Transcript TANZANIA’S ELECTORAL SYSTEM

BUDGET FOR OUTCOMES
Linking the Budget to MKUKUTA Policy
Outcomes
by
Oswald Mashindano
Seminar on Budget Analysis organized for Economics
and Finance Committee of the Parliament and Civil
Society
Courtyard Hotel
2nd – 3rd of June 2007
Monday, July 20, 2015
1
1



Outline
Outline
Introduction
The Budget Process




Strategic Resource Allocation



Preamble
Making Appropriate
Resource Allocations
Decisions,
Choices
and
Existing Monitoring Systems




The Budget Circle
Budget Models and Frameworks
Implementation Challenges
The Concept of Monitoring
Existing Systems
Significance of the Monitoring System
Conclusion
Monday, July 20, 2015
2
2

Introduction
The Country’s Development Path



Poverty Eradication – the main development
challenge for Tanzania
Tanzania war against poverty has a long and
rich history
 Series of policy frameworks and strategies
1st comprehensive PRS – NPES (1998)


It provides a framework to guide poverty
eradication initiatives in the country
 reduce absolute poverty by 50% by 2010
 eradicate it by year 2025
It coincides with MKUKUTA (2010) and it is 5
years away to the MDGs
Monday, July 20, 2015
3
2

Introduction………./C
Government PRS 1



In 2000 the Government crafted PRSP in the
context of HIPC initiative
PRS1 was a 3 years strategy focussing on
priority areas of
 basic education, primary health, water, rural
roads, agricultural research and extension,
Judiciary and HIV/AIDS
Little progress (if any) in the areas of income
poverty, youth, gender, employment, rural
electrification, agriculture and water provision,
was registered
Monday, July 20, 2015
4
2



Introduction………./C
Disparities across social groups,
gender and geographical location
Growth helped the poor but was
much better for the rich
Relying on growth alone to reduce
poverty is neither equitable nor
efficient
Monday, July 20, 2015
5
2
Introduction………./C
Table 1.1: Mainland Tanzania - Changes in Growth and
Poverty: 1991/92-2000/01
Growth Item
% Change
Change in growth between Household Budget
+206
Surveys
Change in head count ratio: basic needs
-7.5
Change in head count ratio: food poverty
-13.6
Source: Mbelle (2007)
Monday, July 20, 2015
6
2



Introduction………./C
From Table 1.1 - much of the growth had
not translated into poverty reduction
The growth process was not pro-poor
The successor PRS2 (2005-2010)




is MDG-based
adopted an outcome-based approach
with the twin goals of achieving and sustaining
high economic growth and substantial poverty
reduction
PRS2 contains 3 broad clusters



Monday, July 20, 2015
Growth and Reduction of Income Poverty
Quality of Life and Social Well-being and
Governance and Accountability
7
3

General Budget Process
Government budget is a tool for economic
and financial management



It is a guide for allocation and expenditure of
resources
brings balanced growth within regions of the
country and economic stability
It is an important tool for implementation of
MKUKUTA (a framework for national
development planning and budgeting)
Monday, July 20, 2015
8
General Budget Process……/C
3

Budget Process




Institutional framework (Key players in
the budget process:
MoF:


is consultative and participatory
based on the principle of partnership (Govt,
DPs (donors) and NSAs (including CSOs)
Takes the leading role in co-ordination,
preparation, and execution of the Government
budget
MPEE: Along with MoF, participates in


setting the budget macro-economic framework
elaborating the Budget Guidelines
Monday, July 20, 2015
9
General Budget Process……/C
3

PER - WGs: Comprise the Govt, DPs, and
NSAs (incl CSOs)


PER WGs monitors, tracks and reviews public
expenditures, and provides inputs to the MTEF
and budget guidelines
Sector Ministries:


draft budget proposals according to the Budget
Guidelines
co-ordinates input from agencies that fall
under their responsibilities
Monday, July 20, 2015
10
General Budget Process……/C
3

PMO-RALG and other stakeholders
(NGOs, CBOs, and communities):


Play an increasing role
planning and budgeting
in
LGA’s
The cabinet: approves the Govt
budget before it is sent to the
Parliament for scrutiny and final
approval
Monday, July 20, 2015
11
General Budget Process……/C
3

The Budget Circle (BC)




The fiscal year runs from 1st July to 30 June of
the following calendar year
MoF starts the BC by estimating revenue and
expenditure
MDAs and Regions are required to submit their
revenue
and
resource
estimates
and
projections for the 3 coming years
 according
to a timetable and Budget
Guidelines
With MoF, MPEE drafts the Budget Guidelines
and issues them to guide strategic decisions in
allocating resources over the MTEF period
 that are consistent with the PRS priorities
Monday, July 20, 2015
12
General Budget Process……/C
3

The Budget Guidelines




highlight policy intentions
outcomes for the coming year
set budget ceilings
and
strategic
The Cabinet approves the Budget
Guidelines followed by MoF notifying
MDAs and local government authorities of
the
ceilings,
and
accompanying
instructions
In each Ministry preparation of the budget
is done through a Budget Committee
chaired by the PS
Monday, July 20, 2015
13
General Budget Process……/C
3


Models and Frameworks
There are 3 models used by budgetary
institutions


Macroeconomic Model for Tanzania (MACMOD):
 It
is an in-house model developed with
assistance from Chr. Michelsen Institute (CMI)
of Bergen, Norway
 MPEE and MoF use the model for planning,
forecasting and policy analysis
Strategic Budget Allocations System (SBAS):
 Also an in-house model that is used to link the
country’s MKUKUTA targets and resource
requirements with MTEF and the Govt Budget
Monday, July 20, 2015
14
General Budget Process……/C
3

Social Accounting Matrix (SAM):



developed by NBS
SAM is used by MPEE and MoF to estimate the
impact of fiscal policy on growth and poverty
reduction
Other frameworks include



Integrated Financial Management System
(IFMS)
Planning and Reporting (PlanRep), and
Core
(Community)
Welfare
Indicators
Questionnaire (CWIQ)
Monday, July 20, 2015
15
General Budget Process……/C
3

Integrated Financial Management
System (IFMS)


Govts are vast institutions and use up
quite large amounts of resources
Thus, new technology are important
To enable and enhance cooperation within
and across departments
 To enhance information sharing
 Thus improving govt operations

Monday, July 20, 2015
16
General Budget Process……/C
3

IFMS is one of the technologies
introduced in Tanzania in 1996 as part of
the PSRP


focuses on
national objective to improve
governance and financial accountability
IFMS among others,has led

to the decision to automate accounting
activities executed by different MDAs
 In 1998/99 10 pilot MDAs were automated
and in 1999/00 all MDAs were taken on board
 Bank
reconciliation
and
payments
are
currently processed centrally through the
Central Payment Office using electronic
instructions
Monday, July 20, 2015
17
General Budget Process……/C
3






With IFMS it is easy and quick to retrieve
information
IFMS has reduced bank accounts costs
IFMS has made it easier to communicate within and
across MDAs
The decision-making capability has also been
enhanced
IFMS has led to the establishment of the National
Website where information about MDAs is available
However, for the IFMS to be sustainable


regular training, and
keeping abreast of new technology eg new measures
to step up security eg Fire Walls
Monday, July 20, 2015
18
General Budget Process……/C
3

Planning and Reporting (PlanRep)


This is a planning and reporting tool
 Designed by PMO-RALG and MoF for the LGAs
 It is a software operating both at LGAs level,
Regional level and PMO-RALG HQs
 The latter 2 levels are mainly using it to
display aggregated data from the LGAs
PlanRep is meant to enhance the capacity
of the LGAs to undertake a number of
activities
Monday, July 20, 2015
19
3
General Budget Process……/C
Box 2.1: What does the PlanRep do?







Create a Performance Budget framework of objectives,
targets and activities planned by respective LGAs eg
Improve services and reduce HIV/AIDS infections
Link any target to an MKUKUTA cluster
Link each activity with a responsible person
Calculate projected revenue from formula-based and other
grants from Central Government, Own Sources, the
Community and Development Partners
Allocate projected revenue to local authority departments
and sections
Enter budgets for personal emoluments (PE), other
charges (OC) and development projects
Export budget information to MoF and PMO-RALG
Monday, July 20, 2015
20
General Budget Process……/C
3


It allows the user to enter data for each month for each
budget activity and aggregate them for each quarter
Special software has also been designed by PMO-RALG to
import data from each council to provide aggregations of
each function



Thus enabling the Ministry to see the overall picture
both by LGAs and by region
Centrally, at the MoF the PlanRep output from each
LGA is imported to the SBAS and used to produce the
consolidated budget for MKUKUTA
PlanRep has integrated the conventional bottom-up
planning system where village plans are prepared
first using O&OD approach
Monday, July 20, 2015
21
General Budget Process……/C
3

Core (Community) Welfare Indicators
Questionnaire (CWIQ)


CWIQ is a monitoring tool used to collect data on
welfare at community and/or hh level
It is a hh survey used to monitor outcomes of
development actions such as


PRS through the leading indicators like access,
use and satisfaction
Figure 2.1 presents the findings on the
analysis made to assess the performance of
primary education in Ghana, using data
collected through CWIQ
Monday, July 20, 2015
22
General Budget Process……/C
3
3 indicators have been looked at namely, access to school (within 30 minutes),
usage (enrolment rate), and quality of service (% satisfied) The rural poor
appears to be the most unsatisfied with the quality of service, as less than 20%
reported to be satisfied
Figure 2.1: Using CWIQ to Monitor Primary Education in Ghana
100
90
80
70
60
Access
50
Enrollment
Satisfaction
40
30
20
10
0
National
Monday, July 20, 2015
Rural
Rural poor
Urban
Urban poor
23
General Budget Process……/C
3

Second example




Figure 2.2 presents the findings on the
analysis made to assess the performance of
primary education in Ghana using data
collected through CWIQ
The focus - What the pupils complain about
Indicators investigated, poor teaching,
overcrowded of classes, poor facilities and lack
of books
Again the findings show that rural poor are the
most deprived segment of the population in
Ghana
Monday, July 20, 2015
24
General Budget Process……/C
3
Figure 2.2: Using CWIQ to Monitor Prim ary Education in Ghana
50
45
40
35
30
Poor teaching
Overcrow ding
25
Poor f acilities
20
Lack of books
15
10
5
0
National
Monday, July 20, 2015
Rural
Rural poor
Urban
Urban poor
25
General Budget Process……/C
3



CWIQ has been rolled out in more than 10
Sub Saharan African countries including
Kenya, Ghana, Nigeria, Lesotho, Swaziland,
Ethiopia and Tanzania
In terms of strength, this instrument is said
to be quick and user friendly
It also helps to build institutional capacity
in terms of collection of quality data, speed
(in capturing data) and generation of
annual series
Monday, July 20, 2015
26
General Budget Process……/C
3

Models and
Challenges




Frameworks:
Implementation
The budget process in TZ is loaded with many
systems to support and facilitate budget
execution
It is necessary for the effective and efficient
budget execution
However, availability of such systems alone is
not a sufficient condition
There are many other challenges, which need to
be addressed if the budget process in TZ is to be
efficiently executed
Monday, July 20, 2015
27
General Budget Process……/C
3

Examples:





There is a great need to harmonize the
systems supporting the central budget
process
Different technological levels
 makes compatibility of software difficult thus
allowing export of distorted information to the
central budget frame
They also vary in capacity and strength
Some are more powerful than others thus,
levels of details also vary
While others can make disbursement, others
cannot
Monday, July 20, 2015
28
General Budget Process……/C
3


Such variations can cause serious errors in some
sensitive and critical reports like the CAG reports
The tendency to keep on changing and/or adopting
new software (templates, questionnaires etc) or
frequent withdrawal of one which works and
substitute it with a new one
 Makes it difficulty and sometimes impossible for
MDAs’ officials to catch up
 Thus, MDAs are forced to use different software,
which do not allow comparison or merging
 Financial
accountability
is
subsequently
dishonoured
Monday, July 20, 2015
29
General Budget Process……/C
3




The multiplicity of planning and budget
frames calls for frequent and continuous
training of the MDAs
Unfortunately, this is not happening in TZ
Demand for training is higher than what
the country can offer
Many
MDAs
are
not
adequately
knowledgeable of the budget frameworks

Eg, there is little knowledge of SBAS by
officials within MDAs, and that knowledge is
confined to a few officials
Monday, July 20, 2015
30
4




Strategic Resource Allocation
The basic and/or Fundamental Principle of Economic
theory states that
 Resources are Scarce but needs (or demands)
are unlimited
 Thus, there is a great need for appropriate
decisions and choices to be able to address the
fundamental
economic
questions
and/or
problems of :
What goods (and services) to produce?
How shall goods (and services) be produced? and
For whom shall goods (and services) be produced?
Monday, July 20, 2015
31
4

Strategic Resource Allocation……/C
Making Appropriate Decisions, Choices and
Resource Allocations





The govt of TZ approved MKUKUTA in early February
2005
Then Govt through MPEE prepared implementation
framework for MKUKUTA
Implementation of MKUKUTA thereafter started
officially in 2005/06 financial year
The Govt Budget is the main mechanism of resource
allocation for implementing the strategy
In view of this background the Govt commissioned the
Costing Study which aims at
Monday, July 20, 2015
32
4
Strategic Resource Allocation……/C

Identifying important sector interventions for the
attainment of the MKUKUTA targets and MDG
targets
Estimate and make projections of resources
required to implement MKUKUTA
8 sectors have been costed so far

Main findings are:






Monday, July 20, 2015
The resource requirements for meeting MKUKUTA/MDG
targets are high compared to current mobilization efforts
The financing gap is large and differs from one sector to
the other
Quick wins (for faster reduction of poverty) exist in all
sectors
In all sectors need was demonstrated for scaling up
investments in order to achieve MKUKUTA and MDG
targets
33
4

Strategic Resource Allocation……/C
Owing to the short term and long term
large financing gap



which cannot easily be closed by reallocations
or by additional resource mobilization
There is a clear need to be strategic in both
resource mobilization as well as resource
allocation if MKUKUTA targets are to be
attained
Monday, July 20, 2015
34
4

Strategic Resource Allocation……/C
Appropriate choices and resource allocation would
inevitably require setting priorities of the
interventions in a systematic way



eg through cost – benefit analysis or socialeconomic analysis or Economic Rate of Return
and in consideration of its effectiveness in terms of
removing the binding constraints
These are constraints with the following attributes
 relatively very severe
 which affect a large part of sectors - employing
many poor people,
 and which can be removed using relatively little
government resources
Monday, July 20, 2015
35
4

Strategic Resource Allocation……/C
Priority intervention must be those:






which are consistent to the overriding
objectives
which are the most efficient and cost effective
interventions
which are quick wins and have broad impact
which have catalystic attributes
which abide to the Opportunities and Obstacles
for Development (O&OD) principles
Thus, the rational approach for TZ is to


ensure careful and appropriate or strategic
economic choices and decisions
Ensure efficient allocation and utilization of the
available resources
Monday, July 20, 2015
36
4



Strategic Resource Allocation……/C
Tz has not been able to ensure Strategic Allocation of
resource
There is still a huge room for improvement of efficiency
and effectiveness in resource allocation
For example: The current pace of investment in the
education sector does not seem to be strategic and
therefore may not attain MKUKUTA and MDGs targets


Increase income disparity and inequality
Intensify poverty in the country
Avoid Crash Training Programmes
 Make use of the surplus education skills in the
neighboring country – the Botswana Model
 Make use of the retirees
What kind of the future population are we preparing given
the current demographic structure??


Monday, July 20, 2015
37
4
Monday, July 20, 2015
Strategic Resource Allocation……/C
38
4

Strategic Resource Allocation……/C
There is a major shift in the coming Govt
Budget


a deliberate govt move to direct more
resources to few strategic programmes which
are believed to be quick wins
A few questions are still not clear




It is not known as to how the sectors were
selected
whether or not the Cost- Benefit Analysis was
conducted
who was consulted
whether or not there are adequate safety
measures (or safeguards) to ensure consistent
utilization of the allocated resources
Monday, July 20, 2015
.
39
5



Existing Monitoring System
Monitoring System is an important tool in
determining the direction and impact of
interventions
It is concerned with tracking
implementation of policies or programs,
and with observing how the values of
different indicators against stated goals
and targets change over time
It helps to identify the causal link
between policy interventions and
outcomes
Monday, July 20, 2015
40
Existing Monitoring System……../C
5

The first PRS monitoring system
(NPMS) in TZ



developed in 2001- when the country
was implementing a 3 years PRS
PMS was a tool meant to monitor and
evaluate the poverty reduction
initiatives in TZ
It was through PMS that during PRS1,
3 annual PRSP Progress Reports were
published
Monday, July 20, 2015
41
Existing Monitoring System……../C
5

PMS allows data collection, research and analysis,
surveys etc. using the 4 PMS Technical Working
Groups namely,



Routine Data WG, Survey and Census WG, Research
and Analysis WG and Dissemination WG
PMS provided the govt and others with an increased
amount of information and data for decisionmaking
Approaches for disseminating monitoring outputs to
stakeholders


stakeholders’ workshops, media (radio, television,
news papers etc), drama and publications
Poverty Policy Week (PPW) has been an annual event
from 2002 and 2004 - policy dialogue and sharing of
information from the PMS was evident
Monday, July 20, 2015
42
Existing Monitoring System……../C
5

PMS was revised in 2005 to take into
account new dimensions spelt out in
MKUKUTA, such as



a move from priority sectors to outcome based
approach
a 5 years implementation period (2005/06 –
2009/10) compared to a 3 years implementation
period, etc
A revised PMS has subsequently refined
and strengthened some of the functions

4 cluster-based Working Groups have been
created
Monday, July 20, 2015
43
Existing Monitoring System……../C
5

Significance of the Monitoring System


Monitoring system is an important tool in terms of
gauging the direction and implementation performance
of policies, programs and therefore the budget
It is a pre-requisite for ensuring appropriate choices,
decisions and budgeting such as



Monday, July 20, 2015
matching the right amount of resources to the right
interventions to deliver results
assisting in tracking resource allocation and
expenditure and therefore ensuring strategic and/or
efficient utilization of resources
Decisions on whether or not investment should be
scaled-up, whether or not there should be reallocation or shifts of resources can meaningfully be
made with the credible monitoring outputs
44
Existing Monitoring System……../C
5

Challenges



In TZ a number of challenges need to be resolved
for the existing monitoring system to realize the
intended objectives
For example, different technological levels have
tended to adversely affect linkages, compatibility
and comparison of different outputs
Poor skills of most MDAs officials and low pace to
cope with changing technologies are also evident
obstacles to the planning and budget process in
the country
Monday, July 20, 2015
45
6




Conclusion
There are some weaknesses in Tanzania’s budget
system, which adversely affect its execution and
therefore performance
Some of the budgeting tools are not compatible to
each other and therefore direct linkages are lacking
The limited knowledge by officials within MDAs
makes it difficult to optimally utilize the budget
frameworks,
thus compromising
quality
and
accuracy of the monitoring outputs
Appropriate choices and decisions and therefore
strategic budgeting cannot be guaranteed
Monday, July 20, 2015
46
Thank you for Listening
Monday, July 20, 2015
47