Enhancing Aid Effectiveness-Joint Assistance Strategy

DPG Orientation Seminar

12 September 2006

I. Global Aid Context Paris Declaration-Framework for Aid Effectiveness:

From donorship to ownership

Partners set the agenda

Aligning with partners’ agenda

Using partners’ systems

Establishing common arrangements

Simplifying procedures

Sharing information

Ownership(Partner countries)

Alignment(Donors-Partners)

Harmonization(Donors-Donors)

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II. A Shifting Aid Environment in Tanzania TAS (2002-2005): A framework to more effectively manage and improve

predictability of external resources; restore local ownership and leadership

Progress achieved: Improved relationship in development cooperation; national capacity developed through core reforms (essentially PFM); new mechanisms adopted (PRS I; PER; MTEF); rationalization and increased national ownership of technical assistance; move from project to program aid and increasingly GBS

Outstanding Challenges: still widespread provision of off-budget financing (projects) impeding strategic budget resource allocation at national level, transparency & domestic accountability; parallel systems and procedures; uncoordinated Development Programme at LGAs; multiple missions, meetings and analytical studies

Scaling up TAS towards JAS to operate at a higher level of commitment to the principles of H&A by effectively aligning donor country assistance strategies with MKUKUTA and MKUZA. Further enhancement of national ownership and GoT wide leadership.

III. Joint Assistance Strategy (JAS) Inclusive Dialogue

Idea of JAS emerged in TAS process in 2003/04 resulting from a joint GOT-DP study on rationalisation/ harmonisation of processes

Idea was taken further in GOT-DP consultations formulation of a JAS Concept Paper end 2004

JAS Consultative Meeting with domestic and international stakeholders in April 2005

First draft JAS Document prepared by GOT in May 2005

JAS Retreat with Directors of Policy and Planning in November 2005

Outcomes of JAS Retreat incorporated into third draft JAS Document November 2005

JAS discussion with Parliamentarians

JAS discussion with Zanzibar on 3rd draft

JAS Consultative Meeting with PSs and DPs in April 2006 – agreed on JAST principles

III. Joint Assistance Strategy (JAS) JAS to emphasize:

Guiding framework of principles moving toward post Paris High-Level Forum

The principle of National Ownership and Leadership with broad-based stakeholder participation (CSO, private sector, local governments, Parliament) in identifying development goals and formulate strategies;

Country-led partnership representing a paradigm shift towards putting Tanzania in the driver’s seats/reduce the asymmetrical relationships and tensions in the donor-led approach. Ensuring that aid is aligned with GoT priorities.

Shift from external accountability to domestic accountability (Legislature, non-state actors – participation, quality)

Mutual accountability (to move towards better alignment and greater predictability in ODA disbursement)

III. JAS-Key Principles Harmonisation and alignment around MKUKUTA/MKUZA and

national budget Align National, Sector and Local policies, strategies and processes

with MKUKUTA/MKUZA and national budget

Align DPs support, strategies, and processes with national priorities (MKUKUTA/MKUZA), systems, procedures and processes

Mix of aid delivery modalities: GBS: GoT’s preferred modality (currently 38% of total ODA); Current

PRBS instrument evolving: more inclusive; focused on domestic accountability with PAF to be increasingly aligned to MKUKUTA Monitoring Master Plan and national instruments and processes

Basket funding (as a transition to GBS) to protect public reforms and/or thematic areas not yet mainstreamed in normal government activities

Direct Project Funding (under specific conditions; well aligned to national systems – for pilots and innovations & emergency aid)

Channel/Disburse ODA through Govt Exchequer and Budget System

Use of national procurement, accounting and auditing systems and procedures

Developing National Capacity Supporting the building of sustainable human resource, technical and

financial capacity in Tanzania institutions

Working closely with Govt to eliminate systems that historically detracted from this goal (i.e. separate or parallel PIUs, etc.)

Enhanced TA strategy Demand driven, responsive to GoT needs and focused on capacity

development

Increasingly untied from the source of financial assistance (focusing on value for money)

Procurement under Govt Leadership and using Govt system (I.e. pooled TA)

Better Division of Labour: More effective division of labour among GOT agencies with clearly defined roles – lead agency in

each sector/thematic area

Rationalise number of DPs per sector/thematic area and the number of sectors/thematic areas per DP

Concept of lead & delegating partner by sector & thematic areas (based on comparative & competitive advantages)

Dialogue: Improving public policy choices, effectiveness in planning, budget management and public service

delivery

High quality and regular dialogue under Govt leadership

Based on existing, national processes (i.e. MKUKUTA/MKUZA, PER, Sector Reviews, etc.)

Facilitating domestic and mutual accountability

On the basis of agreed DoL arrangements

III. JAS-Going Forward Cabinet approval process– ascertaining GoT’s commitments

Joint JAS Working Group to carry out: Preparation of JAS Monitoring Framework and Action Plan immediately after the JAS Consultation and to be carried out into first quarter of FY 2006/07

MoU/Commitments of Principles – Mutual commitments to JAS

JAS – dynamic and evolutionary process with emphasis on inclusiveness and dialogue

IV. Paris Baseline Exercise – Assessing where we are Paris Baseline Exercise in Tanzania – concluded at the end of

August, under GoT/MoF leadership in steering the process in Tanzania

Paris Indicators to inform the JAST progress – JAST Monitoring Framework, building on the Paris Indicators and the baseline exercise

Baseline exercise provides quantitative assessment on where we are: at the beginning of JAST Implementation

Opportunity for dialogue

INDICATORS Survey Results Target

Indicator 3: Aid flows are aligned with national priorities

90% of aid flows to government sector reported on government's budget

At least 85% reported on budget

Indicator 4: Strengthened capacity by coordinated support

50% of technical cooperation flows are implemented through coordinated programmes

50%

Indicator 5a: Use of country PFM systems

66% of aid to the public sector using countries PFM systems (76% through Exchequer, 60-61% using financial reporting and auditing, 55% using all the three procedures)

a two-thirds reduction for score 5+, a one-third reduction for score 3.5-4.5

INDICATORS Survey Results Target

Indicator 5b: Use of country procurement systems

62% of aid to public sector using public procurement systems

a two-thirds reduction for score A, a one-third reduction for score B

Indicator 6: Avoiding parallel implementation structures

69 PIUs Reduce by two-thirds

Indicator 7: Aid is more predictable

70% of aid disbursed within the fiscal year for which it was scheduled

Halve the proportion of aid not dibusred within the fiscal year for which it was scheduled

INDICATORS Survey Results Target

Indicator 9: Use of common arrangements or procedures

55% of flows are provided in the context of programme-based approahces (40% GBS, 15% Basket)

66%

Indicator 10a: Joint missions

17% of donor missions to the field are joint

40%

Indicator 10b: Joint analytic work

38% of country analytic work is joint

66%

IV. Paris Baseline Exercise –Challenges Improving MTEF processes – ensuring aid alignment (reflected on

budget)

TA/TC for capacity development through coordinated framework

H&A of processes and procedures

PIUs – systematic approach

Predictability

Reduction of transaction costs