TGTS Included 122215 118868 119566 -2.7% 0.6% in TGS TPSW - TGPSW 37741 36190 34821 36448 -4.1% -3.8% 4.7%
OTHERS 18947 12785 11381 8837 -32.5% -11.0% -22.4% TOTAL 285624 270628 263186 259846 -5.3% -2.7% -1.3% Source: CSD
Table 2.5: Civil Service Average Salaries, FY97-FY99 Salary Scale FY97 FY98 FY99 FY99 FY98 FY99 FY99 TGOS 33707 37703 38212 47220 11.9% 1.4% 23.6% TGS 47099 57313 57625 78067 0.5% 35.5% TGTS Included 56314 57073 80162 1.3% 40.5% in TGS TPSW + TGPSW 65002 60506 61400 70925 -6.9% 1.5% 15.5%/6
OTHERS 35344 115878 108011 167861 227.9% -6.8% 55.4% TOTAL 47498 54684 55387 74143 15.1% 1.3% 33.9% Source:CSD
2.8 In FY99, savings on wages were used to increase expenditures on goods and services from 4.5 percent of GDP in FY98 to 5.7 percent in FY99. In FYOO, the increases in wages and salaries without a parallel increase in resource availability have led to a crowding out of expenditures for other charges during the first eight months of the financial year. 2.9 Expenditures on interest payments declined from 2.2 percent in FY99 to 1.6 percent in FYOO,as a result of a fall in both domestic and foreign interest payments. During FYOO,foreign interest payments are projected to fall substantially from 1 percent of GDP to 0.5 percent of GDP. However, this decline in foreign interest payments is offset by an increase in domestic interest payments to one percent of GDP. About four percent of GDP or a little more than one fourth of the overall budget is spent of development expenditures, most of which is foreign financed. However, problems with
12 the proper integration of development expenditures in the budget continue. Data on official development expenditures collected by UNDP indicate that official development assistance is about 12 percent of GDP, indicating that still only about one third of all development assistance to Tanzania is captured in the budget. Deficit Financing 2.10 Following the introduction of the cash budget in 1996, Tanzania recorded continuous budget surpluses (after grants) in the past three years. In FY99, the surplus was 0.3 percent of GDP. In FY00 a small budget deficit in the magnitude of 0.6 percent of GDP was registered. However, taking into account net inflows from foreign loans, which also constitute development assistance and contain a significant grant element, the surplus for FY99 increases to 0.8 percent of GDP and the deficit for FY00 turns into a small surplus of 0.2 percent of GDP. These surpluses have allowed Government to reduce its outstanding debt with the domestic banking and non-banking institutions and also repay arrears to a significant extent. Table 2.6: Financing of the Fiscal Deficit, FY95 - FY00 CentralGovemment Operations FY95 FY96 FY97 FY98 FY99 Y100/1
Overall balance before grants (checks -5.9% -4.3% -1.6% -2.8% -3.5% -4.7% issued or commitment basis) Overall balance after grants (checks -3.9% -2.2% 2.0% 0.2% 0.5% -0.6% issuedor commitment basis) Overallbalance after grants (checks -5.0% -3.0% 1.9% 0.2% 0.3% -0.6% clearedor cash basis) Foreignloans (net) 0.9% -1.2% -0.5% 1.0% 0.4% 0.8% Overall balance after grants and -4.1% -4.2% 1.3% 1.1% 0.8% 0.2% foreign loans (checks cleared or cash basis) Domestic (net) 3.3% 3.3% -0.7% -0.4% -0.2% -0.1% Bank 2.10%° 2.7% -0.4% -0.9% 0.0% Non bank (net of amortization) 1.2% 0.6% -0.3% 0.5% -0.1% Privatization Funds 0.0% 0.5% 0.3% 0.1% 0.2% 0.8% 0.4% -0.9% -0.8% -0.8% Change in arrears /I LikelyOutturn Source:IMF, Tanzanian authorities
Budget Implementation
2.11 Previous Public Expenditure Reviews have highlighted the lack of predictability of budget releases as one of the main problems afflicting the budget process in Tanzania. This unpredictability of resource flows from the Treasury to spending units has a direct impact on the allocative and operational efficiency of the budget system, which will be discussed in subsequent sections. At the aggregate level, it is instructive to analyze the sources of shocks to government revenue and to trace its effects on the various expenditure items.
13 Table 2.7: Sources of Budget Shocks FY97 FY98 FY99 BudgetOutturn Outturn Budget Outturn Outturn! Budget Outturn Outturnl / Budget Budget Budget TShm % TShm % TShm %
TotalResources 703142 685630 98% 800200 700969 88% 779786 799100 102% DomesticRevenue 563756572030 101% 671500 619083 92% 699521 689500 99% ImportSupport 139386113600 82% 128700 81886 64% 80265 109600 137%
LessFirst Claim 371075399776 108% 422500 421831 100% 435360 431378 99% Expenditures DebtService and 185710200548 108% 196500 203024 103% 190578 210900 111]% Arrears Wagesand Salaries 185365199228 107% 226000 218807 97% 244782 220478 90%
Available Resources for Other Expend.And Dom. Dev. 332067285854 86% 377700 279138 74% 344426 367722 107%
TotalOther and 387822311897 80% 518400 410348 79% 562898 471000 84% Development OtherGoods and 260831 187327 72% 274300 223763 82% 298433 340900 114% Services Development 126990 124570 98% 244100 186585 76% 264465 130100 49%
Residual(checks issued) -55755 -26043 47% -140700 -131210 93% -218472 -103278 47% Adj. To cash and other 6600 -15900 items Residual(checks cleared) -55755 -26043 47% -140700 -124610 89% -218472 -119178 55%
FinancingofResidual 55755 26043 47% 140800 124612 89% 218472 119217 55% ForeignProject 48152 63900 133% 149400 174362 117% 229000 117717 51% Financing DomesticFinancing 7603 -37857 -498% -8600 -49750 578% -10528 1500 -14% Source: Data provided by authorities and staff estimates
2.12 Compared to the previous two years, when resource availability from domestic revenue and import/budget support was below the budget estimates, for FY99 the resource availability from these sources was in fact slightly above the estimated amounts, mainly on account of higher than projected import/budget support from donors in the form of grants and loans. 2.13 First claim expenditures consisting of debt service payments and payments for wages and salaries were also within the resource envelope provided by the budget. However, while payments for wages and salaries were considerably less than was budgeted, this was offset by higher than estimated debt service payments. This is reminiscent of FY98, where there also was an apparent trade-off between under spending on supply votes and increased debt service payments. 2.14 As a result of the positive developments on the side of resource availability and the containment of first claim expenditures within the limits provided by the budget,
14 available resources for expenditures on account of "other charges" and for domestic development expenditure was seven percent higher than estimated in the budget. This higher resource availability translated directly into higher spending on goods and services (14 percent above budget) and domestically funded development expenditures (88 percent above budget). As in previous years, total development expenditures funded from both domestic and foreign sources, was again significantly below the budgeted amounts. In fact, the discrepancy for FY99 amounted to about 50 percent and was thus considerably higher than in previous years. 2.15 Overall, compared to previous years FY99 represents a significant improvement with respect to the predictability and availability of funds for financing operations and maintenance and domestic development expenditure.
2.3 SECTORAL ALLOCATIONS AND PRIORITIZATION
2.16 Table 2.8 shows the sectoral distribution of actual recurrent expenditures for the period FY96 - FY00. In FY99, debt service payments from the consolidated fund declined significantly, which led to a reduction of the share of consolidated fund services in total recurrent expenditures from 37.2 percent in FY98 to only 30 percent in FY99. During the first eight months of FY00, the share of consolidated fund service payments in total recurrent expenditures increased slightly to 33 percent. In FY99, most of the savings for reduced debt service payments were used to increase expenditures in administration, the social services, and the productive sectors. In the administrative sector, the President's Office, the Ministry of Foreign Affairs, and the Ministry of Finance saw the largest increases in recurrent expenditure. Much of the increase in expenditures by the Ministry of Finance is explained by the centralization of payments for electricity. In the social sectors, the shares of the Ministry of Health and the Ministry of Science, Technology, and Higher Education increased from 4.1 percent to 4.8 percent and from 3.1 to 4.2 percent, respectively. Unfortunately, the allocation to regions for the delivery of basic social services declined from 17.2 to 16.6 percent and the share of the Ministry of Education declined also from 2.7 percent to 2.5 percent. In the productive sectors, expenditures of all three Ministries covered increased significantly, Agriculture by 0.6 percentage points, Industries and Trade by 0.2 percentage points, and Tourism, Natural Resources, and Environment by 0.7 percentage points. Data for the first eight months of FY00 imply relative gains by the defense sector and the social sectors, with reductions in the share of all other sectors. Table 2.8: Sectoral Shares in Total Recurrent Expenditures - Actual Sector FY96 FY97 FY98 FY99 FYOO* Administration 16.8% 10.7% 12.3% 16.5% 12.3% Defense And Security 19.1% 18.7% 17.0% 17.0% 17.7% Social Services 28.4% 26.2% 27.6% 29.5% 32.7% Economic Services 1.6% 4.6% 3.3% 3.1% 2.2% Productive 4. 1%o 2.7% 2.6% 4.0% 2.1% Consolidated Fund Service 29.9% 37.0% 37.20/o 30.0% 33.0%
Grand Total 100.0% 100.0% 100.0% 100.0% 100.0% * July to February Source: Appropriation Accounts for data up to FY99. Flash Reports for FY00
15 2.17 Table 2.9 shows nominal growth rates of actual expenditures. Throughout the period FY97-FYOO,social services were the only sector whose expenditures grew consistently faster than overall governmentexpenditures. Defense expendituresincreased at about the same rate as overall expendituresduring most years, while the other sectors saw significant variations in their expenditure levels over the past five years. During FY99, the administrative and productivesectors received the biggest increases among all sectors. However, during the first eight months of FY00 expenditure cuts affected mainly these two sectors and economic services. Table 2.9: Sectoral Growth Rates of RecurrentExpenditures - Actual Sector FY97 FY98 FY99 FY00* Administration -14.0% 36.6% 52.8% -18.1% Defense And Security 32.0% 8.2% 14.0% 14.4% Social Services 24.7% 25.7% 21.3% 21.9% Economic Services 286.3% -14.3% 5.4% -23.3% Productive -11.4% 14.6% 74.7% -42.0% Consolidated Fund Service 67.3% 20.0% -8.3% 20.7% Grand Total 35.1% 19.3% 13.8% 9.7% * July to February Source: Appropriation Accounts for data up to FY99. Flash Reports for FYOo
2.18 With respect to development expenditures,there was a significantreorientation of expenditure patterns from administration to the social sectors. While in FY98, the Ministries of Finance, Defense and National Security and the Prime Minister's Office received significant resources for development purposes, in FY99 their share was drastically reduced. On the other hand, the Ministry of Water, which in FY98 only received 0.6 percent of the development budget received in FY99 17.3 percent of the development budget. The Ministries of Health and Education as well as the Regions also saw significant increases in their share of the development budget in FY99. However, given the multitude of problems with the capturing of information on development expenditures which are mainly financedby donors, the informationfrom the development accounts needs to be considered with great caution. As many development expenditures funded by donors are not captured in the budget estimates and the appropriationaccounts, it is difficult to ascertain the true distribution of development expenditures across sectors. Changes in the coverage of donor expenditures are also a possible source of apparent changes in sectoral allocations of developmentexpenditures. Table 2.10: Sectoral Shares in Total Development Expenditures - Actual Sector FY96 FY97 FY98 FY99 Administration 21.4% 49.0% 24.2% 1.4% Defense And Security 1.3% 0.9% 0.2% 0.0% Social Services 37.5% 26.0% 22.5% 49.6% Economic Services 23.1% 21.7% 40.1% 40.2% Productive 16.7% 2.5% 13.0% 8.8% Consolidated Fund Service 0.0% 0.0% 0.0% 0.0% Grand Total 100.0%/ 100.0% 100.0% 100.0% Source: Appropriation Accounts
2.19 In the following we examine allocations to the priority sectors in more detail. In the first instance we examine whether the share of expenditures allocated to the priority
16 sectors has increased during the past two years and whether allocations to the priority sectors were respected during budget implementation. Priorities for budget allocations are defined in the Government's budget guidelines. Prior to FY99, the RPFB had emphasized resource allocation to four priority sector groups: social services, infrastructure, law and order and environment. However, as the budget guidelines for FY99 state "not much effort has been put in translating Government priorities into strategic options given the obvious limitations of the resource envelope." The budget for FY99 was the first to benefit fully from the newly introduced PER process and Government's intention was to "fully fund and accord protection status to few strategic expenditures within priority sectors." For FY99, the priority areas defined in the budget guidelines include: * Roads * Education . Water * Agriculture * Energy * Law and Order * Health
2.20 In addition to these priority areas, the national population census 1998, payment of utility bills (to be paid centrally by MoF) and the settlement of arrears were other priorities defined for FY99. The expenditure priorities of FY00 were similar, with Land issues, the implementation of the Civil Service Reform, the payment of debts, general elections, and the implementation of the LGRP added to the priorities. In the context of the PER process and Government's focus on poverty reduction, these priority sectors have been further narrowed down to those areas that are likely to have the biggest impact on poverty reduction, i.e., rural roads, water, basic health, primary education, agricultural research and development and extension and the Judiciary. 2.21 Table 2.11 shows the development of actual recurrent expenditures for the priority sectors for the period FY98 to FY00, both as shares of discretionary expenditures as well as in nominal growth rates. Throughout the period, actual expenditures on priority sectors grew slightly faster than expenditures on non-priority sectors. This led to an increase in the share of discretionary expenditures going to the priority sectors from 42.8 percent in FY97 to 46.7 percent in FY00. Growth rates of actual expenditures vary significantly across the various priority areas. During FY99, the nominal growth of expenditures in the Judiciary and Education Sector was actually below the average growth rate of discretionary expenditures and in FY00 only education sector expenditures were above the average growth rate of discretionary expenditures.
2.22 Table 2.12 presents a more detailed analysis of priority expenditures during the first eight months of FY00. The budget estimates indicated significant increases in allocations for "other charges" to the priority sectors. In particular, allocations for "other charges" to local governments for social services were more than doubled in FY00, reflecting partly the shift of responsibilities to Local Governments for the management of social service delivery under the Local Government Reform Program. However, comparing actual exchequer releases to the priority sectors for the first eight months of FY00 to exchequer releases during the same period in FY99 shows that exchequer releases are significantly below the budgeted increases. Instead of the budgeted increase for OC to local governments by 221.7 percent, the actual increase during the first eight month of FY00 was only 158.5 percent. For all other priority areas, exchequer releases
17 during the first eight months of FY00 were actually less than during the same period of FY99.
Table 2.11: RecurrentExpenditure in the Priority Sectors, 1997/99-FYOO FY97 FY98 FY99 FYOO* FY97 FY98 FY99 FYOO* As share of discretionary expenditure Nominal annual growth rate Judiciary 1.0% 1.1% 1.0% 0.7% 34% 26% 17% -23% Agriculture & 3.3% 2.9% 3.3% 1.2% 18% 5% 47% -62% Livestock Education/i 21.1% 22.1% 18.9% 25.9% 25% 25% 9% 43% Works (plus Road 6.5% 5.9% 8.2% 5.2% 349% 9% 77% -33% Fund)/!. Lands, Hous.,& Urb. 0.1% 0.1% 0.5% 0.5% -63% 25% 381% 9% Dev. Water/i 2.9% 3.1% 3.3% 3.4% 21% 27% 37% 9% Health"] 8.9% 10.5% 10.6% 10.4% 32% 40% 29% 2%
Total Priority 42.8% 44.6% 44.8% 46.7% 40% 24% 28% 9% Total Discretionary 100.0% 100.0% 100.0% 100.0% 21% 19% 28% 4% /1 includes transfers to districts * July - February On the other hand, the implementation of the pay reform program led to a significant increase in exchequer releases for personal emoluments during the first eight months of FYOO. As a consequence of the local government reform program, there were further transfers of staff from various priority ministries and regions to local governments. This resulted in lower than average increases in PE releases for these spending units, while the exchequer releases to local governments as well as to the ministries of education and health were above the average increase of PE by 30.5 percent. Table 2.12: Change in Allocations and Exchequer Releases to Priority Sectors, FYOO(July- February) change over Juiy-Feb FY99 Ministry!Department PE IPE OC OC OC+PE OC+PE' Estimate Actual Estimate Actual Estimate Actual Judiciary 39.2% 24.0% 151.6% -51.5% 78.4% -8.1% Ministry of Education 9.4% 36.8% 20.0% -77% 13.8% 14.6% Ministry of Health -4.9% 32.7% 10.7% 226.5%o 9.4 -22.9% Ministry of Water 5.0% 20.8% 12.0% -49.4% 7.4% -22.8% Regions (Social -18.3% 11.4% 49.4% -57.4% -11 .9% -8.1% Services) I 1 Local Government 1.9% 41.3% 221.7% 158.5% 12.1% 47.7% (Social Services) Ministry of Agriculture -1.4% -39.9% 7.5% -81.6% 2.6% -65.2% and Co-operatives |I_ I GRAND TOTAL 3.6% 30.5% !49.3%/ -7.3% 27.5% 8.5% Source: Ministry of Finance, Policy Analysis Department
Differences to the changes shown in table 14 are due to different methods of calculation. While in this table the change in exchequer releases during the first eight months is computed. in table 14 data for 1999/2000 are extrapolated and compared to'actual expenditures in the previous year.
18 2.23 As mentioned elsewhere, development expenditures recorded in the budget estimates and in the appropriationaccounts give only a very incomplete picture of actual development expenditures, the majority of which is donor financed. This is even more true for the priority sectors,as most donor support typically concentrates on these sectors. In many cases, donor support is directly provided to the ministries or to local authorities without ever being properly recorded in the budget accounts. Keeping in mind these caveats, the share of the development budget going to the priority sectors has increased steadily during the past three years. While in FY98 only 31.1 of the development budget was allocated to the priority sectors, in FY00, 61.7 percent were allocated to these sectors. Parallel to increases in allocations were increases in actual expenditures. However, the prioritizationis less pronouncedin actual development expendituresthan in the estimates. The share of actual development expenditures (recorded in the appropriationaccounts) increased from 19.9 percent in FY98 to 42.9 percent in FY99. Table 2.13: DevelopmentExpenditure in the Priority Sectors (as % of total recurrent expenditure),1997/98-FYOO VOTE HOLDER FY98 FY99 FY00 budget actual budget actual budget actual
Judiciary 0.0 0.0 0.0 0.0 0.0 Agr. & Livestock 1.8 _6. 8.4 7.0 13.4 Education 2.6 6.9 4.2 6.8 10.3 Works & Trans 15.2 0.0 19.6 14.0 16.7 Lands, Housing 0.4 0.0 0.0 0.0 0.2 Water, Energy 2.5 0.6 11.7 6.7 10.1 Health 8.6 6.3 8.2 8.5 10.9 TOTAL 31.1 19.9 52.0 42.9 61.7
2.4 OPERATIONALEFFICIENCY
2.24 This section discusses cross cutting issues that affect the operational efficiency in all sectors. Operational efficiency concerns the question of whether the public sector is able to achieve the planned and budgeted for service delivery objectives and whether it does so in an efficient manner. Sector specific indicators of operational efficiency are discussed in the sector PERs. However, although performance budgets have been developed for all ministries, relatively little progress has been made in developing output and outcome indicators which would allow the monitoring of the impact of public expenditures and thus assess technical efficiency. Nonetheless, there is ample evidence that service delivery is poor in most parts of the public sector and that efficiency in the public sector is low. From a budget perspective, the key constraints to operational efficiency were (a) insufficientresource availability for expenditures on operations and maintenance, (b) unpredictability of resource availability for vote holders, and (c) civil service wages that are for the middle and upper level civil servants significantly below those in the private sector. Improvements in these areas are essential if other measures such as the introduction of performance management systems and the implementation of anti-corruption measures are to achieve their intended purposes.
19 Public Sector Reform Program 2.25 A well motivated, efficient, honest, performance-oriented civil service is the key determinant of technical efficiency in the delivery of public services. Between 1993 and 1998 Government has been implementing the Civil Service Reform Program which has achieved the following results:2 * The civil service workforce was reduced from roughly 354,600 in FY94 to about 264,000 by FY99; * The salary structures were rationalized and decompressed, the old scheme with 196 grades under 23 scales as reduced to 45 grades under four scales; * 36 inequitably and non-transparently awarded allowances were eliminated or consolidated into the revised salary structure; and * greater control was gained over the wage bill and the integrity of the payroll was restored. 2.26 However, the reforms undertaken under the CSRP did not lead to significant increases in civil service take home pay. The increase in average real pay by 75 percent in real terms over the period FY94 to FY98 was mainly the result of the consolidation of allowances into the salary structure rather than real increases in take home pay. Indeed, during the last three years, middle and upper level civil servants experienced real income losses of up to 35 percent. This led to a further widening of the gap between public and private sector salaries and gives rise to a multitude of problems such as low motivation, vulnerability to petty bribery, or moonlighting. While pay reform by itself will not eliminate all problems in the public sector, it is nonetheless a necessary condition for other reforms under the Public Sector Reform Program to be effective. 2.27 The Public Sector Reform Program (PSRP) extends and carries forward the CSRP. The program comprises three phases and extends over the period 2000-2011: Phase 1: Installing a Strategic Process for Sustainable Performance Improvement (2000-2004); Phase 2: Institution a Performance Management Culture (2005-2011); and
Phase 3: Establishing Quality Improvement Cycles (2009-201 1).
2.28 The core of Phase 1 are measures to improve the incentive structure and to create a close link between performance and budgets. In particular, the operationalization of the "Performance Improvement Model" includes strategic planning, annual performance planning and budgeting linked to the overall government budget process, systematic execution of plans and budgets with a focus on service improvements, and monitoring, evaluation, and reporting. Availabilityof Resources for Operations and Maintenance 2.29 Insufficient allocations for operation and maintenance expenditures are the second major problem affecting public sector efficiency. The introduction of the cash budget has
2URT. Pay Reform Implementation Study: Operationalizingthe Medium Term Public Service Pay Policy. Draft Final Report. 21 May 1999.
20 aggravated the problem of a shortage of funds for operations and maintenance. Under enforced tight resource constraints, expenditures for operations and maintenance have the role of the residual, i.e., these expenditures are only funded from what remains after taking care of statutory payments such as debt service and wages and salaries. However, at a more fundamental level, under-funding of operations and maintenance has its origin in two problems frequently encountered in public expenditure management. The first is the undertaking of investment projects without properly taking into account the required financial resources for operations and maintenance. Examples are the road net work, where even following the increase in resources made available through the Roads Fund, it is estimated that these resources are only sufficient to properly maintain about one fourth of the existing roads network in Tanzania. Another example is Tanzania's extended health network. Public resources are neither sufficient to properly maintain physical structures of hospitals, dispensaries, and health centers nor to provide adequate amounts of drugs, thus limiting the capacity of these facilities to provide effective services. The second problem arises from an over-ambitious expansion of service delivery targets and a definition of the role of government wvhichis not compatible with available resources. This leads to a squeezing of operations and maintenance expenditures, which are then spread too thinly across the public sector as to allow effective service delivery. 2.30 FY99 represented a turning point with regard to the provision of funds for operation and maintenance. After a period of continuous decline, which saw expenditures on goods and services plunge from 7.5 percent of GDP in FY95 to only 4.5 percent in FY98, FY99 was the first year that saw an increase in expenditures by more than one percent of GDP and for FY00, expenditures on goods and services are expected to increase to 6.2 percent of GDP. While this reversal in the downward trend of operation and maintenance expenditures is very welcome, it remains yet to be established to what extent these increased expenditures indeed translated to improved service delivery. 2.31 The share of OC in total expenditure increased for all sectors and with the exception of the administrative sector, exchequer releases for Other Charges were above the budgeted amounts. During the first eight months of FY00, increases in expenditures on wages and salaries in combination with revenue shortfalls led to a serious crowding out of expenditures on Other Charges. Overall, actual expenditure for Other Charges were only three fourth of the budgeted amounts and the share of actual Other Charges in total expenditures declined significantly during the fiscal year. Table 2.14: Sectoral expenditures on OC and PE, FY99-FYOO FY99 FYOO* Share of OC Actual as % of Estimate Share of OC Actual as % of Estimate in Total PE oc in Total PE OC Administration 84% 92% 95% 75% 108% 66% Defense and 46% 93% 127% 39% 109% 88% Security Social Services 41% 98% 122% 34% 133% 93% Economic 88% 86% 131% 88% 108% 61% Services Productive 71% 88% 156% 56% 71% 60% Total 58% 95% 115% 50% 119% 74% *July to February
21 Predictability of Resource Availability 2.32 A consequence of the cash budget is the unpredictability of available resources for operation and maintenance expenditures. Figure 1 graphs monthly data on tax revenue, interest payments and expenditures on "other goods and services." Expenditures on "other goods and services" show large month on month fluctuations, driven mainly by fluctuations in revenue and lumpy interest payments. Figure 1: Tax Revenue, Interest Payments,and Expenditureon Other Goods and Services
MortNyRevenue and Expenditure, FY98 MonthlyRevenus and Expenditure,FY99
7600D_ TaxRebenje, 8(1C00 TaxRevenue 50000,. 6000 4C0000 OtherGoods_ OtherGoods 303000- -o- andservioes 400 2ndsErvice 20000 -- Interest 2000 iteestn 1COOO paynient -- , jnpaymant 0 --- 0 - - 1 3 5 7 9 11 1 3 5 7 9 11
2.33 We also examine how these aggregate fluctuations were passed on Figure 2: Ratio of Actual to Budgeted to spending units. The purpose of this Expenditures on OC for Priority and Non- analysis is to (a) identify cash Priority Sectors, January - September 1999 management patterns with respect to 300% releases to individual vote holders, (b) 25 % -- establish whether the priority sectors 200% of health, education, water, agriculture, and the regions differ from those of 5 0_ non-priority sectors, and (c) gauge to l00% what extent monthly cash releases to 50 -- _ ministries are distorted by the cash 0% y budget system currently in place in t0 2Z Tanzania. The main instrument for the - Prioity --- Non-Prnonty(excl. Finance) analysis is to trace the ratio of actual to - budgeted releases on "other charges" Source: TanzanianAuthorities for FY99 and the first eight months of FY00. 2.34 We start the analysis by looking at overall releases on "other charges" for priority and non-priority ministries before we proceed to the more detailed analysis of selected priority and non-priority ministries.3 Exchequer releases to the Ministry of Finance are excluded from all aggregates. since funds initially allocated to the Ministry of Finance are
In this analysis,exchequer releases to the followingMinistries are included: Ministryof Education and Culture, Ministry of Health, Ministry of Agricultureand Cooperatives,Ministry of Water. the Judiciary as well as exchequer releases to the regions and local governmentsin the areas of social services.
22 used to affect reallocations during the year and inclusion of data on the Ministry of Finance would thus distort the analysis of allocations and exchequer releases to spending units. Road Fund expenditures are also excluded since they are fimded from earmarked resources and thus outside the normal allocation process. During FY99, until April 1999 monthly exchequer releases for "other charges" for both priority and non-priority sectors were significantly above budgeted amounts. Thereafter, for the last two months of FY99 exchequer releases to the priority sectors were significantly below estimates and for the first eight months of FYOO, exchequer releases to both priority and non-priority sectors were below the estimated amounts. The volatility of exchequer releases to the priority sectors is significantly higher than that of non-priority sector releases. Given the overall pattern of overall resource availability in FY99, priority sectors have benefited more from additional resources for other charges than the non-priority sectors. However, for the first eight months of FYOO, the shortfall of overall resource availability for other charges compared to estimates has affected priority sectors more than non-priority sectors. These patterns appear to indicate that priority sectors are given a certain priority in the allocation of additional resources but are not protected in the case of resource shortfalls. While in FY99, priority sectors received 34 percent of all exchequer releases for "other charges," in FYOOthis share fell to only 25 percent of a shrinking overall allocation. 2.35 Figures 4 and 5 show the ratio of actual exchequer releases to budget estimates for a sample of priority and non-priority spending units, respectively. From the visual inspection of expenditure patterns for priority and non-priority sectors several observations emerge: * Month to month expenditure releases are highly variable for both priority and non-priority Ministries. * Monthly expenditure patterns across Ministries are not synchronized, possibly reflecting lumpy procurements. * Single month releases can claim a significant of the total annual budget allocation to a particular Ministry. For example, in the case of the Ministry of Water the budget release in March was higher than the budgeted amount for the whole year for the particular Ministry. * From the mission's discussions with sector Ministries and local authorities, it appears that the variation in monthly releases does not necessarily reflect the Ministries' financial requirements. This indicates some scope for improved management of budgetary releases across Ministries, even within the limits imposed by the cash budget management system. * Ministries smooth volatility in monthly releases to a certain extent through the use of supplier credit and accumulation of arrears. These are typically settled once higher releases than budgeted are received.
23 2.36 Figure 3 shows the ratio of actual to budgeted expenditure releases in the education and health sectors at the Ministerial, regional, and district level. The education sector benefited more from additional resources than the health sector. For both sectors, the regional levels received the biggest increases compared to budgeted amounts, while the Ministerial level benefited least from additional exchequer releases compared to the budget estimates.
Figure 3: Ratio of Actual to Estimates for Other Charges- Educationand Health Sectors
rIRealth SectorExpencitures Edication Sector Expendtures
4000 .FY99Q 500.0 ~ FY99Q1 300.0 Iji.i FI1~Y9902 400.0 F9Q 200.0 0 FY9903 FY300.0 100.0 FYY99Q4 FY99 240 1000Y _ _ MoH Regions Districts FY0002 MoC RgosDtit FYOOQ2
24 Figure 4: Priority Ministries - Ratio of Actual to Estimates for Other Charges:
3 00% _ _ ...... _ . .. _I 3000/% - -- __.__
250% ----- ~ - - ~ 20~~~~~~~~~~~~~~~~~0,
2500%------
100% A------
0% ! 0/
us Zfiz ' Z ' u -' '' Z 7 us@ z -' us z -'
-...- Total (excL.Finance and RoadFund)! -- -..Total (exci. Finance and Road Fund)j
- Ministry of Health + Ministry of Education
600% 1600 5000'- 0-- -- 0A i-i2l0/o0l~--W--A :-100
400'/. 300%~~~~~~~~~~~80 j - - -/
200% 400%. 100% 7- --- Ao 2000/° i .
A-.. Total (excl. Finance and Road Fund) ---- A - Total (exc; Finance and Road Fund) +-Ministry of Agncultureand Co-operathes. + Ministry of Water
600% - - - - 3 0 ------600°.., +~ ~ ~ -~ ~j-50/ 00 -__------, 500% 3 00t
400% 2 S0C% __ -\ - -
2 DO% ~~~~~~~~~~~~~100% ' 0% 5I ------A 100% ~A--;- 0%
7~O a °/o o 5 4 a o ni7oZCin-7i O o co
- -A --- Total (excl. Financeand RoadFund)------Total (excl. Financeand Road Fund) + Regions I + Local Govemment
25 Figure 5: Non-Priority Ministries - Ratio of Actual to Estimates for Other Charges:
2000/. 200%_-_..____..______.__._.___..0 A A
'150%- A A 150% - __ 100%° 100%
50%. ^,^. 50%- 50%.~ ~ ~ ~ ~ ~ ~~~0 0% ,, I I, XI 0%/o ^i , , , ' z>
| . ,.. Total (excl. Financeand Road Fund) l - Total (excl. Financeand Road Fund) . i + President'sOffice and CabinetSecretaat Ministry of ForeignAffairs & Int Co-operation
200%__ 250%
150".o-1 ,s>^.^.A.^ 200. -t 150%-- s. -*.I 10o% A 4
50<0-~ ~ ~~ ~ ~~~~~10 .A '0
50o
' , 0 e a
-.. Total (excl. Financeand RoadFund)' --.. Total (excl. Financeand RoadFund) ; _ Defence lMinistry of Science,Tech.& HigherEducation
2.5. OPERATIONAL EFFICIENCY - FINDINGS OF THE COMPTROLLER AND AUDITOR GENERAL
Introduction
2.37 The analysis of the extent of compliance to prudential budget management procedures and regulations by the Government was undertaken as one of the key objectives of the PER99 evaluative work. The analysis was based on information collected from the Controller and Auditor General's (CAG) reports for the FY94 - FY97 and discussions with the Office of the Controller and Auditor General (OCAG), interviews with a sample of central government vote holders and local government officials, and from a meeting involving a cross section of stakeholders. The PER FY00 updates the PER99 analysis, based on information from the FY98 CAG reports for the central government and local authorities. 2.38 As for PER99, the analysis of the CAG reports is intended to: establish the prevalence of qualified or adverse audit opinions issued by CAG; identify the main causes of these unfavorable audit opinions; assess the extent of responsiveness to audit
26 queries and follow up action by vote holders; and analyze and explain the patterns for excess spending or under-funding of votes. Main Findings
2.39 Audit certificates of accounts and statements issued by CAG continued to be predominantly adverse although there was some improvement in FY98 for ministries (Table 1). For regions and local governments the state of the accounts deteriorated tremendously in FY98 with none of the regions receiving a clean certificate and the majority of local governments receiving adverse opinions and qualified certificates. Whereas qualified opinions indicate some points of objection by CAG, the accounts receiving adverse opinion are deemed not to represent a true and fair status of the respective votes. As noted in the PER99, the votes which received adverse certificates had major errors in their accounts and statements submitted for audit, and did not have the required bank reconciliation statements to support the appropriation accounts. 2.40 In FY98, 46 percent of the ministries' accounts received adverse opinion, 12 percent received qualified certificate, while 42 percent received clean certificate (Table Al). Thus. 54 percent of the ministries' accounts received qualified certificate and adverse opinion, showing a slight improvement compared to an average of 60 percent for the period FY94 - FY97. All (100 percent) accounts of the regional governments received adverse opinion in FY98, signaling a significant deterioration compared to the average of 67 percent during FY94 - FY97. During FY98 114 final accounts of local authorities were audited, 2 of which were for FY97 and 1 for FY96. 60 percent of these accounts were declared adverse, 19 percent received qualified certificates, while only 21 percent were pronounced clean. The share of district council accounts receiving an adverse opinion wvas63 percent and higher than the share of urban councils receiving an adverse opinion(42 percent). This may point towards greater capacity constraints in district councils. Overall the status of the local government accounts worsened in FY98, with 79 percent of the audited statements receiving either a qualified or adverse opinion in FY98 compared to an average of 76 percent for FY94 - FY97. As PER99 well noted, the worsening of the trend in the quality of certificates issued by CAG to regions and local governments signifies the continued prevalence of the underlying problems of budget management more generally and accounting problems more specifically. 2.41 The FY98 was also marked by the continued prevalence of expenditures that are not vouched or improperly vouched. However, incidences of unvouched expenditures decreased slightly in FY98 while those of improperly vouched expenditures increased. Improperly vouched expenditures increased from 3.7 percent of total in FY94 to 6.8 percent in FY98 while unvouched expenditures decreased from 1.9 percent of total in FY94 to 1.06 percent in FY98 (Table 2). Overall, the share of non-vouched and improperly vouched expenditures out of the total, rose to 8.8 percent in FY98 from 5.5 percent in FY94. Absence of payment vouchers and other documentary evidence to substantiate the authenticity of expenditures was cited by CAG to be the major reason behind this rise. 2.42 Widespread incidences of embezzlement of cash and stores remained high and continued to raise concern in FY98. The magnitude of cash and stores losses decreased slightly from 0.26 percent of total expenditure in FY97 to 0.15 percent in FY98 (Table 3).
27 Embezzlement of cash and stores remain high mainly on account of non-production or non-completion of bank reconciliation statements and poor procurement and stores management. 2.43 Weak controls, extra budgetary expenditures and irregularities have been observed to be the main causes behind poor certification and losses (PER99). In particular, the immediate and underlying causes for the most frequent audit queries are noted to include: incidences of excess votes; failure by the accounting officers to reconcile bank accounts; inadequate supporting documentation of expenditures; failure to follow approved procurement procedures; and failure of purchasing units to account for purchases, and cash and store losses. Dishonesty and lack of technical manpower capacity especially in the ranks of accountants and auditors constrains the effort to reduce audit queries. 2.44 Excess spending increased in FY98, but overall they were significantly lower than savings. Excess spending occurs in specific votes and is either a result of additional spending on a line item in excess of the budget allocation or unauthorized reallocations across specific line items. As noted in PER99, the problem of excess spending appears not to be widespread and has been put under control through the strict application of the cash budget system. The magnitude of excesses have been relatively low except for FY96, which had a budget overrun due to funding of the general elections (Table 4). Saving or "surplus" problems continued to be much more widespread and more pronounced for development than the recurrent budgets. Expenditure saving slightly declined for recurrent budget but significantly increased for development budget during FY98 compared to FY97. Reasons for the occurrence of savings or surpluses include: unrealistic estimates; projects, which face poor implementation due to under-funding or other implementation bottlenecks; unrecorded expenditures; non-recording or non- charging of aid expenditure for some projects to the accounts hence making it appear as savings against the appropriate estimated provision; and failure to fully account for aid received in the form of goods, materials and equipment (PER999). 2.45 The response to CAG's audit queries improved slightly for the ministries but worsened for the regions in FY98. As for the period FY94 - FY97, satisfactory replies and subsequent redress by vote holders to queries from OCAG continued to be a very small proportion of the total queries issued in FY98. On average, only about 13 percent of queries issued were replied to in FY98, a slight increase over the period FY94-FY97 when an average of 10 percent of issued queries were replied to (Table 5). This suggests that little or no action seems to have been taken by accounting officers to rectify the recurring weaknesses in expenditure control and other compliance issues. The implication of this situation is that in many cases the proper utilization of public funds can not be ascertained, and unless the offenders are sanctioned, little or no improvement will be recorded. However, as noted in PER99 a major cause of non-responsiveness to the CAG's queries is the absence of the will to enforce accountability and a lack of appropriate legal instruments for enforcement. The review of the Exchequer Ordinance is expected to provide for more effective enforcement of compliance to audit disclosures. However, the law itself may not be sufficient, unless it is accompanied by a change in the operative culture to more accountable and transparent behavior in the civil service and by bringing such accountability increasingly into the public domain. Involvement of the
28 press, donors, political institutions, and non-governmental organizations in the review of public expenditure effectiveness will serve as strong stimulants of prudence and accountable behavior.
2.6 ASSESSMENTOF INSTITUTIONSFOR IMPROVED BUDGET PERFORMANCE
2.46 Expenditure management and public sector performance at the three levels of budget performance is critically influenced by the institutional arrangements and processes used for budgeting and expenditure management. This section discusses some of the key institutional arrangements underlying public finance management and provides a brief overview of recent initiatives to strengthen the institutional framework for public finance management. Table 15 provides an overview of institutional arrangements that affect public finance performance. In addition to institutional arrangements affecting directly public finance management (shown in column one of table 15), accountability and transparency are the other key ingredients to ensure improved public finance performance. Table 2.15: Key Institutional Arrangement and Expenditure Outcomes Institutional arrangements Accountability Transparency I. Aggregate Fiscal Discipline A. Macro framework and Ex-post reconciliation Published coordination mechanisms Sanctions Made Public B. Dominance of central ministries Openness of financial markets Freedom of the press C. Formal constraints D. Hard budget constraints E. Comprehensiveness of budget 11.Prioritization A. Forward estimates Reporting on outcomes Published B. Comprehensiveness of the budget Ex-post evaluations Freedom of the press C. Flexibility of line agencies Hard budget constraints Made public D. Breadth of consultations Technical capacity of parliament Comprehensible E. Use of objective criteria Ill. Technical Efficiency A. Civil service pay and merit-based Clarity of purpose/task Published recruitment/promotion Chief executive tenure Made public B. Managerial autonomy of line Financial accounts, audits Freedom of the press agencies Client surveys C. Predictability of resource flow Contestabilitv in service Delivery Source: Ed Campos, Sanjay Pradhan,"Budgetary Institutionsand Expenditure Outcomes- BindingGovemments to Fiscal Performance"Policy Research Working Paper 1646,The World Bank. September 1996
2.47 At the aggregate level, the institutional set up is currently dominated by the cash budget management system, which gives overriding power to the Ministry of Finance and the Central Bank to establish monthly aggregate expenditure levels and enforce a hard budget constraint. However, the cash budget management system imposes significant costs in the form of reduced operational efficiency and will need to be replaced by more flexible and robust mechanisms which can support improved efficiency and service delivery capacity while ensuring aggregate fiscal discipline. However, it is widely accepted that the relaxation of the cash budget system will be gradual to avoid the recurrence of large fiscal imbalances. Such a gradual approach could involve the move to a quarterly commitment system as well as the relaxation of the cash budget constraints
29 for MDAs that are part of the performance management pilot. As the cash budget system is relaxed, the Medium Term Expenditure Framework will gain even greater significance as it provides a three year macro framework for estimating resource availability from both domestic and foreign sources and to coordinate expenditure planning and management. While the cash budget system limits the benefits of a MTEF approach, the use of the MTEF since FY99 nonetheless has already led to improvements in budgetary planning and allocations. Equally important, its introduction while the cash budget is still in place provides the opportunity for learning by doing with limited risks and will thus facilitate the eventual move away from the cash budget system. 2.48 At the level of strategic allocations, the PER/MTEF process provides a framework for wider participation in the budgeting process. Government has opened up the process to provide the opportunity for various stakeholders to provide inputs to the process of making strategic allocations. At present, the allocation process is heavily influenced by donors through the MDF and HIPC conditionalities. However, the goal should be to further strengthen domestic participation in the allocation process to ensure that local priorities are catered to and that poverty is addressed in an effective way. Limited technical capacity both in the executive arm of Government as well as in Parliament limits the application of objective criteria in the allocation process. However, it is expected that training provided in the framework of the MTEF as well as support by local research institutes and external consultants in the preparation of Public Expenditure Reviews will lead to strengthened capacities in this area. 2.49 Institutional problems at the level of operational efficiency are still severe and limit effective service delivery. Efforts under the Public Sector Reform Program are intended to overcome some of these institutional bottlenecks. However, it is also necessary that these bottlenecks are taken into account during the process of budgetary planning and that Government refrains from undertaking activities before institutional and human resource constraints are reduced. 2.50 In the following section we provide an overview of the status of various initiatives that are intended to improve the institutional framework for budget management in Tanzania. StrengtheningFinancial Managementand Accountability
2.51 The PER process is now focusing on raising and monitoring the efficacy of the public expenditure after having achieved some significant success in promoting greater focus on priority sectors as well as OC in budget allocations. Emphasis is being placed on rolling out the Integrated Financial Management Systems to widen coverage; introduction and widening the adoption of Performance Budgeting; strengthening the public audit system, follow ups and public disclosure; and implementation of performance improvement plans under the Public Service Reform Program. These measures will be buttressed by the amendment of the Exchequer Ordinance, splitting it into two acts. the Financial Management Act and the Public Audit Act.
30 ComputerizedFinancial Accounting System
2.52 An Integrated Financial Management System (Platinum) has been introduced to all Ministries. In addition, the IFMS has also been introduced in TRA and 19 TRA offices and sub-treasuries in the districts. While Ministries are connected on-line to the central Platinum server through a wide area network (WAN), the 19 remote sites exchange data with the center through a dial-up network. 2.53 It is also planned to implement in a phased manner a new Financial Management and Accounting Framework based on Platinum SQL for all Local Government Councils. Preparation for implementation is currently underway in 28 Councils. 2.54 Training in the use of the IFMS has been provided to staff in the Ministries and districts, as well as to staff in the Office of the Controller and Auditor General. 2.55 The Budget Manager module of the Platinum system also allows for multi-year budgets, profiling year 1 by month (or quarter) and years 2 and 3 in total, which allows for the eventual integration of the Medium Term Expenditure Framework into the computerized IFMS. In addition, the coding of expenditures and revenues in the new chart of accounts already includes codes for objectives, targets, and activities, in order to make the IFMS compatible with the introduction of performance budgeting. 2.56 It is foreseen that starting July 1, 2001 only IFMS is used as governrment budgeting, accounting, and financial information system, with no fiscal transactions taking place outside the IFMS. Creatingthe Legal Frameworkfor Improved Public Finance Management
2.57 A new accounting circular was issued in July 1999 to enable the use of the IFMS and cash budget management. In light of the ongoing reforms, the Exchequer Ordinance that currently provides the legal basis for public finance management has become inadequate. To further streamline public finance management and to create the legal basis for new public finance management approaches, two new bills, the Public Audit Bill and the Public Finance Management Bill will be tabled in Parliament during its June 2000 session. Implementing regulations will be issued in August 2000. The new legislation will also entail improvements in the framework for public procurement. PerformanceBudgeting
2.58 Performance budgeting was introduced to seven ministries in 1998 on a pilot basis. In 1999, the pilot was extended and performance budgets were prepared by all Ministries in 1999. A review of the experience with performance budgeting yielded the following main conclusions:4 * Most spending agencies did not adhere to the set ceilings. Only eleven (11) ministries out of twenty-five (25) and one (1) independent department out of sixteenth (16), adhered to the set ceilings. This shows a weakness of prioritization of targets.
Report on the Performance Budgcting Evaluation Workshop, held at Bahari Beach Hotel from 2-3 August. 1999
31 * Most spending agencies did not prioritize their objectives and its justification as required. * Lack of clarity and consistency of objectives, policies/strategies and targets. * Shortfalls in the budget guidelines for FY00 regarding PE ceilings of parastatals which were not separated from ministerial "OC". * It is clear that the conceptual framework of performance budget has taken root. * The technical side of performance budgeting through target tables was generally stronger than the planning side through a strategic framework. The weakest area being that of presenting the objectives in priority and annual targets as well as identification of activities. * There is a lack of clarity and sequence of thinking from general to particular and vice versa. i.e. the link between the strategic framework, 3 year targets and annual targets is lacking. * There is inadequate integration of personnel dealing with the planning and budgetary parts of performance budgeting, (i.e., personnel dealing with PE preparation and OC/Planning).
2.59 In order to facilitate performance budgeting in the coming years, GoT issued in August 1999, a performance budgeting operations manual, which provides detailed instructions on the process and technical requirements for preparing a performance budget as well as the framework for monitoring and reviewing the performance budget. 2.60 Performance auditing would be a logical complement to the introduction of performance budgeting. Although the Office of the Controller and Auditor General is eager to expand its audits to cover this new area, the OCAG currently lacks resources, manpower, and skills to carry out such audits effectively. Donor Coordination
2.61 Tanzania is one of the main recipients of external assistance in Sub-Saharan Africa. On average Tanzania receives about US$ 900 million per year from external sources. This amount is slightly over 10 percent of GDP. However, not all of the inflows pass through the exchequer system to support the Government budget. It is estimated that about 70 percent of such external resources go directly to the projects supported by donors. 2.62 Every donor has different processes and strategies of channeling the resources to the targeted projects. The multiplicity of these has made donor coordination a tedious one requiring more capacity at the Ministry of Finance. Donors have different accounting systems, different disbursement modalities and different financial years. To harmonize the multiplicity of the donor accounting systems, there are plans to integrate donor facilities in the new Integrated Financial Management System (IFMS) using the Platinum software. 2.63 In addition, the Government is now taking the lead in preparing a country assistance strategy referred to as Tanzania Assistance Strategy (TAS). This is a broad based framework which encompasses all the donor interventions in the country in a coordinated manner. In such an endeavor, the Government will list its priorities, talke
32 stock of its domestic resource envelope to determine the resource gap which then can form the basis for negotiations with donors. 2.64 Another promising approach to ensure greater integration of donor resources into overall government programs is the development of sector development programs and basket funding arrangements. Sector development programs have been developed for the roads and the health sector and are under preparation for the education sector. Basket funding arrangements support the strengthening of the TRA as well as the implementation of the Local Government Reform Program. Reducing Corruption
2.65 Corruption in various forms and at various levels of Government is a major obstacleto achieving operational efficiency in the delivery of public services. In order to reduce corruption, Government under the leadership of the Prevention of Corruption Bureau (PCB) has developed a comprehensive anti-corruption strategy, which is currently in the process of being operationalized and will be implemented over the coming years. Strengthening the Office of the Comptroller and Auditor General
2.66 The Office of the Comptroller and Auditor General (OCAG) plays a key role in ensuring accountability for the use of public resources in Tanzania. In FY00, the OCAG has received a significant increase in budgetary resources which allowed an acceleration in the audit process. The audit report for the financial year FY98 has been published with less delay (15 months after the end of the financial year) than in previous years and there was a significant reduction in the backlog of audits of local Governments. The main issue is now on the effective follow-up to the OCAG report. This must entail both effective prosecution and sanctions for problems identified by the OCAG and the implementation of measures that prevent the recurrence of problems highlighted by the OCAG.
33 2.7 ROAD FUND MANAGEMENT
Background
2.67 The roads sector is one of the central sectors in the Tanzania economy and is crucial for the sustainability of the country's economic development. The road sector handles about 70 percent of internal freight, 64 percent of transit cargo and is a major mode of passenger transport. The strategic nature of the sector has made the Government of Tanzania accord it and other infrastructure investments a high priority. The Tanzania Vision 2025 considers the development of the road network absolutely essential for promoting development, particularly rural development. 2.68 The administration of the road network falls under two separate ministries. The Ministry of Works (MOW) which administers trunk and regional roads, and the Ministry of Regional Administration and Local Governments (MRALG) which, through local authorities administers district, urban and feeder roads. The management of trunk road construction, rehabilitation, and maintenance is, from February 2000, managed by an executive road agency - TANROADS. In terns of financing of upgrading, rehabilitation and maintenance there is participation of both the Government and donors at all levels of the sector. There is also the participation of the private sector and communities in road maintenance. The main source of finance for maintenance and operations is the Road Fund, which is funded from as a fuel user charge and shared at the ratio of 70:30 between WOW and MRALG. The focus of this section of the report is to assess the effectiveness in the management of the Road Fund. Establishment of the Road Fund
2.69 The Road Fund was established after the approval of the Amendment No.2 to the 1985 Road Tolls Act on December 23, 1998. This is the fund "into which shall be paid all monies collected as roads toll imposed on diesel and petrol, transit fees, heavy vehicle licenses, vehicle overloading fees, or any other source at the rate or rates to be determined by Parliament from time to time." The amendment vested the administration of the Road Fund to the Road Fund Board, to be composed of a Chairman and eight members, four of them representing the private sector. The Road Fund Board was officially inaugurated on August 27, 1999, after which it organized the Secretariat, including the appointments of TANROADS Chief Executive in November 1999 and Road Fund manager and accountant in January 2000. There are several pertinent issues that need to be considered as the Government gears toward ensuring that more resources are availed for funding road rehabilitation and maintenance. Key Issues on Road Fund Management
Sources of Roads Fund Revenue
2.70 Before the amendment of the Road Tolls Act of 1985, fuel levy was the onlv source of revenue for the Road Fund. Although the Road Tolls Act was amended two years ago to include in the Road Fund more sources of revenue, so far these additional
34 sources have not contributed to the fund. The proceeds of these sources have instead been allocated by the Treasury to other expenditures. Table 16 shows the amounts of revenue collected from transit fees, heavy vehicle license fees and vehicle overloading fees, which were not deposited in the road fund account. Table 2.16: Revenue Collected by Treasury but not included in the Road Fund (Tsh. million)
RevenueSource FY98 FY99 FY00* Transit fees 624 800 | 5 Heavv vehicle license fees 652 604 0.6 Vehicleoverloading fees 1014 658 1 5.0 TOTAL 2290 2062 1635 * Upto December1999. Source: Louis Berger S.A (2000) - PER study on Tracking of the Roads Fund
The Fuel Levy rate
2.71 There is also concern about the rate of the fuel levy. The levy was Tsh. 7 per liter in 1991 but was raised to Tsh. 70 per liter in July 1998, and has remained at that level to date. In real terms, the rate has actually declined and may not be serving well the intended purpose. Expressed in US dollars, for example, the rate varied between 2.0 cents in early 1992 and 10.6 cents in late 1998. Since this peak, the rate did not follow the depreciation of the shilling and now represents only 8.8 cents (Louis Berger S.A, 2000 - PER study on Tracking of the Roads Fund). Aside from administrative problems related to tax evasion due to illegal fuel business, the fixed nature of the rate of fuel levy in nominal terms explains why the road fund revenue has been almost stagnant over time (Table 17) and declined in real terms. Table 2.17: Road Fund (fuel levy) Collection, FY97 - FY00 (Tsh. Million)
FY97 FY98 FY99 l FY00 l Road Fund (Total fuel levy collected) 33936 36703 38395 25898 * Up to December 1999. Estimated collection for FY00 is Ths. 38.847 million. Source: Louis Berger S.A (2000) - PER study on Tracking of the Roads Fund
Revenue Collection and Releases of Road Fund
2.72 The Road Fund collection and release procedure is as follows: first, the amounts collected by the Tanzania Revenue Authority (TRA) in the Dar es Salaam region are deposited directly into the Road Fund Collection account at the Bank of Tanzania (BOT), while the amounts collected in the remaining 19 regions are banked in commercial banks and eventually transferred to the Pay Master General (PMG) account at BOT. Second, the releases of revenue from the PMG account to the Road Fund Collection account, and from the Road Fund Collection account to the MOW Road Fund account and MRALG Road Fund account depend on the directives of the PMG/Permanent Secretary in the Ministry of Finance. Third, the releases of revenue from the MOW Road Fund account to regional engineers' accounts at NMB and from MRALG Road Fund account to the
35 District Councils' accounts at NMB are done under the directive of the accounting officers in the respective ministries. 2.73 Although the procedure above is very clear, in practice there has been a problem of non-release or shortfalls in the release of funds by the Treasury. During FY97 to FY99, for example, a total of Tsh. 109,034 million was collected as fuel levy, but out of this only Tsh. 81,946 million were actually released by Treasury to MOW and MRALG. The balance of Tsh. 27,088 millions or 24.8 percent of total collection, which represents almost one year of collection, was not transferred to the respective ministries. In FY00 the untransferred Dalancestood at Ths. 9,108 million or 35.2 percent of total collection as of December 1999. This makes total untransferred collection during FY97 to December 1999 stand at Tsh. 36,196 million. Although the Government has promised to remit the outstanding untransferred balance before the next financial year, the withholding or delay in releasing these funds must have had implications in terms of the delays in road works implementation and payment of various contractors. 2.74 There were also problems related to the distribution and timing of the releases of road fund revenue. Results of the tracking study of the Road Fund indicate that the distribution ratios between the two ministries (MOW and MRALG) were not respected in FY97 and FY98. During these two years MOW received 82.26 percent and 84.8 percent respectively, instead of the scheduled 80 percent. However, the 70:30 ratio has been respected since FY99. It is also noted that in FY97 there was no release during the first quarter of the fiscal year and at the end of the second quarter only 31.25 percent of the annual total was released. In FY98 the situation improved mainly because of a major release on July 10, 1997. However, only 46.9 of the annual total was released at the end of the first two quarters. Basic Problems of the Fuel Levy Collection Process and Recommendations to Improve the Process
2.75 Two basic problems are noted as regards fuel levy collection process. The problems are: first, the process is complicated with too many entities involved and long transit time for the funds in the banking system. Significant interest earnings are lost during this process. The other problem is that the time taken by the whole process is quite long and under the full control of the Permanent Secretary - Treasury, which makes the time of the release quite unpredictable. This results in serious cash flow problems during the implementation of the road maintenance contracts. 2.76 The following suggestions would help improve the collection process and revenues collected. First, the Road Fund Board should enter into formal agreements with each agency in charge of collecting a given type of road toll/levy for the transfer of the funds collected on a regular and guarantied basis. Second, TRA should transfer the fuel levy directly to the Road Fund Board account without going though the Treasury which will receive all corresponding information on the movements of funds. Third, The Road Fund Board should arrange to receive the funds from TRA in the regions in order to be able to secure and maximize any interest generated between the time of collection and of expenditure of the funds. Fourth, the overload fines should be centralized on the Roads Fund account as soon as collected by the Weigh Bridge units. Lastly, the fuel levy should be increased whenever there is a significant depreciation of the shilling, so as to offset the
36 impact of the depreciation on real Road Fund revenue. In the short term, this could be achieved without increasing the total fuel retail price by reallocating the taxes collected on fuel between TPDC, TIPER, energy fund, excise duty and road toll in order to increase the share of the later at the expense of some others.
37
3. SYSTEMICFISCAL ISSUES
3.1 THE PLIGHT OF THE DEVELOPMENT BUDGET
3.1 Budget analytical work done under the public expenditure review process (PER) for FY98 and FY99 revealed a number of disturbing features of the development budget in Tanzania. First, there is a significant divergence between commitments and disbursements and within the fiscal year releases of funds are erratic constraining proper planning of commitments. Generally actual disbursements are much less than what was originally provided for. The divergence is marginally higher for the foreign financing component (55% - 95%) than for the local component (49% -98%). The divergence is also higher for the regions (52% - 89%) than for the ministries (23% - 85%). There is also a wide divergence between budgeted and disbursed amounts partly due to lack of counter-part funding.
Chart 3: Actual Development Expenditure (% of Budget)
Chart iAclual De- elopm eat Expenditure (% of Budget)
400 400 ______i
-s O '"0O ~+0 NIM ,eInstries.Depts t~~ & Regions
15 o .~. I~~~~~~~~~~~~~~~~~~~~~~~~~N Ot . __. _ d_ ns re s.., D. Rcgi
I0 __
19596 1996/97 7 90/989 998/99 Ye~ars
3.2 Data on actual development expenditure of regions for FY96-FY99 as a proportion of total development expenditure shows that its share is not only small and erratic (annual average of 8.6 percent of total development expenditure) but also declined from 13.0 percent for FY96 to only 5.1 percent in FY97, only to recover partly to 9.9 percent by FY99 probably reflecting the recent decentralization drive. In addition, most regions did not receive any funds for development expenditure during the first 8 months of FY00 and delays of up to 6 months were experienced in FY99 and the releases were sporadic hampering planning of commitments. In terms of regional distribution, analysis of available data also suggests a skewed distribution of the development budget partly
38 reflecting donor preferences in selecting geographic areas of operation. For example, over the period FY96-FY99, four regions (Mara, Kagera, Rukwa and Mwanza) alone accounted for about 61.1 percent of the annual development expenditure by region. 3.3 Analysis of the development budgets and actual outtums by source of funding (local or foreign) shows that the development budget is heavily donor-funded to the tune of very close to 80 percent. This reliance on foreign financing has also been increasing in recent years from 58.8 percent in FY96 to 91.9 percent in FY99 coinciding with the period of applying the cash budget system focused on the recurrent budget. In addition, it is also apparent that there are fairly wide divergences between the budgeted amount (proxy for commitments) and actual outtum (proxy for disbursements) both by donors and government. The experience of the last four years suggest that overall, development expenditure has been off-budget by an average of 73 percent. Generally the foreign component exhibits a higher variance (79.6 percent off-budget) compared to the local component which has on average been off-budget by 67 percent. 3.4 Variations of development expenditures within the fiscal year are also very significant Chart4DevelopmentExpend. and move closely with the releases of foreign 0o0% - finance. Quarterly development expenditures 809ao5_ C ,. reflect closely the pattern observed for 60% -:- C FY96 development grants and concessional loans, 40% FY97 with most of the expenditure being recorded 20% U either in the second or fourth quarter. This a 02 Q3 probably reflects the end of the fiscal year of I donors as mentioned before, and associated disbursement and reporting requirements. No separate data are available to allow the breakdown of development expenditure into domestically and foreign financed components. However, the share financed from domestic resources is typically small and closely linked to foreign financed expenditures, usually in the form of counterpart funding, 3.5 Second, the development budget is characterized by a preponderance of extra budgetary financing particularly at regional and local government levels. Interviews with the Coast region officials, for example, revealed that there is a wide variation of modes for supporting development activities. One category of donors channels the funds through the regional office. The second category of donors sends finance directly to the districts or to the district council through the ministry responsible; while the third category bypasses the concemed ministry, region and district authorities by sending money directly to the projects which they implement with the help of project management units. Still other donors channel resources directly to the bank accounts of groups (e.g. women) implementing a project. 3.6 The third issue relates to inadequate provision of counter-part funding which is needed to trigger committed finance of development projects especially by the multilateral institutions. The issue of counterpart funding relates to the requirement by donors that the Government makes available some resources to complement and trigger committed donor finance of development projects. This applies more so for multilateral donors, as most bilateral donors do not have the counter-part funding requirement. However, the level of counterpart funding requirement varies across donors ranging from
39 5 - 15 percent. One problem is that the basis of such levels is not quite apparent. But an even greater problem is that the Government has been unable to provide for the counterpart funds thereby inducing delays in donor disbursements or non-disbursement altogether. A reduction of the magnitude of counterpart funding requirement and a gradual shift towards generalized budget support will certainly help alleviate the problem of disbursement. However, this requires a solid financial management system to be in place to obviate the need for tight donor controls of development project financing. 3.7 The fourth issue relates to problems in the development budget process and weaknesses in implementation capacity. The development budget process is thwarted by numerous problems as identified in a study commissioned by the PER Working Group: (i) The number of institutions involved in determining the budget is large and the process operates at different levels right from the central ministries through line ministries, to the local governments, communities and specific enclave projects. (ii) The guidelines for the preparation of the Medium Term Plan and Expenditure Framework do not provide sufficient guidance for prioritization in the development budget. Delays in issuance of the Budget Guidelines put strain on those responsible for preparing ministerial budgets. The Budget Guidelines also do not show how the ceilings for this component of the budget are arrived at, as most of it is based on guess work on what level and type of support is likely to emerge. Compliance to the BG themselves is not observed, again partly due to the high level of uncertainty of financing. (iii) There are capacity constraints in the institutions concerned (planning units in ministries and the budget division in MoF and local authorities) which cause delays in project execution and unclear assessments of what is intended for a given period. The capacity problems also affect success in project implementation due to weaknesses in design; project management and monitoring of implementation, especially at the local government level. (iv) A more serious implementation problem relates to weaknesses in the procurement system, which holds up progress in implementation. This problem is particularly acute in the roads sector. The capacity of handling procurement is weak partly because a significant number of supplies officers were trained a long time ago and their skill profiles have not evolved with the changing requirements of modem procurement systems. Moreover, there are weaknesses in the procurement law, which hamper transparency and prudence. These weaknesses are now being addressed under a proposed amendment to the law. (v)There are also problems of coordination between the roles of MoF and PLANCOM especially on sectoral issues. Since sector specialists in PLANCOM were not transferred to MoF, with the shift in the responsibility for this component of the budget, sector issues are not adequately addressed partly because the limited capacity in MoF tends to be pre- occupied with the recurrent budget. The criteria used in selecting development projects in the budget is also not transparent. There are also problems of integration between the central government and local government budgeting that is still evolving.
40 3.2 DESIRABLE LEVEL OF REVENUE MOBILIZATION
3.8 In determining the desirable level and the modalities of domestic revenue mobilization the Govermment typically has to strike a balance between meeting demands for higher public expenditure, and therefore higher revenue mobilization, and lower taxation of private incomes. Tanzania has a relatively low tax revenue-GDP ratio, which lies considerably below the average for Sub-Saharan Africa of 16.4 percent. Estimates indicate that the revenue potential of the Tanzanian economy might be currently six to nine percentage points higher than what is currently achieved, i.e. between 17 and 20 percent of GDP. However, it is also clearly understood that realizing this revenue potential is an extremely tedious and slow process, which is likely to take a considerable number of years to achieve. 3.9 The demand for higher revenue mobilization comes from the severe under- funding of basic social services such as primary health and education and of physical infrastructure services, which have been identified as being essential to economic growth and progress in sustainable human development. It also arises from the desire for greater self-financing and low donor dependence in the longer term. The key arguments for increasing revenue would thus be that it would have high payoffs in terms of facilitating growth and reducing poverty on a sustainable basis. The argument for higher revenue is also closely intertwined with the provision of foreign aid by donors and the issue of unsustainable aid intensity. A central assumption underlying most donor assistance is that their resources are additional to whatever funds can be mobilized efficiently domestically, rather than substituting for domestic revenue. As a result of the decision to protect expenditure to social sectors, the share of expenditure allocated to these sectors as a percentage of discretionary expenditure has shown an upward trend in recent years, rising from 17.1 percent in FY96 to 22.2 percent and 24.7 percent in FY97 and FY98, respectively. This increase has been realized largely on account of increased donor support. The important issue here is that a permanent solution to the problem of under- funding of government operations cannot be found in ever increasing but only in increased domestic resource mobilization and their efficient use. Further reductions in tax exemptions, rationalization of the tax regime and improvement in tax administration to curb tax evasion are some of the important measures that are required to help broaden the tax base and increase tax revenue. 3.10 On the other hand there are costs to large transfers of private resources to government. The cost of higher revenue mobilization in this regard are two-fold. Firstly, taxation withdraws resources from the private sector and households and thus has significant opportunity costs. Secondly, taxation may introduce inefficiencies into the incentive system of an economy. 3.11 When the tax burden falls on a narrow base, those shouldering such a burden disproportionately will be aggrieved leading to poor compliance. The issue of the withdrawal of resources from the private sector is accentuated by the fact that in Tanzania the easily accessible tax base is relatively small and tax evasion wide spread, which increases the tax burden on the few tax payers. To provide a comparative view of the tax burden faced by the businesses we present some information on the marginal effective tax rates (METR), as shown in a recent World Bank study on Uganda, Kenya, and
41 Tanzania. The METR in effect measures the impact of the tax regime on the net business profit and activity. The study distinguishes between the effects on the cost of capital and on the cost of production. Overall Tanzania's METR for the manufacturingsector's cost of capital, at 40 percent, is the highest in East Africa (Kenya 28.8 percent and Uganda 33.8 percent). Taxes on machinery, inventories and land are particularlyhigh. In the case of tourism, Tanzania's METR on capital and cost of production for foreign firms lies significantly above Kenya's, the main competitorbut below that for Uganda. The higher METR for manufacturingleads to the frequent expressionsby manufacturersof an overly high tax burden. The key challenge in this area is thus to increase tax revenue without increasing the METR. This calls for a need to broaden the tax base and reduce tax evasion as well as exemptions. Table 3.1: Marginal Effective Tax Rate on Capital for Foreign Firms (ApplyingUganda's Non-Tax Parametersto Kenya and Tanzania)
Uganda Kenya Tanzania Manufacturing Buildings 38.9 1.9 25.6 Machinery -3.9 12.3 31.0 Inventory 59.0 69.0 61.9 Land 32.8 27.5 39.0 Aggregate 33.8 28.8 40.0
Tourism Buildings 36.5 0.9 15.9 Machinery -1.8 10.0 28.5 Inventory 59.0 69.0 61.9 Land 32.8 27.5 39.0 Aggregate 32.6 7.5 21.9
Table 3.2: Marginal EffectiveTax Rate Cost of Productionfor Foreign Firms (Applying Uganda's Non-Tax Parametersto Kenya and Tanzania)
Uganda Kenya Tanzania Manufacturing Capital 33.8 28.8 40.0 Labor 10.0 0.1 4.0 Fuel 174.0 62.0 25.4 Overall 30.7 21.5 28.8
Tourism Capital 32.6 7.5 21.9 Labor 10.0 0.1 4.0 Fuel 174.0 62 25.4 Overall 29.9 7.2 17.0 Source: Chen and Reinikka. 1999 3.12 Distortionsmay arise in the incentive regime due to excessivelyhigh taxes. In the past, reform efforts have aimed at reducing these inefficiencies, which have led to a decline in the tax revenue-GDPratio for many African economies. The focus of many of
42 these reforms was clearly on efficiency without paying sufficient attention to the implications for revenue and public finance. Here the assumption was that either distortionarytaxes would be replaced by non-distortionarytaxes and thus reformnswould be revenue neutral, or could actually increase tax revenue through enhanced compliance as tax rates were reduced. 3.13 It is important to point out that the key factor deterrnining the desirability of domestic resource mobilization effortshas to be the effectivenessand efficiency of public spending. If efficiency is low, it is clearly undesirable to increase resource flows to the public sector, unless it is ensured that increased resource flows are necessary and will lead to increased efficiency in public service delivery. This argument is closely associatedwith enhanced willingness to pay taxes when quality and quantity of service delivery by the public sector improves. This further strengthensthe argument for public sector efficiency as a precondition for increasing resource mobilization. On the other hand, it also cautions against using the budget excessively as an instrument for redistribution, since if the perceived service delivery to those who pay taxes goes down, their willingness to pay taxes may also decline.
3.3 FIsCALRESTRAINT AND CASH BUDGET MANAGEMENT SYSTEM
3.14 The cash budget management system was introduced in FY97 to impose fiscal discipline on the spending units and enforce limits on aggregate spending in line with collected revenue and external aid disbursed through the exchequer system. Since its introduction the GoT has succeeded to inject considerable discipline into the budget process. The cash budget system has also been successfulfrom a macro perspectivein the sense that it has by and large managed to curb budget deficits (before and after grants) that were characteristic of the Tanzania budget prior to its introduction, and generated surpluses averaging I percent of GDP thereafter. The cash budget system has also facilitated the recent sharp reduction in the rate of inflation from almost 35 percent in 1995 to 6 percent in March 2000. 3.15 However, the cash budget systemhas also entailed significant costs particularly in the form of unpredictable funding of essential public services leading to wide monthly swings in the funding of government operations to match revenue availability. Commitmentsagainst government obligations,apart from the wage bill and debt service, have had to be in a monthlytime frame restricting the scope for activity planning. There are particularly large quarterly and monthly variations of the "Other Charges" (OC) which arise from the large variations in releases for this item of expenditure. Personal emoluments and debt service are the first claim, so the brunt of fluctuations in the releases from domestic and disbursement of external aid under the cash budget management system is borne by the other charges. As a result of the unpredictable availability of finance, service delivery in all sectors has been erratic although priority activities within priority social sectors (education, health, water, roads and agriculture) have now been protected. Generally,the capacity of the Government to provide adequate physical infrastructure and to provide all Tanzanians with access to basic social services has been restricted to cash availabilitywith insignificantuse of domestic credit to smooth the monthly gaps. The cash budget era has also been marked by failure to respect sectoral and economic allocations as approved by Parliament as expenditure programs
43 were under-funded due to revenue shortfalls. This is particularly manifested in the squeeze on expenditures on other charges especially on materials and supplies, as well as counterpart funds for donor funded development projects. These items have typically been treated as residuals in making cash-based exchequer releases. The consequence has been to impinge upon both allocative efficiency and budget predictability. For the system of performance budget to operate effectively, the predictability of budget allocations will have to improve. 3.16 In order to mitigate some of the negative effects of cash budgeting, borrowing to smooth fluctuations resulting from unpredictable monthly revenue flows is one recourse but the law restricts advances. In the absence of large cash floats such smoothing is limited. Moreover within the month there is a bunching of releases towards the end of each month as these releases are predicated on actual cash availability. With VAT and income tax collections gravitating towards end month due dates, the actual releases follow the same patterns. Given that uncertainty in the final out-turn poses a risk, such temporary deficit financing may be converted to increased stock of indebtedness violating the commitment to reducing it. An issue that has been raised by some observers is whether such a risk is significant given that overall the country has managed to run budget surpluses for three years now and that sustainable fiscal deficit levels are hardly in danger of being violated. 3.17 The Government has also recently allowed a number of Ministries to operate with three-months commitments instead of monthly commitments. This should improve the capacity of these Ministries for rational budget implementation. However, this decision to move to a three months commitment system presupposes that the problems associated with the application of the cash budget are mainly due to volatility in the timing and forecasting of receipts. This timing issue, month to month volatility in receipts and errors in forecast can in principle be dealt with in several other ways, including the adoption of quarterly cycle in place of the monthly cycle or by using short term borrowing, adjustments in one period for the prior's deficit/surplus, and substantive reserve funds to smoothen out spending patterns. Nevertheless, it is also fundamental to consider whether or not the inconsistency and budget slippage in the application of the cash budget system are due to "emergency spending needs", wasteful spending, poor coordination in budget management between the BoT and MoF, or reflect a lack of realism in the budget itself. That is, besides the timing issue it is equally important to ensure that the budget allocations reasonably reflect the true commitments that the Government has undertaken and address other important sources of budget slippage otherwise the problems will persist. The government has therefore to continue not only to cement hard budget safeguards and inject discipline and sanctions into the budget process but also right-size its budget. These can be achieved by implementing a solid MTEF and rigorously apply IFMS to provide a timely and meaningful accounting data. The Ministry of Finance will need to closely watch whether the relaxation of monthly cash budgeting requirements interferes with maintaining overall fiscal discipline and macroeconomic stability.
44 3.4 MACROECONOMIC STABILITY AND DEBT SUSTAINABILITY
3.18 A positive decision has been reached by financiers, which will allow Tanzania accede to the enhanced HIPC relief. The interim relief will be available from the last quarter of FY01 onwards when the Government plans to reach the completion point. Thereafter the full HIPC relief is expected. This change has profound influences both on the resource envelope projections and on the deepening of recent progress in expenditure prioritization, given the poverty-focusof the enhanced HIPC initiative. We focus here on the implications for the size of the resource envelope and the level of aggregate spending. The Governrmentis aware of the continuing evolution of the procedures governing HIPC agreements and used existing guidelines for projecting the MTEF scenarios, aware that adjustments may need to be made. 3.19 The interim HIPC relief, through IDA and IMF grants, will enable the country to free up a sizeable amount of its own resources for servicing multilateraldebt ( estimates used in the current MTEF projections are $60 million for FY01 rising to about $110 million after reaching the completion point). The additional relief over that availed under the interim arrangement will be due to reduced debt service for bilateral debt when the Paris Club relief associated with terms for enhanced relief becomes effective after reaching the completion point. Interest on external debt tapers down after FY01. The net effect on expenditure projections from the above relief in combination with increased revenue effort is to raise it from the likely out-turn of 17 percent of GDP for FY00 to 20.3% of GDP in FY03, a full three percentage points of a growing GDP. 3.20 Partly related to the above is a significant change in the projected size of the fiscal deficit to accommodate increased expenditure enabled by the relief and smaller increases in project grants. Given that the HIPC relief will be in the form of budgetary support, long-term, and irrevocable once the completion point is approved, the risks associated with the related expansion of the fiscal deficit (after grants) are not significant. The projected deficit after grants will rise from the projected actual of-0.4 percent in FY00 to -1 4 percent of GDP in FY03. The fiscal deficit before grants will rise to nearly -6 percent over the corresponding period approximately its size in FY95, the increase being fully financed by an increase in external grants and very soft loans. This size of the deficit appears to be sustainable, given the real GDP growth projections ranging between 5 and 6.6 percent for the period and the fairly steady flow of relief from the HIPC arrangement. Barring any major surprises from offsetting large cuts of bilateral aid, this situation is basically sustainable. A sample of donors interviewed during the PER mission confirmed additionally of HIPC support. The section on macroeconomic review deals extensively with the issue of debt sustainability after HIPC, where new borrowing is contracted. This form of financing is basically non inflationary. 3.21 One possible downside effect of this shift in fiscal stance, however, is that it is likely to increase relatively more expenditures on goods and services that are typically not traded internationally, leading to the strengthening of the shilling and reducing the competitiveness of Tanzanian goods. The resultant shift in the relative profitability against producing for export for example would lead to loss in the base for robust growth. The Bank of Tanzania could begin focusing immediately on effective strategies for prudent sterilization against such effects.
45 3.5 CO-EXISTENCEOF OVERALLFISCAL SURPLUSSIDE BY SIDE WITHUNDER- FUNDINGOF PRIORITYSECTORS
3.22 There is continued concern over the co-existenceof overall fiscal surplus (after grants) side by side with under-funding of priority sectors. The perception is that the Government is putting monies away (building up reserves) and/or availing it to the private sector through the domestic banking system (by reducing its stock of domestic debt with the banking system) while governmentexpenditures and net lending remained around 15.1 percent of GDP for FY97 to FY99. It may be argued that a shift of resources from the budget to the private sector may raise overall effectiveness in the their utilization, if as presumed, the private sector is a better user. However, given the very slow movement of these resources from the banking system to the productive sector, as reflected by loan to deposit ratios ranging between 30 and 50 percent, the shift may not be de facto happening. Moreover a rise in gainful absorption of these resources by the private sector depends also on the absorptive capacity of the private sector, which can be enhanced only if supportive infrastructure and better public service delivery can be financed. 3.23 The Government has projected a rise in the budget deficit to 1 percent of GDP (after grants) in the next three years (MTEF) to address this concem. This target is within a prudent range. The PER report for FY99 estimates sustainablefiscal deficit levels (after grants), given the growth projections of 5 percent per annum and sustainable level of indebtedness of the country, at 2 percent of GDP. If the current level of the external grants to GDP is maintained at four percent (made more likely by the prospective HIPC resources), then a fiscal deficit-of 2 percent as a proportion of GDP would not seem imprudent. Key to sustained price stability is that deficits are not financed through excessive increase in net domesticassets. 3.6 CONCERNON ABSORPTIVECAPACITY CONSTRAINT WITH INCREASING RESOURCES
3.24 Another issue relates to the concern regarding possible limited absorptive capacity of the Govemment for much larger expenditures.Available projectionsfor FY01 - FY03 show a considerablerise in the share of governmentexpenditure to GDP from the current 15.1 percent to 16.2 percent in FY03, against the backdrop of projected economic growth to the tune of 6.5 percent by the end of this period.This is not a small increase indeed and will be financed through higher domesticrevenue and the expectedrise in external grants -mainly from enhanced HIPC debt relief A large part of this expenditure increase is on account of the much higher projected external grants and an allowance for a fiscal deficit after grants averaging 0.8 percent over the FY01 - FY03 period in contrast to the estimated surplus of 0.3 percent in FY99. This increase is equivalent to 1.1 percentage points of a much larger GDP base. Currently the priority sector financing needs, based on the MTEF and related supportive technical studies, are grossly under-funded and absorption should not be a problem. Total availablefinance meets approximatelyonly 60 percent of requirements. This is particularly so given that the workforce in the civil service has been starved of supplies for delivery of service. It can be contended that even with improved cost-efficiencyin public service deliverythe current ratio of other charges to personal emoluments remains far below the desirable level. Comparable efficiency
46 ratios in Tanzania during the 1960s, when public service delivery was efficient, other charge as a percentage of discretionary recurrent expenditure (netting out debt service) averaged 65 percent. However, the main concern with the absorptive capacity is whether the expected increase in external financing will yield the anticipated results, with a degree of accountability and transparency needed to provide comfort to new forms of financing - budget support and sector-wide programs.
3.7 EARMARKING OF REVENUE AND THE EFFECTIVENESS OF BUDGET MANAGEMENT
3.25 Revenue earmarking for specific expenditures is on an upward trend in Tanzania. The most significant among the earmarking arrangements is the Road Fund. Other forms of earmarking include retention of user charges for specific public services such as education, health, land services and natural resources. These add to the more traditional forms of retention of revenue collected by local authorities/governments. This form of budget management found justification in the effort to protect these expenditures from system-wide resource allocation pressures and in compliance to the multiple level jurisdiction over taxation powers. 3.26 There are three main reasons for starting to pay greater attention to this system of budget management before it mushrooms in an unwieldy fashion. First and foremost is to avoid undernining strategic budget allocations across sectors and geographical locations. Tanzania has just embarked on strengthening the strategic expenditure allocation system through adoption of an MTEF , the rising earmarking trend only serves to undermine this effort and making greater transparency of the budget more difficult to achieve. 3.27 Secondly it is more difficult to enforce overall cross sector and within sector allocations with the greater autonomy associated with revenue retention systems. It is not far fetched to think of the use of such retained revenue in a manner that is not consistent with national prioritization scheme. 3.28 Thirdly and perhaps the most worrisome potential effect in the continued expansion in earmarking, is the likelihood of imposing excessive burdens on specific users of public services, as the relevant sectors strive to raise the resource envelope within their control. Many of the services so provided have useful positive externalities, whose financing burden should be more widely shared. The temptation for keeping on raising the road toll, for example, in order to raise the size of Road Fund are immense and would have dire consequences of excessive cost to the operators. The alternative could be to channel additional resources to the Road Fund from increased allocations from the PMG account and integrating donor finance into the Fund.
3.8 PREDICTABILITY OF DONOR RESOURCES
3.29 Tanzania is one of the major recipients of external assistance as compared to a number of other countries in Sub-Saharan Africa. On average Tanzania receives about US$ 900 million per year from external sources. Most of the external resources have been used for technical assistance, capital budget, balance of payments support and on food aid. This amount is slightly over 10 percent of GDP. However, not all of the inflows pass
47 through the exchequer system to support the Government budget. It is estimated that about 70 percent of such external resources go directly to the projects supported by donors. Every donor has his own strategy of channeling the resources to the targeted projects (A detailed review of donor attitudes towards program and project aid is given in Annex I). The multiplicity of these resources has made donor coordination a tedious one requiring more capacity at the Ministry of Finance. Donors have different accounting systems, different disbursement modalities and different financial years. 3.30 To harmonize the multiplicity of the donor accounting systems, there are plans to integrate donor facilities in the new Integrated Financial Management System (IFMS) using the Platinum software. In addition, the Govermnent is now in preparing the Tanzania Assistance Strategy (TAS). This is a broad based framework which aims to encompass all the donor interventions in the country in a coordinated manner. In such an endeavor, the Government will list its priorities, take stock of its domestic resource envelope to determine the resource gap which forms the basis for negotiation with donors for support. 3.31 The cut in governrnent expenditure, especially development expenditure, has at times been necessitated not only by unpredictability of counterpart funds, but also by unpredictability of donor finances, particularly those that went directly to the projects without passing through the budget or being recorded by the Government. The extent of integration of donor resources into the budget, for example, was 19 percent in FY95, 12 percent in FY96, 28 percent in FY97 and 33 percent in FY98 (PER FY99 Issues Paper). Moreover, actual releases of resources as compared to those budgeted have shown a large variance for the development budget. Between FY95 and FY98, for example, the shortfall of donor disbursements ranged between 42 percent and 79 percent of budget projections, while local counterpart funding shortfalls ranged between 16 percent and 76 percent. The problem of unpredictability of the budget, either due to shortfalls in local counterpart funds, non-adherence to conditions for donor disbursement, inaccurate projections, or unrecorded donor support, is among issues that are at the core of the debate on how to strengthen the government-donor partnership in development and have been treated at greater length in the earlier sections.
48
4. FISCAL POLICY AND THE MACROECONOMIC CONTEXT
4.1 INTRODUCTION
4.1 Over the last several years the Government of Tanzania has run a tight fiscal policy through the instrument of a cash budget with a domestic budget surplus. The consequence has been a fairly rapid but orderly process of disinflation, with the rate of inflation coming down to an annualized rate of around 7% by the end of 1999. While it is essential to consolidate this achievement so that there is no return to the double-digit inflation of earlier years, it is nonetheless no more than a precursor to the real agenda of growth and poverty reduction. Growth is important not only in its own right but as a mechanism for reducing poverty both directly and indirectly via the enhanced social spending it permits. The sources of this growth will inevitably lie in private enterprise, with the government attempting to minimize factors that may inhibit this and promote those that encourage it. The latter factors include not only the regulatory and market environment, but also macroeconomic policies bearing on investment, saving, liquidity and credit. 4.2 There are two types of circumstance in which designing macroeconomic policy is relatively straightforward in principle, however hard to execute in practice. One is when the economy is suffering from excessive fiscal deficits, rapid monetary growth, high inflation, and a lack of private credit. The imperative then is to reduce the deficit, which permits the other problems to be addressed. The second circumstance is when there has been an extended history of steady growth in a stable policy environment, in which case the imperative is to maintain the policy regime. Tanzania is currently in neither of these configurations, but in transition between the two. While this is a satisfactory interim outcome, given the country's earlier policy history, it does make the current design of policy more difficult. 4.3 The crucial short run choice is over the volume of resources the government can devote to its spending programs without crowding out the recovery of private activity. There is also the closely related question, which is how many resources can the private sector use? Addressing either question requires us to form a view of how private and public activities are related. The next section of this paper briefly reviews the major mechanisms involved, from a perspective reflecting current conditions in Tanzania. Section 3 reviews the resources available to government, and Section 4 considers how this information is deployed in the Guidelines for the Preparation of the MTEF. Section 5 reviews the domestic credit position, Section 6 discusses options for the government's fiscal stance and Section 7 concludes. 4.4 To keep the discussion in the text reasonably brief, a substantial amount of material is relegated to three annexes. Annex 1 provides background on developments in the real economy, including some discussion of our incomplete information. Annex 2 contains a conceptual discussion of fiscal policy issues, and particularly of the
49 importance of separating the domestic from the external components of the fiscal deficit. Annex 3 provides a discussionof debt sustainability. 4.5 It should be stressed at the outset that the Tanzanian authorities have done a great deal of effective work to produce a coherent and consistent budget frame, which incorporates the best available information on revenue projections as well as a large volume of sectoral work on priorities. This process has undergone an impressive cumulative development over the last couple of years, but remains an ongoing one. Against this background, these notes are intended to highlight some issues for considerationand possible further developmentof this process.
4.2 LiNKs BETWEENPUBLIC AND PRIVATEACTIVrITES
4.6 These are many, varied, and mainly familiar, including most notably taxation and other forms of de facto confiscation5,and the whole panoply of regulation and law, but here we focus on three other mechanisms.These are the competition for credit, the real exchange rate, and supply side effects. 4.7 It may seem obvious that there is direct competitionfor domestic credit, so that increased use of it by governmentwill crowd out private sector access one-for-one. We are also often in the habit of thinking that the private use of credit is intimately related to investment. Hence the concern that government borrowing may crowd out private investment and ultimately growth. There are qualifications to this view however. Most important, there is nothing to ensure that the banking system will remain fully lent if the government reduces its borrowing. If private borrowers are deemed not to be creditworthy, the system simply becomes more liquid and the loan-deposit ratio falls. This has evidently happened in Tanzania, though it is difficult to be precise about the degree, since the fall in loans also reflectedthe cleaning out of non-performing parastatal loans. Second, much of the credit advancedto the private sector in Tanzania is for trade rather than for investment. Investment tends to be financed from an enterprise's own resources or, in cases where the outputs will generate foreign exchange (such as mining) from external sources. Thus, especially in the short run, withdrawal of government may neither induce increased access to credit by the private sector, and even if it does, this may have a very muted impact on investment activity. Finally, a rapid expansion of private sector credit might in any case be problematic.Since the banking system lacks experience in risk assessment,the alternativeto rather limited lending might be a rush of lending leading to an unacceptablyhigh bad-debt ratio. 4.8 When a government obtains access to increased resources from external donors and spends some part of this on non-tradablegoods, this will tend to induce appreciation of the real exchange rate (so-called 'Dutch Disease'), unless there are offsetting effects on supply. Provided the aid flow is likely to continue over a relatively long horizon, this is just a necessary cost of accessing the additional resources. It might be of particular concern when it is hoped to develop some types of non-traditionalexports and this might have some bearing on how the aid is used; however,it seems most unlikely that it would
While taxes are the most important single mechanism for "crowding out" private activity - by removing private purchasing power - their share in GDP is difficult to raise quickly. Hence, the burden they impose is a relatively fixed feature in the short run.
50 ever be a ground for rejecting incremental aid flows. To do so would be analogous to refusing to exploit a newly discovered mineral resource on the ground that the consequential exports would damage the interests of other exporters. Supposing that it is agreed that it is appropriate, nationally, to utilize the additional resources, then some agents in the economy must raise their expenditures. The key point is that these Dutch Disease effects are in no way specificto governmentinvolvement. Exactly the same issue arises for transfers of external resources to NGOs operating in-country, or to increased private spending if the governmentpassed the aid on to the private sector via tax cuts or increased credit. What matters is that the nation is able to spend more and that part of this spending is on non-tradable.In brief, the real exchange rate issue is a feature of accepting the resource inflow,not of any link between this and the level of government spending. 4.9 The argument in the preceding paragraph must be qualified to the extent that some forms of spending are likely to have supply side effects. Especially if these come into operation quickly, the real exchange rate consequences of the inflow will be muted and may even be reversed. For example, a program of rehabilitation of roads could remove bottlenecksand lead to an expansion,inter alia, of the production of non-tradable in excess of the increased demand for them. This argument leads on to the more general point that private and public activities are frequently complementary,so that the private sector may not be best served by a contraction in public sector spending. This is particularly likely to be true in Tanzania, where many forns of govemment spending are low by the standardsof comparablecountries.
4.3 RESOuRCES LIKELYTO BE AVAILABLETO THE GOVERNMENT,FYO1 - FY03
Domestic revenue
4.10 It is convenientto scale the main fiscal magnitudesrelative to GDP. The series for domestic revenue as a share of GDP given in the Guidelines6 of February differ somewhat from those in the Poverty Reductionand Growth Facility document of March. Since the revenue figures are largely the same, there must be some difference in the treatment of GDP. However, both show revenue growing modestly as a share of GDP over the years FY00 (provisionalout-turn) and the three years projected for the MTEF. 4.11 Here we work with the figures in the Guidelines, which are 12.4% for the current year, and 12.6%, 12.8% and 13.0% for the MTEF period 7. The present figure is modest by the standards of comparable countries, and the assumed growth of revenues, at 0.2 percent of GDP a year, also does not seem excessivelyambitious. However, it has to be noted that this ratio has averaged 12.4% over the last decade, and while it has varied substantially year on year, it has been trend-less. The authorities are not planning any
6 Guidelines forthe Prepardtion of the Medium Term Expenditure Plan and Framework 2000/01 - 2002/03, MOF and Planning Commission, February 2000. PRGF has 11.5%, 11.6%. 12.0% and 12.2%.
51 major tax reforms, but are relying mainly on reduced exemptions and increased administrativeefficiency to deliver the revenue gains8. 4.12 On past performance, this may prove difficult to deliver. It may depend to a marked extent on the form which growth takes. Some sectors (mining, manufacturing) are easier to tax than others (subsistence agriculture). The Guidelines anticipates growth over MTEF period at annual rates of 6.1%, 6.6% and 6.8%, with mining growing at three times the average, manufacturing at twice the average and agriculture at a little over half the average. This type of compositionalshift should make it easier to raise the tax share without raising tax rates, which are already quite high. The baseline assumptions in the Decision Point document for the enhanced HIPC Initiative (March) assume somewhat lower growth, but, more importantly, they assume that agriculture and manufacturing both grow at close to the average rate (mining is again assumed to grow substantially faster). This configuration of growth would make raising the revenue performance rather harder. In any event, it would be worth developing a more disaggregated method of forecasting revenues, both to obtain more refined inputs into the MTEF and also to permit closer monitoring of perforrmance. Aid 4.13 Whereas the Guidelines envisage some uplift in domestic revenue as a share of GDP, the converse is true for aid flows. Abstracting from the interim relief under HIPC (0.2% this year and then 0.6%, 0.6% and 0.5%), these are shown as declining sharply (6.2% in the current year, and then 3.1%, 2.9% and 2.0%). However this contraction of resources simply reflects the lack of forward commitment by many donors and is heavily concentrated on project finance in the development budget. If we strip out the foreign financed part of the development budget, we are left with a flow of import support at 2.8% in the current year, and then 3.1%, 2.9% and 2.0%. There are also some rather small changes in domestic financing (from a small domestic surplus to a balanced domestic budget). The net effect for recurrent expenditure plus the locally financed component of the development budget is to follow the likely out-turn at 13.5% of GDP this year with figures of 13.9%, 13.9%and 14.0% over the MTEF horizon. In effect, the modest growth of domestic revenues plus HIPC plus the somewhat more relaxed domestic fiscal stance is fully neutralized (after the first year) by the anticipated erosion of program aid. 4.14 However, this erosion is most unlikely to happen. There is a strong case for basing the MTEF projections on the most likely scenario, which is that program aid will in fact continue at similar relative levels to the present ones. To take a more conservative view would only be justified either if there were strong grounds for believing that aid cuts were probable, or there were grounds for thinking that regular upward revision of spending ceilings is allocatively less costly than infrequent downward revisions. By way of contrast, the HIPC Decision Point document assumes very substantial inflows of new resources in this period, so that the NPV of debt to exports actually rises quite rapidly in the first few years after HIPC relief.
The 'built in elasticity' of many taxes is somewhat less than one, so that revenue tends to rise proportionately less than the relevant tax base. This means that the tax authorities sometimes have to ~runto stay stillWin terms of revenue shares.
52 4.15 Handling this forecasting issue is difficult, and made more so by the fact that there are many relatively predetermined calls on govenmmentresources (debt service, wages). This has the consequenceof levering relatively small proportional adjustmentsin total resources into much larger proportional changes in discretionary spending. For example, if the level of program assistance in the last year of the MTEF remained at the level around 3% of GDP as in earlier years, and these resources were used on the discretionarycategory of goods and services, spendingon the category could be raised by nearly 15%. In any event, forecasting resources is necessarily risky, but the risk is two- sided, and not minimizedby excessive caution.
4.4 THE GUIDELINES DOCUMENT
4.16 The Guidelines document has a rather complex set of functions. It is at the heart of the two-way process between the spending ministries and the central economic authorities of the government. However, given the commitment to transparency and participation, it also offers a window on that process for other participants and affected parties. One function that is common to both these roles is that of demonstrating the relation between the derivation of priorities and the budgetary outcomes. In many respects, the Guidelines is an admirable document, and very clearly constructed; however,there is room for improvement,particularly in this last regard. 4.17 Tables are provided relating the "funds requirements and proposed allocations" for the various priority sectors. The logic leading to the selection of the priority sectors themselves seems clear enough. However, it remains obscure what governs the distinction between priority and non-priority activities within these sectors. It is also obscure how prioritization affects the budget allocation process. This may be a matter of substance,that is if the concept of prioritization is poorly articulated with the process of budget allocation.Alternatively, this link may be well established,in which case what is required is merely a clearer exposition of it in the document. To illustrate the point, consider the information abstracted from the Guidelines in Table 1 for a number of priority sectors. 4.1 8 The startling thing about this table is the lack of any pattern. Sometimes allocations are very far below requirements, sometimesthey exceed them. In some cases the ratio for a sector is stable over time, suggesting that the severity of rationing is constant: in others it falls or rises. It does not seem as if the term "requirement" has any stable interpretation,either between sectors, or within a sector over time. This means that the role of the MTEF in matching limited funds to those activities which have the highest pay-offs or are otherwise felt to be most urgent is very inscrutable to the outside observer. Hidden within the table, there is however one pattern, which is that a particular ratio for a sector in a given year is usually applied across all activities in the sector.
53 Table 4.1: Budget allocation as share of requirement for priority activities in various sectors
(%)___ _ FYOO FYOI FY02 FY03
Education 63 90 111 142 Health* 53 66/85 94/109 127/141 Water 35 47 34 50 Agriculture 32 38 36 38 Roads (National/Regional) 109 83 85 85 (District/Urban) 87 82 82 80 Energy 19 25 28 30 Judiciary 40 45 45 46 * Health includes activities which were not listed in the requirements but which received priority allocations.The lower figure gives the ratio ignoring these expenditures, the higher includes them. 4.19 For example, the ratio of 63% applied to education in FY00 was applied uniformly across primary, secondary and higher education as well as the inspectorate. If the "requirements" entry for each of these sub-sectors reflected careful consideration within the sector - so that a uniform benefit/cost cut-off had been applied, then uniform rationing would be appropriate. However, the rather random behavior of a sector's ratios over time makes that seem implausible. 4.20 In any event, there seems to be considerable scope to develop this linkage between the prioritization process and the budget allocation more systematically.
4.5 ASPECTSOF DOMESTICCREDIT
4.21 It has been remarked that, for a number of years, the ratio of various money measures to GDP has been falling in Tanzania. This is a potential cause for concern for two reasons. The first is that it robs government of opportunities to obtain seignorage revenues in a non-inflationary way. The other, of wider significance, is that we normally anticipate economic development to be accompanied and indeed facilitated by a process of financial deepening and this involves a rising money to GDP ratio. A falling ratio is then a signal of financial ill health. It may reflect a lack of confidence in the domestic currency, so that agents economize in holding it, possibly by substituting international currency. Alternatively, it may be a response to financial repression, where very unfavorable terms make the formal financial sector an unattractive intermediary. In either case, high transactions costs are imposed on economic activity. When these conditions are reversed by successful policies of stabilization and liberalization, we would expect the demand for money to recover, but possibly quite slowly and after a lag as confidence is re-established. 4.22 Both of these phenomena were present in Tanzania, and both have been reversed by policy reform. The financial system is therefore likely to be in a transitional phase, which may be further complicated by the process of privatization. Table 4.2 presents a number of summary statistics for the last five years, again using GDP as a scaling device9. The liberalization had also led to dramatic shifts in the composition of broad money (currency, and the various types of deposits - demand, savings, time and foreign
End of year value as per cent of GDP for the preceding year.
54 currency), but by 1995 these seemed to have settled down. Hence the table starts from that year and does not explore this compositionalissue. 4.23 There are several disturbing features of the data in this table. First, there is the continued decline in the money income ratio well into the post liberalizationperiod. Over the three years 1995 to 1998, this ratio was falling at an average annual rate of 11 per cent. There are signs that this is now stabilizinghowever. The behavior of reserve money is included as a memorandum item. It followed a very similar path, pretty stable at 41% of M3. This reflects the loss of seignorage referred to earlier. Also, since the bulk of MO is currency outside the banking system, this has also fallen sharplyrelative to GDP.
Table 4.2: Financialvariables in % of GDP 1995 1996 1997 1998 1999'1 Monetary Survey Broad Money (M3) 24.9 21.7 19.7 18.2 19.0
Net Foreign Assets 5.5 7.7 8.5 8.3 9.7 Net Domestic Assets 19.4 14.0 11.2 9.9 9.4 Credit to Government 9.2 7.9 5.1 4.8 5.6 Credit to Private Sector 5.4 3.1 3.5 4.3 4.7 Other 4.8 3.0 2.7 0.9 -1.0
Memo item (MO) 10.4 8.9 7.8 7.4 8.0
Commercial Banks"_ Domestic Deposits 17.7 15.4 14.2 13.2 13.0 Of which, by private 13.8 13.0 12.3 11.2 11.3
Total Domestic Lending 9.0 3.9 3.9 4.5 4.9 Of which, to private 5.4 3.1 3.5 4.3 4.8 Govemnment Securities 5.6 6.8 5.2 5.5 5.1 Cash and Deposits with BOT 2.2 1.9 1.3 2.0 1.6 Foreign Assets 5.6 4.8 5.0 4.7 4.8
Lending to deposit ratio (%O/) 50.5 25.3 27.7 33.7 37.9
4.24 On the asset side of the monetary survey, the steep decline that is the necessary counterpart to the fall in the money income ratio is not uniformnlydistributed. The net foreign asset ratio in fact showed steady growth at an average rate of 15%. This reflected in part the drive to raise the net internationalreserve position. In consequence,the fall in the domestic asset ratio is really precipitate: it has more than halved over the period, with most of this happening in the first two years. This was the consequence of sharp reductions in credit to government and the 'other' component that includes parastatals. The private credit ratio followed a U-shaped path.
O For Monetary Survey, end December 1999, for CommercialBanks, end September 1999. The table does not provide an exhaustive breakdown of all liabilities and assets, so the listed components of the balance sheet do not sum to zero. 12These are for domestic deposits and loans only so differ slightly from those calculated by BOT.
55 4.25 Further light is thrown on this evolution by the figures for the commercial banks. The domestic deposit ratio fell quite sharply, but this was largely due to a contraction in the official component, with the private deposit ratio holding up quite well. Total domestic lending fell sharply in the first year, but the loans to the private sector, unsurprisingly, were almost identical to the private credit component of the monetary survey. It is worth noting that the commercialbanks hold foreign assets of the same order as their total lending to the private sector and usually somewhat larger. The loan to deposit ratio fell from a value of a little over 50% in 1995 (probably not unreasonable for what is essentially a deposit banking system) to a very low level of about half that in 1996 and 1997 before making a partial recovery in 1998 and 1999. 4.26 While it seems most illuminating to present these data in the form of ratios to GDP, it is worth stressing that private credit has indeed expanded rapidly albeit from a very low base. Over the four years from the end of 1996 it has risen in nominal terms at annual rates of 39%, 48% and 26%, or from Tsh 116.6 billion to Tsh 302.2 billion. Since the cumulative inflation over this period was 37%, the growth in real private credit averaged24% per annum over these three years. 4.27 To summarize all this information, what seems to have happened is that the governmenthas made a major withdrawal from its previous reliance on domestic credit, but this has had a rather limited effect of "crowding the private sector back in". On the contrary, private sector engagement with the financial system, relative to GDP, seems to have been relatively invariant to these changes. Hence the reduction in government engagement has simply led to a contraction in the scale of financial intermediation. The banking system is currently under-lent and over-liquid. There are a number of reasons why this may be the case. As inflationhas fallen, there has been little downward shift in either loan or deposit rates. This has had the effect of turning real deposit rates from heavily negative to - just - positive, but only in the last six months. It may eventually lead to increased private domestic deposits. However, the other effect has been to raise real loan rates from moderate to high levels, which may have replaced quantitative credit rationing with rationing by price. In addition spreads have remained wide and the banking system is inexperiencedin risk assessment for loans to the productive sectors. All these difficulties seem to be common across countries following financial liberalization.It is not clear why, but an extendedtransition period seems to be necessary. Presumably both the deposit ratio and the loan to deposit ratio will pick up in the future: the difficulty is in gauging when this might happen. 4.28 The upshot of this quick overview of money and credit is highly ambiguous. A major reduction in the government's use of domestic credit has produced a rapid proportional expansion in private credit, but since the base for this expansion was so small, this private response has still been small relative to the scale of the stimulus. In addition, the earlier financial liberalizationand disinflation have still to feed through into the terms and conditions on which credit is available. The system seems to be very far from equilibrium,but it is hard to judge the rate at which it will move. We consider the implicationsfurther in the following section.
56 4.6 FISCALOPTIONS
4.29 It is argued in Annex 2 that fiscal options can conveniently be thought of by partitioning the overall deficit into the component that can be financed externally (on concessional terms) and the component that requires domestic financing. Further, Annex 3 argues that it is desirable for Tanzania to accept as large an external deficit as donors are prepared to finance. For any given choice of domestic deficit, this implies that additional aid should automatically be spent. In turn, the considerations determining what an appropriate level of the domestic deficit might be are not contingent on the level of external finance that is available. 4.30 In examining these considerations, we assume that the government can use additional resources effectively, i.e. that it has not reached its implementation limits. Then the choice of a value for the deficit depends on what levels of monetary expansion, build-up of foreign exchange reserves, and expansion of credit to the private sector are desired. 4.31 The strategy in the Guidelines is currently designed to switch fiscal policy from the fairly substantial domestic surplus that has been run in recent years, on the order of 1% of GDP, to a much lower level in the current year and in the first year of the MTEF, and to (domestic) budget balance thereafter. However, this switch is less complete than might appear. There is a general contingency built in, which behaves rather oddly: it moves from 0.4% of GDP in FY01 up to 0.9% in FY02 before falling back to 0.3% in FY03. Apart from being inexplicably volatile, these numbers are large. In this configuration they also represent an unsatisfactory device. There are really three possibilities. First, they could remain unspent, in which case the government will really be running a domestic budget surplus, not a balance. Second, they could be deployed in face of some genuine unforeseen events, but it is wildly implausible that these would have expenditure implications of this pattern. Third, they could end up being spent but according to the exercise of ministerial muscle rather than the allocational procedures embedded in the MTEF. If the intention is to smooth spending in the expectation of uneven revenue flows, that should be signaled, rather than calling the device a contingency. Since the revenue fall in the final year is most likely an artifact of the forecasting procedure, as already noted, the "contingency" is in fact likely to remain high in the third year of the MTEF. This would exacerbate the problem of either effectively running a substantial surplus, or having resources whose deployment might not be subject to the full rigor of prioritization within the MTEF. 4.32 Foreign exchange reserves are already at the target value of four months imports. While there is some evidence that the decline in the demand for money relative to GDP has been halted and may even have reversed, it would not be wise - yet - to rely on a falling velocity of circulation. Hence the prudent rate of monetary expansion would involve a stable velocity, so that the authorities can plan for the money supply to rise in line with nominal GDP at the target rates for inflation and real growth. This would place the expansion at around 11% per annum over the MTEF period. Since additions to foreign exchange reserves will only be required to match the growth of imports (to preserve the 4 month ratio), a balanced budget implies that the bulk of this permissible monetary expansion should be available for private credit. This in turn could imply a
57 continued very rapid expansion of private credit, but now from the somewhat enhanced base generated by the previous expansion. The scale of this potential expansion is likely to cause problems for the commercial banks in identifying creditworthy customers. If they are inclined to lend regardless, that poses problems for the authorities in supervising the banks. On the other hand, the commercial banks may react by failing to expand their loan portfolio at the implied rate. 4.33 In these circumstances, there is quite a compelling case that the government should choose to run a modest domestic deficit rather than a balanced budget; this would enable it to increase spending on the under-funded recurrent budget and improve service delivery. It is not clear, given the credit position just described, that it would risk crowding out desirable private activity. This is not to deny that there needs to be adequate provision for further expansion in private credit. Indeed the capacity to do this is already built into the present, highly liquid, system. The question is rather how much credit the private sector is plausibly going to require, and whether it is likely that it will be able to use the whole increase in domestic credit over the next several years.
4.7 CONCLUSION
4.34 There has been much progress over the past year, both in consolidating the achievements of macroeconomic policy and in developing the budget process. In particular, the move from a domestic budget surplus towards balance is timely, though it is for consideration whether the shift could be carried a little further still. However, the transitional status of the Tanzanian economy makes macroeconomic management particularly difficult at present, and it will be important for the authorities to remain flexible. Within the MTEF itself, there is also scope for rethinking the use of the contingency item, and for improving the transparencyof the link between prioritization and the budget allocation process.
58 PART III
SECTORAL PUBLIC EXPENDITURE ISSUES
59
5. EDUCATION SECTOR
5.1 BASIC EDUCATION
5.1.1. Scope of the PER FY00
5.1 The FY00 Public Expenditure Reviews (PER) for the basic education sub-sector and other priority sectors were commissionedby the Government of Tanzania's PER Working Group during the first half of FY00 to form the basis for the Government of Tanzania's FY01 budget and FY01 - FY03 medium term expenditure framework (MTEF). 5.2 The education sector PER is explicitlyan update of the FY99 review. It is based on the broad framework of the FY99 PER and updates the findings based on the latest available statistics. The PER FY00 differs from the FY99 review by providing a systematic assessment of the activities which the education ministries will need to undertake to generate a high quality input to the medium-termexpenditure framework for FY01.
5.1.2 Recent Developments 5.3 Three main developmentsin the form of sector initiatives have taken place since the FY99 PER was produced. The initiatives are: the local government reform program (LGRP), the school mapping, and the Education Sector Development Program (ESDP). The LGRP will lead to major challenges for education sector planners as it shifts responsibility for resource allocation from central to local authorities. Starting around mid-2000, districts will be allocated an educationblock grant which they can use at their discretion to strengthen education services. In the past, these funds were tied to teachers' salaries. Now the decision on the proportion of funds which should be used to fund salaries will be made by the districts themselves.Districts will be held accountable by the government against a set of agreed service standards.This change is intended to enhance efficiency and effectivenessin the provisionof educationservices. 5.4 School mapping describes the process of information gathering and community consultation during which informationon a wide range of education issues is collected through district wards. Fifteen districts have already been mapped, with the balance expected to be complete by end-2001. The ESDP is a means through which Tanzania can address some of the profound inefficiencieswhich beset the sector. Though still to be finalized, the ESDP provides an impetus to develop a coherent sector strategy, and to help government cut back the high management costs which it experiences through uncoordinateddonor projects in the sector. 5.5 These three developmentswill have far-reachingimplications for the sector. The LGRP provides a basis for the redistribution of teachers, since districts will be held
60 accountable for service standards and will have incentives to redeploy teachers from surplus to deficit areas. It should also lead to an improved balance of spending between salaries and other charges. The school mapping process will support these changes. Data produced by the district exercises can be used to validate and update existing planning information, and the micro-plans generated under the process will galvanize local community support for education. The ESDP should see a significant increase in the developmentfunds available to the sector. 5.6 Although each of these initiatives will have an impact on planning at the central level, the contribution of the LGRP and ESDP is difficult to estimate. Planning for both programs is still underway, so it is important that planners within MoEC keep themselves informed of progress in the development of these activities. 5.1.3 Expenditure Trends
5.7 Recurrent Expenditure:Total government recurrent expenditure on education has increased in real terms over the last 10 years. Expenditure has increased in real terms and on a per capita basis. An average of 24 percent of total government recurrent expenditure is spent on education, although compared to other countries the absolute amount spent is still low. The largest share of government recurrent expenditure goes to primary education. In 1998, 62 percent of total recurrent funding to the sector was spent on primary education, compared to 51 percent in 1992. Real government recurrent expenditureper primary pupil has increased by around 40 percent since 1992. At public secondary schools, real recurrent expenditure per pupil has fallen by around 50 per cent since 1992. At teacher education colleges, real recurrent expenditure per pupil has more than doubled since 1995. Table 5.1: Share of Actual Recurrent Budget Expenditure,1992/93 - FY99 92/93 93/94 94/95 9596 96197 97/98 98/99 Primary 0.51 0.52 0.63 0.65 0.67 0.67 0.62 Secondary 0.15 0.14 0.10 0.07 0.07 0.09 0.07 Teacher Education 0.05 0.04 0.03 0.02 0.02 0.03 0.02 Higher & Technical 0.20 0.23 0.20 0.21 0.20 0.17 0.24 Administration and other 0.09 0.07 0.05 0.05 0.04 0.05 0.05 Total nominal 1.00 1.00 1.00 1.00 1.00 1.00 1.00
5.8 Development Expenditure: Development expenditure is sourced mainly from foreign donors. A small amount, 8 percent, of the total government development budget (including foreign funding) goes to education, mostly to primary'3. Parents are the main financiersof primary education, spending more per pupil than government.At secondary level they fund at par with government.In absolute terms parents pay more for secondary education than they do for primary, since the cost of secondary education is much higher than that of primary education. 5.9 Expenditure Management Issues: Development expenditure is disbursed intermittently from central government to the districts. The rationale for allocation is not clear at either central or district level. A significant portion of public and private
These figures may be underestimateddue to incomplete coverage.
61 allocations to the sector are not spent on education. Districts retain a significant portion (57 per cent) of the universal primary education fee rather than allowing it to be retained at school level as per government policy. In addition, some 41 per cent of government recurrent allocations for other charges (e.g. text books, etc) may be spent outside the sector'4 . District councils tend to generate and remit resourcesto education. 5.1.4 Performance Trends
5.10 Despite this rise in resource availability, the performance of the sector has continuedto disappoint: In primary education, all major indicators (see Table 5.2) show a deterioration against the annual average results for the previous five years. Nor does the trend of this deteriorationappear to be declining.
Table 5.2: Performance Indicatorsin Primary Education 5-year average (1993- Performance in Government target 1997) 1998 (by 2003) Total Government spending (TSh bn) 74.49 74.84 Total enrollment 3.943.579 4,042.568 t.b.c Pupil-teacher ratio/2 37 39 45 Gross enrolment ratio 78% 77% 85% Net enrolment ratio 56.2% 56.5% 70% Completionrate SI-SIV 87.3% 86.8% 95% Completionrate SI-SVII 68.0% 66.5% 95% Non-salary cost per pupil (TSh) 518 744 10,000 Total cost per pupil (TSh) 18,452 18,253 21,000 SVII-Form I Transition rate 15.2% 15.0% 20.0% Drop out rate 6.6% 6.6%o 3% Primary SchoolExam Passes - boys 26.32% (1) 25.9% 60% -girls 14.01 (1) 13.0% 60% -total 20.17% (I) 19.4% 60% Notes: 1. Figures for 1997 only. 2. There is some debate within MoEC about the accuracy of PTR data. 3. MoEC reporting of total enrolment ratios appears inconsistentwith same data by gender. * In secondary education. which has in fact suffered a fall in resource availability as funds are redirected towards primary education, performance indicators have improved. Concern still exists, however, about the low level of exam passes in the secondary sub-sector. Seminaries(private and accounting for seven per cent of all secondary schools) achieve pass rates at least double that of the rest of the sub-sector (public and private), so there is substantial scope for performance improvement.
14PC op cit
62 Table 5.3: Performance Indicators in Secondary Education 5-year average Performance Government (1993-1997) in 1998 target (by 2003) Total govemment spending (TSh bn) 8.67 8.49 t.b.c. Total Enrolment 206,845 226,903 t.b.c. Pupil-teacherratio 18.06 19.41 t.b.c. Survival rate FI-FVI 14.4% 27.0% (1) t.b.c. Non-salary cost per pupil (TSh) 12,091 11,480 t.b.c. Total cost per pupil (TSh) 39,813 33,098 t.b.c. Form Four Exam (pass at 1-111) 23.65% 29.00% t.b.c. Form Six Exam (pass at 1-111) 71.42% 75.80% t.b.c. Notes: I. FY98
In teacher training, efficiency continues to fall as the number of trainers has not fallen in line with declines in the number of students. As a result, the trainee/teacher ratio in teacher training colleges has halved in the past five years. Also, there is evidence that a large number of teacher training graduates do not actually become teachers, so the state's investment in their training is, to some extent, wasted. Table 5.4: Performance Indicators in the Teacher Training Sub-Sector 5-year Performance Government average in 1998 target (by (1993-1997) 2003) No. of students 14,179 6,614 t.b.c First year students 5,891 1,838 t.b.c Percentage of first years 41% 28% t.b.c Students per college 394 189 t.b.c First year students per college 163 53 t.b.c Final year students as a percentageof all students 47% 28% t.b.c Successful graduatesper college 203 87 t.b.c Students per staff member 14 7 t.b.c Staff 1,060 940 t.b.c Number of colleges 36 35 t.b.c
5.11 With funding having increased and performance still declining, it seems clear that additional resources will not generate an improvement in performance in the sector unless the sector can strengthen its internal efficiency to generate improvements in performance.
5.1.5 Regional Variation
5.12 There is substantial variation in performance between different regions. Table 5.5 shows the average, highest and lowest regional values for two key indicators of performance. As shown, Kagera has only 43 percent of its school-age boys in primary school, whilst Kilimanjaro has managed to enroll 71 percent. Dar es Salaam has managed an impressive 81 per cent net enrolment rate for its girls, while Kagera manages just 46 percent.
63 Table 5.5: Regional Variation on Selected Performance Indicators boys girls Total Net Regional EnrolmentRates: Highestvalue 71 81 76 National average 56 58 57 Lowestvalue 43 46 45 PSLE passes at regional level: Highestvalue 44.67% 27.47% 34.66% National average 25.94% 13.02% 19.43% Lowest value 15.26% 5.94% 10.32%
5.13 As was emphasized in the FY99 PER, such levels of regional variation suggest that there is considerable scope for improvementsin efficiency and effectiveness, and that there may be inequitable allocation of resources. Furthermore, they suggest that there may be opportunities for regional targeting of investment and effort to raise some of the kev performance indicators. The situation in Kagera, for example, clearlv warrants urgent attention. 5.1.6 Budget and Expenditure Projections
5.14 Projections of the likely costs of sector spending proposals and resource availability were made using the same model used in the FY99 education sector PER. Taking a base case scenario, which uses the Ministry of Finance's own GDP projections, it is clear that there will be insufficient funds available to meet the cost of government's policy objectives and targets for the sector. Even under a more optimistic scenario, which assumes significant efficiency improvements (the main efficiency driver in the system is the PTR) and increased development resources, partly through the HIPC II initiative, a financing gap is likely. 5.15 The results of these projections are, perhaps, surprising given the resources which MoEC has dedicated to sector planning over the past few years. A wide range of reports - most notably the basic education masterplan (BEMP) - has identified the key opportunities in the education sector. In principle, these reports should have provided sufficient information to produce a viable and sustainable medium term financing strategy. 5.16 In practice, however, these studies have not resulted in a coherent and sustainable sector strategy. The reason is that they did not place enough emphasis on practical aspects of planning. In particular, there has been a lack of prioritization of activities, and a lack of insight into appropriate sequencing of activities.
5.1.7 Next Steps
5.17 The Education PER review concludes that there are six priority areas for action which the Basic Education sub-sector must address if it is to provide future generations of Tanzanians with the types of skills needed by the country in the twenty-first century: * Since the current spending proposals (implied by current policy targets) of the Ministry of Education and culture cannot be met from government resources, even under optimistic revenue assumptions, a revised series of spending proposals needs to be developed.
64 * Despite increased funding, the performance of the sector has continued to decline. This demonstrates that the sector needs to place at least as much emphasis on its internal efficiency as it does on seeking additional resources.
* Within the various sub-sectors, major opportunities to improve sector performancewill come from:
* In primary education, the reallocation of teaching posts and double shift teaching in urban areas (note, however, that additional funding is probably needed to facilitate the redeployment of teachers);
* In secondary education, addressing the low number of places available in the sub-sectorand identifyingthe reasons for the disparity between results in seminary and public schools;
* In teacher training, cutting back facilities and numbers of trainers (perhaps re-deploying some to the primary and secondary sectors), and tying trainees to periods of teaching.
* The sector has not provided a comprehensive and coherent statement of priorities within the sub-sector. Without such an explicit indication of priorities, the sector will find it difficult to respond to disruptions in financing. The MOEC must produce such a statement, which should be guided by technical advice on the appropriate sequencing of activities, as a matter of urgency.
* The school mapping exercise provides the sector with an opportunity to enhance its planning capacity, including by focussing on district level planning issues. But the amount of information being generated by the studies threatens to overwhelm the statistics unit of the ministry. Urgent attention needs to be given to the question of how such information should be coded and stored, and how collection approaches can be harmonized to ensure comparabilityof data.
* The statistics collected by the ministry allow for a comprehensive assessment of sector performance. But the annual BEST document does not make the most of these opportunities.The document needs to be updated to allow the comparison of key performance indicators, and should include a commentaryby the ministry explaining why performance has changed over the 12 months.
65 5.2 HIGHERAND TECHNICALEDUCATION
5.2.1 Recent Developments and Education Policy Context
5.18 Reforms in the educationsector were part and parcel of the economicreforms that started in 1986 a la Bretton Woods Institutions.The reforms began with the adoption of the First Economic Recovery Program (ERPI). Tanzania mainland was the first to undertake these reforms followed by Zanzibar two years later. The main key issues of these reforms for the educationsub-sector were access, quality, financing and efficiency. However, various sectoral reviews in the Education Sector Development Program (ESDP) and in the Education Public ExpenditureReview (EPER) have not addressed the reform issues at all the levels of the education sector: primary, secondary and tertiary. The lower two sub-sectors continued to receive greater reform and planning attention. The broad Education and Training Policy (ETP) was therefore started in 1995 to harmonize all activities in the education sector so that the benefits of reforms reach all the three levels. The ETP objectives were quality improvement; increasing access to education for women and other disadvantagedgroups and areas; broadening the financial base for education and training; enhancing of partnership in the provision of education including decentralizationof authority and responsibilities;integration of formal and non- formal education and facilitation of the culture for job creation and self employment. The Higher Education Expenditure Review thus derives its framework from and is consistent with the ETP broad objectives. 5.19 Less attention to the tertiary sub-sector has led to deliberate constriction of demand due to the failure to accommodate the higher supply of quality students for admission; high cost of delivery of tertiary education; input orientedmanagement rather than result oriented; and unguaranteed comparable quality of inputs. Higher Education Development (BED) should, therefore, receive resource priority to address these problems whose solutions are defined as strategies in the medium term policy and regarded as a future thrust of achieving both internal and extemal efficiencytargets. It is noteworthy that the plans for quality higher and technical education, and general investment in skilled human capital continue to be developed in the context of poor quality secondary education. The Higher and Technical Education macro-policies are therefore set to serve and address problems of lower sub-sectors. In this light, the National Council for Technical Education (NACTE) is intended to deal with issues of coordination, curriculum quality control, accreditation and licensing as solutions to the problems.
5.2.2 Sub-Sector Performance 19942000
5.20 The sub-sector performanceduring the 1994-2000was generally low. * There has been low university enrolments(both public and private) that can be translated into a low participation rate of 0.27 gross enrolment ratio for a national populationof about 32 million people.
* With respect to Technical Colleges, student enrolments were generally low. Technical education had also imbalances in the ratio of
66 engineers/technologists, technicians and craftsmen. The present ratio is 1:2:14 instead of the target 1:5:25 accepted intemationally and by regional comparisons.
* The 13 tertiary institutions (besides the three public universities) classified as higher education institutions are spread over 10 ministries. As such expansion coordination has not been easy or is non-existent.
* Tanzania has also smaller pool of students which inputs into higher education than its neighboring countries. Tanzania maintains a low participation rates in secondary education, currently at 5 percent of the age cohort, as compared to 11% in Uganda and 25% in Kenya. The transition rate from primary to secondary education is 15%. Within the secondary education the transition rate from 0-level to A-level is 15%, as each year, only about 6,500 students graduate from high school out of whom about 30 percent get formal admission to universities and by the time other tertiary institutions get their share, the pool gets quite thin.
i The demand for higher education in Tanzania is low. The four higher education institutions (i.e., University of Dar es Salaam, Sokoine University of Agriculture, Institute of Finance Management and the Open University of Tanzania) enroll a small fraction of the candidates with the minimum qualification for entry. University of Dar es Salaam on its part takes an average of 20% of the applicants with at least minimum required points.
* The state of equity balance is likely to deteriorate due to the introduction of cost sharing and the liberalization of private secondary schools. A World Bank (1995) Social Sector Review noted that in 1994 only 1% of the Tanzanian "real poor" were likely to have completed secondary education compared to over 11% of the "better off'. Grosh and Forgy (I994)15 estimate that the top 20% of the population, in terms of wealth consume 40% of all government spending on education.
* With respect to gender balance, female students have continued to be the un- favored group despite their higher rates of return on education. There have been imbalances in terrns of enrolment proportions in higher education, between higher learning institutions, and between faculties/disciplines. Enrolment ratios in higher education in the 1994-2000 period have ranged between 17% and 21%. Between higher learning institutions, FY99 saw the lowest enrolment proportion of 8% being recorded by the technical colleges while the highest of 26% being recorded by the private universities. As regards faculties/disciplines, female proportions were: B.Sc. general with 5%, B.Sc. Geology with 7%, Computer Science with 6%, Engineering with 5%
'5 Grosh, M. and Forgy. B. (1994) -Incidence of Selected Social Services in Tanzania", The World Bank: Dar es Salaam.
67 and Agricultural Engineering with 0%. The higher education institutions are committed to actively correcting the gender imbalances as shown in their institutional transformationprogram plans. However, it has to be realized that the problem of low intake of female candidates has its roots in the whole education system right from the primary and secondary levels.
* The issue of fragmentationand compartmentalizationof knowledge has posed a major critique of the Tanzania higher education. For example, the Education Sector Reform and Development Program appraisal mission of 1999 observed that the education system is diffused and widely distributed such that the basic sciences are taught at three University campuses of Muhimbili University College of Health Science (MUCHS), Sokoine University of Agriculture (SUA) and University of Dar es Salaam (UDSM) resulting in duplication and poor synergy. This is also true for the tertiary institutes majoring in Commerce and Accountancycourses.
* Issues of quality of outputs or graduates are normally related to issues of higher education system external efficiency and productivity. They are also related to broad higher education impact, outcomes and client satisfaction. The "Report of the Committee of the Development of a University in Northern Rhodesia (the Lockwood Report of 1964)" vindicates the argument that higher education institutions in Tanzania need to be sufficiently mature not to be unduly concerned about international standards. They have to be relevant first to their own people. Despite the above positive opinions there has been dissatisfaction with the product of the system as graduates cannot hold to a job and they show unsatisfactorywork performance.The institutions appear to be aware of the problems posed by poor quality, yet they are tied to several structuralproblems which need resolution.
* Regarding postgraduate training at the level of Masters Degree and Ph.D., there has been low enrolment. The enrolment of postgraduate students is around 550 for the four institutions:UDSM, SUA, IFM and IDM although the planned enrolment for UDSM alone is 600 by the end of 1999. Expansion of postgraduate training is necessary to provide greater access to higher level education for qualifying Tanzanian candidates and to ensure maximum utilization of the available resources. Increase in enrolment at this level will also promote research capacity and competence.
5.2.3 Financing of Higher Education
5.21 For recurrent expenditure, higher education major financing source has been the central government,followed by internally generated funds. Financial income for higher education during the period 1993 to 1999 did not decline in nominal terms though as a proportion of GDP and Government recurrent expenditure the proportion has remained stable at around 0.5% and 4% respectively. Recurrent expenditure per student was Tsh. 2800 and Tsh. 1914 for 1980 and 1993 respectively. These figures are quite high when
68 compared with other countries in the region. This situation suggests two things. First, the almost impossibility of private individuals affording to pay for higher education without subsidy in the light of low income levels and high cost of higher education relative to per- capita income. Second, the regional comparisons and trends tend to suggest that higher education expenditures in Tanzania are highly inefficient mainly because of low enrolments. 5.22 Almost all university faculties and institutes have been engaged in consultancy services and income generation. However, poor record keeping within the institutions and departments makes it difficult to establish how much is generated. For example, in FY97 UDSM alone generated around Tshs. 335,530,631 from this source; a figure equal to 5.3% of approved government budget to UDSM in the same year. 5.23 During phase three of cost sharing, the government introduced student loans to be repayable after the completion of studies. Also based on cost-sharing policy, institutions have introduced fees for private sponsored students. However, due to small size of the labor market and declining employment opportunities in the formal sector the probability of the loan repayments may be low. On the other hand the response rate for privately sponsored candidates has been very low. Indeed, according to the UDSM Private Students Fees Report (1998) during the academic year FY98 only 46 private students responded, representing less than 10% of admissions. 5.24 A major source of financing higher education activities especially capacity building and institutional strengthening has been donor funding, since for several years the government has not funded research costs and other development costs in higher education. Major donor sources include NORAD (Norway), DANIDA (Denmark), British Council (UK), Commonwealth, DutchJMHO (Netherlands), DAAD (Gernany), GTZ (Germany), Netherlands, Irish Aid/HE, (Ireland) NUFU (Norway), Swiss Government Belgian Government, International Development Research Center of Canada (IDRC) and UJNDP. Experience with donor funding is that there has been a tendency of changing focus over time and this has already posed problems related to sustainability and continuity of the donor funding source. 5.25 By 1985, the salary of a senior academic was lower than what a trained graduate could earn after six years of service in several public parastatals. New salary scales for teaching staff in higher education institutions under the Ministry of Science and Technology and Higher Education became operative in July 1999. Otherwise University salaries had remained stagnant. The salaries have of late improved more rapidly than salaries in other areas. The academic monthly salaries now range between 15 and over 40 times the (annual) per capita GDP. Yet the low value of University salaries, when converted into dollars is a source of dissatisfaction and subsequent brain-drain among academics. In comparison with salaries outside the country given in dollar terms, a professor at UDSM, for example, was receiving US$ 1,000 per month in FY00 while the lowest level of assistant lecturer was receiving USS350 per month. 5.26 Suggested Remedies: Performance improvement in the sub-sector requires the following remedial actions, which are shown also in Table 5.6. * Deliberate effort to increase overall sub-sector resources through education levy measures;
69 * Control of course/programcontent through an accreditationbody; * Creating a body to rationalizethe existingcapacity/institutions; * Introduce and implementaffirmative measures to address gender imbalance in enrolment; * Strengthenthe higher EducationAccreditation Council to monitor quality, and provide enabling environment for curricular reviews and staff professional growth; * Allow institutionsto be independentand autonomous; * Rationalize governnent resources to higher education and encourage participationof private sector.
70
Table 5.6: Main Problem Areas and Suggested Remedies for Higher Education and Technical Development in Tanzania Problem Cause(s) Remedies Small sizes of Lack of co-ordination,lack of * Creating a body to rationalize existing Institutions centralized allocation of capacity. resources, lack of rationalization. * Survey of institutionsand options for their survival. + Retaining only well performing institutions for support and making them cost-efficient; redefining governmentrole from a provider and enabler to regulator and stimulator.
Low enrolment High costs in public Universities * Increase budgetary allocation to 5% of Lack of space and general GNP. capacityunder utilization. * Amalgamationof small institutions. * Better utilization of staff. * Involvement of third parties in financing higher education * Encouragingoff-campus students. * Targeting resources toward physical plant and facilities expansion. * Reduce managementcosts * Strengthen distant learning
Low quality Lack of quality control and * Strengthenthe Higher Education monitoring, lack of curricula AccreditationCouncil. reviews, lack of teacher * Provide enabling environment. specialized skills. * Retain Academic Staff. * Introduce output/studentbased funding mechanisms * Overhaul Curricula.
SkewedGender * Historicaltrends * Co-ordinate effortsbetween MOEC and Enrolment MSTHE on sensitization * Formal and non-formal * Resocialization socializationprocess. * Expansion and diversificationof physical and pedagogical facilities in science schools. * Lack of sensitization * Pre-enrolmentscience courses for girls; * Unbalancedphysical and * Provide girls scholarships. pedagogical facilities in * Remedial science for girls. schools/colleges.
71 Lack of * Heavy dependencyon * IntroduceHigher Education Act with Institutional govermment. contractualrelationships; Transfonnations * Appointees of govemment. * Createown staff regulations and terms of services; * Lack of vision/mission. * Council and Boardsto have greater authority; * Lack of framework for * Studentsto be sponsoredon mutually supervisory,regulation, agreed upon terms using capitation grant. guidance,quality assurance, and incentives.
Under-finding Low budgetary allocationand * Rationalize level of government low private sector participation. contribution; * Introduce legallyprotected student loans scheme; * IntroduceEducation Levy; * Encourage private sector to establish and maintain institutions,provide loans and scholarships, providepart time employment to students; * Encourage and reward income generation activities in institutions.
5.2.4 Analysis of Efficiency and Effectiveness of Higher and Technical Education 5.27 The efficiency of the higher education system can be measured in many ways, but it is common to look at the utilization of human, physical and financial resources. In this case we are interested in unit costs, staff-student ratios, capacity utilization and transition and wastage rates for the sub-sector. These indicators tend to suggest that there are inefficiencies that need to be addressed. 5.28 Capacity Utilization: Higher education institutions need to utilize efficiently their fixed and variable resources and assets so as to cut down the unit costs. The most valuable fixed resources are the teaching facilities, the learning resources and the utilities. Data from UDSM transformation program (1999) suggest for example that no room is fully utilized. Room utilization rates are: 68% at UDSM (main campus); 43% at MUCHS and 89% at UCLAS. 5.29 Teacher-Students Ratios: The teacher-student ratio is one of the basic criteria for optimal utilization of the available teaching, research and consultancy resources. Table 3.7 suggests that the ratios are generally high by regional average, mainly because of low enrolments and small size institutions. This trend results in high unit costs and high proportion expenditure on personal emoluments as compared to expenditure on other charges within an institution. 5.30 High-Unit Costs: One of the challenges facing both the government and the institutions is to reduce the high unit costs due to low student/staff ratios. Tanzania higher education unit costs are higher than those found in other African Universities. By 1997 the unit costs at UDSM and SUA were US$ 6,071 and US$ 10,188 respectively. On the other hand the average public per unit expenditure per student also remains high at US$3,300 for SUA and at US$ 2,800 for UDSM. During the same period the unit costs in
72 comparable countries were: University of Zimbabwe, US$4,308; US$3,298 at University of Zambia and they were US$1,325 at Kenyatta in Kenya (GoT, MSTHE, 1998)16. Table 5.7: Teacher-StudentRatios in Selected Higher and Technical Education FY97 FY98 FY99 UDSM 1:7 1:7 1:7 SUA 1:5 1:6 1:3 MUCHS 1:2 1:2 1:5 UCLAS 1:3 1:5 1:3 DIT 1:14 1:15 1:10 MOSHI CO-OP 1:2 1:2 1:2 KARUME - 1:10 1:9 IFM 1:11 1:17 Source: Computed from MOSTHE Basic Statistics (1999)
Wastage: 1991 1992 1993 1994 1995 1996 1997 Arts (0.10) (0.07) 0.04 0.03 (0.14) (0.15) (0.06) Commerce (0.24) (0.20) (0. 9) (0.23) (0.15) (0.14) (0.14) Education (0.17) (0.07) (0.00) (0.13) (0.13) (0.12) (0.07) Engineering (0.1 1 ) (0.10) (0.17) (0.08) (0.05) (0.15) (0. 1 9) Law (0.04) (0.07) (0.02) (0.01) (0.07) (0.00) (0.05) Science (0.50) (0.44) (0.39) (0.48) (0.38) (0.34) (0.32) Phartnacy (0.48) (0.53) (0.63) (0.49) (0.38) (0.04) (0.60)
Nursing - - - - (0.52) (0.62) (0.70) Medicine (0.47) (0.54) (0.49) (0.56) (0.33) (0.31) (0.20)
Dentistry - - - (0.44) (0.61) (0.40) N.A Source: Computed from Cohort progression reports and undergraduate Students' performance reports. Notes: Cohort length is 3 years for Law, Arts, Commerce and Science; 4 years for Engineering and Education and 5 years for Medicine and Dentistry.
5.31 Analysis of Personal Emoluments and Other Charges: Interestingly, the proportion of expenditure covering students' welfare in higher learning institutions has remained high (over 20%) and growing even after introduction of student loans, which are supposed to meet accommodation and catering costs. In terms of the pattern of spending, Tanzania compares favorably with Belgium and France. but badly with other African countries, Japan and Sweden. Students' welfare takes a high budget of UDSM when compared with industrialized countries. Funds for operational costs are smaller in Tanzania often at the cost of education quality. Cost sharing through the Student Loan Scheme is yet to prove effective. This is because, graduates through this program have not started repaying the funds from the loans they received. At the same time, the government has not established an effective mechanism to track down graduates so as to get the money back nor has the revolving fund account been established. Within the
16 United Republic of Tanzania (1998) "Financial Sustainability of Higher Education: A Report of the Task Force on Financial Sustainability of Higher Education in Tanzania'. MSTHE: Dar es Salaam.
73 institutions themselves Personal Emolument (PE) consume a high proportion of public allocations as comparedto the share of other charges (OC).
Table 5.8: Proportion of Funds Allocated to Various Expenditure Items for Universities in Africa, Europe and UDSM. Item Africa Belgium and Japan and UDSM France Sweden Personal Emoluments 46 75 48 68 Student Welfare 31 4 7 20 Operating costs and material 23 21 45 12 100 100 100 100 Source:URT (1998) Financial Sustainability of HigherEducation in Tanzania,p. 60.
5.32 SuggestedRemedies: Performance improvement in higher education requires the following actions shownalso in Table 5.9. * Dramaticincrease in enrolment, * Rationalizationof institutionsand capacity utilization; * Improvedmanagement of institutions and reduce managerialcosts; * Establishingmechanism to track down loaned money from graduates; * Increased employmentopportunities; * Establishingstrategies that will lower unit costs.
Table 5.9: Main Efficiency Problem Areas and Suggested Remedies for Higher and Technical Educationin Tanzania Problem Cause(s) Remedies High tuition and welfare costs + High Unit Cost * Establish strategies that will : Increasingcost of living, lower unit costs; Reduce * Increasingmanagerial managerial costs; Reduce costs. Poverty among Tanzanians.
Difficulties in recovering * Lack of mechanismsto * Establishmechanism by student loans. track down graduates. Act of Parliament to track down loaned money from graduates; * Many of the graduatesdo * Increase employment not secure sufficiently well opportunities paying jobs to pay the loans * Promote and support self employment initiatives.
Under-utilized institutionsand Unmet needs for middle cadre * Rationalize institutions; Uncoordinatedcourses personnel. Establish an Accreditationbody for Awardsand control of course content (curriculum). High WastageRates Weak candidates; poor teaching * Tighten entrance criteria methods/poorassessment tools. and validate assessment tools; * Provideteacher professional development.
74 5.2.5 Review of Higher and Technical Education Sub-Sector Expenditure: 1993-1999
5.33 Funding of Higher Education in Tanzania involves a multiple of sources. These include the Union Government (for both the Mainland and Zanzibar since Higher Education is a Union matter), the Government of Zanzibar, external donors, private sector entities, parents, beneficiaries (either in the form of "own" funds or student loans which have to be repaid), Non-Governmental Organizations, the institutions themselves through income generation contributions as well as the general populace through means that do not involve traditional tax and non tax revenue generation measures of the central government. An example of such means is the proposed education levy. 5.34 Regarding funding of Higher and Technical Education through Government budgetary Operations, four issues are examined. These include Government Recurrent Expenditure, Government Development Expenditure, Donor funding and other forms of funding. The analysis focuses on structure and predictability of resource flows. 5.35 Government recurrent expenditure: Table 5.10 shows trends in the funding of Higher and Technical education from recurrent budget for the years FY94-FY99. In nominal terms government recurrent expenditure has been increasing annually by between 7% and 57.9% between 1994/5 and 1998/9 while in real terms the increase has been between 0.6% and 46.7%, respectively. The proportion of Higher and Technical Education funding in total government recurrent budget shows an unsystematic pattern, initially rising from 3.3% in 1993/4 to 4.2% in 1994/5 before declining steadily to 3.7% during 1997/8. A sharp up turn to 4.7% of total recurrent government budget is experienced in 1998/9, as part of concerted government efforts to revamp the social services sector. Out of total GDP, Higher and Technical education received 0.5% annually between 1993/4 and 1996/7. This proportion shrunk to 0.4% in 1997/8 before rising to 0.6%. Table 5.10: Trends in Higher and Technical Education Funding in Tanzania 1993-1999(%). Year Govt.Recurrent Expenditure annual Higherand TechnicalEducation changes Fundingas proportionof Nominal Real Govt.Recurrent GDP Budget 1993/4 - - 3.3 0.5 1994/5 +48.0 +31.4 4.2 0.5 1995/6 +10.0 +9.1 3.9 0.5 1996/7 +17.1 +8.7 3.9 0.5 1997/8 +7.0 +0.6 3.7 0.4 1998/9 -57.9 +46.7 4.7 0.6 Source:Own Computations from data in l URT.Appropriation Accounts. Ministry of Science.Technology and Higher Education (various). 2.URT/WorldBank (PER)(1999).
5.36 The analysis of the allocation of Government recurrent expenditure is attempted by decomposing the expenditure into personal emoluments (personnel expenses) and other charges. In Higher education, personnel expenses excluding teachers' salaries have constituted a paltry proportion of the budget. It has ranged between 0.02% during 1998/9 and 0.3% for the years 1994/5 and 1995/6. Direct student costs (excluding student loans)
75 have claimed on average 27% between 1993/4 and FY00 ranging from a low rate of 14.9% in FY00 to a high 42.4% during 1994/5. With regard to Technical education, personnel expenses have averaged 10.5% between 1993/4 and FY00, the lowest proportion being 3.5% in 1995/6 and highest being 16.6% during 1996/7. Direct student costs ranged from 0.1% during 1995/6 (closure) to a high 35.1% during 1993/4. Students in Technical education do not receive student loans as a matter of policy. On average personnel expenses consume around 5% of the government recurrent expenditure channeled to Higher and Technical education. In Higher education the average is around 0.2% while for Technical education it is around 10.5%. Student costs (excluding student loans) also feature significantly. Table 5.11 summarizes the information. Table 5.11:: Tanzania: Higher and Technical EducationExpenditure By Purpose: 1993- 1999 Percent of Sub-Vote (Actual, %) 1993/4 1994/5 1995/6 1996/7 1997/8 1998/9 1999/0 A: HIGHEREDUCATION Personnel expenses 0.2 0.3 0.3 0.05 0.02 0.04 0.09 Student costs (Welfare/allowancesexcl. student loans) 31.1 42.4 22.3 30.5 22.4 24.9 14.9 B: TECHNICALEDUCATION Personnel expenses 12.3 16.0 2.5 16.6 10.1 10.9 4.8 Student costs (no loans issued) 35.1 31.9 0.1 24.1 3.7 20.8 16.1 C: A VERAGE Personnel expenses 6.3 8.2 1.4 8.3 5.1 5.5 2.4 Student costs 33.1 37.2 11.2 27.3 30.3 22.9 15.5 Notes:FY00 estimates Source: Own computations from Appropriation Accounts, Ministry of Science Technology and Higher Education (MSTHE) (various)
5.37 Government Development Expenditure: Government development expenditure on Higher and Technical education has remained almost at same level for the period under study (both in proportion to total government development expenditure and to GDP as Table 3.13 shows). Historically much of the development expenditure in Higher and Technical education has been foreign financed and has not been mainstreamed in the government budgetary process. Thus the reflections of government development expenditure was very small compared to the investments that were observed to be taking place in the institutions. 5.38 As a proportion of total government development expenditure, Higher and Technical education allocation was in the order of 0.4% during 1994/5, 1996/7 and 1998/9. Only during 1995/6 did it rise to 0.5%. 5.39 In GDP terms, Higher and Technical education development budget expenditure remained at 0.01% for the entire 1994/5 - 1998/9 period. Government development expenditure declined from 1.8% in 1994/5 to 0.2% in the following year before picking gradually to 0.5% during 1996/7 and peaking to 2.5% during 1998/9.
76 Table 5.12: Trends in Government Development Expenditure in Higher and Technical Year As % of Total Govt. As % of GDP DevelopmentExp. THE GDE 1994/5 0.4 0.01 1.8 1995/6 0.5 0.01 0.2 1996/7 0.4 0.01 0.5 1998/9 0.4 0.01 2.5 Notes: THE = Technical and Higher Education allocation GDE = Govt. DevelopmentExpenditure Source: Own Computationsfrom MSTHE and URT/WorldBank documents.
5.40 A notable feature from Table 5.12 is that even when Government development expenditure increased during 1998/9 (as proportion of GDP) there was no corresponding (or any) increase to the allocation to Higher and Technical education. Within the sub- sector, allocation has tended to favor higher education, receiving 98.2% of total sub- sector allocation during 1994/5; 70.5% during 1995/6; 76.1% during 1997/8 and 91.2% during 1998/9 (computations from sources in Table 5.12). 5.41 Donor Funding in Higher and Technical Education: The expenditure by Donors in Higher and Technical education follows the pattern of the budget as a whole - funding development programs. 5.42 Tracking donor funds in the main government budgetary framework has been a traditional difficulty in the past. However, despite recent efforts to reflect donor funds in the government budget, tracking is still not an easy task. For the years we could make two observations: One, the proportion of local (government) funds is less than donor funds e.g. for 1994/5 local funds made up only 13.9% of total development funds to the sub-sector. The proportion improved to 58.7% during 1995/6 and to a further 69% during 1998/9. Secondly, foreign financing was fully directed to Higher education with none to technical education. 5.43 Recent moves in other sectors e.g. health promise to keep better records and better monitoring of donor expenditures through creation of a common basket. Though experience with common basket funding is limited, it might be a useful approach for donor funding of Higher and Technical education. 5.44 Other Sources of Finance for Higher and Technical Education: The group of "other sources" includes private, own funding, student loans, NGOs, etc. The funding from this group is the most difficult to track as information is very scattered. However given recent reforms in the economy in general and education sector in particular, this is the source that is expected to play a leading role in the future. A comprehensive study on the potentialities of this source will be most welcome. Perhaps one can make remarks on one source that is the student loan scheme. A weakness like low (or no) recovery rates is not only experienced in Tanzania but also in other African countries like Kenya, Zimbabwe, Botswana, etc. A comprehensive evaluation will shed more light. 5.45 Predictability of Resource Flows to Higher and Technical Education: This section analyzes predictability of resources to the sub-sector from three sources: government recurrent budget, government development budget and donor financing (for
77 years with complete data). Table 5.13 summarizes the results. With regard to Government Recurrent expenditure, on average about 87% of the approved estimates are actually disbursed and spent. The lowest score was 81.7% during 1995/6 and the highest was 96.9% during 1998/9. Donor finances do not usually fund recurrent expenditure. The predictability of development expenditure differs substantially between government and donor sources. The average success rate for the former is 77.6% (highest, 100% during 1998/9; lowest, 24.6% during 1995/6); while for the latter it is 34% (highest, 100% during 1994/5; lowest, 0% during 1997/8) (as reflected in Appropriation Accounts). Table 5.13: Predictability of Resource Flows to Higher and Technical Education in Tanzania (%) 1994-1999* Year Recurrent Expenditure Development Expenditure Govt. Donor Govt. Donor 1994/5 88.0 n.a 97.3 100.0 1995/6 81.7 n.a 24.6 5.7 1997/8 80.4 n.a 88.5 0.0 1998/9 96.9 n.a 100.0 30.0 Note: *Computedas actual expenditureas a proportionof approved estimates. Source: Own computationsfrom AppropriationAccounts MSTHE(various)
5.46 Government recurrent financing scores highly in terms of predictability. This is not very surprising given the fact that the budget cycle in Tanzania allows a foresight in the likely allocation through the indicative ceilings given to programmes. With respect to donor financing common observations have included lack of honouring already made commitments and delayed disbursements within the financial year. 5.47 Predictability of resources in Zanzibar is equally low, as the budgeted sum has been declining from year to year e.g. from TShs. 463 million during 1992/3 to TShs. 230 million during FY00. Predictability ranged between 30% (FY00 for first seven months to the highest 96.3% recorded during 1997/8). 5.2.6 Policy Recommendations
5.48 In view of the analysis the following are the recommendations: * In the short and medium terms Higher and Technical education has to be seen to be demand-driven. Measures which address this, are immediate improvement of sub-sector management, institutional development and capacity building - i.e., strengthening of capacity to monitor progress and achievement in the sub-sector. * To institute mechanisms for constant monitoring of sub-sector expenditures. * To pool resource allocation in order to effect co-ordination/rationalization in an efficient manner. * Formulation of a masterplan for Higher and Technical education in order to synchronize programs and institutional plans. This will lead to implementable programs of activities. * To sensitize on the need for extra budgetary resources for financing Higher and Technical education (e.g. through supporting education levy initiatives).
78 * In the short term cost effectiveness has to be emphasized especially through expanding enrolments in existing institutions in order to increase capacity utilization, with due attention to increasing educational opportunities for women at the tertiary level.
79
6. HEALTH SECTOR
6.1 INTRODUCTION
Background
6.1 The Health Sector has registered remarkable progress since the 1967 Arusha Declaration. The sector's emphasis has been on rural health development as a strategy for equitable distribution of health services. Despite the general improvement in the health and family status, the low growth of the economy particularly in the early 1980s with associated poor health services resulted into high infant and maternal mortality rates. Analysis of disease patterns and trends show that over 70 percent of life years lost in Tanzania are caused by the top ten major diseases, which are communicable but preventable, such as malaria, diarrhea, prenatal/maternal conditions and HIV/AIDS related diseases. Health Sector Reforms
6.2 Major reforms have been initiated and proposed by the ministry to rationalize the roles and responsibilities in the provision and financing of the health services. The reforms will focus on ensunng a more transparent, cost-effective use of existing and future resources through emphasis on priorities towards outcomes rather than inputs; and on improving delivery, quality and impact of essential health care to the poor. It is noteworthy that, the health sector reform is embedded in the wider context of Civil service and local government reforms. 6.3 Regarding the use of resources, a disproportionate amount is spent on personal emoluments (over 70%), at the expense of resources allocated towards the actual delivery of health services. Moreover, despite the government's emphasis on equitable distribution of health services, available evidence indicates that the personnel distribution heavily favors the urban areas consisting of about 20% of the population and yet served by about 70% of the total workforce. 6.2 HEALTHPOLICY OBJECTIVES
6.4 The overall objective of the Government of Tanzania's health policy is to improve the health and well-being of all Tanzanians with a focus on those most at risk and to encourage the health system to be more responsive to the needs of the people. To achieve its overall objective, the Government of Tanzania aims to: (i) Reduce infant mortality rates from 88/1000 live births (1997) to 84/1000 live births by the year 2002. Reduce maternal mortality rates from the range of 200- 700/100,000 live births (1997) to the range of 200-500/100,000 live births by the year 2002. GoT also expects to increase life expectancy of males from 49 years as at 1997 to 50 years by 2002 and for females from 51 years to 52 years, through the
80 provision of adequate and equitable maternal and child health services, promotion of adequate nutrition, control of communicable and preventable diseases and treatment of common conditionsof illness (ii) Ensure that quality health services are availableand accessible to all in urban and rural areas within reachable distances at low travel costs (from 72% as at 1984 to 90% by 2002) (iii) Move towards self sufficiency and equitable distribution of human resources by training all cadres required at all levels (iv) Sensitize the community on common preventable health problems and improve capacity at all levels of society to assess, analyze problems and design appropriate action through genuine community involvement(from 50% as at 1996 to 80% by 2002) (v) Promote awareness in government and community at large that health problems can only be adequately addressed through multi-sectoral co-operation and sector wide approaches (vi) Create awareness through family health promotion that responsibility for one's health rests squarely with the able bodied individually as an integrated part of the family.
6.3 STATUSOF THE HEALTH SYSTEM
6.5 The Health System Network: The Tanzanian health network consists about 4844 facilitiesthat are well distributed across the country. Out of these facilities, 2877 belong to the government. Out of the government owned facilities, 284 are health centers and 2512 dispensaries providing primary care services. These are in turn linked to 81 hospitals that include district and regional hospitals as well as Muhimbili National referral and teaching hospital. Where governrnent district hospitals do not exist, the areas are served by voluntary agency hospitals that are supported financially by the government through subventions. However, most of the government facilities are reported to be in need of heavy rehabilitation. 6.6 Human Resources: The health sector workforce is large and young consisting of about 67500. However, this figure does not include the unemployed health professionals whose number is reported to be significant. About 50% are reported to be either lowly trained or unskilled. About 73% are employed in government facilities while another 7% are seconded by GoT to Voluntary Agency hospitals hence GoT employs 80% of this workforce, spending over 70% of its recurrent budget on personal emoluments. Whereas the governmentspends a large percentage of its recurrent budget on personal emoluments for the health work workers, productivity is low. 6.7 Drugs and other medical supplies: It has been estimated that the country requires about US$1.23 per capita to meet its drug needs. A household survey has also establishedthat on average Tanzanians spend about US$ 3 per capita of their income on purchase of drugs (MOH, 1998). The Ministry of Health has declared drugs allocation a protected item on the budget. However, studies have shown that more funds are spent on
81 provision of drug kits for health centers and dispensaries as opposed to drugs for hospitals that are traditionally more expensive (Pavignani 1998). 6.8 Financial Resources: The health sector is mainly funded by the exchequer, donors and contributions from members of the community. Donors mainly support vertical programs like EPI, control of STDs and HIV/AIDS and the TB and Leprosy programs among others. There has been failures by some of the donors to release all their financial commitment to the health sector in several occasions. Trends in the government expenditure on health therefore indicate a notable under-funding at all levels of the sector. 6.4 PUBLIC EXPENDITUREPERFORMANCE
Background
6.9 The FY00 public expenditure review is a follow up of the last PER exercises conducted in 1997 and 1998. It aimed at supporting the preparation of the Medium Term Expenditure Framework (MTEF) in order to strengthen budget management in Tanzania specifically in the health sector. A number of studies (e.g. Recurrent cost projections, Performance Indicators, Expenditure Tracking, PER FY98 and costing of the Essential District Health Package) have already been carried out in the health sector. PER FY00 aimed at building on the previous studies to provide room towards accurate measurements of spending trends needed to analyze the effectiveness of fiscal interventions and system evolution.
Analysis of Expenditure Trends in the Health Sector
6.10 For the past two years, the amount of funds released was more than what was budgeted for the sector (Table 3.15). This was due to shortage of drugs in most of health facilities, which forced the government to allocate extra funds to the sector. The increases were around 23.75 percent in FY98 and FY99, while the actual expenditures in the same financial years were over and above the budget. In FY98 and FY99 actual expenditures were about 9.08 and 14.04 percent over the respective budgets. Expenditure trends at regional and district levels are difficult to obtain as they are aggregated with other sectors' expenditures. However, it is estimated that the Ministry of Health expenditure alone accounts between the range of 40-50 percent of all public health expenditures.
82 Table 6.1: Government Budgets and Actual Expenditures for Health Sector in Billion Tanzania Shillings. FY98 FY99 FY00 Actual/budget(%) Budget Actual Budget Actual Budget Actual 1997/8 199819 (Feb. 2000) RecurrentExpenditure MoH 22.03 25.86 28.90 37.15 31.60 18.59 117.00 128.55 Regions 7.25 7.25 8.40 8.40 9.24 4.80 100.00 100.00 Local 12.90 12.90 14.90 13.98 16.39 8.131 100.001 93.80 government Total Recurrent 42.18 46.01 52.20 59.53 57.23 31.52 109.08 114.04 Development Expenditure MoH | Local 1.97 1.97 2.00 1.99 3.38 1.00 100.00 99.61 Foreign 23.99 3.25 19.49 9.60 20.00 1.37 13.54 49.28 Regions/Local 1.38 1.38 1.36 1.26 0.40 0.20 100.00 92.64 government Total 27.34 6.60 22.85 12.86 23.78 2.58 24.13 56.26 Development Total Health 69.52 52.61 75.05 72.39 81.31 33.90 75.67 96.45 Source:Ministry of Finance.
Sub-Sector Budget Allocations
6.11 Table 6.2 shows the MoH's FY99 budget allocations across sub-sectors of central administration and roles of hospitals and institutions under the ministry. The sub-sector breakdown shows that 40.7% of the total spending was allocated to hospitals to maintain the already existing infrastructure, 4.65% to National Institute of Medical Research and the Tanzania Food and Nutrition Center. Muhimbili Medical Center alone consumes 17.3% of the Ministry's budgetary allocation. This situation suggests that the Government policy on giving priority to primary health care (PHC) is not yet in place as far as allocation of resources is concerned. However, this might be because the Government has to fund salaries and maintaining the existing health infrastructure. The explanation above could not take into account the allocations in regions and local government where most of preventive activities take place. 6.12 A critical analysis of PE costs reveals that a substantial amount is spent on District Designated Hospital and Voluntary Agency owned hospitals. Subventions to these hospitals are mainly in the form of seconded personnel. It is high time now to rethink whether the Government should continue to subsidize Voluntary Agency health facilities. There is a need to review the coverage of health facilities to identify scope for rationalization, particularly where mission and government facilities overlap. This will form the basis for review of policies regarding subventions.
83 Table 6.2: Sub-services/Functions Breakdown of Government Recurrent Budget for Health - FY99 PE* | OC* Total l Bn. % Bn. % Bn. % Shs. Shs. Shs. MoH Admin/Central** 2.40 18.60 13.40 83.60 15.80 54.90 Muhimbili Medical Center 4.20 32.60 0.80 5.00 5.00 17.40 KCMC hospital 0.90 7.00 0.40 2.50 1.30 4.50 District Designated Hospitals (DDH) 2.03 15.80 0.60 4.00 2.63 9.10 Bugando Hospital 0.52 4.04 0.40 2.50 0.92 3.20 MuhimbiliOrthopaedic Institute 0.31 2.41 0.10 0.60 0.41 1.40 Ocean Road Cancer Institute 0.21 1.63 0.10 0.60 0.31 1.10 VoluntaryAgency (VA) hospitals 1.10 8.50 0.05 0.30 1.15 4.00 National Institute for Medical 0.80 6.22 0.09 0.60 0.85 2.90 Research (NIMR) Tanzania Food and Nutrition Center 0.40 3.11 0.05 0.30 0.45 1.60 (TFNC) TOTAL 12.87 100% 16.03 100% 28.82 100% *PE are personal emoluments,OC are other charges. Drugs costs have been allocatedto various levels of health care based on informationsupplied by Medical Stores Department. **MOH/Admin/Centralincludes MOH administration,accounts, planning and nursing sections, the Govemment Chemistservice and Tanzania Food Commission.
Analysis of Health Sector Funding Requirement
6.13 The definition of sector funding "needs" has to be set in the context of what might be affordable at the country's level of development and incomes. The World Development Report (1993) recommends US$ 12 per capita for provision of a basic package of health services in developing countries. Based on this assumption, the overall funding needs for the health sector in Tanzania would be US$ 360 million based on the 1999 population figures of about 30 million people. 6.14 In order to run services at optimal levels, about US$ 150-180 million is required for the sector (Pavignani 1998, HERA 1999). It is, however, estimated that currently less than US$ 100 million is available to the sector from all sources, with the Government of Tanzania and donors providing the bulk of the resources. Based on various assumptions. the cost of running the government Health sector is estimated at US$ 126 million in 2001 rising to about US$ 132 million in 2002. Priority Areas
6.15 In order to improve the delivery of health services, the priority will be to strengthen the delivery of the essential district health package as well as to arrest the further deterioration of the physical facilities. Provision of drugs will continue to be a protected item in the budget. The following priority areas are therefore recommended. 1. Drugs and essential medical supplies 2. Kerosene for storage of vaccines in rural areas 3. Essential hospital equipment and supplies 4. Strengthening of the referral system
84 5. Equipment for safe motherhood for all levels (vaccines,delivery beds and kits etc) 6. Conditional survey of physical facilities and equipment and prioritization for urgent rehabilitation of the most critical ones 7. Mechanisms for introductionof CHF and cost sharing to lower level facilities Mechanisms for implementationof the National Insurance Fund.
Table 6.3: Funds Requirements and Proposed Allocation of Funds for Priority and Activities in the Health Sector. (Millions of Tshs). Priority Area/Activity Estimates Projections 1999/0 200011 2001/2 2002/3 Reqts. Propsd. Reqts. Propsd. Reqts. Propsd. Alloc. Alloc. Alloc. Drugs 9500.00 17600.0 11610.4 19360.0 18178.9 20134.4 25474.5 Essential Medical Supplies 2664.63 5500.0 3627.07 6000.0 5634.43 6240.0 7894.5 Essential hospitals equipment 3197.55 6500.0 4286.54 7000.0 6573.5 7280.0 9210.29 and reagents (diagnostic equipment X-ray inclusive) EPI - Kerosene 266.46 600.0 395.68 700.0 657.35 728.0 921.03 Utilities for hospital and 53.26 120.0 79.14 150.0 140.86 156.0 197.36 Training Institutions Strengthening referral hospitals - 1065.85 2500.0 1648.67 3000.0 2817.22 3120.0 3947.27 provide PHC units with drugs, equipment and trained staff Define the referral functions of 639.51 1500.0 989.20 2000.0 1878.14 2080.0 2631.51 secondary and tertiary curative services (referral facilities no longer attend health center cases) Counterpart funds for the 639.51 400.0 263.79 200.0 187.81 208.0 263.15 introduction of CHF and cost sharing to lower level health facilities _ Start up cost and counterpart 266.46 200.0 131.89 100.0 93.91 104.0 131.58 funds for introduction of National Health Insurance Immunization of 2 years kids for 266.46 1874.40 1079.6 1187.20 71% to 75%. HIV/AIDS awareness campaign 0.00 4846 4731.0 4680.00 Total recurrent 15973.84 34920.0 29752.8 38510.0 41972.7 40050.4 56538.4 Total development 2874.75 20840.0 4422.68 23670.0 4375.0 24616.8 4375.0 Total resources priority areas 18848.59 55760.0 34175.4 62180.0 46347.7 64667.2 60913.4
6.16 Apart from the above items, other areas of priority that are required for developinginstitutional infrastructurefor sustainabilityin health care delivery are: 1. Improved health education strategies 2. Developmentand institutionalizationof the health sector reform strategies.
85 Proposalsfor the FYO1Budget
6.17 To make the budget preparation realistic and to help achievethe stated goals and objectives and improve the output, the followingproposals are recommended: 1. Reduce the number of unskilled staff and institute mechanisms for rational distribution of staff by transferring some skilled staff to PHC. This will have a twofold effect of releasing resources as well as addressingthe issue of quality of services provided in the PHC units. 2. Strengthen supervisory teams to check on treatment protocols and irrational prescriptions.
86
7. WATER SECTOR
7.1 INTRODUCTION
Water Sector PER Objectivesfor FY01
7.1 The objective of the FY00 PER for the water sector was to provide a brief update of water policy objectives and budget performance, issues and options in the water sector during 1997/9 - FY00. The update focuses specifically on the current status and performance of rural and urban water supply and water resources management during the past three years. Also, the review provides a budget outlook for FY01 and indicative expenditure plans for the Ministry of Water for at least the next three years (FY01 - FY03), linked to the expected water sector outputs. Options for improving the impact of the budget on the water sector performance are also mentioned in this PER. Thus the FY00 PER for the water sector was to assist the Govemment (MOF) in the preparation of the FY01 Financial Year Budget Guidelines and the MTEF for FY01 - FY03. PER Study Approachand Methodology
7.2 The study's approach and methodology aimed at capacity building in PER analysis in the Ministry of Water and maximizationof the transfer of skills to counterpart staff.
7.2 ISSUES RELATED TO BUDGET PERFORMANCE FOR FY98-FYOO
Total Budget
7.3 The budget performance for the Ministry of Water between FY98 to FY00 showed an oscillating but poor budget track in actual expenditures. The trend indicates that the commitment of the GoT budget to Ministry of Water has been very low, not only in terms of its allocations, but more important in terms of what actually is availed to the sector. Capital Budget Issues
7.4 Over time, the GoT budget has increasingly become dependent on donor funds, at an average of about 60 percent, to finance its annually planned (total) budgets for the Ministry of Water. For example, more than 90% of the approved development budget for FY99 to the ministry has originated from foreign sources. Specific development budget issues observed include: * Declining planned, approvedand actual developmentbudget expenditure; * High dependency on foreign funds and inadequate local funds in capital budget;
87 * Increasing difficulties in commitment of counterpart funds for development projects; and * Declining trend and high divergence between donor commitment and disbursement.
Recurrent Budget Issues
7.5 The recurrent budget accounted for about 50% of total actual expenditure during the 1998/9 - FY00 period. More than 70 percent of released local funds to the Ministry were spent for payment of PE. For this reason, the Ministry's service delivery and undertaking of activities such as operation and maintenance (O&M) of infrastructures, which are often financed by other charges (OC), have been under-financed. Although most urban water supply and Sewerage systems are autonomously operating and generate their own income, they still consume a large share of the recurrent budget through salaries of senior staff and O&M, especially the electricity bill, which is still borne by the GoT. Specific recurrent budget issues include: * Oscillating planned, approved and actual recurrent expenditure; a Recurrent expenditure by service or output levels is dominated by rural and urban sector. While the rural sector consumes high budget on O&M expenses, the urban sector's recurrent budget is expended for sanitation/sewerage activities.
7.6 Personnel Emoluments (PE): There has been a systematic increase in PE, mainly due to the increasing seniority and promotions of the ministry's staff; and continued reliance on many casual laborers comprising of gauge readers, pump attendants and watchmen who are employed on temporary basis mainly in the major water schemes and different water basins to collect data on water resources and do other manual works. The rising trend of wage bill implies that the PE budget destined to pay staff will continue to increase directly with staff's seniority and promotions. 7.7 Other Charges (OC): The expenditure for other charges by the service levels/outputs indicates that between FY98 and FY00, the water drilling agency (DDCA) - a subcontractor to the Water Resources Division, has been leading by claiming about 66.6% of the total OC released to Ministry of Water. Water drilling is followed by the Central Water Store (10%). In fact, the OC for DDCA and the Central Water Store (CWS) used to be very small in the past, but in FY98 and FY99, the DDCA and CWS claimed a considerable amount of the MDF resources allocated to development projects to address the El Nino based water crisis experienced in Dar es Salaam. Next in terms of claiming resources were divisions such as rural water supply (8.3%), urban water supply (4.5%) and others 10.3%. 7.8 Generally, the Ministry of Water utilizes OC to most of the casual laborers employed by the Water Resources Management Division. Casual laborers are temporarily employed (some for much longer time), most of them are semi- or unskilled (particularly the gauge readers and technicians), and are paid under OC and not under PE. However, there has been insufficiency of funds (other charges) for operation and maintenance of water pumps, resulting into defective pumping systems.
88 Budget Ceiling
7.9 Though well understood and planned for, the water sector development is held back by poor budget disbursement by both the exchequer and donors. As such, most of the water problems have been and will continue to roll over for many fiscal years. Notably, the budget ceiling criteria which is applied by the Government is outdated and may derail the performance budgeting approach because it defeats/contradicts with the performnance-oriented spirit in the sense that no strategic plan can be comprehensively implemented with such an expenditure approach. Therefore, a revised framework to integrate the budget ceiling with budget perfornance is required. Impact of Expenditure on Water Sector Development
7.10 Public expenditure investment include not only additions to water supply plant, machinery and equipment but also intangible components of services such as refined management and institutional facilities, improved quality of water supply as well as additions to the stock of human capital through training, etc. The important achievement that emerges from this study is the establishment of the prerequisite local water supply and sewerage services capability. These include improved infrastructure and support institutions, which facilitate the development of the water sector. Specific realizations comprise the following: 7.11 Sector fiscal discipline is in order: The Ministry of Water knows its expenditure priorities and how to use resource to attain the long-term water sector goals. For example, in the FY99 PER Report, a lot of financing gaps were identified. The gaps were expected to be addressed by the PER FY00. The gaps were prioritized from level 1 to 5 and totaled Tshs. 15,197,956,000. Some of the activities have already been implemented and others have to be reviewed for inclusion in the next budget proposal. 7.12 Review of Water Policy 1991 has been completed smoothly: The review of Rural Supply (a component of the 1991 National Water Policy) has been completed and has incorporated a view of strengthening the rural authorities for development and management of the rural water supply services. The rural water supply policy focuses on community participation in conceiving, planning, construction, operation, maintenance, and ownership of their rural water supply schemes. The policy provides full involvement of users at all stages of the project cycle and is based and guided by social, economic, environmental and sustainability principles. 7.13 Some rural water supply strategies have started to be implemented: * A few Water Users Associations/Trusts/Companies have been legally established. Ownership has already been transferred to these water user entities/companies. * Participatory Approach applied in strengthening the local community to manage and run their own water supply schemes in sustainable manner has been adopted. This approach provides for legal registration by the communities to operate and maintain their organization legally.
89 7.14 Urban Water and Sanitation Sector projects favored and showing sign of good performance: On Urban Water and Sanitation, the governmenthas built up necessary institutionalframework to support water sector development.The institutional impact has been the establishment of independent water authorities, with their own boards in all 20 regional headquarters.With effect from 1st January 1998 the Minister of Water declared all 18 UWSDs to be Urban Water Supply and Sewerage Authorities (UWSAs) in different levels of development and categories. For instance, five of the boards (Arusha, Dar/Kibaha, Moshi, Mwanza and Tanga) are completely autonomous. They do not depend on Government subvention for O&M, except for the capital or development expenditures. 7.15 The governmentsees the strengtheningof rural and urban water supply authorities as advantageous since it aims to build the capacity of local authorities for self-financing and ensure the sustainability of service delivery. The success of the process will eventually reduce the burden of providing water and sanitation services by the central government. 7.16 Sector focus and shift in water sector policy priorities in the public expenditure: Since 1991 the Governmenthas been emphasizing urban development, with a focus on Urban Water infrastructurerehabilitation. The sub-sectorhas been consuming over 50% of the resource allocation, in terms of both local and foreign funding. The foreign input componenthas been in urban water development. 7.17 Rural water has had a 20% allocation share. However, TAS and HIPC initiatives intend to support a shift towards water resource management and rural water supply. In the wake of HIPC and TAS, sector-spending prioritization has to be earmarked to the rehabilitation of inoperative rural water schemes while handing over the same to the people, thereafter. 7.3 INSTITUTIONALFRAMEWORK AND CAPACITY BUILDING
7.18 The Tanzanian government has set up an adequate institutional framework to implement major water sector policy objectives and strategies. The role of the Ministry of Water is also changing from that of being a service provider to being a facilitator, regulator and promoter of rural and urban water supply and sanitation/sewerage services. However, it has weak vertical and horizontal linkages. It is not conducive for either the central or local government to fully manage, co-ordinate and execute the development activities pertaining to the sector all over the country. 7.19 The human resources development has been halted mainly due to lack of funds for capacity building activities such as training. The capacity building/training budget is located in the development/capitalcomponent, which is not forthcoming as planned or authorized. Attrition of the staff due to retirement,retrenchment, death, ill-motivationand voluntary termination of services has further eroded the sector of its most needed human resources. For instance, in the 5 years to come, all the heads of divisions and some units will be legally obliged to retire. This implies that no replacement will be accomplished. Due to this adverse situation, division will either be managed by under-qualified people, or will resort to expertise consultancy, which seem to be more expensive than the cost required to develop the existing human resource.
90 7.20 Unfortunately,recruitment of staff into the water sector was suspended for several years. The employment permit was delayed and interviews for the post applicants are prolonged by the Civil Service Commission (CSC), alleging that there is no money to convene such an interview. Also, the Ministry of Water has a backlog of about 800 (eight hundred staff) to be promoted by the CSC, which is claiming to suffer from budgetary financial inadequacy. Main Institutional Administrative Issues and Concerns
7.21 The following are major institutional and administrative issues and concerns for the Water sector: * Weak institutional set-up coupled by inadequate working tools, facilities and equipment, machinery and poor transport facilities, combined with an inefficient provision of water services and poor communication system within the sector. * Shortages of adequate personnel to manage water and sanitation programs (i.e., inadequate trained, skilled and motivated staff). This issues is connected to the restricted recruitment of staff, retaining of the required qualified professional and technical staff in the face of competitive attractions in the non-public sectors and poor supply of the adequately trained personnel. * It is difficult to equitably allocate water rights among competing users for the overall socio-economic development of Tanzania, while at the same time promoting sustainable development and management of water resources. * Inadequate financial resources for water sector development.
7.4 CURRENT STATUS OF WATER SECTOR PERFORMANCE
Surface Water
7.22 Tanzania has an abundance of inland waters with several large lakes and rivers to meet most of the present needs. However, differences in topography, rainfall pattern and climate account for the existing variation in the availability of water in different parts of the country. Specific surface water issues include: * Scarcity, misuse and wastage of water pose a serious and growing threat to sustainable development and protection of the environment. * Increased human activities in the various catchment areas, competing and conflicting demands and land use are also impacting on the available water resources in a number of ways. Such ongoing activities are causing deterioration of the catchment areas at many places with consequent changes to runoff patterns and water balance. * The water resources are unevenly distributed nationally in space and time, and are scarce in many areas. Also, there is high variability in rainfall, diverse climatic conditions and geographical features. Rivers and lakes generally rise
91 during the rainy season and recede during the dry season. Generally, Tanzania is relatively dry. * Conservation of surface water sources against increasing pollution and degradation of the environment.
Groundwater
7.23 Groundwater potential in the country is variable. It is one of the major sources of water, particularly in the semi-arid areas but still remains being not well established and developed. In general, the natural groundwater quality in Tanzania is good, acceptable for most use. Specific groundwater issues include: * High salinity (chloride) causes high evaporation rate and poor drainage, hardness and corrosion due to high carbon dioxide. * High concentration of iron or fluoride is a common problem only in the area surrounding the Rift valley system where volcanic chemicals contaminate the groundwater. . Lack of surveyed adequate data and information and mismanagement of resources.
Rainfall
7.24 Tanzania has high annual rainfall. However, rainwater harvesting is mostly used as a supplement to other water supply sources in most parts of the country. Several different types of rainwater storage facilities such as tanks, dams and charcoals, have been constructed at various levels from institutions to households. Rainwater harvesting from rooftops in rural areas is gradually gaining momentum although on a very small scale. Therefore rainwater-harvesting tank construction could be a novel idea that will eventually be applied on a large scale. * Erratic and highly unreliable rainfalls and data. * Poor rooftop construction of the harvesting systems. * Lack of proper operation and regular maintenance of the harvesting systems.
Rural Water Supply
7.25 The current official estimates of water supply coverage of the rural population is about 48.5% of the rural population that has access to safe drinking water within a walking distance of 400m served through different types of schemes. The main rural water supply issues and concerns include: * There is a growing demand for water supply by rapidly growing rural population. Therefore, rehabilitation and investment or development of the water sector should match with such demand.
92 * Identification of available water resources potentials, including rainwater harvesting, increased number of shallow wells, dams and charcoals, that can be developed throughout the entire country in the wet and dry season, including both surface and groundwater,and springs. * Protection and conservationof water sources and promotionof efficient use of water to ensure the sustainabilityof water schemes. * Protection and conservationof water sources and promotionof efficient use of water to ensure the sustainabilityof water schemes. * Promotion of the existing rural water through cost management system by a shift from the concept of free water to cost sharing. * Promote private sector participation (local government authorities and other private stakeholders) to ensure successful hand over from the centrally managed large rural water suppliesto autonomous entities. * Promote co-ordinationof the stakeholders in the water sector. The MOW has to ensure that local governmentsdevelop adequate capacitiesto assist communitiestake over the managementand operation and maintenanceof rural schemes.
Urban Water Supply and Sewerage
7.26 Currently, there are 62 registered urban centers in Tanzania, out of which 20 are regional administrative headquarters. There are also 52 minor urban settlements in the country with some form of piped water system. The water supplies in these towns are inadequate in both the quantities produced and the coverage of the distributionnetwork. 7.27 The sewerage coverage is about 10% and only in a few urban areas (e.g. Dar es Salaam, Arusha. Moshi, Mwanza. Tanga, Tabora and Dodoma). The sewerage system in these urban areas cover central business areas and are in poor condition. In the rest of the urban areas and other unserviced areas, septic tanks and pit latrines are commonly used. Poor excreta disposal in urban areas is the major cause of pollution of water sources, hence the source of various intestinal diseases. 7.28 The process of strengtheningof rural and urban water supply authorities aims to build the capacity of local authorities for self-financing and ensure sustainability of the service delivery. The success of the process will eventually reduce the burden to the central governmentof providing water and sanitation services. This is an effective move of ensuring the sustainabilityof the water and sanitation services in the country, that calls for the process to be intensified. Specific urban water supply and sewage system issues and concerns include: * Ever-increasing demand from various socio-economic activities and rapid increase in the urban population (estimated a more than 6% p.a.) in almost all towns;
93 * All urban centers in Tanzania face frequent and critical water supply shortages due to leakage and wastage of aged water and sewerage infrastructures.There is an urgent need to combat and minimize leakage and wastage. * Deterioration of the water quality due to industrial and household pollution; which also increases operational costs. The promotion of research and technologies for the management of wastewater, with a view of protecting water resources and defluoridation, which will improve the quality of the water to be served to the people; * Urgent need of identification of available water resources potentials and the demands. Identification of the potential for rainwater harvesting and the promotion of the technology among the urban people with a view of increasing availability of water; * Emphasizing demand management approaches especially in water scarce areas and during drought periods.
Irrigation
7.29 Of the total 43 million hectares suitable for agriculturalproduction in Tanzania, only about 6.3 million hectares are under cultivation. The irrigation potential in Tanzania is estimated to be over one million hectares. However, the area under irrigation is about 175,000 hectares only, of which 120,000 hectares are under small-holderirrigation. Of the irrigated areas, about 69,000 hectares are irrigated in the Pangani basin and about 30,000 hectares in the Rufiji basin. 7.30 The Main Irrigation Issues and Concerns include: - Irrigation is the largest consumptivewater user and makes the greatest impact on net water resources. D Irrigators are reported to be often in conflict with each other, and with other water resource users.
HydropowerGeneration
7.31 The hydroelectric power potential in Tanzania is estimated at 4.7 GW, out of which only 12% has been developed. Over 70 percent of electrical power capacity is generated at hydropower plants on Ruaha and Pangani rivers, with a total installed capacity of 280 MW and 97 MW, respectively. However, a substantial amount of the national electricity is generated at two hydro-electric power plants, at Kidatu (204MW) and Mtera (80MW), which together make up 76% of installed hydropower capacity or 51% of the total installed capacity (555MW) for the national grid system. The water flows to these power plants are regulated by the Mtera reservoir with a nominal live storage capacity of 3,200 million Cubic Meters and Kidatu with live storage capacity of 125 million cubic meters.
94 7.32 Main Hydropower GenerationIssues and Concernsinclude: * Provision of the necessary hydrological information base for the planning, development and operation of hydropower system; * Optimal allocation that benefits the whole spectrum of social-economic demands; and * Regulating the operation of hydropower reservoirs and at the same time managing and regulating all other water uses.
Conflicts in Water Uses
7.33 There exist several types of conflicts in water use for irrigation. There are conflicts between users in the same category. This is mostly common for irrigators and also upstream users causing inconveniences to downstream users, either in one furrow system or several furrow systems. Other conflicts are between users of differing categories such as between irrigation and domestic water supply, especially in the dry season when most of the water is used for irrigation; between irrigators and hydropower, whereby hydropower producersblame the upstream irrigators for massive losses of water and poor water management. Generally,irrigation downstream the major dams is affected by these conflicts, which occur mainly because of uncoordinated regulation policies. There are also other conflicts such as those between irrigators and pastoralists, which mainly involve land issues and notable by livestock migrating from place to place and trespassing agriculturallands. 7.34 Further, the linkages between regular and adequate provision of safe and treated drinking water, the individual's health status, as well as the quality and level of industrial and commercial output of goods and services in the country require an in-depth understanding and hence empirical investigation.
7.5 WATERSECTOR POLICY OBJECTIVES AND PRIORITIES FOR THE FY01
The Development and Water Sector Vision
7.35 The overall long-term goal of socio-economicdevelopment for Tanzania by the year 2025 is to attain sustainable human development with all the prerequisites for achieving a fully developed economy. The Tanzanian society of 2025 must have freed itself from abject poverty and attained a high quality of life for all people, meaning that: people will have attained respectable levels of incomes, enhanced ownership of assets, reduced vulnerability, enhanced and increased power over their own future. One of the achievements expected by the year 2025 is an increase of access to safe water from 50 percent to 90 percent of the population. In specific terms, we may believe that people, looking 25 years ahead would opt for a water future where: * Accessibility and provision of safe water for drinking and sanitation is ensured;
95 * Water supplies are adequate to support agricultural and non-agricultural production activities; * The negative effects of droughts and floods are minimized; * The use of water for human purposes takes care of and protects the environment and creatures that require water; and * Conflicts over water do not develop, neither at the local level, in the region nor internationally.
Ministry of Water Mission and Water Sector Policy Objectives
7.36 The mission of the Ministry of Water has always been to achieve sustainable development and management of water resources for the benefit of all Tanzanians, socially and economically. The broad Water Sector Policy objectives are: - to increase health and productivity of the population through the provision of safe and adequate water supply and sanitation services to the maximum number of people; to provide effective water supply and waste water disposal services to commerce and industry to help maintain their productivity, as well as recognizing agricultural, power generation and recreational needs; and to identify and preserve water sources and catchment areas. 7.37 To achieve the above water policy target, the government has proposed several policy strategies as follows: * Promoting community participation, cost sharing and cost recovery in rural water supply activities; * Maintaining, rehabilitating water schemes and securing of new capital investment; • Promoting the use of appropriate technology; * Encouraging private enterprise to develop and intensify privatization; * Enhancing human resource development; * Developing water sources for urban and rural areas; * Improving efficiency in the sector; * Improving the environmental sustainability of water supplies; * Promoting conservation measures and proper management of water resources; * Undertaking institutional reform, evolving new organizational structures, enhancing capacity and promoting decentralization; and * Reviewing the regulatory and legal framework.
Water Sector Priorities for FY01
7.38 In implementing these strategies, the government will be guided by the following water sector's funding priorities set in FY01, which have been identified as follows:
96 * Rehabilitationof networks for planning and design for: * Provisionof institutional support to rural based water user communities. * Hydrologicalnetwork. * Hydrogeologicalnetwork. * Rehabilitation of drilling equipment and earth-moving equipment for water supply and seweragesystems. * Developmentof new water sources (Drilling of bore holes and construction of dams). * Rehabilitationof rural water supply scheme and completion of ongoing rural water supply projects (earning little budget money) * Rehabilitationof rural water supply and sewerage services; * Rehabilitation of drilling equipment and earth-moving equipment for rural water supply and sewerage services. - Establishmentof water-user entities in the rural area. lRehabilitation and Expansion of Urban water supply and sewerage systems with respect to population growth and other economic activities. That is, develop new water sources for urban water supplies and sewerage services in urban areas where social and economic activities are expanding. * Enhance capacity building, recruitmentof manpower and retraining of staff (engineers, technicians, managerialprofessionals and other experts). * Intensificationof water quality control and monitoring. * Enhanceenvironment management and conservationmeasures.
Options for Improving the Impact of the Budget on the Water Sector
7.39 At the moment, more funds are needed to enable the GoT to implement the water sector developmentprojects and to accomplishthe institutionalreforms before it becomes a facilitator,regulator and promoter of water supply and sanitation services in Tanzania. However, the following observationsdepict the water sector developments. Reforms Not Well Capturedin the Current Budgeting 7.40 It was noted earlier that the budget performance for the Ministry of Water between FY98 to FY00 marked an oscillating and poor track due to low commitment of the GoT budget to Ministry of Water. This has partly been the consequenceof depending upon the budget ceiling determined by the GoT (through MOF) to instill realistic fiscal discipline through the cash budget system. However, declining and low flows of resources may signify a shift of government policy from a provider of public service to policy formulation, promoter and facilitator. The Ministry of Water's role is still reforming from traditional service provider to a facilitator, regulator and promoter of
97 rural and urban water supply and sewerage services. Lack of understanding of this reform and bureaucraticbudget procedures may lead to poor budgetary prioritization. Ongoing Resource Deployment Reform
7.41 Ongoing Govermnent initiatives are aimed at increasing efficiency in managing urban water supply and sanitation. All the 20 regional headquarters have independent water authorities,with their own boards. Five of the boards (Arusha, Dar/Kibaha, Moshi, Mwanza and Tanga) are completely autonomous - not depending on Government subvention for O&M. Urban Sector RehabilitationProgram (USRP) project is to further consolidate the management of these boards through the establishment of more reliable water sources. As a result, an expansion of the area served with water supply will be facilitated so that the revenue base can be widened. This will sooner or later free the central government'sfinancial resources and manpower to be used elsewhere. Measures to Reduce Aid Dependency and Enhance Optimal Utilization of Resources
7.42 The above analysis has demonstrated the problem relating to increasing dependency on donor funds for the water sector's development. The Ministry of Water has over time designed strategies aimed at reducing foreign aid dependency. Many of these strategies have aimed at reducing the need for foreign money to finance water resource management activities and enhancing optimal utilization of water resources. The envisaged strategy is to transfer water supply and sanitation facilities from central ownership to the beneficiaries by creating an enabling environment for public companies, user entities/trustees, and the community to participate. Specific water sector strategies include: * Use of village committees; * Village water fund; * Income generating activities; and * Human resource development.
Water Sector Budget Outlook for FY01
7.43 The above water sector priorities can be approximated into major Ministry of Water functions, activities and measurable output indicators such as water and sanitation services, coverage to rural population or number of people in urban areas who will have access to safe water within the stated time period. Based on water sector policies, strategies and priorities, the budget outlook is provided in Tables 7.1, 7.2 and 3.20 as follows: Table 7.1: Projected Total Budget Outlook for FY01 - 2003/04 Year FY00 FY01 - FY02 FY03 Recurrent 2,803,825,000 4,218,933,420 5,371,601,328 6,839,193,217 Capital 21,508,512,000 32,239,570,500 34,901,088,819 34,875,994,320 Total 24,312,337,000 36.458,503,920 46,229,382,971 41,715,187,537
98 Table 7.2: Breakdown of Capital Budget Outlook for FY01 Code ServiceLevels Local Foreign Total 101 Administration& General 15,013,296 0 15,013,296 102 Finance and Accounts 0 0 0 103 Policy and Planning 81,174,124 94,358,567 175,532,691 201 Water RJAss and Exploration 1,000,955,428 9,500,000,000 10,500.955,428 202 CentralWater Store 100,426,000 0 100,426,000 203 Water Laboratory 250,702,000 424,000,157 674,702,157 301 Urban Water and Sewerage 1,501,000,466 10,583,508,764 13,084,935,230 302 Central Water Board 101,000,000 158,767,118 259,767,118 401 Rural Water Supply 505,128,043 2,088,154,702 2,593,282,751 501 Water Resource Institute 200,192,029 600,789,000 800,981,029 601 Water Drilling 1,034,400,800 4,000,000,000 5,034,400,800 TOTALCAPITAL OUTLOOK 4,789,992,186 27,449,578,314 32,239,570,500
Table 7.3: Breakdown of Recurrent Budget Outlook for FY01 Code ServiceLevels Total Recurrent PE OC 101 Administration& General 291,491,593 109,107,142 182,384,451 102 Finance and Accounts 68,988,888 30,253,999 38,734,888 103 Policy and Planning 113,690,906 60,256,180 53,434,726 201 Water RJAssand Exploration 920,659,239 556,512,071 364,147,168 202 Central Water Store 73,120,250 40,548,860 32,571,390 203 Water Laboratory 197,386,954 53,889,456 143,497,498 301 Urban Water and Sewerage 1,050,344,697 589,020,682 461,324,015 302 Central Water Board 109,607,431 66,995,864 42,611,567 401 Rural Water Supply 919,045,226 450,332,663 468.712,563 501 WaterResource Institute 234,166,550 109,866,592 124,299,958 601 Water Drilling 240,431,686 111,579,884 128,851,802 TOTAL RECURRENTOUTLOOK 4,218,933,420 2,218,363,393 2,040,570,026
99
8. ROADS SECTOR
8.1 THE ROAD NETWORK IN TANZANIA
8.1 The road network in Tanzania comprises approximately 84930 km of roads, out of which, 10230 km (12%) are trunk, 24700 km (29%) are regional and 50000 km (59%) are district (Table 8.1). According to the Ministry of Works (MOW) estimates road network consist of 10840 km (13%) good, 20803 km (24%) fair and 53287 km (63%) poor condition. About 38% of trunk roads and 1% of regional roads are paved, while about 62% of trunk roads and 99% of regional roads are unpaved. The bulk of the road network (63%) requires rehabilitation. Only 37% of the road network requires routine and/or normal period maintenance. This in turn has important budgetary implication. Table 3.21 presents currently available information on the length and condition of the road network as presented in the survey carried out in May 1999. Table 8.1: Road Network by Type Surface and Condition(in km) Type of Road Condition of Road Network 1999 Good Fair Poor Total Trunk Roads Paved 2317(59%) 1163(30%) [441(11%) 3921 (100%) Unpaved 776 (12%) 2858 (45%) 2675 (42%) 6309 (100%) Total TrunkRoads 3093 (30%) 4021 (39%/) 3116 (30%) 10230 (100%) Regional Roads Paved 22 (10%) 116 (70%) 45 (20%) 223 (100%) Unpaved 2100(9%) l 5731 (23%) 16646 (68%) 24477 (100%) TotalRegional Roads 2122 (9%) |5887 (24%) 16691 (68%) 24700 (100%) 3. DISTRICT ROADS Total District Roads 3995 (8%) 9755 (20%) l 36250(73%) 50000(100%)
TOTAL ROADS 9210(11%) 19663 (23%) l 56057 (66%) 84930 (100%) Source:Ministry of Works
8.2 GOVERNMENT VISION FOR THE ROADS DEVELOPMENT
8.2 The road sector is one of the central sectors in the Tanzania economy and is crucial for the sustainability of the country's economic development. The share of road transport in overall GDP is about 5%, while the share of transport equipment in gross fixed capital formation is about 37%. Road transport is a major mode of passenger transport, and also handles about 70% of the internal freight traffic and 64% of the transit cargo. In addition, road transport dominates other modes of transport in terms of employment creation. The vastness of the country and the dispersed nature of the population, business and economic activities add to the strategic importance of the roads sector to the country. 8.3 The Tanzania Development Vision 2025 accords very high priority to investment in infrastructures. Specifically, the development of the road network is judged to be
100 absolutely essential for promoting rural development. Within the context of the Vision, the road sector is required to facilitate wealth creation and equitable distribution of the benefits arising from growth. The roads sector is also required to facilitate the creation of a strong, diversified, resilient and competitive economy, promote rural development, stimulate investment and other income generating activities and ensure wider participation by the Tanzanian community in markets. 8.4 The Government's mission and vision for the development of the sector is thus focused at improving the national road network. In this case the Government agrees that no sustainable and meaningful socio-economic development can take place in the regions and villages while the condition of roads is bad. Poor roads will not allow for the full exploitation of the national human and natural resources that would lead to a higher growth of the economy. An improved national road network would consist of roads that are good for vehicles to drive on under all whether conditions. Also it would offer the shortest possible road link between different geographical locations, both in urban and rural areas, to facilitate production, distribution and marketing of all kinds of goods and services. 8.3 ROLE OF PARENTMINISTRIES
8.5 The responsibility of administration and management of the road network is
presently shared between MOW and MRALG. However, from 1 't July 2000, the new semi-autonomous road agency "TANROADS" took over the maintenance and development role of MOW. MOW manages the trunk and regional roads, including planning, designing, constructing, improving and maintaining the roads hereunder. On the other hand, MRALG is responsible for allocating and distributing resources from the Road Fund to the districts, where the local administration is responsible for road maintenance and development. GoT is committed to remaining the principle financier of maintenance, rehabilitation, and upgrading activities. On the other hand, the above mentioned activities are to be carried out by independent contractors and not by Government departments or agencies. 8.4 THE ROAD FUND
8.6 The Government has adopted a new institutional structure for the roads sector. Under the new set up, the government has amended the Road Toll Act in order to create a dedicated Roads Fund, a Road Fund Board and a road agency - TANROADS. The current act provides for ring fencing of revenues from the road toll so that they will be used primarily for maintenance works for trunk, regional, district and feeder roads. The road funds are being managed by the Road Fund Board, which includes private sector representatives to ensure that the interests of the stakeholders are addressed in the maintenance of roads. 8.7 The Road Fund is dedicated to the maintenance and upgrading of trunk, regional and district roads. Revenue for this fund is obtained from a user charge on fuel consumers. Under this system, the road users are charged a fuel levy of Tshs 80 per liter of fuel (Tshs. 70 per liter before the FY01 budget) The funds are collected by the oil companies at the time that the fuel leaves the bonded warehouse. These funds are paid to the Commissioner of Customs who deposits them into the Road Fund Account of the
101 MOW (70%) for trunk and regional and the MRALG (30%) for district and feeder roads. Of these allocations, only 10% may be used for development of the road network whereas the remainder is earmarked for maintenance operations. 8.8 The road fund has in previous years been managed by the MOW. In line with the current changes in the institutional set up, where the Road Fund Board has been created, the Road Fund is managed by a Board which is also the policy organ for directing the activities of the road agency TANROADS. 8.5 THE "NEW" MOW ANDTANROADS
8.9 The ongoing institutional reforms have a bearing on the future role of the MOW in the road sub-sector. The Road Fund Board is replacing the MOW role of managing the resources form the Road Fund. Establishment of the TANROADS on the other hand has taken away the MOW responsibilities of maintaining, rehabilitating and upgrading the trunk and regional roads. The ongoing Local Government reforms will also change the nature of resource flows from the Central Government to Local Authorities. Under the new structure resources from the road fund will flow in the form of block grants to the Local Authorities. This will replace the current practice of allocating the funds through the MRALG. 8.10 In view of the above changes, the role of MOW has been limited to policy formulation, strategic planning and regulation of the TANROADS and Road Fund Board, including donor co-ordination. 8.6 MOW OVERALL EXPENDITURE PERFORMANCE FY98-FYOO
8.11 Despite the observed growth in Government's revenue and subsequent allocation to MOW, total allocations have fluctuated over the past few years. In most cases actual releases have been far less than originally budgeted. This has been the case for both the development and recurrent budget as shown in Table 8.2. In FY98 for instance, only 63% of development budget and 77% of recurrent budget were made available. During the FY99 no allocation was made to the MOW development budget. This can partly be explained by priority that was given to emergency repairs of roads following EL-NINO rains in that year. Again in FY99, actual recurrent allocation to MOW was higher than the budgeted amount by 2% due to the fact that development funds were dedicated to the maintenance of road infrastructure that was destroyed by the EL-NINO rains. To a large extent these variations have affected the ability of the ministry to meet its financial obligations on road maintenance and rehabilitation. Table 8.2 gives the allocation of resources to the road sector for FY98 to FY00.
102 Table 8.2: Government allocation of resources to the road sector (in mill. Tsh.) FY98 FY99 FY00 Budget Actual Actual Budget Actual Actual Approve as % as % d Budget Budget Budget 1. Total Domestic Revenue 695300 661233 95% 733276 689325 95% 777200 2. Allocation to Ministries Development 24471 12711 52% 8000 4307 54% 20000 Recurrent 563682 528300 94% 622444 453800 73% 787085 2. Allocation to MOW Development 3952 2500 63% - - - 2927 Recurrent 23046 17779 77% 37189 38091 102% 32485 Rec. Alloc. To MOW of which PE 1568 2384 152% 1932 1858 96% 2479 of which OC 21478 15395 72% 35257 36233 103% 30006 Total 26998 20279 75% 37189 38091 102% 35412 Allocation to Roads Development 3952 2500 63% - - - 2927 Recurrent 20358 15835 78% 23083 19334 84% 26391 Total 24310 18335 75% 23083 19334 84% 29318 Roads as % of Ministries 4% 3% 4% 4% 4% Rev. from the Road Fund Total collections 33745 17000 52% 46000 38395 83% 40476 Allocation to MOW 20000 15000 75% 32250 31777 99% 28333 Alloc.to MOW of which Development (10%) 2000 1500 75% 3225 3178 99% 2833 Recurrent (90%/6) 18000 13500 75% 29025 28599 99% 25500 Source: Ministry of Works.
8.7 MOW EXPENDITUREON ROADS
8.1 2 MOW expenditure on roads (i.e. trunk and regional roads) over the past few years has centered on three main areas: Emergency maintenance of roads such as those caused by EL-NINO rains during FY98; Roads maintenance of rehabilitation/upgrading; and Implementation of priority and upgrading projects (ongoing projects under IRP). 8.13 From Table 8.3 it can be observed that for the two years FY98 and FY 99, more emphasis has been on the roads rehabilitation (i.e. 63% and 56% of the total respectively) as compared roads maintenance ( i.e. 37% and 44% of the total respectively). Again, when one looks at the actual expenditure on maintenance and rehabilitation, it is clear that trunk roads has received higher weight than regional roads. This confirms the importance of the trunk roads as the main transport arteries and the priority on these roads being based on the population served, agricultural output, mining, tourism, and impact on regional co-operation.
103 Table 8.3: Resources allocation for road maintenance and rehabilitation (mil. Tsh.) FY98 FY99 FY00 Budget Actual Actual Budget Actual Actual Approv as % as % Budget Budget Budget Road maintenance Trunk Roads 11057 7391 67% 12250 15627 128% 37251 Regional Roads 8914 4028 45% 15310 8982 59% 10151 Total maintenance 19971 11419 57% 27560 24609 89% 47402
Road rehabilitation Trunk Roads 25493 17388 68% 42622 29264 69% 30716 RegionalRoads __ .._ 1937 2010 -Total rehabilitation 25493 19325 76% 42622 31274 73% 32521
GRAND TOTAL 45464 30744 68% 70182 55883 80% 79923
Total Maintenance% 37% 44% Rehabilitation% 63% 56% Source:Ministrv of Works
8.8 LOCALAUTHORITIES EXPENDITURE ON ROADS
8.14 LAs expenditure on roads is for district and rural roads, where the councils has the responsibility of managing these roads under the co-ordination of the MRALG (formerly by the PMO). In this case "district roads" comprise roads that link district headquarters with ward centers, important centers within the district and important centers within the high class road. While the MOW figures show that district roads constitute 59% of the total road network, data from 1999 survey by Inter Consult indicate that district roads constitute 33.6 of the total road network in Tanzania. Lack of firm data on the road network in Tanzania has a negative implication for the management of the network in terms of planning road works and ensuring effective budgeting. 8.15 The Condition of most district roads, feeder and urban roads in Tanzania is very poor with very few of them providing year-round access. Estimates show that about 60% of the district and feeder road networks are impassable to motor vehicles throughout the year due to missing bridges and culverts, and short interspersed stretches of native bad soils along a big portion of the district roads. It is estimated that 90% of the district roads and feeder roads are not accessible by motor vehicles during the rain season. The major task facing the district roads is rehabilitation due to damages caused by the EL-NINO rains. 8.16 The budget for district and rural roads is met by a combination of subventions form the central government through MRALG and councils own revenues. While resources from the central government are used for development purposes, resources from the district and urban councils are used for maintenance purposes. Disbursement for development purpose has been minimal and even the greater part of the maintenance expenditure is met by the Road Fund. Table 8.4 shows the distribution of the Road Fund
104 for trunk and regional roads (Ministry of Works), and for district and rural roads (Prime Minister's Office and Ministry of Regional Administration and Local Government). Table 8.4: Road Fund collection and allocation to MOW and PMO/MRALG (in mill. Tsh.) Year TotalCollection of Allocationsto Road Fund (1) MOW (2) PMO/MRALG (3) 3/1 (%)
1991/92 3741.9 2464.3 616.1 16% 1992/93 6840.8 5337.3 1334.3 20% FY94 14272.2 8515.4 2317.0 17% FY95 21198.5 16265.6 3796.9 18% FY96 28307.5 16000.0 4000.0 14% FY97 25398.8 15998.4 3450.0 14% FY98 33745.3 14999.8 2600.0 8% FY99 38365.5 29818.7 12779.3 33%
FY00 22275.4* . 4252.0** .. Note: * Collection from July 1999 to January 2000, ** Allocation up to February 2000. Figures beginning from FY99 are allocations to MRALG. Source: MOW. PMO and MRALG
8.17 It is clear from Table 8.4 that the allocations of the Road Fund have remained less than 20% over the past five years except for the FY99 when they were about 33%. It can also be noted that before FY99 not the total amount of Road Fund collected in each year was disbursed to MOW and PMO. Some funds from this source were diverted to other uses. The situation improved only recently in FY99 when the Road Fund Board was formed to oversee the collection and distribution of the Road Fund. 8.9 DONORCOMMUNITY RESOURCES FOR ROADS
8.18 Table 8.5 shows the donor commitment for trunk and regional roads in terms of the amount budgeted and the actual amount disbursed. It is worth to note here that there are some district roads that receive donor funding although not reflected in Table 8.5. Table 8.5: Flow of resourceform donors (in mil. Tsh.)
Type FY98 FY99 I FY00 Budget Actual % Budget Budget Actual % Budget ] Budget Trunk Roads 1740 1324 76% 3450 2733 79% 4000 Regional Roads 39895 2807 7% 47698 16382 34% 27758 Total Donor 41635 4131 10% 51148 19115 37% 31758 Source:Ministry of Works
8.19 Table 8.5 indicates that actual amounts disbursed were far less than the budgeted amounts for FY98 and FY99. The deviations between the budgeted amounts and actual disbursements for regional roads ranged from 93% to -66%, while for trunk roads they ranged from -24% to -21% for FY98 and FY99, respectively. Much of the deviations can be explained by delays in the release of funds due to delays in finalizing of the
105 institutional changes for the management of the road sector. These institutional changes were related to: * Establishment of a dedicated road fund for the maintenance of the road network; * Establishment of the roads board for the management of the road fund and to regulate the use, maintenance and development of the road network; and * Establishment of the road agency that will be responsible for the maintenance and development of the trunk road and regional road network.
8.20 The big variation between committed and disbursed amounts has widely been shown by the EU and the World Bank. This variation reflects basically the inability of the MOW to access the funds from the donor community. Some of the reasons that have contributed to this situation are: failure to provide down payment of full amount of the counterpart funds by the Government; delays in the institutional reforms mentioned above; delays in procurements which have resulted in cost overruns; and delays in the disbursement of the road fund which leads to a low absorption of the funds because of time constraint and seasonal rains that are not conducive for road maintenance, especially for gravel and earth roads. 8.10 RECOMMENDATIONS
8.21 Detailed assessment of the impact of the past road maintenance operations, with particular emphasis on whether the expenditures have created the desired benefits, is important. It would appear that the unpaved road network is deteriorating despite increased maintenance funding, and the effects of very spread and limited maintenance may in fact be negligible and possibly wasted. 8.22 Detailed annual road condition and traffic surveys to monitor impact of road maintenance operations, and create basis for selecting and prioritizing a strategic road networks that must receive full maintenance. is crucial. Condition surveys must include some forms of scientific evidence to support visual inspections and limit impact of subjective opinions and possible other motives to show a road in good condition. Detailed annual road condition surveys with some degree of scientific evidence are required to effectively monitor the development, and in particular to identify expenditures that do not produce the expected results or benefits. Normally, annual road surveys should be undertaken by an outside evaluator in order to firmly establish money used for road maintenance is well spent. 8.23 In order to fund the road sector as required two approaches are suggested: either to increase Road Fund revenues or to scale down the level of ambition for the road network and maintenance policy. It has, however, been shown that the road fund is capable of generating surplus recurrent funding to bridge the financing gap for development expenditure in the next two fiscal years where the bulk of the investment is required. This would require a temporal relaxation of the road fund statute depicting that only 10% may be used for development activities. However, where it is not easy to raise road fund revenues, the second option should be taken.
106 8.24 Dedication of the Road Fund to the maintenance and development of a strategic road network, as opposed to the present split between MOW and MRALG. These funds should be released on time and sufficiently in order to implement planned projects and programs on road network. 8.25 There is a need for a detailed assessment of the status of implementation of development projects with donor commitments, including verification of need for GoT counterpart funding (also for projects with 100% donor funding where compensationand possibly relocation of utilities is still required); and preparation of realistic time schedule for individual project implementation. The objective here is to ensure the availability counterpart funding, possibly by postponing some projects until they become affordable or by increasing the developmentexpenditure from the national budget.
107 9. AGRICULTURE
9.1 OBJECTIVES OF THE FY01 AGRICULTURAL SECTOR PER.
9.1 The overall objective of the FY01 agricultural sector PER was to provide inputs into the preparation of the budget guidelines, the budget for FY01 and sector MTEF for FY01-FY03. This PER also devoted particular attention to the relationship between budget allocations and the poverty alleviation as well as food security. Specific tasks included: (i) review of recent performance of the sector, (ii) assessment of the available resources and major constraints (iii) analysis of the sector plan and budget for FY01 and (iv) recommending options.
9.2 PERFORMANCE OF THE AGRICULTURAL SECTOR
9.2 Generally, agricultural performance for the past three years was positive, despite the existence of various impediments. Agricultural GDP grew at a rate of 2.2% (Table 9.1) in 1997 but declined to 1.9% in 1998 because of adverse whether conditions (BOT, 1999) and also due to some imperfections in the operations of the liberalized crop markets.
Table 9.1: Agriculture GDP and Growth Rates (in constant 1992 prices) Agricultural GDP Growth rates Sub sector (Tsh. Bill) (% per year) 1996 1997 1998 1985-90 1990-95 1995-98 1997 1998 Main food Crops 323.1 269.9 350.3 4.3 3.0 3.5 -16.5 29.7 Other Food Crops 136.5 140.3 144.2 3.0 2.8 2.9 2.7 2.8 Export Crops 67.2 64.2 77.4 1.8 7.7 5.4 2.7 1.9 Live Stock 94.3 96.8 98.7 3.0 2.5 2.7 -4.5 2.6 Forestry/Hunting 45.6 46.8 47.4 2.7 2.6 2.6 2.7 1.2 Fishing 41.2 42.8 44.3 3.0 3.7 3.4 3.7 3.5 Agricultural GDP 709.0 662.8 764.3 3.5 3.3 3.3 2.4 1.9 Source: MAC:
Food Crops 9.3 Production of cereals and non-cereals increased from 3111 and 2775 thousand metric tons in FY97 to 4271 and 3750 thousand metric tons in FY99, equivalent to an increase of 37% and 33% respectively. Total food production increased by 35%. Performance of most food crops during FY99, was poor, mainly due to poor rainfall, which was accompanied by long periods of dry spells. Food production dropped by 7% from 7971 to 7440 thousand metric tons with paddy and wheat registering the bigger falls in production. 9.4 Production of food crops in the country during the 1997-1999 period was generally affected by unfavorable whether conditions: rains were either too little, too much. late and /or rained for only a short period. The production of cereals was forecasted to increase by 5% during FY00, as opposed to a fall in non-cereal crops of 3%. However, overall total food production was expected to increase by 1%. 9.5 Food insecurity continued to be a major problem and recurring phenomenon in different parts of the country. Physical and economic access to sufficient. safe and
108 nutritious food to meet dietary needs and food preferences for an active health life remained outside the reach of the majority of the people. Although food production has been marginally increasing over the past three years, and in some years exceeding the overall food requirements, the nutritional energy requirements were far from being met on a sustainable basis. During the normal agricultural production years, some parts of the country were able to produce sufficient food crops while others registered short falls. 9.6 Over-dependence on rain-fed agriculture, adverse climatic conditions labor shortage in rural areas due to rural-urban migration among the youths and increasing incidence of HIV/AIDS infection, were among the frequently cited factors that contributed immensely to food insecurity in Tanzania. Other factors included lack of subsidies for agro-inputs, lack of credit, frequent institutional changes and at the policy level - the relative emphasis on social sectors compared to economic sectors. Cash Crops
9.7 Output performance of all cash crops was negative except for coffee, sugar and cashew-nuts. Cashew-nut production grew by 39% in FY98 from 67500 metric tons the previous season and by 13% to 105000 metric tons in FY99. The growth in production of coffee and sugar increased from negative 12% and 27% to 13% and 31% respectively. The crops whose production fell persistently are cotton and sisal. Cotton production fell from 66661 metric tons in FY98 to 24169 metric tons in FY99 (about 64% compared to 27% in the year earlier). During the same period, sisal production fell by 19 and 25 percent respectively. Similarly, growth in production of tea and tobacco declined from 33% and 44% registered in FY98 to - 16% and -13% in FY99 respectively. Table 9.2: Cash Crops Production (in metric tons) Year/Crop Coffee Cotton* Sisal Tea Cashew- Tobacco Pyrethrum Sugar nut FY97 42000 90697 22000 19767 67000 35379 600 116300 FY98 37000 66661 20000 26206 93173 51014 400 85000 FY99 41900 24169 15000 22000 105000 44264 500 111040 FYO0** 50000 54300 20000 26000 110000 56000 1000 120000 % change -12.0 -26.5 -9.0 33.0 39.0 44.0 -33.0 -27.0 FY97-FY98 I_I o%change 13.0 -63.7 -25.0 -16.0 13.0 -13.0 25.0 31.0 FY98-FY99 * I bale lint cotton 181kgs it Estimates Source: MAC, Budget Speech, FYOO.
9.8 The observed decline in coffee production was mainly on account of bad weather coupled with low use of inputs while the decline in production of cotton was caused by failure of co-operatives to pay farmers promptly, bad weather conditions and increasing input prices. By contrast, the impressive performance in the production of cashew-nuts and tobacco was due to good weather condition, availability of inputs and liberalization of marketing. 9.9 Foreign exchange earnings from exports of coffee, cotton and sisal declined over the period 1996-1998 while that from cashew-nuts, tea and tobacco increased. The top earners of foreign exchange earnings remained to be coffee, cotton and the strongly coming up cashew-nuts.
109 Livestock
9.10 The general performance of the meat sub-sector during the FY99 period was satisfactoryrelative to local demand. About 268700tons of meat were produced in FY 99 comparedto 260000 tons in FY98. The target of meat production for FY00 was 300000 tons. Milk production increased from both traditional (rural) and commercial sector. During FY98 about 670 liters of milk were produced compared to 600 liters of milk produced in FY97. Productionof day-old chicks was below the national requirement of 10 million by 2 million due to poor quality of feed, frequent disease outbreak and rapid rise of feed prices. The capacity of animal feed industry stood at 381000 metric tons while actual production was 280000 metric tons in FY97. Overall, the livestock sector contributedabout 13% of GDP. Co-operatives
9.11 The number of co-operatives increased from 4515 in FY96 to 4538 in FY98. Despite the increase in number of registered co-operatives,only 3.7% of all registered co- operatives' accounts were audited compared to 25% in FY96. Activities undertaken by the co-operatives directorate in MAC, including inspection and supervision of primary societies and co-operatives, establishment of Inspection Fund, and establishment Credit Co-operativeSocieties (SACCOS),were scaled-up during FY98. 9.12 MAC in collaboration with the Bank of Tanzania (BOT) continued with the process of designing strategies to establish financial institutions to support the co- operatives sector includingthe establishmentof additional SACCOS to cover most parts of the country. This is in addition to the supervisionof banks owned by co-operatives. The co-operatives that have their own banks include Kilimanjaro Native Co-operative Union (KNCU) (Kilimanjaro Co-operativeBank started in 1996), VUASU, and Nyanza Co-operative Union (NCU). The objective has been to address the problems faced by primary societies including fierce competition from private crop buyers and lack of sufficientfinancial resources. 9.3 BUDGETPERFORMANCE FY98-FYOO
9.13 A declining Recurrent Budget: Generally,recurrent expenditure for the agriculture sector declined during FY99. However, actual expenditure for some of the sub-votes tended to exceed the approvedbudget estimates. For instance actual expenditure on Food Security exceeded approved expenditure by 347.2%. This over expenditure on food security is broadly ascribed to food deficits occasionedby the El Nino rains of 1997 and early 1998. However, it is also clear that the largest share of the expenditure went to finance crop development,co-operative development and administration.
110 Table 9.3: Recurrent Budget for FY98-FYOO (Mil. Tsh) Sub votelProgram FY98 FY99 FYOO** Actual % of Actual % of Actual Expenditure Budget Expenditure Budget Expenditure 101 Administration& General 2302.1 112.0 2253.6 162.0 457.3 102 Financeand Accounts 38.9 58.6 71.3 89.0 2.7 103 Policy and Planning 79.4 52.8 91.4 55.0 49.3 104 Agric. Training Institute 255.1 34.0 0.3 201 Crop Development 5936.0 161.3 3634.2 69.0 836.5 301 Researchand Development 1588.6 79.4 1617.8 91.4 82.6 401 Co-op. & Inst. Development 1440.6 109.8 1874.0 115.5 842.5 501 NationalFood Security 1040.4 92.1 6138.8 547.2 0.0 601 LivestockDevelopment 16.5 0.6 2369.7 75.0 0.02 TOTAL 10142.8 95.6 18306.0 119.5 2271.1 Note ** Actual Expenditure for July-December Sources MAC, AppropriationsAccounts and Appendix 3.1
9.14 Both the Co-operative and Crop Development Departments spent the lion's share of the entire budget of the ministry (Table 9.3). By contrast the Agricultural Training Institute and Livestock Development Department suffered from inadequate resources. whereas food security received no funds at all. 9.4 CONSTRAINTSAND FUTURE PROSPECTS OF THEAGRICULTURE SECTOR
9.15 Due to numerous constraints agricultural production and productivity has remained rather low and consequently the country is still a net food importer and recipient of food aid. Several cross-cutting impediments to accelerated agricultural development, which are detailed in the recent Agricultural Memorandum (World Bank, 2000) include: inadequate budgetary allocations; poor state of rural infrastructure; inadequate rural financing; poor technology development and transfer; multiple levies, fees, and taxes; seasonal labor shortage; uncertainties about land ownership and use; issues concerning water availability for irrigation and livestock use; and low private sector participation in agricultural production. 9.16 Constraints on food crops sub-sector include: unfair food trade practices; arbitrary crop movement bans; impact of food imports on domestic prices; and unprofitable input use. The critical constraints currently facing the co-operative sub-sector include: lack of capital/credit facilities; employees without relevant skills/qualifications; and financial mismanagement. These weaknesses facilitate existence of rampant thefts and frauds. Most people still view co-operatives as government institutions with weak control and no follow-up. 9.17 Prospects for the future growth of the sector depend on the intensification of production. Most of the growth in per capita output in agriculture will have to come from more intensive use of existing resources. But this can not be possible if farmers continue to depend on rainfall and weather conditions. Although the liberalization process has laid the foundation for the private sector to increasingly participate in agricultural development activities, further success will hinge on the ability of macro policies to adequately address inadequacies related to the five 'ins' namely: incentives, institutions, infrastructure information and inputs. This will enhance productivity and competitiveness in the sector and will contribute towards the transformation of farming
111 practices. Successful intensification of agriculture will therefore depend on completing the reform agenda and sustaining a sound policy framework on both the macro and sectoral levels; reversing the present low level of productivity; building the rural asset base and inter-linkages. The components of this framework will entail making higher investment in infrastructure particularly rural roads, research and extension; building and/or maintaining efficient institutions; using livestock resources efficiently; efficient service delivery; dealing with decentralizationissues in a pragmatic manner; conserving the environment; and developinghuman resources. These will need to be accompanied by the creation of an appropriatelegal framework.
9.5 RESOURCESAVAILABLE TO THE AGRICULTURAL SECTOR
Physical Resources
9.18 Tanzania is endowed with a vast land resource suitable for crop production. Of the total 43 million hectares suitable for crop production in Tanzania, only 6.3 million hectares are cultivated (MAC's Agricultural and Livestock Policy FY97). With an estimated population of 32 million, land availability in Tanzania is not a constraining factor in the short run. Though there are some areas in Tanzania where population density is high, such population is not limited by existing regional boundaries considering that they are free to move to areas where population density is still much lower. However, there is need to device appropriate policies, strategies and incentives for the implementations of incentives aimed at ensuring proper usage of land and water resources. Human Resources in MAC 9.19 The MAC has well-educatedpersonnel with the appropriate capacity to run and implement agriculturalpolicies and plans. Most of the educated personnel are found in research and training departments/institutes.For instance, there are over 350 MAC employees who are highly trained research scientists (60% have MScs and Ph.Ds). Other employees are graduates of Agricultural Institutes in the country with the majority holding diplomas and certificates. These are mostly livestock and agriculture field auxiliaries and other supportingstaff.
FinancialResources for MAC
9.20 Based on the budget frame for FYOO-FY02,MAC expected to spend a total of Ths. 4.2 billion on extension services with support from IDA, AfDB and the Government of Netherlands. MAC also expected to spend about Tsh. 4.7 billion on research and development in the medium-term.The World Bank committed USD 21.8 million for a five-year period running up to year 2003 while other donors pledged a total of USD 23.1 million during the same period. A total Tsh. 2.1 billion was expected to be used on regulatory services, particularlygiving priority to the control of epidemics and infectious diseases, sanitary control, quality control and standards, and inspection of pests and diseases. This was to be co-financed by the MAC and the German Government. However, German assistance declined considerably (from 1.5% in FY98 to 0.02% in
112 FY00) hence calling for the GoT increase resources on regulatory services. The World Bank has been the major financier of the Agricultural Information and Statistics (AIS) activities and the outlook seems to have been very promising. World Bank Funding on AIS increased from 25.7% in FY 98 to 35% in FY00. MAC also expected to spend Tsh. 1.2 billion to promote and strengthen co-operatives in the medium-terrn. Potential Sources of Financingfor MAC
9.21 Local Sources: The potential areas for generating local funds for the MAC include, foundation seed farms, seed quality control, livestock movement permits, secondary markets and holding grounds, meat inspection and primary markets, pasture seed and hay production, permits for livestock and hides export, training institutes, and research centers. If all these revenue sources were fully operational, MAC estimates that as much as Tsh. 1.8 billion can be collected annually. 9.22 Foreign Sources: Under the Multilateral Debt Fund and the HIPC Initiatives the MAC, like other ministries, is faced with a challenge to come up with concrete proposals to utilize these debt relief funds for the sectors development. Thus, this is one important area for acquisition of foreign resources which MAC has to capitalize on. 9.6 PRIORITY AREAS FOR UTILIZING MEAGER RESOURCES
9.23 The major objectives of the Government with respect to the agriculture sector are to (i) ensure basic food security for the nation and improve the standard of nutrition and living conditions in rural areas (ii) provide support services to the agriculture sector which cannot be provided efficiently by the emerging private sector, and (iii) increase foreign exchange earning through promoting increased exportation of agricultural produce and output of agro-based industries. 9.24 Achieving these objectives will entail giving priority to strengthening policy formulation, rehabilitation of research, extension and training facilities, and enhancing institutional reforms and capacity building in MAC. It will also require continued funding of support services that promote and facilitate environmentally sustainable economic growth and sustainable development in the rural areas, higher income for the rural people, growth in agricultural exports, and environmentally and sustainable use of land resources.
9.7 POLICY RECOMMENDATIONS
* The Government needs to facilitate and encourage private sector involvement in agribusiness and agricultural services coupled with a renewed emphasis on use of improved agricultural technologies, improved farming techniques and promotion of rural financial services.
* The Government through the Co-operatives Department in the MAC should take the lead to promote and strengthen the co-operative sub-sector through (i) the provision of training to workers, members, and the public at large especially on credit management, delivery and recovery systems, and (ii) the promotion and establishment of SACCOS.
113 * The Govermmentneeds to design strategies and mechanisms, which will enable Tanzania to disengage gradually from donor dependency as far as funding of economic development in general, and of agricultural sector specificallyis concerned. This is necessaryto avoid leading the country into a vicious dependencytrap.
* The effective implementation of budget requires the government and donors to collaborate in ensuring that a sector-wideapproach to planning and aid co- ordination is adopted. Coordinateddonor support to coherent sector programs that address both recurrent expenditure and investment requirements of each sector in line with the Tanzania Assistance Strategy (TAS) and the Highly Indebted Poor Countries (HIPC) initiativeswill be absolutely essential.
114
10. JUSTICE
10.1 INTRODUCTION
10.1 The Ministry of Justice and Constitutional Affairs (MJCA) is composed of three independent departments, namely, the Attorney General's Chambers, Judiciary and the Law Reform Commission of Tanzania.The Attorney General's Chambersis headed by the Deputy Attorney General and the Permanent Secretary,while the Registrar of the Court of Appeal and two Executive Secretaries head the Judiciary and the Law Reform Commission of Tanzania, respectively. 10.2 The Justice and Judiciary departments are independent in accordance to observance and upholding of the doctrine of Separation of Powers, and institution of the principle of Checks and Balances. The Judiciary is supposed to perform its duties independently, without interference from the Executive and Legislative branches of govemment; and to be able to check the powers of the other two branches of the government.
10.2 VISION
10.3 The vision of the MJCA is a component part of the Tanzania's Development Vision 2025 which among other things, aspiresto develop a society that has the following attributes: Peace, political stability, national unity, and social cohesion; Democracy as well as political and social tolerance; Good governance, rule of law, integrity and moral uprightness; The highest level of ingenuity, self confidence and self esteem; Peace centered development; Economic and social justice; Equal opportunityto all citizens to participate in contribute to the development of the nation , paying attention to minority and disadvantaged groups in society; A strong, diversified,resilient and competitiveeconomy which can effectively cope with the challenges of the developmentgoal and confidently adapt to changing market and technological conditions in the increasing liberalized and globalized world economy; and sustainabledevelopment endeavor. 10.4 The Ministry's Visionwhich upholds, and is also commensuratewith the attributes of the Vision 2025 aspires to have a society in which there is: speedy dispensation of justice; affordability and access to accessjustice for all social groups; integrity and professionalism of legal officers; enhanced independence of the Judiciary; and a legal and regulatory framework, andjurisprudence of high standards,which are responsiveto social, political and technologicaltrends at both national and internationallevel.
10.3 MAJOR ISSUES
10.5 The main issues which need to be addressedcurrently include: (i) Updating and harmonizingthe legal and regulatory framework; (ii) Enhancing the independenceof the judiciary and integrityof legal officers; (iii) Strengtheningthe managementand co-ordinationof legal sector institutions;
115 (iv) Enhancing the competence and motivation of the personnel in public legal institutions (v) Improving pre-service training and constantly upgrading legal skills of law officers in the public service to enable them cope up with new challenges in the market economy and new liberal constitutionregime; (vi) Enhancing access to legal services for the poor and disadvantaged; (vii) Developing and maintaining an enabling and conducive work environmentfor the public legal officers. 10.6 In addition to addressing these problems, refonns in the legal sector must also aim at making the legal sector responsive to social, political, economic technological transformation.The challenges currently facing the legal sector include: (i) The changing social culture of the people due to urbanization and the expanding and intensifying interaction with other cultures, which requires a more dynamic family law. (ii) The new pluralistic democratic political environment coupled with the movement towards participatorymanagement of socio-economicdevelopment (iii) The expanding institutionally complexprivate sector led market economy. The legal framework needs to change to facilitate regulation of corporate behavior, to protect consumer interests, and timely resolution of civil and commercial disputes, and (iv) The rapidly growing electronic commerce creates many business transactions not requiring the use of ordinary paperwork. Thus the nature of evidence admissible in court must be redefined.
10.4 GoVERNMENT EXPENDITUREON MJCA
10.7 The public legal sector, in this case the three departments of the MJCA, has for a longtime been accorded a verv low priority in the allocation of budgetary resources. Table 10.1 shows approved and actual expenditure for FY98 and FY99. Table 10.1: Actual Government Expenditure on MJCA, FY98 and FY99 (Million Tsh. and Percentages) Item FY98 FY99 Approved Actual Approved Actual Recurrent Expenditure 458190.8 428384.4 550923.8 547388.7 Ministries 339,912.0 311,065.2 430,019.3 418,416.0 Regions 118,278.8 117,319.2 120,904.5 128,972.7 Development Expenditure 300,548.6 82,894.7 187,277.8 90,159.0 Total Government Expenditure 758739.4 511279.1 511279.1 637547.7 MJCA development Expenditure 331.9 24.4 248.9 4.9 MJCA Recurrent Expenditure 5540.9 5507.7 7592.6 7374 Total MJCA Expenditure 5872.8 5532.1 7841.5 7378.9 MJCA Share in Total Recurfent 1.21 1.3 1.4 1.3 Expenditure MJCA Share in Total Development 0.11 0.05 0.13 0.01 Expenditure MJCA share of Total Government 0.77 1.08 1.5 1.2 Expenditure I___I_I Note: Data from MJCA indicate that the ministry's recurrent expenditure tor FY99was only 7306.5. Source: Ministry of Finance Files
116 10.8 According to Table 10.1 the share of the legal sector in the total government actual expenditure increased only marginally from 1.08% in FY/98 to 1.2% in FY99. The increase was partly for meeting the cost of white paper exercise and paying debts. The share of the sector in government actual recurrent expenditure remained more or less constant at 1.3%, while that of development expenditure dropped drastically from 0.05 in FY98 to 0.01 in FY99. A large part of it came from donors. Low allocationsfor developmentexpenditure in the MJCA can be accounted for by the fact that it was not among the priority sectors prior to FY00. The implication of this is the increased potential of doing away with marginalization of the MJCA in terms of budget allocation, and hence, the possibility of improving the quantity and quality of the services provided by the public legal sector.
10.5 ALLOCATIONS WITHIN THE MJCA
10.9 The small budget in the MJCA is allocated and spent independently in the three departmentsbased on their differentfunctions. 10.10 Table 3.30 shows that within the ministry, the budget expenditure is distributed into the three independent departments. The judiciary department received over 70% of the budgeted allocations during FY98 and FY99. Over the same period the AGC department received less than 30% while the Law Reform Commission received less than 2% of the budgeted resources for MJCA. Most of the expenditurein the departmentswere directed into recurrent expenditure with only the AGC department having some small development expenditure. The other two departments had no development expenditure during the two fiscal years. Table 10.2: Distribution of MJCA Expenditure by Departments(million Tshs) Department FY98 FY99 FYOO* Total MJCA Expenditure Justice Department's Total Expenditure 914.4 1934.7 528.7 Recurrent Expenditure 890.0 1929.3 Development Expenditure 24.4 4.92 Department's share of MJCA Expenditure 16 5% 26.4%
Law Reform Commission Total Expenditure 102.4 86.5 44.5 Recurrent Expenditure 102.4 86.5 Development Expenditure 0.00 0.00 Departnent's share of MJCA Expenditure 1.9% 1.2%
Judiciary Department's Total Expenditure 4515.3 5290.7 2244.2 Recurrent Expenditure 4515.3 5290.7 DevelopmentExpenditure 0.00 0.00 Department's share of MJCA Expenditure 81.6% 72.4% Source: BudgetEstimates Documents for therespective years. Actual expendituresfor theperiod between July 1999and January.
10.6 ACTUAL RECURRENT EXPENDITURE BY DEPARTMENTS AND ZONES
10.11 This section analyses recurrent expenditure of the various sub-departments and zones in each of the three departments of the MJCA. The analysis is made so as to reveal the areas in which recurrent expenditure was actually made and in reference to the roles which the legal sector is expected to play in the country particularlyduring reforms.
117 Table 10.3: Actual Recurrent Expenditure in the Judiciary Department in terms of PE and OC (in percentage) Sub-Department/Zonal FY98 FY99 Budget FY00 PE% OC% PE% OC% PE% OC% 1. Admiinistation and 29.8 70.2 28.8 71.2 14.1 85.9 General Expenditure 2. High Court 73.2 26.8 19.5 80.5 7.1 92.9 3. Courtof Appeal 32.5 67.5 11.6 88.4 15.3 84.7 4. DistrictCourts 0.0 0.0 0.0 100.0 60.4 39.6 5.Primary Courts 100.0 0.0 75.1 24.9 56.5 43.5 6. Anisha Zone 86.3 13.7 67.9 32.1 7. Dar es SalaamZone 91.2 8.8 78.5 21.5 76.3 23.7 8. DodomaZone 83.3 16.7 67.0 33.0 66.2 33.8 9. MbeyaZone 89.6 10.4 79.5 20.5 71.4 28.6 10.Mtwara Zone 82.6 17.4 83.6 16.4 74.5 25.5 I1. MwanzaZone 86.1 13.9 78.7 21.3 78.0 22.0 12. Tabora Zone 88.5 11.5 130.5 -30.5 67.0 33.0 13.Tanga Zone 84.6 15.4 66.2 33.8 67.5 32.5 14. Bukoba Zone 80.5 19.5 75.5 24.5 62.4 37.6 lS.Songea Zone 85.4 14.6 76.7 23.3 68.1 31.9 16. MoshiZone 85.6 14.4 73.6 26.4 77.2 22.8 7. Total Recurrent Exp. 62.9 37.1 53.7 46.3 51.8 48.2 Note:PE= PersonalEmolument OC=Other Charges * Budgetestimates Source:MJCA's Budget Estimates for respectiveDepartnent
10.12 The Judiciary Department's expenditure is distributed into various sub-departments and zones as shown in Table 10.3 In general the proportion of personal emoluments (PE) expenditure dominates (over 70% on average) in all cases except in the Administration and General Department, District Courts and the Court of Appeal. Otherwise the rest of the departments and zones have relatively smaller proportions of other charges (OC) expenditure. The effects of such small OC expenditure is to have staff being paid salaries but with no equipment and facilities to enable them perform their duties efficiently. A large number of pending cases and the general decline in the quality of services provided by the judiciary department is partly due to this problem. 10. 13 Overall, in FY98 and FY99 the department's actual recurrent expenditure was concentrated in the Administration and General expenditure (over 44%), followed by Primary courts (about 15%). However, looking, for instance, at the department's FY99 approved budget (i.e. govemment commitment) it is shown that most (over 40%) of the departments recurrent funds would have gone to Primary Courts followed by the Administration and General expenditure (about 17%). The above noted actual expenditures, therefore, was a reversal of what would appear to have been put as a priority i.e. funding the primary courts activities and in the process administering justice to the rural people. In fact, while the current expenditure for the Administration and General Expenditure increased, in FY99, by 286% from the approved expenditure of Tshs 814.6 million to actual expenditure of Tshs. 2,333.3 million; the corresponding figures for the Primary Courts show a remarkable decrease as the actual expenditure of Tshs 805.7 million was only about 44% of the approved budget of Tshs 1848.5 million.
118 Table 10.4: Development Expenditure on MCJA (TShs. Million and %) FY98 FY99 FY00 Approved Actual Approved Actual Budget Budget MCJA Development Expenditureof which 331.9 24.4 248.9 4.9 (i) Local (%/6) 0 0 0 (ii) Foreign 100 100 100 100 Govcrmuents Total Dev. Expenditure 300,548.6 51718 187,277.8 82,894.7 MCJA share of Total Dev. Expenditure 0.11 0.05 0.13 0.01 Expenditure by Departments AG Chamber Total 310.9 24.4 248.9 4.9 ShareOf 93.7 100 100 100
______M ICA Judiciary Total 21.0 Nil. Nil. Nil. Share of 6.3 0 0 0 MJCA ____ Law Reform Commission Total Nil Nil Nil Nil Share () ) 0 0 Source:MJCA's Budget Estimates for respectiveDepartments
10.14 In the case of the High Court its actual recurrent expenditure for the FY99 was only 66% of the approved budget. A slight decline in the corresponding shares was observed for the Court of Appeal, as well as Mtwara and Tabora High Court zones. The rest of the High Court zones had substantially higher actual expenditures compared to the approved budgets. Overall, the departments recurrent actual expenditure of Tshs. 5290.7 million for FY99 was higher, 116.4% than the approved expenditure. The increase was actually due to increased election petitions most of which were heard at High court and Court of Appeal. The need to clear such political cases explains partly the increased resource allocations to these courts. However, this appears to have been done at the expense of under funding the primary courts most of which are dealing with settling various disputes and criminal cases for the majority of people. Such a practice tends to defeat the objective of bringing social and economic justice to all people. The budget estimates for FY00 however have addressed this problem by giving more weight to primary courts with a share of 44% of the department's total recurrent expenditure. 10.15 Part of the differences between the actual and approved recurrent expenditure arises from the fact that the government has been injecting funds, in say, the Judiciary for the purposes of paying debts, enabling the court activities to continue and other expenses. These expenditures which do not fall within the original budget estimates are sometimes included in the expenditure as OC and in certain cases they are not included. 10.16 Like most other ministries, the MJCA has been receiving very little or no development funds. Only recently has the MJCA been included in the cluster of priority sectors, which include education, health, water, roads, agriculture and lands. Most of the development funding to the MJCA as showvnin Table 3.32 has been coming from the donor community.
119 10.7 RECOMMENDATIONS i) Establish a planning and policy unit in the Ministry and in the three departments. However, this unit should be part of the new directorate of research and library services, which has been approved by the Government. ii) Increase governmentfinancing to the legal sector so as to improve remuneration and complementaryresources availability, iii) Call for more donor financing in development expenditures, particularly in training, equipment acquisition, construction and rehabilitation of office buildings and strengtheningof libraries and record keeping, iv) Adopt disputes solving, mechanisms, so as to reduce burden on the formal courts, v) Respective departmentsto undertake internal cost-cuttingexercises, vi) Allow for recruitmentof staff,particularly professionallegal staff, vii) Improve the budgetary process by allowing the registrar of the Court of Appeal and the Executive Secretary to the Law Reform Commission of Tanzania participate in the budget discussions in the Inter-ministerial Technical Committee.
120 ANNEX I:
PUBLIC EXPENDITURE REVIEW FY00 CONSULTATIVE MEETING: KARIMJEE HALL, DAR ES SALAAM (May 2-3, 2000)
RECORD OF PROCEEDINGS
Welcoming Note
1. Mr. Peter Ngumbullu, Permanent Secretary (PS), Ministry of Finance began by welcoming all the participants to the PER FY00 consultative meeting. Noted that the broad participation goes a long way to consolidate the partnership approach to development agreed between the Government of Tanzania and her development partners a few years back. The PS recognized the presence of Mr. James Adams, The World Bank Country Director for Tanzania and Uganda and co-chairman of the consultative meeting; and Mr. Gerard G. Johnson - Assistant Director International Monetary Fund (IMF), East African Division who was in the country leading the IMF mission to review the Poverty Reduction and Growth Facility (PRGF) program. The PS also thanked the PER Working Group, now expanded to include almost all stakeholders, for the tremendous progress made under Govermment leadership to oversee the implementation of the PER process for FY00. 2. Prior to inviting the Guest of honor to formally open the meeting, the PS summarized the work program for PER FY00 to have included the following technical studies and activities:
(i) Overall Fiscal Sustainability study (ii) Analysis of the Development Budget: Performance and Issues (iii) Road Fund Tracking study (iv) Poverty Monitoring Indicators study (v) PER - Education, Health, Water, Roads, Agriculture and Judiciary (vi) MTEF Training in 12 Ministries (vii) Mainstreaming Gender in the Government Budget (viii) Joint World Bank - Bilateral Donors PER Mission (ix) Development of the cross-sector MTEF (x) Development of the TAS and PRSP
Noted that all the activities in the work program have been implemented successfully
Official Opening
121 3. The Deputy Minister for Finance Hon. Abdisalaam Issa Khatib (MP) opened the meeting on behalf of the Minister for Finance Hon. Daniel Yona (MP). The Deputy Minister expressed gratitude to the organizers for inviting the Minister for Finance to open the PER FY00 consultative meeting.
4. Noted that the PER FY00 process consolidated and deepened the new approach focusing mainly on providing direct support to the Government's budgeting process.
5. The Minister was encouraged that the now broadened and participatory PER process has opened up the budget process to stakeholders outside the government (private sector, civil society, and research/academic institutions).
6. Emphasized that the Government values the consultative meeting as it provides a unique forum to all stakeholders to discuss key public expenditure policies and programs.
7. Appreciated the advantages of the MTEF approach in terms of ensuring (i) aggregate fiscal discipline (ii) allocation of resources in accordance with strategic priorities, and (iii) efficient and effective use of resources in budget execution. Consequently, the Minister indicated that the plan of the Government is to extend the MTEF to cover all ministries and regions by fiscal year 2001/02. The Deputy Minister pleaded to donors to adopt the MTEF in making their commitments.
8. Informed the meeting that the Government has added the Judiciary, Lands and HIlV/AIDS to the list of priority sectors / areas (i.e. education, health, agriculture, water, roads and energy). Also indicated that the Government also places high priority on actions to uphold good governance particularly on the implementation of the anti- corruption strategy and strengthening public financial management systems.
9. Noted that Tanzania has qualified for the enhanced HIPC debt relief initiative to the tune of US$ 2 billion in net present value terms to be delivered over a period of 10 - 20 years. In addition, Tanzania has also been provided with debt relief by the Paris Club (US$ 390 million). The Minister expressed gratitude to all the development partners for the strong support and also to the people of Tanzania who shouldered the pre-requisite qualifications to the HIPC relief including the austerity of the ESAF program. The Minister reiterated the GoT's commitment to utilizing the resources from the debt relief initiatives to improve the delivery of social services and infrastructure.
10. Also registered the GoT's appreciation to all the partners collaborating on the MDF arrangement, and expressed hope that the MDF and other donor programs will be sustained to enable the Governrnent to make quicker progress in funding the priority sectors.
11. Informed the meeting that the IFMS is now operational in all ministries, government departments and agencies. This has substantially improved the control of expenditures and preparation of accounts. The Government plans to roll out the IFMS to the local authorities to cover 22 of them in FY01. The minister was encouraged that the
122 health sector basket partners are using IFMS and urged other donors to channel their resources through the IFMS considering that the IFMS ensures transparency and accountability in public financial management.
12. Concluded by emphasizing that the Government accords very high priority to building a strong partnership with all key stakeholders in promoting socio-economic development of Tanzania while ensuring Government ownership and leadership. The Minister lauded the joint visit to Tanzania by 4 Ministers for International Development Cooperation from Netherlands, UK, Norway and Germany in the framneworkof the UTSTEIN initiative, which focuses on deepening the poverty reduction impact of development assistance and simplifying coordination and implementation through strengthening recipient leadership, improving and rationalizing donor systems and increasingvalue for money.
Vote of Thanks
13. Mr. James W. Adams, Country Director (CD) for Tanzania and Uganda - World Bank, and Co-Chairmanof the PER FYOOconsultative meeting, thanked the Minister for Finance for a thoughtful opening speech. The CD then made the following major observations:
Compared to five years ago, the PER process has been revolutionizedfrom being exclusive and dominatedby the WB and IMF to being an important participatory process involving Government, donors, private sector and civil society. Lauded Government leadership,commitment and broadening up of the process as being a hallmark of the PER and whole budget process. The CD emphasizedthat the PER process itself needs to be strengthenedfurther together with the MTEF.
* The budget process is of central importance in the process of economic advancement. Thus, sustaining the gains that Tanzania has made on the macroeconomic front over the last few years requires that the Government keeps guard on ensuring efficient and effective utilization of available budgetary resources.
* Although the MoF has began to reach out the sector ministries to strengthen the budget process through the IFMS and MTEF, there is a lot still to be done to improve financial accountabilityin the budget management system. In this regard what is required is capacity building to (i) make the MoF much stronger in managing the budget process, and, (ii) address capacity constraints at the local level as decentralizationproceeds.
* The Government has set up a robust budgetary process by broadening participation in the process. While five years ago the discussion on budget perfornance and management issues were confined to the Government, World Bank and IMF, it is remarkable that the process has now been opened up to other donors, civil society and Parliament - including members from the opposition
123 parties. The Government has also implemented tough decisions. All these need to be recognized and appreciated during the PER consultations particularly by critics. However, the Government needs to sustain budget discipline.
P1: MacroeconomicContext of the MTEF
Presentation
* The Acting Permanent Secretary - Planning Commission, reviewed the macroeconomic performance of the Tanzania economy over the past five years (1994 - 1999), drawing out specific emerging issues that have a bearing on the PER process. The review highlighted the following:
* Tanzania's economy appears to be stabilizing and hence poised for higher levels of growth in the long-run. From a low GDP growth rate of 1.4 percent in 1994, GDP growth has steadily risen to 4.8 percent in 1999. Growth recovery has mostly been driven by macroeconomic reforms that Tanzania has been implementing in recent years. Though encouraging, the upturn in GDP growth is still low to have significant impact on poverty eradication. Besides consolidating and sustaining macroeconomic reforms, the achievement of higher growth will require (i) improved performance of agriculture (ii) strengthening the environment for private investments in the pacemakers for growth - particularly mining and tourism (iii) further privatization and restructuring of industrial sector.
* The anti-inflation stance has paid off. From the peak of 35.5 percent in 1994, inflation declined steadily to 6.3 percent in February 2000, mainly due to tight monetary and fiscal stance pursued during the period. This stance needs to be maintained, coupled with increased production of food so as to reduce inflation further to level consistent with inflation level in Tanzania's major trading partners.
* Tanzania has made considerable progress in restoring fiscal discipline and channeling public resources toward defined priority areas. However, the level of revenue mobilization remains low mainly due to an extremely low domestic revenue base. This severely limits the Government's capacity to provide basic services to its people. The reduction in the fiscal deficit (before grants) is almost entirely attributed to reductions in Government expenditures (excluding amortization), since domestic revenues as a proportion of nominal GDP have declined over time.
* The introduction of the cash budget system has reinforced discipline in Government expenditure. However, as a result of massive expenditure cuts made in trying to match expenditure to revenue availability, most Government obligations, apart from the wage bill and debt service have had to be cut substantially. In the process, service delivery in all sectors has been affected,
124 although priority activities with priority social sectors (education, health, water, roads and agriculture) have now been protected.
* The Government intends to continue to undertake prudent fiscal measures to ensure macroeconomic stability. More stabilization efforts will focus on enhancingrevenue collections through expanding the tax base and rationalization of the tax system. Stringent budgetary measures will continue to be exercised in order to ensure that expenditures match available resources. The integrated financial management system will be strengthened to enhance efficiency, effectiveness and transparency in expendituremanagement.
* The growth of the extended broad money (M3) declined from 37.7 percent in FY95 to 11.0 percent in FY99, and may decline to 9.2 percent by end-June 2000. The rapid decline in money supply growth, led to a rapid decline in the rate of inflation, which in turn contributed positively towards stability of the exchange rate.
* The performance of credit growth, particularly credit to the productive sectors, has not been impressive after liberalization. Commercial banks have shown increasingaversion to lending, preferring to hold risk free assets such as Treasury Bills, partly because of high risks in lending, difficulties on the part of commercial banks to assess the credit worthiness of private borrowers and problems associatedwith the handling of commercial disputes. The establishment of a Credit Information Bureau to provide information on credit worthiness of prospective borrowers and the establishment of a Commercial Court to speed up the settlementof commercial disputes, are expected to improve the situation.
* The spread between lending and deposit rates continues to be unduly high. Both the concentrationof new banks in major urban centres and the restructuringof the National Bank of Commerce, including the closure of its remote branches, has deprived rural areas of financial services. This requires a deliberate strategy for assisting the rural sector through the provision of micro-finance services. The recently finalised Rural and Micro-finance policy and a revision of the Banking and Financial Institutions Act later this year to provide for a legal framework for regulation and supervision of micro-finance institutions, are some of the strategies.
* The bulk of Tanzania's export sector remains traditional agricultural commodities, accounting for about two thirds of the total export value. Consequently, a large portion of the export bundle remains vulnerable to vagaries of weather and adverse movements in the world commodity prices, and hence leading to a weak balance of payments position. Liberalization of mineral trade, pursuit of macroeconomicstability and removal of foreign exchange restrictions are expected to generated more foreign exchange from mineral exports and tourism.
125 * Core functions of the Governmenthave been redefined to include maintenanceof law and order, provision of basic social and economic infrastructure,and creation of an enabling environment for the private sector and other economic agents to invest in productive economic activities. The Government now focuses on policy formulation and economicmanagement, investing in core functionsand providing legal and regulatory frameworks.Several institutional changes with a bearing on private sector developmenthave also been made.
* The Vision 2025 will be implemented in phases of three years starting from FY02. Preparation of programs and projects will be undertaken during FY01. Other processes, i.e. PRSP, TAS and PER will be instruments of implementing the Vision, which provides the umbrella framework for guiding development policy formulation, prioritization of development programs and projects and setting development goals and targets in the medium term.
P2: Fiscal Policy and the Macroeconomic Context
Presentation
* A consultant for the PER Working Group from Oxford University, Mr. David Bevan, summarized the Tanzania FY00 fiscal policy issues and the macroeconomic context. Specific issues addressed included, a review of links between public and private activities from a perspective reflecting current conditions in Tanzania, the resources available to govemment, Guidelines for the Preparation of the MTEF, the domestic credit position, and options for the government's fiscal stance. The review highlighted the following:
- Over the last several years, the Government of Tanzania has run a tight fiscal policy through the instrument of a cash budget, with a domestic budget surplus. The consequence has been a fairly rapid but orderly process of disinflation, with the annual rate of inflation coming down to around 7% by the end of 1999. While it is essential to consolidate this achievement so that there is no return to the double-digit inflation of earlier years, it is nonetheless no more than a precursor to the real agenda of growth and poverty reduction. Growth is important not only in its own right but as a mechanism for reducing poverty both directly and indirectly via the enhanced social spending it permits. The sources of this growth will inevitably lie in private enterprise, with the government attempting to minimize factors that may inhibit this and promote those that encourage it. The latter factors include not only the regulatory and market environment, but also macroeconomic policies bearing on investment, saving, liquidity and credit.
* Tanzania is currently in transition between the economy suffering from excessive fiscal deficits, rapid monetary growth, high inflation, and a lack of private credit in which the imperative is to reduce the deficit so as to permit other problems to be addressed; and the economy in which there has been an extended history of steady growth in a stable policy environment, where the imperative is to maintain the policy
126 regime. The crucial short run choice in terms of policy design for the economy in this interim outcome is over the volume of resources that the government can devote to its spending programs without crowding out the recovery of private activity, while at the same time addressing the question related to the amount of resources that the private sector can actually put into use.
* There is nothing to ensure that the banking system will remain fully lent if the government reduces its borrowing. If private borrowers are deemed not to be creditworthy, the system simply becomes more liquid and the loan-deposit ratio falls. This has evidently happened in Tanzania, though it is difficult to be precise about the degree, since the fall in loans also reflected the cleaning out of non-performing parastatal loans.
* Much of the credit advanced to the private sector in Tanzania is for trade rather than for investment. Investment tends to be financed from an enterprise's own resources or, in cases where the outputs will generate foreign exchange (such as mining) from external sources. Thus, especially in the short run, withdrawal of government may neither induce increased access to credit by the private sector, and even if it does, this may have a very muted impact on investment activity.
- A rapid expansion of private sector credit might be problematic. Since the banking system lacks experience in risk assessment, the alternative to rather limited lending might be a rush of lending leading to an unacceptably high bad-debt ratio.
* When a government obtains access to increased resources from external donors and spends some part of this on non-tradable goods, this will tend to induce appreciation of the real exchange rate (the so-called 'Dutch Disease'), unless there are offsetting effects on supply. The Dutch Disease effects are in no way specific to government involvement. Exactly the same issue arises for transfers of external resources to NGOs operating in-country, or to increased private spending if the government passed the aid on to the private sector via tax cuts or increased credit. What matters is that the nation is able to spend more and that part of this spending is on non-tradables. The real exchange rate issue is a feature of accepting the resource inflow, not of any link between this and the level of government spending. * Some forms of spending are likely to have supply side effects. Especially if these come into operation quickly, the real exchange rate consequences of the inflow will be muted and may even be reversed. For example, a program of rehabilitation of roads could remove bottlenecks and lead to an expansion of the production of non- tradables in excess of the increased demand for them. This entails that private and public activities are frequently complementary, so that the private sector may not be best served by a contraction in public sector spending. This is particularly likely to be true in Tanzania, where many forms of government spending are low by the standards of comparable countries.
127 * The MTEF for the next three years shows revenue growing modestly as a share of GDP. The shares are 12.4% for the current year (FY00), and 12.6%, 12.8% and 13.0% for the MTEF period (FY01 - FY03). The present figure is modest by the standards of comparable countries, and the assumed growth of revenues, at 0.2 percent of GDP a year, also does not seem excessively ambitious. However, it has to be noted that this ratio has averaged 12.4% over the last decade, and while it has varied substantially, it has been trend-less. At the same time the authorities are not planning any major tax reforms, but are relying mainly on reduced exemptions and increased administrative efficiency to deliver the revenue gains.
* It would be worth developing a more disaggregated method of forecasting revenues, both to obtain more refined inputs into the MTEF and also to permit closer monitoring of performance. This would involve analyzing the compositional shift of growth in various sectors.
* There is a strong case for basing the MTEF projections on the most likely scenario, which is that program aid will in fact continue at similar relative levels to the present ones. To take a more conservative view would only be justified either if there were strong grounds for believing that aid cuts were probable, or there were grounds for thinking that regular upward revision of spending ceilings is allocatively less costly than infrequent downward revisions. Budget Guidelines projections are pessimistic, while the HIPC Decision Point document assumes very substantial inflows of new resources in this period. It should be noted that forecasting resources is necessarily risky, but the risk is two-sided, and not minimized by excessive caution.
The logic leading to the selection of the priority sectors themselves seems clear enough. However, it remains obscure what governs the distinction between priority and non-priority activities within these sectors. It is also obscure how prioritization affects the budget allocation process. Allocation to a number of priority sectors as indicated in the Budget Guidelines document lack of any pattern. Sometimes allocations are very far below requirements, sometimes they exceed them. In some cases the ratio for a sector is stable over time, suggesting that the severity of rationing is constant: in others it falls or rises. It does not seem as if the term "requirement" has any stable interpretation, either between sectors, or within a sector over time. This means that the role of the MTEF in matching limited funds to those activities which have the highest pay-offs or are otherwise felt to be most urgent is very inscrutable to the outside observer. There thus seems to be considerable scope to develop this linkage between the prioritization process and the budget allocation more systematically.
* The ratio of various money measures to GDP has been falling in Tanzania. A falling ratio is a signal of financial ill health. It may reflect a lack of confidence in the domestic currency, so that agents economize in holding it, possibly by substituting international currency. Alternatively, it may be a response to financial repression, where very unfavorable terms make the formal financial sector an unattractive internediary. In either case, high transactions costs are imposed on economic activity.
128 When these conditions are reversed by successful policies of stabilization and liberalization, the demand for money is expected to recover, but possibly quite slowly and after a lag as confidence is re-established.
* Private credit has indeed expanded rapidly albeit from a very low base. Over the four years from the end of 1996 it has risen in nominal terms at annual rates of 39%, 48% and 26%, or from Tsh 116.6 billion to Tsh 302.2 billion. Since the cumulative inflation over this period was 37%, the growth in real private credit averaged 24% per annum over these three years. A major reduction in the government's use of domestic credit has produced a rapid proportional expansion in private credit, but since the base for this expansion was so small, this private response has still been small relative to the scale of the stimulus. In other words, the Government withdrawal from its previous reliance on domestic credit has had a limited effect of "crowding the private sector back in", since private sector engagement with the financial system, relative to GDP. seems to have been relatively invariant to these changes. Hence the reduction in government engagement has simply led to a contraction in the scale of financial intermediation. The bankingsystem is currently under-lent and over-liquid.
* It is desirable for Tanzania to accept as large an external deficit as donors are prepared to finance. For any given choice of domestic deficit, this implies that additional aid should automatically be spent. In turn, the considerations determining what an appropriate level of the domestic deficit might be are not contingent on the level of extemal finance that is available, rather on the extent to which the government can use additional resources effectively (i.e. the Government has not reached its implementation limit). Then the choice of a value for the deficit depends on what levels of monetary expansion, build-up of foreign exchange reserves, and expansion of credit to the private sector are desired.
* There are three possibilities in relation to keeping a contingency allocation in the budget. First, they could remain unspent, in which case the govemment will be running a domestic budget surplus, not a balance. Second, they could be deployed in face of some genuine unforeseen events, but it is wildly implausible that these would have expenditure implications of this pattern. Third, they could end up being spent but according to the exercise of ministerial muscle rather than the allocation procedures (based on prioritization) embedded in the MTEF. If the intention is to smooth spending in the expectation of uneven revenue flows, that should be signaled, rather than calling the device a contingency.
* There is a compelling case that the govermment should choose to run a modest domestic deficit rather than a balanced budget; to enable it to increase spending on the under-funded recurrent budget and improve service delivery. It is not clear, given the already highly liquid financial system and credit position now, that it would risk crowding out desirable private activity given. The question is rather how much credit the private sector is plausibly going to require, and whether it is likely that it will be able to use the whole increase in domestic credit over the next several years.
129 Discussion/Comments on P1 and P2
* Noted, by an IMF official, that it is true that Tanzania was still in a transitional stage. The country could only run the deficit if foreign reserves can finance it or if enough resources are expected from donors. However, experience has shown that there is a risk of enough inflows not forthcoming. Agreed with the observation that budget surplus has failed to crowd-in private sector credit, but noted that this was mainly because of high lending rates and risk aversion. Bank credit in Tanzania is much lower at 5% of GDP, unlike the Sub-Saharan average of 14% of GDP, indicating that the country still had a long way to go in increasing lending. However, despite all these, IMF thinking was that running deficit was probably not a viable proposition.
Concerns/comments by the donor community:
* Even though the MTEF projects a reasonably small deficits in three years, there is, however, a big contingency which may translate into large surpluses, at the time when public services are under-funded. Some amount of deficit ought to be allowed, to make increased public funding possible, especially in sectors like roads whose allocation has been disappointingly low. * There is an urgent need to use existing resources to improve existing programs and resource allocation through the budget.
Comments and concerns by members of Parliament.
* Expressed delight on the way Tanzania was, through the PER process, building a very good base for dialogue - especially on how to chart out ways of reducing poverty and improving welfare of the people. . Expressed concern as to how real are Tanzania's plans given the problem of inconsistency between revenue collection and delivery of visible development. * There is poor translation of macro achievements into real improvement in life (e.g., 4% grow-th in agriculture reflects growth in which crops when all crops are currently performing poorly?). * Actual expenditure in development budget does not reflect budget as approved by the Parliament. * In order to have accountability there must be good governance in place. However, to have good governance calls for having an opposition from the political front, and other stakeholders in the society; and respecting the rule of law while shunning political patronage and corrupt practices. * There is a need to re-examine the cash budget system. Much as it has succeeded in reducing budget excesses, this has been done at the expense of disregard to the budget as approved by the Parliament. In addition the cash budget has severely reduced service delivery capacity of the Government by making monthly resource availability
130 unpredictable. There is thus a need to set the limit of deviations of allocations through the cash budget vis-a-vis the approved allocations.
* Agriculture in Tanzania can do a lot to bring growth and development especially in rural areas. If Tanzania is to cross the international poverty line, then there is a need to revive agriculture, especially through more funding of research and extension services, irrigation, and better use of inputs. An agro-investment master-plan, which is well funded and supervised, is important if agriculture is to grow at the envisaged 8 percent. Also important are improvements in rural roads and credit to the sector; and ensuring that there are organized markets for both cash and food crops. * There is a need to consider the effect of energy tariffs on macro and micro enterprises, with the view to revising them downwards. * There is a need to put in place mechanisms to monitor mineral prospecting and trade/marketing rules if Tanzania is to benefit more from these economic activities.
Comments/concerns by the private sector: • Although Tanzania has done major policy changes, there are still lags in putting in place an enabling environment and regulatory framework that conforms to the country's move to a market economy. Lack of regulatory framework makes lending a risky business, thus curtailing the availability of credit to "risky" areas where loan recovery is uncertain. * Privatization of the banking system is almost complete, yet there is no single development bank to cater for long-term investment and other development oriented projects. To promote agriculture, the country also needs an agricultural bank with a focus on rural credit. * The private sector is still very young. It cannot make itself the engine of growth. The government has a role to build capacity in the sector, to help it grow and become efficient. * There are studies that have shown that the Tanzania shilling is overvalued; the rate of overvaluation being 1.1 percent per month since 1994. This has had effect on producer prices, lowering them by 70 percent in real terms. This in turn has reduced competition and investment in agricultural and export related activities because of low retum. * Tanzania seems to have its priorities upside-down. Allocations to agriculture are not reflective of the role of agriculture, which is the main engine of the economy, employing 80 percent of the population. Failure to focus on agriculture will not allow GDP growth to go beyond the current 4.8 percent. Moreover, because of complementarity (raw materials, income/demand, etc.), poor performance in agriculture will also affect negatively performance in the industrial sector. There is thus a need to enhance growth in productive sectors or sectors that generate wealth if poverty is to be reduced.
131 * There has been a serious compressionof demand in the Tanzanian economy. Whereas money/GDP ratio has been declining, tax/GDP ratio has been rising. This situation has affected profitability of most economic activities. The Government ought to stimulate the economy by focusing on the real side of the economy, especially fiscal stimulation involving sensible government spending on the productive side of the economy (roads, etc.) and reduction of nuisance taxes especially on raw materials while at the same time widening the tax base through encouraging growth and reducing tax evasion/leakage. * Noted by TRA official that revenue fluctuations are going to fall as the economy expands and production in taxable areas expands. This means, therefore, that tax reforms have to be implemented gradually, otherwise the stability of government revenue will be affected.
P3: Enhancing Efficiencyin the Public Sector
Presentation
* The presentation by the Permanent Secretary - Civil Service Department (CSD) highlighted the following: * Public Service Reform Program is a continuation of the Civil Service Reform Program (CSRP) 1993 - 1999, which focused on restructuring, cost cutting and institution building. The achievements of CSRP include: 25.7 percent reduction in workforce from350,000 to 260,000; reduction of ministerial divisions; training of 25,000 civil servants; launch of the Local Government Reforrn Program; and restructuringof regional administrationreducing staff from 14,000to 2,000. * The overall purpose of the PSRP is to continue reforming the public sector so that it provides support to the attainment of a high rate of economic growth and delivery of quality public services within priority sectors that conform to public expectations for value, satisfaction, and relevance by end 2011. The aims of the program reflect the Government's vision of the future public service as stated in the National Vision 2025. The Public Service will be an institution of excellence playing a pivotal role in achieving sustained economic growth and prosperity, and eradication of poverty in the 21" century. * The program development objective is to improve accountability, transparency and resource management for service delivery. The public service intends to deliver efficiently and effectively the Government's economic and social programs on a continuous and sustainable basis. In the medium-term (Phase 1), this development objective will be underpinned by the policy shift to outsourceservices to the private sector and to local authorities and the strategic theme to deliver quality public services under severe budgetary constraints. The program intends also to implement a medium term pay policy, implement job evaluationlre-gradingexercise, efficiently reduce employment, develop the Public Service Commission,build capacity through training and retooling, and improve records management, IT and communications. The Global Distance Learning Network (GDLN), an integral part of the public
132 service reform program, was recently introduced in Tanzania. The network's center (GDLC), based at IFM, is intended to be part of a global knowledge-sharing network to strengthen the capacity of public and private decision-makers and implementers to design, plan and manage economic and social development policies.
* Enhancing technical efficiency and public service organizations (MDAs) involves: (i) adopting and operationalizing Performance Improvement Model (PIM), which introduces results oriented management through performance improvement management systems; (ii) training ministries on PIM and empowering and energizing ministries to implement it; (iii) strengthening capacity and performance orientation in MDAs; (iv) rigorous application of meritocratic recruitment principles in personnel management; (v) putting in place an effective monitoring and evaluation system for institutional and individual performance; (vi) putting in place a fair compensation system and competitively remunerated public servants on the basis of medium term pay policy; (vii) introduction and application of Selective Accelerated Salary Enhancement (SASE) and Performance Improvement Funds (PIF) to strategically planned areas; (viii) operationalizing job evaluation and reducing distortions; and (ix) capacity building through training institutions - e.g., PSC, IDM and GDLC. * The PSRP total budget stands at $ 106.7 million. Commitments so far amount to $ 73.1 million, with the difference between total budget and commitments representing the shortfall. More donors are invited to contribute to the program, which is to be launched in June 2000.
Discussion
* Equal opportunities for men and women does not mean equal representation, but presence of representation. This has not always been the case in the Tanzania's civil service. The new public service reform program ought to also focus on tackling the gender imbalance problem. CSD has to address the issue of incentives like huge travel allowances. * Decline in accountability was noted. The report of the Controller and Auditor General showed poor certification in terms of adverse or qualified opinion. This was explained by embezzlement of cash and store, poor record keeping, etc. However, no follow-ups, sanctions and prosecutions are taking place. If donors have to channel their funds through the budget (basket funding, programns, etc) this trend has to change. * Duration of civil service reform is long and the cost is high but the results are unsatisfactory. The exercise seems to be very long and expensive and heavily based on the borrowed funds or grants from donors (WB and others). It is advisable that, instead of using the money to pay external consultants it is better to use the money for compensating retrenched employees and pay better those remaining. * It was also noted that jobs that have been reduced have not released enough resources for training other remaining staffs and improve services offered by the public sector.
133 Also sustainability of the civil service reform process was questioned as it depends on borrowed funds or grants from donors.
Review of Fiscal Performance - An External Evaluation
Presentation:
* The presentation was done jointly by members of the PER Mission - one from The World Bank and another from the Embassy of Sweden * The analysis of fiscal performance was broken down into three distinct areas: aggregate fiscal discipline, strategic allocation, and technical efficiency. * Aggregate fiscal discipline: Domestic Revenue is still low standing at 11.5 percent of GDP in FY99 and FY00. Net foreign inflows in the form of grants and concessional loans increased from 4 percent of GDP to 4.4 percent in FY99 and are projected to further rise to 4.8 percent in FY00. The net foreign inflows contributed to a budget surplus of 0.3 percent of GDP in FY99. However, the budget situation is projected to tum into a deficit of 0.5 percent of GDP in FY00 due to increased public expenditure. Wage bill has shrunk from 4.2 percent of GDP to 3.7 due to civil servant retrenchment. However, the wage bill is projected to increase to 4.3 percent of GDP in FY00 because of the Pay Reform Program. After a continuous decline over the past few years, expenditure on other charges increased for the first time in FY99 to 5.7 percent of GDP up from 4.5 percent in FY98. During FY99, deviation of actual from budgeted figures at the aggregate level were less than in previous years. - Strategic allocation: Priority sectors (education, health, rural roads, water, agriculture and the Judiciary) benefited from the increase in other charges. The share of discretionary expenditures going to priority sectors increased form 42.8 percent in FY97 to 46.7 percent in FY00. Likewise, the share of development expenditure shifted to the priority sectors from 31.1 percent in FY98 to 61.7 percent in FY00. However, foreign development expenditure is still not captured in the govermnment's accounts.
* Technical Efficiency: Operational efficiency and service delivery remains constrained by low wages and salaries, insufficient of funds for operations and maintenance, and the unpredictability of resource availability due to the cash budget system in place. This trend is likely to change due to the recent increase in civil service salaries and expenditures on operations and maintenance. * Fiscal management efficiency is still weak. Audit certificates of accounts and statements issued by CAG continued to be predominantly adverse although there was some improvement in FY98 for ministries. Government continued the implementation of institutional reforms which are likely to considerably strengthen fiscal management. The ongoing reforms include the implementation of the Integrated Financial Management System, the legislation reforms underlying financial management, strengthening of the MTEF process, introduction of performnance management systems and budgeting, strengthening of the auditor
134 general, the development of an Anti Corruption Strategy, and enhance integration of foreign aid into the budget process through the development of the Tanzania Assistance Strategy, Sector Development Programs in Health, Education, and Roads and basket funding arrangements in support of the Local Government Reform Program and the strengthening of the TRA.
P5: Systemic Fiscal Issues
Presentation: * The presentation was done jointly by members of the PER Mission - one from The World Bank and another from DFID, highlighting eight major emerging and continuing issues in fiscal management which need to be addressed. * The plight of the Development Budget: The development budget is in a very worrying state. Budget analytical work done under the PER FY00 process revealed four major disturbing features of the development budget in Tanzania. First, there is significant divergence between commitments and disbursements; and within the fiscal year, releases of funds are erratic constraining proper planning of commitments. Second, the development budget is characterized by a preponderance of extra budgetary financing particularly at regional and local government levels. Third, provision of counter-part funding, which is needed to trigger committed finance of development projects especially by the multilateral institutions, is inadequate. Last but not least, are the problems in the development budget process and the weaknesses in implementation capacity. The problems include a large number of institutions involved; guidance for prioritization is not provided sufficiently in the Medium Term Plan and Expenditure Framework; capacity constraints in the institutions concerned; weaknesses in the procurement system; and the problem of coordination between the roles of MOF and PLANCOM especially on sectoral issues. . Desirable Level of Revenue Mobilization: The dilemma is how to reconcile Tanzania's low tax effort with a relatively small easily accessible tax base. The Government in determining the desirable level and modalities for domestic revenue mobilization typically has to strike a balance between meeting demands for higher public expenditure, and therefore higher revenue mobilization, and lower taxation of private incomes. The demand for higher revenue mobilization comes from the severe under-funding of basic social services such as primary health and education and of physical infrastructure services, which have been identified as impediments to economic growth and progress in sustainable human development. It also arises from the desire for greater self-financing and low donor dependence in the longer term. On the other hand, the costs to large transfer of private resources to government are two- fold: withdrawal of resources from the private sector and inefficiency into the incentive system of an economy. It is important to point out that the key factor determining the desirability of domestic resource mobilization efforts has to be the effectiveness and efficiency of public spending. * Fiscal Restraint and Cash Budget Management System: The cash budget management system was introduced in FY97 to impose fiscal discipline on the
135 spending units and enforce limits on aggregate spending in line with collected revenue and external aid disbursed through the exchequer system. Despite the good objective, the system has entailed significant costs particularly in the form of unpredictable funding of essential public services leading to wide monthly swings in the funding of government operations to match revenue availability. In order to mitigate some of the negative effects of cash budgeting, borrowing to smooth fluctuations resulting from unpredictablemonthly revenue flows is one recourse but the law restricts advances. However, the Government has recently allowed a number of Ministries to operatewith three-monthcommitments instead of monthly ones. * Macroeconomic Stability and Debt Sustainability: A positive decision has been reached by financiers, which will allow Tanzania accede to the enhanced HIPC relief. The interim HIPC relief, through IDA and IMF grants, will enable the country to free up a sizable amount of its own resources for servicing multilateral debt. Given that the HIPC relief will be in the form of budgetary support, long-term, and irrevocable once the completion point is approved,the risks associated with the related expansion of the fiscal deficit (after grants) are not significant. One possible downside effect of this shift in fiscal stance, however, is that it is likely to increase relatively more expenditures on goods and services that are typically not traded internationally, leading to the strengthening of the shilling and reducing the competitiveness of Tanzanian goods. - Co-existence of Overall Fiscal Surplus Side by Side with Under-funding of Priority Sectors: The perception is that the Government is putting monies away (building up reserves) and/or availing it to the private sector (a better user) through the domestic banking system. However, a rise in gainful absorption of these resources by the private sector depends on the absorptive capacity of the private sector, which can be enhanced only if supportive infrastructure and better public service delivery can be financed. * Concern on Absorptive Capacity Constraint with Increasing Resources: This issue relates to the concern regarding possible limited of absorptive capacity of the Government for much larger expenditures. Currently the priority sector financing needs, based on the MTEF and related supportivetechnical studies, are grossly under- funded and absorption should not be a problem. Total available finance meets approximatelyonly 60 percent of requirements. * Earmarking of Revenue and the Effectiveness of Budget Management: Revenue earmarking for specific expenditures is on an upward trend in Tanzania. The most significant among the earmarking arrangements is the Road Fund. Other forms of earmarking include retention of user charges for specific public services such as education, health, land services and natural resources. There are three reasons for starting to pay greater attention to the system of budget management before it mushrooms in an unwieldy fashion: to avoid underminingstrategic budget allocations across sectors and geographical locations; the difficulty of enforcing overall cross sector and within sector allocation with the greater autonomy associatedwith revenue retention systems; and the likelihood of imposing excessive burdens on specific users
136 of public services, as the relevant sectors strive to raise the resource envelope within their control. * Predictabilitv of Donor Resources: Tanzania is one of the major recipients of external assistance in Sub-Saharan Africa. However, donor co-ordination is tedious and requires more capacity at the Ministry of Finance. Donors have different accounting systems, different disbursement modalities and different financial years. To harmonize the multiplicity of the donor accounting systems, there are plans to integrate donor facilities in the new Integrated Financial Management System (IFMS) using the Platinum software. In addition, the Government is now taking the lead in preparing a country assistance strategy referred to as Tanzania Assistance Strategy (TAS). Unrecorded donor support is also among issues that are at the core of the debate on how to strengthen the government-donor partnership in development.
Discussion/Comments On P4 And P5
* About 70% of the donor assistance are extra-budgetary. Donor countries need to do away with this situation. However, this calls for improvement in financial management and accountability. The scaring number of adverse opinion and qualified certificates need to be reduced. * It was noted that about 17% of the donors development assistance (DDA) to Tanzania is charged to non development programs. Corruption absorb the big part of the above mentioned share of DDA. Also expatriate and technical remuneration claims a substantial amount of it. On one hand the GOT needs to do whatever possible to stop corruption, and on the other hand, Donors needs to asses the amount of DDA that goes back in the forn of expatriate and technical remuneration. * Fiscal policy is used in many countries in the world to address economic growth and competitiveness of the players in production. It is also high time for Tanzania to do the same. For instance there has been a practice of Government agencies to raise fees on inputs for the productive sector. If this is not coordinated it will discourage investment and production in productive sector. * None inclusion of various fees in the Road Fund was noted. Also counterpart funding is a serious problem. Low levels of counterpart funding lead to the loss of donor assistance. So, the Government needs to raise the level of counterpart funding. * While the Government is trying to raise revenue, tax exemptions have been increasing, at the same time the tax effort is very low. Also, it was noted that, there is no serious control of the government expenditure. The question was raised on whether the productive sector should be squeezed in favor of conspicuous consumption. * Not sure whether the figures/numbers on the donor funds that go through the budget are well captured. Figures/numbers are definitely high since much of the figures are now captured in the MDF basket funds. PER WG should try to investigate whether there can be any possibility of predicting donor funds.
137 * Inclusion of Judiciary in priority sectors was welcomed by the participants. However, it was noted that allocation to the sector is to small to reflect it as a priority sector. * There is a persistence in making mistakes in the development budget. Deviations between budgeted and actual development expenditure have been so consistent but there has been no learning. While resources are there and others come in (through donor assistance) actual development expenditure has been far less than the budgeted amount. Solutions suggested to this are: First, as a sector develop, credible development program it should get more resources. Secondly, Government agents, ministries and departments should get earmarked resources since it gives them autonomy in terms of controlling the source of resources.
P6: HIV/AIDS AS A DEVELOPMENT PROBLEM
Presentation - by Planning Commission * During the early 1980's when the rate of HIV/AIDS infection was low the disease was considered an exclusive concern of the health sector. Curative and preventive measures were solely left to the ministries and institutions responsible for health affairs. As the infection rates gain momentum and more information becomes available, it became evident that the disease is a global and multi-sectoral problem that impacts all sectors of society. The fight against HIV/AIDS requires the joint effort of entire international and local community. * HIV/AIDS represents a serious crisis for development in large parts of the developing world where it is rapidly reversing social and economic achievements. The HIV/AIDS epidemic has spread with ferocious speed. HIV/AIDS has now infected 50 million people worldwide. More than 16 million have died, 2.6 million in 1999 alone. Today, about 36 million people are estimated to be living with HIV/AIDS, 95% of them in developing countries * In most affected countries HIV/AIDS is swiftly dismantling the development achievements of the post 50 years. Life expectancy is now declining in many countries after decades of progress. In several nations it has been shortened by 10 years. Adult mortality rate has risen by 50% in many countries and by 100% in most affected countries. Child mortality rates have doubled in many countries and could double again if HIV/AIDS continues unchecked. The rapid rise in adult deaths is leaving a large number of orphans, 11.2 million worldwide, 10.7 million of them in Africa alone. * Recent World Bank estimates suggest that HIV/AIDS has a substantial negative impact on economic growth. In general, it is the 15-49 age group that is disproportionately affected by HIV/AIDS epidemic. Through its impact on the labor force, HIV/AIDS diminishes productivity just as developing countries need to become more competitive to cope with rapid globalization. All sectors are affected. HIV/AIDS illness and care reduces time and labor used in vital work of agriculture. HIV/AIDS also undermine PSD development by removing skilled labor, increasing expenditure, and reducing revenues.
138 * HIV/AIDS overtaxes social systems and the health and educational development that the poor need to escape poverty. Across Africa HIV/AIDS has drained skilled manpower in every sector, which was scarce to begin with. Teachers and student are dying or leaving school because they can longer afford it, have fallen ill, or because they are needed at home or to care for the sick. Health care system in many countries are stretched beyond their limits as they deal with a growing number of HIV/AIDS patients and the loss of health personnel to illness and death. HIV/AIDS has also caused the loss of policy makers and managers for the overall operation of the Government. * Women in general, and girls in particular, are biologically and socially more vulnerable to HIV/AIDS and are disproportionately infected and affected by the epidemic. Women and girls also bear the greatest burden of care; families often take girls out of school to care for the sick relatives or assume family responsibilities, jeopardizing recent gains in health, nutrition and girls' education. It is worth to note is that, HIV/AIDS particularlytargets the poor. The epidemic has overwhelminglyhit the world's poor countriesand those with the greatest disparitiesof income. * HIV/AIDS has been in Tanzania for about 17 years now. The number of adult HIV/AIDS infection in Tanzania in 1997 is estimated to be 1.5 million (NACP, 1998). Given the fatality of the illness, and with 1.5 million infected productive adults, the HIV/AIDS epidemic can no longer be viewed as just a health problem, it has to be recognized as a developmentproblem. In terms of geographical distribution the five leading regions in HIV/AIDS cases are Mbeya, Dar es Salaam, Kilimanjaro, Mwanza and Kagera. - The Way Out: As it has been shown HIV/AIDS is a multi-sectoralproblem both in terms of its causes as well as its solution. Therefore the fight against AIDS requires a multisectoral approach/program that addresses all fronts and involves all the social economic agencies both at the country, regional, and global levels. At the country level the obvious actors are the Government (central and local), the private sector, the civil society including non governmental organizations (NGOs), communities and households. The war against HIV/AIDS must be fought on three fronts, curative, preventive and promotive activities. * Tanzania has adopted the MTP III as our comprehensive multisectoral program for HIV/AIDS control. MTP III is a multisectoral unti-HIV/AIDS program that addresses all frontiers and tries to involve all important actors. However, while MTP III is an important anti-HIV/AIDS program for Tanzania, it is not adequate for the purpose as it is unable and it was not meant to address some of the critical factors that are known to cause/influence the spread of HIV/AIDS. Other supportive framneworks such as the Development Vision 2025, the Poverty Eradication Strategy, the Poverty Reduction Strategy under HIPC initiative etc. will assist in mobilizing political support and the masses for participating in activities that will eventually fight the spread of HIV/AID. * Some important constraints to consider: Both MTP III and Vision 2025 were passed before the end of 1999. But their effective implementation is yet to begin. While the detailed implementation plans are still under preparation, implementation work will
139 require massive resources particularly budgetary resources and the supply of those resources is the most challenging problem being faced.
Discussion/Commentson P6 * The inclusion of the HIV/AIDS in the PER as the main issue was welcomed by the participants. It was noted that many programs including MTP3 have been put forward to deal with the problem but with not much success. It was proposed that: (i) Political leaders should speak out clear and louder. HIV/AIDS should come out clearly in every meeting, seminar, workshop, etc. (ii) MoF should approach the donors on what they can do to tackle this problem (iii) Develop new international coordination with other African countries to combat the issue internationally. (iv) Interest of the donors to help combat HIV/AIDS, through more local network funding. * Observation on the problem has been as follows: (i) Intensification of the proposed focus on multisectoral HIV/AIDS approach. Indicate how the available funds will help to combat the problem. (ii) Most of the institutions dealing with the problem may not have enough capacity to deal with the problem. So they need assistance in terms of human capacity. (iii) Indicators should be set so that progress can be monitored and assessed. (iv) Systematization and human rights should be put in place while fighting the problem. * Much more details of HIV/AIDS from the sectoral paper is needed. HIV/AIDS is the problem that should be addressed by the Government. Government should come out with a clear plan of how to deal with the problem. 'What should a nation do when it is in a war?' 'It should mobilize resources for the war'. Why seeking money which we can't disburse? HIV/AIDS should be moved to the top of the agenda and hence attract more resources. It was noted that ADB is ready to cooperate with other donors to help the Government to strengthen HIV/AIDS control programs. * Numbers/figures should be given in terms of caring HIV/AIDS affected person or caring orphan. The budget should indicate whether we are going in the right direction or not. It was noted that more than 16% of the affected people are children. Care and counseling should involve everybody in the community. * People in laboratories are limited. Also facilities for screening are limited, hence increase the spread of the problem. * There are success stories in reducing HIV/AIDS cases in some countries like Uganda and Senegal. Studies by GTZ have shown a decline in HIV/AIDS cases in some region ofTanzania. For instance, 10 years experience for Mbeya has shown that HIV/AIDS figures have gone down from 20% to 15%, and from 15% to 5% for syphilis. The decline in these figures shows that there is a way to reduce the extent of the problem. * Things to be noted by the Government: (i) Intensify awareness program. (ii) Enact legislation that can punish those who deliberately spread HIV/AIDS. (iii) Proper funding of the programs that are against HIV/AIDS. (iv) Stop those people who claim to have cure for aids as they draw away the resources of the poor people.
140 P7: CROSS-SECTOR MTEF
Presentation - By the Commissioner for Policy Analysis, Ministry of Finance
* The fiscal year FY01 will be the second year since the introduction of MTEF approach to the Tanzania budget planning process linking policy, planning and budgeting in a medium term framnework.This MTEF is built on the foundation of the projected resource envelope and expenditure priorities consistent with the agreed macroeconomic and sectoral objectives. The presence of HIPC debt relief as well as the continued inflow of donor support has helped to enhance the predictability of the resource envelope for the budget. Resulting from this enhanced resource level, the expenditure allocations in the next MTEF particularly for priority sectors and activities, have been increased significantly when compared to allocations to other sectors and activities. The first MTEF for Tanzania was confined only to the five priority sectors (education, health, water, agriculture and roads). During the PER FY FY99 consultative meeting it was felt that there was a need to extend the coverage of the MTEF to other sectors on the basis that the exercise needs to be seen in the context of the broader public sector management reform and therefore has to involve all sectors of the government, including the Ministry of Finance and Planning Commission. * In analyzing sectoral allocations, expenditure is divided into the following main sectors: Administration, Law and Order, Social Service, Economic Service, and Consolidated Fund Service (CFS). The analysis focus is on two dimensions,: sectoral allocation by shares, and deviations of actual sectoral expenditure from budgeted sectoral allocations. * Sectoral allocation by shares: During the past two years (i.e. FY98 and FY99). average shares of actual spending as a percentage of the actual total sectoral recurrent expenditure were: CFS (33.6%), social services (28.5%). productive services (3.3%), economic services (3.2%), Law and Order (17.0%), and administration (14.4%). Comparing the two years, the shares of recurrent expenditure on Social Services, and Law and Order increased while shares of the other four sectors decreased. Increase in expenditure shares on Social Services shows the Government's commitment toward improving social service delivery. With regard to development expenditures the average shares were: Administration (12.7%), Law and Order(0.1%), Social Services (36.2%), Economic services (40.1%), Productive services (10.9%), and CFS (0.0%). The much faster increase in the actual development expenditure on social services and economic services reflects the Government's intention to develop the two key sectors. * Deviations of actual sectoral expenditure from budgeted sectoral allocations: Under this, most of the sectors under-spent. The highest under-spending occurred in Economic Services (-30.6%) while the highest and only over-spending occurred in CFS (+22.2%) for the same period. Looking at the deviations for the two respective years. deviations for FY98 range from -30.6% to +22.2% while for the year FY99 range from -9.0% (for Administration) to +3.6% (for Social Services). This shows
141 that actual sectoral recurrent expenditure for FY99 was more consistent with the budgeted allocations than the year earlier. * Outstanding Priority Sector Issues: Notwithstanding recent gains in some macroeconomic variables, there are outstanding problems in the sectors. Such problems are manifested in the following outcomes. (i) The continued downward trend in the status of human development indicators and quality of social services particularly in education, health, nutrition, water and sanitation. (ii) Weak and low growth of the agriculture sector relative to its potential. (iii) Inadequate investment in physical infrastructure notably transport, marketing and processing. (iv) Vulnerable balance of payments position due to adverse developments in the international environment such as a decline in commodity prices, rising import prices and erratic recovery of the export sector. (v) Lack of micro-finance services. * Along with the broader objective of enhancing sustainable economic growth and poverty eradication, the Government will address those problems through the MTEF process. The overall objectives of the government for priority sectors up to the year 2002/03: * For the education sector the overall objectives continued to be: to increase enrolment of pupils in primary education by 10% annually; to increase transition rate of primary to secondary level from 15% to 21%; to improve the quality of teachers through in- service and pre-service training at the rate of 30% annually; to increase enrolment in higher learning institutions, promote gender equity and improve training; and to increase the capacity and improve inspection services coverage from 50% to 70%. * For the health sector, the main thrust of the MTEF for FYOI-FY03, is to improve primary health care by focusing on equity with emphasis on capacity building, improvement of service delivery and provision of drugs, medical supplies and HIV/AIDS educational contact. * For the water sector the overall objective is to increase access to clean, safe and adequate water supply by at least 9% points for the rural population and 7% points for the urban population. * For the agricultural sector, the government will continue to avail public resources to the sector's strategic priority activities, namely: extension services, research, regulatory services, promotion of functioning co-operative societies, marketing information and agricultural statistics, early warning systems and food security management. * For the road sub-sector, issues that have high priority include: road maintenance of an upgraded network; implementation of priority rehabilitation and upgrading projects; and rehabilitation and maintenance of rural roads under the local government authorities' jurisdiction. * With regard to the land sector, priority will be given to the key areas directly related to the operationalization of the new land policy and law. These key areas are land resource management; land tenure security enhancement; land information
142 management, and speeding up the processes for issuing land titles and resolution of land disputes. * Good governance in the context of this MTEF includes: enforcing law and order (in particular the judiciary); general election; the national population census; implementation of the National Vision 2025; the anticorruption strategy; and the control and audit. The Budget Frame * Specific Consideration in Developing the Budget Frame: Specific considerations that guided the development up of the budget frame were as follows: (i) the draft budget frame prepared by the MOF was adopted as the baseline scenario, (ii) the resource envelope as projected in the baseline scenario was re-examinedto correct for the declining tax effort (tax/GDP ratio) over time, (iii) the upper case scenario is to include additional resource projection from the enhanced HIPC and the possible offsets between expected resources from the MDF and the HIPC debt relief, (iv) projections of external resources (loans and grants) were based on likely turn-out figures informed through questionnaire survey of all DAC donors, (v) the level of the fiscal deficit ought to be consistent with the government macroeconomicpolicies to ensure sustained macroeconomic stability, and (vi) exchange rate of Tshs. 750 to the USD is an underestimate. - Underlying Assumptions of the Budget Frame: The macroeconomic policy targets for the MTEF FY01 - FY03 underlie assumptions that guided the development of the budget frame: (i) Real economic growth of 5.8% in 2000 rising progressively to 6.9% by the year 2003, (ii) Consumer price inflation of 5.0% is expected to decline consistent with the inflation trend of the trading partners, (iii) Revenue collection is targeted at 13.0 percent of GDP at market price in FY03 (iv) A decline in broad money supply (M3), (v) Increase in foreign reserves to the equivalent of 4 months of imports of goods and services by end 2000, and (vi) An average exchange rate of between Tshs. 800-850 to one USD is projected for FY01. * Resource Allocation Criteria: In terms of the criteria used to allocate additional resources the following principles were applied: (i) Priority areas should be the beneficiaries of additional resources after funding PE, general elections, national population census and build-up to the government pension fund (ii) Additional resources should fund non-wage expenditures - both OC (recurrent expenditure) and development expenditure (iii) Priority activities within priority sectors should be targeted in allocating expenditures so as to have the maximum impact on poverty reduction (iv) Allocations to non-priority sectors were to be maintained at the same level in real terms. (v) The division between PE and OC be such that all additional resources allocated to the priority sectors were to go to OC (vi) In deciding the allocations between sectors, the same proportions as in the Budget Guidelines were applied. (vii) As regards allocation within sectors, use was made of the sector development programs and studies/reports that were commissioned to update expenditure plans for the priority sectorscovered by the PER FY99.
Discussion and Comments on P7
143 * The major source of funds allocated to the roads sector is the Road Fund but this does not cover all requirements. There should be additional funds for development purposes of roads from the Government budget. * Private sector is neither involved in the PER process nor the MTEF preparation although it is involved in paying taxes and creating jobs. There is need of including private sector in the permanent PER Macro group. * It was also noted that there is inconsistency in numbers in the cross sector MTEF especially for the education sector and health sector numbers. * Allocation to priority sectors (specifically agriculture and roads) is so minimal that it does not reflect priority of the sectors. For instance allocation to roads is not enough to cover required road maintenance targets, hence leading to fast deterioration of the road network. * Clarification on the participation of the private sector in the PER process was made as follows: "Private sector participate full in the PER Working Group but not in the PER Macro Group, but the final numbers/figures are presented to the PER WG, in which the private sector is represented. However, in the future the private sector will be represented in the PER Macro group. * Clarification on the Road Fund was as follows: Road Fund numbers are indicative. Further more Tsh. 5/= billion. has been set as the provision for development budget in the roads sector. However, one has to note that given fixed nature of resource envelope, trade-offs would mean shifting of resources from one sector in order to add to the other. * In the future there is a need to see whether it is possible to reallocate resources for development purposes to the maintenance of roads in case there are shortfalls on the recurrent side.
P8: EDUCATION SECTOR MTEF
Presentation - By Permanent Secretary Ministry of Education and Culture * The education sector has formulated several policies including the Education and Training Policy, Higher Education Policy, Science and Technology Policy and Technical Education Policy. The implementation of these policies has triggered the development of the Education Sector Development Program (ESDP). The ESDP provides for an opportunity to address issues and problems caused by large numbers of uncoordinated development programs/projects. It strengthens sector management by bringing all donor and govermment funding capital and recurrent within a single planning and implementation framework in support of an agreed sector strategy. * General Trend of Education Financing: The sub-sector financing shows that basic education is mainly financed by the Central Government, followed by external donors and parents. Donor contribution in the education sector appear to be increasing, with growing priority given to basic education. A number of initiatives are underway that might help to increase funding of the sector. These include the following: a national
144 education levy; household involvement in site construction/rehabilitation of classrooms and teachers houses; contribution to a revolving fund for textbook, and a contribution to the cost of school inspection; and district education trust funds. * For recurrent expenditure: The major financing source has been the Central Government. These are categorized into PE, OC and student direct costs. Since the financial year 1992/93,the Government introducedcost sharing in phases. Total real government expenditure has increased over the last 10 years. However, public sector spending on education is low (only 2.6% of GDP) compared with other countries like Kenya (6.1%), Uganda (2.9%) and South Africa (6.4%). Between 1993 and 1998 the share allocated to primary education rose from 51% (1993) to 67% in 1998, falling slightly to 62% in 1999. Secondary education received 7% of the sector budget in 1999 compared to 15%, six years earlier, a reduction of 53%. The shares of the recurrent budget allocated to teachers training and administration have fallen by 60% and 44% respectively. Expenditure on Higher and Technical education almost stagnated up to 1997 with slight improvement in 1999. The pattern of recurrent expenditure shows that in primary education, personal emoluments have averaged 96% of total government recurrent expenditure since 1995, in secondary education, it has averaged 63%, while in teacher training it has averaged 69% of govermnent recurrent expenditure since 1996. * As regards development expenditure, for several years the Government has not funded research costs in higher education. The donor community has been the main source of financing the cost of research and other development costs in higher education. In real terms, development expenditure on education appears to be increasing, albeit from a low level, considering the sector's share of the recurrent budget. * Mobilization of Funds: For some time, the financing burden for the education sector has been shifting from public to private sources. There are other sources of financing which include: (i) District Education Trust Funds - under ESDP, each district is required to establish a District Education Trust Fund primarily for financing education activities. (ii) Education Levy - it is envisaged that the fund would serve the resource mobilization function and the grant and resource allocation function. * Performance Indicators in Basic, Secondary, Teacher Training, Higher and Technical Education: In general, the performance of the basic education sub-sector has declined and that of secondary education has improved even if the overall results are still poor. In teacher training, internal efficiency has fallen by half, while in Higher and Technical education the student/teacher ratio still remains very low. It lies between 1:4 and 1:1 in some courses like nursing. * Sector Priorities: The establishment of the Education Sector Development Program (ESDP), within the Tanzania Development Vision 2025. aims at achieving high quality livelihood for all Tanzanians through realization of Universal Primary Education, the eradication of illiteracy and attainment of quality human resources required to effectively respond to the developmental challenges of a changing environment. The Medium Term Plan therefore tries to bring on board priority programs that are logical bases as well as catalysts that strengthen the effective and
145 efficient implementationof programs. The Medium Term Plan is aimed at the learner. However, prioritization in any sector is inevitable particularly in the context of scarce resources while competing needs are numerous. The thrust of the Medium Term Plan is to enhance learning achievement.This period the ESDP will address the following priorities: to improve the learning environment at all levels; to strengthen the management capacity at national, district, and institutional levels; to improve Education Management Inforrnation System (EMIS); and to control the spread of HIV/AIDS/STI through the education system. * Sector Main Problems: The problems include: Low enrolment rates, low quality, low transition, inequitable provision of services, high costs, low parental contributions and effective demand for education, weak quality control in higher education,and low patterns of expansion for higher education. * ExpenditureProjections: The government has decided to accord high priority to the education sector, which is a symbol of recognition of its pivotal role in the development of the nation. The education share of the discretionary budget had been rising since independence.
P9: THE HEALTH SECTOR - MTEF
Presentation- by the Permanent SecretaryMinistry of Health - The Health System Network: The Tanzanian health network consists about 4844 facilities that are well distributed across the country of these facilities, 2877 belong to the government. Analysis of Disease (1995 Study) patterns and trends show that the burden of disease is mainly concentrated on communicableand preventable diseases that can be controlled through effective preventive and promotive health programs at district and primary levels. - Health Sector Reforms: The ministry initiated and proposed major reforms in the sector to rationalize the roles and responsibilities in the provision and financing of health services. * Health Policy Objectives: The overall objective of the Government of Tanzania's health policy is to improve health and well-being of all Tanzanians with a focus on those most at risk and to encourage the health system to be more responsive to the needs of the people. * Specific Objectives: To achieve its overall objective, the Government of Tanzania aims to (i) reduce infant and maternal mortality, morbidity and increase life expectancy; (ii) ensure that quality health services are available and accessible; (iii) move towards self sufficiency and equitable distribution of human resources by training all cadres required at all levels; (iv) sensitize the community on common preventable health problems and improve capacity at all levels of society; (v) promote awareness in government and community at large that health problems can only be adequately addressed through multi-sectoral co-operation and sector wide approaches; (vi) create awareness through family health promotion that responsibility for one's health rests squarely with the able-bodied individuals as an integrated part
146 of the family; and (vii) public/private mix will be promoted in the delivery of health services. * Immediate Objectives: The Ministry of Health, following the thrust of the on-going health reforms, will take the process forward in the Plan of Work with the following underlying immediate objectives: (i) priority attention to improved access, equality and efficiency of primary health (district level) services; (ii) strengthen and reorient secondary and tertiary services delivery to support primary health care services; (iii) improve the capacity for policy development and analysis, development of guidelines for national implementation, performance monitoring and evaluation, legislation and regulation of service delivery and health professionals; (vi) implement a human resource program to train adequate numbers of health staff to manage the services (primary, secondary and tertiary); (v) strengthen the national support systems for personnel management. drugs and supplies, medical equipment and physical infrastructure management, transport management and communication; (vi) increased and varied financing sources for health care delivery and improved financial management; (vii) increased private sector involvement in the delivery of public health services; and (viii) within the sector-wide approach, improve the relationship between all partners, and institute mechanisms to ensure that support to the health sector is addressed in its totality with sharing of information and actions. * Implementation Strategies: In order to meet the challenges of providing health services within the Health Sector Reform agenda, eight inter-linked strategies have been developed to address the above mentioned immediate objectives. The idea behind these strategies are that: (i) more resources will be injected into the health system and existing resources will be used efficiently; (ii) resources will be distributed more equitably; (iii) priorities, objectives and standards will be clearly defined and monitored; (iv) managers at all institutional levels will have greater authority in the planning, allocation and use of available resources; (v) staff will be better motivated through improvement in working environment; and (vi) drugs and essential supplies to be made available as required. * In order to implement these strategies, a phased three-year development program of work has been developed. * Priority Areas: The priority areas focus on facilitating and strengthen the delivery of health services to comply with the essential district health package as well as to arrest the further deterioration of the physical facilities. The following priority areas are therefore recommended: (i) drugs and essential medical supplies; (ii) kerosene for storage of vaccines in rural areas; (iii) essential hospital equipment and supplies; (iv) strengthening of the referral system; (v) equipment for safe motherhood for all levels; (vi) conditional survey of physical facilities and equipment and prioritization for urgent rehabilitation of the most critical ones; (vii) mechanisms for introduction of CHF and cost sharing to lower level facilities; (viii) mechanisms for implementation of the National Insurance Fund; (ix) improved health education strategies; and (x) development and institutionalization of the health sector reform strategies. * The following are the key components pertaining the above priority areas and which need to be strengthened: (i) Sector Financing; (ii) Sector Monitoring and Evaluation;
147 (iii) Sector Financial Management; (iv) District Health Management; and (v) Health Network Rationalization. * Health Sector Overall ExpenditurePerformance FY1997-2000: In the past 2 years and half of the current fiscal year, the amount of funds released was more than what was budgeted for the sector. This was intended to alleviate the shortage of drugs in most of health facilities. * Financial Resources and Medium Term Framework for the 2000-2003: The government, donors and contributions from members of the community mainly fund the health sector. Donors mainly support vertical programs. Trends in the government expenditure on health therefore indicate a notable under-funding at all levels of the sector. * Way Forward (2000-2003): (i) Planned activities in year one shall be budgeted within existing resource envelope; (ii) New reform activities will continue to be funded over and above committed and tied funding by donors and government, partners and other donors; (iii) This year, most of the reform activities will be integrated into the Annual Development and Recurrent Expenditure books; (iv) The MOH will continue with the introduction of policy objectives and targets that will allow identification of scarce resources and the need for greater inputs over time; (v) MOH will continue to emphasize on the need to integrate vertical programs into sectoral and district plans and budgets so that most of the vertical program funds are reflected in government budget books in order to develop comprehensive health plans at all levels; (vi) The MOH will continue with its efforts to assist the regions and districts to build their capacity in planning, management and supervision; and (vii) MTEF will eventually show an integrated budget frame for all activities.
Discussion/Commentson P8 and P9
* There is a need to link the Education and Health MTEF document with the TAS document. * Performance indicators in education are worrying. One wonders why so much resources (money) have been put in to the education sector without making difference. There is a need of reconsidering the main problems facing the sector once again. * There is a need to study why primary education is under performing as compared to secondary education * There is poor management of the resources available in the education sector and not the issue of cutting down administration. It is noted that there is under spending of the money provided to the sector (by Swedish and other donors). * Problem of data inconsistencies between the cross sector MTEF and sector MTEFs figures. * Education fund is contributed indirectly and directly by levies. However, donors were asked to assist in developing this fund.
148 * Human resources need to be considered as a priority area. * There is a very long list of priorities in the education sector. Hence, translation of priorities and objectives into expenditure is not consistent with overall resource envelope. There is need of redefining the absolute priorities consistent with the resource envelope. * No development expenditure for development of teachers although it is a priority area in the education sector.
PlO:WATER SECTOR - MTEF
Presentation- by the PermanentSecretary Ministry of Water. * National Goal: The national goal focuses on universal access to safe water by the year 2025. This goal shall be fulfilled through proper, efficient exploitation of water resources for enhanced socio-economic development by providing clean, safe and adequate water and wastewaterdisposal system.
X Vision: The Ministry of Water aims to achieve sustainable water resources development and management which is responsive to the needs, interests and priorities of the Tanzania population including men and women, both in rural and urban areas. * Mission: The Mission of the Ministry of Water is to ensure water resources managementand developmentsare carried out in collaborationwith all stakeholders in an economic, environmentand social sustainablemanner. To fulfill this, the MOW will undertake the following: * Facilitation, co-ordination, monitoring and regulation provision of water and sanitation services to the public with a gender perspective. * Formulate a realistic, comprehensive,dynamic and gender sensitive water policy which takes into accountother related policies, * Develop competent sector professionalsof high integrity. * MediumTerm Objectives:The main focus for the water sector during FY01 - FY03 will be to rehabilitate and expand and expand water and sanitation facilities, and install efficient managementto bring the service level from 48.5% to 50% of the rural population and from 68% to 70% of the urban sector by year 2002/03. This will be achieved by fulfilling the following objectives. (i) Revision of the National Water Policy by year 2001, (ii) Facilitation of the sustainable provision of adequate, safe and clean water for different social groups in rural and urban areas between years 2000 and 2003: rural areas (from 48.5% to 55% of population coverage) and urban areas (from 68% to 75% of population coverage).(iii) Facilitationof the development of urban sewerage and drainage facilities forn 10% population coverage in 2000 to 25% population coverage by the year 2003. (iv) Improvement of water resources monitoring infrastructurefrom 20% in 2000 to 40% by the year 2003. (vi) Protection of water resources in order to control pollution levels from 30% in 2000 to 10% by year 2003. (vii) Developmentof professionalsof high integrity with gender capacities
149 for effective and efficient development and management of Water Sector from 60% in 2000 to 80% by the year 2003. * Medium Term Expenditure Strategies: (i) Facilitation, regulation, promotion of the participation of the private sector and composition of the Water Resources Management Policy, as a part of the National Water Policy. (ii) Construction and rehabilitation of Water Schemes in rural areas, starting with semi-arid areas/regions. (iii) Rehabilitation and expansion of water schemes in urban and peri-urban areas - regional and district headquarters. (iv) Rehabilitate and expand the schemes for sanitation services in urban areas to meet the demand. (v) Rehabilitation and expansion of hydrometric and meteorological network for the sake of reliable database for realistic sector planning. (vi) Establishment of environmental conservation and pollution control networks for water sources. (vii) Training of gender sensitive and competent professionals for the water sector, technicians, engineers and water resources scientists.
P11: ROAD SECTOR - MTEF
Presentation - by the Permanent Secretary Ministry of Works * The road network in Tanzania comprises approximately 85,000 km of roads, classified into three overall categories: trunk roads; regional roads including essential This year's MTEF of the Ministry of Works (MOW) differs from last year's by its inclusion of institutional changes in the road sector, specifically the creation of TANROADS. The new organization is a semi-autonomous executive agency dedicated to the management of the road network and execution of future maintenance and rehabilitation of the road network. * district and feeder roads; and district and feeder roads. - According to the MOW estimates, only 15% of the trunk and 10% of regional roads were in good condition prior to the commencement of IRP in 1990. Although progress has been achieved on the paved trunk roads, the following deficiencies have occurred: (i) While the number of km paved trunk road in good condition has increased, the overall percentage of trunk roads in good condition has decreased by 3% from 1997 to 1999. (ii) There has been a significant decrease in the number of km of trunk road in fair condition, with a corresponding increase of those in poor condition. (iii) The number of km of regional roads in good condition has been reduced from 18% in 1997 to 15% in 1999. (iv) There has been a 2% decrease in the number of km of regional roads in fair condition. (v) There has been a 5% increase in the number of km of regional roads in poor condition. This informnationpaints a rather negative picture of the achievements in the road sector. However, it is difficult to draw any conclusions as to the effectiveness of the road maintenance carried out. This is due to the consequences of El Nino weather phenomenon in FY98 and the mode of survey which relies on visual inspection, and thus which is prone to subjective interpretation. * Vision: The Tanzania development vision 2025 accords very high priority to investment in infrastructure. In particular, the development of the road network is
150 judged to be absolutely essential for promoting rural development.Consequently, the Government's mission and vision for the development of the sector is focused at improvingthe national road network. * Organization and Management of the Road Sector: In order to strengthen the organization and the management of the sector the governmentembarked on various steps: the FY99 transfer of the responsibility for maintenance and development of district roads to the Ministry of Regional Administration and Local Government (previously under the Prime Minister's Office); the adoption of a new institutional structure for the road sector through amendment of the Roads Toll Act in order to create a dedicated Road Fund to be managed by a Road Fund Board; and the establishment of a semi-autonomousroad agency TANROADSunder the Executive Agencies Act which will be responsible for road maintenance and development of the road network (previouslyunder the department of roads-MOW). * Review of the past expenditureperformance FY98 - FY00: * The level of expenditure by the Ministry of Works has fluctuated in both real and nominal terms. Comparison of actual releases with budgeted funds shows that actual released funds have in most cases been far less than the budgeted amounts. This has also been the case for both the development and recurrent budget. In FY00 however, recurrent costs surpassed the budget by 2% due to the fact that the development funds were dedicated to the maintenance of road infrastructure that was destroyed by El Nino. * In FY 98, actual non-salary expenditures were less than the budgeted amounts for most sub-votes. The ratio of actual PE allocations to budget was close to or above 100% except for sub-vote 103 (Policy) FY99 shows a different picture: overall, releases for non-salary expenditures (other charges) were higher than the budgeted amounts;on average, there was a shortfall in the total PE actual allocations to budget. There were many cases of over-expenditure in most sub-votes, the largest being in Sub-vote 102 (Finance and Accounts). The road sub-vote is still given the top priority in the Ministry of Works, receiving more than 90% of total resources. * Over the past three years, govermmentexpenditure in the roads sector has focused mainly on three main areas: emergency maintenance of roads such as those damaged by El-Nino rains during FY98; maintenance of the rehabilitated/upgraded road network; and implementationof priority rehabilitation and upgrading projects. For the period FY98 and FY99, the actual allocation of funds for road maintenance activities averaged about 57% and 89% of the road maintenance budget, respectively. As a proportion of the total maintenance and rehabilitation budget, actual expenditure on road maintenance averaged 37% and 44% respectively during the same period. The actual allocation of funds for road rehabilitation was 76% and 73% of the budget in FY98 and FY99. As a proportion of the total budget, funds allocated for rehabilitation averaged 63% and 56% during the same period. * The Medium Term Expenditure Framework: According to the revenue projections, there will be a significantly reduced resource envelope for the roads sector. This conclusion is based on the Tshs 22,443 million collected as Road Fund
151 revenue up to 3 1st January, 2000 and the identical growth rates as those used in the budget guidelines. For this reason, measures will have to be taken either to enhance revenue collection, or to readjust expenditureplans downward in accordance with the revenue shortfall. There are three options for implementing the above measures: controlling fuel smuggling and dumping; changing the tax structure on fuel products to raise the fuel levy; or limiting Road Fund resources to the maintenance of a strategic road network. The distribution of the Road Fund resources between maintenance and development is based on the proposed distribution set out in the Road Fund Act as well as that which is determinedby the government.According to the distribution: maintenance of Trunk and Regional Roads receives 63%; development of Trunk and Regional Roads 7%; maintenance of District, Rural, Feeder Roads 27%; and development of District, Rural Feeder Roads 3%. According to the budget guidelines for the period FYOI-FY03the roads sector will continue giving high priority to the following areas: road maintenance of upgraded network; implementation of priority rehabilitation and upgrading projects; and rehabilitation and maintenance of rural roads under local Government authoritiesjurisdiction under MRALG. Budget Strategy for the Road Sector: In order for Ministry of Works to achieve its strategic objectives in the road sector for the coming three years with the resources available, the following actions need to be taken: dedication of Road Fund to maintenance and development of the strategic network; conducting detailed annual road condition and traffic survey; putting in place measures to control fuel dumping and smuggling; assessmentof impact of past maintenanceefforts; and change the tax structure for petroleum products.
P12: JUSTICE & CONSTITUTIONAL AFFAIRS - MTEF
Presentation - by the Permanent Secretary Ministryof Justice and Constitutionalaffairs * An efficient, fair and transparent system of justice is crucial for securing and perpetuating an enabling environment for the peaceful and dynamic social and political development and prosperity of the nation. This is the main reason why the Government is committed to institute and execute the reformnand development of the legal and judicial service in the country. * Vision and Mission: The vision of the Ministry for the next three years is accessible and timely justice for all. In line with the overall vision the Mission of the Ministry is the development of social justice, equality and rule of law, constitutionalism, fundamental human rights, equality and social justice, equality of all before the law, ethical and fair conduct by law enforcement officers, accessibilityand affordability of legal services for all citizens, efficient and timely resolution of disputes, transparency and accountability. * Government Expenditure on MJCA: The MJCA has for a long been accorded a very low priority in the allocation of budgetary resources, the provision of the basic infrastructure and facilities, and in public esteem generally. Between the years FY98 and FY99, the share of MJCA in total governmentactual expenditure increased only
152 marginally from 1.08% to 1.2%. The share of the sector in government actual recurrent expenditure remained more or less constant at 1.3%, while that of development expenditure dropped drastically from 0.05% in FY98 to 0.01 in FY99. Within the Ministry, the budget expenditure is distributed into the three independent departments: the Judiciary Department, the Justice Department and the Law Reform Commission. The Judiciary department got the largest share, over 70% of the budget of the FY98 and FY99 fiscal years. The AGC department got less than 30% of the budget during the period while the Law Reform Commission share was less than 2% only. Most of the expenditure in the departments was directed into recurrent expenditure with only the AGC department having some small development expenditure. Like most other ministries, the MJCA has been receiving very little or no development funds. Only recently has the MJCA been included in the cluster of priorities, which include such other institutions as social services, infrastructure and agriculture. Most of the development fundingto the MJCA has been coming from the donor community. * Performance Indicators of the MJCA: These include efficiency, effectiveness, outcome indicator and the work process indicator. Available inforrnation suggests that efficiency is at a reasonable status. Effectiveness is still hindered by inadequate funds while the outcome indicator reveals the presence of corruption problems in the sector. The work process indicator suggests that justice administration in the country is hindered by a small budget especially from other charges (OC) allocated to the departments. CCharacteristics of the Tanzanian Legal Sector: In general, the Tanzanian legal sector is characterized by the following defects: managerial problems; low competence at the lower levels and morale of public sector legal personnel; inadequate number of professionally trained legal personnel in some specialized areas; constrained independence and low integrity of the judicial system; ignorance and poverty of the majority of the citizens; and excessively limited and poorly maintained work environmentfor all public institutionsin the legal sector. * Major Issues: Given the defects of the Tanzanian legal system, the main issues, which at present must be addressed are: (I) updating and harmonizing the legal and regulatory framework; (ii) strengtheningthe managementand co-ordination of legal sector institutions; (iii) enhancing the competence and motivation of personnel in public legal institutions; (v) improving pre-servicetraining and constantly upgrading legal skills of law officers in the public service to enable them cope up with new challenges in the market economy and a new liberal constitution regime; (vi) enhancing access to legal services for the poor and disadvantaged; (vii) developing and maintaining an enabling and conducive work environment for public legal officers. * In addition to addressing these problem, reforms in the legal sector must also aim at making the legal sector responsive to social, political, economic and technological transformation. * Major Problems: The major problems include: financial problem - the budgetary resource allocationto the MJCA has always been far too low to enable the ministry
153 perform its functions effectively; shortage of staff - this problem is very serious, especially in the AGC department; lack of training; low pay; poor state of office buildings, office equipment and office supplies; corruption; and shortage/poor library facilities. * Priorities: In order to realize the objectives of National Development Vision (Vision 2025) which aims at higher economic growth led mainly by the private sector, good govemance, rule of the law, peace, stability, equity and the fight against corruption, there is need to address the following priorities: (i) the fundamental priority is to increase the funding of the MJCA (ii) to improve the work environment (iii) to improve remuneration, payment to court assessors, allowances and other approved benefits; (iv) to develop and implement strong in-service training programs (v) recruitment of more staff; (vi) to procure vehicles for supervision (vii) to establish and update the legal database and information systems; (viii) to rehabilitate and furnish and equip court buildings and offices; (ix) to improve pre-service training in the country; (x) to educate the masses about various legal aspects; and (xi) to strengthen the commercial court. * Projection for Future Budgets: The projection is based on the assumption that the MJCA which is currently included in the PER - Poverty Eradication will together with social service sector such as education, health and water, be identified as priority sectors, eligible for additional resources to be available through the HIPC initiatives and the TAS arrangement. It is assumed that the government will recognize the expanded role of the public Ministry of Justice, and will be prepared to increase resource allocation to the MJCA. It is assumed that the budget (in nominal terms) will increase by 25 percent.
P13: AGRICULTURE SECTOR - MTEF
Presentation - by the Permanent Secretary Ministry of Agriculture & Cooperatives * The Tanzanian economy depends on agriculture and therefore the sector's performance determines how the overall economy performs. The sector contributes about 50% of the GDP, providing about 75% of Tanzania's foreign exchange earnings. The sector also provides employment to about 80% of the population the majority of whom live in the rural areas. * The General Performance Trend of the Agricultural Sector: The performance of the sector has not been impressive in recent years in its role as an engine of growth, reduction of poverty and source of food security. The agricultural GDP has only grown at an average rate of 3.3 percent per annum since 1985. * Vision: On the basis of the National Vision 2025 for Food and Agriculture, the Ministry of Agriculture and Cooperatives (MAC), acting as a catalyst for agricultural and cooperative development, aspires to be: action oriented, professionally staffed and managed, dynamic, innovative and efficient, and provider of services that are demand driven, cost effective and environmnentallyfriendly.
154 * Mission: The mission of MAC is thus to formulate sound policies, provide sound regulatoryframeworks and support services as well as technical advice to farners and to the private sector for a sustainable growth and poverty reduction. * Objectives: The MAC objectives in respect to agricultural development are as follows: (i) to review and formulate sound agricultural policies in order to ensure the right direction towards developing the sector; (ii) to provide support services to farmers and other institutionsin order to improve technological know how which will facilitate increased agricultural production, productivity and quality; (iii) to provide the regulatory framework and services in order to sustain agricultural industrial growth; (iv) to provide technical services in agricultural farming in order to promote effective use of resources for sustainable agricultural development; (v) to develop human resources within the sector in order to increase the productivity of labor and to improve ability, awareness and morale; (vi) to provide assistance to co-operative development particularly in areas of human resource development and institutional capacity building without effect on their independence; and (vii) to provide the enabling environment for private sector participation in agricultural production, processing and marketing. * Policies: To achieve the stated goals and objectives, instruments employed include the following strategies: (i) to improve the agricultural extension and advisory services; (ii) to raise the efficiency and reduce the cost of production through use of appropriate technology; (iii) to regulate and control quality and standards of agriculturaloutputs and inputs; (iv) to coordinateagriculture and livestock research to generate appropriate technology; (v) to improve supervision and inspection of cooperatives (unions and societies); (vi) to institute cost sharing in research and training activities; (vii) to facilitate the cooperative movement through intensive and extensive member education on obligations and rights; and (viii) to train required manpowerfor their efficient and effective delivery of agriculturalsupport services. * General Budgetary Performance: The share of MAC in the total governrment expenditure(both recurrent, development, and donor financed) has declined since the early 1990s. In 1990/91, MAC received about 5.1% of the expenditure. The share in 1991/92and FY96 fluctuated in 3 and 4 percent. Between FY98, FY99 and FY00, the share was 2.1, 4.1 and 4.3 respectively. * Financial Resources to the Agricultural Sector: The agricultural sector is financed by the government,development partners (bilateraland multilateral),NGOs, retention schemes and contribution from crop commodity industries. The Ministry has launched a number of initiatives so as to increase funding in the agricultural sector particularlyin areas of research and inputs. * Achievements against Objectives and Targets: (i) a new organizational structure based on the core functions is in place and functioning; (ii) rationalizationof MAC and decentralization of extension services to the councils; (iii) privatization of parastatals under MAC for increased production is on-going; (iv) private sector development; (v) review and harmonization of the several acts and regulations has been completed; (vi) participating in TAS and HIPC initiatives; (vii) taking part in
155 preparing the Poverty Reduction Strategy Paper (PRSP); and (viii) several other programs/projectsare under implementation. * Medium Term Expenditure Framework (FY01 - FY03): The medium term objectives for the sector based on the MTEF planning model are as follows: (i) to ensure basic food security for the nation and to improve national standards of nutrition and living in the rural areas through increased production growth rates of at least 4% and 4% and 5% per annum for food crops and livestock products respectively; (ii) to promote and encourage the production and export of agricultural and livestock produce to increase foreign exchange earnings and the supply of crops and livestock raw materials, their by-productsand residues to the local industries;(iii) to develop human resources within the sector and introducenew technologiesin order to increase the productivity of labor and land; (iv) to promote integrated and sustainable use and management of natural resources such as land, soil and water vegetation in order to conserve the environment;(v) to provide support services to the agricultural sector, which cannot be provided efficientlyby the private sector. Policies and Strategies: * The sector's goal and policy objectives as contained in the agriculturaland livestock policy and the Co-operative development policy of 1997 remain the pillars in redefining the roles of Ministry and the emergingprivate sector in the development of the agricultural sector in the country. The policy direction is based on economic reforms to increase the role for private sector participation in agriculture and the disengagement of the government form commercial activities and direct production function in the agriculture sector. * Currently, there are two categories of agricultural sector strategies. The strategies to implement the sector policies; and the strategies to implement the MAC Medium Term Strategic Plan 1999-2004. * Priorities: The following are priority areas and expenditure items for the MAC where public resources need to be invested: (i) strengthening policy forrnulation, analysis, review and monitoring of agriculture sector development; (ii) strengthen agricultural data on information system; (iii) the rehabilitation of research, extension and training facilities; (iv)enhance institutional reforms and capacity building in MAC; (v) complete and consolidate the on-going agricultural development projects; and (vi) support sustainableagricultural development activities. * Conclusion: The agriculture sector operates as an integral part of a large economic system. Hence a sound performance of the agricultural sector depends on the efficiency and effectiveness of the other sectors. The other sectors in turn require a strong agricultural sector for achieving social objectives. Thus, the linkages are very critical.
P14: LAND SECTOR - MTEF
Presentation - by the Permanent SecretaryMinistry of Lands & Human Settlement
156 * Land is the ultimate resource, for without it, life on earth, as well as economic development cannot be sustained. Economic activities directly related to land resource utilization account for over 80% of Tanzania's GDP. The sector also provides more than 85% of national employment. Unfortunately, the majority of people in Tanzania hold land under customary or deemed rights of occupancy, whereby the security of tenure was until recently, not secured compared to the granted right of occupancy which was the preserve of the few. Rapid population increase compounded the problem of security of land tenure in urban areas and compounded conflicts in land use. Urban population now is estimated to account for 30% of the total populationof Tanzania. * Problems: Among the many problems of land management experienced in rapidly urbanizing Tanzania are the following: shortage of planned land; massive growth of unplanned areas; lack of security of tenure for the majority of urban dwellers; problems of land administrationto the extent of not knowing what is going on in the market; wide breach of land use regulations by developers and the inabilityof public authorities to enforce regulations, inadequate and uncoordinated land information; and emergence of parallel, unofficial and poorly understood and documented lands delivery system. - Ministerial Vision: To achieve efficient delivery of high quality land development services and a multipurpose cadastral information system for sustainable economic development and growth. * Challenges:Poor land administrationand management;poor record keeping; demand for plots being greater than supply; delay in the issuance and registration of titles; inability to provide serviced land; unmanagedurban population growth in relation to town planning and in the provision of housing services; and slow speed in the provision of housing servicesin the rural areas. * Mission: The main mission of the Ministry of Lands and Human Settlements Development can thus be summarized as follows: to administer and manage land related issues (ownership, value, use etc.), to provide effective and efficient land delivery services; to administerand regulate cadastral surveys, hydrographic surveys, and mapping activities in the country; and to create enabling environment and institutionalframework to support the human settlementsdevelopment process. * Objectives: To facilitate realization of the mission of the Ministry of Lands and Human Settlements Development, the budget plan focuses over a period of three years with the following key set of objectives: excellency in service delivery; increasing revenue collection; and creation of an effective institutional and financial framework for the developmentof sustainablesettlements. * Strategies: To publicize the Land Act No. 4 of 1999 and the Village Land Act No. 5 of 1999 and undertake special training; to have an effective land administration and management system; to establish an integrated and automated land information system; to establish a land register and data bank system; to improve the land delivery system; to issue and register titles promptly; to ensure that town planning is ahead of urban growth; to ensure that land use plans are adhered to; to embark on partnership
157 with urban dwellers to improve the management of towns and cities; to promote research and development in technologies for low cost housing construction; to promote the establishment of building finance societies; and to create a corruption free working environment. * Review of FY00 Performance:The operational objectives are: ensuring excellency in service delivery; promoting appropriate use of land resources so as to increase revenue by 31%; and the creation of an effective institutional and financial framework for the development of sustainable settlements. On all three fronts there have been tremendous achievements.The quality of land Management and service delivery has given hope for excellency. Revenue collection by end of February 2000 had increased by 12% compared to the same period of FY99 or had attained 75% of the FY00 estimated level. * Budget Estimates for year 2000101:The ministry's budget estimates are based on the objectives, targets and related activities covering the period of three years (2000/1 to 2002/3). Proposed financial requirements are at Tshs. 936 billion over the next ten years. 10% of this amount is to be contributed by Government and the balance of 90% by donors and the private sector. According to the proposal, government needs to spend Tshs. 13.7 billion in the year 2001/02 and Tshs. 13.27 billion in 2002/03. other charges (OC), in addition to the payment of personnel emoluments (PE). * The Ministry realizes the constrains against obtaining the proposed expenditure allocations and therefore focuses on narrower but more realistic targets. Donor and private sector support to back up government financial projections and proposals is extremely vital. Such focusing has taken account of the following priority sequence: (i) components that are pre-conditionsfor operationalizationof the new land laws; (ii) projects that facilitate basic planning across sectors; and (iii) projects that facilitate poverty reduction and promote sound economic management. Implementation of some of the componentshas already started.
Discussion/Comments on P10, P11, P12, P13 and P14 * "Development means roads". If you can not connect the country you can not reduce poverty, improve social services, and you can not develop the economy. It is worrying to note that allocation for road maintenance is minimal and even the allocation to the sector as the whole does not reflect its priority. Rural roads are not given weight in the Roads MTEF. A paper on the rural roads is missing. There is a need of having a specific paper for the rural roads in the PER workshop. * Tanzania has very fertile land but imports food. The major problem is that of policy. There is a need to link agriculture with land. investment in agriculture does not receive the same weight as industry. There is a need to make leases on land irrevocable and change the relevant laws to facilitate the use of land as capital. It was also noted that the process of acquiring takes too long (3-4 years). This discourages both local and foreign investmentin high scale agriculture. * Budget allocation to the agriculture sector should be proportionalto its contribution to the economy. Removal of VAT on agricultural machinery is necessary for the
158 development of the sector. Also, free movement of food from one region to another, and from one country to another is importantfor the developmentof the sector. * Private sector involvement in the water sector should receive more weight. For the city of Dar es Salaam the provision of water could be subdividedto different private providers. * The Government is fighting corruption, but one has to note that fighting corruption needs a well functioningjudiciary system. Also a well function judiciary system will encourage private investment in different areas of the economy; especially foreign direct investment. There is thus a need of paying more attention to the judiciary system in terms of resource allocation so that it can play the role it is supposed to play. * All our budgets are fire-fighting brigades waiting for fire to erupt. A more integrated budget where everybody gets a fair share of the cake is needed. There is a need to fit the shares to the three arms of the Government. Parliamentaryallocations should be respected. We need to refocus future budgets to give more weight to development/productionaspects and not only to consumption.For priority sectors, we better look at the unit cost and not the total amount.
Summary of Major Emerging Issues
HIV/AIDS epidemic: The HIV/AIDs epidemic is a serious multi-sectoral development problem in Tanzania. Fighting it requires that (i) the top political leadership puts HIV/AIDS on top of the national development agenda; (ii) top political leaders must take the lead by speaking about the severity of the problem and plead to the people, especially the youths, to change their sexual behavior; (iii) articulate a cohesive strategy on how to fight the epidemic including a medium term costing of priority actions to be taken from central to community level; (iv) establish a mechanism for cross-sectoral coordination; and (v) full scale mobilization of resources (local and foreign) just like in a liberation war situation.
Translate macro-stability into improved welfare and reduced poverty: Tanzania has now largely achieved macroeconomic stability. However, there is a tension between good macroeconomic performance and translating this into a real improvement of welfare of the people at the micro level. The issue then is what it takes to move forward: (i) it is terribly important to maintain and sustain stable macroeconomic fundamentals enhanced by additional resource availability from HIPC and other debt relief initiatives; (ii) more investment (domestic and foreign) directed to agriculture, rural infrastructure and social service provision is key and a more effective development program is urgently required; and (iii) the private sector should be encouragedand enabled to take the lead.
Need to re-examine the use of the cash budget system. The cash budget system has succeeded in reducing budget excesses, but this has been done at the expense of diminishing the authorizing role of the budget as approved by the parliament. In addition, the cash budget has severely reduced the service delivery capacity of the Government by making monthly resource availability unpredictable. There is thus a need
159 to set the limit of deviations of allocations through the cash budget vis-a-vis the approved allocations.
Strengthening Accountability: The issue of accountability needs a further push to ensure that resources are better managed and accounted for. This entails increased follow-ups sanctions and prosecutions of those found to be involved in embezzlement and losses of public resources - something that will give donors confidence to channel their resources through budget.
Improve Governance: Improvement in accountability calls good governance, which recognizes the role of opposition at the political front, and the role of other stakeholders on the country. Good governance also calls for recognition of the rule of law, and shuns political patronage and corrupt practices.
Improve Revenue Collection and Tax Equity: Fiscal deficits have declined but mainly due to cuts in government expenditure rather than increases in revenue collection. There is need to increase revenue mobilization and to raise the tax effort in the long-run. Improvements in tax administration and further streamlining of the tax system should be a priority so as to broaden the tax base while at the same time reducing the burden on tax payers. Random raising of fees by government agencies is a concern that needs to be addressed since the practice may lead to tax evasion and discouragement of investment, especially in productive sectors.
Enhance Transparency of the Budgeting Process: The nature and process of allocation of resources to various sectors is not transparent. Some priority sectors are allocated more than they require when allocation to others are stagnant or increase marginally - e.g. allocations to the road and agriculture sectors.
Minimize Earmarking of Revenue: Earmarking of revenue creates problems in terms of coordination and prioritization and should be minimized.
Improve Integration of Donor Resources in the Development Budget: Poor integration of donor resources into the Govt. budget is worrisome to the extent that it undermines the accountability and the credibility of the development budget. Donors need to ensure that their flows are captured in the budget. Government on her part needs to intensi'fy the fight against corruption and increase further accountability and transparency.
Efficient Implementation of the Public Sector Reform Program is Crucial: There is concern that civil service reforns are not encompassing enough and too slow. In particular, staff reductions are too limited to create sufficient savings for effective salary increases without crowding out other expenditures. PSRP needs to be well integrated with other reforms and should pay more attention to the gender dimension and create equal opportunities for women to participate and accede to higher levels of the civil service.
Fiscal Deficit Policy: There is a need to consider whether a balanced budget (or surplus budget) is beneficial to the economy: Given the level of expenditure that is currently
160 supportedby the economy and the low level of domestic demand, there may be a need for a small deficit. However, there are worrying issues - i.e. , whether foreign reserves can support this deficit if resources from external sources (donors) are not forthcomingin the magnitudes expected; and whether contingent allocation will not generate further surpluses.
Move from project to budget support: Improvements in financial management and accountabilityshould enable donors to employ increasingly aid modalities such as basket funding, sector development programs, and general budget support and limit the number of discrete projects.
Prioritization is still a problem in some sectors, i.e., the identification of absolute or key priorities that will make a difference in terms of improving perfornance indicators. The translation of objectives and priorities into expenditures in consistency with the overall resource envelope is still a problem in some sectors.
Broaden Participation in PER Macro and Sectoral Working Groups: Even though the private sector is represented in PER Working Group, its participation needs to be extended into the Macro-Working group that is responsible for drawing the budget frame and the underlying assumptions. Enhanced participation in sector working groups by interestedstakeholders is desirable.
Support Private Sector Development for Economic Growth: Private sector development requires Government attention and support through the creation of an enabling environment for the participation of the private sector in the economy, including appropriate regulation.
Private sector contributions in the social sectors need to be given more attention.
Enhance Funding for Road Maintenance: Resources from the Road Fund are greatly insufficient for adequate road maintenance. It is thus imperative to consider options for providing additional resources for road maintenance, e.g., through the provision of funds from the general budget or through a shift of donor funds from road development to road maintenance.
No improvement in Education: Despite the fact that a lot of resources have been injected into education there is no noticeable improvement. This highlights the point that with enhanced resource availability from various sources for the priority sectors, there is also an urgent need to improve monitoring of service delivery to ensure that additional resources are used to improve outcomes.
Link sector MTEFs with TAS: There is need to link the sectoral MTEFs with the TAS document and other initiatives.
161 List of Participants
No. I NAME | TITLE/OFFICE A. GOVERNMENT 1. Mr. Peter Ngumbullu P. Secretary - Ministry of Finance 2. Mr. Peter B. Barie Permanent Secretary - Min. of AgricultureCulture 3. Ms. Janet Bitegeko Ministry of Agriculture& Cooperatives 4. Mr. Bedason A. Shallanda Ministry of Finance 5. Mr. Gray Mgonja Ministry of Finance 6. Mr. Jerome J. Buretta Ministry of Finance 7. Mr. Peniel Lvimo Ministry of Finance 8. Mr. Prosper J. Mbena Ministry of Finance 9. Ms. Elipina Mlaki Ministry of Finance JO. Mr. Likolo Ndalamei Ministry of Finance, Zambia 11. Mr. Daud M. Msangi Ministry of Finance 12. Mr. E. Mwaipaja Ministry of Finanice 13. Mr. H.S. Makundi Ministry of MNRT 14. Mr. Frans Ronsholt Ministry of Finance 15. Mr. Raphael Mollel Permanent Secretary,Prime Minister's Office 16. Dr. Enos S. Bukuku Prime Minister's Office 17. Mr. A. R. M. S. Rajab Permanent Secretary- Vice President's Office 18. Prof. Hamphrey P. B. Moshi Ministry of Finance 19. Ms. Joyce Mapunjo Ag. Conmmissioner-Treasunr 20, Ms. Salome I. Sijaona Permanent Secretary - MRALG 21. Mr. Alfred L. P. Kabagire MRALG 22. Mr. Richard Mkumbo Ministry of Health 23. Ms. Mariam J. Mwaffisi Ministry of Health 24. Mr. Laston T. Msongole Planning Comnmssion 25. Ms. Mwantumu Malale Permanent Secretary-Community Development,Women & Children 26. Mr. Ngeli Kilangwa Prime Minister's Office 27. Mr. Basil Kaunga Prime Minister's Office 28. Mr. Iziraiah Mukaruka Vice President's Office 29. Mr. R.A. Moshy Ag. Permanent Secretary,Min. Energy & Minerals 30. Mr. S. Odunga Permanent Secretarv- Ministry of Works 31. Mr. Gilbert J. Kinvero Ministry of Works 32. Mr. V. Katabwa Ministrv of Works 33. Mr. S.H. Mwiru Ministrv of ScienceTechnology & Higher Education 34. Ms. Catherine Joseph Ministry of Agriculture& Cooperatives 35. Mr. E. E. Maimu Civil Service Departnent 36. Mr. George D. Yambesi Civil Service Department 37. Mr. J Rugumyamheto Civil Service Department 38. Mr. William Kleiman Civil Service Department 39. Mr. Amantius Msole Tanzania Revenue Authority 40. Mr. M.G. Kamugisha Tanzania Revenue Authority 41. Mr. B. Luanda Judiciary 42. Mr. M. Abisai Judiciary 43. Mr. B.A. Mahiza Planning Commission 44. Mr. Aloysius G.T. Nyenza Ministry of Water 45. Mr. G. Nilsen MinistryWorks 46. Mr. Ahmad Mbegu Ministry of ScienceTech & Higher Education 47. Mr. A. S. Ndeki Commissionerfor Education - MOEC
162 48. Mr. D. M. S. Mmari Permanent Secretary- Ministry of Lands 49. Mr. G. Saelie Ministry of Water 50. Mrs. D. R. Makani Ministry of Justice& ConstitutionalAffairs 51. Mr. John C. Millinga Ministry of Justice& ConstitutionalAffairs 52. Mr. Kulwa S. Massaba Ministry of Justice& ConstitutionalAffairs 53. Mr. Seith J. Makundi Ministry of Lands 54. Mr. Benard S. Mchomvu Permanent Secretary,Home Affairs 55. Mr. F.E. Mbonde MRALG 56. Mr. A. N. M Idama Ministry of Education& Culture
B. PARASTATAL/NGOs 57. Mrs. C. Kiliaki Bank of Tanzania 58. Mr. Charles M. Chenza Bank of Tanzania 59. Mr. Ali A. Mfuruki hifotech ComputersLtd. 60. Dr. Brian Cooksey TADGREG 61. Mr. Arnold B. S, Kilewo Private Sector Foundation 62. Dr. Servacius B. Likwelile REPOA 63. Dr. Haji Semboja ESRF 64. Mr. Malik Jaffer Aga Khan Foundation 65. Mr. A.E. Musiba TCCIA 66. Mr. I.S. Hatibu Bakwata 67. Ms. Joan A. Nkya Christian Social Services Comission 68. Mr. N. Gotecha CTJ 69. Mr. Salum Shamte Tanzania Chamberof Agriculture& Livestock 70. Prof. Samuel M. Wangwe Economic & Social ResearchFoundation 64. Mr. Dunstan Mrutu Tanzania Private Sector Foundation
C. MEMBERS OF PARLIAMENT 71. Hon. Dr. Omari S. Kizango Member of Parliament 72. Hon. Makidara Mosi Member of Parliament 73. Hon. Y.K. Mahmoud Member of Parliament 74. Hon. W. H. Shellukindo Member of Parliament 75. Hon. J.W. Chevo Member of Parliament 76. Hon. Gerald J. Ngotolainyo Member of Parliament 77. Hon. J.C. Semwaiko Member of Parliament 78. Hon. Aripa Marealle Member of Parliament 79. Ms. Phoebe 0. Mmbaga Parliament of Tanzania 74. Hon. Philip A. Magani Member of Parliament
D. DONORS 80. Ms. Riikka Laatu Counsellor - Embassyof Finland 81. Ritra Jolkkonen Ambassador - Embassy of Finland 82. Mr. Patrick E. Doaaghty ILO 83. Mr. Van Banimng Netherlands Embassy 84. Mr. William Mitchelle Canadian High Commission 85. Ms. Rose A. Mushi CIDA 86. Ms. Ame Olsen Norwegian Embassy 87. Mr. Peter Beck Christiansen European Commission 88. Mr. Alex Baum EU Delegation 89. Ms.Valerie Leach UNDAF Adviser 90. Mr. Udo Etukudo UNDP 91. Ms. Dorothy Nsherenguzi SDC 92. Ms. Theresia Genda SDC
163 93. Mr. Olivier Burki SDC 94. Mr. Ephrem Kirenga SDC 95. Mr. AntoineHeudre Embassy of France 96. Mr. Sten Rylander Swedish Embassy - SIDA 97. Ms. Karsten Lund Jorgensen Danish Embassy 98. Mr. Oddvarjokobsen UNDP 99. Mr. Alessandro Faichetto Embassy of Italy 100. Leutenegger Jean-Jacques Embassy of Switzerland 101. Mr. Teferi Seyoum UNFPA 102. Mr. Frans van Rijn Embassy of Netherlands 103. Mr. Zoya Potapora Russian Embassy 104. Mr. Richard K. Ndaskoi SDC 105. Mr. Mitsuaki Furukawa JICA 106. Mr. Jackson Biswaro JICA 107. Dr. Rolf Drescher Gernan Embassy 108. Dr. ChristineMcNab Swedish Embassy 109. Mr. GilbertKajuna USAID 110. Mr. Ronan Corvin Embassy Ireland 111. Mr. Masashi Kono Embassy of Japan 112. Mr. T. Lindqvist Danish Embassy 113. Mr. Gunnar Foreland Norway Embassy 114. Mr. Heuts Philip Belgian Embassy 115. Mr. Nicklaus Zingg Counsellor (Dev) Embassv of Switzerland 116. Mr. M. Stein Olson USAID 117. Mr. Stafford Baker USAID - Ag. Director 118. Ms. CharlottaNorrby Economist -Embassy of Sweden 119. Mr. Peter L. Hansen Ambassador - Denmark 120. Ms. Rebekka van Roemburg Royal Netherlands of Embassy 121. Ms. Amina A. Ali Ireland Aid 122. Ms. Fiona Shera DFID 123. Mr. John P. Snell Deputy Representative.FAO 124. Dr. Jorgen Levin Gothemburg University, Sweden 125. Mr. Steven Lee Economic Adviser - DFID 126. Mr. G.G. Johnson IMF 127. Mr. H. Hirschhofer IMF 128. Mr, Tsidi M. Tsikata IMF 129. Mr. Peter Mwanakatwe African Development Bank 130. Mr. James Adams World Bank 131. Prof. Benno Ndulu World Bank 132. Dr. BenTarimo World Bank 133. Dr. Philip Mpango World Bank 134. Dr. Emmanuel Malangalila World Bank 135. Dr. Rest Lasway World Bank 136. Mr. EmrmnanuelMungunasi World Bank 137. Mr. Vedasto Rwechungura World Bank 138. Mr. Donald Hamilton World Bank 139. Mr. George M. Kabelwa World Bank 140. Dr. Hamisi H. Mwinvimvua World Bank 141. Dr. Robert Utz World Bank 142. Dr. Mushiba Nyamazana World Bank - Zambia
E. ACADEMIC 143. Prof. Anselm Lwoga SokoimeUniversity of Agriculture- Morogoro
164 144. Prof. L. Luhanga Vice Chancellor- Universityof Dares Salaam 145. Prof. G. Mmari Vice Chancellor- Open University of Tanzania 146. Prof. Nehemiah E. Osoro Universitv of Dar es Salaam 147. Prof. RobertMabele University of Dar es Salaam (ERB) 148. Mr. P. Mwanakatwe African Development Bank 149. Mr. David Bevan Oxford University
F. MEDIA 150. Mr. Ongeni John Habari 151. Ms. Koiya Kibanga DTV 152. Mr. ChristopherMfinanga DTV 153. Mr. Fumbuka Ng'wanakilala The Guardian 154. Mr. Gervas J.Luganda The Democrat 155. Mr. Saidi Msonda The guardian 156. Mr. Nicholaus Mbaga TVT 157. Mr. Masoud Nassor Masoud Business Times 158. Mr. Abduel Elinaza Busines Times 159. Mr. A.O. Kombo CEN.TV 160. Mr. Freddy Maro Daily News 161. Ms. Agatha Mshanga TVT 162. Mr. Assah Mwambene Daily News 163. Mr. Hussein Iddi CTN 164. Mr. Kuringe Mongi CTN 165. Mr. Perege Gumbo FinancialTimes/Guardian 166. Mr. Safina Mohamed Maelezo 167. Mr. Willy Kitima Business Times 168. Mr. David Luninze BBC World Service 169. Mr. B. Lugwishe The African 170. Mr. Joseph Bendu The Democrat 171. Ms. Premy Kibanga The East African
165 ANNEX 2: DATA
166 Table 1: TanzaniaKey Indicators
S/N Indicator Unit 1990 1991 1992 1993 1994 1995 1996 1997 199 1999 2000* I Populafionl2 iions 24.6 25.3 26.0 26.7 27.5 28.3 29.1 30.0 30.9 31.9 33.0 olw Mainland/2 Millions 23.9 24.6 25.3 265. 26.7 27.5 28.3 29.1 30,0 30.9 31.9 2 GOP GrowVtZ |6 6.2 2.8 1.8 0a1 1.4 3.6 4.2 3.3 4.0 4.5 5.0 3 Inflationl2 efo 35.8 28.7 21.8 24-0 33.5 27.4 21.0 16,1 12.9 7.8 6.0 4 Exchange Rate/2 TZSIUS$ 197.6 222.5 301.9 414.5 509.6 574.8 580.0 6248 6654.7 720.0 800.0 5l Exportsl2 Mul.USS 336.9 342.9 410.6 437.0 519.4 682.9 763.8 752.0 58.5 540.9 650.0 $lmports/2 Mit. US$ 1170.5 1219.1 1300.6 1282.8 1309.3 1340.5 1212.6 1148.0 1366.0 1418.6 1350.0 7 Current Account Bslance12 Mii. US$ -558.9 -736.1 -800.1 -1022.0 -711.0 -646.4 -461.3 -555.1 -946.6 -881.9 -784.8 8 Balance of Paymentsl2 Mil. US$ -200.0 -260.0 -228.1 -634.4 -401.3 -386.0 -245.0 -556.0 -615.7 -411.3 -274.8 9 Average Deposit RateJ2 96 26.0 26.0 26.0 24.0 25.0 21.0 15.7 10.0 9.0 8.0 9.0 10 Average Lending Rate/2 % 26.0 26.0 30.0 30.0 31.5 35.5 33.5 26.5 24.0 20.0 20,0 t 1 Growth in Money Supply (M3)J2 % 43.3 26.9 42.7 39.3 35.5 32.2 8.7 13.3 10.8 8.0 12.0 12 Foreign Reserves/2 Mil. US$ 238.9 301.2 458.5 271.9 431.8 288.s 500.6 636.7 689.0 690.0 700.0 13 External Debt/2 Bil. US$11 5,6 6.0 5.9 7.5 8.0 8.4 7.6 8.0 7.8 7.5 7.3 14 Total Domestic Revenue/l Bilt TZS 94.7 137.1 173.6 164.1 242.4 331.2 448.4 572.0 627.5 689.3 810.3 15 Tax Revenue/i oil. TZS 81.5 118.3 153.4 146.4 220.4 299.9 383.7 505.4 586.2 616.3 728.7 16 Non-Tax Revenue/I Oil. TZS 13.2 18.8 20.2 17.7 22.1 31.3 64.6 66.7 41.3 73.0 81.6 17. Total Expenditurell Bit. TZS 127.9 201.2 223.8 337.9 410.5 453.4 500,1 730.9 856.2 927.7 1180.7 18 Recurrent Expenditurell Bil. TZS 111.6 163.0 191 2 273.2 335.8 386.6 470.0 606.3 669.6 791.2 933.8 19 Development Expenditurell Bii. TZS 15.3 36.2 32.5 64.7 74.7 66.8 30.1 124.0 196.6 136.5 246.9 20 Grants/1 Bil. TZS 27.7 22.9 32.8 58.3 76.9 67.3 46.9 115,4 119.4 169.9 235.6 21 Fiscal Balancell Bil. TZS -33.2 -64.1 -50.2 -173.18 -168.1 -122.2 -51.7 -1588 -228.7 -238.4 -70.4 22 Foreign Direct Investmerit2 Mu.,US$ 0.0 0.0 12.0 20.0 50. 150.9 148.6 154.6 172.2 183.8 196. 23 Toursrm Earnings/2 Mii. US$ 65.0 94.7 120.0 146.8 192.1 258.1 322.0 392.4 570.0 733.3 S43.4 24 Gross Domestic Savingsl2 Oii. TZS 78 6 114.1 131.3 46.7 -3.6 75.4 271,0 328.2 360.0 390.0 422.6 25 Gross Investments/2 Bit. TZS 214.0 282.4 369.4 429.6 561.8 591,9 620.6 692.4 827.1 880.0 936.3 26 p er cApita lncome/2 1USS 160.9 180 7 167.0 149.2 156.2 176.9 210.3 235.6 257.0 270.0 283.6
Notes: /1 Fiscal Year is used, and it ends on June 30th of the mentionedyear. 12 Calendar year is used, and it ends on December 3l th, * If calendar year, data are projections and if fiscal year, data are estimates. Average Depositrates: Annual average rate on six months deposit Average Lending rates: Annual average rate on short term loans Exports: Merchandise Exports Imports: MerchandiseImports Gross Investments:Gross fixed capital formation
Sources; The Planning Commission,The United Republic of Tanzania, EconomicSurvey, various issues. Bureau of Statistics, PlanningCorrmission, National Accounts of Tanzania,various issues. The Bank of Tanzania,Economic Bulletin, various issues. The Bank of Tanzania, Economicand Operatians Report, variou5 issues
167 Table 2: Balance of Payments (in mAit6ios01 US dol1as).
Items _1531 1900 19921 1393 iss_' 193Os _ 1939 19"7 1996 19ss*
Current Account -559.0 7361. -7C81 -10220 .7 111 44,4 .413 -6Sl 4416 4tC2.0|
Goods -778.5 5 .919.t -35.6,6 -790.0 8575? ,448.9 -395.4 .77. -877.7 Exports (lob) 407.. 362.3 397.0 439.3 519.4 682.9 763.8 752.6 5'8.5 5409 Imports ) 1186.3 1227.6l 1316.6 1274.9 1309.3 1340.5 1212.6 1148. 1366.0 1418.6
Serves -157,2 .157.5 .169.1 .389.9 -85.1 -216.9 -278.8 .306.4 -452.6 -225 Receipts 130.6 142.1 167.5 310t. 418.2 52. 9 537.1 493.8 537.0 640.9 Payments 287.8 299.6 336.6 700.7 503.3 799. 15.9 800.2 989.6 865
Income -185.0 .184.2 -225 4 -147 S 1223.5 110.3 -72.0 .122.8 -124.2 -75.2 Receipts 5.9 79 8.1 21.4 30.9 31.t 41.5 44.9 48.3 56.0 Payrrents 190.9 192.1 233.5 169.0 153,4 142.1 113.5 167.7 172.5 131.2
Currer.t rarrslers 561.1 4709 606.0 351.1 266.5 338 4 338.4 269.6 4077 315. Infows 592.7 503.5 641.0 381.1 311.5 370.7 370.7 337.2 448.1 439.2 Government 538.4 480.3 506.2 370.9 215.0 236.0 2360 238.8 279.5 305.2 Private 54.3 23.2 134.8 10.2 96.5 134.7 134.7 99 4 100.6 134.0 Outdows 31.0 32.6 35.0 30.0 25.0 32.3 32.3 67.7 40.4 123.3
Cap8talAccount 327.2 353.1 298.2 200.6 262.6 191.0 151.0 166.9 276.0 303.1
Captaltransfers 3272 353.1 2982 200.6 262.6 191.0 191.0 166.0 276.0 303.1 nflows 327.2 353 1 296.2 200.6 2626 19t.0 191.0 166.9 276.0 3031 Ouclows 0.0 0 0 0.0 0.0 a.0 0. 0.0 0.0 0.0 0.0 Acqusitonldsposa)sof nvn-produced 0.0 0 C 0.0 0 0 0.0 0.0 0.0 0.0 0.0 0.0 non-ftancbil asseG
Financtal Account 42. 117.9 107.3 57.0 -106.8 13S.5 0.3 -136.4 57.0 225.2
Dorectinveslment 0C 00 12.0 20C 50.0 150.0 1405 157.8 172.2 1834 Abroad 0o 0 0 0.o 0.0 0 .0 0.0 0 0.0 0 In Tanzania 0.0 CQ 12.0 200 50.0 150.0 140.5 157.6 172.2 1836
Per1otn invesrtnt 0.0 0 0.0 0 0 0.0 00 0 0 0.0 0.0 0 0
Otherinvestmrent 42.3 1179 953 37.0 56.9 -10.5 -148.2 -294.2 -75.2 41.8 tnf15hovetranial resources 236.9 21. 331.9 615.| 434.5 437.4 316.6 4168 438.0 479.9 Disbursement of Govemment loans 2235 260.5 267.5 372.4 274.2 244 1 224.9 269.8 239.2 3196 Tre tIcrttdAn otelf nanciallovws 13.4 10.5 64.4 1432 122.1 1419 71.0 119.4 134.5 78.4 Disbursementof loans to coer sectors 0 0.0 0.0 99 8 36.2 S14 1t6.7 23.0 63.9 70.5 Outfow offinancil resources 194.0 153 1 236.6 578.4 591.3 447. 466.7 711.0 513.2 438.2 Re pymenLolgovemmentloans 16.8 1457 2366 498.1 491.3 272.5 361.| 757.6 593.1 4470 Tradecreditandotherfinancial flows 25.8 74 1.0 68.4 75.6 162.6 43.1 -107.5 -1364 -55.8 Repaymentotloans by otrer sectors 0.0 0. 0 11.9 24.4 12.0 61.8 52.0 47.4 50.5
Errors and omisslons 47.s 33.1 -105.3 27.6 94.0 -70.1 25.0 -31.5 .42.1 -77.7
OverallBalance -141. -232.1 -4D7.| -736.7 -461.3 -386.0 -245.0 -556.1 415.7 -411.3
FinancIng 141.6 232.1 407.9 736.7 461.3 386.0 245.0 556.1 615.7 411.3
NetReserve assero(- increase) -139 -653 -253.5 157.3 -770 60.1 -165.3 -844 -11.1 .1214 SCFAR 0.0 0.0 0.0 0.1 0.0 0.0 0.0 0.1 -0.1 0.0 Except"crnalfinancing 261 317 506.1 570 3 530.3 3259 410.3 640.4 626.9 5327 Arrears 100.2 344.7 206.7 1990 294 269.4 312.2 130.9 130.0 116.4 Rescheduling 155.8 00 138 7 136.6 144 00 co 00 1S92 1753 116.2 Oebtlorgv.eness 11.0 0.0 28.0 23.5 236 00 0.0 194 51.4 1159 Use or Fund credit 144 -27.1 135.7 70.4 00 0.0 0.0 00 0.2 0.1 Grantssborrowingfor8OPpurposes . . 149.8 73.6 56.5 98.1 156.3 169.1 184.1 Financinggap . . 0.0 00 0.0 0 0 0.O 0 0. 0 0
Memorandum Items: GDP(mp)lt.72S 1 607.762.00 2.125,325.00 2.796.640.00 3.452,560.00 4.281.600.00 5.047, 69.76 6,281,976.00 GOP(mp)Uilt. tUSD 3443.8 37681 4.04221 3,967.14 t 170.36 4,065.74 5952.91 6.994 67 7 594.43 8,450.50 CAB6toP -16.2 .19.5 -17.4 -25.8 -17.1 -13.3 -7.7 -7.9 -12.5 .10.2 CABIGOP(excl. currentoricialtransfers) .31.9 -323 -30.0 .35 1 .22.2 -18 1 -11.7 -11.4 -16.1 -13.8 Gross Olncrl Reserves 192.8 242. 394.3 22803 331.3 270.9 441.1 623.1 S99.0 775.6 Weelts Imr 6. 8. 12. 60a 9.5 6.6 11.3 -16.6 .13.2 -17
* Provision al
Source Balanceof PaymentsODepartment OftheBank ofTanzanra.
168 Tbal. 3: SUMMARY or CEENTRALGOVERNMENT OPERATIONS4 (In ,Oillolns ol Tananfla shilings)
Fy99 F678 FY6t FY94 FY90 FY11 FYW2 FY93 I FY94 FY95 F| 96 FYt7 FY1 FY19 FY69
rot laRNevee 20,931.0W 31,09B D0 46,431.60 71,790.00 94,69500 132.2000 173,566.00 1 64,110.06e 42,444.00 331,240.00 440,373.00 572,030.00 6 19.003.00 69,325.&0 777.644.30 Tax 1evenue 19,66100 29,1t400 42.557 03 63pR5 00 P 1. 471 00 18,39700 153,356 00 146,420D00D 203055.00 299,900ao 39a3.744 00 509,355.00 566,*22.00 616,244.00 65.107.00 NoOl, taOernOo 1,170 00 1.914,00 3,074.00 8.705 00 13.184.00 14,061)00 20,210.00 17.69. 223,006.00 31.34D009 G4,62000 S6,575 00 52.901.00 73,041.00 9l237.6 0
I (0lalrxpeadlluOe an0 Net Lending 32.373 0G 47.44560 3,368.00 93,990.00 126,142 00 151,863 00 194,89100 305,059.00 3)0.910 0o 395,60/ 0 420,522 uO 5S,0099 00 730,326.00 819,339.40 1,17.6,77.79 H-o-Mrenl epe.nditwe 26,912.00 35.146 00 51.896600 78,119.00 103,066 00 135,375 00 162,286 00 240g94900 296.22100 345,915 00 415,140 00 4, 543,751,00 6a2,812,40 9080656,40 Dst 16,p-0td exoendluoe and 5,463.00 12,299.00 21,472,00 15.975.00 22,376 00 106,4a8.00 32,605.00 64,700.0D 7 4,66 00 49,692.00 5,382.00 26,400.00 106.585,00 936,524.00 359,913.39 p rt o0f lenfendog
G- oalalICe(Chedk, -sned) (11,54 2 co (6.3.0 (24,937.00) (32,34 00 31,907 56) (10,690 D 21,235600 ( 040,949 06 j136,466 60J (fi4.36 0D) 21,85100 96,931.00 111,253.0) (36,094.40 p91, 134.4 Adj,4~Ir1n.. 11ro; 900, 054 Oblel 3.2DS,DD. (2,026.00) (2.9S2.00) (3.6 40d.00J (4.129 00) (07557S00) (0t,8070.6D) 6,625.60 t36.15 3.00 50,049.0 02,445 .06 (36,512.00 6 3,033 00 (52,041.00 (14,09i.00 10,14; (6,1)~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~9,650 3,1DD(a500 4wa101,9460,446(669669.FIcOnOid( (8.337 00) (610.3a3001 (3g9,9)900) (25653 60Co 5,71 6 o0 ( 27,37S5oO (23.15 oo6 (134,321 00( ( 1697190oo) ( 13,710800) 1 20,33b.00 20,410.06 (S91,920.e0 ( 692.052.9 (045,601.44 Oj-,l- lo 919c216,447.40) (01e0 916019) (4,9460) l1t.020.oo (t2(0.00) 13.923 00) 4,291.00 11.47100 (03,63600 (51.957 ) 40,225 60 74./3300 136.30300 8.10500 39,934.60
I tIalar |)!S 8,337 00 9.384 00 29.91900D 25,52 c0 35.7755r O 2,37S Z73.695Oq 134,32160 165O,219O 125,735.00 64,634 06 (20.419.00 187,496.00 179,42200 153,204.00
6016,nm TII,9 . 11,401 00 15,909.00 20,965 00 2,7,664.00 22,6600 32,1O86.09 0,313.60 76,9090,0 905,552.00 4D.09200 110,95.00 169,646.00 94.157,.0 Fo1 09t 0tnc.ng, -0 17 2,2>2 00 2.401 00 7,318 00 (3,245 00) 1.46900 6,98s 00 22,676.02 29,436 06 47.754 00 (31.958 00 (34.000 00) (4.0.0 69 (19.6b4.00) 38,017.00 DnelIc00, Drrro.w,g 6, I 15 DO 4,563 00 6,692.00 6,112.60 6,563 00 4 ,35996) (32.277 oo) 46,572 0o 40,646.00 58,1D1.00 52,652 00 (52.770.00 3,570.00 28,160.00 (19.000.,c
Ar;fsprtLGP at nrtrte
Total R .ue 16.0 103 99 123 129 135 136 (02 114 11.9I23 134 13a1 12,3 12,4 To ofev,rue 15.1 9.0 9.1 108 1007 136 120 9.t 104 (0.7 II 1 11. 62 11.7 10. 101ri70l0envru 60 0.6 0.9 15 1 7 IS 6 1.1 10 1.1 1096 .1. 1.4 1.5
ToW f-fpendft0ne and4Net4Lend90g 24.8 15.7 15.7 16.1 160 19.3 19.3 100 17.5 141 122 120 155 16.2 186 Rzecu1lOlRexpendOume 207 61.0 11.1 134 131 13.7 127 040 139 124 12.0 114 11.5 12.7 129 D revelo.nt expeneftr. 4nd 4.2 4 1 4.6 2 7 2 9 1 7 2.0 4.0 3 5 1 6 0 2 0,7 4.0 2.5 5.7 c61t ot )endtog
00er300t00anCe (c6Ieks I6sued) -. 9 -5 4 -s.6 -3 S 4 2 1 9 -17 -4.6 ,6.0 -2.3 08 1.3 .2.4 2.2 6.2 Ad4u.kor.eloorcns. and olef 2 5 O 7 .0.6 - 6 .0 5 .0.9 -O I 0.4 f.7 1.B 2.7 -0.9 1.3 t6.2 .9 4erns (nno 00 0.0 0.0 0.0 0.6 00 0 00 00 0.0 0 O.0 0.0 0.0 O.O O39e,ro 0a000c6(66.66ks9c.er4 .64 -6. 1 .6.4 -4.4 .4.7 2.8 -18 -9. .86 -0.5 253 0 -1. -43 J7.l O1osalI b(o9nce(411060919) ..| .18 .24 .02 n05 04 09 -5.1 *2.4 1.5 22 3.2 0,2 1,0 4J7
?0an61n1 6.4 6.0 6.4 4 4 4 7 2 9 1.8 0.4 7., 4.5 1 9 .0.6 40 2.4 2,4
Eo1os1 g(ants .- 3.0 3 4 3 6 3.6 2 3 2 6 3 6 3.6 3 8 1.4 t.9 2.5 3.2 1,. Foreign FinalIcing, net/t 1.7 o0. 1 6 -06 0.2 0 9 0.9 10 2.2 .1 4 .1.0 -1,1 1.4 -0.6 112 Oomesc Bofrowing 4.7 1.5 1.4 6.4 0 9 *0.4 *2.5 2.9 1.9 2.1 1.S .11 0.1 -0.3 .0.3
Memo tnem. GDP at 1amrkelprice5(liCaI YCeaWS) 130,302 00 302.68000 466.10000 525,133.00 67110550 87J4,79950 1,132,755 53 1,441.840 00 1i.66,54359 S ,4600.93.00 3,124,600,00 3,367,079.0 4.710,741.75 5,620,622.25 6,261,474.50
7 06141de,1,e(gn g0ants prdorto FY87 ComopWU0o6nsof p116entages br0 FYS6, FY099 4ndFY0 0re based on GDP enlirnates 10f the resp1c06e y700s
So.so. The Tanzanian athiorfloos
169 Table 4a: Budget Frame For 1999/2000 - 2002/03 (Accounting) 1999/2000 1999/2000 2000/01 2001/02 2002/2003 REV.EST Likely Outturn Proj. Proj. Proj.
1. TotalResou rces ______1,168,343,00 l1,399,811.66- - 1,523,809.22 1,512,605.60
Domesticrevenue - -~ 777,200.0( 881,953.00 993,923.0 1,120,707.00 Imporlsupport/OGL _ _ _ 173.700;0C 164,841.2( 162,280.13 156,018.18 Projectloans and grants _ ____ 214,943.0 275,475.5( 296,737.9' 159,389.53 HIPC interim relief-Multilateral _ ____ 10,500.0( 46,061.6( 53,893.7- 59,007.26 HIPC interim relief-Paris Club _ 16,480.0( 16,974.4( 17,483.6 Non Bank Borrowing Bank Borrowing _ . (8.000.00) _ _ _ . Adjustmncntto cash (0.0 0.( 0.( PrivatisationFunds 15,000.3C 11.Total Expenditure 1,168,343.00 1,399,811.66 1,523,809.22 1,512,605.60
RecurrentExpenditure 930,000.00 1,061,836.10 1 ,150,313.25 1,274,521.82 CFS __ _ 253,562.00 279,662.0( 265,600.0 285,800.00 Debt service 198,100(.00 221,200.0 202,100.0 218,300.00 interest 106,500.00 124,500.0( 103,000.0 119,200.0 amortization_ 91,600.00 96,700.0 99,100.0 99,100.01 Others _ 55,462.00 58,462.0( 63.500.0( 67,500.0 Recurrent Exp.(exclxCFS) _-C_ ___S 660,038.00 774,884.1( 884,713.2' 988,721.8 o/w Salaries & wages 287,287.20 __ 315,850.6( 356,812.7' 396,504.55 Other____ Charges ______168,156.80 218,189.4 273,641.9 332,146.0 Designated Items* _ _ 190,794.00 208,644.0 - 214,258.5( 260,071.16 Paymentof Arrears 16,400.0 7,290.0( _ . Contigency 17,000.0( 21,758.0 23,694.2 DevelopmentExpenditure _. _ 238,343.00 320,975.56 351,737.9, 214,389.53 Projects 238,343.00 320,975.5( 351,737.9 214,389.53 Local 23,400.00 36,000.0(1 45,000.0 45,000.0 Songo songo energy Fund 9,500.0 10,000.0 10,000.0 Foreign______214,943.00 275,475.5 296,737.9 159,389.53 Other Programme Assistance ,______._._ . IncludesSpecial Expenditure, Road Fund, ParastatalWages, TRA and RetentionSchine * Starting 1998/99,Electricity Bill is includedin the SpecialExpenditure
170 Table 4b: Budget Frame For 199912000- 2002103 (Accounting) As % of GDP
199912000 2000/2001 200112002 200212003 Likely Proj. Proj. Proj. Outturn
I. Total Resources 18.6 20.0 19.6 17.5
Domesticrevenue 12.4 12.6 12.8 13.0 Importsupport/OGL 2.8 2.4 2.1 1.8 Projectloan and grants 3.4 3.9 3. 1.8 HIPCinterim relief-Multilateral 0.2 0.7 0.7 0.7 HIPCinterim relief-Paris Club 0.0 0.2 0.2 0.2 Non Bank Borrowing 0.0 0.0 0.0 0.0 BankBorrowing -0.1 0.0 0.0 0.0 Adjustmentto cash 0.0 0.0 0.0 0.0 PrivatisationFunds 0.0 0.2 0.0 0.0
II. Total Expenditure 18.6 20.0 19.6 17.5
Recurrent Expenditure 14.8 15.2 14.8 14.8
CFS 4.0 4.0 3.4 3.3 Debtservice 3.2 3.2 2.8 2.5 interest 1.7 1.8 1.3 1.4 amortization 1.5 1.4 1.3 1.1
Others 0.9 0.8 0.8 0.8
RecurrentExp.(excl CFS) 10.5 11.1 11.4 11.5 o/w Salaries& wages 4.6 4.5 4.6 4.6 Other Charges 2.7 3.1 3.5 3.9 DesignatedItems 3.0 3.0 2.8 3.0
Paymentof Arrears 0.3 0.1 0.0 0.0
Contigency 0.0 0.2 0.3 0.3
Development Expenditure 3.8 4.6 4.5 2.5
Projects 3.8 4.6 4.5 2.5 Local 0.4| 0.5 0.6 0.5 Songosongo energyFund 0.0 0.1 0.1 0.1 Foreign 3.4 3.9 3.8 1.8 OtherProgramme Assistance 0.0 0.0 0.0 0.0
171 Table Sa: Budget Frame For 199912000. 2002103(Analytical) mill. shs.
199912000 200012001 2001/2002 2002V2003 Likely Outturn Ceilings Proj. Proj.
Domestc revenue 777,200.00 881,953.00 993,923.00 1.120,707.00 ONV Road Toll 40,475.73 41.337.17 43,554.65 45,114.93 Retention Fund Total Expenditure 1,060.343.00 985,183.10 1.089,239.00 1,212,937.75 Recurrent expenditure 822,000.00 939,683.10 1,039,239.00 1,162,937.75 Interest on external debt 36,500.00 67,500.00 46,000.00 62,200.00 Interest on domestc debt 70,000.00 57,000.00 57,000.00 57,000.00 Wages/salaries 287,287.20 315,850.60 356,812.75 396,504.59
Goodslservices/transfers 428,212.80 499,332.50 579,426.25 647,233.16 olw Road Fund 40,475.73 41,337.17 43,554.65 45,114.93 Special exp. 117,818-27 114,517.18 130,480.96 170,868.66 CFS (Others) 55,462.00 58,462.00 63,500.00 67,500.00 TRA Parastatal Wages Retention Scheme 32,500.00 36,150.92 37,000.00 40,000.00 Election Costs 13,800.00 32,200.00 Census 40,000.00 Other Charges 168,156.80 216,665.23 264,890.63 323,749.58 Development expenditure 238,343.00 45,500.00 50,000.00 50,000.00 Projects 238,343.00 36,000.00 40,000.00 40,000.00 Local 23,400.00 36,000.00 40,000.D 40,000.00 Foreign 214,943.00 Other Programme Assistance Energy Fund Songo songo 9,500.00 10,000.00 10,000.00
Overall deficit (checks issued) - before grant (283.143.00) (103,230.10) (95.316.00) (92,230.75)
Grants 266,603.00 185,600.00 190,300.00 144,000.00 import supportlOGL 119,200.00 142,800.00 146,400.00 100,000.00 project grants 136,903.00 HIPC interim relief 10,500.00 42,800.00 43,900.00 44,000.00
Overall deficit (checks issued) - after grants (16,540.00) 82,369.90 94,984.00 51,769.25
Adjustment (0.00) . .
Overall deficit (checks cleared) (16,540.00) 82,369.90 94,984.0 51,769.25
Financing 16,540.00 (82,369.90) (94,984.00) (51,769.25) Foreign 40,940.00 (22.100.00) (22,600.00) (22,600.00) Programmme loans 54,500.00 74,600.00 76,500.00 76,500.00 project loan 78,040.00 amortization (91,600.00) (96,700.00) (99,100.00) (99,100.00) Local (net) (8,000.00) (17,000.00) Bank (net) (8,000.00) (17,000.00) Non-bank borrowing | amorteation Privatisation Funds . Change in Arrears (16,400.00) (15,000.00) Contigency (28,269.90) (72,384.00) (29.169.25) Financing Gap (0.00) (0.00)
memo item: GDPmp 6,280,400.00 6,996.680.00 7,756,799.00 8,619.665.00 OC for distribution 372,750.80 440,870.50 515,926.25 579,733.16 Primary Deficit(checks issued) (176.643.00) 21,269.90 7,684.00 26,969.25 Government Saving(checks issued) (44.800.00) (57,730.10) (45.316.00) (42,230.75) % of GDP (0.01) (0.01) (0.01) (0-00)
Source: The Tanzanian authorities
172 TableSb: Budget FrameFor 199U12000* 200203 (Analytical) % of GOP
1999/2000 2000101 2001102 2002/03 Likely Ceilings Proj. Proj. Outturn
Domesticrevenue 12.38 S2.61 12.81 13.00 OANRoad Fund 0.64 0.59 0.56 0.52 Retention Fund - TotalExpenditure 16.88 14.08 14.04 14.7 Recurrentexpenditure 13.09 13.43 13.40 13.49 Intereston externaldebt 0.58 0.96 0.59 0.72 intereston domesticdebt 1.11 0.81 0.73 0.66 Wages/salaries 4.57 4.51 4.60 4.60
Goodstservicesitransfers 6.82 7.14 7.47 7.51 t(w RoadFund 0.64 0.59 0.56 0.52 Specialexp. 1.88 1.64 1.68 1.98 CFS (Others) 0.88 0.84 0.82 0.78 TRA . . ParastatalWages .- -. RetentionScheme 0.52 0.52 0.48 0.46
OtherCharges 2.68 3.10 3.41 3.76 Developmentexpenditure 3.80 0.65 0.64 0.5a Projects 3.80 0.51 0.52 0.46 Local 0.37 0.51 0.52 0.46 Foreign 3.42 OtherProgramme Assistance . .
Overalldeficit (checks issued) - befo (4.51) (1.48) (1.23) (1.07)
Grants 4.25 2.65 2.45 1.67 importsupportSOGL 1.90 2.04 1.89 1.15 projectgrants 2.18 HIPCinterim relief 0.17 0.61 0.57 0.51
Overalldeficit (checks issued) - afte (0.26) 1.18 1.22 0.60
Adjustment - - .
Overalldefic't (checks cleared) (0.26) 1.18 1.22 0.60
Financing 0.26 (1t183 (1.22) (0.60) Foreign 0.65 (0.32) (0.29) (0.26) importsupport loans 0.87 1.07 0.99 0.89 projectloan 1.24 . amortration (1.46) (1.38) (1.28) (1.15) Local(net) (0.13) (0.24) . Bank(net) (0.13) (0.24) . Non-bank . borrowing amortization PrivatisationFunds . Chengein Arrears (.26) (0.21)
memno: GDPmp 6,280,400.00 6,996,680.00 7,756,799.00 8,619,665.00
PrimaryOeficit(checks issed) (2.81) 030 0.10 0.31 GovemmentSaving(checks issued) (0.71) (0.83) (0.58) (0.49)
Source:Table 5a
173 Tabl. $a: RECURRENT EXPENDITJRE BY MINISTRIESIOEPARTMSENTSINCLUDINO TRANSFERS TO LOCAL GOVERNMENT
V ots. rMstinbtrnolyOcp.rlt 1X1t990 1 55tp2000 905o6o1 -- 200110 2 200Ye s . FRCVIStONALACTUAL LIKE£ur1T31UtN CEILINt3 PROJECTIN C 9 2 7.579.625.1Z 310,II t9t2.7 26 Ad5mrrst1ation VICEPRESIDENT 15.284.5048,00 270.31t,585.00 28S.702.St48.40 3.007,31 ,47n.2s8 ,187 987.6e 17 Admirisw1on Rgontror st Poslib= Pafies 2.5072S.6t76.00 2.577.242.754.00 ,S237,76U.t01.20 92 7.346,0015324.t1 30 Ao5;ci1t4tion P,osidws Oftc. d Cabinet Secrsetiat S.b37.035,t3.CO 6.S-o.o25.J0S.005 6 55.139.875.45 6,945,744.D44 4,577,72S.3 493Ot.0714.7s 31 AVicstOio vbe president.40r.. 422.532.09 50 4*3t.410Q,72.00 457.77t.111.60 47 1.657081171.26336 1.t?42.t755.923 32 Armai rscmsoo Prccidoers of ce- Chit ServmcDevorstroenl 2.245.5513.556.00 1.490.644912.00 1.5$0.!80,017.20 205.4S9.211.56 215t012.55715 33 Acrnmf trbon Ethics Secrearit t 139.796.t25.OC 171,611,300-00 1956.465.91.00 13,443,230.13546 34 AdmAnitIain Minitri of Foleilgn Affairs, InOC& O 5.c 145.025.042,00900 t1.71,765,256.0S 12,3e5,405,430.O 12 09S.203.83112 324,256.17355 35 Adirrinistratio Permanent Cormmissionof Enquiry 25.547252.00 2S11,tT,0554,0S 306,S8t1,!71.20 315,067,454.80 545."07.46e.78 36 Adminstrtion CMI Soence Commnission 143,a36.9250O 167,S18.692,W5 490.999,99960 517,.44,415665 2.185203,e42.zs 37 Atmoisntatlon Prio, 'iniste8's Office *,21,! 7.J6D00 1.905.93648e400 20.14.278.945.40 2.097,251,a05o65 8.306,293>s03.79 40 Adminisration Jdkiary 3259.484.416.00 7,424.595,43600 7.809.741.703.80 0,050,786,2I6.36 1,16.924.021.92 1t235.375,746 O 41 AS,MilitStr.fn Ministryof 2Jcitt and ConstitutioncdAffirs c,024,30 455o 1,0S,026354400 1.1t1,214,420 S.45.65,632217 42 Adlucist100,t- 015c. of tn0 Speake. 5,366.348,293.00 4,987,341.43600 5.200.749.441.80 5.460.109,2404 60 1.712.290.117.00 1.9520702533 40 Ar4rnio,si110- E,,chequerand Audit Deparleenlt Sr4.637,771 00 1.074,516.73200) 1.635.5.t'6 4,U89,2203225.31 50 AdrainistSon Mcnjs,tryr.FinSnce VOTE50 37,438.72S.211.0X 4.730.936,020.00 4,405,113.725.91 4.640.116,934.40 50,istt of Fi,nsoe SPECLAL 57.057.831.22.55 0.O5 0.05 0.11
Accountmtll Gen0 1rs Ofrice 1,032.6305300.DO 2544.sa7.3e0o.0 2.66t.263,065 00 2.7U4.938.552.0S zTaczannRevenue Authorily 20.977.00S,XOC.0 23.074.705.000.53 25.t32.170,000.00 27,920.3t7,5000.0 4,393.069,94467 51 Adm1i5,stoaWn Mii-trcy SHcrner45 5.104l51.35Z 05 3.656,270,15400 4,073 477.113.20 4.235 619264.40 1,344.528,031.56 1,402.39483,.15 54 Adrnilillu.iOn Rad. Tanzania 1.202.9068,45.00 1.220,262,70800 1,289,960.634.40 267,458,031 St 200.235.505.10 SS Adkni.fl.fdinc 7Tanza,io flhsstne,l C0.Ae 401,77.725.0C 169,5S4752.00 255,408.242.6C 46 t,356.072.116.65 Sr ASn,ins.li- ntins.i, o1 RegionSl A4,,i!niWcto. *nd L.o. G. g394,0.755 00 1.13a554d300.X0 1.2065.99.35. 00 1,279,313,319 735,1.757594 759.962.W3 46 57 AdministraSSl MinisIry i Defesse an National SeNce 1.375612.057OD 654.485,716.00 692.372.065.aD 213.751.979.4i 59 Admrinstration L.. Reform Cmris sbo 86 465,341.00 173,S95.112.00 2t3.t.14.60 27. 3t3,560.72 251.813,713.60 264453.060.so 60 AdmmliSilrti(fl IndqsVal Court Of Tanzania 134,g96,027.00 165.245,00.00 239,786.020.00 4,011,930,451.39 4.166.210,559.80 61 Adonris31rcli5 OlelCommisos 1,578,314,478.00 13,!65,057,676.00 32,06,310,5595 266,141983..16 270.902,675.46 63 AdminstrlcboLn Local Govenrrst l SeMNceCcrrns icn t174,949,402.00 201.521t.454,00 254.103,594.20 66 A5ins 7rathot P5sidenorsC5c.. - Pblnning Comrmission 2.,247,925,168500 1332s5550.00 1,374,521.012.5S0 41.419.301,1901.24 I a66.616,442.99 Admenftsibtl Regions 0a.4K0567.101.00 7,684,071,549.05 9,502.913.745.79 9.618.6t59334,23 10,52596.408S,.67 0,990,75,035.95 AMrOiOlslOal,01 L.ccl Gove.rmenl 4,746.841,914.500 8.552,51,9395D 59,990.795.035.95 8.990,795,0355 VOTE 33.35.55.50.C05,6 S.b.foIe1 155,5.45.Os45045205 tCS,246,265,tO.05 13,1S51.5C9,.46.20 1S0.113.243.43B.20 tt;,s6r.,64,170.34
93.205.341,97905 30 Defence and Secun1 Doefhc. 72,534,0t9,147.00 8O,a84,429,40S.CO S5002.715,579 05 89.327,775,979.05 12.517,237,051.80 39 D2eence0nc4 Secu1t0 y Tre Nabiono St0ice 11,73S,466.972.00 10,921.231,116500 ,6D3.65.671.80 1152.049,123.471.80 373507.479.5612.4 25 Defence 8ndScuc,ty Poic, Foce 3C24,4010.00 32.5Q,22.376 34.T1.90.75.0 5.28.937.95540 1O.50.15,124.00 20.55165.540.4.15 29 DeOlnce and Secrnty nismryo1 HomseArirs . Plisons 16 440,501.017.00 17,325,509.315.o0 18.543,502.161.55 163,500,727,046.41 Sub.Total 14.040,52.545.55 141.713,004,21.-05 1513541.83.703.4 105,506,942.455,55 25.530.233.111.20 30.143.!75.10C.Oe 46 S0o.1ccisl ec Micl,y .1 Edccao r 16,456,605555400 1 ,737 402,103.00 22.597.4317513.90 52 Social s-5cs Mbislry or Health 23.135.390.U44.00 2.397.977.450.X 31.664.650,249.00 *1,t40,273.227805 52,359S1.1D24 96 53 Src.i seMces Ministry SI Co,mhnnio Dc. Gi,5der t. Cult.,. 1.742,412.515.0 1 095.039.72.00 1,177.556.299.60 I.2237331.4942.0 1.315,039.243 2.075.561.158.00 2.356.554.315.2a t5 Scoia serees Mritstry of Latour and You4hDevelopmeni 1.5e22779,954.00 1543,34,644.00 51,2836335,652.40 412026,7291s 67 51oc0!I05N4c5 Teachees SeNike C51n1issiOl 117,301,54.DO 221.772.54435 273704.441.20 333.$44566.40 .555355543 75 29.525.5 .25 4t Socal s0n i10s M11j517y0le. 50,115cc.Science. TecS.5TchS HorEHigh,, Ed,C1 on .1.155is.ry, 20,50.404 07.55 24.345,101,571.72 .174,953,4C9.30 7,112,500,51249 49 Social SeNices Ministryof Waler 5.050.704.34005 2,953.742.240.00 4.453.700.292.05l Socialser,,es Regions 11.444.9380.264rS 10124,03.203.00 1,441.444.205.51 14.651.676,145.37 17.611.313.050.12 155.169.225.366.74 Social4 Nice, L.ccalGoeO,mcn-t 10S0,75,791,351.00 144134.0517.I58.D0 16.,610.393 405.73 174.3S6337t11.47 339.614,729.406.3l Sub.TolI 17T5.410,047,897.00 221,355.755,8.5 76..s0.352,755.69 2S5.s5,055,s95.oS 37,543,50.11S33 So51on1- servces 2 I Jin,clryetWoIk2 33.747.209 465.50 32,444.09.136 00 34,899,260.482.85 344514095955 3,562776.697 27 48 Economic Srvice0 inisos .to Lards & Hcman Sertlem1trs Dcc 2.S11,972,625.00 2,714.920.27600 2.991,115,045.0 3.240 7Gi.29800 2 647,029,3t22.17 55 Economic saries M 1in1istryOfEnergy I'd Miner48s 2.202.25,330 1.732.327,614500 2,212.,71.000.40 2.417.950.1t5.54 a 502.777,405 SO 62 Ecofonmics0rices Mirfisty of Communicmnors and Transport 1 0.330.89,s95.005 5,465.309,736.00 7.126.55504.4.O 7,775,769,502.'4 Ecollormic .rvice Electricty bill . . . . 60 16,009,112.3$0026 56 Echonor0iswr4ces SMinistryot ReLoiral Admi AnS Ixal G0.1 11,51aS05,O000.00 12.404.044.732.00 12.635,146,969 20 13S,55,146,96e 23413,304.37927 Econom.w cr-ces Lo 90-5001001e0t 1.490.422.463.50 2.117.235 39.500 2.261.213,700 e0 2.332.992.323.e4 .30 Ts.04.,5230?0,671.57235.SO Sub Trwi 62.251,25590511.00 57,070,211,045.00 62.11115,77.6
69 pFodwcc Mt1inistryo1 Nctut.l Reso,rces Sad Teium 8,626.11.967 C 6133.53548.50 7.155.34,Y592.40 .6205,226,935,00n .134.009.924.78 43 Procb. Ministr tA015AaricJtureand Co-opefafive 1$,597 5e,0s32 0 7,95,536.132.00 8.570,25r,0u5.60 50406243,21560 S557,9S6.061. 1 1,53,250,535 00 44 PPoducinve Ministry of Industries and Ttade 3352,796,S91.20 1.327.499.164.00 1,440.025,52.t20 01W l945.3264.H.31 Sub.-Totl 2.9576.4S0 1*.n19.t99,219,100 17,10,s632,243.20 t1136,202 SALARY INCREASE . 290,64,993.020 13 55,741.9S64.77.45 RECRUITMESN7T 2.500.000.00DDo, 400.0.000005.00 5,300,06S.555.00 INSURANCE 9.475351S 000 00 2n.175.95.620.0D 32.15.332C,2. [TOTALCONTINGENCYMINK 0 2.6S43.56. S 1.75.0 35 259537 .7O-AI.4l541TiclRIES5t3P75 562.49575t1220.ZO 542.21172t.12.05 U 742.25903720073 555i354675.69
174 TablIe61: RECURRENT EXPENDII'URE BY MINISTRIES/DEPARTMENTS INCLUDINGTRANSFERS TO LOCAL GOVERNMENT
Vote ______Ministry/Depattment 1998/99 1999/2000 2000/01 2001/02 2002103 PROVISIONA LIKELY CEILING PROJEC PROJE L ACTUAL OUTTURN TION CTION
26 Administrationl _ VICE PRESIDENT _ | 0.03 0.05 0.04 0.04 0.04 27 Administration Registrarof Political Parties _ -- 0.46 0.49 0.44 0.41 0.40 30 Adtinistration President's Office and CabiuictSecretariat 1.00 .14 1.02 0.94 0.91 -- A Adntinistration Vice President'sOffice -_ 0_____OX.8 0.08 0.07 0.06 0.06 32 Administration President's Office - Civil Service Department 0,40 0,27 0.25 0.22 0.22 33 - AdMinistration Ethics Secretauiat_ 0.02 0.03 0.03 0.03 0.03 34 Administration Ministry of ForeignAffairs & Int.Co-operation_ 2.606C _ 2116 1.93 1.74 1,67 35 Adiiiinistration_ Permanent Connmissioniof Enquiry 0.04 0 05 00. 04 0.04 36 Adninistration CivilServicc CoCimnssion 0.03 0.03 0.08 0.07 0.07 37 Administrationr Pime Minister's Office __ -- 0.86 0 35 0 31] 0.28 0.27 4U Admirnistration Judiciary _ 0.93 1.30 1.22 1.08 1.03 41 Administration Ministsyof Justiceaind Consditutional A-ffairs _ 0.36 0.20 0.18 0.16 0.15 j2Adminuistration0 __ Office of the Speaker ____ _ 0.5 0.92 0.82 0.73 0.70 -45 Administiaotn___ _ Exchequer auld Au Departmlent __ 16 0.20 0.25 0.23 0.22 St) Administration Ministry of Finance VOTE 50 6.64 0.87 0.69 0.63 0,61 Ministry of Finance SPECIAL 10.23 (.00 0.0 0 0.0 0.00 ______AccountantGeneral's Office 0.00 0.19_ 0.40 0.36 0.35 ______l_____. Tanzania Revenue Authority - 0.00 3.87 3.59 3.42 3.47 5 1 Administration Ministry of Home Affairs 0.91 0.71 0.63 0.57 0.55 54 Adminiistration Radio Tanzania 0.2 l )2 0 0.20 0.18 .17 55 Administration Tanzania Investnetit Centre 0.09 0.03 0.04 0.04 0.03 -5-6-S--_Admlinistration Ministry of RegionalAdmiinistration and Local 0.10 ()21 0.19 0.17 0.17 Govemment 57 | Administration Ministr of Defense and NationalService -0.33 0.12 -0.1 0.10 0.09 59j Admilnistration Law Reform Commission 0.200_ 0.03 0.03 0.03 0.03 60) Administration IndlustrialCourt of Tannia _ 0.02 0.03 0.04 0.03 0.03 -61 Admnistration ElectoralCommissioni 0.28 2.56 4.99 0.54 0.52 63 Admlinistration_ Local GovernmenitService Commission_ 0.03 0 04 0.04 0.04 0.03 66,(, Administrationl President'sOffice - Plauulin0gCommission 0.40 0.24 0.21 5.58 0.23 _Adininistration Regions _1_ _41 1_4811 __3013
175 Administrationl_ Local lGovenmncit 0.84 1.58 1.40 1.21 1.12 ______.____ VOTE 33,35,55,59,60.63 0.00 0.(0 0.00 0.00 0.00
____ Sub-Total - 29.52 19.41 2(1.73 20.22 14.51 38 Dcfenccand Sccurity Defence 12.87 14.92 13.36 12.03 11.57 3'9 Dcfence and Sccurity The National Scrvicc 2.08 -- 2.01 1.81 1.62 1.55 28_ _DcSsefe and Securily Police Forc6 5.37 6.01 5.40 4.84 4.63 29 Defenceand Security Miniistry of Honic Affairs - Prisonis 2.92 3.20 2.89 2.63 2.55 Sub-Total - 23.24 26.14 23.46 21.13 20.31 46 Social scrvices Minhistryof Educatioui _ 2.93 3.46 3.53 3.44 3.74 52 Social services Ministry of Healli_ 4.11 4.13 4.93 5.62 6.54 53 Social services Ministry of Conuiiuiiity Dcv. Gender & Culture 0.3 1 0.20 0.18 0.17 0.16
65 Social services _ _Ministry of Labour and Youth Developmcnt - -32 0.30 0.29 0.28 0.30 67 Social services Teacher's Scrvice Comiiiission_ 0.02 0.04 0.04 0.04 0.05 68 Social services Ministry of Science, Tcch.& Higher Education 2.75 3.70 3.79 4.16 4.95 -49 Social scrvices Ministry of Water 0.90 0.54 0.69 0.70 0.88 Social services Regions __ 2.04 ___ 7 2.09 1.97 2.19 Social services Local Goveniment 17.76 26.58 25.63 23.49 23.36 Sub-Total _ 31.13 40.83 41.19 39.87 42.17 47 Economic services 2/ Ministly of Works 5.99 5.99 5.43 4.91 4.66 4X~ Economic services Ministry of Lands & HumiainSettlemiients Dcv, 0.52 0.50 0.47 0.44 0.44 58 Economicservices Ministry of Energy aid Minerals 0.39 0.33 0.34 0.33 0.33 62 Economicservices Ministry of Conmnmications anidTransport 1.83 1.19 1.11 1.05 1.06 Economiiicscrvices Electricity bill 0.00 0.00 0.00 0.00 0.00 56 Economiticservices Ministry of Regionail Adin. And Local Govt. 2.04 - 2.29 1.97 1.80 1.99 coiixiixc scrvices govemmct i -Loal 0.26 0.39 0.35 0.31 0.30 Sub-Total _ __ 11.04 1t0.69 9.67 8.84 8.78 69 Productivc Ministry of Natural Resources and Tourism 1.53 1.22 1.11 1.03 1.01 43 Productivc Ministry of Agriculturc_andCo-operaitivs 2.95 1.47 1.33 1.22 1.19
44 Productivc__ Ministry of Industrics and Trade - _-_---0.59 0.24 0.22 0.21 0.21 Su b-Total 5.07 2.93 2.67 2.45 2.40 ______.__._ SALARY INCREASE |__ ();0)(0.00 0.00 3.99 6.92 ___-__ RECRUITMENT 0.M0 0.00 0.39 0.54 0.68 INSURANCE _ 0.0( 0.00 1.48 2.72 3.98 CONTINGENCY 0.0( 0.00 0.41 0.24 0.24 TOTAL MINISTRIESIDEPTS ______- l0000100.4 10.00 100.00 100.00 100.001 Sotirce; Table 6a__
176 Table7a: RECURRENTEXPENDITURE BY REGIONS vote 1998199 1992000 2000101 2001102 20021 ______Pov. Actual LUkelyOturm CEILINOS Pro]. ProL
70 Arusna ,182,264.300.00 1,286,258,640.00 1,642,711,236.29 1.740,121.591.53 2.026.089.672.37 71 PWani 669,877.400.00 745,512,956.00 982,363,356.78 1.041,239,650.93 1,119,674,118.65 72 Dodomna 874,370,B0.00 976,256,964.00 1.271,023,777.11 1,355,95B,3i6.24 1.685.603,881.59 73 Iringa 1,042,837.600.00 1,116.400,980.00 1,393.427,262.80 1,464,740,739.09 1,734.041.913.08 74 Kigoma 709,706,100.00 758,156,732.00 1,009,117,582.15 1,081,789,56Z06 1.197.013.950.70 75 Kiimanjaro 1,011,491,100.00 1,097.623.456.00 1,375,183,854.71 1,452.843,278.13 1.70t1649.457.43 76 Lindi 705,977,800.00 759,434,068.00 955,1198633.14 998,142,430.67 1.153,232,108.56 77 Mara 807,830,600.00 875.535.272.00 1.0833569,650-20 1.126,866,305.67 1.261.048.046.42 78 Mbeya 827,246,10000 866.138,316.00 1.176,483,945.80 1,265,210,386.37 1,572.011,139.40 79 Morogoro 1.055,890,500.00 1.158,719,632.00 1.497.355,686.19 1,594.207,940.26 1,915.100,w65.01 80 Mtwara 713,453,600.00 811,056,720.00 1,047,184,775.35 1,099,589,193.66 1,181,933,508.13 81 Mwanza 1,064,283.300.00 1.183,829,336.00 1,493,648,056.06 1,562,595,202.88 1,692,217,11531 82 Ruvuma 746.538.800.00 829,635,304.00 1,039,929,917.21 1,089,076,406.22 1.194.750.742.47 83 Shinyanga 990,965,680000 1,085,666,204.00 1,387.065,610.58 1,460,006,368.45 1,701,683,617.89 84 Singida 651,275,000.00 698,963,358D00 898,421.496.09 948,806,869.70 1,063.430.787.30 85 Tabora 868,373,40000 929,529.012.00 1.215,353,445.17 1,296,339,262.10 1,520.387,142.80 86 Tanga 995,996,400.00 1,033,666,32800 1,309,070.609.47 1,383,869,366.39 1,635,831.327.93 87 Kagera 630,188,500.00 739.604,212.00 955,645,56636 1,005,889,279.42 1,158.063,698.67 88 Dares Salaam 229,313,400.00 279,510.298.00 402,996.480.17 428,613,163.99 550,916,840.45 89 Ru1ra 633,213,500.00 576.607.048.00 808,687,895.80 871,460.665.83 1,071.412121.62 = Total Regions 16,411,094,000.00 17,808,104,832.00 22,944,368,041.40 24,270,365,979.60 28,137,011,855.9
Source.The Tanzanianauthorities
Table 7b: RECURRENTEXPENDITURE BY REGIONS(in pementages)
Vote 1998199 199912000 2000101 2001102 2002103 ______Ptov. Actual Likely Olturn CEILINGS Proj. Prol.
70 Arusha 7.2 7.2 7.2 7.2 7.2 71 Pwani 4.1 4.2 4 3 4.3 4.0 72 Dodoma 5.3 5.5 5.5 5.6 6.0 73 lnnga 64 63 6.1 6.0 62 74 Kigoma 4 3 4 3 4 4 4.5 4.3 75 Kilimanjaro 6.2 6 2 6 0 6.0 6 0 76 Lindi 4 3 4 3 4.2 4.1 41 77 Mara 4.9 4 9 4 7 4.6 4.5 78 Mbeya 5.0 4 9 5 1 5.2 5.6 79 Morogoro 6.4 6.5 6 5 6 6 8 80 Mtwara 43 46 46 45 42 81 Mwanza 65 66 65 64 60 62 Ruvuma 4.5 4.7 4.5 4.5 4.2 83 Shinyanga 6 0 61 6 0 6 0 6 0 84 Singida 4 0 3 9 3 9 3.5 38 85 Tabora 5 3 5 2 5 3 5.3 5.4 86 Tanga 6.1 5 8 5.7 5.7 5 8 87 Kagera 3 8 4 2 4 2 4 2 41 88 DaresSalaam 1.4 t 6 1.8 18 2.0 89 Rukwa 3.9 3 2 3.5 36 3.8 total Regions 100.0 180.0 100.0 100.0 100.0
Source:Table 7a
177 Table Ea: RECURRENTEXPENOITURE BY DISTRICTCOUNCILS
Vote 1998t99 199912000 2000101 2001102 2002ro3 ______Prov. Actual LikelyOlturn CEILINGS Pro]. Proj.
70 Arusha 5,521,966,075.17 8,882,024,609.00 10,700.130,904.31 11,693.623,729.13 13.129,323,8626. 71 Pwani 3.099.510.332.22 5,611,006,210.W0 6,472Z446,683.69 6,917,842.47255 7,533,369.151.68 72 Dodorria 3,933,569,070.00 5,931,967,147.00 6,691,728,01320 7,030,858,496.85 7,505.205,71228 73 Iringa 5,069,176,570.06 7,441,058,680.00 8,321,306,14252 8,716,492,434.58 9,263,7514a5.51 74 Kigoma 3,460,938.26235 5,046,093,248.o0 5,871,158,929.77 6,290,830,837.86 6,885,643,124.79 75 Kilimanjaro 6,942,569,646.75 10,331,495,432.00 11,635,077,289.87 12,277,353.629.28 13,142,902,410.40 75 Lndi 2,600,759,497.52 4,069603,258.00 4,805,233,941.61 5,216,929.287,14 5,779,495,737.51 77 Mara 4,455,030,987.50 6,424,364,070.00 7,341,449,060.59 7,786.875,532.40 8,407,139,66240 78 Mbeya 6,260,829,00513 9,059,893,849.00 10,148,305,887.61 10,612,266,275.07 11,278,828,046.11 79 Morogoro 4.693,718,791.21 7,180,196,680.00 8,051,537,269.68 8,441,995,178.87 8,937.622,917.36 80 Mtwara 3,353,770,170.72 5,238,440,999.00 5,962,677,934.48 6,302,976,721.67 6,781.494,079.32 81 Mwanza 6,193,181,39244 8,966,733,91800 9,942,000,066.24 10,338,872,842.99 10,897,107,431.31 82 Ruvurra 3,767,377.838.82 5,974.817,224.00 6,771,203,47335 7,173,518,179.74 7.719,673,690.37 83 Shinyanga 5,014,458,11568 7,418,453,212.00 8,435,813.088.72 8.923,274,315.15 9,608,656,759.54 84 Singida 2,991,498,982.63 4,531,602,137.00 5,337,016,534.80 5,608,503,728.79 5,437,9Q6,091.98 85 Tabora 3,410,069,236.71 4.68e,086,094.00 5.314,549,309 38 5,618,557,628.15 6,039,155,843.11 86 Tanga 4,911,125,325 57 7,449,226,546 00 8,449,648,62&61 8,946,346,338.07 9,628,507,465.86 87 Kagera 5,129,646,064,24 7,503,174,014.00 8,591,525,047.13 9,158,079,354.08 9.933,133,552.89 88 Dar es Salaarn . 89 Rukwa 3,404,369,635.63 3,534,194,440.00 4,033,099,007 19 4,289,781,348.00 4.639,335,108.33 Total District 84,213,585,000.36 126,282,631,767.00 142,876,907,212.78 1 161.644,978,130.3S 163,698,2S2,163.64
Source: The Tanzanian authorities.
Table 8b: RECURRENTEXPENDITURE BY DISTRICTCOUNCILS (in percentages)
Vote Region 1998199 199912000 2000101 2001102 2002V03 Prov. Actual Likely Oturn CEILINGS Proj. Prof.
70 Arusha 6 6 71 7 S 7.7 8 0 71 Pwani 3.7 45 4.5 46 46 72 Dodoma 4.7 4,7 4.7 4.6 46 73 Iringa 6.0 59 5,8 5.8 57 74 Kigoma 41 40 4.1 4.2 42 75 Kilimanjaro 8 2 8.2 81 81 8.0 76 Lindi 3.1 3.2 34 3.4 3.5 77 Mara 53 51 51 51 51 78 Mbeya 74 7.2 71 7.0 69 79 Morogoro 5.6 57 56 56 55 80 Mtwara 4 0 4 2 4.2 4,2 4.1 81 Mwanza 7.4 72 70 6.8 6.7 82 Ru-vuma 4.5 4.8 4 7 4.7 4 7 83 Shnyanga 6 0 5 9 5 9 5.9 5 9 84 Singida 3.6 3 6 3.7 3.8 3 9 85 Tabora 4.0 37 3.7 3.7 3.7 86 Tanga 5 8 5 9 5 9 5.9 5 9 87 Kagera 61 6 0 6.0 6 0 6.1 88 Dar es Salaam 00 0G0 0.0 0.0 a0 89 Rukwa 4 0 2.8 2.8 2.8 2.8 _Totat oistrict 100.0 100.0 100.0 100.0 100.0
Source: Table 8a
178 Table 9a: RECURRENT EXPENDITURE BY URBAN COUNCILS
Vote 1998/99 1999/2000 2000101 2001102 2002103 Budget Likely Olturn CEILINGS Proj. Proj.
I Arusha 992.155,200.00 1.441,049,655.00 1,574.915,748.65 1,613,293,687.82 1,671.945.582.14 2 Dodoma 1,292,828,300.00 1,795,548,186.00 1,990,944,127.60 2,048,026,178.05 2.135.522,571.98 3 Iringa 618,131,800.00 926,445,046.00 1,027,662.179.48 1,062,959.416.12 1.116,794,917.57 4 Kigorna 485,915,900.00 678,442,854.00 774,778,549.14 810,431.878.81 865,100,406.55 5 Lindi 297 748,800.00 463.958,993.00 542,720,082.02 577,147,853.90 629,827,566.11 6 Moshi 766.302.800.00 1,175.306.653.00 1.294,032.173.27 1.329,444,133.39 1,383,720.872.87 7 Musoma 632,263,100.00 972f923,105.00 1,128,567,453.33 1,191,770.294.14 1,288,708,248.45 6 Mbeya 1,060,774,900.00 1.475,072,888.00 1,615,766,104.40 1,655,363,311.65 1,715,982,999.54 9 Motogoro 978,055,900.00 1,519,282,047.00 1t,66,550,337.13 1.740.972,926.90 1,824,317,753.72 10 Mtwara 350,842,500.00 551,520,706.00 620,631,900.35 645,592,551.35 683,833,008.73 11 Mwanza 1,137,179,100.00 1,704,523,072.00 1,853,591,068.31 1,890,498,208.94 1,947,109,713.25 12 Songea 680,350,400.00 1,055,229,876.00 1,252,375,859.39 1,336,754,259.92 1,466,274,490.23 13 Shinyanga 516,281,300.00 790,445,848.00 917,843,808.56 968,109,616.50 1,045,195,211.03 14 Singida 514,146,200.00 788,295,171.00 903,919,895.39 952,929,521.72 1.027,766,626.55 15 Tabora 1,040,607,700.00 1,462,053,770.00 1,786,294.963.61 1,929,559,587.73 2.149,184.740.64 16 Tanga 1,124,159,700.00 1,587,564,433.00 1,867,845,438.50 1,923,023,551.00 2,007.690.825.04 17 Bukoba 441,949,900.00 679,119,247.00 814,139,004.22 871,161,200.60 958,699,133.75 18 Dar es Salaam 6,297.559,900.00 8,552,891,705.00 8,989,559.183.47 8,996,659,517.14 9,007,402,700.16 llala 222,157,100.00 377,397,012.72 467,436,990.07 605,092,738.90 Temeke 212,735,800.00 353,917,155.13 438,255,085.00 567,151,928.14 Kinondoni . 185,033,700.00 308,706,564.70 382,065,171.84 494.096,695.58 DSSD 212,119,000.00 252.910,862.00 265,556,405.10 265,556,405.10 265,556,405.10 19 Sumbawanga 706,680,000.00 940,069,005.00 1,038,726,004.05 1,070,135,696.24 1,118,178,490.39 , Total Urban 20,346,052,400.0 29,532,579,722.00 32,986,441,018.51 34,167,147,043.91 36,975,153,628.42
Source: The Tanzanian authorities.
Table 9b: RECURRENT EXPENDITURE BY URBAN COUNCILS (in percentages)
Vote 1998199 1999/2000 2000(01 2001102 2002103 Prov. Actual Likely Ofturn CEILiNGS Proj. Proj.
I Arusha 4.9 4,9 4.8 4.7 4.6 2 Dodoma 6.4 6.1 6.0 6 0 59 3 tringa 3.0 3.1 3.1 3.1 3.1 4 Kigoma 2.4 2.3 2.3 2.4 2.4 S Lindi 1.5 1.6 1.6 1.7 1.8 6 Moshi 3 8 4.0 3.9 3.9 3.8 7 Musorna 4.1 3 3 3.4 3.5 3.6 8 Mbeya 5.2 5.0 4.9 4.8 4.8 9 Morogoro 4.8 5.1 5.1 5.1 5.1 10 Mtwara 1.7 1.9 1.9 1.9 1.9 11 Mwanza 5.6 5.8 5.6 5.5 5.4 12 Songea 3.3 3.6 3.8 3.9 4.1 13 Shnyanga 2.5 2.7 2.8 2.8 2.9 14 Singida 2.5 2.7 2.7 2.8 2.9 15 Tabora 5.1 5.0 5.4 5.6 6.0 16 Tanga S.5 5.7 5.7 5.6 5.6 17 Bukoba 2.2 2.3 2.5 2.5 2.7 18 Dar es Salaam 31.0 29.0 27.3 26.3 25.0 llaaa 0.0 0.8 1.1 1.4 1.7 Temeke 0.0 0.7 1.1 1.3 1.6 Kinondoni 0.0 0.6 0.9 1.1 1.4 DSS0 1.0 - 0.9 0.8 0.8 0.7 19 Surnbawanga 3.5 3.2 3.1 3.1 3.1 Total Urban 100.0 100.0 100.0 100.0 100.0
Source: Table 9a
179 Table lOa: DEVELOPMENTEXPENDITURE.MINISTRIES
VOTE MtNISTRYtREGION l98a99 t999200D 2000t01 200102 2002/03 .______Budget Likuly Otun I Celtings Pro. Pro).
26 VICE PRESIDENT 27 Registrarof PoliticalParties 28 PoliceForce 29 Ministryof Home Aftairs -Prisons 30 Presidents Office and CabinetSecretariat 3,000,000,000 2,195,671,212 2,679,320,763 500,0o00000 200,000,000 31 Vice Presidents Office 0 32 PresidentsOffice - Civil SeMce Oepartment 500,000,000 365,945,202 500,000,000 500.000, 500,0,000 33 EthicsSecretaiat 34 Ministryof Foreign Affairs& Int Co-operation 35 PermanentCommission of Enquiry 36 CrvilService Commission 37 Prime Ministers Office 200,000,000 146.376,061 20,080,000 363,621,880 416,950,505 38 Defence 39 The National Service 40 Judiciary 409,307,832 500,000,000 450,000,000 41 Ministry of Justice and Constitutional Affairs 42 Office of the Speaker 43 Ministry of Agriculture and Co-operatives 2,437,500,020 1.783,982,B60 2,555,329,062 2,943,708,405 3.200,000,000 44 Ministry of Industries and Trade 0 45 Exchequer and Audit Department 0 50,000,000 50,008,000 50,000,000 46 Ministry of Education 2,131,250,000 1,559,841,424 2,234,274,898 4,407,658,156 4,434,552,966 47 Ministry of Works 4,000,000,000 2,927,561,616 5,000,000,000 6,000,000,000 6,000, 000, 000 48 Ministry of Lands & Human Settlements Dev. 500,000,000 365,945,202 1.024,170,064 1,033,944,754 1,040,515,865 49 M inistry of Water 3,225,008,000 2,360,346,553 3,212,738,251 3,500,000,000 3,500,000,000 50 Mrinistry ol Finance VOTE 50 1,322,000,000 967,559, 114 1,450,000,080 2,000,000200 1,518 116, 202 51 Ministry of Home Affairs 0 52 Ministry of Health 3,375,000,000 2,470,130,114 3,538,147,932 3,500,000.000 3,500,000,000 53 Ministry of Community Dev. Gender & Culture 0 352,480,609 500,000,000 54 Radio Tanzania 1,600,000,ODO 1,171,024,647 500000, 000 500,000,008 500,000.000 55 Tanzania Investment Centre 0 56 Ministry of Regional Adm &Local Govt. 193,750,008 141,803,766 290,625,00 387,500,002 389,864,462 57 Ministry of Defense and National Service 1,000,000,000 731,890,404 1,000,000800 1,000,008,000 1,000,008,000 58 MiNstry of Energy and Minerals 1,743,750,000 1,276,233,892 1,828,043,09B 1,828,043.098 2,000,000,000 59 Law Reform Commission 60 Industrial Court of Tanzania 61 Electoral Comrnission 62 Ministry of Communications and Transport 302,020,002 300,000.002 63 Local Government Service Commission 65 Ministry of Labour and Youth Development 66 President's Office- Planning Commission 500,000,000 365,945,202 500,00a,000 500,000,008 508,00,008 67 Teacher's Service Commission 0 B8 Ministry of Science, Tech.& Higher Education 1,743,750,080 1,278,233,892 1,828,043,098 1,828,8043,098 2,00i,000,000 69 Ministry of Natural Resources and Tourism Total Ministries 27,472,000,000 20,106,493,182 28,800,000,000 32,000,000,000 32,000,000,000
NOTE
180 Table 10b: DevelopmentExpenditure Ministries (in percentage)
VOTE MinistrylRegion 1998199 1999100 2000101 1 2001102 2002103 Budget Likely Otturn CeDings Proi. Proj.
26 Vice President's Office . . 27 Registrarof Political Parties 28 Police Force 29 Ministry of Home Affairs - Prisons .- - - 30 President'sOffice and Cabinet Secretariat 10.9 10.9 9.3 1.6 0.6 31 Vice President's Office . 32 President'sOfRice - Civil Service Department 1.8 1.8 1.7 1.6 1.6 33 Ethics Secretariat . . - 34 Ministry of Foreign Affairs & Int. Co-operation 35 PermanentCommission of Enquiry 36 Civil Service Commission - - - 37 Prime Minister's Office 0.7 0.7 0.7 1.1 1.3 38 Defence . 39 The National Service . 40 Judiciary 1.4 1.6 1.4
41 Ministry of Justice and Constitutional Affairs - - 42 Office of the Speaker , 43 Ministry of Agriculture and Co-operatives 8.9 8.9 8.9 9.2 10.0 44 Ministry of Industries and Trade - - - - 45 Exchequerand Audit Department - 0.2 0.2 0.2 46 Ministry of Education 7.B 7.8 7.8 13.8 13.9 47 Ministry ofWorks 14.6 14.6 17.4 18.7 18.7 48 Ministry of Lands & Human Settlements Dev. 1.a 1.8 3.6 3.2 3.3 49 Ministry of Water 11.7 11.7 11.2 10.9 10.9 50 Ministry of Finance VOTE 50 4.8 4.8 5.0 6.2 4.7 51 Ministry of Home Affairs - - - 52 Ministry of Health 12.3 12.3 12.3 10.9 10.9 53 Ministry of Community Dev. Gender& Culture - - 1.1 1.6 54 Radio Tanzania 5.5 5.8 1.7 1.6 1.6 55 Tanzania Investment Centre - - - - 56 Ministry of Regional Adm.&Local Govt. 0.7 0.7 1.0 1.2 1.2 57 Ministry of Defense and National Service 3.6 3.6 3.5 3.1 3.1 58 Ministry of Energy and Minerals 6.3 5.3 6.3 5.7 6.2 59 Law Reform Commission - - - - - 60 Industrial Court of Tanzania , 61 Electoral Commission . . 62 Ministry of Communications and Transport 0.9 0.9 63 Local Government Service Commission - - 65 Ministry of Labour and Youth Development - 66 President's Office - Planning Commission 1.8 1.8 1.7 1.6 1.6 67 Teachers Service Commission - - - 68 Ministry of Science, Tech.& Higher Education 6.3 6.3 6.3 5.7 6.2 69 Ministry of Natural Resources and Tourism - - - Total Ministries 100,0 100.0 100.0 100.0 100.0
NOTE: Based on iocal component only. Source: Table I Oa
181 Table 1Ia: DevelopmentExpenditure-Regions
199912000 199912000 2000101 2001102 2002103 Budget LikelyO/tum Ceilings Proj. Pro. 70 Arusha 343,570,000251,455,586.14 549.712,000.00610,791,111.11 610,791,111.11 71 Pwani 205,342,000150,287,839.36 328,547,200.00365,052,444.44 365,052,444.44 72 Dodoma 196,285,000143,659,107.97 314,056,000.00348,951,111.11 348,951,111.11 73 lInga 249,342,000182,491,017.14 398,947,200.00443,274,666.67 443,274,666.67 74 Kigoma 167,228,000122,392,568.50 267,564,800.00297,294,222.22 297,294,222.22 75 Kilimanjaro 252,342,000184,686,688.35 403,747,200.00448,608,000.00 448,608,000.00 76 Undi 213,342,000156,142,962.59 341,347,200W00379,274,666.67 379,274,666.67 77 Mara 218,785,000160,126,642.06 350,056,000.00388,951,111.11 388,951,111.11 78 Mbeya 348,456,000255,031,602.65 557,529,600.00619,477,333.33 619,477,333.33 79 Morogoro 212,785,000155,735,299.64 340,456,000.00378,284,444.44 378,284,444.44 80 Mtwara 194,785,000142,561,272.36 311,656,000.00346,284,444.44 346,284,444.44 81 Mwanza 278,899,000204,123,501.81 446,238,400.00495,820,444.44 495,820,444.44 82 Ruvuma 199,228,000145,813,061.43 318,764,800.00354,183,111.11 354,183,111.11 83 Shinyanga 240,899,000176,311,666.46 385,438,400.00428,264,888.89 428,264,888.89 84 Singida 139,228,000101,899,637.18 222,764,800.00 247,516,444.44 247,516,444.44 85 Tabora 237,042,000173,488,765.17 379,267,200.00 421,408,000.00 421,408,000.00 86 Tanga 256,342,000187,614,249.97 410,147,200.00455,719,111.11 455,719,111.11 87 Kagera 237,342,000173,708,332.29 379,747,200.00421,941,333.33 421,941,333.33 88 Dares Salaam 118,530,000 86,750,969.60 189,648,000.00210,720,000.00 210,720,000.00 89 Rukwa 190,228,000139,226,047.79 304,364,800.00338,183,111.11 338,183,111.11 Total Regions 4,500,000,000 3,293,506,818 7,200,000,000 8,000,000,000 8,000,000,000
Note: Basedon local componentonly. Source: TheTanzanian authorities.
Table 1lb: DevelopmentExpenditure-Regions (in percentage)
199912000 199912000 2000101 2001102 2002103 _ Budget Likely Ottum Ceilings Proj. Proj. 70 Arusha 7.6 7.6 7.6 7.6 7.6 71 Pwani 4.6 4.6 4.6 4.6 4.6 72 Dodoma 4.4 4.4 4.4 4.4 4.4 73 Iringa 5.5 5.5 5.5 5 5 5.5 74 Kigoma 3.7 3.7 3.7 3.7 3.7 75 Kilimanjaro 5.6 5.6 5.6 5.6 5.6 76 Lindi 4.7 4.7 4.7 4.7 4.7 77 Mara 4.9 4.9 4.9 4.9 4.9 78 Mbeya 7.7 7.7 7.7 7.7 7.7 79 Morogoro 4.7 4.7 4.7 4.7 4.7 80 Mtwara 4.3 4.3 4.3 4.3 4.3 81 Mwanza 6.2 6.2 6.2 6.2 6.2 82 Ruvuma 4.4 4.4 4.4 4.4 4.4 83 Shinyanga 5.4 5.4 5.4 5.4 5.4 84 Singida 3.1 3.1 3.1 3.1 3.1 85 Tabora 5.3 5.3 5.3 5.3 5.3 86 Tanga 5.7 5.7 5.7 5.7 5.7 87 Kagera 5.3 5.3 5.3 5.3 5.3 88 Dar es Salaam 2.6 2.6 2.6 2.6 2.6 89 Rukwa 4.2 4.2 4.2 4.2 4.2 I Total Regions 100.0 100.0 100.0 100.0 100.0
NOTE: Basedon local componentonly Source: Table11a
182 Table 12a: Sectoral Recurrent Allocation 199912000 - 2002/03 ______.__ -V T
__ __ I998199 _ _- _- _ - ' ' -- 1999100) ______PE ACT PE EST OC ACT OC EST Total Act. Total Est. P5 OC Total
Mitsis1r-ie.sApqrniiioiit 11,792,943,974 _ 13 273,114,771 141,315,041,053 127,950,8()02,5 |53,107,985,127 141,223,956,92i 15;7071540,420 191,10,381,400 206, 817,921,82C l_____11.s~ _ 3,040,952,077- 3,507,237,20C 5,449,615,[)2424 8,490,567,101 6.263,580,845 4.654.0u4,54s.3g 3.030,067,OOb 7,684,071,549,39 Loecal(iovcnauceii 4,746,841,914 -4,778,-770-,-600 ? ___._ 4,7f,4 ,917~4 ~4 778:7ii,60 8.562,66 l1,9(5) -___'___'___:_- 8,562,-661S,95' fTikit- ,346,557,746-35 3,346,557,7416,.35 -3,36,06-7,70 - 6,2-7,964,98 6,276,964,96 3,369,067,700 Urbanroulicils _ . ______1,409,702,900 2,285,696,9787 1,400,284,167.651,409,702,900 I - 1,400,284,167.65 - 2,285,696,987
Security
__cu__, .______._I
l)efentceandlSe'.urity -______
MTinis6rii,/I)i cnet 70,133,382,1 S 75,541,249,711 GO,82Y,156,8816 47,742,400,389 136,9i2,539,041 123,283,650,100 85,15t,077,8t6 56,562,006,400 141,-713,84,2 TotlDefenice and 70,133,382,154 75,541,249,711 ,2~im 742130,062,939,040 123,28,60101 8 '51,07 5,5206400 141,713,084,216 Security SosciallSe7tUrs_ Euationl ______MEinistriLDpaLntni '3,595,248,9)26 ~9,615,855,9i0C 22,504,781,911 3,426,077,sou 32,100,030,8370 33,041,93 13,710,079,51 25,332,503,300 39,042,582,831 l{egioii~~~~, 5,043,975,55 64-9T,1-76,89-6 2625-,1749-1-8097 ,39 8,69, 155,3 7 __ 7,30629.9 I7,2,2 0,1,0 8,3,2 Local ,ovemiriLt 67.069,374,67267,520,503,440 4,985,195,103 3,312.308,914 72,05459 ,22 2s,354 078 6,l27 ---13,16,720-,2 118,923,08,276 -- tn-lt 663,99,8462,1S14,354,005,269 4,057,948,814 2b, 19,456.68 58,048,795,4238 ,24,72s.8x 8,94,167,26'I 9,26,600 9 42 1 hhan0'oun11N 1f3,0)78.3528-,061.11 fl163,I,-,498,370j ~927~,246,289-616,089-,458 16 140574303 S~,8..6 1882,120,5) 1,40330 2,781586
it-lac29tl4 MInlstrwl/DLirtincril 2,356,805f1832 119445,335$,200 22,C785,735321,0iIC '65,858, 2IC32,3i.N69 8,64071938,20G 3205,4159,860113 521,521,8 00 23 970,67,60 Rcgions1.41IJ,993,88 1.28 1,624,294,224 656,2~~94,9620,5,9.02072884.8186523291 8,T29,799,35~3 ~70-9,401,6009,3,00,95.0 Lou~1n~n~Yit G I 6~67,343,667.34I ,8, 58i ,4,9,758 2,7,6.61.1,'6-42,43.87,708,203-,0254 1 ,0,-92,6-28-,02-8,800 2223,3277 1)i-sir-i ct -13,4 97,7-11,65-2.21 1358-8,501,317. 1,014,8 071753 67104,i7 14~,512,198,9535.14 14,26.5,199 1451,2744 ,876~,902,200 16,38,02,4
Urlxuii 3,269,632,0T3133-9,62-i4,54-270 23,3,73 5.-3,5-01 ,443,597,4 ~3,445,646;,895.48-5-,9 T153 751, -M26,60 5845,913 Councils S-TtAM 058396366 23945,75,24- 22-7957 136,996,193,26 43216,32213.86 3, 4,949ii5483 32,020,2547i.3 2,49921i 5,7,0,94.03, Witter
183 . ,6,645,I-- I ,716,305,060C3,434,5-(,16(1) -- 79,914-,000 5,050 4,34 -- 2,56,219,600-I-,S-2,37s 1,001,704,40 2,953,742,240 Ministries/D)epartwIFcnt Region.s 783,885,49.60 902,385,6-80 364,6)X,3i31i2,365,610.50 I14,493,802.60 1,014,751,290.50
Iocal (iovcmunient- 15,190,926.30 9,377,847,700 692,388,20(8.80 -460),042,869.70 10,007,579,135.10 9,37,890,5693.70 1,913,J83,53 ,065,097,70 2,978,281,235 _ District _ T7498,72X.695.h7 7,549,167,398 _ 563,604,0011.96 374,474,895.94 8C062,332,f697.63 7,923,642,294.44 1,831,643,843 1.033,587,300 2,865,231,143 llirbauiCounllcil. 1,816,462,230.1631,828,680,301.50 128,784,206.84 5,5S67973.-76 1,945,246,437.4-7 1,914,248,27. 26 8,539,692 3_51,4 1 050,092 11,715,721,595.90 11,996,538,980 4,491,05n5,61.81 1,452,322,480.21 IG,,206,i77,277U 13,448,861,460.20 3,865,221,375| 2066,802,100 S1932,0222 Sub__Sb-Tot.l .t _1 ' '1 '-15-1_,3N -11,9 ",8.9 ' _,9,68f__ _. ' !_.023,475
SocialOthiers 1,433,183,173 1,0,6,0) 2,131,00-9,329g 70,8,1) 3,563,192,502 2!,2(15,-846-,9009 1,921, 16 4,720 816,941,80i 2,738,106,520
Totl _SoilSectors tt5,985,900,273 118,079,794,4(0 59,4Z4,147,fi3tl 46,6 7,8 175,147 164,77 159),51,529,74.6 G61,880,230,200221,390,759,674.61 ElconomicInfrastructure
Mini.striLsf l)aIInenI 1,857,313,265 1,935,046,80 3 409,396,20() 48, 35,285,100 45,265,709,465 50,470,331,906 2,741 ,322,5 42,148,391,30 44,889,713,868 Recgionsis_ __]()_
-- I-ocal (iovrmweoit - 97,904,861 1,105,289,700 - 9-2,517,0()2296,671,400 1,490,422,463 1,401,961,10 I1,583,865,293 534,067,100 2,117,932,393 Oistri ct 989,302,937.41 895,284.657 317,939,257.62 240,303,834 1,207,242,195.03 1,135,588,497 I ,196,86,441 360,686,300 1,557,553,741 Uirbhan 2)08,60 1,0)23.59 21 0(,005,043 74,57X,344.3X 56,367,566 283,180,267.97 266,372,609 386,997,852 173,380,800 560,378,652
SUI).Tot,uaI = 2,955,218,125 3,U41,336,50(1 43,8009,913,801 4,1,96,50H 4C,756,131,)92 51,872,293,fK)0 4,325,187,861 42,682,458,400 47,007,646,261
O~thIi -- ______- ___ _ .______- ___. ____}
Ministrits0)½aririini 22,140875 70620 13,304,633,973 11,459,176,000I S 4451 157,62314,334,8822 2.822,628,780 8,139,936,900 10,962,565,680 iRcgionis --- (1)__ , . ('I) . X , s b (2)
Local Govcmmc ----
liistrict - ______~ ~_ ~ ~_ ~ _~ _ ~~_ _ _ _ _ - _ _ _ _ _ . ______,______.______
UrbaulCouncils
Sub-Toltal 2,140,523,643 2,N75,70G,20t 130433,972 11,459,176,400 15,445,157,621 14,334,882,200 2,822,628,780 8,139,936,900 10,962,565,680
TotaliECoflonifjc = 5,o74 1,774 S,916,042,700 57,105,547,773 G0,291,132,505 62,201,2X9,547_ 66,20 7, 1 75;3711 7,14781G6,64150,822,395,300 57,970,211,941
184 Infrastructure ______
Productivc ______-___
Ministries/I)epartnilcnt 9,287,327,71 10,550,319,10 19,289,152,971 12,375,2 8,40 28,576,480,690 22,925,607,500 6,553, 69,144 9,345,719,700 15,899,288,844 Regions ______(') _____ - (I) ______- ______(2)2 ______- - Local Gov-cninent
Disrict.t _ UrbanCounci s Totai Produtv 287 327718 10,550,3191-00 19,289,152,970 i2 ,375,28841 28,576,480,688 22,925,607,500 6,553,569,144 9,345,719,700 15,899,288,844 Salary Increanse -- Recruitment _1- Ilsurance Contingency ______Grand Total 220,tl83,0X9,8i84231 ,646,f5282 343,412,661,33f6 297,813,784, 45 563,495,751,220 529,460,313,427 287,287,200,00 372,750 800,000 660,038,000,000
Source:Tlhe manzanianAuthorities Note: I I ._. /1 Road Fundallocation to Ministry of Regional Administration and ILocal(Covenunicnit as well as Nlnistry of Work.sis included in OC. /2 Assumptions tor distribution of OC and lE for regions and local governncmt are as fillows Education 72% I Ilealtht 18% Water 10% /3 Assumptionslor distribution between urban anddistrict councils Ibr PE and OC arc as follows
UJiban 19.5% . . I)istrict 80.5%
Urban 18.6% District 81.4%
/4 ODCallocations dlonot iicltude parastatal wages whichiis captured in thdespecial expeinditure .___. ______I .I
185 Table 12b: Sectoral Recurrent Allocation 1999/2000 - 2002/03 (in percentage) _
______1998199- _ __- _ _ _ _ r 199100 _ __ _ PE ACT PE EST OC ACT OC EST Total Act. Total Est. PE OC-- Total A dministration ______Ami5 .4 T5.7 41.2 - 43.() -27.2- 26.7)IY - 5.5- - 513 31.3
M inistries/Departmnenl ______Reginincs/l)cpar- I1.4 _ .I5 16 0.9 -15 2 - 1.6 O.X 12 ,ocal Govcrunent 2.2 2.1 0.0 (.0 0.8 0.9 3.0 0.0 1.3 D)i.tiict 1.5 -- - 1.5 0.0 0.0 06 0.6 2.2 0.0 1.0 Urban 0.6i ().6 ° n- 0. 0.2 0.3 0.8 0.0 ___ 0.3 Comncils Total Administration 8. 9.3 42.7 -29._ ____ 43. 28.8 1.152.1 33.8
DNfenccand Security ______. _ _ _ _ 31.9 32.6 17,7 16.0 23.2 23.3 29.6 15.2 21.5 Ministries/Departnent Total Defenic and 3 9 32.617.7 16.I 23.2 23.3 29.66 15.2 21.5 Secu rity______
Social Scetor.s_ Educatioin 4.4 4.2 6.6 7.9 5.7 6.2 4.8 6.8 5.9 Ministries/I )tpurtment-___-_2X __ OS __ __ 1______°_I_O.Z_0. ____ 0.A kcgioii ~~~~2.6 ____2~.8 - 0.8 ___ . 15A. .1 0.2 Local mvcmnuLcnt 30.5 29.1 ~ 1.5- _1 1. 12.X -3.4 1 37.5 3.0 18.0 DI)Sthct 24.5 23.S 1.2 I 10.3 10- l o.31.0 2.5 14.! ---)li(lt-)~ _- .9_ _--5.7 1 0.3 0.2 2.5 2.6 6.6 0.5 3.1
Sulh-Tot_l- 37.4 36.1 8.8 9,2 20.0 21.0 42.4 10.0 - 24.1
. _ ._ 6.1 - 5 4 4. 3.4
Rgi-ons - _ 0 6 0.7 0.2 0- 0.4 03 3.0 0.2 1.4 Local iovcnuiLenlt 7.6 7.3 0.4 0.3 3.2 _. 3.3_ 6.8 0.7 3.4 District 6.1 5.9 .3 0.2 2.6 2.7 5 1 0.5. 0.2 0. - lbfin~-- _ 1.4 _ 01 0.1 0.=1.5 0. 18 Councils
186 Sulb-Tot.al = .3 -- 1 19_9.U 6.6 __5.7 7 8.2
Watcr _ ~______.. 7 0 .7 1.0.3 0(.9 0.5 0.7 0.3 0.4
Ministrics/Depailment ______.o4 0.4. _ _ 0.2 0.2 02 0.0 0.0 0.C L.-CalJoven ni l 4.2 4.0 _ .2 0_2 1. __ 19 0:.7 0.3--- O'S ~ Di.stri 3.4_ 3.3 0.2 0_.1 _ _1.4 15.____1 _ 04 Urhan ~~ 0.8 0.D8 0.0°0°.---0 -- 0.3 - -0.4 0 0.0 0.0 CouncilS Sub-Toal l T 5.3- 1 5.2 .3 -- ~ (--1.- 5 - -~2.9 - --2.5 ' 1.-3 4 U.6 0.9
SociaWOthers .7 (.2 0.6 1 0.4 (0.7 0.2 .4
Tooa-lSialSects __5_r_ 51.03 517. 55.5 ______33.3
Economiic lnfrastucture Roads 0.8_____ 0.8 12.6 {--16.3 8.0 _ __'3.5 1_6 113 6.3 Minis(ries/D)cpartnmeni Regions _ -0.0 - ().() - (. 0.n- o -o7 _. 0. 0.0O- Local Govenim U3 -o __ 0.3 ().3 0.3._ 0.6 0.1 0.3 ---1isricF --0.4.4 0.3 (01 0.2 -- 0.2 0.4 0.1 0.2 l_rbll. _ .1 0.1 0.1 * 0.1 0.0 Councils sul-To(tal 1.31.3 12.8 10.4 8.3 _ _ , 1.5 11.51
Otlers 1_( 1.2 3.9 3. _ 2.7 2.7 i7__I02 1. Ministrics/Dcparmenlm ,-gio.n 0.- 0.0 0.0 0.0 _ 0.0 0u.0 0.0 - .o 0.0 0.0 Local (iovernmnnit __(( 0 -(.() 0.0 (.0 0.0__ 0.( 0. 0.0 - 5src -l .() 0).0) 0.0_ - 0).0 ~- 0. 0.03 0.l) 0 .() 0.0 __ H~i 0.0._ 0)(.0 l3.0 0.0 0.0 0.0 0).0 0.0 0.0 C otlicils _Sulb-Tltal_ 1(3 1.2Z _ 3.9 = 3.8 2;7 __2.7_ -1.0 _ 2.2 I.7
Total Ecunomke 2.3- - Z -_26 I 6.6J - -11 0 - 1252.5 13.6 8. Infrastructure
187 __ - 4.2 - 4.6 - __ 5.6 .2- 5.1 4.3 2.3 2.4 Miistrics/i)epartuien_ Itegiois ___ 0.0 _ 0o.0 0.()--- -__ 0.0 0.0 0.0 0.0 0.0 ______0.0 IoalGovrrnicnt 0.0_, ___)0 _ 0.0_ 0.00 0. (.0 __(10) 0.0 - -___0.0 _)iTric 0 00 ______-- 0 _0_ _ 0 . 0. 0.0 Urban 0.0 0.0 0.0 0.0 0 ) (.0 0.0 0.0 0.0 Counclvils il otal Productive . - -__ 4.6 .3 2.3 2.5 2.4 Salary_increase ~ 0.0 __ 0.0 ______0.0 0.0) 0-0 - ---- 0.00 O.O uteriTl 0:0 0.0 D (10.0.0 (0 __ 0.0 0.0 0.0 0.0 -- 0.0 lnsuraiinc 0.0 0.0 00.0 00 _( _0 0. 0.0 Cenrgc y 0.0 0.0 0.0 (.0 (.0 0.0 0.0 0.( Grand Total 100.0 100.0 I J-o() 100. 100.0 100.0
Suc:T bc a -- _____- ______._
188 Table 13a: Sectoral Development Allocation 2000/2001 - 2002/03 Ministrics/Departments
1998/99 199912/000 2000/01 2001/02 2002/03 Budget likcly 0/turn Ceilings Projection Projection Administration Ministries/Department 193,750,000.00 5,354,327,223.82 6,579,253,595.06 5,653,602,488.70 5,024,931,168.82
Defcnccand Security _ ___ _ Ministries/Dcpartment _ __ 731,890,404.10 1,000,000,000.00 1,000,000,000.00 1,000,000,000.00 Total Defcncc antl Security 193,7501,6000.0(0I 6,086,217,627.92 7,579,253,595.06 6,653,602,488.70 6,024,931,168.82
SocialSectors_ Education Ministries/Dcp"' mnt 3,875,000,000.0() 2,836,07_,315.) 4,062.317,996.51 6,235,701,254.02 6,434,552,965.83
Health Healh _ __, ______.______Ministics/Dcpartmcnt 3 375,(00),(000.()00 2,47(0,13(0,11385 3,538,147,932.44 3,500,000,000,00 3,500,000,000.00
______aeWatcr- ._.- _-I______.______Ministries/Dcpartnmcnt 3,225,000,000.00 2,360,346,553.23 3,212,738,251.22 3.500,000,000.00 3,500,000,000.00
tal So8cial Sectcs 1r_(_I,475,0(l,tl1.1 7,666,551,982.99 11,813,204,10.17 _13,235,701,254.02 13,434,552,965.83
Economic Infrastucturc__ (Lands and Energy) ______
Ministiics/Dcparlincnt _ 2,243,750,00).00 4,569,740,710.62 7,52,213,162.49 9,161,987,852.29 9,340,515,865.45
Total Economic Infrastucture 2,243,750,000.00 4,569,740,710.62 7,852,213,162.49 9,161,987,852.29 9,340,515,865.45
Prodluctive ______=______Mhlistries/Dcpament 2,437,500,000.00 1,783,982,860.00 2,555,329,062.32 2,948,708,405.00 3,200,000,000.00
Total 15,350,00IJ,000.0l0 20,106,493,181.53 28,800,000,000.04 32,000,000,000.10 Notc: Bascd on domestic component_ Sorcc: Te ut__orities __Taza_niAn
189 Table 13b: Sectoral Development Allocation 2000/2001- 2002/03 Ministries/Departments (in percentage)
1998/99 1999/2000 2000101 2001/02 2002/03 Budget Likely 0/turn Ceilings Projection Projection Administration Ministries/Department 1.3 26.6 22.8 17.7 15.7
Defense and Security Ministries/Department 0.0 3.6 3.5 3.1 3.1 Total Defenseand Security 1.3 30.3 26.3 20.8 18.8
Social Sectors Education Ministries/Department 25.2 14.1 14.1 19.5 20.1
Health Ministries/Department 22.0 12,3 12.3 10.9 10.9
Water Ministries/Department 21.0 11.7 11.2 10.9 10.9
Total Social Sectors 68.2 38.1 37.5 41.4 42.0
Economic Infrastucture (Lands and Energy) Ministries/Department 14.6 22.7 27.3 28.6 29.2
Total Economic Infrastructure 14.6 22.7 27.3 28.6 29.2
Productive Ministries/Department 15.9 8.9 8.9 9.2 10.0
Total 100.0 100.0 100.0 100.0 100.0
Note: Based on domestic component Source: Table 13b
190 Table 14a: Sectoral Development Allocation 199912000- 2002103 Regions/Local Government
1999/2000 2000101 2001102 2002103 Likely Olturn Ceilings Projectfon Projection
Administration 996,941,588.73 1,894,813,398.76 1,663,400,622.18 1.506,232,792.20
Social Sectors Education 464,558,056.26 1,015,579,499.12 1,558,925,313.50 1,608,638,241.45
Health 404,615,081.26 884,536,983.11 875,000,000.00 875,000,000.00
Water 386,632,188.76 803,184,562.80 875,000,000.00 875,000,000.00
Total Social Sectors 1,255,805,326.28 2,703,301,045.04 3,308,925,313.50 3,358,638,241.45
Economic Infrastructure 748,537,900.33 1,963,053,290.62 2,290,496,963.07 2,335,128,966.35
Productive 292,222,003.13 638,832,265.58 737,177,101.25 800,000,000.00
Total 3,293,506,818.47 7,200,000,000.00 8,000,000,000.00 8,000,000,000.00
Note: Based on domestic component Source: The Tanzanian Authorities
Table 14b: Sectoral Development Allocation 200012001- 2002103 Regions/Local Government (in percentage)
199912000 2000101 2001102 2002103 Likely Olturn Ceilings Projection Projection
Administration 30.3 26.3 20.8 18.8
Social Sectors Education 14.1 14.1 19.5 20.1
Health 12.3 12.3 10.9 10.9
Water 11.7 11.2 10.9 10.9
Total Social Sectors 38.1 37.5 41.4 42.0
Economic Infrastucture 22.7 27.3 28.6 29.2
Productive 8.9 8.9 9.2 10.0
Total 100.0 100.0 100.0 100.0
NOTE: Note: Based on domestic component Source: Table 14a
191 Table 15a: Summary of Funds Requirements and Proposed Allocation Ffor Priority Activities In Some Sectors (In Mlilions of Tshs.)
199912000 2000101 2001102 2002103 Requirement LikelyOlturn Requirement Prop. Allocation Requirement Prop. Allocation Requirement Prop Allocatlon
Education 107,775.10 40,447.17 111,172.75 59,060.14 115,674.72 76,349.32 120,301.71 98,808.20
Health 46,680.00 24,724.70 55,760.00 41,613.62 62,180.00 56,840.86 64,667.20 75,048.04
Water 8,706.00 4,813.78 11,260.00 8,860.37 16,930.00 10,533.32 17,607.20 13,381.26
Judiciary 6,852.90 3,412.65 7,194.00 4,426.72 7,503.70 4,758.45 7,803.85 4,963.96
Election 16,174.00 13,800.00 31,406.00 32,000.00 - 3,943.62 - 4,100.00
Agriculture 15,252.00 6,059.87 12,443.00 7,258.80 13,120.00 8,122,53 13,644.80 8,891.20
Energy 5,382.00 2,580.12 5,435.82 3,538.39 5,490.18 3,743.64 5,709.79 4,145.46
Roads 46,000.00 46,955.61 50,000.00 41,337.17 52,000.00 43,554.65 54,080.00 45,114.93
Lands 850.00 365.95 1,050.00 1,024.17 1,150.00 1,033.94 1,196.00 1,040.52
Controller and auditor 1,085.40 730.06 1,413.40 1,323.87 1,597.90 1,400.30 1,806.30 1,481.32 General
TOTAL 254,757.40 143,889.89 287,134.97 200,443.25 275,646.50 210,280.63 286,816.84 258,974.89
Source: The Tanzanian Authorities
192 Table 15b: Summary of Funds Requirements and Proposed Allocation for Priority Activities In Some Sectors (In Percentage)
199912000 200012001 2001102 2002103 Requirement Li_ely 0tturn Requirement Prop. Allocation Requirement Prop. Allocation Requirement Prop. Allocation
Education 42.3 28.1 38.7 29.5 42.0 36.3 41.9 38.5
Health 18.3 17.2 19.4 20.8 22.6 27.0 22.5 29.2
Water 3.4 3.3 3.9 4.4 6.1 5.0 6.1 5.2
Judiciary 2.7 2.4 2.5 2.2 2.7 2.3 2,7 1.9
Election 6.3 9.G 10.9 16.0 0.0 1.9 0.0 1.6
Agriculture 6.0 4.2 4.3 3.6 4.8 3.9 4.8 3.5
Energy 2.1 1.8 1.9 1.8 2.0 1.8 2.0 1.6
Roads 18.1 32.6 17.4 20.6 18.9 20.7 18.9 17.6
Lands 0.3 0.3 0.4 0.5 0.4 0.5 0.4 0.4
Controller and auditor 0.4 0.5 0.5 0.7 0.6 0.7 0.6 0.6 General
TOTAL 100.0 100.0 1000 100.0_ 100.0 100.0 100.0 100.0
Source: Table 15a
193 t.1b. 46*: 9-.4o, E.p-)di7- by Mn0I)Opn.7 InIIUAn8. 7,01.,. L-, O-o..-.,
V.1. I ltlwma~~~~~~~~~~~1889 2000 ______~~~~mIO.'wp. I oc.cy Lik4SO0Uul C408 ______
70Ado1,5.rl(,c VI0. F-lod.o,. 007,. 37.68,04.00n00 147.000.0o0(0on 5.3114.0401,(53 93,575230800 1016.7,10.20000 270.319.569131) W78h3,30840 807.644.072,00 3.728SN91.40414 I7AdNg4.t5.l(o IleglcOor.lP.4Vo8 Po.o4o I0,598,87,0.0 2,522.39.105000 2.502.06.081800 I8,324.904.00 2.600S.91.600.01) 2,877,242.7040DO7,0061,20320 2.115,873.118.00 2,131Z764.1011,20 30 As' sh-. P,..ddr.f0111c..odC.bI0.lSo8Ili7120.481,702,00 5.508,540.211.50 6.631.035.9f3.0O 267.037,5508.0 5.037.788.200.00 41.108.425,70800o 274.710.303.40 I.293.410.40.5 85808054 37 AdmwdOm,.o MAc.PI"d,Ill. Offio 81,093.509000 34,7374.591799 4322802,0890.0 164,439.372172Oa 26A.077.110399 433,410,972.99 172,017.235.00 285.100,06.00 457.771.137.810 32 A40.5.So,b- P7eMdhTsOOIo..CMv 8cp'on 275,034,070,00 7.500.040.68000 2,245.502.5S6.80 433.50 172.03 7.067,085.600000 l,493.644,072.0 455,26S417.8 7,125.67'300.60 7.0(80080.50.20 33 Ad.k4i8.boo EiNksSe0etaUt. 27.978,994,00 111.917,831OC), f3g.705.825.9D 44,2011,700.00 127.409,6(0)99 171.611.399.00 46,411,705-0(0 70.054,i76,03 if.185,45007.111 34 Ad4o9o(.1lo,. M0,OoFoolo8.. 5 Cbs,5*tl 331.17.7,322,0.0 17,290,562,081.101 iV4,87,043 ?.00.9 3,404,004.05000 8,o7n.s87,2w00Oa 1179.0 2SA59.29 2.822191.758 so 8.5608308.07n00 1.385.40.430.1110 35 Adc.IW8.S,.N Po,-no.oCoccm78o.. of 0nqw5 00,800.027.8 (4004l.231.00 209.547,252.00 159,259.104.03 ¶3i,040,609.99 201.107.964.I0) 707,225.741.20 730,759,728.00 3011.11011.171,20 30 Ad.100.11wo CIOAI.,Mm1 ccnI,Io20.340.4.9449 K8A07,551A0 143,036.092500 44.091.792.00 122,322,0009DO i7,0f60(002.O0 480920.301.80 444.073.018.00 48011.MM,0001) 37 Adc94740skn M7l.*7O Om..0( 515,050,021.800 4.310.096,02900 4.031.017,80000 (;01.331.288.03 1,204,604,000.l0 7.005.028.008.00 827.207,052,40 1.302.007.718.00 2.8814.778.14040 40 A8m,9lI0.11on J09101..3 2.7538.284,4781 2.6,39990 5.359,404.41600 2,G037.745,&36.00 3.412,649,600 00 7,024,395,43909 3.792.222.t27.00 4,017.4011,578,00 7,808.748.70580 41TAdmoallsow MO.7.fy of .7-11C .o Co0hnbolull Afaw,10 245,873.033 OD 1,778.152.470 00 2,024.306,40500O :30f.328R.844.50 718,6807.29.8 7.000.020.54050 370.300,2801.20 767.170.92M.01) i141,214.648.00 42 AdmWir4,Oo0o 059offlettespohw. 7.544,810,23.0() 2.827520.90500 5.289,346.293.00 .0,32303 2,000.980,450099 40987.3800436,O0 2.101.757.072780 3.0730006,304.11( 0.105.740.441.80 45 Admi,4t50000 Eodhequsw 4d AuitDeOI8578U 242,444,717.00 631,193.00 0UO 874.031.713.00 344.754.032.0) 730.997.050.02 7.074,010.7T37.0 36079.00.801'au l,273.0865508.08 .3,78150 SI) Ad,snill,allon Mf07s0y off5.ooO VOTE 50 885.004.710.00 30.752.73,4902W9 37.438,728.211.99 7,038,505,32D00 3,545.S7Z,7V00.0 4,720,928,029.00 489,82,590.9 ,08m2083. 4.4805,8330.nS11 Minisfry of l0c0, SPECIAL. 57.647,931,2620) 57,047,037.292.99 0.99 9.99 0,00 .005
Ae,o50(t Ge-89s OM-c 7,03Z.020,050.50 1,0322.30,090.00 8o9.800,000.00 78044.567.8100,018 2,544,847,10100O 8aoo9. Octnco A.1ho17y 20.971,990,09.00 20.077.990,000.00 23,074.700.50.91) 21,074,M0111,000,0 0 51 4 7241,0,i,099o ff0007A00000c24,509,590,03) 4.275,0I7.70500 5.7(14,183,325.00 1.410.820,184.00 2.830.242.9D000 3,858.270.184.00 7.407,7145.03220 2,580,702,52600 407,7*535 54 A4 fk,0007.d.T-7,084. 285,330,2060.0 0(8.838.730.00 1.203,854S0,0)59 303.U94,000.0 95,09,9.92830,392.700.8 280.803,838.40 099.488,788.00 t,M0.0e.824.40 ,5% 04n4r0o501o 5cc,0n748o,0c07Co 39,570.704.00 452.458.927500 491.017.73,0.9 51,907,452.99 737,5763D.39D9 700.554.752.00 04,570,424.00 200030.078.11D 278.400243.0 00 Ado,94,000onM0990 s.f R.olcnM Adki.Ir.5.O *M7 [.-0 .1 40.037.750.0o 499.9909.000990 539.440.759.99 %13.70504,300.00 7.8301,504.30199 - t,308,8000.350. 7.206,086008.8 57A8cl,5,ftaall of01ir 40f.0,- OcOsoiO-591055 01,559,537,00 i7.74.057.000 OD 7.075072,007.00 7320,597.274.99) 515,898,400.01 054.480.778.00 145.527.101.99 04449400237-2,00080 59 Ado,I*.W..o L". R.50). C.oo0,Wval 27,752.2680.08 50.723,087.05 86.4115,341.0o 00.203.472.00 77.631.700.00 07,0.19 0506539 00.M8.802.0 2087.36I4.11048 60 A8ntIr,10s7oo (,00Cow.dftl 7107780.5 25,299.297.00 799,255,0495DO 134.990,077.00 37.452.000.00 727.783,8099.9 165.245.800.00 30,324,1099.80 200.467.428.00 230,780.024.0 4 07 Adn.7rV8*ol, 0c7.C,o 1c 301,400.478.08 l,538.0334.000.00 1.578,314.47800 00.007,078.00 73,999,090.000.99 73,865,037.075.99 69,310.990.00 32.O99000,008,60 32.0118.3il811.1109 03Ad N b,.OOo L-,d0Gwo0,72.c. C708o(1Is40 35,005107.Q8 13,4,215 74,049,44200 5091,07.54.00 7508602,8089D 281,57i,454.00) 53.403.714128 290.034.078.0 254.702,5.2004 60 Admlo,c03loo Pht,d703 Offl~- Pt.-nnC0cMM7740 313,525,1800.9 1,874,499,909550 2,247.P25,16000 802,537,605.99 703,642.00000 1.3282,9056999 033.7310.539.91 742.800,474.00 1.374.IZ,lXG*.6 Adn.IW,loeno 6.000). 3,D065052,0339 5.7,75040 8.4900.567.01.00 4,054,004,540.99 3,038.087,5000.00 7,584,07754991) 4.589,704,771.45 4.0,286,0088N.24 9.803I1113.745.710 Aftw,ialon.o LomWGov.,,on0 4,748,847.514.00 4,7460,04.914.00 a,M0.661,28939 320.00259 8000785.825.9 *11.8,950 VI2TE 33.35.5550.50.,03
550.70707 ~~~~~~~~~~~~~~~~~~10,099,737.700.99140.764,400.071,00 708.345,394040Z00 2.4,0,0,9 74.399.978,200.00 000.590.365.10sl.04 30.307.487.200.40 180,78'1,72.084.3 1133,11611808,344L]
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00 P540-11- 0600670 of N1046001-6*0.651.00,06 Z,509,7896,620.4 0.20.0436,064.90 7,620,226.363.00 2,566.76.935.40 5,544,300,602634 ,134.6081,824.74 43 Po04.ofv 1,1.4,5 o65A10cu151r6669 Cw060.460. 3,566.79.J68690 0 173.819,43000 5.545,604,210606 3,69,66,79666sa 5.66.209,213 06 6,557.969a.0416 44 K4,ooC1,b060o6yW6l.de.6.,4oIlad 424,672.642.2D 116966'89,649.09 1,54f.506,93202 424.9772,62.20 1.225.577.696 3,1651.356,635.0 So9.lo,,1ol 6,661,247.60620 '16,3211,46,482.65 14,262.3893.42,6 6,5611.247,6011.20 lZ.444,070,120.1S 14,3463246721,3l S.Isry5soo..... Z9,846.9930,20A43 2,4.606.2 57169676 55.741,2696677.65 Flem441,01 4,50,00.095.09 4,000,50906O004 0,0610,006.066,00 0,004,66,066.0 1556dn.0 20,17.9060.63009 20,179,69.,626.M0 32,075,036226.06 32076,630.320.00 c0.601000 1,750,6325.7.22 1T5.356,2.256.22 ,9.29719 1,9653,36701.50 a6,6___1101._66613764.t0O g01 __66.64462632,04_73 742309,6237~255,72 4046565 66 64669 92 7
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195 7.bt. l4o: RtECUREERTEXFE44DlTURE BY MI40sTR4Es0D0EAftTM044TS INCLUDI0O TRANSFERSTO LOC.RLOOVENE * P.ET PERSONAL EROLUMENI'SPrE AM3 OTHER CHAROES '00-
Vol _S0412000 TsT0/00 200 I s rFTO044,O0.iAeloal 040447004ieW4,t- C1410 _ -- rvrE 0ac 1 T4.4 E 00 1.1oc FE 0 C 0001
20 A444,4rdoo Vlc Prcd.4Wt 0444.. 02 004 0.03 03 0.07 0 Q0 00 3 0.00Q04 27 AdmIn drotbn O 400rnrdPorb P0l\teg 0 0 0.QD 0.75 0.46 0 1.0Q5 0.49 0.00 0 08t44 30 Admn,f rt8cn 0.54 4 Ot d C 4n41 Srcetdan11 0-°0 1.00 1.0° 0.09 2.33 1.14 0.09 1.93 1.02 31 AdaIlo*.On 040. PnnoIo. 0.04 O 0.0S 0.00 11 0 e0 0.05 0.00 0.07 32 AdmWlor .lnn P700id0nt0f0046 n.CMSe 0 Doepa,bnl.1 007 040 0.1n 0.41 037 0.14 0.34 0.5 33 Ad otaon EOlIo,S.a0 01 003 0.02 0.02 O,0 0.03 OOl 0.0D 0.03 34 |odmpwrskoon M ofFem4gnAflrsASfll.Coopaon 0 1.3 3 29 2. 1.7 3.17 2.13 1.21 2.02 1.03 35 Pn'n'onlICn.nmI044mo4 En4uh6 .OO04 0Adm4d0cn 0.04 0, 0.05 0.05 0.05 004 040S 30 d,4.o S'40onI00 0.04 00 0.0O3 0.02 0.00 0.03 004 0.14 0.00 37 1Am.drOnI*teos .f P.004 0.23 1.2 0.0 0.21 0.4 0.35 0.20 0.42 0.31 40 AdmOITI*o& Judbbr7 1.25 0.73 0.03 1.20 1.34 1 :n 1 20 4.3D 1.22 41 Ad|misraleon Mhb4y odJustce nd ComsIuOlon.IAffAs 0.11 0.52 0.3 Q 13 0.20 0.20 0.12 0.23 0Oi 42 AdmiNsr.0-on Ofk o.T rlh Spe.A 0 70 1.11 0.05 0.73 I.44 0.92 0.09 0.94 .2 40 AdOO,4*.Oon 0004~~h -dA.01At84040100440.- .4 0.40 012 0.00.20 0.1 0.301 020 |dmIdsbOl.SnA0 Mkhhy.0BFhF oo. VOTE SO o.34 4070 e.64 0.36 4 aS0.07 . .20 0.O0 0104101704T .f`hSPECIAL 0.00 4.70 40.23 0.O 0.0 0.O00 0.0 0.00 0.00
AeooImlIGe0rJn 0s40.e 000 0.DO 0.W 0 00 0.41 01 0.10 0.e0 TeN4.nh 5Ym.uAub.n1y 0.40 00 0.0 0.00 023 2.07 0.W 7.07 3.59 S4 AdMWstrOdon MhItryof Home IAfI. 0 37 1.25 004 0,49 0 90.7 0.47 079 0.03 S4 Adm4Orian Tn 0 3..2. 0TnleInve 0.34 023 0.42 020 0.20 5954 Adn,64T."'n Rdmdve.1-T.5 Tlnorwm ICalb.onC00m R Adh3rz ca oenel 0 .02 o Zo} 0.430n2 .20.00 oOo 0.02 4.4 0.03loD 0.03 a0070 0 .04 d5 A4dO.'a* KW kVduP0ofCoulA Ad .0400 -0 I..4 G- -. a 0042 044 0.10 0,00 3.4 0.24 0.00 0.37 0.40 07 AdZi.Nr* o Mi:y of Defa.. and Nmonl l 0 02o504 00 2 0.33 0.0 0.20 0.2 0.00 0.17 .44 56 AdoI,*atgn Lord Rol"on Comm400issi 0"0 0 02 0.0 0.03 0.03 0.03 0.03 0.03 0.03 600 A4n41441404 4n0j404 Cm" of TR14*911. 00.1 003 002 0.0 0.00 0.03 0.04 0.00 0.00 01 Admr *.0b- Elftt06trC"0lvain .0.0 0 45 02 00. 02 4 002 0.1 43.O1 03 Adn*4*.bon L00WO03BN- N*C01fl.4 02004 0.03 0.00.0.4002 00 0. 0.04 00 Adniis,0,Inor P1.4440hrs OIn'. flo.o4g 4200010440n 0.17 0.00.00.40.7024 .20 0.23 0.24 Adm,o4Irm*o.o Re.00003 4.204.0 .04 1.2 1.40 4.2 .6 1.41 1.40 Ado,i,4s0r0o LOT44430u emt4no 3.10 0.0 0.004 2.00 020 4.00 2.00s 0.00 4.4 VOTE330,5055.5900,003 0.00 0 000 00 0 0o. 0.00 0.00 0..I Sub.ToI.I 8.90 4Z74 2.062 10.07 2004 40.441 .82 314.4 21.7 38 ruFnce M40O s0pur7 4t.4fnc0 17.1a 101 4207 40.00 260 144.2 30 00.04 40.00 13. DT -n4dS.nnly Th-.N40on I Seare. .47 1 03 2.00 2 01 2.33 3 4.04 20 D0e440t .d S.0C.0 P1`0r Fr.o4 0345. S07 7.33 43 6.04 7.00 3.S IS 29 000oo -4d See"t Minihry olHr meAffrs. Pds.. 3.00 2 321 2.03 2 3. 3 20 2.03 4 2.00 Vub-Tn.Il 21.87 17. 2. 24 20.001211 2014 201114 1 1 234 40 Soeda -4.01. Mhhr. .o Ed-..Oon .4"3 245 203 4943 230 3.40 4.23 2.00 |.03 52 SooIdu-40.c MhIry0ofC mity 4.07 000O, e 4.4 4.0 7. 4.13 4.208 .4 53 Socal enAc s MWM4Col mo,447 4.03 0.v GurderAC2h0 032 0.30 034 032 0.20 03. 0.08 0.0 d50oiasoa . Mht70414of01044 t nd Youth DeveR.p0n4 0.33 032 0.32 0.34 00 0.20 0.33 0.24 O20 07 S00444..r..e. tI_ .- 04cc C-n4ol.n 0.02 0.02 0.02 0.02 000 004 0.02 000 0.04 00 Sa al me04o.n Mhhby01 Sd-..4 Teh4. High. Ed0.0n 0.20 4 38 2.75 0.32 7.02 3.70 0.31 7.10 3.70 40 Sort40.40. MhNhyr 041 0.73 40 0.0 0. 0.39 0.54 0 074 0100 S0.181 Wm":9 0t.g1r0s 3.00 400 2.004 3.30.0 40 SOstiIns Relilrzos 3 se 1 oe 1 2.0 43"30 5004400140.0 I.0044007R440004.4 2 3 j 0 5d s1 877 283 8 1 Sl 2 1~~~~~~~~~~~~~~~~~~~a 42. 202 47170 45.02 0.r, 20.0 43.00 83 2103 Sric T.ot.1 07 70 17 J166 62 24.27 40.03 61023 2673 41L 47 Ec omic ser4o.I 27 Mhbtry otWcdrs 0.4 929 5.99 00 441.77 5.99 0442 0.90 5.43 40 EcOoR,IMnoomern Mhh4.400L0r Huma S 0tlementsDev 0.3 0 71 052 0.| 0.79 .00 0.24 09 0.47 58 Eo ,Irmswm. MhhtyofEnrgy nMdMher4 0.1 0.54 0.39 0. 0 0.33 05 05.2 054 62 Eeeh.no. 4o Mh. Ccm-un c4 d Tr..pt0. eo0 2.02 1.03 0.57 1.0 4.10 0.54 4 1.114 000E401* 3540., E404n4 4000 0.ID 0.00 0402 0.00 4.000 56 000004* .009 ur.lc 016840140oRe1ob nu . And Loo4 GoeL 000 3.35 2.04 0.00 4.70 .20 0. 3.70 1.07 Eo00omk eaN 1000'sov mmeol 0.00 0. 024 0 1 021 0. 0.3 0. S.ubTo.I1 0.30 0.32 413 104 2.45 19J4 less10 6927.l 1I174 007
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So.re.: Tabl. I04
196 .-.Co.l400d T.649 lgb: Reoatr.OtOEp.oodfore by b stoSe4bDep.4ments Inelud11.e Tml0.4to I.0L. V1.rIOmeIO (tb p..0003lg Pefofod Ellumot, *P6 3d OUher Chl,g4s OC
- t0 22002203 e IllWnS5trUDet Ttmenle _ P^DINONSdll),a prcK Ion P oc TdOl PE C 01il
2S Adt4l0,tr.. VACEPRESIDENT 0 02 O 0 a0O O 000 0.04 27 A&mWtl,-I an R.oo4oood Pdtalk P.dde 0.00 0.7 0 41 00 070 0 40 30 Ad&,4tllob5 P-edlocc, 00,.r.4 Cbhet Soe7tviot 0.D 17.1 004 0.07 I 73 0.91 31 Aftini,l6.000 Vice.pePdn,Orc 0.00 0.0 00 004 00I 006 22 Adl"A P- C.Offioc-CI Cd M Senkc. 00p40t 0.13 0 31 022 ) 1 0.31 0.22 33 Adl,800it.0,0 ErtN" S4oco.1dc O0O1 0.04 0 03 0 01 0 04 D03 34 Ad,8,to4iOoo MWdAN rf For.lg.iAlf0w. ,0t Cooxr io-t 1.01 2 30 | 74 00| 2.20 1 A1 35 Aftl,I1e0-o P-on. C-roei4o. d Enf.oy 000 0.04 0 0 0 04 004 0.4 20 AZZ09f0o0 COOO.rccoC.oc-o.o.01 0.12 a0a 0 00 212 000 37 Adftlrt.n-on Pn,e Mm-les. Off-ce 01 0 3 0.2 0.010 0o7 40 Acflccag40Oo JodidorT 1010 1010 10o4 000 11 1 02s 41f A,8,OaloVf4n MbicoofJojo4&ieond C9cOfo0 oI M4A , 01OI 0C2 016 1 021 0 42 Admob6..ol Oflf, d th00Spe07 e 0,31 0.8. 0 7 O 1 0.84 0.7 45 AcOoco.IOan 4dr.chegoo ALK4t D.p.clnn 0 10| 0.35 0 2 0.0 D 3 0 22 S0 Adc*OMl0n Micltly of io,n VOTE50O 1 14 100I 0 6 I0n 10 I a 06 M44.f,yor 40onorrSPECAL 000 0 00 00 0.00 0.00 000
A0 m,o4nfGec. DI0t5ar I | O30 0 0 0 10 0.5 0 3 T r. R-eveue Athry7 00 000 3 0.00 6 8 3.47
sI Acbr40it,jAto- MiN.0yT of H00,, Afi. 0.4 0 71 007 032 0 70 0 0 54 ARci,flcaS- R. .rv7c, .io OI1 020 0o1 S10 025 01I 55 AdcioA,.O.. T7.oo.,v. 1es.6e0tC.0*. 000 06 a04 001 000 003 So Adwlo*a06cioo 64/0461f e o0IA,8,Anntoon. endLooIGooeOsenO 0. 0332 017 0.00 030 0. 7 0 57 A00lnlStrOOof McootcyOlDeOno9eao0144904000 00 01 0.10 004 0.1 0.00 SD AflHltmt..on Lb Ft4..c.omi.s4on O00 002 003 002 0 0 60 AdcOcgoI4,.-to Indcti-lCo. & T7.a 001 00 1 0.0 I 001 0O 0.0 61 AdwA4lofrabon Ekctoo..lCovnh ion 00 21 I 0 O5 002 1.001 0. 63 A wdnc6raOon Loca G--srmeot S-. Commo In 00. 000 0.04 0.01 0.06 0 r6 Adnnitco4.-40 P009.d.W. OI04 PlooN6gCoocoio 0 1f 10 000 0.1 0.20| 0.2 A 01044Oon Rego-I 1723 0 30 1221 1233 I1 A00ooO4000oe Loc.IG0ce,n,.- 2I0 O01 121 227 o0 II VOTE 330 3,55560,63 00 00o 00 00 00 00
SbT0.04 4.0 31.07 2 701. 14.61
30 Dd0 ,o.d0cooo, DdOen. 1 100I 1203 027 104 11.50 39 OOo cod S0u.K Tte N.l I Sc-- 0 2 a0 0.2 101 29 OcloC d,S-ccofy Potoc Fo--- 030 20 4.84 5.5 27 4.62 29 Dd--en S-e y Moi*1/ oNroeof H- All.- 221 200 263 220 2S4 2. Sub-T. 24.4 176 21.10 2Z44 3.2 21
40 Ooc ul.ero:e . Mfni4tyldeoo 207 320 3 44 337 4 2.04 02 SOoo,IOIXNooIo MocI4rf H.Ah00 1.97 56 1.02 11 53 SoonjeNcei M.t. of Co_oroy Drr GenObc & CoOoe 027 0 I 07 0 25 0 01 6S S_u =4001e,. Mkiory ol Laboc .rd Yto, DevedOo-oOf 07 0 27 0.20 0 2 0.2 0.2 67 S-coo 946e0 T794,0', S-. C-C niiC n 002 .O7I 0 04 0.02 0 005 00 O .S DeL MiNEtyool n Tedh* liSghEduc* on 0 27 7 71 41 024 9 406 40 S.d1 MoioyolWMe.rycicos 0 01 00 05 124 0 40199R0060 -40 200 140 0.7 231 2071 S .I.1nco. Lc.cd Gwernmert 360 0 I011 2324 34 1200 23 Sub-700.0 4.4 0. 00.07 4U 4±0, 4t1
t7 Eoonomc- -nrioel 27 Miniv4 or WY5 . 0.73 0 74 4 . 0 0 '70 40 44 Ecenorrie 9400049 Miitcy of L.nd. & rm n44etdem eD 020 0.00 044O 0 0.00 0 56 E-o,mk -Nioe0 MEity yf E-y Mio7 00d 00 0. 0 005 0.00
E-oc -IooO- Eleetyi4Y tn00 2 a1o 00 0.0 0 05 0 01
Ec-olc,-,os L.100490-409 047 017 031 04 0.1 03 SLrb-T.10 2.1S 16. 7 3.04 1. 16.44 *.79
60 Poodk,WI Milonloy 00 N0404I ll-.90ce 40d To-l. 0 70 0.2 0.02 0.65 1 101 43 |,0/,1/c ObMLory of Agncv7u. -d Co4e04009 1 0 1.34 1 2 0.0 0. 0.109 0 44 Z6,0,0,h. Mir46y of b t10ile.cdT lTrd. 00 0.29 0.21 01.1 0.30 0.20 Suo4Thf0. 1.0 2.34 2.4C I., 0.6 2.4 S9110N . S0041 000 2.0 144 0 6 R-b,n7mxt 12 0.00 0.64 0 3 0 a0.6 1-9060 00 0.0 2.7 0.0 00 3.00 CaOOO4001 0 0.00 0 24 0.4 0 02 ______GRAND TOTAL _09.0 004. 100.0 10. 160.6 100.9
S0070 T.b00164
197 IA61
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20V2/2003 Administration Heath _ Educathn TOTAL FE - - oC-- - PR- u c - --- -FE -- C 70 Anlsha 339,367,593. 366,088,s2s-6 T 709, 928,361.77 326,839,4464 4 10,714,891.79 273,150,853.W 2,026,089 672. 71 Pwani 310,341,262.48 248,066,455 28 222,738,872.38 174,624,689.18 14,300,253.94 149,602.585.39 1,119,674,118.65 72 Dodoma 281,587,391.58 269,512,540.24 495,426,379.14 326,31B,090 34 16.271,796 48 296,487,683.81 1,685,603,881.59 73 Iringa 293,196,551 02 280,737,215 81 637,306,338 39 250,980,173 00 8,328,654.59 263,492,980.27 i.734,041,S13.08 74 Kigoma 185,823,479.86 2 t8,481,718 29 397,141,746 61 212,399,142 60 9,825,852.12 174,243,011.21 1,197,913,950.70 75 Kilimanjaro 308,552,751.08 253,223,076.47 628,D21329,15 2468,33,639.76 1o,203,99858 252,815,462.41 1701B,649,457.43 76 Lmndi 226,958,422.87 224,488,611 19 3s9.810,487.67 1 7,229,846 70 6,878,690,86 137,869,049.28 1,153,232,108.56 77 Mara 254,683,093.29 300,203,084.19 435,131,517.07m59625,707 47 8,444,390.24 202,960,254.16 1,261,048,046.42 78 Mbeya 243,449,610.47 345,080,37087 387,756,651.43 281,85,589 39 9,816,12990 304,021,78734 1,572,011,139.40 79 Morogoro 313,412.844.00 234.250,855 70 629,662,511.04 522.372,584 23 11,824,918.56 203.576,851 49 1,915,100s565.01 80 Mtwara 206,645,096.43 275,468,616 47 380,267,776.61 184,794,207 20 3,412,367 96 126,345,543.46 1,181,933,608.13 81 Mwanza 311,255,560.21 392,779,978.88 598,254,981. 11 89,463,148.20 10,922,01648 289,541,430.43 1,692,217,115.31 82 Ruvuma 166,338,345.00 274,193,662 62 487,231,223 77 121,633,559 85 15,111,700 43 130,242,250.81 1,194,750,742 47 83 Shinyanga 254,889,154.94 416,131,688.81 582,732,326.49 190,634,737.02 9,565,562.78 247,730,147.86 1,701,683,61789 84 Singida 201,046,969.48 232,541,237 87 343,078,507 46 136,347,761.08 4,333,786.85 146,082,524.55 1,063,430,787.30 85 Tabora 229,635,993.94 261,509,278.32 512,151,311.31 345,590,944.69 3,275,907 35 168,223.707.19 1.520,387,142.80 86 Tanga 262,961,975.90 283,260,626 25 590,440,781 92 241,457,1t1 .30 9,510,686.58 248.200,075.98 1,635.831.327 93 87 Kagera 253,385,267.51 278,547,924 95 301,517,758 75 77,242,292 16 10,109,021 33 237,281,433.96 1,158,083,698.67 88 DaresSalaam 126,840,055.51 265.343,940.24 11,51174463 3,054.075.29 144,167,024.78 550,916,840.45 89 Rukwa 116.333,357.84 219,084,62173 257,691,460.69 319,217,476.82 5,493,216.87 153,591,987.66 1,071,412,12162 Total Regions 4,886.704,776,86 5,638,994.029.22 8.s96,289,322.78 4,318,99-,162.07 1862987,918.96 4,149,626,645.91 28,137,011,859.7S
Source The Tanzanian Authonties
199 * -. - . s@ < 7 _^ctwoCzCs N~ >>W a - ,S cu o_ e o 3 ~~ ~ ~ ~ ~~~~~~~~C s xv C-oS 8NNSbovC\v-oNxae_ 0WwOvzzNo\zootcEMo0' O ..8 . O % > ~C h - a abS-a °1 8>> -WWeKs5O- 8 S > S CX-CCs--. 4 ;_weev -__ - S>x>zowe<>e JC.>0aC )_ Eo0hh_.. °c > ~ c-w :a wc - XO w_o__nF ' ;C > .o 'uxw. c 0- _ Q° <= _~~~~~~~~~~~~~~~~~ *-~~~~~~~~~~ xC C -< ow Cw C >>o_r 8~ C>.~ ;o Nxx* w~~~~ e t C. C. NC Cv C..- N N SOX0f lIU'.Q WX ~atb XOXv0_u°OeCC C OV g N s : O,v _;> v_ _ W t. I < 0$ O_O rssosNS8wso_iNO_NOE< O~ ~~~~~~~~~~~~~~~.XXNNo C: sWXeO0 .5wXww_<4Xw w o = O O S o4X z_ .N C.v_vjo_aN°S~>>~N>-0vwvwO O < O o oX A _ o - SwXCi>X_8E>W>o o_oczwow-swc 8 s_N>X_o>V NaX S_O oo so°a o>X_fL g 2w 0 0o z W C0W - N0 O s0 X0 wzW _ ° S ' ° > ° - ~l _0 ...ContinuedTable 17b: RccurrentExpenditure-Regions (Percentage) 200212003 Administration Health Education TOTAL PE OC PE OC PE OC 70 Arusha 6.9 6.5 7.9 7.6 5.7 6.6 7.2 71 Pwani 6.4 4.4 2.5 4.0 7.7 3.6 4.0 72 Dodoma 5.8 4.8 5.5 7.6 8.7 7.1 6.0 73 Iringa 6,0 5.0 7.1 5.8 4.5 6.3 6.2 74 Kigoma 3.8 3.9 4.4 4.9 5.3 4.2 4.3 75 Kilimanjaro 6.3 4.5 7.0 5.8 5.5 6.1 6.0 76 Lindi 4.6 4.0 4.0 4.6 3.7 3.3 4.1 77 Mara 5.2 5.3 4.9 1.4 4.5 4.9 4.5 78 Mbeya 5.0 6.1 4.3 6.5 5.3 7.3 5.6 79 Morogoro 6.4 4.2 7.0 12.1 6,3 4.9 6.8 80 Mtwara 4.2 4.9 4.2 4.3 4.5 3.0 4.2 81 Mwanza 6.4 7.0 6.7 2.1 5.9 7.0 6.0 82 Ruvuma 3.4 4.9 5.4 2.8 8.1 3.1 4.2 83 Shinyaniga 5.2 7.4 6.5 4.4 5.1 6.0 6.0 84 Singida 4.1 4.1 3.8 3.2 2.3 3,5 3.8 85 Tabora 4.7 4.6 5.7 8.O 1.8 4.1 5.4 86 Tanga 5.4 5.0 6.6 5.6 5.1 6.0 5.8 87 Kagera 5.2 4.9 3.4 1.8 5.4 5.7 4.1 88 Dar es Salaan 2.6 4.7 0.( 0.3 1.6 3.5 2.0 89 Rukwa 2.4 3.9 2.9 7.4 2.9 3.7 3.8 Total Regions 100.0 1W0.0 1001 W0.0 100.0 10(0.0 100.0 Source: Table 17a 201 =0' ° > t(O G35>S i= .~. 000 0. .. . . 0, 0_N@s _b, .00 00.~000 a .oobso8o.oo 00.- 0 N" - 0*.00_w ___00 1 ._ tO1O 0'0t00to00 00-x OtO 00N. So000000000000 Oo.00.o.. S0 0S88888080000 o8O88_ _S.^'0 0w 000_ 0_00Sg 0if 0 - 0 OtotoOO_O.3..1 w O_ ot_a o 0000w- OtOJOt.9, Y 00 00 0-_z° E 000a- ;"- 0 0 0 0o < sa . .> , ...Con2nuoe I obl. 18.: R0, rr-nE Exp..d;wo.D0tridc Coafndis 2 s99nooo Ed ... on lI2ol2-h Ro_.d, I WYI.r Ad4n,ntr.li7o TOQl( PE OC PE (3 PE OC PE OC Pi5 PEl OC Arsa 5,445,481,51000 1,614,655,40000 74137,305,729.00 133,049.600.00 93,070,279L00 29,41 ,000.00 163,7537,62.00 50.050,500.00 604,346,917.00 7,053,95,109.00 I,S2S,066,500 00 pw'- 3,558,4.46,480000 42S,668,70000 024,922,738.00 I01,327,100 00 70,133,122 00 26,116,500 OD 99,099,114 00 65,3D,S00.00 436,941,636.00 4.989,5S3,110.00 621.4235100.00 Uode&na 4,249,73Y,q9600 349,707,400.00 805,478,252 00 67,154,900.00 36,641,215.00 33,645,50003 107,273,363 00 69,793,50000 212,534,03100 5,411,665,847.00 520,301,300.00 2 wmoR 5,586,914,143.00 427,738,900.00 724,993,519 00 87,649,000.00 Y9.305,915 00 2t,662,500.0D 127,932,66600 30,051,100.00 336,950,937.00 6,S66t,57,I0.00 574,901,500.00 Krgoma3,539,1 . 70,87S00 528,907,000o00 533,662,962 00 74,466,00D00 46,139,993 00 10,207,40000 39,442,934.00 60,536,900.00 193,559,i81.00 4,371,9753948.00 674,1 i 7,300.00 K dilil 3n!raax 7,406,763.022 00 472,553,500.00 1,30S,879,24S.00 170,092,400.00 80,500,051.00 51,870,500.00 167,188,809 00 65,182,80000 600,384,302.00 9,563,796,232.00 767,699,200.0O L,do4 2,579.484.226.00 308,633,300.00 593,665,97500 104,296,100 00 40,125,020.00 14,680,800 00 112,X38,940 00 83,609,900 00 232,468,997.00 3,55,533,1358.00 51,220,100.00 Mwr,r 4,092,673,207.69 432,774,700.00 5S2,806,79100 96,061,100 00 59,561,252.00 8,018,600.00 53,118,075.00 09,221,300.00 241,231,065.00 5.798,1S80370.00 626175,700.00 Mboy3. 6,749,226,960.00 720,537,100.00 947,724,422 00 67,954,600.00 S6,040,9S0.00 20,063,700.00 85,036,755.00 24,225,400 00 360,276,022.00 S,22S,313,049.00 031,500,000.00 MOorogoro 5,063,374,627 00 455,145,500 00 795,510,769.00 79,053,900000 106,519,384.00 20,435,000.00 82,709,142.00 36,207,500 00 540,260,S5S00 6,583,374,780.00 591,S21,900.00 Mtw ra 3,952,4908,07 00 380,353,500.00 538,200,299.00 65,.735,90000 24,370,806,00 12.195,900.00 52,818,25000 60,771,100.00 150,497,109.00 4,718,304,599 00 520,056,400.00 MAwru-7 6,569,264,616 00 400,970,900 00 2,.2I,852,023 00 76.69,700 00 76,057,94300 11,511,30000 1310,02,59900 39,2100,DO 00 452,467.217 00 S,350,461,218.00 616,272,700.00 Rlivaw-9 4,475,433,864 00 319,216,200.00 652,070,703.D0 120,222,10000 45,992,461,00 5 W077,3000087,423,799.00 45,0216,00000 234,511,607.00 5,496,240,424.00 470,576,800.00 Shinyaga 5,370,912,672.00 594,865,100.00 876,552,726.00 95,153,000 00 53,744.374.00 a,775,000.00 87,429,09200 49,036,300.00 2S2,2S5,948.00 6.669,823,812.00 748,629.400.00 607,220,196.00 242,971,70000 49,025,313.00 6,893,900 00 83,649,814.00 95,070,000.00 179,093,250.00 4,060,397,737.00 471,204,400.00 S 6gid. 3,140,609,164 00 226,268,800.00 'I ab.rs 3,271,209,146 00 509,131,200 00 649,434,330.00 69.20,900 00 47,438,143.00 9,707,700 00 77,001,063.00 34,310,800 00 220,172,812 00 4.265,655,494.00 422.430,600 00 T.oga S,0 22,265,57800 488,762,200.00 965.234,608000 1128,F1,S0000 06,639,352 00 35,470,306.00 1 14,783,241,00 39,164,700 00 580,094,687.00 6,767,017,346.00 602.209,000.00 Kagem 5,716,234,294 00 499,668,800 00 720,532.629 00 142,35,400 00 39,727,975.00 12,689,20000 69,255,417.00 64,574,600.00 247,551,709.00 6,7S3,2S2,014.60 719,092,000.00 D.res2a1an- . . Rsbk- 2,354,224,059 00 223,12I,S000.0 553.274,63900 66,173,000.00 64,805,861 00 15,654,00000 67,091.098 00 30,273,300.00 164,436,603.00 3,208,912,340.00 325,202,100.00 Tohl2 9D.0_,934,167,26700 9.260,605,000.00 14.511,127,440 00 1,876,902.20D 00 1,196,867,44100 360,606,300 00 21,832i.643,84300 1,033,587,300.00 .,276,964,968.006 112,750,770,967 9 22,531,8600,800.00 S3o,-rs T. Z.9,,a AAhmbornoes 203 44 - 44 W-I O C G W Co-Z_ OwO -I-§ - 00' 0040' 00we w 0 08 0 1 00,0o 04 t0 ^.s 0 s =04 p0So.0 00 o 0 0S o '0~ o~ 0S 14c4 ° _. _1~4 0 . _ _ _. 00 _0° 4o woos o o . ow@oovx^°oo'oo.o8 _0 _ ,0 00w 0O, 0 4 O0'ww0 00 0- 0 ln < 00 -000 00000 WX 0 _- O0_V.1 00 , 00_,0- 0 V000 -X0000 W00 0 __ |0_ - oo- o. 0 r00 - - 0C0e0 CX£XO04 0 00 0_X. 0_W | S S S Vs O 9 _ O _ _ O O O S S0- _00_0000- 0 o __0 000_, ,9 OOOooO*sooO o_ _ _0 00,0 0oo 00 -4 00< -O0g000-000000N00°< 00 . 0.0N0 °° 00° Y0X0 v _8 OOo=ooSoO-gooo - c00 w0 t O 00a 000__ 0xW00r ° 0 ° 00 Vo 4 x -4 N 0-0w -0-So N' 0. vv 1 0_ 00 0 ~9 . t 0o OOOo°,0 oo < ,~~~~~ SN_o NsQ_w~~ .00w V~ ~ ~ _0e0 o8 0N t ,0. -, 4_ C0IasO 0O00e0§0oa WCw00 N0 o-o 1<- 00000000C 000000c0c0_000W0° w eb w g 4-J o oo 408oo.a_o S0800 o00 o0 .0_00 0 000 s 6>u , ._2 0.4-0-0 >,,00C\ ..C-nn-d I Wl. ID.: Regumrnt ES.p,nditura-DIstk1c C.M.M,l 2001R32 _ d,tion _ _ H.IUh R oads$_Wler A,Iuihit,UOn Total PiS 1( PiR 6E C1 __ PE oc PE3C PE PE PiE OC Anrs6o 5,717,755,585.50 3,35,930,208.22 784,671,015 45 745,066,666 75 97,72S,7S4 55 44,249,701.55 17 194 1,366.I0 141,713,066.i5 - 634,564,262.S5 7,406,656,014.45 4,286,967,714.68 Pwwu 3,736,410,804.00 890,955,246.47 866,168,895.90 563 ,6G0,25.63 73,639,77S.10 39,293,030.85 104,054,069 70 184,921,104.10 . 45S,7Bg,717.80 5,239,062,265.50 1,678,780,207.05 Dodo,rol 4,462,225,95530 726,940,07.94 045,752,164 60 373,535,102.00 38,473,275 75 50,620,629.47 112,637,031 IS 197,613,42S.08 223,160,732.55 5,682,249,139.3S 1,348,609.357.50 Irung. 5,866,259,850 15 889,022,727 98 761,243,194 95 4S7,529,251 86 93,834,210.75 43,123,561 61 134,329,299 30 87,351,854.13 353,798,4S3.85 7,209,465,09.00 i,507,027,395,58 Ku'0m-a 3,716,129,421 90 1,099,292,919.08 560,346,110.10 414.,201,568.40 4S,446,992 65 15,357,329.01 62,415,080.70 171,404,275,96 203,237,140 05 4,590,574,745.40 1,>00,256,092.46 KiIirnjar,s 7,777,102,013 10 9S2,166,461.09 I,374,323,210.40 990,601.769 95 S4,609,053.55 70,040,603.96 175,548,249.45 184,55S,60469 630,403,517.10 10.041,986,043.60 2.235,367,585.68 1.md, 2,708,458,437.30 641,470.809.20 623,349,273.75 580.125,267 8S 42,131,271.00 22,087.6S8.91 118,480,887 00 236,733.205.25 244,092,446.85 3,736,512,315 90 1,480,416,971 24 Mara 5,137,098,967.35 S99,489,254.76 579,92,430.55 534,3198.00.75 62,539,293.60 12,564,216.00 55,773,978.75 252,904,47239 253,292,618.25 6,088,097,788.50 1.698,777,743,90 Mbq.y 7,086,608,245.00 1,497,581,487 00 995.1 10,643.10I 77,99 ,266 19 90,351,397.50 28,380.983.14 89,288,592.75 68,591,836.50 378.289,823 10 8,639,728,701.40 1,972,537,573.62 Moog,oso 5,316,545,30S 35 945,985,250.85 835,286,307 45 444,726,865 65 111,845,353.20 30,745,049 51 86,8144,599.10 102,744,485.83 567,273,900,90 6,917,793,519.00 1,524,201,659.87 5 W4.ro 4,150,122,978.75 792,614,206 69 5f5j110,313 95 365,642,210 9S 25,589,409.30 18,349,084 87 55,459,162 55 172,067,390 22 I SS,021,964 45 4,9S4,303,828,95 1.548,672,892.72 Mus-n3z 6,897,727,.67 80 1,016,288,776 68 1,174,795,464.15 426,570,435 10 79,860,840 15 17,319,084 34 140,509,528.95 110,710,067 97 . 475,090,577.05 8.767,984,278.90 1,70,880,364.09 R--m,o 4,699,205,557 20 663,352,247.57 605,522,630.15 601,462,822 71 40,292,084 05 8,842,869 02 91,794,978.45 128,307,795 24 . 246,237,187.35 5,771,052,445.20 1,402,465,734.54 Sh6myorg 5,639,457,275.60 1,216,381,806.71 920,3W0,362.30 529,26S,604.21 56,431,592 70 13,202,241 71 91,800,546.60 141,106,579.92 7295,245,245.40 7.003,315,002.60 1,919,959,31Z.55 S nids4 3,297,639,622.20 470,282,468.66 637,581,205 80 795,250,213 21 52,316,575 65 10,372,072.27 87,032,354.70 269,181.350.81 188,047,912.50 4,263,417,623.85 I,S45,086,104.94 T.b,,, 3,435,189,603.30 642,505,656.43 601,906,046.50 305,360.532.96 49,810,050 15 14,605,515.S9 80,0501,116.15 97,147,654 27 231,101,452.60 4,470,938,260.70 t,119,619,159A45 Tsga 5,262,878,856 90 1,015,855,009.62 1,013,496,422 40 660,865,819.60 90,971,319.60 33,366,89304 120,522.403 05 110,890,994.53 617,499,421.35 7,105,368,423.30 1,840,977.914.77 Koorg. 6.002,046,008.70 1,038,523,547.10 746,059,24995 795,181,797.0w 41,714,37375 19,091,269.01 72,697.187.05 182,836,62623 259.929,294.45 7,122,446,114.70 2,035,633.23938 DUr salissrs . . . . , R,akwo 2,471,935,261.95 443,082,135.83 586,188,370.95 365,073,408.38 68,130,154.05 23,551,89650 70,445,65290 55,715,S70.28 . 172,658,517.15 3,369,357,957.00 920,423,391.00 TotalDztAM 93,380,875,63035 19,247,628,498.69 15,236,683,820.40 10,439,876,306.22 1,256,710,813.05 542,662,98756 1,923,226,03515 2,926,50D,74253 _ 6,590,813,216.40 110,550509,51533 53,1S6,668,615 00 Sowr-eTwanaian Afltoriloe 205 -Co- -ue IS. R.k ... E. tni1Isid Cnii 2062103 gdu¢Uon ~~~~ ~ ~ ~~~~HadlhR..ds _Wat1r Atd.Misr.ti.n Tt FE oc PE OC PE OC PE OC PF PE PE OC Ar slsh 5,71-7,755,585.50 4,363,21S,196.36 784,671,015.45 I ,125,641,972.70 97,723,734.55 49559,665.73 171,941,366.1i 154248,633.56 - 614,564,262.S5 7,406,656,014.45 5,722,667,868.35 POani 3,736,410,804 00 1,158,374,147.23 866,168,895.90 S51,499,644 14 73,639,778.10 44,008,194.36 104,054,069 70 240,424,900.25 458,788,717.80 5,239,062,265.50 2,294,306.886.18 3odo,ma 4,462,225,935.30 945,000,269.38 845,752,164.W6 564,334,452.01 38,473,275 75 56,695,105.01 11 ,637,031.!5 256,926,806.53 223,160,732.55 5,682.249,139.35 1,822,956,572.93 ittoga 5,866,259,850.15 1,155,S61,586.17 761 ,243,194.95 736,556,087.26 93,834,210.75 48,29R,389.01 134,329,299.30 I 113,570,384.07 353,798,483.85 7,209,465,039.00 2,054,286,446.51 Ki"nwa 3,716,129,42190 1,429,244,064.45 560,346,110610 625,773,090.32 48,446,992.65 17,200,208.49 62,415,080.7D 222,851,061613 203,237,140.05 4,590,574,745.40 2,295,068,379.39 Kdiwlnjgo 7,777,102,01110 1,276,962,273.16 1,374,323,210.40 1,496,594,842.09 84,609,053.55 87,405,550.35 175,548,249.45 239,953,701 20 630,403,517.10 l0,041,9R6,043.60 3,100,916,366.80 Liwdi 2,700,458,437 30 034,007,324.76 623,349,273.75 876,449,558.26 42,131,271 .00 24,738,211.58 118,480,087.00 307,780,327.01 244,092,446.85 3,736,512,315.90 2,042,9S3,421.61 M sIr4 5,137,098,967.35 1,169,469,625.51 579,392,9306.55 07,246,950.38 62,539,193.60 13,5 1,921.92 55,773,9787.5 32S,813,376 09 , 253,292,618.25 6,080,097,780.50 2,319,041,873.90 M e.yo 7,086,6BS.245 00 I,947,078,35R56 995,110,643.10 571,054,710.12 90,351,397.50 31,786,701.11 89,288,592.75 69,179,574.87 , 378.289,S23 10 8,639,728,701.45 2,639,099,344.66 M or6obog 5,316,543,358 35 1,229,921,336 52 835,286,307.45 671,890,514.95 111,S45,353.20 34,434,455.45 86,844,599.10 133,583,091.43 567,273,900.90 6,917,793,519.00 2,069,829,398.36 tv.ra 4,150,122.978 75 1,030,516,189.67 565,110,313.95 552,409,922.49 25,589,409.30 20,550,975.05 55,459,162.50 223,713,163 11 . 158,021,964.45 4,954,303,823.95 1,827,190,250.37 Mwanza 6,897,727,867 60 I,321,326,351.35 1,174,795,464 15 644,459,895.32 79,860,840.15 19,397,374.46 140,509,528 95 143,939,531.29 475,090,577.85 8,767,984,278.90 2,129,123,152.41 Rlivill-ia 4,699,205,557 20 862,456,444.52 685,522,638 13 909,441,596 95 49,292,084.05 9,904,013.31 91,794,97S 45 166,8019,190.39 246,237.187.35 5,771,052,445.20 1,948,621,245.17 Shmy-ag. 5,639,457,255 60 1,607.479,979.13 920,380,362 30 799,615,755 69 56,431,592.70 14,786,510.72 91,800,546 60 183,459,511.39 , 295,245,245.40 7,003,315,002.60 2,605,341,756.94 S0,gid. 3,297,639,622 20 6l1,437,056.74 637,581,205 80 1,201,458,954 93 52,316,57865 11,616,720.94 87,832,304.70 349,975,735 52 188,047,912.50 4,263,417,623.85 2,174,488,468.13 Tah7ora 3,435,189,603 30 835,352,779.86 631,906,046 50 582,200,237 60 49,810,050.15 16,358,177.79 80,351,116,1I 126,306,379.15 231,181,452.60 4,478,933,268.70 1,560,217,574.4i T.pga ,262,07,805690 1,320,762,389.75 1,013,496,422 40 990,43 1,864 ')I 90,971,319.60 59,770,025.21 120,522,403 O5 144,174,762.69 617,499,421.35 7,105,368,423.30 2,523,139,042.56 K02ger 6,002,046,000 70 1,350,234,S55.26 746,059,249.99 1,201,355,592.20 41,714,373 75 21,382,221.29 72,697,1S7 .5 237,714,769.44 259,929,294.45 7,122,446,114.70 2,810,6S7,438.19 D. 43,,Ia -,. zuiwk 2,471.935,261 95 576,072,504.21 586,180,370.95 556.683.080095 68,110,154,05 26,378,124 08 70,443,632.90 111,443.362.09 172,658.517.15 3,369.357,957.00 1,269,977,151.33 101A D6Oicts 973,300,873.63035 25,024,775,7520641 5 236,683,82040 I 5,772,498,723.75 1,256,710,R13.05 607,782,546.06 1,923,226,035. I 3,804,885,616.26 . 6,590,813,216,40 1 118,388,309,51535 45,209,942,6381 Sowrce:Txezoimn AlItharifio 206 1.00 lsh R-nrrron, ftprndft0ur-DOJl,0 1'.-o,,, 40999 jO-,lo8t.) Odomli.,, J0.OIO, 00,04,~~~~~~~~~~~~~~~~~~~~~~~~R.d W.t,. Ad 4o04*o____d_____ T.0.l 00sha6 EFde>ts.- OC 80i.3tO, 0CR PE DC PE (0C FE1 PE Pr oC A.,SO 6.2 070 32 .94.0 140 601 7.3 0.0 I0 4.2 1443 IW D 34 47 4A 3.4 20 54 43 64 12.0 5.1 36 S.0 DA0n,0. 49 36 4 6 3 2 1 6 2'9 50 54 °33 39 4.7 4.6 0.4 40 44I47 2 3 10I 34 S's 00 502 0.4 4 . Kr6,000 45414 3S 03 42 2.0 3.3 57 44 35 4.41 53 9.0 83 6.3 t,1,00,006,90 3 49 47 92 30 97 021 9 9 .74 U.d. 3.t 3 33 4 .243 a 5.6 0 3s9 30 41 4.9 tlus0 06 33 4.1 49 24 29 29 3 7t5 44 33 Mbm,yo 7.7 04 69 09 30 78 3 1 b5.4 7.4 7.0 60. M-oIm 56 40 5 *63 34 44 4.9 4 77.4 M 1.7 644,60,0 4. 30 3.9 3.7 33 27 76 2.4 2 4.0 4 Nf 0-. 70 53 01 4a 21 4.9 7. 30 39 3.9 7.5 4.9 K000 4. 30 47 4.3 4.2 24 5.1 86 34 44 4.0 3.8 shinoYooo 60 6 65 57 2 4.1 3 67 0.0 .7 60 2. 0i.e.0. 34 4.1 4.4 41 2.3 16 6.5 1.7 36 27 3.1 3.7 T1.00 3 9 3 54 20 2 40 4.9 30 8.2 4.2 4 1 34 Tm . 5.51 3I I3 .3 I 6O 3 '.9 . 0S 3.6 4000, 63 57 3.3 4.0 1 3 4.1 7.7 64 . 6.1 0. 00,0000480, 0.n 00 .o 0.0 0u 20 0.0 0.0 0. 0.0 0.° 0.o R.t6, 3. 12 41 22 314 3.6 4.4 22 2 3.4 4.1 26 lodIlsi0 O Ib o In o ooOl.olo on o 0, 1.00 lo e 10 00 TlWi40,0001-TD¢a 420.0 400.0 400 0 400.0 0000 4220 4000 402oo0 40. 00.4 400.0 400.0 Tom1 1 3914. 77.003923:.000.36 3,332,150900.00 13.0,132.l0 o00 037.322.900.00 1,.84.324,30 00 290 071,00 00 1.324,307,5000 430,764.90000 .22.370o 0000 4,596000.600 00 99,662,37300.36 .4917.00.100.00 IUe, =-, 0-0n 070 s_0a 7, -1 823.1. 2.74% 03% 975% , % 83% 708 so00 r2% SOIT bl. 16. ...Co.in-,d T.ble 10: Recur..t Eop.ndAuoei,drni.t C.wlsd 2000001 (PoOcenb.o) _Edu..on 04h4- _-al Ro.d A d 00.4crt n 6 4 __ons ToAd.0_ An~~~~~~~~~~ O ~ ~~~~F,E O sha~~~~~CPE OC PE or P E oc FE r os7 O I On 0 | 9 000 A-3hi P-ri a0.0 ~~~~~~~~~~~00 0 0.000 0 a00 0 0aO) 200a 0 00 Oo 0 0 0a 0.0 0.0 0 .0 0 0 0 0 DPdo. . 0 .0 0 .0 a 0 0 0 a 0 0n O00 0 .nga 0.0 0.0 0.0 0 0 0.0 00 00 90 00 0 0 Kig009 0.0 00 00 o.o 0 0 0.0 0 0 00 0. 00 00 K0,40,04 0.0 00 00 000 000 0. 00 0 OO 0. 0.0 0.0 0 0 00 0 0 0 0 O 00 0D 0.0 00 M,0Lmd0 0.0 0o 0 00 .0 00 0.°° OOo 00 Mbey, 0.0 00 00 0 00 0n 0 00 00 00 00 Mwooa 0.0 0.0 a0 0 0.0 0 00 0.0 00 0.0 0.0 M,so 0. 00 0 00 0.0 00 0. oO 00 00 0. M4o. 0 00 00 00 00 00 00 00 00 00 MW- 0.0a 00 0 0 C 0 00 00 00 00 0.0 00 000-6,6 00 00 00 0O a0 00 0 0.0 0.0 0.0 0.0 S41453i 00 00 00 00 00 00 O0 .0 0.0 0.0 0.0 SOri 0.0 00 00 O0 00 O.0e0 0.0 e0.0.0 1403-g4 . 0 0 0a 0 0.O 0. 0.o 0.0 1sSgid 0.0 O 0.0 0.0 00 0.0 2 0 0.0 O.0 00 .0 T0400, 00 2 00 0.0 0. 0 00 00 0 0 0.0 0.0 0.0 O. Rk.bs01 0. 00 0 0. 0.0 00 00 0.0 0.0 0.0 0.0 T04440,004,4, ~~~~~~~~~~00 0 a0 ~~~00 0 ~ 2 ~ 0.0~ ~~~c0 ~~0.0 0 0 .0 0 0 :oo . Total DMsheI .o a 0 b 13 O 00 0 0 a a OtA 0a0. Memo Item.: Tsb3 L-10 i-t0 4 413.207,102,218 35 18,955207,097 Di 20,.05563,92795 7.4132ee,57s5S9 1,663,058,557 65 598,15,152 00 2.008,642,717.75 2,440,340,23024 2,36i,003 75 8.98,434,049.00 440,405,362,400.45 20,4046.98572 83 000290000000008s Poron,84g8 07104,4 Local .X - _ , S-0T8 T1b6e 1G8 207 ...ContinuedTable 18b: RecurrentE6panditutDistricl Councils 2000t10(Percentage) Education Health Roadt Water Administration Total PE OC PE OC PE OC PE oc PE oC PE OC Anisha 1 17.4 5.1 7 1 718 8.2 6.9 4.8 9.6 6.: 13.4 PwarI 4.0 4 6 5.7 5 4 5.9 7.2 5 4 6.3 7.0 4.4 5.0 Dodorna 4 6 3.8 5.6 3.6 31 9.3 5.9 6.8 3,4 4.6 4.1 Inng3 6.3 4.6 5 0 4 7 7 5 7.9 7. 3 0 5.4 6.1 4 5 Kigoma 4 0 5.7 3.7 4.0 3.9 2.8 3.2 5.9 3.1 3.9 5.2 KlinanlaTo 8.3 5.1 9.0 9 5 6.7 14.4 9 1 6.3 9.6 8.5 6.5 Lindi 2 9 3.3 4.1 Sc 3.4 4.1 6.2 6.1 3.7 3.2 4.4 Mara 55 4.7 3.8 51 500 2.2 2.9 8.6 3.8 5.1 61 Mbeya 7 6 7.8 6.5 3.6 7 2 5.2 4 6 2.3 5.7 7.3 6.2 Morogoro 5 7 4.9 5.5 4.3 8.9 5.7 4.5 3 5 8.6 5.8 4.6 Mlwara 4 4 4.1 3.7 3.5 2.0 3.4 2.9 5.9 2.4 4.2 4.1 Mwanza 7A4 5.3 7 7 4 1 6.4 3.2 7,3 3.6 7.2 7.4 4.8 Ruvuma 5 0 3.4 4.5 5.6 3.5 1.6 4.6 4,4 3 7 4.9 4.1 Shinyanga 6 0 6.4 6 0 5 t 4 5 2 4 468 4.8 4.5 5.9 5.a SingUda 3.5 2.4 4 2 7.6 4.2 1.9 4.6 9.2 2.9 3.6 4.4 Tabora 3.7 3.3 4 5 3 7 4.0 2.7 4.2 3.3 3.5 3.8 3.4 Tanga 5.6 5.3 6.7 6 3 7 2 9.6 6.3 3.8 9.4 6.0 5.5 Kagera 6.4 5.4 4.9 7 6 3.3 3.5 3.8 6.2 3.9 6.0 6 0 DaresSalaam 0.0 0.0 0.0 0.0 0.0 0.0 0 0 0.0 0.0 0.0 0.0 Rukwa 2.6 2.3 3.8 35 5.4 4.3 3.7 2.9 2.6 2.8 27 TotalDitd4cts 100.0 1000 100.0 1000 100.0 100.0 100.0 100.0 130.0 100.0 100.0 MemoIers: . TotalLocal Go 113.207,102218 35 i8,955.201,697.ot 20.56,5.63,92795 7,413266,57s.59 1,663,058,55765 598 155,15200 2,008,842,711.75 2,440,340,338.24 2,361,00375 6,968,434,049.o0 146,455,362,468.4529,406,99.762 83 UrbanCouncils 682 0.82 0.74 0.83 0.76 0.81 0 96 0.96 0.73 0.81 0 83 Source: oTablo11ta -..Continu.d T.ble 18b: Rec-r,ert ExpendHsne4)istriutCouncils 2001102(Perurnta.eg Educalion OrHath OC__n_ Road WalPE AdD nistretion Total _OC_ _ PE 00 PE 00 PE 00 PE 00 PE 00 PE 0 Amsha 0.0 0.0 00 0.0 0 0 0.0 0.0 0.0 0.0 0 0.0 Pwani 0.0 0.0 0 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Dodoma 0.0 00 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Innga 0 0 00 0.0 0 0 0.0 0.0 0.0 0 0 0.0 0.0 0.0 Kigoma 0.0 0 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Kilimanjaro 0.0 0 0 0 0 0 0 0 0 0.0 0.0 0.0 0.0 0.0 0.0 Lindi 0.0 0 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Mara 0.0 0. 0.0 0.0 06 0.0 0 0 0.0 0.0 0.0 0.0 Mbeya 0.0 0.0 0.0 00 0.0 00 0 0 0.0 0.0 0.0 0.0 Moroogro 0 0 0.0 .O0 0 0 0 O 0 0 0.0 0.0 0.0 0.0 0.0 Mtwara 0 0 0.6 0 0 0 0 0.0 0.0 0.0 0 0 0.0 0.0 0.0 Mwanza 0 0 0,0 0 0 0 0 0.0 0.0 0.0 0.0 0.0 6.0 0.0 Ruvuma 0.0 0.0 0 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Shinyanga 0.0 0.0 0 0 0 0 0 0 0.0 0.0 0.0 0.0 6.0 0.0 Singida 0 0 0 0 0 0 0 0 0.0 0.0 0.0 0 0 0.0 0.0 0.0 Tatora 0.0 0.0 0 0 0 0 0.6 0.0 0.0 0.0 0.0 0.0 0.0 Tanga 0.0 0.0 0 0 0 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Krgena 1212 122.4 1361 120.3 1323 123.5 104.6 103.6 136.4 123.7 120.1 Dar esSalaam 0.0 00 0 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Ru1wa 0 0 0.0 0 0 0 0 0.0 0.0 0.0 0.0 D.0 00 0.0 TotalRegions 0 0 O.D 0 0 0.0 0.0 0.0 0.0 0 0 0.0 0.0 0.0 Memollems: TotalLocal GOo 113,207,102,21835 23.558,443,429.6120,585,563.927.95 11,995,412,250.05 1.663,058,557.65 669,933,770.24 2,008.842,71175 3,032,973,255.91 2,361,003.75 8,986,434.,049.00t46,465,362,468.45 39.256,762,705.81 UrbanCouncls . - . Sou,ce:Table 1ia 208 to O w , Se >w o 000 w < 440 to00'o0 >swD 0 O4 . _- . '.-o>O4:1 0s03 ovl _0 0 to '0t0't.4to' 00' 8_ow< ws>w>wZ m 1s 0' o>oKsoD_ DV- o ~~ ~ ~ ~ ~ ~ ~ ~ ~ t _., to 0 C~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ _' _, Ot0tt O00t0'' WO W 00_ tVotoDD '_000.Yn 0''t0tt0 _'t00,-:: 0' 00 _to 0 O .0 0 0. CC'< W 0.0 W D0 -0 0'.D W. =0.C 010_ 8to -vwuwX>w 0 0. O0 .0D 0'to.to0'G I Y< b 0 D O _ - 800 y 00 0°bOY>'00* 0-30 0 W _ 0' 0' - Educ40n Health Roads Waler Ad n,ulio To4al PEI Ot PE Oc PE oc PE] . PE * . PE 241..60,500 0 I7,0o0.o0OO 10.358.40000 4.099.00000o 01,.30,7W.00 080,425.200.0( - 3KN,O00.0o 1. AuruOa R6el830.R0000 19,905.000.00 1 .252.J78,300.0o 40.80.800.00 2 DOndorra 094,9076.90000 22,.725.I100.00 251,935.200oo0 9M0.31000 00 1.2.5D,3D.030 3,000,000,000 14,433,9000 5.411,WOo00 7B.529.000.Do 3 10.0 432.701,2000 W 8,soi.700.00 4,8617.10000 W 0 o, ,20WO .24.7200.00 4.64,0.00.00 8.002,8000 44.733.60).00 507.001.00.00 30.029.000,) 4 E olu 34,11,000 00 I9,874.500.00 70.242.68000 5.30000000 1.1..436.1.00. 2.600,000.00 2,451.09W00 1.,292,20000 40.191,400.00 20.,24.600.00 |ind,L 052,654.4000O I0R98.000.00 73.02t3W0000 141980,000O 17.130,4001,0 2,97U.700o00 27.509,00800 270.33.100 00 27,315,10.00 6 Mnoshl 4S7.005.70.00 It,518,00000 174,735.70000 1.0.13 20000 18.162.300.00 4,002,000.00 2.059.90000 55,56,.00000 731.249.0r.00 2t.753.20.00 7 MoSomIs 58E .59.400 00 37,916,5000 113,006,400 00 6,062 200 00 7.I.0000W 1.713,500.00 2.S .9.400.o0 0.007.700.00 700.770.000.0 40.492.,00.00 0 MItre. 531.829,200.00 19,35140000 120.23300000W .300.00000 13.370,000.00 3.0R0.000.00 3,351.1 G00 53.220.40000 1,00,013.50i2.001 07061,400.00 9 MnIror o 7J3.413,4DO.00 23,484.60000 127,152.9000 O1.M00700W00 la,0e1.99000 4.0998.70000 2312.800 00 51.220.900.00 935.191,000.00 42.t04,0C0.00 10 Mlwea. 220.563.600.00 12.012.90000 79,924,90000 5.240,700.09 10.014,200W 2.813,400W00 1,80,050000 12.3J4.800 0300,787,100.0 20.075,000.00 M1.1Uwa. *23.776,600 0 00 22,405,00000 21I1.552.10000 3.000.000O 1.490.300 00 2,000.00000 72,50.100 00 1,109.774.l00.00 27.405,000.00 12 songe. SDt,400,50000 43.8990300.00 59,506,700.00 15 404.000.00 8.1.23.600.00 9950,300. 2.1Z71.60000 41.01.3,200.00 MAMA71#0.00 00,378.00.00 1 Shi.yafga 073,7037.00 27.1.1,700.00 62.641.000.00 7 584.D000. 7.311500.DO 1,.650,000.00 38.253.40.W0 409.229.800.00 30,25l,70.00 1.4 Sinzida 351..999t00,00 20.003. 00 00 00,928,008.00 111.04.70000 .10,000D00 229.00 00 1.300.00000 34.0Q3.000.00 475.918,800.00 34,227.00,00 1S T9bol0 707,291.000 0, 90,300,800.00 126 120,20000 7 M3O.000 T6.102.9w1. 00 4.055.10000 1,740.DOOW0 2,559,40000 8S,129.100.00 937,202.000.0W 1.05.40S.100.80 16 Oa,a 715.080,500 00 27,641.300.00 291,7"4800 00 10,120,00000 7.014.300.0 2,775,000.00 1.744.50000 o7.180.300W00 l.003.523.400.00 40.138.310,00 1 k7oba 323.959.20000 31Et4.050000 Du 1.2M72r3.1 090 3.636.50000 760,00D.00 2.420.20000 17.391.6W0.00 402,101.70WOO 39.048.2300.00 10 0D4 es 491-514 .35.709,700.00 128,018.700W 1,1 50,675,300 DO 58,91.,000 00 75.405.700.00 S,877.00000 46.6 .a1.000 7,971.00000 3.662.5M00 434.701.4000W .098.,02,200.00 300.S7,700.0 19 llaiR 20 erorke 21 0010 0S0S 212.119,00000 212,119.000.00 . 19 Orr0b.aago 403.073.90000 1.0.197.1.00.00 90.100.1000 3.070.0000 20.270,30000 1,604.50000 2.R41E5SOD W 71.007.000.00 8000.70.300.00 25,801,700.00 _ Tula U.b.n 13,003,242.200.00 809.7 1.309.08 5,7070223.100.00 2117.794.300.00 279.377,000.00 08.30,20.00 67,998.300.008 1S0,122,000.00 330,930.09.00oo 1,37,4.73,400.00 1470000.00 109507 0w0.00 Sou.ce OarURO,SlnAuIhorr11.11 T.ble 1.9hRECURRENT EOPENOITURE-UR .ANCOUNCILS 1M901.9 _tdus^sion lth _Road. - WaleeH A.M lSUM.allon 8 PE OC PE OC PE OC PE OC PE OC PE OC 2 Dodomea 0.4 3.7 806 4.3 4,50.3 21.2 358 0.0 S.7 0.4 4.0 3 long7a 3.1 2.S 286 49t 30 0t2 10.2 00 0.0 3. I 3.4 4 61000 2. 3.11 2.1. 24 4.1 48 00 00| 2.9 0.4| 2.4 3.0 S ILilui 0 MIWYO 1.1 0.2 2.0 853 .1 5.2 0.2 IS0.00. 10.000] 0.02.0j 5.31,4 5.4~443.0 0 |Moshl 3.5 2.2 4.7 4. 9|0.5 9 0 0. °0.20. 4. I. 5,2 3.0| 4.0 5. 7 |Mosorra O 2 3 O J 2 2 S 3 O O | 00ZO | 9 4 9 MOgOlO 5.3 39 J 48 80 89 0 00 75 S3.2 4.0 4. 1.0 |MIraSl 1.8 20 2 2 2.4 386. 0. 0.0OO 6 1 0.0 0,7 2.2 5.7 3.1 I |M.anea 5.0 32 0 S7 1.4 0.0 3.0 0.0 020 00 5.3 12 000008e 30 72 1.0 71. 0.0 1.0 0.0 00 80 2,0 J23 t. 2.4 4.0 1 0igo.K3 2.7 4.4 I7 30 26 2.9 0 0 0 0.0 2.0 0.0 0.0 4.2 2.3 2.4 43. 1.4 Si rgi7a 2.I 4 4 2 7 5 1. 0.4 .2 4. 131. 04.Oh9M.9 51 149 34 34 5.9 .2 0.0 . 9.3 S 4. S.G 4.5 1. 04000 s 4.5 79 4.0 2 5 4.9 0.0 0.0 09 a 1.3 2.1 4.4 1. 0bey8s .3 5.2 I 5 3.3 3 I 00 00 31. 4.3 22.3 1.9 M00, Sa1agam 31.4 21.3 31.0 27.1a 26.0 Ia4 005 52.7 . 19 11410 0.0 00 0 0.0D 00 0 0 000 0.0 0. .. 20 1.1,11110 0. 0 0 0 00 0. 00 |OO 0 0 00 0.0 0.0 0.0 0.0 21. Kinonldoni 0.0 0.0 0.D 0 00 0.0 0,0 3.D0 0 0 0.0 0.0 0.0 0.0 0.0 1.1 0.0 | S 0.0 0.0 0.7 0 D| O0 9 0. 0 0 .0 .0 3.5 2.0 1I |Suaersuga 3.5 3.0 25 .6| 103 65 0. 00 6.0 02 T7olalUrban 100.0 IW0.0 '°°°. 1.00.0 IM. ID.0 100.A0 1.00.000 1.00.0IO0O.010. 0, Memo 1112S: 537300 4 4971.010o |Total 1Eol Got. 77905923000 335215890t 1.38 12000 9275049006e 1I04024200 29607140 132450 7500 430D764900 1t257 0500200000 082 204 1.9 OrSOnCIun ls a1. 18T 277 29% 15% 19% 0% 4% 1.9 30S Suo-rr TOr,ae .0 210 ...Co.IiO.0.,.bl0. 1b: REC13RRIENTEtXPEON1ITUtCURbAN COUNCILS 80800oo I______-durallon ______84.4119 Ro-ds-90400nd1il.l.04 Totrd PE OC PE ocPE OC PE PEI Pi OC AnTshw ItZ1~2 0.65,21tt00 60,356,2000DO 360.40tS,d4 oo 25.DO00,6000D 15,606.J 0 S9.179,200 0W - 14.052.051.00 8.3424514.255. U-,535,404.00 200no 308,08 111ItO.400.1t3tt.00 70.42r,7ToO0Oo 3J1.,Js2,.18t000OD 2 s .71s,900 00 7, 29,6 00 5.721,800,00 21.530.34600 17. 700.4W00 . t8t0.518.,37.00 t,470.471.St,00 120S .00.00 7 00 Ifi,8o 580.030.1tl6.00 530604,00,.00 1i28,451,000W 24,500,000)00 I 1.903,03, 00 1,750,000.00 . . 108.297.343.00 34500.246.009 10.154.D3.00 200 K445,614,4200,00,04 00 72,119,70000 10.018,057Doo 6.201.$50000 14.000.312.00 3,009.0000O 32.615,265.00 597.112.04,00 01711,18,11100.0 S0W LrrdK 236,243,01.00 47.34J,100 00 03.796.374.00 39.434,7Q000 25.979,09600 6.256,0000oD .3.005.8t22z00 370,0800.83.00 04,073O.tl(0.00 00 Mrs1h4 7,403.06 on 69,017,60DbO 248.670.31I Ob 20.254.00 00 24.442.069 00 3,652,000,00 11.t68.273.00 1.002,3t3.053.00 62.9235t00.00 700 Mom,os 590,502.611.00 97,516.900.W I39.729,t91.00 4.*.352,40000 9,219,702.00 4.Si7,100 00 86,01.51 .00 812,536.705.00 147.346400.00 0.00 0000 1 10.081.20300 73,825.700.00 167.0SS,16200 II8.0DO8000 17.44.9420no 620,00000 006.060.941.00 1.8t2.5531t.00 935.191.700.00 9 00M-90,0r CI055,.61.07l 00 92,.000 0000 189.929..34 00 26.571,40000 26.489.49100 7.750.00DI00 tS.061.3I1.00I1900.,351.147.00 1t20920.300.00 1D00M ... 514.039012.00 30.#92,000.00 1I4.475,705 00 Mo.18M5.20doo.y 1203.135.0o 3.103,00.00 S0,312.M400 A92,200.706.00 50.31,1000.00 800D M0."/, 1,808.000,370.00 60.s33.40000 223.3295.2200 15,700,000,00 626.457.00 2.490.20000 9S1,423300 1,86109709,472.00 04.72.00.00 1200 SOooga 060e.44.917.00 12s.4$6.0(0.00 03.193.165.0 61.991.30000 6,052,0,s o0 2.85Q,7,oo00 $1.23.42900 0;7113,.276,00 904.2,60.o0 I 200 Sb angs S128.009,400.00 09.410.800.00 80.010.5880S t1 ,2B80.40000 15.449.511100 3..900,000Oa t I12,1 o00 57s.r77,..00t4114.0.3,200 8490 S00Qd. 443.725.414.00 054,05.200.00 8l7.t059,059.00 46.18.700 00 5.707,26400 13.047,100.00 90.0654 00 00.300.471.00 123.0^2700.09 1S000 29800 045.554.35700 248,458,to.00 155,758.91500 54,940.00000 11,348,209aQ 13.549,00D00 82.000,0000 122,421.34900 1,130.112*.07.00 320.040.600.00 16.00 TEns 009.192.19000 99,341,900.40 410.022.01 00D 23796060.000oo 0 3o.900.00 2.103,10000 171,509.7090Pd 1.561.86206 io 120.041.400.00 8700 000obs 414,.04.706.00 182,447,200.00 77.617.15500 13,01.2700co 5,040,907.00 1.042.00000 33,704.479.00 551.227.247W00 127t902.000.00 a000W 0l es SAI04m 0.241,241.01700 5,830,00000 I,640.S63,30300 80,001.D0o00 177275.0tl 0 5,00000o0 60.009.344.00 . 466,0.08 0 6.53 20003t.000.00 80 8110a 129.055,40000 7J3.101,70.00 20.O.00.000 . 22.257,10Doo 20 00 Te,m,. 70.972,0000 117.423.02 o0 20.,000,00 00 4.340,000.00 .121735,800.00 21 00 KIn.ndoni 09.00.200.00 68,114,500.00 20,000.00000 . 111.033,700.00 US70 . . 252.910.862.00 . . . . 252.910,4D2.D0 2200 0.-n,-wng. 597.045.71300 52.610.1000o 127.22.706300 17.0177.30J00 37.54,5.97.00 6,202,00000 2.248.51500 99.899,207.00 864.008..4060,40.099 04.0 _TOM DlOSIlol. _ 1,002,120,5S0.00 1.044.03.370.00 _ ,094.171,5.00 I 751,1A280D700 3S0,90.002.00 173.300,I00.00 11 ,035,092.00 J 1,510,400.00I 2,24,0.00 I 2 441;.0 20 720 02 o. 082,W290S.00 501,1(0 T.-.Wnitf A.lo-des ..,ContO...d TA18 1gb: RECIJRRENTEXPENDITURE-URRAI COUNCILS 1900/00 _ . . Edue^Don Uealt!w _ Roads ~~~~~~~~~~~~~~~~~~~Wat r ~~~~~ Adm inssUalio^~~~~~1.1imTDT OTA PE OC PE OC PE OC PE 0 PO PE OC 8AiIISSO 4.2 7. 4 32 0.1 000 s.: 3 0009 2 84058 3. 2.0 2 5 32 .00 0.0 A Rioma 2 4 3.9 2 0 008 30 1t7 0 0 0 0 00 S4 132 4 4 3 20100 0 0 0.0 1 4 30 0 0M-os 34 3.2 49 2. 026 2 1 0.0 00 00 7 3..0 Si I 00u1000 21 0,3 2 7 00O 2.' 20 06 00 0.0 3.1 3,1 5.3 8 0M05. 59 4.0 3 3 8 4.5 3 6 OO 0.0 0.0 S.2 3.3 9 At0100,-r g0 S 3 30I 4 S 0O.2 0 5.2 4,6 10 M8or. 6 1 2.1 2 22 3 S a a aO 2 2 620 2.o 88 00,82 0. 3.0s 5 4 281 02 8 4 00 0.0 00 8.S 0.9 3.0 2.0 4.8 82 557nyong3 27 5.4 17 I0 40 2.7 OO 02 00 2.7 84 S0,nd. 23 30 2 0.8 1. 7.9 00 00 00 *2 2. 44 85 1.00144.5 825 21 73 20 70 00 28.1 00.0 5.4i 4.3 11.7~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~o 86 Tw.g0 .9 2A.4 0 7 2 2. 801 0 00 20 1.0 0.0 4.5 17 Oouok. 2 2 1 8 I I J 0 9 0.0 0. 00 1.5 2,1 4.6 I8 c Oec So,W-nn J3 I 0.2322 3I 0 2 9 7J 0 00 20 4 31, 0.r I9 llal 0.0 70 0D 0 7 C00 8.5 0.0 0 0 0.0 0 .0 7.9 22 1T0,0ko 00 2e 00 I5N 0D0 IS a0 820 eo 0.0 0.0 7.0 28 1 Inonoom 0.0 13 D 0 9 0 0 1105 0 0.0 O 0. 0.0 6e DSSo 0 0 0 0 00 0.0 0.0 0.0 0.0 0.0 0.9 0.0 12 S0umb0,0a00 3.2 2,6 25 23 0.7 3.6 0.2 0. 800.O 4.4 3.2 2.7 Tolo 83,48000 1.08200.0 100. 0080080 00800100,0 100.0I 00M.0Items: T08l LoNa8Go.W 107g84626727 11100720000 19W05290970 2623DZ3800 1853665293 534057800 1W913185JJ5 80D500702 2241575 o55048J380 139401297N09 1S33013900 U_IOf 0001-o,l0,1 4 18 17% 2A, _ 20% 24% 32% 48 2% 100% 27X 81 169 Sou.re TWle 10e 211 .. 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MI*v r 5i 40 3 3 16 *S J6 ° 0° 38 52 3.4 9h.0-oo 5 a 3 7 a 4 5 00 0. 1 0.0 5.2 s04 °10mt.*. 17 2. 2 12 24 35 I0.0Gd 0 0 0.0 2.2 It21 rson-' 3 l 36 2 ^ Z D Z 0s.0 a a o 0 8.5 *1 31 1 ^ | 2smgids J 3.5 2 3 6 r s 5 7 9 o 0o 0 0 0.0 4.2 252.5 44.2~~~~~~~~~~~~~~~~~~22 t6I53."b- 45 1S 483 13 32 22 9 178°° 9o7 0O° T. 4 12t 17'uobe 2.3 5r S I 81 o C0 00 00 tS 2. .91 ,.. n.o 7 0 0 oo 97a 00IISC0o 0 0.0 a*0 7.7 20Temeke o | 38 0.0 156 a0I.a "IJ.O. 00 a0 00 7.2 2 1 rnnor0J53 009 a0 0 11.S 0 a 0 0 0 0 0.0 0 . { OSSO 00 0.0 Ia5'3 O00 00 00~~~~~~O 00 00o o :o 1015urbswm7 ~~~| ~ ~~~~32 ZSI. 97300 0 0 . 32 2.7 |tordbtN Z sol4I ~1132C7102211| 23$SS443430 20555563sZ8 O 99541 2 z5 t305 8 5669937 | 0821)J329135 40988*41 0 14b455362468t 325ZS0N2a0 213 ...C.o.non.d T.b0. 15b: RECURRENTEXPENDITURE-UREBAN COUNCILS 2000103 _ ctRlon Helth a Wa.T AdminiOl1lies IOIAL ______~~~~~~~~PEI09I P6 OC PEI DC PEI Dc Pe oc 6o I ArosS. 102.434.570SI. 153.245.60507~ ~~~37,1.664 731.4 636 I10,5 1. 6 . . 18673156.3316, 4360677S 11IU 2 Ddo4e I.236,420,677.80 2J2,040,148,11 34794177.40 06935E11459 *,4M,117.80 4,704,120.18 Z2,60fi,8fiS.40 732.4324.4t . 125509929, t9 1.753.594.556.30 361.527.1S.U 3 1,1. 6el7.335,75s0o 162.746.134.23 134.873,55000 65.966,57901 12.458.241.35 660,144.0 . . . IIJ.712,315.IS 671.4109.7.30 234t 75,159.2t 4 0.jon,. 471,045,141.00 2l8,g60,74I.S0 i06.908.05.IS 160.67697 7 14.761.52760 2,474,312.30 . 34.,24.02825 520.167. 4s.36 234.132,751.5 S I,nrIl ~~~~~~~24&.656,091.05143,858,595.0i 67.966.157.70 01.040.211.13 27.2 6.8050.0 5,143,307.32 .- 35.515.374AE) 368.O1l.452.06 230.541.1i0340 S M951, 80.713,7o0000 1790181797.24 251.103.826.55 54534415.00 25.065.612.45 3.002.454go 100.29.58645 1.14S,372.0S.65 230.768,007.22 I1 u,som 620.027.741.55 294,004,51800 14.710,38535 122,112.501.3t 9,754,187.10 3,713.658.22 90.315.22S05a 8,4413.540.25 421.694,708.20 6 MOos. 1.15.S30.2631A 223.S53,068.93 178,407,857.10 36,656.04453 18,319.289,10 S,153.03 68 . 90,373.43500 1,450,430.(47.40 20,35,122.14 9 Mologo 1.104,6S4,124.S5 281,137,100.97 169,420,32570 76,029,22504 27.013,9i6555 6,371.55436 . . . 123,9.5410.65 Y4.427,910.374453.67934.30 10 MIs 1329.739,807.0 I 15.S3,7556 4 120,1959,3S25 48,507.73479 14,052.512.25 2,55.346.01 . , . 52.626,3J1.20 51f,420,191.30 t67.012.,17.43 I I MOO,nOS I.7n 05,02S0.50 202,000.321.74 26.6995.683.10 42,272.65319 457,759.65 2.047.792.62 . . . 703,550,294.15 1.100.709.445.0 246,3"7.207es 12 SoTle 720.872.057.85 393.03.650%.35 90.502.,44 25 16fD1 3.I6 82 7,36,52.725 7.343.6i7426 . . 85.300.3SO.4S 003.077 39.003.6,4.50,00.43 1Shiny0n 538,334,43300 302,026.02613 00.42.343.6s 30.394.305.8Z 1,71.fi SS 3.200.345.6f . . . 64,167,7$6.65 700,eS84530.45 IJS.030.600.03 |4 5fd 45 ,911,747.70 t 4,57,76f.27M 12J,752,011.95 124,366,DSJI2 6.00 .6,f400 11.217,112.61 . . . 101,t4,J60.70 607.964.304.55 J34,t91,9S2.00 I 7Tolal. a87,632,07465 754,316.034.01 163.579.423.75 t47.677.300.530 119157035 I I.1135,13 74 . 43,931.55306 . 12g.542,41645 1.1*91.48.60.90 957.316,122.14 6 lTon" l.01 7.92S.SS790 301,809.353.54 430.523.11890 64.I2.6954.5* 11.375.603.40 2.304.540.40 . . 180.17g,604 4S I ,630J03.974.6* 3060,04a0.230 10 | Rkob. 454,544,941 30 341,396.310.92 81,498,01275 37,161,431.59 5.292.952.35 .35,,775It . . . 35.452.702.05 576.70e.059.35 370.1919524.40 IDI 56111bn 4,556,004,07585 17,700,311.067 1,722,906.4681S 726.27,94927 123.138.763.65 4.110.fi99 S 3,005,1120 . . 4950,004,62142 0,958,063,740.25 48,230,952.91 1 1151 . 3951.217Z6.49 . 190.26.04 06. 16.442.798.35 .050,002.736.9 2 Oonmke . 215,4"0,2305Z . 3916616.5M24 . 16,442.7035S 19,066,294'03 342.lSl.625,I4 21K0ondo0 . 294,253,857.21 . 8J3.400.D40.o2 . 16,442.798J . . 494609804N.S OSSD . . 265,5S6,405,10 . . . . 2S,550.405.10 19 S-,mb-Ong. 626,897,998,65 SJ.48 355.7291133.962511.IS 45,981.00.69 39.423.255.35 5,104.067 . . 2,361,00375 104,99536 35 907,204.585Zs 210,703,005.14 Tofl Re ion, 11.020.23660.0 6.6094,409,600 6.34680,107.65 3.e23,427,05&93 406.347,744.46 142.043,276.60 05,010,C76.60 138,43,000.94 2,361,003.70 2,317.426,132.60 20,67.3.0,96 3606546671.31 Scuice To,,,991.nAulSorsoes ...CofmlimC41T.bl. 1sb: RECURRENTEXPENDITURE.URBAN COUNCILS 2000103 ______- Pf DC PEI PE PEI oc PE Pt PE 3OC 4.3 3.37. .3 4.5. 0.006 . 6. 5.6. Z6.3 Qndom 4.1 65s 3 4 45 i.36 24 4 54 5 .0 5.2 6.2 4.4 lrhaK 43.1 2. 0.5 33 J.6 1.0 0.0 00 0. .0 J. 3.03 4 2.4 2Klgom5 20 0. 36 173 0.3 0.o0 IA 2.2 3.0 S (mol I3. 2.0 16 41 f.7 3 6 0 6.0 5.0 .5 1.4 2.9 3 4 3 2 49 2.7 i 3 2.1 0 0 0.6 05. 75 4.1 3.6 3.1 5.3 27 6 0 2 7 0 0 00 0 3.0 3.I,.3 51Mbel 9.6 4 0 3 3 1 6 4.5 30 0.0 0.0 S.05.2 3.4 9 Mololofo 6 5S 3 7 3.e6 4O 0.5 0.0 0.0 5.2 6.2 4.4 .7 2.2 2 2 24 3.5 1.5 0.0 0.0 3.6 2.3 1.2 2.1 -1 . wzn* 61 3.6 54 .1 2 6 4 0.0.. 00 0 | 0.1 3.l 36112| o 7.0 1.7 53 10 I1.6 0.r 9.0 0.0 30 3.2 7.0 13 Shiny7a65 27 5.4 I.7 I. 40 22 0.0 0I0 0. 2.7 2.5 4.2 64 5 4445823 S3. 2. 6 1.5 7.59 0 6.0 0.0 4.2 2.5 4.2 15 7664 4 5 Ill5 3. 7.5 0.0 31.7 00 5.4 4.2 12.1 15T11579 2SI 0 4 00 3.2 30I 16 no 3uob50 6.50 0 I.. 6,0.1 4.7426 12490008 7.~ ~ ~~~~~~~~~300I S1.3 0.91 000. 01.3,4. 8 Dr e, Snoa1.es, 31 3 2 6 3 30 3 2 73 6 6.0 0.0 20.4 31.9 60. 19 11a1. 0.o 7 0 0 97 .6 11.s o 0.0 0.0 0.0 6.0 7.7 20 TenOeke 0.0 30 0.0 156 00 11.S 00 13.0 0.0 0. 9.0 7.2 21 Kinondonl 0.0 5. 6 1 00 115 0. 0.0 0.0 0.0 0.02 0SSD d.0 °°. 50 00 0.0 00 .0 00 00 00 .0 0 19 S,rb*ga .2 7.0 25 23 9.7 3.6 0 0O00.0 4.4 3 .2 2 7 TollReglons 100,b I.2 100.0 .0 10010 100 1006 100 00 100.0 100.0 I00.0 Memo llems: Tol-I.0O5IDoul G 1IiJ32071226 3047029475415 20565543976 1 77294927 1S53055556 750325523 2006542712 3943315497 230104 6964 34049 1"4443360240 3311S543314 U GaCO600IIS *s60ci 30% 10 26% 11% 24% 19% % 4% 100% 27% 4% 15% So.-e: Table ISO 214 Table 204: DOv0opmm4tE.peaditure-Knistdf.si _1999l0 ~ 199512000 2080i 2001/02 2002M03 _ Local Ll F0lgno ... I foc Dn Local Facet,, _oeigoLocal 26 Ad.NIntcohb.n Vice Prcs,dcrs. Offce 27 Ad-MIo4bolo Re9obVr of Po.bcA ParfIs 30 Adninisb^ o0 P- 1d00f, omce andC.binet 8o-roanaf. 3.000,000.00000 31 Ad ncslo4bn Vice PresdenCs Office 2,422,079.000.00 2,045,806,003.37 32 |dmmis4bdo P-ed-en0s f0ic. - CMI STo/e 0.paMr-enl 352.0E6,0600. 000000,000.00 298,162,3o00S 33 Admmfsrba0or Ethics Set-atfal 34 A'dmmlb eon Mi.by f F-eig Aff,ir ILI8t C-rC .oan 35 Admmnisbroon PemrnvanlC-omme.on o' EnouLy 30 Ad-1*s49o.a CrI S0.0/ceCrmmossioc 37 Adft,sioOaf pd..Pn Mf-den. off8ce 52.77,6i3,000 00 200,000,00000 4,457,948,144.Z2 209,668,025 63 413,621,87&70 418,145,732 se 40 Adaad.tNUo- Jodici-ry 41 Ad' nil*olo Mlinsyyof Ju,tce aodConebbhflonlAOfair, 248,924,00000 210.292,59537 42 A4dmimbron Off1c10f tre Speaker 45 Admftstboo Exceqouer od A.dd fVarrent 50 Adon,"Stain, Mhostryo Fhtance VOTE 50 39,887,452,00000 1,322.000,00000 33,692,358,878 38 . 51 AdWcinf."ono Minlsby of ora. Affb.r 54 Admo,i*41on RadIoTaeania 1,600,000,00000 55 Adainisralvon Ta74 b. lnvteementConere SS Admini,r4con MII,byof RgaIln1AdmeLocal Go.t 100,000.000.DO 193,7S0,00O00 290,625.00000 387.500,000 00 389,884.481.72 57 AdhaInl.0.lon MoIsOy ofDefe.n.and NationalS-.c- 1,000DD0,00000 59 Adm,lrbn.f on LawrRelorm Comanf,o.n 60 Adci-ofr.oon Indoobi.9Cpurt of Tac0n. 61 AdmNmrr.fron ElcIc,31 Co,rmmlhon 63 Ada,inl*9oo Local Goc-o ent S.c-A. Coceei.s.o 86 AdoiN,trabon PreSIden7.Offie - Plam.ng Comnisi1on 969,875.00000 S00,000,000.0N 819,239,746.63 . . Sub-Tot-l 100,600,000.00 49,186,980,060o0 6,214,760,080. 41,623.877,486.48 600,28.8025.63 So01,124,0708 . 606,0101Y4.6.4 30 Dcc dnd00c0 0,c Cloeen 39 Delon. 40409000ff e N.Oabooof Salcoce 20 and Scfce000007 cP0ceF- w 29 0010en0aol Sedul,y Mh,isbyof H-oaeAffair. - Pn.ons sub.Totaf . O0 0 . 486 Soao1 .ervi. Mmit0ry.ofEduooio t,100,000.000.00 9,758.977,00000 2,131,250000 00 8.243,270,384.53 2.234,274.89808 4,407,658,155.59 4434'.552.955.83 52 S.ooaOlMNeces Mhisb-yo 1H401 2,000,000,000.00 19,487,694,00000 3.375,000,000.00 16,460,9d0,53344 3,538,147,932.44 6,979.869,220.00 7.022,459.242.08 53 Soddt Mi.0r yr1040of C -tomulyDev. Gender & Col.Ire 2.35B,000,000.00 2,000,21623404 60 SOoale rxces Mnistbyof Ldoour and Youbl Development i,700,000,000 00 - 1,435,980,046.4f - 67 Social servico T.achers Se...ce Cnmralosin 00 Social -ervi-e. Mmc of Socl-, ThTe & Hlghw Ed.ca.on 8OO,Ou,000.0o 3,790,450,00000 7,743,750,00000 3,201.746,46373 1,828,043,098.43 3.606,265,73387 3,28,270,608.41 49 So.a Iconxct. MWis6oyof Wor 2,000,000,00D00 28.710,188,06000 3,225,000,00000 24,251,091,26711 3,2 2,738,251.22 6 329.673.2Y6.50 o 388,268,259.24 S.I Tof,a 6*000.0 ,0O000 66,019,317,000.00 10,476,000,000.W0 68,690,279,089.28 10,913,204,1e8f7 . 21.323,466t436.76 . 21,43,e7i748.57 47 EO.oocrio er-c.coo MnWi/y of W.*. 51,143.812.00000 4.000,000,OO00 43,204,080,791.92 48 Eco.oo- sNeni o M"try o Land, &sHuraen SMcn-t Dev 5-0,000,00300 - 524,170,004.07 1,034.054,609 26 1,040,364,332.1t 08 Ec,e -cicoeinasMWioy orfEncrgy sodMincalo 000,000,000 DO 22 92,659,000000 1,743,7500003.00 19,307,515,184 S 1i,802,043,09843 3.008,265,703.67 3,628270.8N8.41 02 Eo09nomh oe00cO M,s ylOof CamorncaooardTranoorl 9.20,000.000000 - 7,771.i10,3D8.81 Sob-Total 96.00,000,00 923,277,478,800.60; ,2434760,000.00 70,340.8306,346.2 2,362,213,16249 . 4,64C0320,462903 4,688,934,940.67 09 PNodoobve Mris y of N. u-1l Rsouroc0 00d Tounsm 7,600,737,00 On - 6,486,001,8000O- 43 Prod-cbve Mstry ofAgn.,tune and Co-ope-al00 1,00O,000.0000 20,850,010,000o 2,437,500,000.00 17.611,8S3,25974 2,5550329,06232 0,041.0186,889 5,071,776,119.28 44 Produde MeNistryof Indutries and Trad. 320.000.000.00 - 270,200,491.09 . - S.b-Tola1 1,000,000,00C.00 2,523,917.000.00 2,437,600,000.00 24,347,106,660.*2 2,956,328,062.32 . 6,0444,061,09.9 . *071,7765119.28 _TolalJ,t . tricc 9,600,000,000.00 227,076,81,60000 21A.472,000.,00.00 11,0II 21,8 16,221,030,43060, _ 21,05.2043727.20 32.000,00o,00w.o Sc,ir-e The TacoonianAulhonbes 215 ,0 aLI >. > _ ' -- - *'0*_ OW ~~ . = 0A OJj J O~ ~IA' ;'- ' _ - s '''''~ ' '''''''- is' ow w e W o w . D .0 I-wQ I o~~~~~~~~~~~~~~~~ . .4 . . .o . . . L. Table 2ta: Development Expenditure-Regions 199S/99. 199912000 2000101 2001/D2 2002103 Local Foregin Local Foreign Local Foreign Local Foreygin Local foreign 70 Arusha 105,000,W00.00 2,O00.000,000.00 319,720,000.Co 1.680.371,819.31 360,000,000.00 400.000,000.00 400,000,000.0O 71 Pwani 105,000,000.00 439.617,000.00 319,720,000.00 371,339,2B5.54 360,000.000.00 400,000.000.00 400,0O,000.00 72 Dodoma 105,000,000.00 2,104,239,000.00 319,720,000.00 1,777,421,033.84 360,000,000.00 400.000,000.00 400,000,000.00 73 Irlnga 105,000,000.00 1,217,000,000.00 319,720,000o00 1.027,902,752.05 360.000,000.00 - 400.000.000.00 - 400.000,000.00 74 Kigoma 105,000,000.00 179.458.000.00 319,720,000D00 151,585,643.97 360,000,000.00 400,000,000.00 400,000,000,00 75 Kilimanjaro 105.000,000.00 - 31'.720,000.00 360.0,0000000t 400,000,000.00 . 400,000,00O.00 76 Lindi 105.000.000.00 267.000,000.00 319,720.000.00 225,531,137.80 360,000,000.00 400.000,00000 400.000C,oo00 77 Mare 1105,000,0O0.DO 2,585,127,000.00 319,720,000,00 2,183,620,351.57 360.000.000.00 400000,000.00, 400,000.000.00 70 Mbeya tOS,000,00O.DD 140,000,000.00 319,720,000.00 118,256,027.35 360,000,000.00 400,000.000.00 400.000000.00 79 Morogoro 105,000,000.00 938,655,000,00 319.720,000.00 792,868,652.53 3600000,000.00 400000.00.00 . 40,00.0.COO.00 80 Mtwara 105.000,000.00 850,000.0P0.00 319,720,000,00 549,045,84127 360.000,000.00 400,000,000.00 400,0O,O00.00 I8 Mwanza 105.000,000.00 793.654,000.00 319.720,000.00 670,388.350.94 360,000.000.00 400.000.00.00 400.000,OOO.00 82 Ruvuma 105,000,000.00 230,823,000.00 319.720.000,00 194.972.935.72 360,000,000.00 400,000.O.00 400.000,000.00 63 Shinyanga 105.000,000.00 600.000.000.00 319,720,000.00 506,F11,545.79 360,000.000.00 400,000,000.00 400,000,000.00 84 Singlda 1O5.000,000.00 300.00.000 00 319,720.000.00 253,405,772 90 36000.,0000 400,000.000.00 400,000,000.00 85 labora 105.000,000.00 - 319,720.000.00 - 360.000.000.00 400.000.0000W 400.000,ooo.00 86 Tanga 105.000.000.00 600,000,0O0.00 319.720.000.00 506.811,545.79 360.000,000.00 400,000,000.00 400,000.000.00 87 Kagera 105.000.DOO.00 6.266.503,000.00 319.720,000.00 5,293,226,786.90 360.000,000.00 400.000,000.00 400.000.000.00 8e Dar es Salaam 105.000.0C0.00 7,897.805.000.00 319,720,000.00 6.671,164,600.69 360,0W,000.00 . 400,000.000.00 400.0O,O000.00 89 Rukwa 105,000.000.0 179.458,000.00 319.720.000.00 151.585,643.97 360,000,000.00 400,0,0W .00 . 400.000.000.00 I______Total Regions 2,100,000,000.00 27,389,339,000.00 6,394,400,000.00 23,135,388,728.03 7,200,000,000.00 . 8,000,000,000,0 ' ,000,000,000.00I Source: The Tanzanian Authorties Table 21b: Development Expenditure-Regions (in percentage) 199t199 199912000 2000/01 200V02 200M Local Foreign Local Foreign Local Foreign Local Foreign Local Foreign 70 Arusha 5.0 73 5.0 7.3 5.00 S 5.0 71 Pwani 5.0 1.6 5.0 1.6 5.0 - 5 O 5.0 72 Dodoma 5.0 7.7 5 0 7.7 5.0 . 5.0 . 5.0 73 |rifga 5.O 4.4 5.0 4.4 5.0 S5.0 5.0 74 Kigoma 5.0 0.7 5.D 0.7 5.0 . 5.0 . 5.D 75 Kilmanjaro 5.0 0.0 50 0.0 5.0 5.0 . 5.0 76 LjrIdi 5.0 1.0 5.0 1.0 5.0 5.0 . 5,0 77 Mara 5.0 9.4 5.0 9.4 5.0 - 5.0 . 5.0 70 Mtbeya 5.0 0.5 5.0 0.5 5.0 . 5.0 . 5.0 79 Morogoro 5.0 3.4 50 3.4 5.0 . 5.0 . 5.0 80 Mtwara 5.0 2.4 50 2.4 5.0 . 5.0 . 5.0 81 Mwanoa 5.0 2.9 50 2.9 5.0 5.0 - 5.0 82 Ruvuma 5.0 0.8 50 0.9 5s. . 5s0 5.0 83 Shlnyanga 5.0 2.2 50 2.2 5.0 - 5.0 . 5.0 84 Singida 5.0 1.1 50 1.1 5.0 50 . 5.0 d5 Tabora 5.0 0.0 50 0.0 5.0 5.0 . 5.0 86 Tanga 5.0 2.2 5.0 2.2 5.0 . 5.0 . 5,0 87 Kagere 5.0 22.9 5.0 22.9 50 . 5.0 . 5.0 88 Der es Salaam 5.0 28.8 5.0 26.8 5.0 . 5.0 . 5.O 89 Riukwa 5.0 0.7 5 0 0.7 5.0 . 5.0 . 5.0 Total Regions 100.0 100.0 100.0 100,0 100.0 100.0 100.0 Source Table 21a 217 Table22a: Foreign Assistance CashFlow -____-r______--_____._____ (in Mill. US S.) . DO Type Budget Projection Projection Projection Donor Type 1998/99 1999,00 2000/01 2001/02 ADBIADF Project 23.1 17.33 12.99 9.75 BOP Support 40.0 30.00 22.50 16.88 BADEA Project 3.9 2.89 2.17 1.62 EU Project 21.6 18.33 12.83 8.98 SOPSupport 37.9 26.11 5.00 5.00 IDA Project 115.5 86.63 64.97 48.73 BOP Support 40.0 33.00 24.75 21.26 KUWAITFUND Project 1.5 1.16 0.87 0.65 OPECFUND Project 1.5 1.16 0.87 0.65 UNDP Project 7.7 7.70 7.70 7.70 Total Multilateral 292.7 224.3 154.6 121.2 Project 174.8 135.2 102.4 78.1 BOPSupport 117.9 89.1 52.3 43.1 BELGIUM Project 4.5 4.47 4.47 4.47 CANADA Project 3.9 3.85 3.85 3.85 DENMARK Project 33.4 33.42 33.42 33.42 MDF 3.3 3.30 3.30 3.3 FINLAND Project 4.2 4.24 4.24 4.24 MDF 5.0 5.00 4.5 3.5 GERMANY Project 6.0 6.01 6.01 6.01 IRELAND Project 4.6 4.62 4.62 4.62 MDF 2.0 2.00 2.00 1.0 JAPAN Project 15.4 15.40 15.40 15.40 CIS 8.0 8.00 6.00 6.00 NETHERLANDS Project 13.1 13.09 13.09 13.09 MDF 9.5 9.50 7.13 4.6 NORWAY Project 26.7 26.72 26.72 26.72 MDF 2.7 2.7 2.7 2.7 SWEDEN Project 36.5 36.50 36.50 36.50 MOF 8.3 6.0 4.0 2.0 SWITZERLAND Project 3.9 3.85 3.85 3.85 BOP 6.7 6.00 4.50 3.27 UK Project 7.7 7.70 7.70 7.70 SOP 8.0 6.00 4.50 3.90 MDF 20.0 17.00 16.50 8.0 USA TotalBilateral 233.4 225.4 215.0 198.2 Project 159.9 159.9 159.9 159.9 CIS 8.0 8.0 6.0 6.0 BOP 14.7 12.0 9.0 7.2 MDF 50.8 45.5 40.1 25.1 Grand Total 526.0 449.6 369.6 319.4 Project 334.6 295.0 262.2 237.9 CIS 8.0 8.0 6.0 6.0 BOP 132.6 101.1 61.3 50.3 Assumptions: Programmeassistance Inciuding MDF is assumedto decline by 1Spercent from 1998199base. Foreignloans are projected to declineby 15percent from 1998/99base. Projectgrants are projectedto increaseby 15percent each year. Exchangerate: 199912000 is Tshs.705 perS. 2000/01is Tshs. 715per S andyear 2001J02is 720 per S. Source:The TanzanianAuthorities 218 Table 22b: Foreign Assistance Cash Flow (in percent) ______Donor Type Budget 1998/99 Projection Projection Projection 1999/00 2000/01 2001/02 ADB/ADF Project 4.4 3.9 3.5 3.1 BOP Support 7.6 6.7 6.1 5.3 BADEA Project 0.7 0.6 0.6 0.' EU Project 4.1 4.1 3.5 2.8 BOP Support 7.2 5._ 1.4 1.6 IDA Project 22.0 19.3 17.6 15.3 BOP Support 7.6 7.3 6.7 6.7 KUWAITFUND Project 0.3 0.3 0.2 0.2 OPEC FUND Project 0.3 0.3 0.2 0.2 UNDP Project I 5 1.7 2.1 2.4 Total Multilateral 55.6 49.9 41.8 38.0 Project 33.2 30.1 27.7 24.4 BOPSupport 22.4 19. 14.1 13.5 BELGIUM Project O.8 I.C 1.2 1.4 CANADA Project 0.7 0.9 1.0 1.2 DENMARK Project 6.4 7.4 9.0 10.5 MDF 0.6 0.7 0.9 1.0 FINLAND Project 0.L 0.9 1.1 1.3 MDF _ I_.C_ 1.2 1.1 GERMANY Project I_.] 1.3 1.6 1.9 IRELAND Project 0.9'___ 1.2 1.4 MDF 0.4 0_4 0.5 0.3 JAPAN Project 2.9 3.4 4.2 4.8 CIS _ I_ 1._ 1.6 1.9 NETHERLANDS Project 2.5 2.9 3.5 4.1 MDF 1_._ 2_.1 1.9 1.4 NORWAY Project 5.1 5.9 7.2 8.4 MDF 0.5 0.6 0.7 0.8 SWEDEN Project 6.9 8.1 9.9 11.4 MDF 1.6 1.3 1.1 0.6 SWITZERLAND Project 0.7 0.9 1.0 1.2 BOP 1.3 1.3 1.2 1.0 UK Project 1.5 1.1 2.1 2.4 BOP 1.5 1.3 1.2 1.2 I ______MDF 3.8 3.8 4.5 2.5 USA 0.0 0.0 0.0 0.0 Total Bilateral 44.4 50.1 58.2 62.0 .______Project 30.4 35.6 43.2 50.1 CIS 1.5 1.8 1.6 1.9 BOP 2.8 2.7 2.4 2.2 MDF 9.7 10.1 10.9 7.9 Grand Total 100.0 100.0 100.9 100.0 Project 63.6 65.6 70.9 74.5 CIS 1.5 1.8 1.6 1.9 BOP 25.2 22.5 16.6 15.8 Assumptions: Programme assistance including MDF is assumed to decline by 15 percent from 1998/99 base. Foreign loans are projected to decline by 15 percent from 1998/99 base. Project grants are projected to increase by 15 percent each year. Exchange rate: 1999/2000 is Tshs. 705 per $, 2000/01 is Tshs. 715 per $ and year 2001/02 is 720 per $. Source: Table 22 219 Table 23a: Summary Of Audit Certificates Issued Accounts and Statements awarded Accounts and Statements awarded Accounts and statements issued an Clean Certificate Qualified Certificate Adverse Opinion FY94 FY95 FY96 FY97 Y;94 FY95 FY96 FY97 FY94 FY95 FY96 F97 Total Ministries 46 40 69 48 40 8 24 10 4 if 61 53 55 92 43 TotalMinistries(percent) 39.3 33.6 51.1 35.8 42.6 4.8 20.2 7.4 3.0 11.7 52.1 44.5 40,7 61.2 45.7 Total Regions 28 24 31 20 0 4 4 8 10 0 43 52 41 46 60 Total Regions (percent) 37.3 30.0 38.8 26.3 0 5.3 5.0 10.0 13.2 0 57.0 65.0 51.3 60.5 100 Local Authorities (LAs) 6 9 8 20 23 7 8 9 30 20 13 22 23 37 65 TotalLAs(percent) 23.1 23.1 20.0 23.0 21.5 26.9 20.5 22.5 34.5 18.6 50.0 56.4 57.5 42.5 59.8 Table 24: Unvouched and Improperly-Vouched Expenditures YEAR UNVOUCHED IMPROPERLY-VOUCHED TOTAL UNVOUCHED & TOTAL EXP. IMPROPERLY-VOUCHED Absolute Values Percent of Total Absolute Values Percent ol Total Absolute Values Percent of Total Exp. Exp. Exp. FY94 5,225,000,000 1.87 10,250,000,000 3.67 15,475,000,000 5.54 279,139,409,583 FY95 2,788,700,000 0.54 5,609,200,000 1.08 8,397,900,000 1.61 520,752,632,680 FY96 1,344,000,000 0.45 13,903,000,000 4.62 15,247,000,000 5.07 300.791,759,110 FY97 6,005,000,000 1.60 25,676,000,000 6.84 31,68t,000,000 8.44 375,291,200,370 FY98 5,464,849,265 1.06 40,363,465,604 7.80 45,828,314,869 8.85 517682490317 TABLE 25: Cash and Stores Losses (in TSh) YEAR TOTAL EXPENDITURE TOTAL LOSS OF CASHAND STORES TOTAL LOSS AS PERCENT OF TOTAL EXPENDITURE F;Y94 279,139,409,583 787,477,521 0.28 FY95 520,752,632,680 301,508,742 0.06 FY96 300,791,759,110 72,960,000 0.02 FIY97 375,291,200,370 971,000,000 0.26 FY98 517,682,490,317 751,151,042 0.15 220 Table 26: Summary of Excess and Saving (FY94-FY98) Excess MINISTRIES/DEPT Recurrent Development AND REGIONS FY94 FY95 FY96 FY97 FY98 FY94 FY95 FY96 FY97 FY98 TFOTAL MINISTRIES 7.252.813,726 231,660,281 13,753,752,829 3,939,311,177 1,996,893 1,482,172,148 495,717,400 91,627,%8 TOTAL REGIONS 2.073,135,528 1,053,361,504 197.277,935 16,697,877 3,634,386 674,583,542 GRANT) TO'TAIL 9,325,949,254 1,285,021,785 13,753.752.829 197.277,935 3,956,009,054 5,631,279 1,482.172.148 495,717,400 91,629,768 674,583,542 Savding RecurTent Developnsent FY94 FY95 FY96 FY97 FY98 FY94 FY95 FY96 FY97 FY98 TOTAL MINISTRIES 744,473,926 7,974,082,682 33,615,424,377 56,929,568,019 42,293,204,841 49,482,765,434 83,480,905,337 98,358.808,804 70,140,688,278 188,792,388,216 TOTAL REGIONS 47,135,447 1.745,0S1,589 S.713,193,045 1,453.556,604 665,075,203 2,901,945,10S 7,140,424,291 17,983,182,827 8,787,275,582 17,012,093,826 GTRAND TOTAL 792.209,373 9,719,164,271 42,328,618,422 58,383,129,623 44,958,280,044 52,384,510,542 90,621,229,628 116,341,991,631 78,927,963,860 205,804,42,042 Table 27: Summary of Queries Issued and Percentages Replied and Not Rcplied FV94 FY95 FY96 FY97 FY98 MIflNISTRIES/DEP NO. OF NOT REPLILI) NO. ()F NOT REPLIED NO. OF NOT EPLIED NO. OF NOT REPLIED NO. OF NOT REPLIED AND REGIONS QUERIES REPLIED (percent) QUERIES REPLIED (percent) QUERIES REPLIED (percent) QUERIES REPLIED (percent) QUERIES REP]IED (percent) (percent) (percent) (percent) (percent) (percent) TOTAL 3266 91.2 8.8 2338 86.0 14.0 1790 92.2 7.8 1640 90.1 9.9 1824.0 80.9 19.1 MINISTRIES TOTALREGIONS 2954 84.5 15.5 2424 84.2 15.8 1590 92.5 7.5 1434 90.2 9.8 1265.0 96.8 3.2 GR.ANDTOTAI. 6220 88.0 12.0 4762 85.1 14.9 3330 92.3 7.7 3074 90.1 9.9 3089.0 874 12.6 Table 28: ESSENTIAL ITEMS FOR PRIORITY SECTORS- FY00 tVOTE SUBVOTE ITEM DESCRIPTION P.E. O.C. TOTAL 1. BASIC EDUCATION: 70-S9 101** all O.C.Subvention to Local Authorities 79,607,472,000 11,106,720,30(0 90,714,192,300 70-89 204 2012 Examination expensesin the RAS budget 92,314,600 555,947,400 648,262,000 46 301 all MoEC - Basic Educ.SubvoteO.C. 58,368,700 10,282.800 68,651,500 46 501 all MoEC - Teacher Educ.Subvote O.C. 1,890,973,200 860,975,500 2,751,948,700 46 202 all MoEC - 75% oflInspectorate Subvote O.C. 541,730,800 241,118,200 782,849,000 46 2201 30630 Subventionto Institute of AddultEducation 413,812,700 2,966,0)00 416,778,700 46 101 30625 Subventionto Nat. Examination Council 241,509,500 529,000,000 770,509,500 67 all all 75% of TSC O.C. 51,521,500 1 14,016,700 165,538,200 Total Basic Education 82,897,703,000 13,421,026,900 96,318,729,900 2. PRIMARY HEALTH: 170-89 1101** all O.C.Subventionto LocalAuthorities 114,503,602,400 | 2,628,028,800 |17,131,631,200 j52 1201 [1709 _ l.ocal Authorities drugs allocation (kits) 221 budgeted under Moll 6,600,000.(000 6.600,000,000 52 301 all MoH Preventive Subvote O.C. 311,613,500 3,637,011,100 3,948,624,600 70-89 302 all [Regions PreventiveSubvote O.C. 197,546,400 903,278,900 11,100,825,300 Total Primary Health 15,012,762,300 13,768,318,800 28,781,081,100 3. WATER 49 401 all MoWater O.C. 1,802,120,900 1,001,704,400 2,803,825,300 70-89 204 1803/181 Regions O.C. items 18,462,900 56,680,300 75,143,200 Total Water 3,228,963,600 2,123,482,400 5,352,446,000 4. RURAL ROADS 70-89 101 all O.CSubveion to Local Authorities 880,213,900 360,686,300 1,240,900,200 56 [202 2301 Road Fund budgeted for Districts - 13,988,700,000 13,988,700,000 47 701 all MoW -Rural Roads SubvoteO.C. 356,351,000 7,329,900 363,680,900 Total Rural Roads 1,236,564,900 14,356,716,200 15,593,281,100 5. JUJDICIARY 140 [all jall 1AIIO.C. un(derJudiciary Department 14,034,703,600 13,912,649,600 17,947,353,200 6. AGRICULTURERESEARCH AND EXTENSION 43 301 all MoA - Research Development Subvote 654,157,500 774,550,000 1.428,707,500 O.C. 43 201 all MoA - Crops Development SuibvoteO.C. 3,350,707,800 1,961,588,900 5,312,296,700 43 401 all MoA - Cooperative Development Subvote 402,098,000 1,330,043,100J 1,732,141,100 O.C. 43 601 all MoA - Livestock Devt. Subvote O.C. 2,506,087,700 686,866,600 3,192,954,300 Total Agriculture Research and Extension 6,913,051,000 4,753,048,600 11,666,099,600 7. HIV/AIDSI _ _ Total Priority Sectors 113,323,748,400 52,335,242,500 165,658,990,900 * MoF to look into mechanism that will ensure easy veritication of allocation for HIV/AIDS in the year FY01 budget. ** Breakdownfor subvention to Local Authorities is found in Appendices to Volume III of Estimate Book. 222