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Development partners in Tanzania’s Planning and Budgeting system. DPG Orientation :Aid management September 12, 2006 Allister Moon. Tanzania’s planning and budgeting system. Planning and budget cycle MKUKUTA linkage PER process PRBS interface with planning and budgeting - PowerPoint PPT Presentation
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Development partners in Tanzania’s Planning and
Budgeting systemDPG Orientation :Aid management
September 12, 2006
Allister Moon
Tanzania’s planning and budgeting system
• Planning and budget cycle
• MKUKUTA linkage
• PER process
• PRBS interface with planning and budgeting
• Sector reviews, cluster/sector PERs
Planning and budget cycle
• Macro framework preparation, PER Macro group
• MDA submissions, SBAS• Budget Guidelines, BG
Committee• IMTC, Cabinet• PER/PEFAR consultations• Annual budget, MTEF• Parliament
July-September
Sept/OctNov-DecJanuaryMayJuneJuly -August
MKUKUTA- budget linkage
• MKUKUTA : domestically driven policy content and development of implementation instruments
• implementation through MTEF/annual budgets
• Priority sectors > clusters
• SBAS
• MKUKUTA monitoring system
Strategic Budget Allocation System
“ The Tanzanian authorities have gone furthest in any country to develop a hard and structured link between a PRSP and the Budget through the SBAS” - conclusions in a recent multi country study on PRSP/budget linkage
SBAS continued
• SBAS micro – MDAs prepare submissions based on MKUKUTA/Strategic Plan
• SBAS macro – MoF/Budget Guidelines Committee use to to review submissions and link to macroframework
• Challenges – wage bill planning, performance focus, link to MKUKUTA monitoring
• Local Government – PLANREP to be linked 2007/8
Key:Input/information
Approval/decisions
Public Expenditure Review Process
Parliament Cabinet
MKUKUTA Monitoring System
Inter Ministerial Technical Committee
Budget Guidelines Committee(output: Budget Guidelines)
Technical Committee(MKUKUTA Secretariat)
PER Working Group Monitoring
Advisory Committee
Surveys & Routine Data
TWG
Communications TWG
PER Macro Group
Cluster 1 WG Growth
Research & Analysis TWG
Cluster 2 WG:Well being
Sectors(output: Sector Reviews)
Cluster 3 WG:Governance
Cluster 4 WG:
Financial Acct
MKUKUTA Secretariat MPEE
MDAsM&E and MIS units(Policy & Planning
Depts)PM-RALG
LGAs M&E unit
Budget and MKUKUTA monitoring
Public Expenditure Reviews : a short history
– Pre-1998: Bank product by Washington missions => Focus on restoring fiscal equilibrium (introduction of cash budget system).
– 1998 to 2000: Introduction of Participatory annual PERs & MTEF; =>Focus on consolidating fiscal prudence; improving budget predictability & Accountability
– 2001-2004: Participatory annual PERs to support implementation of PRSP => Focus on protecting social sector expenditures.
– 2005 to date: “One Process One Assessment” = Integrated PEFAR review of PE + PFM + PP. => Focus on aligning the budget to support the growth focus of MKUKUTA.
Key features of PER process
• Govt-led & Participatory process (PS-MoF; Secretariat; Broad membership of Macro & Sector PER WGs; Regular meetings); Jointly agreed work program that dovetails with the budget cycle
• Joint External Evaluation: WB, IMF/East AFRITAC, DFID, KfW, EU, Finland, Ireland, Canada, NGOs – Haki Elimu, Water Aid, NPF, REPOA + consultancy support (local & international)
• Annual Stakeholders Consultative meeting => Provide feedback to stakeholders + Get feedback on draft budget frame/cross-sector allocations.
PRBS: interface with budget
• Redesign of PRBS : simplification of PAF, alignment with MKUKUTA, use of national systems, underlying processes, key role of sector reviews
• Timing of annual review in the cycle – in time to assess prior year outturn, early indication of next year financing
• PEFAR as annual fiduciary assessment
Sector reviews : three functions
• integral components of the national planning and budgeting system, feedback on sector performance ,broad dialogue on sector policy and expenditure plans, input for annual budget
• instrument for strengthening domestic accountability, contributing to a broad public awareness of sector issues that can strengthen the role of formal institutions of accountability, especially Parliament
• Less centrally, but very importantly for aid strategy, the base for performance monitoring and policy dialogue for DPs, supportive/catalytic for broad accountability to all stakeholders.
Sector reviews : challenges
• Long way to go in realising these goals across key sectors
• Few sectors have established track record on annual review process (eg health)
• Sector review task force : currently working on tighter definition of ‘satisfactory review’ and how PRBS use of reviews
• Need to recognise that extensive use of sector reviews is an experiment in hybrid instituions, specific to high aid context
JAST – joint analysis, joint programming
• Part 1 JAST text – MoU to be signed October• Part 2 Joint analysis• Part 3 Joint programming• Part 4 Agency specific supplement Parts 2+3 = Joint Program Document, final draft
by end SeptemberPart 4 – timetable as required by individual
agencies, should be minimum additional required to meet agency program doc requirements, with minimal additional consultation/ transaction costs
Part 3 outline
• Intro, context, lessons learnt• Managing external finance• Issues for developing aid strategy: MTEF
projections, scaling up, consistency with MKUKUTA,JAST
• Response to MKUKUTA cluster strategies• M&E/Results matrix• Risk analysis• Other JAST issues
Managing external finance
Institutional challenges of high levels of aid• Vision of DP role as catalyst for strengthening
domestic accountability• Key role of sector reviews in realising this
vision,balancing national planning and budget role, domestic accountability and monitoring/dialogue for DPs
• Recognising the responsibilities of high aid dependence, DPs as integrated particpants in budget process
Key changes in DP input to planning/budget cycle
PRESENT
Got passive recipient of individual agency projections
One off DP input
Exclusively bilateral
FUTURE
GoT actively assesses projections,leads dialogue
Iterative, interactive
DPG role in coordination quality review, facilitating adjustment
Work in progress
• Consistency with JAS: key indications one year ahead – number of projects increasing 25%, average project size falls by 20%, slight fall in % budget support
• Summaries of aid programs by cluster: Cluster priorities, MKUKUTA alignment, financing strategy, development of dialogue/sector reviews
• Summaries of aid programs by cluster: Cluster priorities, MKUKUTA alignment, financing strategy, development of dialogue/sector reviews
Figure ?: Total External Financing (actual+projections)
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0%
of
GD
P
Actual Donor Support MTEF Projection 07 MTEF Projection 06
MTEF Projection 05 MTEF Projection 04 MTEF Projection 03
Figure ?: DPs MTEF Projections
Commitment (18 agencies)
Pipeline/indicative (3 agencies)
Unallocated (4 agencies)
0
500
1000
1500
2000
2500
2006/07 2007/08 2008/09 2009/10
Mill
ion
USD
Commitment (18 agencies) Pipeline/indicative (3 agencies) Unallocated (4 agencies)
Average Forecast Error (in percent)
0 10 20 30 40 50 60 70 80 90
DPs Budget Support
DPs Other Support
DPs Total Support
Domestic Revenue
Percent
Year 3 Year 2 Year 1
Improving DP projections : some options
• Individual agencies prepare comprehensive MTEF projections annually (commitments, pipeline + unallocated)
• DPG takes more collective responsibility for quality of projections (ex ante), and realisation (ex post)
• Reserve funds set aside to assure stable medium term flows(DP or GoT)
• Recommendation : pursue all three approaches, option 1 to be included in next GoT MTEF call, PER macro group to work on detailed proposals on 2 and 3
Work program for DP working groups
• Review sector MTEF projections – identify gaps, encourage WG members to improve coverage (commitment/pipeline)
• Review Joint program doc: – Proposed drafting revisions for cluster text, covering:
sector priorities, developments in external financing, status of sector review/policy dialogue institutions
– Results matrix : review indicators (col 1), review DP inputs and summarise (col 3), insert summary of strategies/intermediate results (col 2)
– comments on other sections
Finalising the joint program doc
• First draft with GoT, comments expected mid Sept, including views on any broader consultation process required
• Similar for civil society
• Still aiming for final draft end Sept/next DPG
• DP views on facilitating HQ engagement/ comment/agreement on final draft ?
Orientation challenges
• DP Government institutions: an increasingly complicated map, changing rapidly
• Important to get a sense of dynamics : where have we come from, what’s the collective vision of future institutions
• No textbook solutions : resource transfers at this level have been rare historically, no models of how this works over the long term, consistent with national ownership and domestic accountability
• Best to view Tanzania institutions not as a model but rather a complex experiment in how to make sustained aid levels consistent with national ownership, with aid as a catalyst for building institutions of domestic accountability