Tanzania - Public expenditure review - FY00 (Vol. 2 of 2) : Consolidating the medium term expenditure framework

Report No. 22078-TA The United Republic of Tanzania Public Expenditure Review (In Two Volumes) Volume II: Consolidating the Medium Term Expenditure Framework January 2001 Government of Tanzania and The World Bank Macroeconomics 2, Africa Region FILE CONi GOVERNMENT FISCAL YEAR July 1 - June 30 (FY00 or 1999/00 = July 1, 1999 to June 30, 2000) CURRENCY EQUIVALENTS Currency Unit = Tanzanian Shilling (T Sh) Interbank Market mid-rate: US$1.00 = T Sh 887.0 (April 16, 2001) ABBREVIATIONS AND ACRONYMS ADT average daily traffic NECTA National Examinations Council of AfDB African Development Bank Tanzania AIDS Acquired Immune Deficiency Syndrome NBC National Bank of Commerce AITF Agricultural Inputs Trust Fund NGO non governmental organization ASYCUDA Computerized Customs Reporting and O&E organizational and efficiency (reviews) Recording System (UNCTAD) 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 pay as you earn 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 Primary Health Care DMO District Medical Officer PSWB Public Sector Wage Bill DMT District, Municipal and Town Councils PTR pupil teacher ratio ESAF Enhanced Structural Adjustment Facility REO Regional Engineer's Office ESP Education Sector Programme RPFB 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 Reserve GOT Government of Tanzania SIP Sector Investment Program HIPC Highly Indebted Poor Countries Debt SPA Special Program of Assistance Initiative SSA Sub-Saharan Africa HIV Human Immuno-deficiency Virus STD Sexually Transitted 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 Dares Salaam MSTHEMinistry of Science, Technology and UNDP United Nations Development Program Higher Education UPE Universal Primary Education MTEF MediumTermExpenditure Framework VAT Value Added Tax Vice President: Callisto Madavo Director: James W. Adams Sector Manaoer: Frederick Kilby Task Team Leader: Benno Ndulu CONTENTS 1. MACROECONOMIC CONTEXT OF THE MEDIUM TERM EXPENDITURE FRAM EW ORK (M TEF) ....................................................................................................................... 1 1.1 INTRODUCTION ................................................................ 1 1.2 ECONOMIC GROWTH............................................................. 1 1.3 INFLATION .............................................................. ......2 1.4 GOVERNMENT FINANCE. ....................... . ............. ........................... 3 1.5 MONETARY DEVELOPMENTS ......................................... ............4 1.6 EXTERNAL SECTOR............................................................. 7 1.7 PRIVATE SECTOR DEVELOPMENT ............................ .................... 8 1.8 IMPLEMENTATION OF THE DEVELOPMENT VISION 2025 ............................9 2. CROSS-SECTORMTEF 2000/01 - 2002/03........................................................................ 10 2.1 INTRODUCTION ............................................................... 10 2.2 EXPERIENCE SINCE THE INTRODUCTION OF THE MTEF............................ 11 2.3 REVIEW OF SECTOR ALLOCATIONS FOR FY98 - FY00 ............. .................... 12 2.4 OUTSTANDING PRIORITY SECTOR ISSUES .......................................... 14 2.5 OVERVIEW OF BUDGET PERFORMANCE FOR JULY 1999 - MARCH 2000 ....... .........20 2.6 MTEF FYO1-FYO3 .....................................................21 3. PUBLIC SERVICE REFORM PROGRAM ............................................................................ 40 3.1 RATIONALE FOR THE PUBLIC SERVICE REFORM PROGRAM - PURPOSE AND PHASING .......40 3.2 STRATEGIC CONTEXT ..........................................................41 3.3 THE CIVIL SERVICE REFORM PROGRAM -- CSRP (1991-1999) ........... ..............43 3.4 THE PUBLIC SERVICE REFORM PROGRAM -- PSRP (2000-2001) .....................45 3.5 DETAILED DESCRIPTION OF EACH PSRP COMPONENT ..................... ............47 3.6 REFORM TARGETS AND BENEFICIARIES ............................................ 53 3.7 MANAGEMENT AND COORDINATION OF THE PSRP ................................... 54 3.8 VISION OF THE NEW PUBLIC SERVICE..................................... .................57 3.8 PROGRAM ANALYSIS: .......................................................... 61 4. HIV/AIDS AS A DEVELOPMENT PROBLEM.................................................................65 4.1 THE GLOBAL PERSPECTIVE............. . ........................... .......... 65 4.2 THE REGIONAL PERSPECTIVE (SUB-SAHARAN AFRICA) .............. ................. 66 4.3 HIV/AIDS SITUATION IN TANZANIA............................................... 68 5. MTEF FOR THE EDUCATION SECTOR .......................................................................... 76 5.1 INTRODUCTION ...............................................................76 5.2 REVIEW OF EXPENDITURE PERFORMANCE.......................................... 79 5.3 REVIEW OF SECTOR PRIORITIES .................................................. 86 5.4 EXPENDITURE PROJECTIONS .................................................... 90 6. MTEF FOR THE HEALTH SECTOR 2000/01 - 2002/03....................................................102 6.1 INTRODUCTION .............................................................. 102 6.2 HEALTH SECTOR REFORMS .................................................... 102 6.3 HEALTH POLICY OBJECTIVES ........................................................... 103 6.4 IMPLEMENTATION STRATEGIES ........................................................ 104 6.5 PRIORITY AREAS WITHIN THE SECTOR ............................................. 105 6.6 HEALTH SECTOR OVERALL EXPENDITURE PERFORMANCE FY1997- 2000. ..... ....... 108 6.7 FINANCIAL RESOURCES AND MEDIUM TERM FRAMEWORK FOR THE 2000 - 2003.................. 110 7. MEDIUM TERM EXPENDITURE FRAMEWORK (MTEF) 2000/01 - 2002/03 FOR THE MINISTRY OF WORKS ................................................................................................................... 113 7.1 INTRODUCTION .............................................................. 113 7.2 OVERVIEW OF THE ROAD NETWORK ................................................. 113 7.3 ORGANIZATION AND MANAGEMENT OF THE ROAD SECTOR.................... ........... 117 7.4 REVIEW OF EXPENDITURE PERFORMANCE FY 1997/98-FY 1999/2000 ........ ......... 118 7.5 THE MTEF FOR THE ROADS SECTOR......................................... 123 8. MTEF FOR THE WATER SECTOR 2000/01 - 2002/03......................................................139 8.1 NATIONAL GOALS ............................................................ 139 8.2 VISIoN ..................................................................... 139 8.3 MISSION.. .................................................................. 139 8.4 MEDIUM TERM OBJECTIVES .................................................... 140 8.5 MEDIUM TERM EXPENDITURE STRATEGIES ..................... .. ........... 140 8.6 MEDIUM TERM PRIORITIZED SERVICE DELIVERY TARGETS AND ACTIVITIES WITH RESPECT To POLICY OBJECTIVES ....................................................... 141 8.7 MEDIUM TERM OPERATIONAL TARGETS AND BUDGET ESTIMATES By SERVICE/ OUTPUT LEVELS IN TSHS MILLION............. ........................... ............ 147 8.8 MEDIUM TERM DEVELOPMENT TARGETS BY SERVICE OR OUTPUT DELIVERY LEVELS AND BUDGET ESTIMATES IN TSHS MILLION ................................................. 152 8.9 MEDIUM TERM EXPENDITURE FRAMEWORK FOR 2000/01 - 2002/03 FOR THE WATER SECTOR ..................................... . ......................153 9. MTEF FOR THE AGRICULTURE SECTOR 2000/01 - 2002/03.......................................154 9.1 INTRODUCTION .............................................................. 154 9.2 CURRENT INSTITUTIONAL PERSPECTIVES .......................................... 155 9.3 REVIEW OF BUDGETS PERFORMANCE (1997/98, 1998/99 & 1999/2000) AGAINST THE MISSION, PLANNED OBJECTIVES, POLICIES, STRATEGIES, TARGETS AND ACTIVITIES ........ ....... 156 9.4 MEDIUM TERM EXPENDITURE FRAMEWORK (2000/01 - 2002/03) ................... 160 9.5 CONCLUSION ...................................... 168 10. MTEF FOR THE MINISTRY OF JUSTICE AND CONSTITUTIONAL AFFAIRS.......172 10.1 INTRODUCTION .............................................................. 172 10.2 REVIEW OF EXPENDITURE PERFORMANCE.......................... ................ 173 10.3 REVIEW OF PROBLEMS AND PRIORITIES............................................ 189 10.4 PROJECTION FOR FUTURE BUDGETS ................................. ............. 194 11. LAND SECTOR M TEF ........................................................................................................... 199 11.1 INTRODUCTION .............................................................. 199 11.2 REVIEW OF 1999/2000 PERFORMANCE ................................................. 202 PREFACE As in previous years, the FY00 Public Expenditure Review (PER) process had the twin objectives of (a) providing support to the Government of Tanzania in the preparation of its budget and Medium Term Expenditure Framework (MTEF) and (b) undertaking an external evaluation of Tanzania's budget performance. The process was led by the Ministry of Finance. The program of work for PER FY00 was carried out with financial and technical support from various donors, including the World Bank, European Union, UNDP, DFID, Denmark, Sweden, Switzerland, and Finland. This report presents the main outputs of the FY00 PER process in Tanzania in two volumes. Volume I consists of three major parts: Part I describes the main features of the PER process as implemented during FY00. Part 2 presents the main findings emerging from a review of fiscal performance and public expenditure management in Tanzania. In addition, part 2 contains a discussion of systemic fiscal issues that are critical to enhancing the efficiency and effectiveness of public expenditures in Tanzania. Part 3 contains summaries of the updates of sectoral expenditure reviews which were undertaken by the priority sector ministries with the support of local and international consultants. The sectors covered include education, health, water, agriculture, works, lands and justice. The volume also contains a data annex and the minutes of the consultative PER meeting held in May 2000. Volume II presents the Government's MTEF for FYO1 - FY03, which was discussed at the consultative meeting in May 2000. The MTEF consists of a description of the macroeconomic context, a cross sectoral MTEF which provides the resource envelopes for individual sectors, and sector MTEFs of the priority sectors, i.e., education, health, water, works, agriculture, justice and lands. In addition, the MTEF also contains a detailed discussion of the public sector reform program and the HIV/AIDS pandemic, which is clearly identified as a key challenge for Tanzania's development efforts which requires a multi-sectoral approach to contain its spread. This report is a joint effort of the Government of Tanzania and a team consisting of a Working Group drawn from the World Bank, other UN agencies, bilateral donors, research/academic institutions and NGOs. The joint-donor mission in November/ December 1999 consisted of: Benno Ndulu (mission leader, AFMTZ), Philip Mpango, Ben Tarimo (AFMTZ); Sumana Dhar, Robert Utz (AFTM2); Hamisi Mwinyimvua (University of Dar es Salaam); Frans van Rijn (Netherlands Embassy), Charlotta Norrby (Swedish Embassy), Torben Lindqvist (Danish Embassy) and Stevan Lee (DFID). A follow-up mission in March-April, 2000 was launched to assist the Government to prepare the cross-sector MTEF and sector MTEFs. The report was written under the supervision of Frederick Kilby, Sector Manager, AFTM2 and Peniel Lyimo, Deputy Permanent Secretary, Ministry of Finance, Government of Tanzania. Allister Moon, Senior Economist, ECSPE, and Anand Rajaram, Senior Economist, PRMPS, provided valuable comments and direction as peer reviewers. The document was produced by Patrick Mamboleo under the guidance of Roboid Covington (AFTM2).  1. MACROECONOMIC CONTEXT OF THE MEDIUM TERM EXPENDITURE FRAMEWORK (MTEF) 1.1 INTRODUCTION 1.1 This chapter provides a brief review of the macroeconomic performance of the Tanzanian economy over the period 1994 - 1999. The review concentrates on economic growth, inflation, fiscal and monetary developments, the external sector, private sector development and ends with a note on the implementation of the National Vision 2025. The broad objective is to characterize the trends, drawing out specific emerging issues that have a bearing on the PER process. This is done taking into account the fact that structural reforms have been much more pronounced in their impact, making the Tanzania of 1999 very different to that of the pre-1994 era. 1.2 EcoNoMic GROWTH 1.2 The performance in terms of real GDP growth in recent years (Table 1.1), indicates Tanzania's economy to be stabilizing and poised for higher levels of growth in the long run. From a low growth rate of 1.4 percent in 1994, GDP has steadily risen to 4.8 percent recorded in 1999, notwithstanding shocks of adverse weather conditions to agriculture during the period. Output in agriculture continues to have the highest impact on the levels of overall economic growth, contributing around half of total GDP. With a low growth rate of 1.9 percent in 1998, agriculture registered significant growth of over 4.0 percent in 1999, the highest in recent years. The performance of other sectors, including mining, manufacturing, electricity and water has also been improving during the period. 1.3 The recovery of growth is mainly a result of the macroeconomic reforms that Tanzania has been implementing in recent years. The up-turn in GDP growth is, however, still too low to have significant impact on poverty reduction implying that the achievement of higher and sustained growth is imperative. Besides consolidating and sustaining macroeconomic reforms, the achievement of higher growth will require (i) improved performance of agriculture whose dominance on the national economy will continue to dictate overall economic performance (ii) strengthening the environment for private investments in the pacemakers for growth, in particular mining and tourism, given the vast unexploited mineral deposits and the huge and unique tourism potential (iii) further privatisation and restructuring of the industrial sector which has already started to pay off in terms of growth in manufacturing. Table 1.1: Trends in Selected macroeconomic indicators Indicator 1994 1995 1996 1997 1998 1999 Real GDP Growth 1.4 3.6 4.2 3.3 4.0 4.8 Inflation 35.5 27.1 21.0 16.1 12.9 7.8 Exchange Rate (Tshs/US $) -annual average 509.6 574.8 580.0 612.1 664.7 743.4 Export/Import ratio (Goods) 39.7 50.9 63.0 65.6 43.1 38.1 Balance of Payments (mil. US $) -461.3 -386.0 -245.0 -556.0 -615.7 -411.3 Current Account Balance (mil. US $) -711.1 -646.4 -461.3 -555.1 -946.6 -861.9 Foreign Reserves (Weeks of imports) 9.5 6.6 11.3 16.6 13.3 17.7 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 Govt. Domestic Revenue (% of GDPmP) 12.5 13.2 13.5 12.6 12.5 12.4 Total Govt. Expenditure (% of GDPm.) 15.5 13.1 15.2 14.8 14.8 16.9 Fiscal Balance (before grants) - % of GDPmp -3.1 0.1 -1.7 -2.3 -2.3 -4.5 Growth of Money Supply (M3) -% 37.7 23.5 18.2 14.5 11.0 9.2 Average Deposit rate 15.0 12.0 11.0 10.0 9.2 9.0 Average Lending rate 31.0 28.0 26.5 24.0 22.0 18.0 1.3 INFLATION 1.4 Inflation which was at its highest peak in 1994 at 35.5 percent has steadily declined over time, reaching 7.0 percent by December 1999, the lowest level recorded in the past 22 years. Subsequently, inflation has continued to decline further to 5.9 percent by end June 2000, which is slightly above the target of 5.0 percent. This decline is mainly due to the tight monetary and fiscal stance pursued during the period as well as improved supplies of some food items. 1.5 Although the anti-inflation stance appears to have paid off there is need to maintain the tight monetary and fiscal policy stance as well as increased production of food so as to reduce inflation to below 5.0 percent, consistent with inflation levels in Tanzania's major trading partners. Stability of food prices is particularly crucial in maintaining low inflation levels because the significant weight of food in the NCPI (71.2 percent). Thus, food supplies, and prices, significantly influence the level of inflation in the country. 2 Chart 1: Trends in GDP Growth and Inflation 40 0 3 5 .0- -- -- - - - - - - -- - - - 30.0 25.0 20.0 15.0 10.0 0.0 1994 1995 1996 1997 1998 1999 -4- Real GDP Growth -a- Inflation 1.4 GOVERNMENT FINANCE 1.6 In recent years, Tanzania has made considerable progress in restoring fiscal discipline and channelling public resources towards defined priority areas. However, the extremely low domestic revenue base leads to low level of revenue mobilisation and severely limits the Government's capacity to provide the most basic services to its people. 1.7 While domestic revenue as a proportion of nominal GDP has declined from 13.5 percent in 1996/97 to 11.3 percent in 1999/2000, the reduction in the fiscal deficit (before grants) is almost entirely attributed to reductions in Government expenditures (excluding amortisation), which fell from 15.5 percent in 1994/95 to 14.8 percent in 1998/99. The domestic revenue position appears to have improved in 1996/97 following the establishment of the Tanzania Revenue Authority in July 1996, which enhanced revenue collection efforts. The introduction of the cash budget system during the year further reinforced discipline in Government expenditure. 1.8 The cash budget system has, however, some consequences. As a result of massive expenditure cuts made to match revenue availability most Government obligations, apart from the wage bill and debt service, have been cut substantially affecting service delivery in all sectors. Currently however, priority activities within priority social sectors (education, health, water, roads and agriculture) have been 3 protected to some extent and facilitated by the Multilateral Debt Fund facility and the prioritisation process built into the MTEF. 1.9 The government is committed to continue undertaking prudent fiscal measures to ensure macroeconomic stability. Further stabilization efforts will focus on enhancing revenue collections, expanding the tax base and rationalization of the tax system. Stringent budgetary measures will also continue to be exercised in order to ensure that expenditures match available resources. Similarly, the integrated financial management system will be strengthened to enhance efficiency, effectiveness and transparency in expenditure management. Chart 2: Fiscal Performance 20.0 10.0 P 50 0.0 1994/95 1995/96 9 /97 1997/98 1998/99 199912000 -50 -10.0 -----.- - - .----.... - - - - - - - - - --+-Govt Domestic Revenue (% of GDPmp) ---Total Govt. Expenditure (% of GDPmp) -.--Fiscal Balance (before grants) - % of GDPmp 1.5 MONETARY DEVELOPMENTS 1.10 During the period under review, the main pre-occupation of the Bank of Tanzania has been the lowering of money supply growth to levels consistent with low and stable rates of inflation. Extended Broad Money (M3) declined from 37.7 percent in 1994/95 to 11.0 percent in 1998/99 but preliminary statistics for fiscal year 1999/2000 show that it grew by 21.7 percent by end-June 2000. The rapid decline in 4 money supply growth, led to a rapid decline in the rate of inflation from 35.5 percent in 1994 down to single digits by January 1999 leading to the stability of the exchange rate of the Tanzania shilling against the US Dollar. The exchange rate has steeply depreciated to levels consistent with market conditions with re-established external competitiveness. The recent growth in M3 was mainly driven by a sharp increase in net foreign assets of the banking system as a result of higher foreign exchange inflows from foreign investment activities, donor inflows and increased tourism. 1.11 The performance of credit growth, particularly credit to the productive sectors, has not been impressive after liberalisation. Commercial banks have shown increasing aversion in lending, preferring to holding risk free Government paper, such as Treasury Bills. This partly reflects high risks in lending, difficulties on the part of commercial banks to assess the credit worthiness of private borrowers and problems associated with the handling of commercial disputes. In order to improve bank lending, the Bank of Tanzania is undertaking measures to promote the establishment of a Credit Information Bureau aimed at providing information on credit worthiness to prospective borrowers from commercial banks. In an attempt to speed up the settlement of commercial disputes, the Government has established a Commercial Court in Dar es Salaam as a Division of the High Court. 1.12 The spread between lending and deposit rates continues to be unduly high. Both the concentration of new banks in major urban centres and the restructuring of the National Bank of Commerce has led to the closure of remote branches thereby depriving rural areas of financial services. A deliberate strategy for addressing the rural sector through provision of micro-finance services is thus needed. Fortunately some steps have already been taken in that direction. A national policy framework for Rural and Microfinance has been finalised, to be followed by the revision of the Banking and Financial Institutions Act later in the year, providing for a legal framework for regulation and supervision of microfinance institutions. 5 Chart 3: Growth of Money Supply (M3) 40.0 ~--- - 35.0 30.0 25.0 - - -- - ---- - - 20.0 - - 15.0 10.0- - - - 5.0 0.0 1994195 1995196 1996197 1997198 1998/99 1999/2000* 6 1.6 EXTERNAL SECTOR 1.13 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 is vulnerable to vagaries of weather as experienced in 1998 following the destructive el nino rains and changing world commodity prices, accounting for the weak Balance of Payments position. This weak Balance of Payments position exerted pressure on the maintenance of the market- determined exchange rate and high level of external reserves. There were some improvement in 1999, with foreign reserves rising to 17.7 weeks of imports from 13.3 weeks in 1998. 1.14 Liberalization of mineral trade, pursuit of macroeconomic stability and removal of foreign exchange restrictions have led to a rapid increase in overt mineral exports in recent years. There are prospects of increased export proceeds resulting from increased output in the mining sector but these are dependant on maintenance of the requisite enabling environment. The same applies to the tourism sector, given improvement of the basic infrastructure facilities and services. Chart 4: Trends in Balance of Payments 0.01 1994 1995 1996 1997 1996 1999 -100.0 -200.0 -600.0 -700.0 -8 0 0 .0 -- -- - - - - - - - - -- - - - - -- - - - - - -9000.0 Balance of Payments (mil US $) Current Account Balance (mil. US $) 7 1.7 PRIVATE SECTOR DEVELOPMENT 1.15 The ongoing reforms have influenced the re-definition of the core functions of Government to being that of maintenance of 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 and commercial activities that will accelerate economic growth and development. In pursuit of those core functions, the Government is now focusing on policy formulation and economic management, investing in the core functions and providing legal and regulatory frameworks. 1.16 During the 1990s, the Government made several institutional changes with a bearing on private sector development such as the establishment of the National Investment Promotion Center, later transformed into the Tanzania Investment Center. Liberalization of the Current Account has reduced transfer risks to foreign investors and the institutionalization of capital markets operations has provided another potential avenue for enhancing private sector participation in investment operations. Further, the Government established a legal and institutional framework to support the privatization program through the Parastatal Sector Reform Commission (PSRC) and Loans and Advances Realization Trust (LART) that developed procedures for liquidation and divestiture of parastatals. Both local and foreign private investors are actively participating in the privatization process in the different sectors and activities earlier owned and managed by the Government. 1.17 In recognition of the role of the private sector in accelerating socio-economic development, the Government has developed modalities for institutionalizing the then ad-hoc consultative process with the private sector in evolving appropriate and effective macro and sectoral policies such as participation in the Government Tax Task Force and the Public Expenditure Review (PER) working group. Similarly, the private sector has also evolved institutional mechanisms of interactions and consultations with the Government through umbrella organizations, such as the Tanzania Chamber of Commerce Industry and Agriculture (TCCIA), Confederation of Tanzania Industries (CTI) and the Tanzania Private Sector Foundation (TPSF). 1.18 The private sector has responded cautiously to these changes as shown in the rise of its share in investment and output. Foreign direct investment has risen from US $ 50.0 million in 1994 to US $ 183.4 million in 1999. Public monopoly in the financial sector has been broken. There are now more than 20 private banks accounting for nearly 80 percent of total assets in the banking system. The insurance market has also been opened up to private and foreign participation and a stock exchange has been opened in Dar es Salaam. The infrastructure sector is increasingly coming under the private sector through privatization, concessioning of assets for private operation and new entry. The most robust response has been in the mining and tourism, currently forming the bulk of foreign investment. 8 1.8 IMPLEMENTATION OF THE DEVELOPMENT VISION 2025 Following the adoption of the Development Vision 2025 in May 1999, the Government initiated a framework for its implementation and operationalization which underpins a participatory approach in designing and formulating development programmes and activities. The Vision 2025 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 will be implemented in phases of three years starting from 2001/2002. Preparation of programs and projects will be undertaken during 2000/2001. Other processes, i.e. Poverty Reduction Strategy Paper (PRSP), Tanzania Assistance Strategy (TAS) and PER will be instruments of implementing the Vision. 9  2. CROSS-SECTOR MTEF 2000/01 - 2002/03 2.1 INTRODUCTION 2.1 The fiscal year 2000/2001 was the second year since the introduction of the MTEF approach to the Tanzania budget planning process linking policy, planning and budgeting in a medium term framework. This new approach helps to ensure improved budgetary outcomes at the macro, strategic and operational levels. This chapter highlights some important experiences gained in the formulation and implementation of the first MTEF and addresses the outstanding issues. It also gives an overview of budget performance for the three quarters of fiscal year 1999/2000 i.e. July 1999 to March 2000 and the fiscal trend forms an important basis for the MTEF. 2.2 Like the previous one, the MTEF for 2000/01-2002/03 is built on the foundation of the projected resource envelope and expenditure priorities consistent with the agreed macroeconomic objectives, economic infrastructure and social service improvements which is a step forward in the direction of achieving poverty reduction targets. The process of formulating this MTEF was guided by the Budget Guidelines document for 2000/01 - 2002/03. However, the figures in both resources and expenditure outlays shown in the Budget Guidelines document are subject to revision once the resource figures are finally firmed up. Unlike the previous MTEF, the current MTEF includes resources freed from debt service obligation under the HIPC debt relief initiative, following the decision point approval by the IMF and World Bank. The projected HIPC relief for year 2000/2001 covers the interim debt relief from World Bank and IMF. It also includes interim relief figures for Paris Club debt which are, however, quite tentative. 2.3 The presence of HIPC debt relief and the continued inflow of donor support, particularly of program nature at the current levels, has helped to enhance the predictability of the resource envelope for the budget. As a result of the enhanced resource level, the expenditure allocations in the MTEF particularly for priority sectors and activities, have increased significantly compared to allocations to other sectors and activities. For the first year of the MTEF (FY 2000/01) the Government plans to increase the share of total allocation to priority areas (basic education, primary health, water, rural roads, judiciary, agricultural research and extension, land services and, activities to combat HIV/AIDS) in total discretionary recurrent expenditures by at least two percentage points over the 1999/00 budget. Similarly, the Government envisages to increase the share of the allocation to 'Other Charges' for the priority areas in total discretionary recurrent expenditures also by two percentage 10 points over the FY 1999/00 budget. This is in line with the Government objective of improving social services and economic infrastructure both of which have a direct bearing on poverty reduction. 2.2 EXPERIENCE SINCE THE INTRODUCTION OF THE MTEF 2.4 The June 1998 PER consultative meeting underscored the need to link policy, planning and budgeting through a medium term expenditure framework (MTEF). It was agreed that the MTEF be adopted as an anchor to the budget process since it facilitates projection and hence predictability of domestic and foreign resources beyond a single year, and the prioritization of needs consistent with the resource framework. The MTEF was therefore introduced to facilitate line ministries and agencies in planning ahead by providing information on which to base strategic and operational decisions. The adoption of the MTEF was also intended to improve budgeting outcomes at the macro, strategic and operational levels and do away with short-term planning which often led to accumulated over-commitments, arrears and inefficiencies at the operational level. 2.5 The first MTEF for Tanzania was subsequently prepared during FY 1998/99 and covered FY 1999/00 - FY 2001/02. The preparation process had three principal features. First, it was confined only to five priority sectors (education, health, water, agriculture, and roads). Second, it involved learning by doing, with no specific prior training. However, the MTEF is not a completely new process but rather as a combination of the Rolling Plan and Forward Budget (RPFB), strategic plans prepared through the Civil Service Department (CSD) and performance budgets. The only major difference is that the MTEF integrates the recurrent and the development budget, covers three years, and also integrates donor funds into the budget. Furthermore, the sector MTEFs were put together by the same sector groups that had been preparing budgets for the ministries. The work was also done in consultation with other stakeholders whereby sub-groups of the PER Working Group provided inputs into the MTEF preparation exercise. The macro sub-group developed the cross sector MTEF while sector groups prepared the respective sector MTEFs. Third, the exercise was done parallel to the annual budget preparation exercise and therefore involved checking for consistency between the budget guidelines numbers and MTEF numbers. The proposals for the MTEF numbers were prepared by the PER working group in support to the budget guidelines Committee as part of the process to improve the framing of the resource envelope and prioritization in expenditure allocation. Ultimately the Government decided that the latter numbers be used in the preparation of the budget for FY 1999/00 and MTEF for FY 1999/00 - FY 2001/02. 2.6 During the PER FY 1998/99 consultative meeting it was felt that there was a need to sensitize and extend the coverage of the MTEF to other sectors so that the exercise is seen in the context of the broader public sector management reform involving all sectors of the government, including the Ministry of Finance and Planning Commission. Early formulation of the budget guidelines and the need to 11 integrate the BG and the MTEF were also emphasized. Concern was also raised that the sector MTEFs were of uneven quality, with some lacking clear intra-sector prioritization, thus pointing to the need for training of government staff involved in the budget preparation process in general and development of MTEF in particular. 2.7 Based on last year's experience as summarized above, the current MTEF (FY 2000/01 - FY2002/03) covers only two additional priority sectors - Judiciary and Lands. The decision to follow a gradual approach to extending the MTEF exercise to cover other sectors is on account of ensuring the quality of the MTEFs. The preparation process was similar to that of the preceding MTEF except that there was prior hands-on-training of Government staff conducted in three phases. Phase 1 and 2 involved training of trainers and drew participants from the Ministry of Finance, Planning Commission, Civil Service Department and key sector ministries and was done with the help of an external consultant. The training focused on reviewing existing planning and budget processes and developing detailed steps to be followed in the preparation of MTEF based budgets. Phase 3 of the MTEF training was led by the Budget Division of the Ministry of Finance and focused on extending the training to budget officers in the remainder of the ministries. Another improvement to the MTEF exercise was an attempt to integrate the Government budget guidelines with the MTEF preparation processes. However, there were delays in the issuance of the budget guidelines for 2000/01-2002/03 partly because of slippage in the initiation of the process. Nevertheless, the Government started applying the MTEF approach in the budget preparation process for FY 2000/01 and for the first time the Ministry of Finance issued a common format to be followed by all priority sector ministries in preparing the next year's budget. 2.3 REVIEW OF SECTOR ALLOCATIONS FOR FY98 - FY00 2.8 In analyzing sectoral allocations, expenditure is divided into the following main sectors: Administration, Law and Order, Social Services, Economic Services, and Consolidated Fund Service (CFS). The analysis is carried out along two dimensions, i.e. sectoral allocation by shares, and deviations of actual sectoral expenditure from budgeted sectoral allocations. During the past two years (i.e. FY98 and FY99), actual spending on CFS has averaged 33.6% of the actual total sectoral recurrent expenditure and expenditure on Social Services averaged 28.5% (made up of education, health, water; community development, women and children; and labour and youth development). While actual recurrent expenditure on productive and economic services averaged 3.3% and 3.2% respectively, expenditure on administration averaged 14.4% and defense 17.0% over the same period. Productive sectors have increasingly come under the purview of the private sector. Using exchequer issues data for the first nine months of FY00, shares of actual recurrent expenditure by sectors were as follows: Administration (12.2%), Law and Order (18.1%), Social Services (32.7%), Economic Services (2.3%), Productive (2.0%), and CFS (32.6%) (Table 2.1). In comparing the two years one observes that shares of recurrent expenditure on Social Services, and Law and Order increased while shares 12 of the other four sectors decreased. Increase in expenditure shares on Social Services shows the Government's commitment toward improving social service delivery. Table 2.1. Actual Sectoral Recurrent allocations (in percentage) Sectors 1997/98 1998/99 1999/00 REC DEV REC DEV REC DEV Administration 12.3 24.2 16.5 1.4 12.2 100.0 Law and Order 17.0 0.2 17.0 0.0 18.1 0.0 Social Services 27.6 22.5 29.5 49.6 32.6 0.0 Economic Services 3.3 40.1 3.1 40.2 2.3 0.0 Productive Services 2.6 13.0 4.0 8.8 2.0 0.0 CFS 37.2 0.0 30.0 0.0 32.6 0.0 GRAND TOTAL 100.0 100.0 100.0 100.0 100.0 100.0 Note: REC = Recurrent Expenditure, DEV = Development Expenditure Source: Computations from Appropriations Accounts and Flash Reports. 2.9 The development expenditure side shows a different picture. Over the past two years average shares of actual development expenditure were Administration (12.7%), Law and Order (0.1%), Social Services (36.2%), Economic Service (40.1%), Productive Services (10.9%), and CFS (0.0%) (Table 2.1). The increase in the actual development expenditure on social services and economic services reflect the Government intention to develop the two key sectors. Furthermore, the two sectors contain most of the priority sub-sectors/activities such as education, health, water, roads, lands and energy. The total expenditure on priority sectors/activities as a percentage of total recurrent expenditure for FY98 and FY 99 were 28.0% and 31.4% respectively. Priority sectors/activities falling under Social Services and Economic Services consumed 25.7% and 28.4% of total expenditure on priority sectors/activities for the two years respectively. 2.10 The analysis of deviations (i.e. actual recurrent expenditure as the percentage of the budgeted recurrent expenditure) by sectors shows that most of the sectors under-spent. For the FY98 under-spending was as follows: Administration (-8.5%), Law and Order (-9.5%), Social Services (-0.7%), and Productive Services (-3.2%) (Table 2.2). 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. For the FY99 the picture was different where under-spending was Administration (-9.0%), Productive Services (-3.2%), and CFS (-2.4%). In the same year there was over-spending in Law and Order (+0.8%), Social Services (+3.6%), and Economic Services (+1.1%) (Table 2.2). Looking at the deviations for the two respective years it can be observed that deviations for FY98 range from -30.6% to +22.2% while for the FY99 the range is from -9.0% to +3.6%. This shows that actual sectoral recurrent expenditure for FY99 was more consistent with the budgeted allocations than the previous year. 13 Table 2.2. Actual Sectoral Expenditure to Budgeted Sectoral Allocations Ratio Sector 1997/98 1998/99 1999/00 REC DEV REC DEV REC DEV Administration 91.5 17.5 91.0 6.4 32.6 2.0 Law and Order 90.5 34.5 100.8 0.0 71.8 0.0 Social Services 99.3 24.6 103.6 54.2 83.6 0.0 Economic Services 69.4 34.0 101.1 52.7 22.5 0.0 Productive Services 90.0 91.4 96.8 31.1 44.5 0.0 CFS 122.2 0.0 97.6 0.0 70.4 0.0 GRAND TOTAL 101.9 27.6 98.7 45.9 61.5 0.4 Note: REC = Recurrent Expenditure, DEV = Development Expenditure Source: Computations from Appropriations Accounts and Flash Reports. 2.4 OUTSTANDING PRIORITY SECTOR ISSUES 2.11 Notwithstanding recent gains in some macroeconomic variables, there are outstanding problems in the sectors, which continue to compromise the pace of economic growth and development. Such problems are manifested in the following outcomes: * The continued downward trend in the status of human development indicators and quality of social services particularly in education, health, nutrition, water and sanitation. * Weak and low growth of agriculture sector relative to its potential despite the fact that over 80 percent of the population rely on it. * Inadequate investment in physical infrastructure notably transport, marketing and processing. * 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. * Lack of micro-finance services. 2.12 Along with the broader objective of enhancing sustainable economic growth and poverty eradication, the Government will address those problems through the MTEF process. In the current MTEF, the Government has laid out strategic expenditure and resource allocations to specified priority activities in the following sectors/sub-sectors: Education, Health, Water, Agriculture, Energy, Roads, Land and Good Governance and a one time priority expenditure on General Elections and Population Census. A summary of requirements and proposed allocation of funds for the priority activities is presented in Table 2.3. What appear to be low allocations, when compared to actual requirements, is a reflection of the overall serious mismatch between resource requirements and availability. Nonetheless, consistent with the prioritisation process, the biggest share of public resources are directed to social 14 sectors (education, health and water) whereas the other sectors are availed even lesser amounts that are short of their respective requirements. 2.13 During the MTEF for 2000/01 - 2002/03, the overall objectives for the education will continue to be: * To increase enrolment of pupils in primary education by 10% annually up to the year 2002/03. * To increase transition rate of primary to secondary level from 15% to 21% by the year 2002/03. + To improve the quality of teachers through in-service and pre-service training at the rate of 30% annually up to the year 2002/03. * To increase enrolment in higher learning institutions, promote gender equity and improve training. + To increase the capacity and improve inspection services coverage from 50% to 70% by the year 2002/03. 2.14 Cognisant of the strategic link the education sector has in the development of Tanzania's economy and society, it has been accorded the highest priority in resource allocation drawing about 57 percent of the resources that are allocated to the social sectors. In addition, the Multilateral Debt Fund facility has significantly enhanced resource availability to the sector. 2.15 Tanzania has a well developed network of health facilities, with a fairly balanced distribution across the various levels of health care. However, efficiency in service delivery in the health sector, is compromised by limited supply of drugs, lack of maintenance of health facilities and low productivity of its large workforce. Thus, the main thrust of the MTEF for 2000/01 - 2002/03, 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. 2.16 The overall objective of the government for the water sector is to increase access to clean, safe and adequate water supply by at least 9.0 percentage points for the rural population and 7.0 percentage points for the urban population by the year 2003. In general terms, the performance of the water sector in both rural and urban areas is measured on the number of people served with adequate clean and safe water. The currently reported water supply coverage is only 46% in rural areas and about 68% in urban centres. Out of these figures, 52% of the urban water supply coverage is eroded by technical and commercial losses and 30% of the rural water supply shortfall is due to malfunctioning or completely inoperative systems. During 2000/01 - 2002/03 the main focus for the water sector will be to rehabilitate existing water and sanitation facilities and install efficient management to enhance service delivery levels in both the rural and urban areas. The latter includes leasing the Dar es Salaam water supply management to private operators. The targets are to increase water 15 supply coverage to 55 percent and 75 percent for rural and urban areas, respectively, in the next three years. 2.17 A redefinition of the Government's role in the agricultural sector within ongoing public sector reforms, has, over the recent years, resulted in declining resource availability to the sector. Nonetheless, in view of the importance of the sector to the development of the economy, 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. 2.18 The roads sub-sector has strategic importance to the Tanzanian economy, given the vastness of the country and the dispersed nature of the population, business and economic activities. The Government will, therefore, continue giving high priority to the following activities in the sector: + Road maintenance of an upgraded network; + Implementation of priority rehabilitation and upgrading projects; * Rehabilitation and maintenance of rural roads under the local government authorities' jurisdiction. 2.19 The completion of liberalization of the petroleum industry has removed the budgetary burden built into the subsidies to TIPER although it will continue to draw substantial public resources in maintaining and rehabilitating current facilities and programs. However, until the restructuring and privatization of the energy sub-sector, in particular power generation and distribution, is completed. Thus, in the current MTEF, priority has been given to supporting the expansion of power generation and distribution capacity, enhanced efficiency in the distribution of power, development of gas resources for production of electricity and for industrial use, development of new and renewable energies and rural electrification. 2.20 Land is an ultimate resource for both sustainable social and economic activities. Economic activities directly related to land resource utilisation account for the greatest proportion of the GDP. Economic policies on land resources utilization have in the past achieved little success due to lack of effective legal backing. In addition, rapid population increase has compounded the problem of security of tenure in urban areas giving rise to conflicts in land use and allocation. Legal backing to support ongoing reforms that will enhance security of tenure to the users has been instituted. However, the sector still faces a number of problems which include inadequate capacity in land surveys, mapping and developing land use plans for various uses such as investments, housing, settlements and infrastructural development. Thus during 2000/01 - 2002/03 priority will be given to the key areas directly related to the operationalization of the new Land Policy and Law which include: land resource management; land tenure security enhancement; and land 16 information management, and speeding up the processes for issuing land titles and resolution of land disputes. 2.21 Good governance, in the context of this MTEF includes the following: (i) Enforcing Law and Order (in particular the Judiciary) Currently, the Judiciary is highly under-funded, as seen from the number of pending court proceedings. The Government will thus enhance allocations to the Judiciary to alleviate this problem (ii) General Elections In 1999/2000, the government started to prepare for General Elections which will combine Presidential, Parliamentary and Civic Elections. Preliminary work for the preparations of these elections are underway and part of the civic elections have been completed. Other activities included registration of voters, workshops and seminars, preparation of polling stations and other related activities. Resource requirements for such activities have been provided for in the MTEF. (iii) The National Population Census During the years 2000/01 - 2002/3 the government will continue with preparation activities such as creation of Enumeration and conducting a pilot census to test the census questionnaire and census administration procedures in conducting the actual census leading to the National Population Census Day in August 2002. (iv) Implementation of the National Vision 2025 The implementation of the National Development Vision 2025 will be through three year Medium Term Plans the first of which will be done in 2000/01 and its implementation will start in 2001/02, including a popularly vetted Poverty Reduction Strategy. (v) The Anti-corruption Strategy The government policy is to seriously combat corruption in the country and has formulated an Anti-Corruption Strategy, which focuses on simplifying, demystifying and depersonalising government programmes procedure and systems so that the loopholes for corruption are reduced. Ministries, regions and local government authorities are the implementing agencies of the strategy. The support from civil society, media and the private sector is also recognised as essential to the successful implementation of the anti-corruption strategy. The planned activities in this area include drawing up plans and implementing these in the areas deemed most prone to corruption behaviour. (vi) Control and Audit The office of the Controller and Auditor General which seeks to strengthen accountability with regard to Government revenue collection and expenditure although it has been operating against the background of problems surrounding increases in audit tasks. Since 1999/2000, however, measures 17 have been taken aimed at increasing the funding for its core activities. For the MTEF of 2000/2001 - 2002/2003 the focus will be on improving the provision of core services through funding of the following priority activities: * In depth and timely auditing of Central and Local Government Authorities Accounts. * Facilitating attendance of PAC/LAAC sessions. * Capacity building. 18 Table 2.3: SUMMARY OF FUNDS REQUIREMENTS AND PROPOSED ALLOCATION OF OTHER CHARGES (OC) AND DEVELOPMENT FOR PRIORITY ACTIVITIES IN SOME SECTORS (In Millions of Tshs.) 1999/2000 2000/2001 2001/2002 2002/2003 Sector/Sub-sector Requirement Likely 0/turn % of Requirement Prop. % of Requirement Prop. % of Requirement Prop. % of Require- Allocation Require- Allocation Require- Allocation Require- ment ment ment ment Education 107,775.10 40.447.17 37.5% 111,172.75 56,558.68 50.9% 115,674.72 74,278.65 64.2% 120,301.71 96,116.32 79.9% O/w Primary 13691.1 8568.01 62.6% 13759.6 11894.10 86.4% 11447.60 15654.98 108.4% 15025.50 20687.60 137.7% Health 46,680.00 24,724.70 53.0% 55,760.00 39,517.56 70.9% 62,180.00 57,980.21 93.2% 64,667.20 75,048.04 116.1% O/w Primary Water 8,706.00 4,813.78 55.3% 11.260.00 8,677.70 77.1% 16,930.00 10,383.21 61.3% 17,607.20 13,186.12 74.9% Judiciary 6,852.90 3,412.65 49.8% 7,19400 4,121.46 57.3% 7,503.70 4,553.92 60.7% 7,803.85 4,747.15 60.8% Election 16,174.00 13,800.00 85.3% 31,406.00 32,000.00 101.9% 000 4,062.93 * 0.00 4,100.00 * Agriculture 15,252.00 6,059.87 39.7% 12,443.00 6,901.41 55.5% 13,120.00 7,874.03 60.0% 13,644.80 8,617.85 63.2% Energy 5,382.00 2,580.12 47.9% 5,435.82 3,408.43 62.7% 5,490.18 3,65163 66.5% 5,709.79 4,04242 70.8% Roads 46,000.00 46,955.61 102.1% 507000.00 41,337.17 82.7% 52,000.00 43,554.65 83.8% 54,080.00 45,114.93 83.4% O/w Rural roads 14000.00 12142.80 86.7% 15000.00 12360.00 82.4% 16000.00 13080.00 81.8% 16640.00 13355.15 80.3% Lands 850.00 365.95 43.1% 1,050.00 1,024.17 97.5% 1,150.00 1,033.94 89.9% 1,196.00 1,040.52 87.0% Controller and Auditor Gen 1,085.40 730.06 67.3% 1,413.40 1,227.07 86.7% 1,597.90 1,335.44 83.6% 1,806.30 1,412.57 78.2% TOTAL 254,757.40 1143,889.89 156.5% 1287,134.97 1194,773.65 167.8% 1275,646.50 1208,708.60 175.7% 1286,816.84 1253,425.91 88.4% Source: Budget Guidelines 2000/01 - 2002/03 19 2.5 OVERVIEW OF BUDGET PERFORMANCE FOR JULY 1999 - MARCH 2000 2.22 This section presents an overview of government efforts towards implementing its budget for the fiscal year 1990/00 as at the end of March. The budget frame for the year indicates that the government intended to collect total resources of Tshs.1,204.7 billion out of which domestic revenue was Tshs.810.3 billion, foreign budgetary support of Tshs.177.5 billion, foreign projects resources of about Tshs.214.9 billion and income from privatization proceeds of Tshs.2 billion. Total recurrent expenditure was set at Tshs.933.8 billion and the rest was development expenditure. Further, a repayment of Tshs.24 billion to the banking system was projected. 2.23 During this period the government implemented various measures to ensure that the budget frame is observed and that it is in line with the agreed benchmarks under ESAF. The cash budget system was maintained to enforce expenditure discipline among spending agencies. On the revenue side the government employed various measures that aimed at increasing efficiency in revenue collection including the repeal of General Notice (GN) that allowed tax exemption on bonafide gifts to religious groups after being noted that there was increasing incidence of tax evasion through this window. However, tax exemption to the groups is still awarded for grants directed towards service equipment for social sector programs and groups. 2.24 The preliminary budgetary operations report for March showed that the Government realized a total resources of about Tshs.746.3 billion against an estimated 856 billion. The resources comprises of domestic revenue that reached Tshs.577.4 billion, which is in excess of about 10 billion above estimated revenue of Tshs.567.2 billion for three quarters of the year (Table 2.4) as a result of the good performance in the collection of income tax, which amounted to Tshs. 166.1 billion, and exceeding the estimates for the same period by Tshs.15.3 billion. Balance of payments support had a shortfall of about Tshs.60 billion after recording a total collection of Tshs.36.5 billion, well below target of Tshs.96.4 billion. The MDF source reached Tshs.38.9 billion which is Tshs.12.2 billion in excess of estimated amount of Tshs.26.7 billion. The project funds source recorded a collection of Tshs.130.5 billion, about 32 billion below target of 162.3 billion mainly due to failure to capture adequately donors resources that are directly channeled to projects. From the revenue earmarked from the privatization proceeds the government managed to get Tshs.1 billion against the targeted 2 billion. Given these trends, it was expected that by the end of the fiscal year the overall resource envelope will reach Tshs. 777.2 which is 4.1 percent below the estimates. 2.25 Government expenditure, during the period under review amounted to Tshs.746.3 billion (Table 2.4) with a recurrent expenditure of Tshs.599.6 and development expenditure of Tshs.125.4 billion. Recurrent expenditure had a shortfall of Tshs.75.4 billion mainly caused by failure of the government to fund other charges by about Tshs.60 billion as a result of unpredictability and shortfall in resource mobilization especially foreign ones. On top of this, other areas expended more than planned resources such as for Personal Emoluments (PE), which surpassed the estimated amount of Tshs.208.3 billion by Tshs.6.6 billion for government employees, and Tshs.8.1 billion for parastatals. 20 2.26 With respect to development expenditure, Tshs.6.4 billion and Tshs.1 19 billion were from local and foreign sources, respectively. Planned development expenditure for July-March 2000 were Tshs.18.2 billion for local and Tshs.162.3 billion for foreign funded projects. The shortfall is largely attributed to low disbursement of domestic component and failure to capture adequately donor resources that are directly channeled to projects. As a result of unpredictability of resources and the fact that the government had to allocate below targets, the government repaid to the Banking system about Tshs.18.6 billion as opposed to the planned repayment of Tshs.4.1 billion. Further, instead of the planned 'no change to non banking borrowing', the government repaid about Tshs.7.3 billion to the banking sector during the same period. Table 2.4: 1999/2000 BUDGET FRAME JULY/MARCH Estimates Actual % A. TOTAL RESOURCES 855,513 746,294 -109,218 -13% 1. DOMESTIC REVENUE 567,194 577,416 10,221 2% 2. BOP SUPPORT 96,410 36,452 -59,959 -62% 3. MDF 26,749 38,934 12,184 46% 4. PROJECT LOANS AND GRANTS 162,282 130,490 -31,792 -20% 5. NON BANKING BORROWING 0 -7,300 -7300 6. BANK BORROWING -4,080 -18,600 -14,520 356% 7. PRIVATIZATION FUNDS 2,000 1,000 -1,000 -50% 8. HIPC INTERIM RELIEF 9. ADJUSTMENT 4,956 -1,830 -25,148 -507% B. TOTAL EXPENDITURE 855,513 746,294 -119,079 -14% 1. RECURRENT EXPENDITURE 675,030 599,581 -75,449 -11% i. External Debt 102,571 91,414 -11,157 -11% ii. Domestic Debt 53,227 52,422 -804 -2% iii. Other CFS 41,874 44,421 2,547 6% iv. PE-Government 208,262 214,891 6,629 3% v. PE-Parastatal 30,198 38,251 8,053 27% vi. TRA/CMSA 16,299 16,220 -79 0% vii. Road Fund 32,067 28,739 -3,328 -10% viii. Retention 24,525 19,664 -4,861 -20% ix. Other 158,397 97,766 -60,630 -38% 2. DEVELOPMENT EXPENDITURE 180,483 125,358 -43,630 -24% i. Local 18,201 6,363 -11,838 -65% ii. Foreign 162,282 118,96 -31,792 -20% 3. EXPENDITURE FLOAT 0 20,010 20,010 2.6 MTEF FYO1-FYO3 The MTEF Process and Resource Envelope Projection 2.27 The timing for the actual preparation work was set for the second half of September 1999 so as to dovetail with and support the preparation of the Budget Guidelines and also the combined World Bank - bilateral donors PER main mission during November - December 1999. The whole process of preparing the cross-sector 21 MTEF was guided by PER Working Group deliberations under the leadership of the Government as was the case in the previous year. However, the details of the macro MTEF were worked out by the macro sub-group of the PER Working Group, drawing members from the Ministry of Finance, Planning Commission, Bank of Tanzania, Vice President's Office, Tanzania Revenue Authority, The World Bank, IMF, Netherlands, Sweden, Denmark, SDC, DFID, UN/UNDAF and REPOA. 2.28 The process of preparing the macro MTEF for FY 1999/00 was revisited to draw lessons and experiences and establish where the major gaps were; find out whether the MTEF process was consistent and credible compared to the final budget (this was done by major budget items of PE and OC), and the linkage with Budget Guidelines Committee and sectors. The macro group also revisited the definition of priorities so as to focus on poverty reduction and definition of social sectors as laid down under the HIPC initiative. The priority sectors identified by the Government were still too broad requiring refinement in order to get priority areas where public expenditure can best be expected to have the largest impact on poverty reduction. The narrower priority areas agreed upon were: basic education, primary health, water, rural roads, judiciary, and agricultural research and extension. For the key macroeconomic projections (GDP, inflation, money supply etc.) attention was given to what happened in 1998/99 compared to the likely turn out for 1999/00. In the case of revenue projections tax refunds were taken into account, a factor which was not done in the previous year's revenue projections. An additional consideration was the amount of resources projected to be freed-up from the various debt relief initiatives including HIPC, MDF, commercial debt buyback and other bilateral debt relief arrangements. Underlying Assumptions and Specific Considerations 2.29 Specific considerations that guided the framing up of the global numbers were as follows: (i) The draft budget frame prepared by the Ministry of Finance was adopted as the baseline scenario. Subsequently two scenarios - optimistic and pessimistic scenarios - were developed by the macro group through revisiting some of the underlying assumptions. The optimistic scenario took into account the inclusion in the resource envelope projections of the extra resources anticipated to be freed from the various debt relief initiatives with the aim of reducing poverty. (ii) The resource envelope as projected in the baseline scenario was re- examined to correct for the declining tax effort (tax/GDP ratio) over time. It was acknowledged that only little can be expected by way of a substantial increase in non-tax revenue because Central Bank dividends which constitute a significant portion of non-tax revenue could not be expected to increase given the further decline in government borrowing. However, the PER process emphasized the need to indicate an increasing revenue effort over time in the macro projections. At minimum the revenue to GDP ratio had to be kept constant at 12.8 percent to 12.9 percent and 13.0 percent for FY 2000/01, FY2001/02 and FY 2002/03 respectively. The basis for adjusting the revenue effort upwards included: first, measures taken by Tanzania Revenue Authority (TRA) to deal with the problem of revenue leakage especially from smuggling of petroleum products; second, the regulatory framework being put in place by 22 the Ministry of Energy; and third, investment in efficiency improvements in tax collection through GDP. Spending on priority sectors in particular needed to exhibit an increasing trend over time to show that absorptive capacity of the expected additional resources is not a problem in the Tanzania context. (iii) The upper case (optimistic) scenario included additional resource projections from the enhanced HIPC ($50m, $75m and $100m for the three years of the MTEF respectively) but taking into account possible offsets between resources expected under the MDF and those from the HIPC debt relief. The likely turn-out for MDF resources were projected as $50m, $45m and $30m for FY01, FY02 and FY03 respectively. (iv) Projections of external resources (loans and grants) were based on likely turn-out figures informed by indicative projections obtained through a questionnaire survey of all DAC donors. (v) The level of the fiscal deficit ought to be consistent with the government macroeconomic policies to ensure sustained macroeconomic stability. (vi) Other specific considerations were that first, the exchange rate of Tshs. 750 to the USD is an underestimate. A more realistic exchange rate was considered to be Tshs. 800 to the USD. Second, a higher ratio of the wage bill to GDP of 4.8 percent be used in the higher case scenario instead of 4.5 percent of GDP. Third, that inflation projections be revised to take into account the actual inflation rate recorded by the end of December 1999 and PRGF projections, and revision of real GDP growth projections to take into account the actual GDP growth of 4.0 percent for 1998. The assumptions finally adopted for the MTEF (FY00 - FY03) are summarized below and presented in detail as Attachment I (Table A2.1). Attachments A2.2 and A2.3 (Tables A2.2 and A2.3) summarize the budget frame for FY01 - FY03. Macroeconomic Policy Targets for the MTEF FY2000/2001 - FY2002/03 * Real economic growth of 5.8 percent in 2000, rising progressively to 6.9 percent by the year 2003. Economic growth for 1999 is estimated at nearly 5 percent. * Consumer price inflation of 5.0 percent by end June 2000, declining to below 5 percent by end June 2002, consistent with the inflation in the economies of trading partners. * Revenue collection targets at equivalent to 12.6 percent of Gross Domestic Product (GDP market prices) in 2000/01, 12.8 percent in 2001/02 and 13.0 percent in 2002/03. * Decline in broad money supply (M3) expansion consistent with growth expansion and inflation targets during the period. * Increase in foreign reserves to the equivalent of 4 months of imports of goods and services by end 2000. * An average exchange rate of between Tshs.800-850 to one United States Dollar is projected for 2000/01. 23 Resource Allocation Criteria 2.30 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 (primary education, primary health, agricultural research and extension, rural and urban water, judiciary and rural roads) 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 personnel emoluments (PE) and other charges (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) The allocation within sectors made use of the sector development programs and studies/reports that were commissioned to update expenditure plans for the priority sectors covered by the PER FY99. The final allocations took into account the updated information and the within- sector allocations meant looking at the sector priorities and translating the sector's share of the resource envelope into the MTEF for that sector. A consistency check was also done with respect to resource envelope projections to ensure that resources distributed to various sectors were consistent with the overall resource envelope. Table 2.5 summarizes the likely outturn and proposed allocation of other charges (OC) for FYO1 - FY03 to priority sectors and activities, while Table 2.6 indicates what these sectors and activities have been allocated in terms of development expenditure resources. Broader sectoral allocations for both PE and OC are shown in the attachment (Tables A2.4 and A2.5). 24 Table 2.5: Summary of Proposed Allocation for Other Charges (OC) for Priority Sectors, Priority Activities and Total OC Available for Distribution (Tsh. Million) Sector 1999//00 2000/01 2001/02 2002/03 Likely Out- Proposed Proposed Proposed turn Allocation Allocation Allocation A. Priority Sectors Education 37,146.53 59,350.24 79,846.38 102,785.23 o/w Primary 8,568.01 12,415.48 16,104.50 21,319.90 Secondary 4,784.56 69,931.75 8,992.04 11,905.27 Teachers 741.02 1,973.75 1,437.58 1,903.32 Inspectorate 560.41 811.94 1,053.27 1,394.51 Higher/Tech. Ed. 15,063.22 21,954.98 27,257.98 36,089.01 Other 7,429.31 10,854.47 14,022.61 18,556.17 Health 21,849.95 37,194.88 53,605.21 70,673.04 o!w Ministry 18,512.52 27,589.22 38,800.21 48,559.12 Regions 709.40 2,192.37 2,809.58 4,319.00 Local Government 2,628.03 7,413.29 11,995.41 17,794.93 Water 2,066.80 4,861.78 6,268.21 9,149.12 o/w Ministry 101.70 2,421.44 3,235.23 5,205.80 Regions 0.00 0.00 0.00 0.00 Local Government 1,065.10 1,440.34 3,033.00 3,943.32 - District 1,033.59 2,354.67 2,926.50 3,804.89 - Urban 31.51 85.67 106.47 138.43 Other Social Services 816.94 920.94 1,233.44 1,603.47 Sub-Total (Social Services) 61,880.22 102,327.84 140,953.24 184,210.86 Agriculture 4,275.88 4,346.08 4,925.32 5,417.85 o/w Extension and Research 906.89 1,088.72 1,199.21 3,640.00 Food Security 954.62 702.40 1,027.89 1,130.68 Agr. Input Trust Fund 1,113.72 1,053.60 1,027.89 1,130.68 Pests & Disease Control 190.92 263.40 274.10 301.52 Other# 254.56 368.76 411.16 452.28 Roads 42,682.46 45,605.56 47,588.79 51,414.21 o/w Ministry 42,148.39 45,033.11 46,928.25 50,674.41 [Road Fundj* 40,476.00 41,337.00 43,555.00 45,115.00 Regions 0.00 0.00 0.00 0.00 Local Government 534.07 572.44 660.53 739.80 Judiciary 3,412.65 3,712.15 4,053.92 4,297.15 Total (Priority Sectors) 112,251.21 155,991.63 197,521.27 245,340.07 B. Priority Activities Lands** Energy 1,303.89 1,730.21 1,991.38 2,330.35 Election 13,800.00 32,000.00 4,062.93 4,100.00 Controller & Auditor General 730.06 1,177.07 1,285.44 1,362.57 Total (Priority Activities) 15,833.95 34,907.28 7,339.75 7,792.92 TOTAL ALLOCATION (Prioriry 128,085.16 190,898.91 204,861.02 253,132.99 Sectors & Activities) TOTAL OC AVAILABLE FOR 372,750.80 459,033.5 527,900.50 592,217.23 DISTRIBUTION I Source: Budget Guidelines 2000/01 - 2002/03 and Budget Frame 2000/01 - 2002/03 # Information Services and Cooperative promotion * Road Fund distribution formula is: 70% - Trunk and Regional Roads under MOW, and 30% Local Governments through MRALG. **Retention revenue caters for OC for Lands. No firm figures were made available for this source of revenue. 25 Table2.6: Summary of Proposed Allocation for Development Expenditure to Priority Sectors and Priority Activities and Total Development Expenditure (Tsh. Million) Sector 1999//00 2000/01 2001/02 2002/03 Likely Out- Proposed Proposed Proposed turn Allocation Allocation Allocation A. Priority Sectors Education 3,300.63 5,077.90 9,733.32 9,994.36 Health 2,874.75 4,422.68 5,625.00 5,625.00 Water 2,746.98 4,015.92 4,375.00 4,375.00 Sub-Total (Social Services) Agriculture 1,783.98 2,555.33 2,948.71 3,200.00 Roads* Judiciary 409.31 500.00 450.00 Sub-Total (Priority Sectors) 10,706.34 16,481.14 23,182.03 23,644.36 B. Priority Activities Lands 365.95 1,024.17 1,033.94 1,040.52 Energy 1,276.23 1,828.04 1,828.04 2,000.00 Election Controller & Auditor General 50.00 100.00 150 Sub-Total (Priority Activities) 1642.18 2,902.21 2,961.98 3,190.52 TOTAL ALLOCATION (Priority 12,348.52 19,383.35 26,144.01 26,834.88 Sectors & Activities)) TOTAL Dev. Exp. Resources 33,866.40 23,421.04 44,734.26 Source: Budget Guidelines 2000/01 - 2002/03 and Budget Frame 2000/01 - 2002/03 *Included in the Road Fund 26 Table A 2.7: MACRO ASSUMPTIONS 1999/2000 - 2002/03 FISCAL YEAR 1997/98 1998/99 1999/2000 1999/200 2000/01 2001/02 2002/03 0 CALENDER YEAR 1998 1999 2000 Likely 2001 2002 2003 Outturn REAL GDP GROWTH 1/ 4.5 5.4 5.4 6.1 6.6 6.8 R49 64 8 6.9 RAG GROWTH2/3.4 4.3 5.6 6.1 6.6 7. f f .. ---n s .. se .....n n.- ee " -- .... .......... ..a n - , ...... ..- - 6* *7'.....- -- 7" "* - ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ . .. . .. . -...............aeee + .. . en en .es- ,.. .. a ee- ÏÑFLATOÑ RATEÏ PRO I 7. . 5 44 - A T -N - 11 6 7 5 .. . ... ........... ...... ....... -O 4/ -1 .... .. . 4 (CAL EN DER) INF5AION4RTE85R8.2/02 7.8.94 0 4,4.51991 -NFLTIO RATE - ROJ 2/ (ALE aNDER) . 5 6.25 4. 5è Ö5 4 -O. IA L nP GR- O WT .... ... . .... a ,. .. ........ 1.1 .7.4 1.1 . 10 64-- . 11072 - G R O W T H-0 45- .0 54.1 .0 68... ......... . . .. . .............. ... .. . ... . ....1 . ............. 4 ................. 2NLAI1AE47 1.05 1.04 I04 1.0ORT 1.0 13955 1.0441.65 1,516.40 858.00 1,758.90 1,846.85 1,939.19 1,205.40 ,305.90 1.372.60 .,478.10 1,564.80 1,665,60 ..M....R T.. 2/...... ....... IM P O R T S 2/ (C A L E N D E R>........................................................................................................ ............ ...... -..... -i- A N G R A TEý I( A .E N.................-D E.............R.) ... ....... . ...... - ...... ............ LX CH A N GE............... RA TE........................................L.........641 .....,...9.....716 ... .......800 ...... 800............ 824.......... 849.. ......874...... E X C H A N G E ....E. 2.. 641............ 9 .......... 68 9 .. 715.. 80 93 1095........ 1281............ ............. ....................... E X C H A N GE.................................................... R A T E............ 2/................ .....(C......A L................i.............I........DE R ).............. ... IMP.............GROW T.H..... RATE ..... 087 ó .....08 052 .... 0686 . 050. .. 050. 4........ " . .... - EX C H AN.. ...... É. R A TE................................ C H A 1065........ 1170........... 117 1170......... ................. ...............1170...... ............. .......... . N...M...... *MO T G. -T 1 ---19--- --,9 .... 1*5 -.....7 ---- '- * 1 95-- 1.*2 "8 1.2 .......................g................................ and............ ................. (a... ............. .......... I. 4 0 .......0 4 0.............0 4 ..............0 4 . 0 46.....I..... VA1EUN .075 1.10 0.17 1.17 0.17 .. .. . . . .. . . . . . . .. . . . . . .I . . . . . . .. . . . . . . .. . .. . . . .. . . . . . .. . . . . . .. . . . . . . .. . . . . . . .. . - . . .. . . . . . .. . . . . . . . .. . . . .. . . .. . . .. . . . . . . .. . . . .I. . . . . . . ..2 7. . . . . .. . . . . . . Table A 2.8: SECTORAL EXPENDITURE GROWTH RATES 1999/2000 2000/01 2001/02 2002/03 Administration 1.05 1.06 1.06 1.06 Defence and Security 1.05 1.09 1.1 1.1 Social services 1.11 1.22 1.3 1.3 Economic services 1.11 1.12 1.12 1.12 Productive sectors 1.05 1.1 1.1 1.1 Resource Distribution in Priority Sectors Recurrent Priority activities 0.8 0.8 0.8 0.8 Non-Priority activities 0.2 0.2 0.2 0.2 Development Priority activities I I 1 1 Non-Priority activites Table A 2.9: BUDGET FRAME FOR 1999/2000 - 2002/03 (ANALYTICAL)" mill. shs. 1999/2000 2000/2001 2001/2002 200212003 Likely Outturn Proj. Proj. Proj. Domestic revenue 777,200 881,953 993,923 1,120,707 O/W Road Toll 40,476 41,337 43,555 45,115 Retention Fund Total Expenditure 1,060,343 1,278,822 1,402,951 1,389,811 Recurrent expenditure 822,000 957,846 1,051,213 1,175,422 Interest on external debt 36,500 67,500 46,000 62,200 Interest on domestic debt 70,000 57,000 57,000 57,000 Wages/salaries 287,287 315,851 356,813 396,505 Goods/services/transfers 428,213 517,496 591,400 659,717 o/w Road Fund 40,476 41,337 43,555 45,115 Special exp. 117,818 131,156 133,704 174,956 CFS (Others) 55,462 58,462 63,500 67,500 TRA Parastatal Wages Retention Scheme 32,500 36,151 37,000 40,000 Election Costs 13,800 32,200 0 0 Census 40,000 Other Charges 168,157 218,189 273,642 332,146 Development expenditure 238,343 320,976 351,738 214,390 Projects 238,343 311,476 341,738 204,390 Local 23,400 36,000 45,000 45,000 Foreign 214,943 275,476 296,738 159,390 Other Programme Assistance 0 Energy Fund Songo songo Overall deficit (checks issued) - before grants -283,143 -396,869 -409,028 -269,104 Grants 266,603 350,929 368,828 254,529 28 Balance of Payment Surpport. 119,200 92,535 85,780 79,518 o/w MDF/PRBS 70,640 72,512 67,219 62,312 project grants 136,903 195,852 212,180 98,520 HIPC interim relief-Multilateral 10,500 46,062 53,894 59,007 HIPC interim relief-Paris Club 16,480 16,974 17,484 Overall deficit (checks issued) - after grants -16,540 -45,939 -40,200 -14,575 Adjustment 0 0 0 0 Overall deficit (checks cleared) -16,540 -45,939 -40,200 -14,575 Financing 16,540 45,939 40,200 14,575 Foreign 40,940 55,229 61,958 38,269 Program loans 54,500 72,306 76,500 76,500 project loan 78,040 79,623 84,558 60,869 amortization -91,600 -96,700 -99,100 -99,100 Local (net) -8,000 -2,000 0 0 Bank (net) -8,000 0 0 0 Non-bank 0 15,000 0 0 borrowing 0 0 0 0 amortization 0 0 0 0 Privatization Funds 0 15,000 0 0 Change in Arrears -16,400 -7,290 0 0 Contingency -17,000 -21,758 -23,694 Financing Gap 0 0 0 memo: GDP, 6,280,400 6,996,680 7,756,799 8,619,665 OC for distribution 372,751 459,034 527,900 592,217 Primary Deficit(checks issued) -176,643 -272,369 -306,028 -149.904 Government Saving(checks issued) -44,800 -75,893 -57,290 -54,715 % ofGDP -0.7% -1.1% -0.7% -0.6% Note: BOP/PRBS for 2000/2001 include contribution from former MDF US$ 88.Omill.(shs70,400 mill.) and EU, US$ 11.9 mill.(shs 9500 mill.) And US $ 12.4 mill.(shs. 10000 mill.) HIPC Relief for 2000/2001 consists of WB US$37.5 mill.(shs.30000 mill.) and IMF US$18.4 mill.(shs.14,720 mill.) HIPC interim relief-Multilateral 55.90 64 68 MDF/PRBS 88.0 79 71 BOP/PRBS 112.3 101 91 Program loans 88 90 88 (World Bank US $70 mill, ADB US $ 17.75 mill) HIPC interim relief-Paris Club Development project - Loan 97 100 70 (50 percent of pledges) Development project - Grant 238 250 113 (50 percent of pledges) 29 Table A 2.10: BUDGET FRAME FOR 1999/2000 - 2002/03 (ANALYTICAL) % OF GDP 1999/2000 2009/01 2001102 2002/2003 Likely Outturn Proj. Proj. Proj. Domestic revenue 12.4% 12.6% 12.8% 13.0% O/W Road Fund 0.6% 0.6% 0.6% 0.5% Retention Fund Total Expenditure 16.9% 18.3% 18.1% 16.1% Recurrent expenditure 13.1% 13.7% 13.6% 13.6% Interest on external debt 0.6% 1.0% 0.6% 0.7% Interest on domestic debt 1.1% 0.8% 0.7% 0.7% Wages/salaries 4.6% 4.5% 4.6% 4.6% Goods/services/transfers 6.8% 7.4% 7.6% 7.7% o/w Road Fund 0.6% 0.6% 0.6% 0.5% Special exp. 1.9% 1.9% 1.7% 2.0% CFS (Others) 0.9% 0.8% 0.8% 0.8% TRA 0.0% 0.0% 0.0% 0.0% Parastatal Wages 0.0% 0.0% 0.0% 0.0% Retention Scheme 0.5% 0.5% 0.5% 0.5% Other Charges 2.7% 3.1% 3.5% 3.9% Development expenditure 3.8% 4.6% 4.5% 2.5% Projects 3.8% 4.5% 4.4% 2.4% Local 0.4% 0.5% 0.6% 0.5% Foreign 3.4% 3.9% 3.8% 1.8% Other Program Assistance 0.0% 0.0% 0.0% 0.0% Overall deficit (checks issued) - before grants -4.5% -5.7% -5.3% -3.1% Grants 4.2% 5.0% 4.8% 3.0% import support/OGL 1.9% 1.3% 1.1% 0.9% project grants 2.2% 2.8% 2.7% 1.1% HIPC interim relief 0.2% 0.7% 0.7% 0.7% Overall deficit (checks issued) - after grants -0.3% -0.7% -0.5% -0.2% Adjustment 0.0% 0.0% 0.0% 0.0% Overall deficit (checks cleared) -0.3% -0.7% -0.5% -0.2% Financing 0.3% 0.7% 0.5% 0.2% Foreign 0.7% 0.8% 0.8% 0.4% import support loans 0.9% 1.0% 1.0% 0.9% project loan 1.2% 1.1% 1.1% 0.7% amortization -1.5% -1.4% -1.3% -1.1% Local (net) -0.1% 0.0% 0.0% 0.0% Bank (net) -0.1% 0.0% 0.0% 0.0% Non-bank 0.0% 0.2% 0.0% 0.0% borrowing 0.0% 0.0% 0.0% 0.0% amortization 0.0% 0.0% 0.0% 0.0% Privatization Funds 0.0% 0.2% 0.0% 0.0% Change in Arrears -0.3% -0.1% 0.0% 0.0% Contingency 0.0% -0.2% -0.3% -0.3% Financing Gap 0.0% 0.0% 0.0% 0.0% memo: GDP., 6,280,400 6,996,680 7,756,799 8,619,665 Primary Deficit(checks issued) -2.8% -3.9% -3.9% -1.7% Government Saving(checks issued) -0.7% -1.1% -0.7% -0.6% 30 Table A 2.11: SECTORAL RECURRENT ALLOCATION 1999/2000 - 2002/03** 1999/2000 2000/01 - PROJECTION 2001/02 - PROJECTION 2002/03 - PROJECTION PE OC Total PE OC Total PE OC Total PE OC Total ADMINISTRATION Ministries/Department 15,707,540,420.191,110,381,400 206,817,921,820.16,4 92J9 7,44. 230.704,134,.18 247,197,051,6 16,492,91 7,44 252,729,879,77 269,222,797.21 16,492917,441 259,944,560,89 276,437,478,3.1 9 30 1 3 4 0 Regions 4,654,004,549 .. .... . ....... ..... 3,030,067,00017,..4,071,.4 4,88 6,7-04,,77. 4,616,208,969 ,02937648,047743,8,08 9688,35 ,8,0,77 5,638,994,029 10,525,698,86 Lo-a-6Government6",162 '9'1,,5 0 .,56 ...6..95 8,990,795,053 0 8,9079S,'5-8,9979- 5-,05-3 '0 ....... .....8,990,795,05J- 8909503- 0b,-~*950 District 6,276,964,968 0 .....6. . .. ,27,964,968 6,590,813,216 0 6,590,813,216 6,590,813,216 0 6,590,813,216 6.,590,813,216 0 6,590,813,216 Ubn CoinCi15 2,285,696,987 0.........85,696,987 2,399,981,836 0 12,399,981,836 2,399,981,836 0 2,399,981,836 2,399,981,836 0 2,399,981,836 TOTAL 28,924,206,924 194,140,448,400 223,064,655,324 30,370,417,271 235,320,343,15 265,690,760,4 30,370,417,27 257,461 ,864,83 287,832,282, 10 30,370,417,271 265,583,554,91 295,953,972,190 ADMINISTRATION 9 29 1 1 1 9 DEFEÑCE AND SECURITY isries/Department 85,151,077,816 56,562,006,4100.141.713084,216 88,989,0'96,807~*~ 58,'120,049,710 147,109,146,5 8899068 5878940154,816.946,27 88,989,096,807 7240,3,4711,399,731,225 18 7 8 TOTAL DEFENCE 85,151,077,816 56,562,006,400 141,713,084,216 88,989,096,807 58,120,049,710 147,109,146,5 88,989,096,80 65,827,849,470 154,816,946,27 88,989,096,807 72,410,634,417 161,399,731,225 AND SEC. 18 7 8 Education Ministries/Department 13,710,079,531 25,332,503,300 39,042,582,831 1 4,395,583,508 3217482 47663 8 4395,583,50 43,855,207,231 58,250,790,738 14,395583,508 58,011,769,400 72,407,352,908 2 8 Regions M,7521,828 707,310,500 884,832,328 186,397,919 .2,106,390,9S6 2,292,788,875 186,397,919 2,699,404,563 2,885,802,482 68,9,1 ,4,2,4 ,6024,565 Loca. Government 107,816,287,827 11,106,720,300 118,923,008,127 113,207,102,218 18,955,201,697 132,162,303,9 113,207,102,2 23,558,443,430 136,765,545,64 113,207,102,218 30,629,475,415 143,836,577,634 15 18 8 District 88,934,167,267 ,206500.98,194,85,2,267 93,3'80,875,63,0 5,486,705,7'1'0 108,867,581,3 93,380,875,63.19,247,628,499.12,628,504,12 93,380,875,630 25,024,775,753 118,405,651,383 40 0 9 an Councils 3,468482,920,560941,8467 .3...300..0.....,.. 55,860..19,826..22...8.. 3,461,495.89876.23.294,722,57-8 19,826,226,58...4.3.10.8.4...3. 24.13.. 041,31124,9,8261,226,5888652660486960 ,663925,435,,9262622. 5 8 Sub-otal 11703,889,186 37,146,534,100 158,850,423,286 127,789,083,645 .94,272,347,478 182,061,431,1 127,789,083,6 70,113,055,223 197,902,138,86 127,789,083,645 92,790,871,461 220,579,955,106 0 4 8 .inistrieDparinent 1,5,1,274 1,86,92,2,00 26,388,029,648 15.29,3,632 27,69,26 21,668,3,08 1,23,638 0,9 ,74,875,66,0,07 23,63 45,7,473 39,512,1 31 .UbnCucl ,9, 153.1 -75 1,.126,60N.. ... 5,428,131 ......5.,348,8 80,108 1,251,589,314 6,600,469,421 5,348,880,108 1,555,535,864 6,904,415,971 5,348,880,108 2,022,427,655 7,371,307,762. Sub-Tota......32,020,254,194 21,849,952,200 53,870,206,394 33,62 1,266,904 37,194,875,041 70,81 6,141,94 33,621,266,90 53,605,209,308 87,226,476,212 33,621,266,904 70,673,042,987 104,294,309,891 5 4 Water M.inistries/P.epartm.ent 1,952,037,840 1,001,704,40 ,93742,240 2,049,639,732 .2,421,435,143 4,471,074,875 2,049,639,732 3,235,232,222 5,284,871,954 2,049,639,732 5,205,801,888 7,255,441,620. Regions 0 0 0 0 0 0 0 0 0 0 0 Locäl.Gö-v *rmment* ......1,9.1'3,183,535 1,065,097,700 2,97,28 1,235 2,008,842,712 2,440,340,338 4,449,183,050 2,008,842,712 3,032,973,256 5,041,815,968 2,008,842.712 3,943,31 5,697 5,952,158,409. .istrict 1,831,643,843 1,033,587,300 2,865,23 1,143 1,923,226,035 2,354,672,201 4,277,898,236 1,923,226,035 2,926,500,743 4,849,726,778 1,923,226,035 3,804,885,616 5,728,111,65. .baCouncilS 81,539,692 31,510,400 113,050,092 85,616,677 85,668,137 171,284,914 85,616,677 106,472,513 192,089,190 85,616,677 138,430,081 224.046,758 . Sub-T.. 9 ...o .. .............38521.5 2068210.,3,2,..,.,8,4 4817541 89027954,5,8,4 ,6,0,7 0,2,8,2 ,5,8,4 ,191756 53276009 ............... . .......................I.................................. I................................................................................................................................ Social Others 1,921,164,720 816,941,800 2.738,106,520 2,017,222,95 920,937,500 2,938160,456 2,017.222,956 233438182 250661138 2,017,222,956 1,603,469,637 3,620,692,593 TOTAL SOCIAL 159,510,529,475 61,880,230,200 221,390,759,675 167,486,055,948 97,249,935,500 264,735,991,4 167,486,055,9 131,219,908,19 298,705,964,14 167,486,055,948 174,216,501,67 341,702,557,620 SECTORS _49 48 1 0 2 SECORSM INFRUSTRUCTURE .Ro........................... .....d...I......................... ............... ...... ................................ ..................... ...... ............. .................... Miitries/D3epartment 2,741,322.568 42.148,391,300 44,889,713,868 21883866 4,3,1,4 791508 ,878,388,696 46,928,25423 9,06291 873866 50Ö,*674,41-3,72 5,-2-,8,46.9- 3 Regions 0 0 0 0 0 0 0 0 0 al Government i,8,5239 .534,067...... . .... ,10 2,-1-1,7,932,39,3 ..63.058.58 572,443,7,945~ 2,2,502, 1,6,558 660,533,354 12,323,591,912 1,6305,58 3,797,356 2,402,855,914. DistriCt 1,196,867,441 360,686,300 1,557,553,741 1,256,710,813 463,693,686 1,720,404.499 1,256,710,813 535,048,417 1,791,759,230 1,256,710,813 599,254,227 1,855,965,040 Urban Councils 386,997,852 173,380,800 560,378,652 406,347,745 108.750,108 515,097,852 406,347,745 125,484,93 7 531,832,682 406,347,745 140,543,129 546,890,874 5 Oters M.inistries/Department 2,822.628,780 8,139,936,900 10,962,565,680 2,963,760,2 19 8,631,673,385 11,595,433,60 2,963,760,219 9,960,734.528 12,924,494,747 2,963,760,219 11,156,022,671 14,119,782,890. 4 .eosm e 0 0 0 0 0 00 0 0 0 0 0 Urban Councils 4 TOTAL ECONOMIC 7,147,816,641 50,822,395,300 57,970,211,941 7,505,207,473 54,237,229,325 61,742,436,79 7,505,207,473 57,549,522,104 65,054,729,577 7,505,207,473 62,570,233,800 70,075,441,273 INFR. 8 32 PRODUCTIVE Ministries/Department 6,553,569,144 9,345,719,700 15,899,288,844 6,881,247,601 14,105,942,305 20,987,189,90 6,881,247,601 15,841,351,803 22,722,599,405 6,881,247,601 17,436,306,073 24,317,553,674 7 Regions 0 0 0 0 0 0 0 o 0 0 0 0 Local Government 0 0 0 0 0 0 0 0 0 0 0 0 District Urban Councils TOTAL PRODUCTIVE 6,553,569,144 9,345,719,700 15,899,288,844 6,881,247,601 14,105,942,305 20,987,189,90 6,881,247,601 15,841,351,803 22,722,599,405 6,881,247,601 17,436,306,073 24,317,553,674 7 SALARY INCREASE 0 0 29,649,993,02 29,649,993,020 55,741,986,878 55,741,986,878 0 RECRUITMENT 2,00,000,000 2,500,000,000 4,000,000,000 4,000,000,000 5,500,000,000 5,500,000,000 INSURANCE 9,475,518,000 9,475,5t8,080 20,179,900,62 20,179,900,620 32,075,038,320 32,075,038,320 0 GRAND 287,287,200,000 372,750,800,000 660,038,000,000 315,850,600,000 459,033,500,00 774,884,100,0 356,812,754,0 527,900,496,40 884,713,250,40 396,504,590,000 592,217,230,88 988,721,820,881 TOTAL 0 00 00 0 0 1 NOTE: /1 Road fund allocation to Ministry of Regional Administration and Local Government as well as Mnistry of Works is included in OC. /2 Assumptions for distribution of OC and PE for regions and local government are as follows Since then both the budget frame and allocations to priority items/activities within priority sectors have been revised in the course of preparing the country's Poverty Reduction Strategy paper (PRSP). The revised Tables are presented below as Tables A6 - A8: 33 TABLE A2.12: SECTORAL ALLOCATION 1999/2000-2002/03 (As percentage of total PE/OC expenditure) 1998/99 1999/2000 2000101 2001/02 2002/03 PE ACT PE EST OC ACT OC EST Total Act. Total Est. PE OC Total PE OC Total PE OC Total PE OC Total ADMINISTRATION Ministries/Departnent......... 5.4% .7% 41.2%/ 43.0% 27.2% 26.7%,' 5.5% 51.3% . 31.3% 5.2% . .% 9 4.6 479% 30.4% 4.2% 43.9% 28.0% -4gi3 ïï ï 1 0.% . %% 14% %0.9% % 2% 0% .1% S6 2 % . 0 09 8 % .00 0 a onil.16 % 0,0% 0.0% 0.2% 0 . 0. .... .. ......0 0... ........ .3% 2.8% V.0% 0.3% 0.7% 0).0ö% 0.....3% 2-JK% 0Ö0%~ 0.2 TOTAL ADMINISTRATION 8.9% 9.3% 42.7% 43.9% 29.5% 28.8% 10.1% 52.1% 33.8% 9.6% 51.3% 34.3% 8.5% 48.8% 32.5% 7.7% 44.8% 29.9% ........................................................................................................................... .EEC AND S"E(:URITYÏ M.nistries/Depaiime.nt 31......9.. 32J. ...f6% .......17.-7 16.0% 23.2% ..3...... 29..A .... .. .6% 15.2% . 21'5% 28.2% 12.7% 19.0% 24.9% 12.50% . 175% 22.4% 12.2% 16.3% TOTAL DEFENCE & SEC. 31.9% 32.6% 17.7% 16.0% 23.2% 23.3% 29.6% 15.2% 21.5% 28.2% 12.7% 19.0% 24.9% 12.5% 17.5% 22.4% 12.2% 16.3% . ..... ................ .. . . . . . . . .. . . . . . . . .......... ....................... ... . ............. .......... .... 1.1 ........I.................... ............................................ ........... ............11 ........ E..... ...................................................... ........ .................... .......... ................... . ......... KG tstries/5-öpartme"nt 4....... 44,% .... 4.'2% .......66% 7.9%7"'9 % ...... 6.2%"''7'4.8%....6.8%...6"'2.9%...4...6,%-72*-*~' .66.5.1%- 4.0%7~*,'%.3%1% 4.6.6%%6.6 3.6%% ....8...'7.3%%' -8 ï.3% 1.5% 1.4% 0.1% 0.2% 0.1% . 05% 0.3% 01% 05% 03% 0.0% 07% 04% oa et 3 23ï ï. 18.0% 35.8% 4.1% 17.1% 31.7% 4.5 15.5% 286% 5.2% 14.5% istrici 2 % .--.5% 1.2% 0.9% 10.3% 1.0 2. 54 14.9% 29.6% 34 14.0% 26.2% 3.6% 12.7% 23.6% 4,2% .0% Un Cotlcils 5.9 .7% 03% 0.2% 2.ï% 3 % 56% 0% 27% 50% 09% 26% .Stl1 8 2 40.5%.. 8%o 235% 35.8% 13.3% 224% 32.2% 57% 22.3% I.................................... ..... .................. ........ ......................... . ....... ............... ....... .............. ..................... ......... ......................I...................... . ................ ..... . ... . . . . . . . . . . . . . . . . . . . .... : .......... ..... ........... ........... ...... ...................................... ....... ....... ....... . . .. . . . .iistnies/Depaiment .1 .... f..% 6 %/ -54 4.1% .3.5äÅ 1 Ö 4 . 5.....0 -34 % 1 ....... 1 å 1% ....... 4-iý...... ý..8 1... . 0 8.%.3 I.cn .......e............ - .% 73 4 3 % 3% 6% 07 .% 6% ...... 6 .% 23 %52 .% 39 .c6o3 2 6 7 0.5% 2 4.% 3%/ 28% 43313% 2.0% 2.9% 3.8% 27% 3,9% Ds-taic ï,1.% 5. 7% .7 0% 8% 9% 94% 02% 9.9% 85% 19% 10.5% . . . . . *................. . * ".................. .... ............. .... .............................. ....................... ... e . .......... ................................................... ....... .... ... ... ....... 0.4% 0.4% 01% 0 . 26% 0 % 0 0% 0.0% 0. 0 .9% 0% 0.0% 0 0% 0 .0% 0. 0% 0 .0% 0. 0% I................................................................................. ........I.. . . ............................................................... ............. . .. ....... Dit3 04 15 0 0.3% 0.4 06 0 5% 0.6% 05% 0.6% 0.5% 05% 0.6% 0.6% 1 08% .8% 00 0.00/ 0.30/ 0.4 00ö 000%.0% %0%.%.. % 0.0%0% 0.0% 0.0% 0.0% S-Total 53 20/% 6.3% 5.7% 2.9 8.o 13o 06 .9%2 % 16 1.% ..1 % % 1.2 % 1.2 .% 1.% f.57 I............................. ... .............. . ... .. ........ ..... ..... ............. ................ ..... . .. ......I...... ................... ...... mivii-tri,.es p-7 ä'-t,6cnt*~.% 10% 0.2% 0.6% 37 07/% 0.2% 0.4% 0.6% 0.2% 0.4 % 0.6% 6.% 0.4% 0.5% 0.3% 0.4% .. ....*.••. .. . . . . . . . . . . . . . .... . . . . . . . . . . . .......± .. . . . . . . . . . . ... ...'".....*..*.* TOTAL SOCIAL SECTORS 52.7% 51.0% 17.3% 15.7% 31.1% 31.1% 55.% 16.6% 33.5% 53.0% 21.2% 34.2% 46.9% 24.9% 33.800% 42.2% 29.4% 34.6% ECONOMIC INFRUSTRUCTURE _______ __________________________________ 34 겯 (PRSP). The revised Tables are Presented betow as Tab1es A6 . A8: 35 Table A 2.13: REVISED BUDGET FRAME FOR POVERTY REDUCTION, 2000/01 - 2002/03 (ANALYTICAL) i 999tZ600 200OY7001 2601124)02, tikely Out4urn 11udget Proj"' In Million of Tsh. Domestic Revenue 768,700 861,402 952,500 1,059,300 Total Expenditure 1,089,500 1,265,997 1,438,238 1,384,102 Recurrent expenditure 822,900 952,521 1,048,400 1,124,502 Interest on external debt 36,200 36,000 37,800 40,570 Interest on domestic debt 73,700 75,000 72,800 70,560 Wages/salaries 287,300 315,851 384,698 423,476 G oods/serv ice s/transfers 425,700 525,670 553,102 589,896 Other Charges 134,300 194,322 202,165 267,642 Development expenditure 266,700 313,476 389,838 259,600 Projects 266,700 313,476 389,838 259,600 Local 23,400 38,000 93,100 100,200 Foreign 243,300 275,476 296,738 159,400 Overall deficit (checks issued) - before grants -320,800 -404,595 -485,738 -324,802 Grants 278,000 366,256 379,280 272,232 Balance of Payment Support. 116,400 124,342 113,900 116,012 o/w MDF/PRBS 70,640 86,520 80,204 74,349 Project grants 150,400 195,852 212,180 98,520 HIPC interim relief- Multilateral 11,200 46,062 53,200 57,700 Overall deficit (checks issued) - after grants -42,800 -38,339 -106,458 -52,570 Overall deficit (checks cleared) 42,800 -38,338 -106,458 -52,570 Financing 131,100 38,339 106,458 52,570 Foreign 56,200 27,629 106,458 52,570 Local (net) -8,000 0 0 0 As Percentage of GDP Domestic Revenue 11.2% 11.3% 11.4% 11.5% Total Expenditure 15.9% 16.7% 17.2% 15.0% Recurrent expenditure 12.0% 12.5% 12.5% 12.2% Interest on external debt 0.5% 0.5% 0.5% 0.4% Interest on domestic debt 1.1% 1.0% 0.9% 0.9% Wagesisalaries 4.2% 4.2% 4.6% 4.6% Goods/services/transfers 6.2% 6.9% 6.6% 6.4% Other Charges 2.0% 2.6% 2.4% 2.9% Development expenditure 3.9% 4.1% 4.7% 2.8% Projects 3.9% 4.1% 4.7% 2.8% Local 0.3% 0.5% 1. 1% 1.1% Foreign 3.5% 3.6% 3.5% 1.7% Overall deficit (checks issued) - before grants -4.7% -5.3% -5.8% -3.5% Grants 4.0% 4.8% 4.5% 3.0% Import support/OGL 1.7% 1.6% 1.4% 1.3% Project grants 2.2% 2.6% 2.5% 1.1% HIPC interim relief 0.2% 0.6% 0.6% 0.6% Overall deficit (checks issued) - after grants -0.6% -0.5% -1.3% -0.6% Overall deficit (checks cleared) 0.6% -0.5% -1.3% -0.6% Financing 1.9% 0.5% 1.3% 0.6% Foreign 0.8% 0.4% 1.3% 0.6% Local (net) -0.1% 0.0% 0.0% 0.0% memo: IGDP , 1 6,872,557 7,596,181 8,363,000 9,206,000 Source: Ministry of Finance 36 Table A 2.14: Summary of Funds Requirements and Proposed Allocation for Priority Activities in Priority Sectors (OC and Development Expenditure.) - (in Millions of Tsh.) 1999/2000 2000/2001 2001/02 2002/03 Requirement (i) Likely (ii) Requi BUDGET % Requirement Prop. Requirement Prop. 0/turn rement Requirement Allocation Allocation Education 107,775.10 40,447.17 111,172.75 87,808.70 79% 150,888.26 103,053.54 157,275.92 128,558.21 Recurrent (C) 54,272.00 67,840.00 91,584.00 Development 33,536.70 35,213.54 36,974.21 Health 46,680.00 24,724.70 98,641.20 75,566.20 77% 107,205.26 85,881.51 111,943.72 102,432.46 Recurrent (C) 32,685.00 40,856.25 55,155.94 Development 42,881.20 45,025.26 47,276.52 Water 8,706.00 4,813.78 44,004.00 37,606.00 85% 51,311.20 40,458.70 53,707.46 44,304.89 Recurrent (OC) 4,862.00 6,077.50 8,204.63 Development 32,744.00 34,381.20 36,100.26 Judiciary 6,852.90 3,412.65 7,594.00 6,100.00 80% 7,923.70 7,545.00 8,244.85 10,059.75 Recurrent (C) 5,700.00 7,125.00 9,618.75 Development 400.00 420.00 441.00 Agriculture 15,252.00 6,059.87 39,387.40 33,475.80 85% 41,411.62 36,455.87 43,351.00 40,727.94 Recurrent (C) 6,531.40 8,164.25 11,021.74 Development 26,944.40 28,291.62 29,706.20 Roads 46,955.61 46,955.61 86,838.00 86,838.00 100% 92,036.66 92,036.66 76,816.79 76,816.79 Recurrent (OC) 55,106.00 57,861.30 60,754.37 Development 31,732.00 34.175.36 16,062.42 TOTAL 232,221.61 126,413.77 387,637.35 327,394.70 84% 450,776.70 365,431.28 451,339.74 402,900.03 Source: Budget Guidelines 2000/01 - 2002/03 Budget estimates Vol. 11 and IV of 2000 37 Table A 2.15: Priority Items within Priority Sectors: FY00 - FY03 Sector/Item FY00 Prel. Actual FY01 Budget est. FY02 Proj. FY03 Proj. F.E. O.C. TOTAL P.E. O.C. TOTAL P.E. O.C. TOTAL P.E. O.C. TOTAL in Millions ofTsh. Education 121704 37213 158917 127789 54272 182061 205402 67840 273242 265870 91584 357454 Basic Education 82898 13421 96319 120316 20974 141290 139909 27935 167844 181096 36097 217193 Health/1 32020 21850 53870 33621 32685 66306 39096 40856 79952 50605 55156 105761 Primary Health 15013 13768 28781 21510 20804 42314 25013 27708 52721 32376 35804 68180 Water 3229 2123 5352 2111 4862 6973 2455 6078 8533 3177 8205 11382 Roads 4325 37887 42212 4541 55106 59647 5279 57861 63140 6835 60754 67589 Rural Roads 1237 14357 15594 1851 26998 28849 2152 35959 38111 2786 46465 49251 Judiciary 4035 3913 7948 3955 5700 9655 4599 7125 11724 5953 9619 15572 Agriculture 8210 5475 13685 3867 6331 10198 4529 8164 12693 5863 11022 16885 Agr. Res. and Ext. 6913 4753 11666 2298 4595 6893 2672 6121 8793 3459 7909 11368 HIV/AIDS* 0 0 0 0 4800 4800 0 6393 6393 0 8261 8261 TotalPrioritySectors 173523 108461 281984 175884 163756 339640 261360 194317 455677 338303 244600 582903 TotalPriorityItems 113324 52335 165659 152041 88734 240775 176800 117318 294118 228847 152360 381207 Rec. Exp. (excl. CFS) 668464 783059 874300 945872 As a % of Discretionary Rec. Exp. Education 5.6% 23.8% 16.3% 6.9% 23.2% 23.5% 7.8% 31.3% 28.1% 9.7% 37.8% 37.8% Basic Education 2.0% 14.4% 15.4% 2.7% 18.0% 16.0% 3.2% 19.2% 19.1% 3.8% 23.0% 23.0% Health /1 3.3% 8.1% 4.3% 4.2% 8.5% 4.5% 4.7% 9.1% 5.4% 5.8% 11.2% 11.2% Primary Health 2.1% 4.3% 2.7% 2.7% 5.4% 2.9% 3.2% 6.0% 3.4% 3.8% 7.2% 7.2% Total Water 0.3% 0.8% 0.3% 0.6% 0.9% 0.3% 0.7% 1.0% 0.3% 0.9% 1.2% 1.2% Roads 5.7% 6.3% 0.6% 7.0% 7.6% 0.6% 6.6% 7.2% 0.7% 6.4% 7.1% 7.2% Rural Roads 2.1% 2.3% 0.2% 3.4% 3.7% 0.2% 4.1% 4.4% 0.3% 4.9% 5.2% 5.2% Judiciary 0.6% 1.2% 0.5% 0.7% 1.2% 0.5% 0.8% 1.3% 0.6% 1.0% 1.6% 1.7% Agriculture 0.8% 2.0% 0.5% 0.8% 1.3% 0.5% 0.9% 1.5% 0.6% 1.2% 1.8% 1.8% Agr. Res. and Ext. 0.7% 1.7% 0.3% 0.6% 0.9% 0.3% 0.7% 1 0% 0.4% 0.8% 1.2% 1.2% HIV/AIDS* 0.0% 0.0% 0.0% 0.6% 0.6% 0.0% 0.7% 0.7% 0.0% 0.9% 0.9% 0.9% Total Priority Sectors 16.2% 42.2% 22.5% 20.9% 43.4% 29.9% 22.2% 52.1% 35.8% 25.9% 61.6% 61.6% Total Priority Items 7.8% 24.8% 19.4% 11.3% 30.7% 20.2% 13.4% 33.6% 24.2% 16.1% 40.3% 40.3% I/ Includes HIV/AIDS Expenditure on HIV/AIDS will basically fund awareness campaigns, development of strategic plans for combating HIV/AIDS, preventive measures such as the provision of condoms, and carrying out studies and monitoring,surveillance of the incidence and impact of the pandemic as well as actions taken to fight it. Source Ministry of Finance 38  3. PUBLIC SERVICE REFORM PROGRAM 3.1 RATIONALE FOR THE PUBLIC SERVICE REFORM PROGRAM - PURPOSE AND PHASING 3.1 The overall purpose of the Public Service Reform Program (PSRP) is to support the attainment of a high rate of economic growth and ensure that delivery of quality public services within priority sectors conforms to public expectations for value, satisfaction, and relevance by end 201 1. 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 21st Century. 3.2 The Government has adopted a multi-phased approach to public service reform as follows: Phase I of the program (2000-2004) will: (1) complete and sustain the comprehensive structural and institutional reforms implemented with considerable success in recent years; and (ii) launch a strategic process for progressively transforming the role, capacity and performance of the public service on a sustainable basis. Phase 2 (2005-2008) will institute a performance management culture in the public service, and Phase 3 (2009-201 1) will bring about quality improvement practices. Program development objectives Public Service Reform Program 3.3 The program development objective is to improve accountability, transparency and resource management for service delivery. The public service will deliver efficiently and effectively the Government's economic and social programs on a continuous and sustainable manner. In the medium-term (Phase 1), this development objective will be underpinned by the policy shift to outsource services to the private sector and to local authorities and the strategic theme to deliver quality public services under severe budgetary constraints. Distance Learning Centre 3.4 The main objective of the Global Distance Learning Network (GDLN) component is to test the effectiveness and sustainability of a distance learning centre (DLC) as 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. This component is an integral part of the public service reform program since one of its primary aims is to help strengthen performance capacity of government officials and private sector managers. 40 Key performance indicators 3.5 Key performance indicators of progress towards the program goal will include the following: The Performance Improvement Model (PIM) will be successfully piloted in central government key social sector ministries, departments and agencies (MAs). Success will be reflected in terms of measurable improvements in the MDAs' redefined roles, decentralized functions and enhanced private sector participation. These will translate into improved quality of services. On the basis of such outcomes, the MDAs will also receive a predictable (budget- based) flow of funds in key sectors; the "quick win' service improvement program initiated under the past phase of the program will be continued; "Quick wins" are identified as reform measures that MDAs can effect to improve quality or to deliver services efficiently with zero or minimal requirement of new technical or financial resources. Improvements in real wage levels for professorial, technical and managerial staff towards levels consistent with incentives for performance and enabling the public service to hire and retain adequate numbers of staff in areas of critical skills, especially in policy and regulatory functions; Demonstrated improvement towards reinstating meritocracy in the public service, i.e., appointments and promotions to the public service carried out on a transparent and competitive basis; Progress in building institutions for safeguarding and sustaining meritocratic practices, as specifically reflected in a legal framework, and a new, independent Public Service Commission; Progress in building sustainable capacity for both change in management as well as service improvements. To this end, planning and policy units in MDAs will be properly equipped and staffed with competent policy analysts and in-service training programs will be readily accessible to public servants; and sustainability of the Distance Learning Centre (DLC) measured by demand for and utilization of the centre's services and ability to cover its operating expenses through fees. 3.2 STRATEGIC CONTEXT 3.6 The government's primary development goal is broad-based economic growth with poverty reduction. To realize this goal, it is planned to: (i) improve and stabilize fiscal performance; (ii) strengthen the base for economic growth by giving a high priority to the rural sector and facilitating private sector investments; (iii) improve environment management; (iv) liberalize prices and marketing; (v) improve market integration and access to productive assets and services; (vi) improve the efficiency of social services and target vulnerable groups; (vii) improve expenditure efficiency; (viii) eliminate redundancies and build capacity; (ix) enhance performance of regulatory functions; and (x) eliminate opportunities for corruption and enforce accountability. The PSRP will directly support a number of these objectives by 41 systematically introducing a strategic process that focuses public service managers on: (i) more efficient use of limited public resources through selected decentralization options and enhanced private sector participation in service delivery; and ii) sustainable improvements in capacity and overall performance. 3.7 The PSRP's objective is to "restart progress in poverty reduction by raising growth performance and extending access to basic social and economic services"'. Donors are supporting this objective mainly through sector development programs (SDPs) and other programs aiming at improving the performance of the NWAS. From a systems perspective, the PSRP's interventions are critical to effective implementation of the development processes initiated under various SDPS. While the SDPs will mainly provide physical, material and sector-specific inputs for the development processes that improve the supply, quality and access to basic social services, the PSRP, together with the other main institutional reform programs (e.g. Public Financial Management Reform Program and Local Government Reform Program), will provide the "systemic" inputs (systems, policies, rules and regulations, and others) to the development processes. Main Issues and Government Strategy Background 3.8 Soon after independence, Tanzania adopted a socialist development strategy. By the late 1980s, after a decade of economic decline and pervasive deterioration in public services, it was clear that the strategy had to be changed. By then also, the public expenditure framework had expanded far beyond what the Government could afford. The public administration had become characterized by under-funding and overstaffing. Civil servants were increasingly de-motivated because, among other reasons, there was a downward spiral in their real incomes and political interference in appointments and pay decisions. Serious distortions and inequities in promotions and compensation took hold. Consequently, discipline, ethical standards and productivity deteriorated. Further, establishment and payroll controls fell into disuse. The public service wage bill was largely out of control, which significantly contributed to fiscal instability and deficits. Implications of Decentralization and Institutional Pluralism 3.9 The Government is launching the next phase of its reform program (PSRP) against the backdrop of ongoing decentralization and institutional pluralism to improve the delivery of services. In that context, the design of the PSRP strategy takes into account three key institutional changes launched under the Civil Service Reform Program (CSRP): Redefined role of the State; New programs for decentralization to local authorities and executive agencies; and Promotion and facilitation of private sector participation in the delivery of social services. 3.10 Redefined Role of the State. This process was started with the ministerial organization and efficiency (O&E) reviews under the CSRP. The Government adopted the policy that, if possible and cost-effective, the roles of the ministries and 42 central departments would be confined to policy and regulatory functions, and the delivery of essential social services. Significant progress has been made in this area. However, a more critical and in-depth rationalization of the ministerial functions is necessary since the public expenditure framework remains too broad to be affordable. 3.11 Decentralization.. In accordance with the GOT's new decentralization policy, operational responsibilities for service delivery of many public service will be shifted from central Ministries to district and urban councils in phases. A system of inter- governmental financial transfers will be put in place. Ministries will retain control for policy, regulatory and strategic functions and in certain cases, continue to provide some services. The end result will be institutional pluralism in the delivery of services which until now was the exclusive domain of ministries. 3.12 Promoting and Facilitating Private Sector Participation. The GOT has, in the 1990s, adopted a private sector-led economic development strategy and also recognized the potential role of the private sector in the provision of social goods and services. Therefore, under the CSRP, measures were initiated to facilitate enhanced private sector participation in these areas. The CSRP also launched programs to inform and educate public servants, especially those in areas affecting private business investments and operations, to play a positive and facilitating role in their client relations. The program also laid out plans to solicit private sector support in the delivery of operational services through contracting-out and similar arrangements. 3.13 More significantly, through the CSRP's organizational and efficiency reviews, sector Ministries and departments are encouraged to foster partnerships with the NGOs, communities and private sector to expand supply, and enhance access to social services. Despite being relatively small, the private sector is already responding significantly to the opportunities arising in sectors such as education and health. This development will gain momentum as Tanzania's economic growth takes off to higher levels, as expected in the medium-term. 3.3 THE CIVIL SERVICE REFORM PROGRAM -- CSRP (1991-1999) 3.14 In 1991 the Government launched the CSRP with a series of studies financed by UNDP. Implementation started in 1993 with the World Bank support through the Parastatal and Public Sector Reform Project (up to December 1999) support of other donors including DFID, SIDA, NORAD, FINNIDA, DANIDA, USAID, EU, UNDP, Switzerland and the Netherlands. It is hoped that there will be similar support for the next phase of the reforms, the PSRP. 3.15 The overall objective of the CSRP was to achieve a "smaller, affordable, well compensated, efficient and effectively performing civil service". The program has so far been implemented in two phases: (i) restoration of the structural preconditions to support fiscal stabilization measures, including: the removal of ghost workers, staff retrenchment, rationalization of the pay and grading system, and reinstatement of establishment and payroll controls expected to bring employment and the wage bill under control; and (ii) institutional improvements, including: a redefinition of the role of government, restructuring for organizational effectiveness and efficiency, outsourcing certain services, decentralization of service delivery, and managerial capacity building. 43 3.16 Specific achievements of the CSRP include: The role of the Government has been redefined. The GOT has progressively withdrawn from direct production of economic goods and services. The total number of public service employees has reduced by approximately 27% from about 355,000 in 1992 to approximately 260,000 by the end of 1999. This is a net reduction after selective additional recruitment into the key sectors of education, health and law and order. Effective controls on employment and the wage bill have been institutionalized. All recruitment and entries into the payroll are controlled. A reliable central personnel database has been established and a computerized payroll system (funded by DFID) is operational since December 1999. Distortions in the compensation system were solved by combining all ad-hoc and non-transparent allowances into a consolidated basic salary, and by rationalizing salary scales and grades. The civil service salary structure has been decompressed, from a ratio of about 9 to I in 1992 to about 21 to I in 1999. Future changes in pay will be guided by targets specified in a new Public Service Pay Policy that emphasizes a clear enhancement of pay for technical and professional staff for the medium-term. Programs for devolving non-core and executive functions to autonomous agencies, local authorities, communities, NGOs and the private sector are in place. A program to implement systematic decentralization to autonomous executive agencies, with seven such agencies established by December 1999, is in operation (being funded by DFID). Programs to improve the leadership, management and governance qualities of the public service are being implemented, including training in key areas of leadership and management development. A code of ethics and conduct for public servants has been promulgated. In collaboration with USAID, the training of public servants to adopt a more facilitating approach to private sector operators is underway (Investors Road Map). Gender issues are being mainstreamed into public service management with SIDA's support. A comprehensive decentralization and local government reform program (LGRP) has been launched. The first phase of the program involving the restructuring of regional administrations has been completed. The establishments in each of the 20 regional administration units were reduced from an average of about 700 posts to 83 posts. This program aims at making public services more responsive and increase citizen participation in decision-making. It is also anticipated that the LGRP will facilitate rationalization of recruitment and compensation of employees between central government and local authorities, resulting in reduced pressure on the public wage bill. The LGRP is strongly supported by Irish AID, DANIDA, FINNIDA, Netherlands, NORAD, SIDA, DFID, EU and UNDP. 3.17 The CSRP enjoyed strong support of both top political leadership and senior management of the civil service. Nevertheless, in active search of sustainable and better results, an in-depth, broad-based and critical assessment of the program has 44 been carried out during 1998/99, beginning with a National Symposium on Civil Service Reforms organized by the University of Dar Es Salaam at Government's request. It was followed by a series of inter-ministerial reviews, planning and consultative fora. The reviews, complemented by a logical framework process, concluded that despite the impressive achievements in structural and institutional reforms, much needs to be done to translate these results into improved service delivery to the people of Tanzania. The program strategy had thus to deal with these issues: (a) the vision and goals of the reform program appear remote from the public interest; (b) unaffordable levels of public expectations; (c) limited overt public support for the reforms in the past; (d) weak local ownership of reform goals and inadequate implementation responsibilities in MDAS; (c) significant levels of capacity deficiency in both technical functions and change management; (f) capacity and performance undermined to a certain extent by low pay of public servants; (g) ineffective co-ordination of all major reform initiatives; and (h) weak monitoring and evaluation for outputs, outcomes and impact. 3.18 In terms of impact, it was imperative to steer the future program towards consolidating the gains made under the CSPP. This meant that the next phase of the reforms would support the effort of MDAs to adapt to an evolving pluralistic environment for the delivery of public services. 3.4 THE PUBLIC SERVICE REFORM PROGRAM -- PSRP (2000-2001). Government has taken a long term perspective to reforms. In this context a Development Vision to the year 2025 was elaborated and goals were set for poverty reduction, through strengthening the competitiveness of Tanzania's economy. Against this background, the Government opted for a more comprehensive Public Service Reform Program (PSRP) with a longer-term (12 year) perspective. The program aims at transforming the public service into a service that has the capacity, systems and culture for client orientation and continuous improvement of services. This will require more than a decade of sustained reform efforts. Therefore, the program will be implemented in three phases. The Government envisages that the PSPP will: . consolidate the institutional reforms started under the CSRP. . support improvements in public services by facilitating public service managers to harness the opportunities arising from the decentralization and institutional pluralism developments. The program will support the MDAs through a strategic process that will: (i) engage participants in structural changes; and (ii) reinforce the changes in structure to redefined roles within that management process. This strategic process 45 will be installed through a model (Performance Improvement Model--PIM). Key features of the PIM (see Figure 1) include: strategic planning; annual planning and performance budgeting; systematic execution of plans and budget with focus on services improvements; and monitoring, evaluation and reporting. The Programme will also advance the process of good governance, particularly through the strengthening of CSD's Ethics Unit and providing it with the resources to proactively promote ethical behaviour of all public servants as well as advancing the opportunities of women especially in senior management roles. During the strategic planning phase of the PIM, a MDA will be challenged to: Redefine its role and mission within the policy framework of decentralization and institutional pluralism; Define the mechanisms by which it will strategically lead the other players in improving services delivery; and Set key result areas for performance that will be monitored through participatory approaches (service delivery surveys, benchmarking and others) during implementation as part of the triggers to move from the first phase of the program to the next. Figure 1: Tanzania's Performance Improvement Model ANN'UAL PLLNNING S4TEGICioy o & PERFOMNCE - i Decuah-ydorn&puiat & p~BULGENG Vision *Erdnykp t * CaPity h/iInfPla F.- NW..A f- FIF Vledium Tenn . t P & ia,der Fxpenditure Frminx-wrk OVALUIONS OF EVALUATION AND Reiewand REPORTINGendorsent of plans and budgets, - Wp&at Cient SreNs EXECUTION PLANS Audits Mploy rimurs rrom PIF and Staff Perfonai Apprnssats appropriations Take actioi, track statu and ~. commnunicate pnx Issues to be addressed by the program 3.19 The main focus issues of the program are: (i) weak capacity of the public service; and (ai) the poor delivery of public services as concluded by the CSRP evaluation and strategic assessment for the future. The CSRP's focused on containing 46 the cost of Government and introducing complementary institutional reforms. These reforms are still on going. A more strategic approach to contain cost and institutional reforms were thus needed to sustain and advance on the results gained in the CSRP. There was also public and political demand for the reforms to yield actual improvements in the quality of public services. Therefore, the strategy adopted for improved services and capacity was realized in a framework for sustaining the structural and institutional reforms. This framework is reflected in the strategic model for performance improvement - PIM ( Figure 2). 3.20 The need for a more comprehensive approach for effective and sustainable capacity building was recognized. Capacity building requires a number of systemic and institutional changes to improve basic competencies, incentives and the public servants' work environment. Such changes were launched through the CSRP, including training of public service managers; enhancing, decompressing and rationalizing compensation; reinstating merit criteria for appointments; introducing a code of ethics and conduct; and addressing gender issues. The other important part of capacity building requires that public servants, especially the managers, are both enabled to facilitate delivery of, and held accountable for specified outputs and outcomes. This aspect is considered to be crucial to sustainability. Phase I of the PSRP will introduce such a management environment in a phased and systematic manner, through the Performance Improvement Component. Subsequent phases of the program will institutionalize these processes and transform the public service into a results-oriented management and continuous quality improvement culture. Pay is also a critical issue to be tackled by the PSRP if capacity is to be addressed on a sustainable basis. 3.21 Several steps are being taken to empower public service managers: (i) functions are being decentralized in line with the approved Public Service Management and Employment Policy. Presently, the Civil Service Department (CSD) is transferring personnel management to the MDAS; (ii) the "common cadre" approach, i.e., economists reporting to the Planning Commission, accountants under the management of the Accountant General, and others regardless of their place of work in other MDAS, is being abolished; (iii) the role of the Division of Establishments in CSD has been redefined in order to be more responsive to the new Management and Employment Policy; and, (iv) with a view to increasing accountability, the Office of the Controller and Auditor General (OCAG) will become an executive agency. Through the PSRP (decentralization of authority) and the public finance reform (performance budgeting), line managers will enjoy greater autonomy. 3.22 Decentralization of public service delivery emanating from the redefinition of the role of Government and ministries under the CSRP has resulted in institutional pluralism in the delivery of these services. The promulgation of the local government reform policy and the launch of its implementation has influenced these developments and the process of developing a strategy for the PSRP for improving public service delivery. 3.5 DETAILED DESCRIPTION OF EACH PSRP COMPONENT 3.23 This first phase (2000-2004) of the PSRP builds on the on-going structural reforms initiated under the CSRP. Key areas of structural changes include decentralization, restructuring and private sector participation and an Executive 47 Agencies Program. These reforms are on-going and will be supported by the PSRP. However, decentralization has since evolved to a comprehensive local government reform program. An interim enabling policy and regulatory framework has been established and is supported by several donors (DFID, DANIDA, FI"IDA, Ireland Aid, Netherlands, NORAD, SIDA, Swiss, EU and UNDP). Decentralization, together with the other structural reforms, has created a new institutional environment for service delivery to which phase I of the PSRP will respond. Although the local government reform aspects of decentralization will not be directly supported by the PSRP, the congruity of the approaches and planning methodologies between the two programmes will be maintained. 3.24 In launching the PSRP, the Government has determined the need for a strategic process to facilitate participation of public service managers in implementing structural changes within a framework that supports service improvements. Therefore, initiating the strategic process will be at the core of the new program strategy. This will be achieved by adding two new components: i) performance improvement in MDAs; and ii) program co-ordination, monitoring and evaluation. 3.25 Under the CSRP, other changes have also occured in the areas of management information systems (MIS) and leadership, management and governance. The MIS component remains crucial to sustain the establishment and payroll controls already instituted. The interventions under the leadership, management and governance areas are critical for developing and maintaining capacity for change management and improved performance of the public service through a more meritocratic approach. It is therefore imperative that phase I of PSRP continue to support these changes. The six components of the program are: 1. Performance Improvement Component: is the central feature of the PSRP. Its implementation will support the strategic focus of the program to improve quantity, quality, and access to public services. It requires putting in place a strategic process that will facilitate decentralization of MDAs' and the expansion of the range of institutions for service improvements and moving them closer to the beneficiaries. Measures for systematic capacity building throughout the public service on a continuous and sustainable manner will also be supported. The specific objectives of the component are to: a) Advance the redefinition of the role of the government and improvements in service delivery with emphasis on the policy and regulatory functions of the Ministries; and judicious exploitation of opportunities for decentralization and private sector participation to improve service delivery. b) Install PIM for enhanced capacity and management of service delivery. c) Promote strategic use of scarce public financial resources through effective operationalization of the PIM in MDAs with a particular attention to core services. d) Facilitate linkages with the various sector reforms by ensuring that these are factored into the formulation of the MDAs' strategic plans; and 48 e) Empower MDAs to improve their performance by providing incentives, developing their organizational capacity, and making them accountable for implementation of their plans and budgets. The component's implementation strategy will include the following features: a) Operationalizing PIM and PIF, in phases, in key MDAs. b) Strengthening CSD as change agent to provide technical leadership and pilot the operationalization of PIM. c) Establishing a core group of experts in strategic planning and other aspects of PIM in CSD and MDAs. d) Training Ministries on PIM and empowering them to implement their plans. e) Strengthening the MDAs' capacity and performance orientation. f) Providing incentives for performance, at both individual and institutional levels. 3.26 The Performance Improvement Fund (PIF) is key to this component's approach. It will be a centrally-managed fund to support the installation of the PIM. In the first instance, for any MDA, PIF support will be available on the basis of strategic plans meeting specified evaluation criteria. Continued assistance will depend on a MDA demonstrating consistent achievement of a set of performance improvement benchmarks. 3.27 Restructuring and Private Sector Participation Component: will complete and consolidate the implementation of reform measures initiated under CSRP's ministerial organization and efficiency reviews. The measures will include: (i) hiving off non-core functions; and (ii) abandoning non-essential functions. The basic objective of this component is to support the operationalization of the institutional changes arising from the restructuring and decentralization of MDAs' functions. The component's activities will include: a) Facilitating the transfer of functions, services and operations from one institution to another. b) Contracting out non-core services. c) Divesting and privatizing services and facilities not needed in the public domain. d) Re-deploying surplus staff. 3.28 Executive Agencies Component: will continue to facilitate the creation and operationalization of Executive Agencies, with significant autonomy from central bureaucracy. The Executive Agencies operate in a more business-like manner leading to greater effectiveness and efficiency, better quality services and greater value for money. They will pioneer results-oriented management of public services. This program facilitates decentralization of those executive non-core functions that, due to strategic or operational considerations, need to remain in the public sphere. The program targets to improve efficiency and effectiveness of public service delivery by: 49 a) isolating the operation of select non-policy and executing functions from the administrative bureaucracy of ministerial structures and systems; b) introducing client orientation and results-oriented management into the new organizations, and c) facilitating clearer accountability for performance of services. 3.29 The strategy to implement the Executive Agencies Program derives largely from the project launched in May 1997 supported by DFID, whose logical framework is depicted in the Government Strategy and Action Plan. Up to 57 organizations in the Government have so far been placed under the program as agency candidates. However, following a priority option analysis of these candidates, 20 have been targeted for abolition or consolidation with others. On that basis, the program's target is to launch 37 executive agencies in the medium-term. Seven were launched by the end of 1999. 3.30 Management Information Systems (MIS) Component: this component of the CSRP was launched in 1995 to reinstate establishment and payroll control. Since then, DFID has supported two complementary projects: (i) personnel control and information systems; and (ii) records management. This is one of the most successful components of the CSRP. In the PSRP, the MIS component will: a) Sustain the effectiveness of the establishment and payroll controls already in place. b) Provide relevant, complete, accurate and timely information to public service managers and decision-makers. c) Support the modernization of information and communications systems in government offices. d) Improve the quality and availability of information through the development of efficient, effective and sustainable paper-based records management systems in the Ministries. e) Introduce an integrated computerized personnel and payroll system at CSD, Treasury and the Ministries thereby establishing a basis for implementing improved processes for human resource management, planning and budgeting. The approach includes measures to: a) Install the personnel and payroll system software procured during the last year and train MDAs' staff. b) Develop a policy and legal framework for the management of the increasing number of electronic records and a strategy designed for its implementation. c) Develop and cause to be developed by others, core IT applications and infrastructure on the basis of common standards and strategies. There is a need for a shared and optimized IT infrastructure. It is assumed that it will be established under the Government Accounting Development Project (GADP) at Ministry of Finance (MoF). 50 d) Support public service managers in acquiring core IT competencies so that they are able to understand, plan and manage MIS projects in their organisations. e) Establish a participatory framework in which an MIS and IT policy for the public service will be formulated 3.31 Leadership, Management and Governance Component: The overall objective of this component is to assist the transformation of the public service into a meritocracy. The future public service will be characterized by: a) Public service managers who are empowered through appropriate management systems, leadership and management skills. b) Rigorous application of merit principles in the management of personnel issues. c) Integrity, transparency and accountability in serving the public. d) Gender sensitivity in planning, implementing, monitoring and evaluating public service policies, programs and activities. 3.32 To achieve these objectives, this program component will have interventions in the following sub-components: a) Leadership and management skills development. b) Restoring meritocracy in the public service. c) Reinstating ethical conduct. d) Mainstreaming gender issues into public service activities. 3.33 Leadership And Management Skills Development Sub-Component. This sub- component will comprise four key initiatives: a) CSD as the leading change agent for the PSRP will make considerable efforts to have in place an adequate number of staff to improve its personnel skills, morale, environment, equipment and efficiency culture. b) Strengthening the leadership and management skills of political leaders and senior executives through appropriate training. c) Establishing a Public Service College with campuses at existing training institutions specializing in management training. The Public Service College will utilize consultants to establish the training needs of all MDAs and from this analysis provide relevant training to address critical skill gaps. d) Training in private sector facilitation. This initiative will build on the work of the "Investor Road Map" project. Focus will be on customer service training and improved communication between the private and public sectors. 3.34 Restoring Meritocracy Sub-Component:t" To restore meritocracy in the public service, recruitment and appointments will be made exclusively on the basis of merit. This implies open competition for vacancies; non-discriminatory recruitment and selection criteria, based on merit; and promotion based on open competition and merit. In addition, an open performance appraisal system will be introduced in all MDAS. Improved personnel management practices will be implemented. An 51 important element of the PSRP is enhanced public service pay levels based on a new public service pay policy and an improved retirement benefits scheme. These will be put in place during this phase of the program. 3.35 Reinstating Ethical Conduct Sub-Component: Reinstating ethical conduct in the public service will be achieved through inculcating values and standards of performance to public servants and the public. This will be done through: a) Implementing the recommendations of the Presidential Commission of Enquiry on Anti-Corruption (Warioba Report). b) Disseminating a Code of Ethics. The code will provide guidelines on levels and quality of performance, outline ethical principles, create awareness on integrity and inspire voluntary commitment. c) Reviewing laws, regulations and practices to identify where they encourage or abate unethical conduct. d) Disseminating information through public awareness campaigns and putting in place mechanisms to deal with complaints. 3.36 Mainstreaming Gender Issues Sub-Component: Increasing gender sensitivity amongst public servants is one strategy envisaged to eliminate the imbalances between men and women. The activities that will be undertaken by the gender sub- component are to: a) Create gender awareness in all strategically placed personnel (males and females). b) Build the capacity of women public servants to take-up the challenge to compete for upward career mobility. c) Produce various reports and information brochures on gender issues targeting both men and women public servants. 3.37 Program Co-ordination, Monitoring and Evaluation Component: this was carried out by its secretariat under phase one on CSRP. In accordance with the redefined program implementation strategy, the CSRP secretariat has been closed and its reform work mainstreamed into CSD and MDAs. This marks an important step in reintegrating project-based initiatives into the civil service to ensure long-term sustainability and capacity building. A key role of CSD in the PSRP will be to provide: (i) technical leadership to reform implementation by ministries, (ii) active monitoring of reforms, and (iii) co-ordination with other reform programs especially public financial management reform and local government reform. CSD is the focal point for co-ordination, monitoring and evaluation. CSD's role will also include informing, educating and communicating with stakeholders on progress of the reform program. 3.38 The objectives of the component will be to: a) Co-ordinate the policy formulation and analysis process. b) Facilitate, inspire and support sector reforms. c) Ensure public sector reform co-ordination. 52 d) Monitor and evaluate the PSRP and related reforms in addition to the various components of the program. e) Inform, educate and disseminate the message of public service reforms and the results of program monitoring to key stakeholders and ensure that stakeholders' comments are taken into account in the MDAs' strategic planning. f) Support enhancement of the capacity of institutions at the centre of Government for policy formulation and analysis, strategic leadership and co-ordination of reforms. Key elements will include: Monitoring the implementation of PIM with an emphasis on decentralization of services. Collecting and analysing information on PSRP components and other reform programs. Developing MDAs' capacity to formulate and evaluate policies. Establishing a baseline to assess progress of the PSRP. Monitoring and evaluating reform outputs and outcomes through service delivery/client surveys. Establishing a feedback mechanism to take into account results of the consultations with clients. Reporting quarterly on progress. Convening regular monitoring sessions to inform IMTC, IWG and ad-hoe inter- ministerial sessions on public service reforms. Informing the formulation of sector strategies with M&E results. Collecting information and monitor trends in public service capacity, motivation and performance. 3.6 REFORM TARGETS AND BENEFICIARIES Key policy and institutional reforms supported by the program: 3.39 During the CSRP the Government initiated the withdrawal from the direct production of economic goods and services. It also progressively reduced its direct involvement in the delivery of non-core services and facilitated a rapidly enhanced participation of private sector, NGOs, local authorities, other autonomous agencies and communities in the production and delivery of these services. Accordingly, the roles and functions of Government ministries were largely confined to policy making, regulation, good governance and the provision of essential public services and infrastructure so as to ensure an enabling environment for private sector development, economic growth, and poverty reduction. The operationalization of this policy underpinned the operation and efficiency (O&E) reviews undertaken in the past five years. Nonetheless, as reflected in the Government's medium term PSRP, further reform measures in this direction are needed. Therefore, this project will support the rationalisation of functions and devolving of responsibilities through decentralization, contracting-out, privatization and abolishing of non-core functions 53 of Ministries. The Central Government would thus remain with responsibility for only essential and core functions. There will also be reduction of red tape in the public service under the "quick wins" program initiated under the CSRP. 3.40 Recognizing the need to develop the capacity of the public service while at the same time transforming it into a results-oriented management culture, the Cabinet approved a Public Service Management and Employment Policy in May 1998 spelling out the vision, principles, ethos and practices to guide public service reforms. More significantly, it demands performance-orientation of every public service manager and outlines the key features of a performance management system. In view of this, a medium to long-term Public Service Pay Policy was approved by the Cabinet in January 1999. The policy marks a shift from the past egalitarian and politically-oriented management of public service pay, the main cause of compressed pay structures in many developing countries. This policy commits GOT to rationalize and significantly enhance public service pay, especially for technical and professional staff, as a crucial factor in ensuring sustainable key capacity, in the public service. This policy will form the basis for Government's guidelines on local cost compensation (LCC). These guidelines will ensure that donor remuneration practices are consistent with government policy and medium-term pay targets. Benefits and target population: 3.41 The PSRP seeks to (i) improve the performance of the Government in service delivery to all citizenry, communities and the private sector improvement of quality, efficiency and effectiveness of public services; (ii) benefit private sector operators by improving the policy and regulatory environment, and ensuring efficient use of public resources in promoting and delivering. essential social services, including economic infrastructure; (iii) ensure that taxpayers receive from the Government value for money, through strategic, transparent and accountable use of resources by public service managers; (iv) promote integrity in the public service; (v) benefit public servants by enhancing their pay to correspond to their competence and performance, promoting meritocracy and fairness in public service appointments thus improving their work environment and promoting their public image. 3.7 MANAGEMENT AND COORDINATION OF THE PSRP PSRP Management 3.42 Overall strategic leadership of the program lies with the Chief Secretary, Secretary to the Cabinet and Head of Public Service. Overall day-to-day management and co-ordination of the program implementation are the responsibility of the PS and CSD. The latter performed that role for the CSFP and has provided leadership in defining the program strategy. The program will emphasize implementation of a capacity building plan that has been prepared for CSD, with a focus on program and project management skills. A limited number of specialized project management staff will be recruited to enable the effective implementation of the PSRP. This will be done through a competitive process and on the basis of qualifications for the assignment. 54 Institutional and implementation arrangements 3.43 The institutional and implementation arrangements reflect the GOT's recognition of the importance to ensure complementarity of the public service, public finance, local government reforms and sector development programs through regular sharing of information. Links have already been established at technical level to ensure close working relationships among the officers involved in the reforms. Committee of all Permanent Secretaries to steer program implementation 3.44 The overall institutional co-ordinating mechanism for the public service reform, local government reform, as well as reforms in key sectors, will be the responsibility of the existing Committee of all Permanent Secretaries (Inter- Ministerial Technical Committee-IMTC) chaired by the Chief Secretary to the President/Secretary to the Cabinet/Head of Public Service. A Steering Committee constituted of Permanent Secretaries (PS) from five central Ministries will continue to meet as a sub-committee of the IMTC. The IMTC will meet at least once a quarter in a special session to deliberate exclusively on implementation progress and plans in each of the major areas of reforms (particularly public service, public financial management and local government). Inter-Ministerial Working Group to facilitate technical co-ordination with other programs 3.45 An Inter-Ministerial Working Group (IWG) chaired by the Permanent Secretary (PS), CSD will provide technical co-ordination of all key public sector reform programs. Membership of the IWG will include the Deputy PSs in the central Ministries, the Director of Policy (CSD), the Accountant-General, and the Commissioner for Local Government. The IWG will meet at least once a month and its decisions and recommendations will be regularly (at least quarterly) tabled at the IMTC meeting. The Policy Development Directorate (CSD) will give technical and administrative support to the IWG. Primary implementation responsibility and accountability vested in MDAS 3.46 The program design places the primary responsibility for reform implementation with the leadership and management of the individual MDA. This is a departure from the CSRP where an enclave reform secretariat had been established. The strategic and technical leadership role and functions of that secretariat have since been mainstreamed into CSD, Office of the President, while implementation has been transferred to the management of the MDAs Accordingly, the Permanent Secretaries and chief executives will be required to specify, promulgate and manage public service reform goals and implementation in their respective organizations. The Permanent Secretary CSD will be directly responsible for implementation of all systemic reform measures. In addition, while the central Ministries, and particularly CSD will provide technical leadership and co-ordination, every chief executive will be held individually accountable for progress in reform implementation in his/her organization. A Presidential Management Information System (PREMIS) will inform Ministers, the Chief Secretary and the President on the progress in reform 55 implementation. In this regard, a high priority activity will be training top public service managers in change management. 3.47 Stakeholders and beneficiaries will participate in defining and assessing progress of the PSPP through such instruments as social pacts, service delivery surveys, and benchmarking. The Program Co-ordination, Monitoring and Evaluation Component (managed by CSD) will use these instruments to identify progress achieved and necessary public service improvements. The findings will be reported to the leadership of the public service (the Chief Secretary, the IMTC and the President) and stakeholders and action will be taken as necessary. At the same time, political leadership in ministries will be sensitized on their roles under a new performance management system that stipulates annual performance agreements between the Chief Secretary, the Ministers and their respective Permanent Secretaries. Measures will be taken to ensure that these agreements are adhered to by the incumbents. 3.48 Furthermore, the implementation of the PIM in MDAs will start with on-the- job training for senior management in strategic planning for their Ministries. Another important feature of the MDAs' strategic and annual plans will be other capacity building measures (including contract recruitment to fill key skill gaps). CSD as the lead change agent 3.49 To prepare CSD for its new role, a program for its capacity development has already been defined. Capacity gaps in CSD will be filled through short-term training, with an emphasis on on-the-job-training and contract employment of both local and international experts. CSD has already recruited international specialists to support the performance improvement process and the enhancement of private sector participation. Through properly targeted training, CSD will develop sustainable capacity for strategic leadership and management of the reform program in the medium- to long-term. CSD is also pioneering the implementation of the PIM. This has commenced with the preparation of a strategic plan for the Department. The co- ordination of each of the PSRP components are the direct responsibility of specific divisions in CSD. The job descriptions and performance criteria for the CSD Directors are being redefined to stipulate effective co-ordination of the PSRP components. Effective donor co-ordination 3.50 In the area of public service reform, the Government has a proven track record of effective donor co-ordination. Donors to the CSRP have included the World Bank, 3.51 Denmark, United Kingdom, European Union, Finland, Netherlands, Norway, Switzerland, UNDP and United States. The Joint Government Donors Program Technical Co-ordination Committee has met regularly (at least every quarter) with the Government in the chair since 1995. It is a measure of the effectiveness of this co-ordination that in 1996 the donors teamed up to establish a Joint Donors Retrenchment Fund, managed by the Government, through which about US$ 100 million has since been paid to the beneficiaries. Strong donor support is indicated for the future program. 56 Figure 4: Overall Institutional Coordinating Mechanism for the PSRP THE CHIEF SECRETARY COMMIITEE OF ALL PERMANENT SECRETARIES (IMTC) PS - Civil Service Deparnment (CSD) Inter-Ministerial Wotring Group (IwG) on PSRP CSD DIRECTOR OF CSD DIRECTOR OF CSD DIRECTOR OF HUMAN CSODDIRECTOR FOR CSD DIRECTOR CSD INSPECTOR CSD PROJECT MANAGEOM a MIS RESOURCES POLICY OF OFTHICS ADMINISTIATOW PERFORMAntCE MANAGEM,EN d LEADERSHIP AND PROGRAM FOR FOR ETHICS ADMINisTATION IMPROVEMEN"T VOIFRMATION MANAGEMEMIT COORDIWATION MERITOCRLACY AND GENDER KESTRUCTURIG. SVSTEMS DEVELOPMENT MOINITORENG AND EXECTIVEEVALUATION 3.8 VISION OF THE NEW PUBLIC SERVICE 3.52 In order to learn from other experiences, the GOT has deliberately arranged for teams of senior Government officials and Ministers to undertake study tours to other African countries (Uganda, Botswana, South Africa and Ghana), South East Asia, Canada, Great Britain and New Zealand. Furthermore, in early 1998, CSD initiated and organized, with DANIDA support, a week-long regional seminar on public service reforms in East and Southern Africa with participation from Kenya, Uganda, Malawi, Mozambique, Zimbabwe, Zambia and South Africa. 3.53 On this basis, and in pursuit of a new vision for the public service, the Government agreed that the next phase of the reform would have the following features: 3.5 A strong focus on service improvements; P A performance improvement fund; -Budgetary incentives for performing institutions; nxsMerit principles and practices in public service appointments; -Enhanced public service pay; -A comprehensive information, education and communication (IEC) program; r e Improved institutional mechanisms for program management and co- ordination; -Contract recruitment to strengthen capacity; and .Strong M&E mechanisms. 3.54 Strong Focus on Service Inprovements.. The strong focus on service improvements is reflected in the strategic theme that has guided the PSRP design. Performance improvement is the focal component of the program. There is a clear nexus between the effective focus on service improvements and strategic imperative for explicit sponsorship of the program by the political leadership in that: 57 Quality public services are the raison d'itre for government, and it has overriding public interest; and The severity of resource constraints will persist in the medium-term, and therefore will continue to determine the limits of government's capacity to perform. 3.55 Furthermore, in the evolving governance environment, the Government recognizes the need to be more accountable to the public. Thus, stakeholders and beneficiaries will participate actively in shaping the reform and in assessing the performance of the public service. Their views will be taken into account through social pacts, service delivery surveys and other participatory approaches. The strategy emphasizes that the challenge for Government and all public service managers is to achieve demonstrable improvements in service delivery under budgetary constraints. The first phase of the PSRP (2000-2004) is geared towards providing a framework for all to effectively respond to this challenge. Strategic Theme 3.56 Performance Improvement Fund The implementation of the MDAs' strategic plan for performance improvement will be facilitated by resources to be made available under a Performance Improvement Fund (PIF). It will be a flexible instrument to support MDA-led programs to improve services within budget constraints. The PIF will be managed centrally by CSD. It will provide resources to implement the improvement plans and related key capacity building interventions. Funds for technical assistance and training in strategic planning, operational planning and performance appraisal will be drawn down according to agreed targets and standards for service improvements. Resources for capacity building will be accessed as soon as a ministry has developed a credible strategic plan and has diagnosed its requirements to deliver the strategy. The institutional, administrative and financial management arrangements for the PIF are outlined in a document entitled Guidelines for Accessing Resources from the Performance Improvement Fund.. 3.57 Budgetary Incentives for Performing Institutions. A simple, but particularly strategic, budget-based incentive is incorporated into the PSRP design. When a MDA demonstrates commitment to operationalize a services improvement program on the basis of the approved PIM, the MDA will be graduated out of the "cash budgeting" exchequer release mechanism. In other words, the Ministry of Finance (MOF) will, on that ' basis, commit to fund fully and predictably the approved budget (printed estimates) of the MDA. This measure is also a key indicator of progress in the implementation of the public financial management reform program. Another budget-based incentive for the restructuring of MDAS, already promulgated by MOF, is that MDAs are allowed to retain a significant portion of the cost-savings realized on the implementation of restructuring and private sector participation programs. 3.58 Merit Principles and Practices in Public Service Appointments.. This is a crucial element in restoring the competence, motivation, integrity and accountability of public servants. This objective is also prominent in the Public Service Employment and Management Policy. In line with this policy, work has started to transform the existing service commissions to a single, strong and independent Public Service Commission. A draft bill to legislate these changes has been prepared and will be tabled before Parliament by July 2000. 58 3.59 Enhanced Public Service Pay: Public service pay levels will be improved to enable the Government to recruit and retain competent staff. Towards this end, in January 1999, the Government adopted a comprehensive Public Service Pay Policy. This policy will set clear targets for pay enhancement in the medium-term, based on the macroeconomic and fiscal scenario reflected in the current Policy Framework Paper (PFP). Considering the wage bill constraint and with regard to areas of current and future skill shortages in the public service, the policy stipulates that for the medium-term there will be comparatively more rapid improvement of compensation for technical and professional staff. In that context, a comprehensive job evaluation and re-grading exercise is being implemented, and a study to operationalize the pay policy is underway. 3.60 Comprehensive Information, Education and Communication (JEC) Program: The execution of a focused IEC program is an important feature of the project's implementation strategy. The IEC outputs include: political leaders to popularize the strategic theme of the program: "quality public services under severe budgetary constraints"; monthly briefs through the print and electronic media on program implementation outputs; a quarterly newsletter widely distributed to all cadres of the public service; Periodic press briefings by, among others, the Minister for Public Service (President's Office); and publicity events to mark major milestones by ministries in the implementation of their performance improvement programs. 3.61 Improved Institutional Mechanisms for Program Management and Co- ordination: The institutional mechanisms for program management are geared to: (i) foster local ownership and responsibility for reform activities in MDAs; and (ii) facilitate effective co-ordination of the program with other public sector reforms. It is, therefore, in this context that the institutional arrangements for the program's management and co-ordination have been defined. 3.62 Contract Recruitment to strengthen Capacity: In functional areas where MDAs are particularly constrained to recruit and retain the necessary skilled personnel, a program co-ordinated by CSD will enable them to contract-hire skilled Tanzanians at market-based compensation levels. In the meantime, the program will support the implementation of the medium-term pay policy and a scheme for sustainable capacity building in the public service. 3.63 Strong Monitoring and Evaluation Mechanisms: The PSRP specifies performance indicators for each component and related activities. Through service delivery surveys, benchmarking and other similar instruments, achievements will be monitored, gauged against MDAs' performance plans, targets and social pacts. The results will be widely disseminated to stakeholders who will take an active role in ensuring that plans and targets are achieved. M&E capacity in CSD and MDAs will need to be developed. M&E will be a vehicle for learning and improving performance in addition to being a means of accountability. The M&E system will provide appropriate checks and balances between the MDAs and civil society. In addition, to reinforce the M&E mechanisms, a Presidential Management Information System (PREMIS) will be put in place. 59 3.64 Commitment and ownership: Government commitment to the reform program can be discerned from the successful implementation of the CSRP, especially in the past three years. It entailed considerable social pain and political risks. Soon after President Benjamin Mkapa came to office in early 1996, he publicly pledged to "vigorously pursue civil service and other public service reforms". His government has supported the reform agenda for example, more than 70,000 public servants were declared redundant and retrenched, recruitment into the public service was frozen even for those graduating from public service institutions (including technicians and professionals in teaching, health services, agriculture development, and others), the public service wage bill was effectively controlled while pay structures were rationalized. This resulted in reduced real pay for many senior public service officers, and many senior staff lost their positions as a result of ministerial restructuring of the regional administrations. Initially, the Government used large sums from its limited budget to finance the expensive retrenchment program. It is through demonstration of its commitment that over the past three years several donors have provided about US$ 100 million to support the retrenchments. In the same spirit of commitment, through CSRP, the Government has successfully launched an ambitious program for decentralization through devolution. 3.65 The PSRP is part of the on-going, broader public sector reforms. The program strategy is designed to facilitate the integration and implementation of the various major reforms taking place across the public service to enhance governance and sector development programs to improve social, economic and infrastructure services. As a follow-up to the 1997 recommendations of the Presidential Commission of Enquiry Against Corruption (Warioba) the Government has also initiated measures to address issues concerning integrity, transparency and accountability. Another significant and complementary GOT initiative is the constitutional reform presented to Parliament as a policy "White Paper", aimed at strengthening the national framework for democracy and good governance. 3.66 The Government has been undertaking systematic, in-depth and critical assessments of the CSRP as a basis for initiating the redefinition of the goals and strategies for the future reform program, including a two-day national symposium on Civil Service Reform (January 1998), in which participants were from academics, private business people, parliamentarians and other political leaders including the opposition and trade unions. Subsequently, the Government established an inter- ministerial task team that defined the long-term program goals and strategies, and documented the comprehensive medium-term program strategy. Moreover, the Government has commenced piloting the performance improvement model by initiating the strategic planning phase in CSD, and two key sector ministries, i.e., agriculture and water, and one executive agency, the Water Drilling and Dam Construction Agency. 3.67 Concurrently, CSD has developed and secured Cabinet approval of key policies that will facilitate and guide the PSRP: the Public Service Management and Employment Policy (May 1998); and the Public Service Pay Policy (January 1999). The Cabinet also formally endorsed the PSRP strategy and action plans (November 1999). 60 3.8 PROGRAM ANALYSIS: 3.68 Economic: The program assists the country's macro-economic stabilization and growth in several ways. Firstly, the program sustains the stabilization of the fiscal position. Secondly, by retrenching redundant staff (about 10 percent of the current establishment) primarily through outsourcing initiatives and implementing performance improvements, the program enhances efficiency and effectiveness in the use of resources. Thirdly, the program will improve the productivity of the public sector by redressing the current imbalance in allocation of budgeted resources between personnel expenditures and operational and maintenance costs. Fourthly, the PSPP will build the capacity of the public service in policy-making, discharge of the regulatory role and facilitation of private sector participation. One key element in the capacity building effort is to increase the capacity for cost effective training for senior level decision-makers in Government, the private sector, and civil society by means of Tanzania's participation in the GDLN. 3.69 Fiscal impact: The first phase of the PSRP is expected to have a positive medium- to long-term fiscal impact. Initially substantial costs will have to be made to pay for the costs of labor-shedding following rationalization of Government functions and retrenchment by Executive Agencies (EAs) during FY99/00. These include retrenchment benefits and costs of managing the reform program (paying for consultancy services, strengthening management, operating costs, and building information systems). There will be no direct costs to the PSRP of retraining some of the retrenchees to undertake income-generating activities in the private sector because this function has been shifted to the Ministry of Labour and Youth Development. However, the costs of retrenchment will be recouped starting the third year of the program mainly in form of reduced personnel emoluments following retrenchment. Additional savings will be in the form of reduced Government subventions to the Government departments that perform non-core functions and have been earmarked to be transformed into EAs, to be privatized or abolished. Other savings, although hard to quantify will include savings on the use of different office facilities such as telephones and Government vehicles or buildings formerly occupied by the retrenchees. Other potential savings that elude quantification include improved service delivery and public service management. 3.70 Technical: The Government's design for the program reflects serious efforts in strategic thinking and planning, lessons learned from the implementation of the CSRP, and a clarity of the outcomes and impact to be pursued through the program. The strategy also has the generic features of a comprehensive approach to public service reform as well as reflecting a broad and long-term perspective on the part of the GOT. By placing the focus on improving the quality of public services, the program will have a strong and sustained broad national support and impact well into the future. 3.71 Institutional: The experience of five years implementing the CSRP has enabled the lead executing agency, CSD, to start developing its capacity and ability to manage a comprehensive program. However, the effective implementation of the PSRP will poses new challenges to CSD who will be steering, supporting and co- ordinating an increasing number of MDAs to sustain serious efforts in program implementation. For process-oriented implementation activities envisaged in the PSRP, CSD needs to develop leadership, co-ordinating, monitoring and evaluation capacity based on professional and technical expertise. In recognition of this, CSD 61 has utilized the donor assistance to enhance its capacity for program management. Specifically, CSD constituted and trained an inter-ministerial task team to guide and support MDAs in the first step of the performance improvement process, i.e., strategic planning. Furthermore, a comprehensive program for leadership and management development, beginning with the senior officers of CSD, has been prepared. 3.72 Social: It is predicted that the implementation of the PSRP and the LGPP will result in loss of jobs for about 27,000 employees on the Government payroll. There is already considerable experience gained through the CSRP in designing and implementing programs to facilitate the redeployment of those retrenched. The CSRP has given rise to mandatory retrenchment of more than 70,000 public servants over the past five years. The program emphasizes fair and timely compensation to support those retrenched to transit to new occupations outside the public service. Except where problems of poor records have resulted in lengthy delays in payments of statutory retirement dues, the program has run relatively smoothly. The trade unions representatives participate in the standing task force that oversees retrenchment and redeployment. The CSPP has a training and counselling program which is demand-driven (use of vouchers). There is, in addition, a supporting mass media information and communication program. A recent FINNIDA evaluation of the redeployment program attested to its cost effectiveness. This entire program had a budget of less than US$ 3 million. FINNIDA has proposed the expansion of the program to cater for all the unemployed. Program management has moved from CSD to the Ministry of Labour and Youth Development. 3.73 PSRP will support the execution of the Government's social programs by enhancing the capacity of the MDAs to provide strategic and policy leadership in the design and implementation of such programs, It will also monitor and evaluate the performance of these programs in terms of changes in the quantity and quality of services delivered to the public. The results of such evaluations will inform public service managers on priority areas for enhancing social services. In this way, the PSRP will complement other Government programs for improving basic social services. 3.74 Participatory approach: The need for a broad consensus on the future reform of the public service was recognized early by the Government. Wide consultations on the program strategy commenced with a National Symposium on Civil Service Reforms. It brought together representatives of the civil society and national political leaders in both Government and the parliamentary opposition to openly discuss issues and options in public service reform. The proceedings of the symposium were published. At the national level as part of the annual CSD budget speech in July 1998, the Minister of State for Civil Service presented to Parliament for debate a fairly comprehensive statement of the planned strategy and content of the future PSRP, as defined in the May 1998 Cabinet Paper on Public Service Employment and Management Policy. Moreover, in the near future, Parliament will debate the bill legislating for the safeguarding of meritocracy by establishing an independent and unified Public Service Commission and other changes in the future management of the public service. 3.75 At the public service level, initiation of the new program strategy commenced with inter-ministerial strategy sessions bringing together Deputy PSs, Cabinet Under Directors from across ministries to review the CSRP and commence defining the 62 future strategy. The sessions served as technical reviews on the adequacy of the strategy, its responsiveness to key issues and problems, and its feasibility in terms of timeframe, resources and objectives. Concurrently, development of the strategy has implied the definition of the policy framework for the next phase of reforms, consultations with many stakeholders in MDAS, various scooping studies, and work by an inter-ministerial sector strategy group. 3.76 It is also significant that the program strategy has been defined with a view to guarantee that its implementation complements and integrates effectively the on- going sector reforms and the local government reform program, through which improvements in primary public services will be realized. With this perspective, a Sector Strategy Working Group led by CSD, comprising representatives from key sector Ministries, was constituted in March 1998 to: (i) link PSRP's design with existing sector strategies; and (ii) identify administrative and technical support requirements for reforms in MDAS. It is within this broad consultative framework that the strategy for this program has evolved over the past year. Sustainability 3.77 Weak macroeconomic performance and fiscal deficits over extended periods have underpin the initiative and drive for public service reform in most countries, including Tanzania. Major issues in economies plagued by fiscal deficits and negative or low growth boated, weak and poorly performing public services. The fiscal deficit has significantly undermined the incentives system, capacity and performance of the public service in these countries. When the fiscal situation improves, there is danger to lose focus on the purpose and goals of public service reform. There is a risk that the reform implementation effort will slow down, and gains made could be reversed. In this context, critical factors for the sustainability of the Tanzania PSRP include: Maintaining Government commitment to an affordable public expenditure framework; Expanding and sustaining private sector participation in delivering basic social services; Fostering broad-based support for the reform agenda; and Generating revenue based on demand for the Distance Learning Centre's Services. 3.78 Maintaining Government commitment to an affordable public expenditure framework. The July 1998 Tanzania PER observed that efforts of the current Government to achieve and maintain macroeconomic stability continues to bear a large measure of success. For many years the overall deficit averaged more than 6 percent of GDP. However, the 1996/97 budget achieved recurrent budgetary savings of 1.3 percent of GDP. This situation could vastly improve with the anticipated higher rates of economic growth (about 8 per cent) projected in the medium-to long- term. Considering the current wide gap between public expectations and the capacity of Government to deliver, the GOT has to contend with strong political and social pressures to rapidly expand its social programs. The prospect is exacerbated by the pressures for political expenditures, likely to be generated by national elections in 63 2000, and every five years thereafter. The PSRP prevent the risk by educating and targeting public service managers and political leaders on strategic management of public resources. The MDAs' strategic planning under the performance improvement model will be linked directly to the annual planning and performance budgeting exercise. 3.79 Expanding and sustaining private sector participation in delivery of basic social services. The levels of basic social services delivered by the public service in Tanzania today are lower than in the 1970s in both quantity and quality. The Government and public aspire to revert to the past levels of services in the shortest possible time. In this respect, there is enormous pressure on the Government to expand facilities and the number of workers in such key sectors as education and health at a pace that would derail the medium-term fiscal framework, and thereby the public service pay policy targets. The Government's critical choice to reduce pressures on its capacity is by enhancing private sector (including communities and NGOs) participation. Private sector participation to supply social services is a recent development in Tanzania and has demonstrated the potential for the private sector's contribution. The PSRP will train public service managers to formulate sector policies and strategies that facilitate enhanced private sector participation in delivering social services. In addition, the program will assist public service managers to reach out and forge partnerships for sector development with the private sector. Fostering broad-based support for the reform agenda. 3.80 In a democratic political environment, such as prevails in Tanzania, there is a risk of reversal of policies and shifts to major reform programs every time there is change of Government. The next general elections in Tanzania are scheduled for October 2000 and before the end of the program implementation period, 2001, there will have been at least two general elections, in which Governments with new agendas may come into office. There is need to ensure the program benefits is sustained even during potential political changes by maintaining broad-based support for the reform agenda. The PSRP strategy incorporates measures geared to building an enduring general support. The program contains information, education and communication (IEC) activities for progressively empowering the civil society to demand services and accountability from the public service. The Program Co- ordination, Monitoring and Evaluation component has a strong focus on ways to enlist public support. The need for extensive consultation and support for the program was recognized early in the program formulation stage and a very participatory process was initiated at that time. 64  4. HIV/AIDS AS A DEVELOPMENT PROBLEM 4.1 During the early 1980's when the rate of HIV/AIDS infections was still low, the disease was considered to be an exclusive concern of the health sector. Curative and preventive activities were solely left to the ministries and institutions responsible for health affairs. 4.2 As the infection rates gained momentum and more information on the disease known, it became evident that the disease is a global and multisectoral problem that impacts all sectors of society and requires the joint effort of the international and local community. 4.1 THE GLOBAL PERSPECTIVE 4.3 HIV/AIDS represents a serious crisis for development in large parts of the developing world where it is rapidly reversing the social and economic achievements of the past half-century. The Explosive Epidemic of HIV/AIDS 4.4 The HIV/AIDS epidemic has spread with ferocious speed and has now infected 50 million people worldwide. More than 16 million have died - 2.6 million in 1999 alone. Today, 34 million people are estimated to be living with HIV/AIDS, over 95 percent of them in developing countries. AIDS is already the fourth leading cause of death in the world, and the leading cause of death in Sub-Saharan Africa. Each day, over 15,000 people are newly infected and approximately half of these are between the ages of 15 and 24. 4.5 The effect on social outcomes has already been extensive. In the most affected countries, HIV/AIDS is swiftly dismantling the development achievements of the past 50 years. Life expectancy is now declining in many countries after decades of progress. In several nations it is already 10 years shorter because of HIV/AIDS. In the hardest-hit countries such as Botswana and Zimbabwe it will soon be 17 years shorter than it would otherwise have been. Adult mortality rates have risen by 50 percent in many countries and 100 percent in those most affected by AIDS. Child mortality rates in many countries have doubled and could double again if HIV/AIDS continues unchecked. The rapid rise in adult deaths is leaving an unprecedented number of orphans, 11.2 million worldwide, 10.7 million of them in Africa alone. Before AIDS, one in 50 children in the developing world was an orphan but today as a result of AIDS, the rate is one in ten in some countries. HIV/AIDS is a Global Epidemic. 4.6 While the first cases of HIV/AIDS in Tanzania were reported in 1983, for sub-Saharan Africa the problem began to surface in the late 1970s. This is also true for many other regions of the world except for North Africa and Middle East, South and South East Asia, Central Asia and New Zealand where it started from the 1980's 65 (Table 4.1). The magnitude of the problem differs between regions. Out of 33.4m people (adult and children) living with HIV/AIDS by December 1998, Sub-Saharan Africa alone had 22.5m or above 60% of the total followed by South and South East Asia with 6.7m while all the remaining regions together had the remaining 3.2m people. Genderwise, again Sub-Saharan Africa has the largest percentage of female HIV positive adults (50%) while in other regions the ratio ranges from 5% to a maximum of 35% (Table 4.1). The main mode of transmission for adults, in Sub- Saharan Africa is heterosexual while for a good number other regions IDU is an important mode. 4.7 In 1982, there was only one country (Uganda) with an HIV prevalence rate, as high as two percent among the general population, along with a much higher rate in certain "at-risk" population groups (e.g. commercial sex workers, truckers). Today there are 21 countries with prevalence rates of more than seven percent, and many other developing and transition economies are now where Uganda was in the 1980s - at the dangerous early stage of the epidemic. The behavior of HIV is such that once the prevalence rate reaches around five percent in the general population, the virus spreads very fast. Therefore, what has happened in these 21 countries can occur in many other developing and transition economies if immediate action is not taken. 4.2 THE REGIONAL PERSPECTIVE (SUB-SAHARAN AFRICA) 4.8 The region has experienced the most severe impact so far. The 13.7 million Africans who have died of AIDS account for 85 percent of the global toll from AIDS, and another 23.3 million are living with HIV/AIDS. In at least five countries, more than 20 percent of adults have HIV. Africa's problem is that there are conditions that allow the virus to spread notably poverty, medical care deficiencies, and/or small-scale implementation or lack of prevention strategies. The Economic and Social Impact of HIV/AIDS 4.9 The epidemic poses a great threat not only to public health, but also to development itself. The World Bank has identified the following factors (among others) to be essential in promoting development and poverty reduction: macroeconomic growth; good governance; human capital development; a favorable climate for private investment; and growth in labour productivity. By undermining each of these, HIV/AIDS is increasingly impeding development. In the worst hit countries sound public and private investments are already proving uneconomic and unsustainable as a result of the epidemic. While many other diseases also kill millions, HIV/AIDS is virtually unique in its impact on the economic and demographic underpinnings of development. Because it weakens and kills adults in their prime years as workers and parents, it erodes productivity, decimates the workforce, depletes the skills base, consumes savings, creates orphans in millions and changes the very structure of households. The HIV prevalence rate refers to the percentage of all adults age 15-49 who are HIV positive, which is the standard definition for the scope of the epidemic in a country. In this paper, the terms "HIV prevalence," and "adult HIV rate" are used interchangeably. 66 AIDS and the Economy 4.10 Recent World Bank estimates suggest that HIV/AIDS has a substantial negative impact on economic growth and the impact grows as the epidemic advances. As long as prevalence remains below five percent, annual per capita economic growth is minimally affected. As prevalence rises, per capita growth can be expected to decline. When HIV prevalence reaches eight percent as the case is in 21 African countries, the cost in per capital growth is estimated to be about 0.4 percentage points per year. Compared to historical performance in Africa, such losses are significant. Annual per capita growth in Africa as a whole for the past three years has been about 1.2 percent. In countries such as Zimbabwe where the HIV rate exceeds 25 percent, annual per capita growth is at least a full percentage point lower than the rate would be without HIV/AIDS. 4.11 The fiscal cost of HIV/AIDS is also significant. One year of basic treatment for a person with AIDS costs an estimated two to three times per capital GDP in medical costs alone. Most of these costs are borne by the public sector, which faces difficult choices. As the number of AIDS cases increases, so does the cost. In a country with HIV prevalence of 15 percent, the estimated budgetary cost of prevention and basic care could rise from 2.5 percent of GDP to reach 6.0 percent by the year 2010. For most countries, this would imply a substantial worsening of the fiscal deficit. AIDS and the Production Sectors 4.12 Overall, the 15-49 age group is disproportionately affected by the HIV/AIDS epidemic. Through its impact on the labour force, HIV/AIDS diminishes productivity just at a time when developing countries need to become more competitive to cope with rapid globalization. All sectors are affected. For example: 4.13 Agriculture: HIV/AIDS reduces investments in agriculture, thereby inhibiting agricultural production. HIV/AIDS illness and care also siphon time and labour away from vital work. 4.14 Private sector development: HIV/AIDS is undermining private sector development by removing skilled labor, increasing expenditures, and reducing revenues. Nearly 19 percent of all skilled laborers in South Africa will have HIV by 2015, according to a new report by ING Barings. On one sugar estate in Kenya where 25 percent of the workforce was HIV-positive, company spending on funerals increased 500 percent and direct health expenditures rose 1,000 percent in eight years. At the same time, productivity fell by half in four years. AIDS and the Social Sectors 4.15 AIDS overtaxes social systems and aborts the health and educational development that the poor (especially children) need to escape poverty: 4.16 Education: Across Africa, HIV/AIDS has drained skilled manpower in every sector, which was scarce to begin with. Teachers and students are dying or leaving school because they can no longer afford it, have fallen ill, or because they are needed at home to work or care for the sick. In some countries more than 30 percent of teachers are living with HIV/AIDS, and more now die each year than graduate 67 from teacher training programs. Moreover, faltering education also diminishes human capital for the future in every other sector. 4.17 Health: Health care systems in many countries are stretched beyond their limits as they deal with a growing number of AIDS patients and the loss of health personnel to illness and death. Once HIV prevalence reaches five percent, demand for medical care is estimated to rise by at least 25 percent and to increase faster than the government is able to supply it. In Cote d'Ivoire, Kenya, Zambia and Zimbabwe, HIV infected patients occupy 50-80 percent of all beds in urban hospitals. The epidemic has already sparked resurgence in tuberculosis (TB) in Africa after years of decline. In some countries, TB cases have risen 500 percent from where they stood before IIV/AIDS. AIDS and Governance 4.18 Many developing countries depend crucially on a small number of policy makers and managers for the overall operation of government. In South Africa, for instance, 15 percent of civil servants are living with HIV/AIDS. The loss of these key officials is further reducing capacity, which is weakening the prospects for good governance while raising the costs of recruitment, training, benefits, and replacements. AIDS and Gender 4.19 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. In some countries, for every 15-19 year old boy who is infected, there are six girls infected in the same age group. Women and girls also bear the greatest burden of care; families often take girls out of school to care for sick relatives or assume family responsibilities, jeopardizing recent gains in health, nutrition and girls' education. AIDS and Poverty 4.20 HIV/AIDS particularly targets the poor. The epidemic has overwhelmingly hit the word's poorest countries and those with the greatest disparities of income. Although people at all income levels are vulnerable to HIV, the poor have suffered the most economically, as the costs of care, foregone income and funerals are substantial. The poor also have less access to basic health care. The epidemic has been found to exacerbate both income inequality and absolute poverty. 4.3 HIV/AIDS SITUATION IN TANZANIA 4.21 HIV/AIDS has been in Tanzania for about 17 years now. The disease has evolved from being a rare and new disease to a common household problem, which has affected most Tanzania families. The HIV/AIDS epidemic will in near future, impact on all sectors of development not only through in increased amounts of resources required for the care of HIV/AIDS, but also through debilitation and depletion of economically active population - especially young women and men. 68 4.22 The number of HIV infected adults 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, but has to be recognized as a development problem. The impact of the epidemic is serious - it is now the major cause of adult mortality in many parts of Tanzania. The impact is exacerbated by affecting the most productive and economically active cohort. The epidemic's long incubation period (average of 10 years) during which transmission continues unnoticed makes it harder to contain. There has been an increase in TB cases and deaths due to the epidemic. Table 4.1: Regional HIV/AIDS Statistics Features, December, 1998 Region Epidemic Adult & Adult and Adult Percentage of Main modes of started Children children prevalence HIV positive Transmission for living with newly rate(*) adults who adults HIV/AIDS infected are women Sub-Saharan Late '70's 22.5 million 4.0 million 8.0% 50% Hetero Africa Early '80's North Africa & Late '80's 210,000 19,000 0.13% 20% IDU, Hetero Middle East South & South- Late '80's 6.7 million 1.2 million 0.69% 25% Hetero East Asia East Asia Pacific Late '80's 560,000 200,000 0.068 15% IDU, Hetero MSM Latin America Late '70's 1.4 million 160,000 0.57% 20% MSM, IDU Early '80's Hetero Caribbean Late '70's 330,000 45,000 1.96% 35% Hetero, MSM Early '80's Eastern Europe & Late '70's 270,000 80,000 0.14% 20% IDU, MSM Central Asia Early '80's Western Europe Late '70's 500,000 30,000 0.25% 20% MSM, IDU Early '80's North America Late '70's 890,000 44,000 0.56% 20% MSM, IU Early '80's Hetero Australia & New Late '70's 12,000 600 0.1% 5% MSM, IDU Zealand Early '80's Total 33.4 million 5.8 million 1.1% 43% Source: UNAIDS updates 1998. * The proportion of adults (15 to 49 year age) living with HIV/AIDS in 1998 using 1997 population numbers. # MSM sexual transmission among men who have sex with men, IDU: Transmission through injecting drug use, Hetero: Heterosexual transmission. 4.23 The adverse impact of the disease on development calls for wider responses outside the health sector and increasing other interventions that address the socio- economic determinants and consequences of AIDS. As a development problem it has a multi-sectoral impact, and thus requires a multisectoral solution. 4.24 The health impact of the disease alone is enough cause for concern. In addition, widespread poverty and unequal distribution of income that typify underdevelopment appear to stimulate the spread of HIV while; labor migration, rapid urbanization, and cultural modernization that often accompany growth also facilitate the spread of HIV at the household level. AIDS deaths exacerbate the poverty and inequality that are conducive to a larger epidemic, thus creating a vicious circle (World Bank, 1997). 69 4.25 The epidemic has had an impact across sectors with the most visible being health, education, social welfare, agriculture, and industry, in demand and provision of services. All sectors are dealing with a loss of experienced/trained professionals - health professionals, teachers, etc. The health sector in particular is experiencing an increased demand for its services, as AIDS patients occupy an ever-increasing number of beds in hospitals. And given multiple illness episodes per AIDS patient, the public expenditure on AIDS treatment is high. In the education sector children are being pulled out of schools, either due to a lack of money for school fees, or they are needed to help at home. The social welfare sector is experiencing a large increase of AIDS orphans. The estimated number of orphans since the beginning of the epidemic is 730,000 (UNAIDS/WHO, 1998). Industries experiencing the loss of skilled workers are facing high costs of recruitment and training of the new personnel. As the labor force in agriculture declines, agricultural production will decline. Agriculture in Tanzania takes place on family farms where agricultural production is labor intensive, and seasonal labor constraints are common. Epidemiology of HIV/AIDS 4.26 This section draws extensively from the NACP HIV/AIDS/STDS surveillance report (1998). The number of adult HIV infection in mainland Tanzania in 1997 is estimated to be 1.5 million. The prevalence of HIV is very high among the general population of Tanzania. 4.27 Within Tanzania, HIV infection is unevenly distributed across geographic areas, gender, age groups, and socio-economic classes. The percentage of the population infected by HIV ranges from less than three percent across most of the country, to more than 44.4 percent in certain sub-populations. Most infection occurs among the most economically active group of adults, those aged 15-49. Thus, HIV in Tanzania has struck the age group otherwise at smallest risk of death and most economically productive. 4.28 HIV/AIDS makes people vulnerable to other infectious diseases, e.g., Tuberculosis. The prevalence of HIV among TB patients in Tanzania varies from 24.5% - 70.5% with an average of 42%. AIDS is not an epidemic of a single disease but a heterogeneous mosaic of potentially large numbers of illnesses arising because of a weakened immune system. Distribution of AIDS Cases 4.29 Between January and December, 1998, a total of 8,575 AIDS cases were reported to the NACP from the 20 regions of mainland Tanzania. Of these, 8221 (95%) were AIDS cases diagnosed during the year of this report. The remaining 454 (5%) were diagnosed before the year of this report. 4.30 Age and sex differences of AIDS cases reported during the period is presented in Table 4.2. Overall, male and female are equally affected but women are affected at an earier age than men. The peak number of AIDS cases for women is in the 27 - 32 year age group while that of men is 33 - 38 years. Between the age 15 - 22, women are four times more affected than men. Note also that 24 cases were of the age group 65 and above. 4.31 Many factors could be responsible for age-sex differences in HIV infection. Among them are early sexual maturity among females and the tendency for older 70 men to seek sexual relations with young girls in attempts to avoid infection. It is also possible that economic considerations are attracting young girls into sexual relations with older and well to do men. Table 4.2: Age and Sex of Reported AIDS Cases: January to December, 1998 Age Female Percentage Male Percent Unknown Percent Total %Total 0-5 82 48 87 50.9 2 1.2 171 2 6-11 31 55.4 25 44.6 - - 56 0.6 12-14 3 60 2 40 - - 5 0.1 15-18 44 77.2 13 22.8 - - 57 0.6 19-22 209 80.4 50 19.2 1 0.4 260 3 23-26 411 71.9 157 27.4 4 0.7 572 6.6 27-32 744 59.4 497 39.7 i 0.9 1252 14.4 33-38 459 46.3 527 53.2 5 0.5 991 11.4 39-44 234 41.7 324 57.8 3 0.5 561 6.4 45-49 83 31.7 177 67.6 2 0.8 262 3 50-54 48 36.9 82 63.1 - - 130 1.5 55-59 19 30.2 43 68.3 1 1.6 63 0.7 60-64 8 27.6 20 69 1 3.4 29 0.3 65 and Over 8 33.3 16 66.7 - - 24 0.3 Unknown 1993 45.3 2244 54.5 5 0.2 4242 48.9 Total 4376 50.44 4264 45.15 35 0.40 8675 100 4.32 The cumulative number of AIDS cases by region and year and the cumulative case rate (number of cases per 100,000 population) are shown in Table 4.3. The total population for 1998 by regions has been projected from the 1988 population census using an exponential growth model with an annual population growth rate of 2.8%. The NACP estimates that only I out of 5 AIDS cases are reported due to under- utilisation of health services, under-diagnosis, under-reporting and delays in reporting. However, the data is believed to reflect the trend of AIDS cases in the country. In the face of under-reporting differences among regions, care is needed in the interpretation of region specific cumulative case rates. Indeed, regions with high case rates are those with fairly complete and regular recording and reporting. Mbeya can be cited here as an example of a region, which reports AIDS cases to the NACP fairly regularly and consistently. It appears on table 3 to have the highest case rate compared to other regions. The same scenario could be different if reporting were regular and consistent in all regions. Thus, it is wise that case rates be used to judge disease burden as well as worthiness of AIDS reporting system in the regions. 4.33 Reporting of HIV serostatus of potential blood donors in the country has been taking place since 1987. Initially, screening was done in regional and referral hospitals only, but since 1990 all hospitals which provide blood transfusion services in the country are screening blood for HIV antibodies prior to transfusion to ensure safe transfusion. Regional Differences in HIV Infection Using Blood Donor Data 4.34 During this reporting year, over 124,251 persons donated blood. Eighteen percent (22,299) of them were women. Ninety-four (94) percent were patients' relatives, 2.7% were institutional donors and relationship of the remaining 3.3% donors was not specified. The overall prevalence of HIV infection among blood donors was 9%. HIV prevalence rate in male blood donors was 8.5% and in female 71 blood donors the rate was significantly higher at 11.8%. Extrapolating these rates to the adult population aged 15 ;years and above, 1,633,599 persons were infected with the AIDS virus as of December, 1998. In general prevalence of HIV infection in both men and women has been increasing continuously in the past seven years. Table 4.3: Cumulative AIDS cases by region and year (1991-1998) Region 1992 1993 1994 1995 1996 1997 1998 Population Case* Rate Arusha 1637 2185 2368 2615 2787 3244 3567 1,942,558 184 Coast 2215 2740 3023 3268 3559 3796 4266 786,049 543 D'Salaam 9295 10406 11050 11302 12983 13899 14517 2,154,648 674 Dodoma 762 1028 1294 1608 1938 2517 2641 1,580,263 167 Iringa 3334 4462 4674 4765 4883 5008 5031 1,573,726 320 Kagera 5813 6646 7064 7223 7426 7671 7881 1,773,239 444 Kigoma 1556 1920 2070 2257 2280 2426 2481 1,116,625 222 Kilimanjaro 3707 4699 5119 5513 5991 6618 7375 1,374,734 536 Lindi 1211 1691 1966 2173 2480 2712 3074 778,735 395 Mara 980 1304 1393 1486 1486 1486 1515 1,274,893 119 Mbeya 9890 11439 12214 12371 14685 16835 19949 2,016,408 989 Morogoro 3598 4328 4575 4903 5189 5438 5534 1,558,884 355 Mtwara 1968 2090 2201 2267 2444 2569 2843 1,014,563 280 Mwanza 4207 5349 5731 5974 6365 7006 7384 2,462,018 300 Rukwa 496 715 777 801 882 1227 1359 1,083,173 125 Ruvuma 1807 2480 2847 3087 3345 3752 4260 1,068,007 399 Shinyanga 1874 2624 3062 3361 3824 4217 4515 2,424,494 186 Singida 1107 1472 1688 1908 2135 2167 2262 1,160,907 195 Tabora 1972 2786 3075 3428 3805 4278 4733 1,329,534 356 Tanga 2636 3207 3475 3793 4062 4278 4632 1,606,328 288 Unspecified 1 1 2 44 44 44 44 44 44 All 60,066 73,572 79,668 84,167 92,593 101,188 109,863 30,079,786 365 Note: Dar es Salaam cases included in this report were reported from Aga Khan and Mwananyamala hospitals only- *Case rates per 100,000 population;HIV Sentinel surveillance using blood donors Table 4.4: Prevalence (%) of HIV infection among male blood donors by regions 1992 - 1998 Region 1992 1993 1994 1995 1996 1997 1998 Arusha 2.6 2.6 2.7 6.1 3.0 2.8 4.2 Coast 4.1 5.9 6.6 5.5 9.4 8.2 7.7 Dodoma 2.8 1.7 0.0 0.0 4.9 7.9 4.9 D'Salaam 8.5 - - 4.9 17.2 19.8 12.5 Iringa 11.1 13.2 7.7 13.0 14.2 14.2 14.8 Kagera 10.9 5.8 7.9 10.8 8.0 8.6 14.8 Kigoma 1.9 7.0 3.4 4.9 5.6 2.8 3.8 Kilimanjaro 2.4 3.4 1.5 10.7 4.1 4.1 4.8 Lindi 3.7 2.5 - 3.0 3.7 3.0 3.3 Mara 6.7 5.0 3.7 5.8 7.6 8.0 7.6 Mbeya 15.1 0.0 - 9.0 11.1 12.6 13 Morogoro 4.6 5.7 - - 4.1 5.5 7.4 Mtwara 5.2 9.5 15.2 10.1 9.7 4,5 8 Mwanza 5.1 4.0 2.9 12.5 7.6 9.5 6.9 Rukwa 6.7 - - - 8.0 7.9 - Ruvuma 6.2 7.3 2.0 3.3 8.1 7.7 7.4 Shinyanga 6.1 6.4 14.7 11.7 8.5 8.5 8 Singida 2.7 2.8 0.0 - 5.6 3.6 6.2 Tabora 2.8 4.4 2.5 6.2 3.2 6.1 5.9 Tanga 7.1 4.4 - 10.4 5.5 8.0 7.3 All 5.3 5.9 6.9 7.8 6.8 7.6 8.5 72 4.35 Tables 4.4 and 4.5 show the prevalence of HIV infection among blood donors by region and gender for the period between 1992 and 1998. Table 4. 5: Prevalence (%) of HIV infection among female blood donors by regions, 1992 - 1998 Region 1992 1993 1994 1995 1996 1997 1998 Arusha 2.2 3.9 - 15.6 4.4 6.0 7.6 Coast 5.0 10.2 11.8 9.2 - 8.0 13.1 Dodoma 4.8 - - 0.0 - 9.2 6.2 D'Salaam 7.7 - 6.7 - 40.6 32.1 Iringa 8.1 17.6 20.0 7.8 12.4 16.4 15.1 Kagera 11,0 8.6 8.3 14.3 7.4 11.3 14.3 Kigoma 4.1 5.8 5.1 0.0 6.1 2.6 2.6 Kilimanjaro 2.2 1.8 2.9 0.0 5.9 8.1 8.1 Lindi .3 1.9 - 1.6 3.6 4.9 5.2 Mara 8.2 2.9 10.0 9.4 10.1 13.1 7.7 Mbeya 20.3 - - 11.4 13.8 14.4 15.1 Morogoro 5.7 10.8 - - 6,0 9.1 8.8 Mtwara 10.5 5.7 0.0 5.6 10.5 - 23 Mwanza 5.7 8.0 5,0 0.0 8.5 11.8 9.5 Rukwa 0.0 - - - 8.8 - - Ruvuma 6.4 6.7 2.1 6.1 10.5 12.7 12.2 Shinyanga 10.0 21.6 33.3 0.0 14.9 14.9 14.6 Singida 4.5 4.6 0.0 - 5.8 5.2 7 Tabora 2.7 5.8 0.0 12.9 3.2 7.7 9.5 Tanga 7.0 5.9 - 20.8 7.0 13.6 11.9 All 5.9 6.2 4.8 9.8 8.2 11.6 11.8 4.36 Prevalence of HIV infection among blood donors shows some specific difference with regard to age and sex. Higher prevalence of HIV infection is seen among females than in males of the same age group. The prevalence across the age group for male ranges between 5.2% for the age group 15 - 19 and 10.1% for the age group 30 - 34. For female the range is 7.8% and 13.2% for the age groups 55 and above and 30 -34 years respectively. 73 Table 4.6: Age-specific prevalence (%) of HIV infection among male blood Donors (1991 - 1998) Age 1991 1992 1993 1994 1995 1996 1997 1998 15-19 3.2 3.7 3.9 2.4 5.3 4.4 4.5 5.2 20-24 5.0 4.9 5.8 2.4 5.8 5.9 4.9 6.8 25-29 6.7 6.0 6.1 5.8 7.2 7.4 7.2 8.5 30-34 6.4 5.8 6.2 5.4 7.7 7.9 7.3 10.1 35-39 6.1 5.6 6.5 9.8 7.8 7.7 7.4 9.8 40-44 4.8 3.9 5.1 0.0 5.9 6.3 6.6 9.1 45-49 4.5 4.2 4.9 7.4 5.8 5.7 5.6 8.4 50-54 4.4 2.6 4.3 0.0 3.5 5.6 4.8 7.1 55+ 4.0 2.3 5.2 12.5 2.5 4.4 5.9 8.2 Total 5.8 5.3 5.9 4.8 6.7 6.9 6.0 8.5 Table 4.7: Age-specific prevalence (%) of HIV infection among femaleblood donors (1991 - 1998) Age 1991 1992 1993 1994 1995 1996 1997 1998 15-19 4.9 4.2 2.9 5.6 5.3 6.3 6.7 8.8 20-24 7.7 7.2 7.5 5.4 9.4 9.8 10.2 11.3 25-29 8.7 6.6 7.2 7.1 11.6 10.1 11.0 13 30-34 6.5 5.7 6.6 6.9 10.0 9.3 11.0 13.2 35-39 4.8 5.7 6.7 10.1 8.8 9.3 12.1 12.5 40-44 6.3 3.6 1.7 5.4 7.6 6.0 9.6 10.3 45-49 3.4 4.4 3.7 7.5 4.8 5.5 8.2 9.8 50-54 5.6 5.4 5.9 6.2 *6.3 5.6 11.2 8.8 55+ 6.7 4.2 5.3 3.3 *16.7 7.1 7.6 7.8 Total 7.2 5.9 6.3 6.9 9.2 8.7 9.7 11.8 The Way Out 4.37 As shown, HIV/AIDS is a multisectoral problem both in terms of its causes as well as its solutions. Therefore to get rid of the problem it 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. 4.38 The war to stem out HIV/AIDS must be fought on three fronts: (1) curative, (2) preventive and (3) promotive activities. 4.39 It is a well known fact that so far there is no cure for AIDS. However curative care is still an important frontier in the war because AIDS is not a specific disease but rather a conglomeration of opportunistic diseases resulting from HIV/AIDS. While death is an obvious end with an AIDS patient, medical care addressing the opportunistic diseases but more realistically meant to relieve pain and delay death is an important and necessary service. Research aiming at finding treatment or vaccine is also an important aspect of the medical or curative frontier. 4.40 Until the time when medicine and or vaccine is identified, preventive activities remain to be the most important frontier in the endeavor to contain the HIV/AIDS problem. Prevention involves a great range of activities including 74 programs for proper treatment of sexually transmitted diseases (STDs), programs for interventions aimed at effecting sexual behavior change and programs for activities aimed at raising social economic prosperity reducing poverty as an important influencing factor to the negative sexual behavior. 4.41 Tanzania has adopted the Medium Term Plan (MTP) III as a comprehensive multi-sectoral program for HIV/AIDS control. Without going into details of what is involved, MTP III is a multi sectoral anti-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 frameworks such as the Development Vision 2025, The Poverty Eradication Strategy, the Poverty Reduction Strategy under HIPC initiative will all assist in mobilizing political support and the masses for participating in activities that will eventually contain the spread of HIV/AIDS. Some important constraints to consider: 4.42 Both MTP III and Vision 2025 were passed before end of 1999. But their effective implementation is yet to begin. While the detailed implementation plans are still under preparation, implementation work will require massive resources particularly budgetary resources and the supply of those resources is the most challenging problem being faced. 75  5. MTEF FOR THE EDUCATION SECTOR 5.1 INTRODUCTION An Overview of the Education Sector 5.1 Since independence in 1961, Tanzania has made deliberate and concerted efforts to invest in education. In the first years of the independence thrust was geared at training Tanzanians to replace expatriates in managerial, technical and professional roles. Subsequent plans were targeted at achieving substantial self-sufficiency in manpower by the 1980s. Currently, a substantial amount of foreign technical assistance co-exists with the growing problem of unemployed university graduates in the formal sector. Despite high priority given to the development of education over the years, the overall quality of and equitable access to education have been declining. Education reforms at various levels have to contend with these nagging issues. 5.2 Education as a key input for social, economic, scientific and technological transformation has remained underdeveloped. Demands of the 21st Century require that for individuals to be able to live and work effectively they should be properly educated and trained in science and technology. This is a major challenge for the education sector today. The Tanzania Development Vision 2025, targeting at enabling the majority of our people to improve their social welfare and contribute significantly to economic development, cannot easily be met without fundamental scientific and technological developments. The 20/20 initiative in the budgetary and planning processes of mobilizing additional resources, is also constrained by financial over dependency, unstable economy and shift of priority from issues of social justice, equality and equity to issues of efficiency, effectiveness and good governance. However, in the light of HIPC and PRSP initiatives, the Government is determined to revive and improve the provision of social services. 5.3 Despite the constraints and the shift of emphasis, education remains the dominant agent through which the nation can hope to achieve the macro-economic objectives as it enables people to access and enjoy their human rights, particularly the right to social security, the right to development and the right to minimum comfort. Despite the complex economic and social development processes in the country, all evidence suggest that without quality education the process of development can be seriously jeopardized. In view of this, a number of policy reforms and strategic programs have been initiated and are at various stages of implementation. 5.4 In recent years there has been two major reforms in the education sector, whose macro objectives include: an increased awareness of the importance of reducing poverty; a growing recognition of the importance of the social sector in poverty reduction; a move towards decentralization of decision making over the use of public funds; and the availability of enhanced public financial management systems. 5.5 These developments lie behind two sector initiatives - the Education Sector Development Program (ESDP) and the Local Government Reform Program (LGRP which determine how the sector should be structured and financed. The LGRP, for 76 example, shifts the responsibility for the management and allocation of primary education sub-sector resources to local authorities, a move intended to enhance efficiency and effectiveness in the provision of education services. 5.6 The education sector has formulated several policies including the Education and Training Policy, Higher Education Policy, Science and Technology Policy and Technical Education Policy all of which have triggered the development of Education Sector Development Program (ESDP). The ESDP provides for an opportunity to address issues and problems of uncoordinated development programs/projects and strengthens sector management by bringing all donor and government funding capital and recurrent within a single planning and implementation framework, in support of an agreed sector strategy. 5.7 In both the Education Sector Reform and Local Government Reform initiatives the importance of quality and quantity is emphasized. The quality of education includes the relevance of the curriculum, the nature and the environment of teaching and learning. Education Financing 5.8 Financing of education in Tanzania is a shared responsibility among a number of stakeholders including the Central Government, Local Authorities, development partners, NGOs, communities and parents. Private contributions are another source of funding mainly in terms of construction of facilities and the running of private owned schools. Virtually all recurrent costs related to personal emoluments are met by the Central Government 5.9 Over the years, the concern of the Government has been how to expand education provision while at the same time consolidate and improve its quality under conditions of severe budgetary constraints. The current macro and sectoral policies focus on the enhancement of partnerships in the provision of education and training and identification of priority areas to concentrate on. Further, the policies advocate broadening of the financial base for education and training through more effective control of government spending, cost sharing and cost recovery. 5.10 International aid agencies have provided significant financial support to the education sector. These have included DANIDA, NORAD, GTZ, Sida, Ireland Aid, JICA, DFID and VLIR. The UN agencies such as UNICEF and UNESCO have been supporting this sector since independence. Multilateral agencies such as the European Union (EU) and the World Bank have also increased support to the education sector. General Trend of Education Financing 5.11 The basic education sub-sector is mainly financed by the Central Government, followed by external donors and parents. About half of secondary education is also financed by the Central Government followed by parents in the form of fees and direct student costs such as uniforms and exercise books. The private sector finances the other half. Teacher training was wholly financed by the Central Government for recurrent expenditures until 1996 when cost sharing was introduced. 5.12 Donor contributions in the education sector appear to be increasing, with growing priority given to basic education and limited support for secondary and 77 teacher training. Nevertheless, communities, individuals, NGOs and CBOs have shown greater interest in supporting secondary education. 5.13 Overall, the financing burden of education has gradually become a shared responsibility between the Government and the households. Apart from the UPE rate of Tsh. 2,000 per child per annum, the household is burdened by other costs which include exercise books, uniforms, writing materials, monthly test expenses, and costs for remedial teaching. The household costs are informal, estimated to average Tsh. 35,000 to Tsh. 40,000 per child per annum in rural areas and much higher in the urban areas. 5.14 A number of initiates are under consideration to increase the sources of funds in the sector including: a national education levy; household involvement in site construction/rehabilitation of classrooms and teachers houses; contribution to a revolving fund for textbooks, and a contribution to the cost of school inspection and District Education Trust Funds. 5.15 The recurrent expenditure for higher education is mainly financed by the Central Government with main allocation concentrated on Personal Emoluments (PE) and student direct costs and less attention to other charges (OC). Since the financial year 1992/93, the Government introduced cost sharing implemented in three phases. In Phase I students paid for their own transport costs, and in Phase II they paid for caution money, union fees, food and accommodation in addition to the phase I cost elements. The costs of tuition remained a government responsibility and therefore a loan scheme was introduced to access students to funds. Phase III policy will involve contribution by students/parents in partial payment of the remaining costs and tuition fees, examination, books, field and stationery allowance and special requirements. 5.16 Both phases I and II raise concern that: (i) the absence of a loan recovery mechanism makes it difficult to collect these funds; (ii) the belief of "free" university education still prevails in the public and therefore parents and students are not ready to contribute to the cost of university education; and (iii) the payment of these loans is difficult due to increased unemployment after graduation. 5.17 Furthermore, for several years the Government has not funded research costs in higher education which is equally important leaving it more to the donor community including financing the cost of research and other development costs. 5.18 The public and private sector have supported higher education development. For example, students fellowships have been established in the University Faculties to facilitate studies and to bridge the gap between the industries and the universities. 5.19 Higher learning institutions also introduced private sponsorship as a means of increasing enrolment while at the same time lessening the financial burden to the government. By 1999, 186 students and 21 at the Sokoine University of Agriculture (SUA) had been enrolled under private sponsorship in the University of Dar es Salaam and its affiliated institutions. This number is expected to increase in the coming years. The private sector has also been invited to invest in university education. For example the NSSF has agreed to construct and develop infrastructure at the UDSM campus. 78 Context of Reforms 5.20 The various institutional and operational weaknesses in the provision of priority social services (education, health, water, agriculture and roads) have prompted the Government to institute reforms, which include more systematic planning and higher priority in budget allocations. As part of the planning processes, the PER working groups (WG) were charged with the responsibility of carrying out detailed sector MTEFs for each priority social sector. 5.21 The Government has been introducing a series of improvements to the planning, budgeting and accounting processes, which are being brought together under the Medium Term Plan and Expenditure Framework (MTEF) approach. The MTEF is bringing together various reforms such as the Rolling Plan and Forward Budgeting (1995) and the Performance Budgeting which was introduced as a pilot in 1998 and built in the Annual Report and Service Improvement Plan (1999). The increased emphasis on performance has been strengthened through the preparation of strategic plans and programs. The MTEF approach requires prioritized three-year integrated (Recurrent and Development, Government and Donor) estimates based on clearly defined performance indicators within a strategic plan. 5.2 REVIEW OF EXPENDITURE PERFORMANCE Recurrent Expenditure: General Trend 5.22 Total real government expenditure has increased over the last 10 years. Per capita expenditure also increased despite a population growth rate estimated at 2.8%. Average share of 24.2% of government recurrent discretionary expenditure goes to the sector. 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%). Recurrent Expenditure by Sub-sector 5.23 Between 1993 and 1998 there has been a substantial reallocation of public expenditure in the education sector in favour of primary education. The share allocated to primary education rose from 51% (1993) to 67% in 1998, falling slightly to 62% in 1999. 5.24 Allocation to secondary, teacher training and administration have all fallen over the period. Secondary education received 7% of the sector budget in 1999 compared to 15%, six years earlier, a reduction of 53%. Table 5.1 Share of Actual Recurrent Budget Expenditure 1992/93 to 1998/99 92/93 93/94 94/95 95/96 96/97 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 Training 0.05 0.04 0.03 0.02 0.02 0.03 0.02 Higher and Technical 0.20 0.23 0.20 0.21 0.20 0.17 0.24 Administration and 0.09 0.07 0.05 0.05 0.04 0.05 0.05 others Total 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Source: Basic Education, PER 2000 79 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 a slight improvement in 1999. Pattern of Recurrent Expenditure 5.25 In primary education, personal emoluments have averaged 96% of total government recurrent expenditure since 1995. In 1999, salary expenditure per primary pupil was Tsh. 19,230 while non-salary expenditure was only Tsh. 744. Thus personal emoluments are increasingly crowding out expenditure on other charges (for textbooks, teaching materials etc.) in primary education. In secondary education, personal emoluments have averaged 63% of total government recurrent expenditure since 1995. In 1999 salary expenditure per student in public secondary schools was Tsh. 53,575 (teachers and non-teachers) while non-salary expenditure per secondary school student was Tsh. 32,091. 5.26 In teacher training, personal emoluments have averaged 69% of total government recurrent expenditure since 1996. In 1999, salary expenditure per student at teachers training colleges was Tsh. 277,728 (teacher and non-teachers salaries), while non-salary expenditure was Tsh. 124,584. The sub-sectoral expenditure pattern, distinctly skewed in favour of salaries, has had a damaging impact on the service delivery and quality of education at all levels. The low enrolment rate as manifested in a fall of GER from 78% in 1997 to 77% in 1998 and low achievement in national exams etc. may be attributed to this. Contribution from Development Partners 5.27 In real terms, development expenditure on education appears to be increasing, albeit at low levels, considering the sector's share of the recurrent budget. Although there are some questions with regard to the full capture of the foreign development expenditure in government accounts, a significant portion of foreign expenditure is transferred by donors directly to districts. The data shows that of the Tsh. 11,513 Table 5.2 Development Expenditure on Education (in Tsh. millions) 1995/96 1996/97 1997/98 1998/99 Total Education Development Expenditure 1,736 3,854 6,630 11,513 Local 456 1,555 1,600 Foreign 3,398 5,075 8,250 Education share of total development budget 4.2% 2.7% 2.7% 7.6% Primary 519 1,267 2,294 6,166 Secondary 285 141 1,934 1,141 Teacher Training 7 93 339 465 Higher and Technical 585 1,818 611 2,324 Administration 340 536 1,453 815 Prinary 30% 33% 35% 54% Secondary 16% 4% 29% 10% Teacher Training 0% 2% 5% 4% Higher and Technical 34% 47% 9% 20% Administration 20% 14% 22% 7% Local share of total 12% 23% 14% Source: Basic Education, PER 2000 80 million or 8% of the total (i.e. government and donor) development budget was spent on education in 1999, the largest share going to primary education, followed by higher and technical education. Mobilisation of Communities and Parents in Financing Education 5.28 For some time, the financing burden for the education sector has been shifting from public to private sources. It has been established that direct payments by parents constitute the largest single source of financing for primary education. Parents pay not only UPE fees (Tsh.2,000 per child), but there are also direct costs to parents i.e. contributing to school buildings, examination expenses, and sports on annual basis. Indirect costs are much larger and include a number of items such as (unit costs are estimated): uniforms (2 pairs at Tsh.6,000 each); 1 pair of shoes (Tsh.6,000); pencils (Tsh.1,000); school bag (Tsh.3,000) and exercise books (Tsh.3,000). 5.29 The list indicates that parental expenditure on education could be as much as Tsh.30,000 per primary school child per year. This compares with average recurrent expenditure per primary pupils of around Tsh.20,000 by the Government. In other words, on average, parents spent Tsh.68 for every Tsh. I spent by the Government. It seems that parental financing of primary education exceeds that of the Government by ratio between 1.5 and 2. With a GDP per capita at approximately Tsh.180,000, the direct cost of sending one child to a primary school (Tsh.35,000) represents 19% of average annual income, and this represents a substantial burden for the poorest families. 5.30 For the secondary education sub-sector the following are the main estimated contributions per pupil: Fees (Tsh.40,000 at a day school, Tsh.70,000 at boarding): uniforms (Tsh.19,000); and Exercise books (Tsh.9,370). When transport and other costs are added, the estimated direct costs per pupil are Tsh.93,000 per annum. This compares with per pupil recurrent expenditure by government of around Tsh.85,000 in 1998/99. Thus even in public secondary schools, the ratio of parental to government recurrent financing is about 1:1. 5.31 For the teacher training sub sector, the estimated annual government funding of around Tsh.400,000 per pupil (1998/99) compares with student contributions of approximately Tsh.240,000 per year. The uncertainty surrounding teacher employment as a result of government's restrictive policy presents an investment predicament. Other Sources of Financing District Education Trust Funds 5.32 Under ESDP, each district is required to establish a District Education Trust Fund primarily for the financing of education activities. Despite the inadequate revenue sources, a number of districts have established Trust Funds, for example Morogoro Rural, and Mufindi. Education Levy 5.33 The Education Sector Development Programme recognises the fact that it is not easy for the government and parents alone to shoulder the burden of education financing. Efforts have to be made to identity other stakeholders and beneficiaries, 81 especially the business community and graduates who have enjoyed benefits. An education fund is in the offing, independent of the government budget and by enlisting the participation of education umbrella organisations. Current sources of funds envisaged include: raising rates on present fees; levying goods and services which are capable of producing good results when big numbers and nominal rates are used; levy contribution by beneficiaries of education like the industrialists, investors, and consumers of education services. It is envisaged that the fund would serve the resource mobilisation function and the grant and resource allocation function. The management of levy contributions has been difficult and the impact of the exercise is difficult to assess. Management Issues Receipt of Funds 5.34 Execution of the recurrent budget occurs through the following mechanisms: (i) subventions from the Ministry of Finance to district councils to fund recurrent expenditure requirements with respect to primary education. Subventions are made in two tranches each month, one to meet personnel emoluments, and the other for other charges (OC). Treasury has undertaken to 'protect' these allocations and ensure that budgeted amounts are received in full. The tracking study confirmed that in the sample districts monthly subventions for personal emoluments were received in full. (ii) Disbursements via MoEC for centrally procured goods and services (mainly examinations). Subventions were received and used accordingly to set, print, distribute, mark and process- examination papers in 1997/98 and 1998/99. (iii) Subventions on Higher Education, were received to facilitate OC, and PE. Subvention for students direct costs were issued with specific instructions. Funds for loan to students were received separately at MSTHE and sent directly to the institutes. (iv) Development expenditure (e.g. for classroom construction) via the regional administration. Less than 50 per cent of budgeted allocations for local government projects were funded in 1996/97 and 1997/98. The tracking study found that funds were received intermittently, and therefore there is a need to establish objective criteria in the allocation of funds. Although there was less allocation for development activities for Higher and Technical Education in 1995/96 and 1996/97, the condition improved from 1997/98 to date. The problem at hand is the monitoring of these projects. (v) Funds from donors may be channelled through the MoEC or disbursed directly to districts. The tracking study found that donor disbursements represented a significant portion (63 per cent) of OC disbursed by the Central Government, and that direct donor contributions appeared to fund better off districts. Donor contribution to the universities has been channelled through MSTHE. NORAD, SI]DA/Sarec and VLIR have been funding both research, postgraduate 82 studies and construction and rehabilitation works. The contribution of donors is four times that of government every year. Use of Funds 5.35 Regarding parental contributions, the study found that district councils retained 57 per cent of universal primary education levies (UPE fees are retained at school level). On the other hand no districts were found to be funding education activities from own sources. Most teachers are paid in full and on time except those located away from district headquarters who experience delays in receiving payments, and often have to spend time (3-10 days per month) chasing salaries. Around half are owed arrears. 5.36 Subventions from government for other charges are supposed to be used in four priority sectors, with the highest amount (68 per cent) going to education. The results of the study suggest significant diversion (with a large standard deviation) of these funds away from priority sectors. Performance Indicators in Basic, Secondary, Teacher Training, Higher and Technical Education. 5.37 This section looks at how the education sector has performed over the past six years. In general, the performance of the basic education sub-sector has declined and that of secondary education has improved even though 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. Basic education 5.38 The basic education sub-sector includes the following: Pre-primary education: Not much has been done to develop this sub-sector and it receives little funds from financiers. The main source is from the community themselves whereby these pre-primary schools are located. Other sources are non governmental organisations (NGOs) and parents. 5.39 Primary education: The expenditure in the primary education sub-sector has been rising in real terms over the past five years. Despite this increase in resources, the performance of the sub-sector has not improved. Table 5.3 gives a summary of key performance indicators in the past twelve months and contrasts these with the average of the past five years. In terms of efficiency terms the sub-sector has experienced falls in gross and net enrolment against the past five years average. Primary school completion rates, too, have fallen. However, the transition rates from primary to secondary levels have been rising. These are recognised as key indicators of efficiency within the sector and the continued decline of some is a source of concern. Nonetheless, there has been an improvement in total enrolment and in the pupil/teacher ratio (PTR) and a real increase in non-salary expenditure per pupil. In effectiveness terms the sub-sector is also under-performing. Results from the primary school leaving examination show a decline in performance between 1997 and 1998. This fall is particularly marked among girl students. 5.40 Adult education: The sub-sector has shown a remarkable decline in enrolment. Measures are to be taken to revive and develop the sub-sector. The 83 Development strategy is to expand Integrated Community Based Adult Education (ICBAE) and Complementary Out- of school Basic Education in Tanzania (COBET) These two programmes target the adults and the out of school youths respectively. The piloting of the two programmes in some districts (Masasi & Kisarawe) for COBET and Sengerema, Morogoro (R), Lushoto and Moshi (R) for ICBAE has shown a remarkable success. The sources of funding for these programmes include the African Development Bank and UNICEF. Table 5.3 Performance Indicators in Primary Education 5 years average Performance in Government (1993-1997) 1998 target (by 2003) Total government spending (Tsh. bn) 74.49 74.84 Total enrolment 3,943,579 4,042,568 Pupil-teacher ratio 37 39 45 Gross enrolment ratio 78% 77% 85% Net enrolment ratio 58% 57% 70% Completion rate SI-SIV 87.3% 86.8% 95% Completion rate SI-SVII 68% 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 1 Transition rate 15.2% 15% 20% Drop out rate 6.6% 6.6% 3% Primary School Exam Passes- boys 26.32% (1) 25.9% 60% Girls 14.01% (1) 13% 60% Total 20.17% (1) 19.4% 60% Source: Basic Education PER 2000. Figures for 1997 only. 5.41 Special education: The sub-sector targets the handicapped youths and children. Education is provided to the handicapped at primary, secondary and higher education levels. In general, special education has attracted the attention of many people and seems to be a cornerstone of education. Currently the major source of funding is the Government of Tanzania. 5.42 Secondary Education: The secondary education sub-sector, in contrast appears to be strengthening its performance. Table 5.4 shows substantial improvement in the PTR, survival rates, and examination results. The fall in non- salary expenditure is less than that in total expenditure showing improved balance of the PC/OC ratio). On the other hand resource availability in the sector is declining. In both efficiency and effectiveness terms, therefore, the sector seems to be improving. Table 5.4 Performance Indicators in Secondary Education 5 years average Performance in (1993-1997) 1998 Total government spending (Tsh. bn) 8.67 8.49 Total enrolment 206,845 226,903 Pupil-teacher ratio 18.06 19.41 Survival rate Fl-FIV 77.8% 94%(1) Survival rate FV-FVI 14.4% 27%(l) Non-salary cost per pupil (Tsh) 12,091 11,480 Total cost per pupil (Tsh.) 39,813 33,098 Form Four Exam (pass at I-III) 23.65% 29% Form Six Exam (pass at I-III) 71.42% 75.80% Source: Basic Education PER 2000 84 5.43 The broad efficiency picture for secondary education is, however, complicated by the growing importance of private schools. Although public investment in the sector has fallen, private sector funding has increased, nearly half of all secondary schools in Tanzania are private, against less than 1% of primary schools. Thus, the improvement in the efficiency of the sector should really be judged against changes in total funding of the sector. 5.44 The teacher training sub-sector in Tanzania is in a difficult position. The probable shifts in the medium and long-term demand for teachers has created a need for new approaches to ensure that efficiency gains are maximised. In the five year period 1993/1997, Tanzania's teacher training colleges produced 32,500 teachers mostly grade A teachers, against an estimated demand of 33,523. Table 5.5 shows that the sector has undergone significant transformation in 1998 and student numbers have halved. But the sub-sector has been unable to respond appropriately to the fall in student enrolment, and efficiency has plummeted. The staff/student ratio has halved over the past five years and now stands at an unacceptable 7 students per staff member. Teacher Training Table 5.5 Performance Indicators in the Teacher Training Sub-sector 5 years average Performance in 1998 (1993-1997) No. of students 14,179 6,614 First year students 5,891 1,838 Percentage of first years 41% 28% Students per college 394 189 First year students per college 163 53 Final year student as a percentage of all students 47% 28% Successful graduates per college 203 87 Students per staff member 14 7 Staff 1,060 940 Number of colleges 36 35 Source: Basic Education PER 2000 Higher and Technical Education 5.45 There has been a slight improvement in the staff/student ratios, from 1:4 in 1993/1994, an average of about 1:6 by 1996/97. Student ratio for UDSM main campus grew from 1:5 in 1993/94 to 1:8.2 in 1998/99 whereas MUCHS grew from 1:2 in 1993/94 to 1:3.5 in 1998/99. Faculties of Commerce and Management, and Law at UDSM have equalled or exceeded the international average of 1:15. Technical Colleges have experienced stagnant growth due to unavailability of resources to expand their infrastructure. The Arusha Technical college had an enrolment of 485 students in 1994/95 and it fell to 444 students in 1998/99. As far as growth is concerned, there has been notable growth in all colleges. In the 1993/94 for example UDSM has grown from 3,031 students to 5221 in 1998/99. However, the question of gender balance is still an issue to be addressed. 85 Table 5.6 Performance indicators in public higher and technical education sub sector 199311994 199611997 1998/1999 Universities* Tech. Colleges Universities Tech. Universities Tech, Colleges Colleges Total Number of 4001 1760 5171 1827 6379 1831 students Staff student ratio 1:24 1:8.5 1:6.4 1:8.2 1:6.1 1:9.4 Total number of staff 1115 206 805 222 1049 193 Number of 2 3 2 3 2 3 Universities * These are selected public universities - UDSM and SUA 5.3 REVIEW OF SECTOR PRIORITIES The Tanzania Development Vision 2025 5.46 The establishment of 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 changing environment. 5.47 Consistent with broader development priorities, the main thrust of ESDP is to ensure growing and equitable access to high quality primary and adult literacy through facility expansion, efficiency gains and efficient supply and use of available resources. Through the Vision 2025, Tanzania aspires to attain high quality livelihood, peace, stability and unity, good governance, a well educated and learning society and a competitive economy capable of producing sustainable growth and shared benefits. In the light of this the education system will have to be restructured and transformed qualitatively, with focus on promoting a science and technological culture from its lowest levels, providing a high standard education to all children between ages 6 and 15. Basic sciences and mathematics will be accorded great importance in keeping with demands of the modern technological age while not losing sight of the humanities. 5.48 Under ESDP, poor communities/groups of the population will be targeted to ensure access to basic education. The resource base will be broadened to ensure adequate funding for education from primary to university level Sector Development Program ESDP Main Problems 5.49 Low Enrolments Rates: The current Net Enrolment Ratio (NER) for primary education is 57%. Late enrolment generally has an adverse effect on performance and this has a particular impact on girls, who score on average ten points lower than boys in the Primary Seven Leaving Examination, thereby restricting their participation in secondary education. It also leads to overcrowding in primary schools, which undermines forward planning. The reasons for low enrolment are complex and include cultural and economic factors. In urban areas, shortage of 86 classroom space as well as appalling classroom environment is thought to be a particular disincentive to enrolment. 5.50 Low Quality: In primary schools, there has been a deterioration in the quality of education. Illiteracy rates have risen and are thought to be growing at around 2% per annum. Only the top ten percent of students from primary schools are selected to join secondary schools, the top ten percent selected, only 30% achieve satisfactory pass grades (Division I- III) at form IV National Examination. 5.51 Low Transition: High drop out and repetition rates mean that a third of children entering the primary system do not complete standard seven, leading to low internal efficiency. In effect, for each student who completes primary school, an additional 2.6 years (input/output ratio) is taken over and above the 7 years which would normally be expected. This equates to a cost which is 37% higher than would be the case if schooling was completed in seven years. Low transition to secondary schools is also likely to act as a disincentive to achievement at primary level. 5.52 Inequitable provision of services: The ongoing school mapping exercise has revealed that the quality and quantity of education services declines with distance from regional and district centers. Variation in performance between regions also suggests that there is inequitable distribution of education services between regions. There is a concern, also, about differential performance rates between girls and boys which prevent female access to further studies and job opportunities. Just about 2% of girls achieve a division I pass in the Form Four National Examination against 10% of boys. 5.53 High costs: The Tanzania education system is expensive compared to that of Uganda. For example, Tanzania spends twice as much per pupil on its secondary education, and around 25% more on primary schooling. With the vast majority of education spending going to personal emoluments, it is clear that the major source of these high costs is the pupil/teacher ratio (37:1) which is well below the efficient level. In Tanzania, teachers undertake only 17 hours of classroom teaching per week, this is about half to a third of international norms. The higher and technical education sub sector is not different either. Low student enrolment has resulted in low capacity utilization and low staff/student ratio. This has eventually led to high costs in running the institutions. The staff/student ratio averages 1:4 in higher learning institutions. 5.54 Parental contributions and effective demand for education: There is concern that the level of parental contribution to primary and secondary education may have reached a peak. Observers, however, note that additional contributions may be available if the performance of schools improves, justifying additional investment. Quality control in higher education 5.55 With the current on going liberalization policy on higher education, the private sector has been allowed to provide higher education. The government has also seen the importance of ensuring quality in the provision of higher education. There has been dissatisfaction from the public on decreasing quality and the types of courses offered at the universities. Quality deterioration is also due to the teaching methods, too specialized course programs and lack of flexibility. This is being 87 rectified by liaison with industries as well as review and revision of the university curriculum. Enrolment and patterns of expansion 5.56 By 1999/2000, UDSM had an enrolment of 6,095 undergraduate students. SUA had an enrolment of 1,436 students. OUT had 6,738 students though it takes very long for one to graduate and the completion rates are low. The eleven operating private universities have an enrolment of 2,350 students. The university system had therefore an enrolment of 16,619 students in 1999 compared to 8,285 in 1995/96. This means a low participation rate for a population of 32 million people. 5.57 The technical colleges of Dar es Salaam, Arusha, Mbeya are characterized by stagnant expansion. Enrolment fluctuated from 1,827 in 1996/97 to 1831 in 1998/99. There is an imbalance between types of skills and levels such as engineers/technologists, technicians and craftsmen. The ratio is 1:2:14 instead of the targeted 1:5:25 (international standards) 5.58 The demand for higher education is high compared to admission. The four institutions (UDSM, SUA, MUCHS, UCLAS) enroll a small fraction of the candidates. UDSM for example takes only 20% of the applicants. 5.59 The higher and technical education system experiences serious gender imbalances despite attempts to improve the situation. The proportion of female enrolment in higher education moved from 17.8% in 1994/95. There is also a big difference of enrolment between faculties/disciplines and within departments. This low intake has its roots in the whole education system right from primary and secondary education levels. 5.60 The enrolment of post graduate students is low. UDSM enrolment is 500 though it plans to reach 600 by this year 2000. This is due to the shortage of resources (financial, human and material) for research. 5.61 In 1998/99, the share of women among students was 23% at UDSM and SUA, 24% at MUCHS, and 8% in technical colleges. Review of Sector priorities 5.62 The ESDP defines clearly government priorities through a set of policies, which guide sector-wide development in education, that are consistent with the thrust of the Tanzania Development Vision 2025. The Sector Development Programme is a comprehensive undertaking involving many programmes that cannot be implemented all at once. The Medium Term Plan therefore tries to bring on board priority programmes that are logical bases as well as catalysts that strengthen the effective and efficient implementation of programmes. The Focus of the Medium Term Plan 5.63 The Medium Term Plan is aimed at the learner. All planned reforms and interventions are meant to improve the learning environment, enhance access and equity, quality revitalisation, and enhancement of learning achievement. The Education Sector Development Programme (ESDP) and the Local Government Reform Programme (LGRP) are guided by both macro and sector policies. The 88 LGRP shifts the responsibility for the management of primary schools to local authorities. This change has the potential to encourage the improvement in efficiency and effectiveness of education service delivery. The learner is, therefore, the focal point around which the ESDP, and the Medium Term Plan are built. 5.64 Prioritization: Prioritisation in any sector is inevitable particularly in the context of scarce resources while competing needs are numerous. The Education Sector Reform Program addresses sectoral problems within current resource constraints. Strategic decisions have been made in relation to the resource envelope and the envisaged activities to be undertaken during the plan period. The objective criteria of setting priorities have been mainly the learner and the teacher. The Thrust of the Medium Term Plan 5.65 The thrust of the Medium Term Plan is to enhance learning achievement. During this period the ESDP will address the following priorities: 1. To Improve Teaching-Learning Environment at All Levels. 5.66 Specific programs for implementation target all levels and concentrate on activities such as: constructions and rehabilitation of classrooms and equipping laboratories, teacher's quarters, supply of teaching and learning materials, enhancing teacher competencies through INSET/PRE-SET, reduction of the high drop-out rate of girls in upper grades; improve school inspection, support girl child from poor/disadvantaged groups, review of curriculum to make them more relevant, enhance research capacity, sensitize the community in gender and management of schools. 2. To strengthen the management capacity at national, district, institutional levels and adult education ceners to plan, implement, co-ordinate and evaluate education programs. 5.67 In this priority area emphasis will be put on promotion of sustainable management and improved co-ordination and evaluation of education programs at respective levels. Activities will include: capacity building in management and administration and financial management and target national and regional leadership, district executive directors, district education officers, district adult education coordinators, ward education coordinators, head-teachers/managers, principals of colleges, assistant head-teachers, school committees/boards, school inspectors. 5.68 Further management training on policy analysis, education planning, budgeting will be given to strategic planning officers in relevant departments in the sector. It will also involve strengthening of the monitoring and evaluation system for the entire education system. 3. To improve Education Management Information System (EMIS) 5.69 The current government policies of cost sharing, decentralization of education provision, shared responsibility and empowerment call for a macro level approach in planning and program implementation. Thus, it is important to study and analyze education provision situations and carry out needs assessments at district, community and school levels. Performance in the education sector is measured against a comprehensive set of indicators which is collected by MoEC/MSTHE from districts 89 and institutions. Specific programs to be implemented include: school mapping, teacher audit, rationalization of tertiary institutions, EMIS (linkage with other education institutions in the education sector and its affiliated institutes). 4. To control the spread of HIVIAIDS/STI through the education system 5.70 In Tanzania about 65% of the total population is below the age of 25 years. This group constitutes youths and children, the former being the majority. Young peoples' health has become a subject of increasing importance in Tanzania, both because of the better understanding of the importance of this age group in national development and because changing conditions of life and patterns of behavior continue to increase health risks for young people. This is specially true with regard to sexual and reproductive behavior and health. Unprotected premarital sexual relations among the youth is increasingly taking place giving rise to early pregnancies and childbearing, induced abortions in hazardous circumstances, sexually transmitted, infections (STI) and the new scourge of Human Immune deficiency Virus (HIV) leading to Acquired Immune Deficiency Syndrome (AIDS). 5.71 The in-school youth are potentially vulnerable to many risks including STI and HIV infection through early sexual intercourse combined with lack of knowledge of inherent risks and preventive measures. This situation gets worse when many of them drop out of school at relatively early ages, and have no reliable source of livelihood. The out-of-school youth are the most vital and economically active group. AIDS has already shown its impact on the individual, the family, the community and society in general. The multifaceted nature of the effects of HIV/AIDS has encroached domains other than health. As a result, everyone feels obliged to deal with the issue of HIV/AIDS/STI prevention and control. The provision of HIV/AIDS education to in-school youth at all levels of education system will control and reduce the spread of HIV/AIDS/STI. 5.72 Specific programs for implementation will involve: sensitization of the in- school youth at primary, secondary and post secondary levels and universities on the spread of HIV/AIDS, preventive measures of HIV/AIDS, train trainers of trainers on HIV/AIDS in education and training institutions, institutionalizing HIV/AIDS guidance and counseling in schools (education and training institutions), train guidance and counseling personnel for students and workers at all levels of the ministry 5.4 EXPENDITURE PROJECTIONS 5.73 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. Table 5.4 shows the expenditure frameworks and action plans. 90 Table 5.7 The medium- term development expenditure framework and action plan 2000/2001 - 2002/2003 (in Tsh. million) PRIORITY PROGRAMME SPECIFIC ACTIVITIES INPUT/COST TIME FRAME Source of Funds A: Basic Education 2000/2001 2001/2002 2002/2003 Start Finish 1. To improve the teaching- Construct new class rooms 13,600.00 14,960.00 16,456.00 2000 On-going DFID learning environment at the 2. Rehabilitate existing 2,855.80 3,141.38 3,455.52 2000 On-going Royal Netherlands, Basic Education level classrooms Finland, Denmark 3. Construct teachers' houses - 4. Textbook supply 12,985.00 14,283.50 15,711.85 2000 On-going Royal Netherlands, EU, and other learning Sweden, DFID materials 5. Enhance teachers 5,013.28 5,514.60 6,066.07 2000 2003 Denmark, Royal competencies (INSET) Netherlands, Finland 6. Re-deploy teachers - - - 7. Expand COBET and 2,257.31 2,483.04 2,731.94 2000 2003 ADF, UNICEF ICBAE 8. Develop Teacher Resource 775.90 853.49 938.84 2000 2003 GoT Centers 9. Improve School Inspection 320.00 352.00 387.20 2000 2003 GoT Priority 1: Program Sub-total 37,807.29 41,588.02 45,746.82 2. To strengthen the Capacity Building in management capacity at Management and national, district, institutional Administration and Financial levels and adult education management at different levels centers to plan, implement, National and Regional 454.32 499.75 549.73 2000 2001 Denmark, Royal coordinate and evaluate leadership Netherlands, Finland education programs District level 4,460.40 4,906.44 5,397.08 2000 2003 Denmark, Royal Netherlands, Finland - Ward level 2,823.70 3,106.07 3,416.68 2000 2003 UNICEF - School level 1,020.80 1,122.88 1,235.17 2000 2003 UNICEF, Irish Aid Priority 2: Programme Sub-total 8,759.22 9,635.14 10,598.66 91 PRIORITY PROGRAMME SPECIFIC ACTIVITIES INPUT/COST TIME FRAME Source of Funds A: Basic Education 2000/2001 2001/2002 2002/2003 Start Finish 3.. To improve Education 1. School Mapping 2000 2002 GoT, UNICEF Management Information 2. Teacher Audit 2000 2003 EU System (EMIS) Priority 3: Program Sub-total 2,201.00 2,421.1 1,119.25 4. To control the spread of 1. Sensitize the in-school 44.00 48.40-53.24 - - - - HIV/AIDS/STI through the youth at primary, secondary education system and post secondary levels on the spread and preventive measures of HIV/AIDS/STI 2. Train TOTs on HIV/AIDS 34.72 38.19 42.01 2000 On-going GoT, UNICEF in education and training institutions 3. Institutionalize HIVAIDS 41.60 45.76 50.34- - - - guidance and counseling in schools 4. Train Guidance and 48.00 52.80 58.08 2000 2003 GoT, UNICEF counselors personnel Priority 4: Program Sub-total 168.32 185.15 203.67 Sub-sector total 48,935.85 53,829.41 57,668.40 92 PRIORITY PROGRAMME SPECIFIC ACTIVITIES INPUT/COST TIME FRAME Source of Funds B: Secondary Education 2000/2001 2001/2002 2002/2003 Start Finish 1. To improve the teaching- 1. Construct and furnish the learning environment at the new classrooms and secondary levels laboratories 2,492.16 2,741.38 3,015.51 2000 2003 ADF. GoT 2. Enhance teachers' competencies (INSET) 551.54 606.69 667.86 2000 On-going ADF 3. Textbook supply and other teaching-learning materials 321,87 354.06 389.46 2000 On-going GoT, ADF 4. Supply of Science Teaching Equipment to 200 780.00 858.04 943.85 2000 2003 ADF Community Secondary Schools 5. Support girls students from poor/disadvantaged families for secondary education 1,480.00 1,628.00 1,790.00 2000 2003 World Bank Priority Program I Sub-Total 5,625.61 6,188.17 6,806.99 2. To strengthen the management Capacity building in capacity at the secondary level to Management and plan, implement, co-ordinate and administration and financial evaluation education programs. management for: - Heads of schools (both public and non public) 155.00 170.50 187.55 2000 2003 GoT School managers of private schools - 88.52 97.37 2003 GoT - Heads of subjects departments 158.00 173.80 191.18 2000 2003 GoT - Librarians 24.00 26.40 29.04 2000 2002 GoT - Members of School Boards (both Government and Non-government) 8.00 120.00 132.00 2000 2003 GoT - laboratory Technicians 24.00 26.40 - 2000 2002 GoT GoT - School Inspectors 8.60 9.46 10.41 2000 2001 93 PRIORITY PROGRAMME SPECIFIC ACTIVITIES INPUT/COST TIME FRAME Source of Funds B: Secondary Education 2000/2001 2001/2002 2002/2003 Start Finish Priority Program 2: Sub-total 377.60 615.08 647.55 4. Control the spread of 1. Train Guidance and HIV/AIDS/STI in secondary Counselors particularly Heads schools of schools and their deputies --- 2000 2003 - 2. Conduct workshops for the TOTs - - 2000 2003 UNICEF, GoT Priority Program 4: Sub-total Sub-sector total 6,003.21 6,803.25 7,454.54 PRIORITY PROGRAMME SPECIFIC ACTIVITIES INPUT/COST TIME FRAME Source of Funds C: Teacher Training 2000/2001 2001/2002 2002/2003 Start Finish 1. To improve the teaching - 1. Enhance the teaching learning environment at the Teacher competencies of college tutors Training level (INSET) 1,381.89 1,520.08 1,672.09 2000 2003 GoT, SIDA 2. Improve PRESET programs 785.00 863.50 949.85 2000 2003 GoT 3. Develop the Teacher Education Master Plan 49.00 - - 2000 2001 UNICEF, SIDA 4. Rehabilitate Physical facilities 200.00 220.00 242.00 2000 On going GoT 5. Enhance Distance teachers Education 311.66 342.83 377.12 2000 2003 Sida Priority Program 1: Sub-total 2,727.55 3,000.23 3,800.23 2. To strengthen the management Capacity building in management capacity at the teacher training level and administration and financial to plan implement, co-ordinate and management for: evaluation education programs - Principals of Teachers' Training Colleges (both government and non-government) 2003 GoT 1.92 2.11 2.32 Managers of teacher training - - colleges (private) 4 PRIORITY PROGRAMME SPECIFIC ACTIVITIES INPUT/COST TIME FRAME Source of Funds B: Secondary Education 2000/2001 2001/2002 2002/2003 Start Finish Members of college boards - - - - Tutors 19.40 21.34 23,47 2000 2003 GoT Librarians - - - - - School Inspectors - - -_ -_- Priority Program 2: Sub-total 21.32 23.45 25.79 3. To improve Education Management Information System 4. Control the spread of 1. Train Guidance and Counselors HIV/AIDS/STI in Teacher Training ( Heads of colleges ,Deputies and Colleges. Matrons in Teachers' Training Colleges Sub-sector total 2,748.87 3,023.68 3,326.92 PRIORITY SPECIFIC ACTIVITIES TIME FRAME Source of Funds PROGRAMME INPUT/COST D: HIGHER 2000/2001 2001/2002 2002/2003 Start Finish EDUCATION 1: To improve teaching 1. Rehabilitate lecture 400 440 484 2000 On-going GoT and learning environment rooms and residential at all levels halls/ hostels 2. Construct lecture 60 66 72.6 2000 2003 GoT theatres 3. Provide funding for research activities 840 924 1,026 2000 On-going GoT, VLIR, Sida/Sarec 4. Construct multi- 800.00 880.00 968.00 2000 2003 GoT purpose science complex for the University of DSM Priority program 1: Sub-Total 2,100 2,310 2,550 2. Capacity building Training of academic staff 720 720 720 2000 2003 Sida/SAREC 95 PRIORITY SPECIFIC ACTIVITIES TIME FRAME Source of Funds PROGRAMME INPUT/COST D: HIGHER 2000/2001 2001/2002 2002/2003 Start Finish EDUCATION Priority Program Two: Sub Total 720 720 720 3. To improve Education Conduct survey/study on 300- - 2000 2001 GoT, World Bank Management Information rationalisation System Identify areas of 150- 2001 2001 GoT, World Bank rationalisation Rationalize Tertiary and - - 2002 2002 GoT, World bank Higher Education institutions (according to report) Rationalize staff 2,000 2003 2003 GoT, World Bank (according to report) Priority Program Three Sub-total 450 5,000 2,000 4. Control the spread of Train Guidance and 30 30 30 2000 On-going GoT .HIV/AIDS/STI Counselors in colleges and Ministry Headquarters Sensitize students and 30 30 30 2000 Ongoing GoT workers through workshops Priority Program Four: sub total 60 60 60 Total Priority Program sub-sector 3330 8090 5330 Total Sector 61,017.91 71,746.34 73,778.96 96 Resource Mobilization For Development Expenditure Table 5.8: Resource flow from donors year 2000-2001 (In Tsh. Millions) Name of Donor MoEC MSTHE Affirmed Pledged Affirmed Pledged I. World Bank 3,152.00 2. SIDA/SAREC 8435.86 3. DENMARK 2,209.52 4. The Royal Netherlands 3,126.36 5. Finland 1,341.92 6. UNICEF 2,026.04 7. ADF 4,450.48 8. DfID 13,600.00 9. Irish Aid 700.00 10. JICA 7,500.00 11. GTZ 962.00 12. EU 1,095.81 12,500.00 6,500.00 25,000.00 13. NORAD 25,000.00 716.14 TOTAL 53,785.99 39,338.00 716.14 1,520.00 GRAND TOTAL AFFIRMED 54,854,130.00; GRAND TOTAL PLEDGED 40,858.00 97 Table 5.9 Education Sector Medium-term Financing Framework 2000/01 - 2002/03 Development and Recurrent Funds (Excluding Salaries) YEAR DEVELOPMENT RECURRENT TOTAL FUNDS _____ ___ GOVERNMENT DONOR 2000 -2001 5,077.90 54,854.13 53,982.25 113,914.28 2001 -2002 7,794.63 52,802.34* 68,554.70 129,151.67 2002-2003 8,043.19 58,082.58* 90,765.01 156,890.78 TOTAL 20,915.72 165,739.05 213,301.96 399,956.73 98 Table 5.10 Summary of education sector medium term recurrent budget framework 2000/01 - 2002/03 (In million Tsh.) S/N SUB-SECTOR - SUB-VOTE ITEM 2000- 2001 2001 -2002 2002 - 2003 Required Allocated Required Allocated Required Allocated resources resources resources resources resources resource 1 PRIMARY EDUCATION 3001 Salaries 127,789.08 127,789.08 127,789.08 127,789.08 127,789.08 127,789.08 Examinations 1,289.80 1,054.69 1,354.30 1,395.05 1,408.47 1,998.50 Expenses Instructional 2,841.20 2,323.30 2,983.30 3,073.04 3,102.63 4,402.37 Materials Text books 3,399.70 2,780.00 3,569.70 3,677.10 3,712.49 5,267.70 Rehabilitation and 4,208.80 3,441.61 4,419.201 4,552.16 4,595.97 6,521.28 Maintenance School Mapping 0 1,164.00 0 1,222.2 0 Furniture and 2,020.10 1,65187 2,121.10 2,184,92 2,205.94 3,130.05 Equipment TOTAL 141,548.685 12'36 PRIMARY 468 140,20 141,708.63 142,814.58 149,108.98 2 SECONDARY 4001 Salaries 10,906.62 6.62 10,906.62 10,906.62h 10,906.62 EDUCATION Instructional materials 2,859.50 2,579.73 3,002.50 3,346.50 3,122.60 4,430.70 Textbooks 2,079.60 1,876.13 2,183.60 2,433.78 2,270.94 3,222.27 Rehabilitation & 2,491.90 2,248.W 2,616.5 2,916.2 2,921.16 3,861.09 Maintenance I Furniture and 252.5 265.1 295.47 275.7 - 91.2 Equipment TOTAL 18,590.12 17,838.37 18,974.32 19,898.65 19,497.02 22,811.88 SECONDARY 3 TEACER TRAINING Salaries 3,168.44 3,168.44 3,168.441 3,168.44 3,168.44 3,168.44 ___ __________ -____ Instructional materials -489.4 -- 441.52 513.91527 534.46 758.35 Textbooks 206 185.85 216.31 241.08 224.95 319.19 Rehabilitation & 247.3 223.1 259.7 289.45 270.09 383.23 Block Teaching 247.5F 223.28 299.91 334.26 311.9 442.55 I M~Paciece 99 TOTALTEACHER TRAINING 4,358.64 4,242.19 4,458.24 4,606.01 4,509.84 5,071.76 4 INSPECTORATE 2001 Salaries 880.82 880.82 880.82 880.82 880.82 880.82 Domestic Travelling 599.8 541.12 629.8 701.96 654.99 929.38 IRunning of Vehicles 300.2 270.83 315.2 351.31 327.81 465.13 TOTAL INSPECTORATE 1780.82 1692.77 1825.82 1934.09 1863.62 2275.33 RECURRENT 5 OTHERS Salaries 3659.611 3659.61 3659.61 3659.61 3659.61 3659.61 TOTAL 3659.61 3659.61 3659.61 3659.61 3659.61 3659.61 OTHERS 6 HIGHER AND TECHNICAL EDUCATION Salaries for HQ., 967.59 967.59 967.59 967.59 967.59 967.59 MTC,and TCA ___ _____ _________ Staff salaries 14,600.00 14,600.00 14,600.00 14,600.00 14,600.00 14,600.00 31 Others 488.52 488.52 488.52 488.52 488.52 488.52 Rationalization of 6,734.00 6,075.15 6,768.00 7,543.43 7,038.72 9,987.34 Institutions Improving Distant 5,050.00 4,555.91 5,075.00 5,656.45 5,278.00 7,489.03 Education improving of equality 5,050.00 4,555.91 5,075.00 5,656.45 5,278.00 7,489.03 in Education S- Students Loan 3,430.00 3,94.41 3,447.00 3,841,93 3,584.88 5,086.69 Scheme Provision of Industrial 1,755.00 1,583.29 1,763.600 1,964.99 1,833.52 2,601.61 Training Tecnical Education1,061.00 957.19 1,066.00 1,18.13 1,108.64 1,573.07 - -- - - - - - --__Improvement Foreign students 1,256.00 1,133.11 1,262.00 1,406.59 1,312.48 1,862.30 TOTAL HIGHER AND TECHNICAL 40,392.11 34,916.67 40,512.11 39,472.15' 41,490.35 52,176.18 GRAND 210,329.98 202,554.16 211,666.78 211,279.14 213,835.02 235,103.74 _______ -TOTAL_______ TOTAL 162,460.68 162,460.68 162,460.68 162,460.68 162,460.6 162,460.68 SALARIES _____ ____ __ __ __ NON SALARY EXPENDITURE 47,869.30 40,093.48 49,206.10 48,818.46 51,374.34 72,643.06 100 - --- TO'TAL Source: Budget Guidelines for the year 2000. NB: Staff salaries: These are salaries jr SUA, UDSM, UCLAS, MUCHS and OUT Others: These are salaries for NRC etc PERFORMANCE INDICATORS IN HIGHER AND TECHNICAL EDUCATION SUB SECTOR 5 years average 1993/1997 Performance in 1998 Universities Colleges Universities Colleges No. of students 3017 1788 4131 1758 First year students 405 219 429 227 Percentage of Ist year 13 12.2 10 12.9 Students per staff member 6.07 7 8.4 9 Staff 646 241 578 207.9 Number of Universities 3 3 3 3 Technical Colleges have experienced stagnant growth due to unavailability of resources to expand their infrastructure. The Arusha Technical college had an enrolment of 485 students in 1994/95 and it fe 101 6. MTEF FOR THE HEALTH SECTOR 2000/01 - 2002/03 6.1 INTRODUCTION 6.1 The Tanzania Health Sector has made remarkable progress since the 1967 Arusha Declaration. There were deliberate and concerted efforts directed towards investing in the health sector where emphasis was on rural health development. This was a strategy for equitable distribution of health services in the country. The impact of fair health facilities distribution can be explained by looking at health and population indicators that showed improvement in the health and family status for the country. Despite this improvement, progress changed particularly in the early 1980s when the country's economy was not performing well. This situation resulted in the overall decline in the quality of and access to health services reflected by the high infant and maternal mortality and morbidity rates. The Health System Network 6.2 The Tanzanian health network consists of about 4844 facilities that are well distributed across the country. 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 government district hospitals do not exist, the areas are served by voluntary agency hospitals that are supported financially by the government through subventions. 6.3 Analysis of disease (1995 Study) patterns and trends show that the burden of disease is mainly concentrated on communicable and preventable diseases that can be controlled through effective preventive and promotive health programs at District and primary level. 6.4 It was found that over 70 percent of life years lost in Tanzania are caused by the Top Ten major diseases such as Malaria, Diarrhoea, prenatal/Maternal conditions and HIV/AIDS related diseases. Malaria and prenatal/maternal conditions account for more than 40 percent (MoH, 1999). 6.2 HEALTH SECTOR REFORMS 6.5 Against this background, the ministry initiated and proposed major reforms in the sector to rationalize the roles and responsibilities in the provision and financing of the health services. The intention of reforms is to restore the lost credibility and ensure cost effective use of existing and future resources through emphasis in priorities on outcomes rather than outputs. Within a longer-term perspective, it is anticipated that the health services through these initiatives will be improved and deliver the expected services. This can only be achieved through having motivated staff, adequate supply of drugs and other medical supplies, dynamic and highly qualified professionals and sustainable resources made available from different sources. Within the context of health sector reforms, the government 102 redefines its role in the health care system from one of dominant provider to facilitator. The reform will focus on ensuring more transparent, cost-effective use of resources, and on improving delivery, quality and have impact of essential health care to the poor. However, it should be noted that, the health sector reform is embedded in the wider context of civil service and local government reforms. 6.6 Other areas of concern are the disproportionate amount of resources spent on personal emoluments (over 70%), at the expense of resources allocated towards the actual delivery of health services. In addition, the effectiveness, quality and sustainability of public health services, availability of financial resources to run the health services, the poor physical state of the public health facilities and equipment and the overall poor utilization of government health services are also of concern. 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. The Government of Tanzania has been exploring various options to address the critical issues affecting delivery of services in the health sector including rationalization of human resources. 6.3 HEALTH POLICY OBJECTIVES 6.7 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. Success in achieving this objective has required adequate solutions to the systemic problems that affect the delivery of health care. In the medium term, therefore a firm foundation will be built for the improvement in the quality of health care as well as for increasing access to health facilities. There is also a critical need for the effective implementation of measures that will help establish a broad enabling environment for improved health services. These measures must take into account factors that are external to the health system, such as cultural attitudes, values and the physical environment in which the population lives, which have an important bearing on health outcomes. 6.8 To achieve its overall objective, the Government of Tanzania aims to: Reduce infant and maternal mortality, morbidity and increase life expectancy through the provision of adequate and equitable maternal and child health services, promotion of adequate nutrition, control of communicable diseases and treatment of common conditions (For details read PER 1999 document). Ensure that quality health services are available and accessible to all in urban and rural areas within reachable distances; Move towards self sufficiency and equitable distribution of human resources by training all cadres required at all levels; Sensitize the community on common preventable health problems and improve capacity at all levels of society to assess and analyze problems and design appropriate action through genuine community involvement; 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, Create awareness through family health promotion that responsibility for one's 103 health rests squarely with the able-bodied individually as an integrated part of the family; Public/Private mix will be promoted in the delivery of health services. 6.9 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: Priority attention to improved access, equality and efficiency of primary health (district level) services, Strengthen and reorient secondary and tertiary services delivery to support primary health care services, 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. Implement a human resource programme to train adequate numbers of health staff to manage the services (primary, secondary and tertiary). Strengthen the national support systems for personnel management, drugs and supplies, medical equipment and physical infrastructure management, transport management and communication. Increased and varied financing sources for health care delivery and improved financial management. Increased private sector involvement in the delivery of public health services. 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 (i.e. transparent and accountability). 6.4 IMPLEMENTATION STRATEGIES 6.10 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 ideas behind these strategies are that: More resources will be injected into the health system and existing resources will be used efficiently; Resources will be distributed more equitably; Priorities, objectives and standards will be clearly defined and monitored; Managers at all institutional levels will have greater authority in the planning, allocation and use of available resources; Staff will be better motivated through improvements in the working environment; Drugs and essential supplies to be made available as required. 6.11 In order to implement these strategies, a phased three-year development program of work has been developed. The 1999-2000 Financial Year Action Plan was estimated to cost US$ 60 million. Through this plan GOT aims to: 104 Increasing its own resources to the health sector and protecting this commitment in spite of the pressure of structural adjustments. Through a number of mechanisms, develop and strengthen approaches to mobilize resources from the private sector and the population at large through user charges, community health fund and phased implementation of the National Health Insurance System. Introduce mechanisms of enhancing donor funding to the health sector through the Sector Wide Approach Program (SWAP); The implementation of the 1999-2000 Financial Year Action Plan has not been done effectively due the following reasons: the systems to operationalize and manage the funds were not ready in place as planned; The flow of funds from the Treasury has been erratic, particularly with regard to Other Charges (OC) and Development expenditures. The Ministry of Health by the end of February has received only Tshs.8.48 Billion out of Tshs.29.26 Billion allocated as Other Charges and only Tshs.1.0 Billion for development programs (Table6. 3). 6.12 These factors have adversely affected the implementation of planned activities in the first three-quarters under the health sector reform agenda. Likewise, sector-wide approach entails that all participating parties develop and fund one Plan of Work, within the Medium Term Expenditure Framework, which covers all national, regional and district health requirements. The Ministry of Health and donors are expected to meet the following conditions: Development and funding of one Program of Work and one annual Plan of Action; Adherence to one set of common administrative arrangements such as financial management and procurement; Management of funds and implementation of program activities by Government; Strict adherence to signed agreements and conditions; Government and donors to be more transparent and show openness regarding their governing policies and views on implementation; Government and donors to show flexibility when implementing the plans. 6.5 PRIORITY AREAS WITHIN THE SECTOR 6.13 The adoption of a sector-wide approach to implement the Health Sector Reform and the above conditions for a successful implementation of the Plan of Work, call for a progressive shift in donor assistance towards budget support for the health sector. In this context, and in line with the Government's performance budgeting concept, the Ministry of Health has identified a number of priority areas which shall serve as a frame for the definition of performance monitoring indicators. It will also be a basis for budget process oriented towards outputs rather than inputs. Table 6.1 shows total requirement and allocations for the priority activities to be implemented in the health sector. 105 6.14 The priority areas focus on facilitating and strengthening 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. Provision of drugs will continue to be a protected item in the budget. The following priority areas are therefore recommended: .Drugs and essential medical supplies; .Kerosene for storage of vaccines in rural areas; .Essential hospital equipment and supplies; .Strengthening of the referral system; .Equipment for safe motherhood for all levels (vaccines, delivery beds and kits etc); .Conditional survey of physical facilities and equipment and prioritization for urgent rehabilitation of the most critical ones; .Mechanisms for the introduction of CHF and cost sharing to lower level facilities; .Mechanisms for the implementation of the National Insurance Fund. 6.15 Apart from the above items, other areas of priority that are required for developing institutional infrastructure for sustainability in health care delivery are; Improved health education strategies; Development and institutionalization of the health sector reform strategies. 6.16 The following are the key components pertaining to the above priority areas and which need to be strengthened: Sector Financing: with focus on the sector overall resource envelope; Sector Monitoring and Evaluation: with focus on both technical and systemic monitoring; Sector Financial Management: with focus on unified systems for merging internal and external resources at central and district levels; District Health Management: with focus on Essential Health Packages and synergies between MoH and MoRALG; Health Network Rationalization: with focus on rationale and affordable rehabilitation of the facilities' network. 106 Table 6.1: Medium Term Recurrent and Development Financing Framework (Priority Areas) FY00 - FY03 for the health sector (Millions of Tshs.). Development and Other Charges Priority ArealActivity fEstimates Projections 2000/01 2001/02 2000/03 1999/2000 Requirement Proposed Requirement Proposed Requirement Proposed Alloc. Allocation. Allocation DRUGS 9,500.00 17,600.00 11,610.36 19,360.00 18,178.86 20,134.40 25,474.52 Essential Medical Supplies 2,664.63 5,500.00 3,627.07 6,000.00 5,634.43 6,240.00 7,894.53 Essential hospital equipment and reagents 6,500.0 4,286.54 7,000.00 6,573.50 7,280.00 9,210.29 (diagnostic equipment X-ray inclusive) 3,197.55 EPI - Kerosene 266.46 600.00 395.68 700.00 657.35 728.00 921.03 Utilities for hospital and Training 53.29 120.00 79.14 150.00 140.86 156.00 197.36 Institutions Strengthening referral Hospitals -provide 2,500.00 1,648.67 3,000.00 2,817.22 3,120.00 3,947.27 PHC units with drugs, equipment and 1,065.85 trained staff Define the referral functions of secondary 1,500.00 989.20 2,000.00 1,878.14 2,080.00 2,631.51 and tertiary curative services (referral facilities no longer attend health centers 639.51 cases Counterpart funds for the introductions of 400.00 263.79 200.00 187.81 208.00 263.15 CHF and cost sharing to lower level health 266.46 facilities Start up cost and counter part funds for 200.00 131.89 100.00 93.91 104.00 131.58 introduction of National Health Insurance 266.46 Immunization of 2 years kids for 71% to 0.00 1,874.40 1,079.60 1,187.20 75% HIV/AIDS awareness campaign 0.00 4,846 4,731.00 4,680.00 Total recurrent 15,973.84 34,920.00 29,752.75 38,510.00 41,972.68 40,050.40 56,538.43 Total Development 2,874.75 20,840.00 4,422.68 23,670.00 4,375.00 24,616.80 4,375.00 Total Resources Priority areas 18,848.59 55,760.00 34,175.43 62,180.00 46,347.68 64,667.20 60,913.43 Sources: Budget Guidelines March 2000 Public Expenditure Review, Report No. 19898.Vol.1, November 1999 107 6.6 HEALTH SECTOR OVERALL EXPENDITURE PERFORMANCE FY1997- 2000. 6.17 Table 6.2 shows the amount of resources that the health sector has received 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 due to the 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 FY 1997/98 and FY 1998/99, while the actual expenditures in the same financial years were over and above the budget. In FY 1997/98 actual expenditure was about 9.08 percent and in 1998/99, it was 14.04 percent over the budget. 6.18 However, expenditure trends in the health sector represent a great challenge, especially at the lower levels. The expenditure figures are desegregated between those spent at ministerial level and public health expenditures spent at regional and district levels. Health expenditures at the regional and district levels are aggregated with other sectors' expenditures. Desegregation at national level using ministry of Finance's supply vote volumes is not possible on actual expenditures on regional and district levels. However, several public expenditure reviews have pointed out that ministry of Health expenditure alone accounts between the range of 40-50% of all public Health expenditures. Table 6.2: Government Budgets and Actual Expenditures for Health Sector in billion Tanzania Shillings 1997/98 1998/99 1999/00 Actual as % of budget Budget Actual Budget Actual Budget Actual 1997/98 1998/99 (Febr.2000) Recurrent MOH 22.03 25.86 28.9 37.15 31.6 18.59 117 128.55 Regions 7.25 7.25 -8.4 8.4 9.24 4.8 100 100 Local 12.9 12.90 14.9 13.98 16.39 8.13 100 93.8 government 42.18 46.01 - 52.20 59.53 57.23 31.52 109.08 114.04 Tot. Recurrent Development MOH Local 1.97 1.97 2.0 1.992 3.375 1.00 100.0 99.61 Foreign 23.99 3.248 19.487 9.603 20.00 1.375 13.54 49.28 Regions/Local 1.38 1.38 1.36 1.26 0.4 0.20 100 92.64 Government Total 27.34 6.598 22.847 12.855 23.775 2.575 24.13 56.26 development. Total Health 69.52 52.608 75.047 72.385 81.31 33.895 75.67 96.45 Source:- Ministry of Finance, (extracted from various books for each respective year) 108 Table 6.3: Sub-Services/Functions breakdown of government recurrent budget for Health-1998/99 PE* OC* Total. Bn. Shs. % Bn.Shs. % Bn. Shs. % MOH ADMIN/CENTRAL** 2.4 18.6 13.4 83.6 15.8 54.9 Muhimbili Medical Center 4.2 32.6 0.8 5.0 5.0 17.4 KCMC hospital 0.9 7.0 0.4 2.5 1.3 4.5 District Designated hospitals (DDH) 2.03 15.8 0.6 4.0 2.63 9.1 Bugando hospital 0.52 4.04 0.4 2.5 0.92 3.2 Muhimbili Orthopaedic Institute (MOl) 0.31 2.41 0.1 0.6 0.41 1.4 Ocean Road Cancer Institute 0.21 1.63 0.1 0.6 0.31 1.1 Voluntary Agency (VA) hospitals 1.1 8.5 0.05 0.3 1.15 4.0 National Institute for Medical Research 0.8 6.22 0.09 0.6 0.85 2.9 (NIMR) Tanzania Food and Nutrition Center 0.4 3.11 0.05 0.3 0.45 1.6 (TFNC) TOTAL 12.87 100% 16.03 100% 28.82 100% *PE are personal emoluments, OC are other charges Drug costs have been allocated to various levels of health care based on information supplied by Medical Stores Department **MOH/Admin/Central includes MOH administration, accounts, planning and nursing sections, the Government Chemist service and Tanzania Food Commission DDHs are Designated District Hospitals-these are hospitals run by voluntary agencies in 19 districts where no government owned hospital exist. They receive subventions and drugs from the government. Other voluntary Agency owned hospitals (about 46) are supported by government through secondment of staff 109 6.7 FINANCIAL RESOURCES AND MEDIUM TERM FRAMEWORK FOR THE 2000 - 2003 6.19 The government, donors and contributions from members of the community fund the health sector. Donors mainly support vertical programs like EPI, control of STDs and HIV/AIDS and the TB and Leprosy programs among others. There have been failures by some of the donors to release all their financial commitment to the health sector on several occasions. Trends in government expenditure on health therefore indicate a notable under- funding at all levels of the sector. The capacity of the government to substantially increase funding to the health sector is severely limited by a badly performing economy and a heavy external debt. However, the Government of Tanzania is in the process of identifying and strengthening other sources of revenue that include cost sharing, community health funds, revolving drugs funds and the phased implementation of a National Health Insurance Scheme. 6.20 The Annual Health Sector Plan of Action for July 1999 - June 2000 planned to get resources from: The government of Tanzania; partners; multilateral and bilateral (donor funds); other sources e.g. community health funds, National Health Insurance and Cost sharing funds. 6.21 It was expected that US$ 198,44,072 would be available to support plan of action in the first year. The Government was to contribute 47% of the funds while donors were to contribute 51% and the private sector 2%. Although funds to be contributed by donors were substantial, the MOH had no access to some of the funds, because they are to be sent directly towards supporting vertical programs as well as support to district and NGOs. 6.22 From the Government the MOH central has received Tshs.18.59 billion out of which Tshs.10.11 billion PE and Tshs.8.48 billion. OC. Whereas Tshs.2.375 billion has been received for the development budget out of which Tshs.1.0 billion is from GOT 1.375 billion is from Donors (DANIDA Tshs.690 million and Tshs.681 million from partners) Areas of priority 6.23 The priority areas intended to assist the MOH to attain its mission of improving health and wellbeing of all Tanzanians with a focus on those most at risk, and put in place a system more responsive to the needs of the people is shown in table 6.1 for three years 2000 - 2003. Way forward (2000 - 2003) 6.24 Planned activities in year one shall be budgeted within the existing resources envelope (Government and donor input) The Government has estimated 70.81/= billion for 2000/ 2001 recurrent expenditure and Tshs.3.54 billion for development. 6.25 New reform activities based on the on-going reform process in the local government as well as within the health sector will continue to be funded over and above committed and tied funding by donors and Government of Tanzania, Partners and other donors. 6.26 This year, most of the reform activities will be integrated into the annual development and recurrent expenditure books. 6.27 The MOH will continue with the introduction of policy objectives and targets that will allow the identification of scarce resources and the need for greater inputs over time (i.e. per capital expenditure through district block grants and per capita drug expenditure). This is to be integrated into the performance budgeting process under the ministry. 110 6.28 The 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. 6.29 The MOH will continue with its efforts to assist the Regions and Districts to build their capacity in planing, management and supervision 6.30 The Medium Term Expenditure Framework (MTEF) will eventually show an integrated budget frame for all activities. Table 6.3 shows the MTEF proposals for year 2000 - 2003 from all sources. 111 Table 6.4: Recurrent and Development projections for Medium Term Expenditure Framework (2000/01 - 2002/03) in Billion Tshs SOURCES 2000 -2001 2001 -2002 2002 -2003 PE OC PE OC Total PE OC Total Ministry of Finance 33.62 37.19 70.81 33.62 52.46 86.08 33.62 70.67 104.29 External Donor 36.44 38.74 42,00* o/w Pool funds 16.70 28.20 40.00 User fees 3.30 3.50 3.80 Community Health Fund (CHF) 0.21 0.25 0.25 National Health Insurance (NHI) 0.89 0.89 0.89 Total available for MTEF - Recurrent 107.25 124.82 146.29 Grand Total of Financing- Recurrent 111.65 1 129.46 151.23 EXPENDITURE AND PROJECTIONS 1999/2000 (Budget 1999/2000 (Actual up to 2000 - 2001 2001 - 2002 2002 -2003 Febr.2000 PE OC Total PE OC Total PE OC Total PE OC Total PE OC Total MOH 2.32 29.26 31.58 10.11 8.48 18.59 4.079 27.585 31.664 4.079 37.660 41.740 4.079 48.559 52.638 Regions 8.53 0.71 9.24 9.023 0.772 9.795 8.956 2.192 11.148 8.956 2.809 11.765 8.956 4.318 13.275 D/Council 19.61 2.628 22.233 10.16 0.62 10.76 20.585 7.413 27.998 20.585 11.995 32.580 20.585 17.794 38.380 Municipalities 5.09 0.75 5.85 NA NA NA. 5.35 1.25 6.60 5.35 1.56 6.90 5.35 2.02 7.37 Total Recurrent 30.45 32.60 63.05 29.29 9.872 39.145 38.97 38.44 77.41 38.97 54.024 92.994 38.97 72.691 111.661 MOH 3.375 1.00 3.54 3.50 3.50 Regions/Local Govt. 0.40 0.2 0.88 0.88 0.88 Sub Total 3.415 1.00 4.42 4.38 4.38 Donor Projects 20.00 1.375 17.54 9.88 3.14* Total Development 23.415 2.375 21.96 14.26 7.52 Total Exp. and 30.45 32.60 86.465 31.65 9.872 41.52 38.97 38.44 99.37 38.97 54.024 107.254 38.97 Projections 72.691 119.181 Note: Applicable Exchange Rate US$ =sh.800/=,N/A: Not available, *Figures 112  7. MEDIUM TERM EXPENDITURE FRAMEWORK (MTEF) 2000/01 - 2002/03 FOR THE MINISTRY OF WORKS 7.1 INTRODUCTION 7.1 This Medium Term Expenditure Framework (MTEF) of the Ministry of Works (MOW) provides an overview of the expenditure strategies the Government wishes to pursue over the next three years, in order to guarantee the sustainability of the trunk and regional road network. It is an update of the 1999/00-2001/02 MTEF. In updating this report we have taken into consideration: (i) Institutional changes in the road sector, specifically the creation of TANROADS. The new organization is a semi-autonomous executive agency dedicated to the management and execution of future maintenance and rehabilitation of the road network. (ii) Lessons learnt from the review of the past expenditure performance and its effects to the future plan particularly the accumulated backlog of maintenance and rehabilitation work. (iii) The budget guidelines that provide indicative budget frame for 2000/2001-2003/2004. The report covers an overview of the road network; organization of the road sector; review of the past expenditure performance; the Medium Term Expenditure Framework; and summary of the budget strategy for the road sector. 7.2 OVERVIEW OF THE ROAD NETWORK The Road Network 7.2 The road network in Tanzania comprises approximately 85,000 km of roads, classified into three overall categories: trunk roads; regional roads including essential district and feeder roads; and district and feeder roads. Trunk Roads 7.3 Trunk roads are defined as the main transport arteries, and together comprise the strategic road network. The trunk road network is divided into 9 main corridors, which in turn are ranked according to their national economic significance. The prioritization is based on population served, agricultural output, mining, tourism and impact on regional co-operation, and resulted in following order: TANZAM CORRIDOR km 1,328 CENTRAL CORRIDOR km 1,584 LAKE CIRCUIT CORRIDOR km 1,019 NORTH-EAST CORRIDOR km 950 GREAT NORTH CORRIDOR km 1,024 SOUTHERN CORRIDOR km 1,326 WESTERN CORRIDOR km 1,286 113 SOUTHERN COASTAL CORRIDOR km 508 MID-WEST CORRIDOR km 1,201 7.4 The total length of the trunk road network, according to the MOW estimates is 10,300 km of which 3,800 km are paved and 6,500 km are unpaved. There have been several studies that have suggested different estimates of the road length. Figures from regional engineers suggest that the corridors mentioned above have a total road length of 9,877 km, of which 3,896 km are paved and 5,981 km are unpaved. The discrepancy is yet to be clarified and the present report makes use of the MOW figures to make it compatible with previous studies. A study is underway to determine the actual road length for the corridors. With the exception of the TANZAM highway, where approaches to Dar es Salaam have an AADT in excess of 7,000 vehicles per day, the traffic volume on the rest of the trunk roads range from 200 to 3000 vehicles per day. Regional Roads 7.5 Regional (or rural) roads typically bridge gaps between regional communities and activity centers and the trunk road network, and serve as "collectors" for district roads. 7.6 The information submitted by the Regional Engineers indicate that Regional Roads total 18,820 km, of which only 241 km are paved and 18,579 are unpaved. The corresponding figures commonly used by MOW are 24,700 km in total, of which only 100 km is paved. As for the trunk roads, the discrepancy is yet to be clarified, and the present report will therefore make use of the MOW figures to enable comparison with previous studies. District Roads 7.7 District roads comprise all other roads not included in the above categories, and are of a more local nature, i.e. serving communities within a district. MOW figures indicate that district roads are estimated to total 50,000 km, comprising of 27,550 km of feeder roads, 20,000 km of district roads and 2,450 km of urban roads. Condition Of The Road Network 7.8 Condition surveys have in the past not been carried out on a regular basis, and the only available historic data within the MOW is from a survey carried out in 1997, and the latest in 1999. The findings are presented in tables 7.1 and 7.2 below. 114 Table 7.1 - Condition Survey 1997 (Source MOW) Trunk Roads - Paved 2,019 (53%) 1,267 (33%) 544 (14%) 3,830 (100%) - Unpaved 1,362 (21%) 3,036 (47%) 2,072 (32%) 6,470 (100%) Total Trunk Roads 3,381 (33%) 4,303 (42%) 2,616 (25%) 10,300 (100%Xi) Regional Roads - Paved 17 (17%) 58 (59%) 23 (23%) 98 (100%) - Unpaved 4,507 (18%) 7,458 (30%) 12,637 (51%) 24,602 (100%) Total Regional Roads 4,524 (18%) 7,516 (30%) 12,660 (51%) 24,700 (100%) Total District Roads 3,995 (8%) 9,755 (20%) 36,250 (73%) 50,000 (100%) Total Roads 11,900 (14%) 21,574 (25%) 51,526 (61%) 85,000 (100%) Note: Figures indicate kn of road and percentage of total Table 7. 2 - Condition Survey 1999 (Source MOW) Condition of Road Netwrk 1999 - Good ' Fair Poor Tolal Trunk Roads - Paved 2,317 (59%) 1,163 (30%) 441 (11%) 3,921 (100%) - Unpaved 776 (12%) 2,858 (45%) 2,675 (42%) 6,309 (100%) Total Trunk Roads 3,093 (30%) 4,021 (39%) 3,116 (30%) 10,230 (100%) Regional Roads* - Paved 22 (10%) 156 (70%) 45 (20%) 223 (100%) - Unpaved 3,730 (15%) 6,871 (28%) 13.876 (57%) 24,477 (100%) Total Regional Roads 3,752 (15%) 7,027 (28%) 13,921 (56%) 24,700 (100%) Total District Roads 3,995 (8/6) 9,755 (20%) 36,250 (73%) 50,000 (100%) Total Roads 10,840 (13%) 20,803 (24%) 53,287 (63%) 84,930 (100%) Note: Figures indicate kin of road and percentage of total * Survey in May 98, ** Survey from 97 7.9 According to the MOW estimates, only 15% of the trunk and 10% of regional roads were in good condition prior to the commencement of Integrated Road Project (IRP) in 1990. Although progress has been achieved on the paved trunk roads, the following deficiencies have occurred: - 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. 115 - 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. - The number of km of regional roads in good condition has been reduced from 18% in 1997 to 15% in 1999. - There has been a 2% decrease in the number of km of regional roads in fair condition. - There has been a 5% increase in the number of km of regional roads in poor condition. 7.10 When viewed on their own, the above data paint a rather negative picture of the achievements in the road sector. It could be argued that heavy investments by donors in the rehabilitation and reconstruction of paved trunk roads has significantly facilitated the increase of this road network, while on the other hand, insufficient maintenance has further deteriorated the remainder of the trunk and regional road network. However, it is difficult to draw any conclusions as to the effectiveness of the road maintenance carried out, since: - The condition surveys also depict the consequences of the El-Nino weather phenomenon, which occurred in 1997/98, and left one third of Tanzania flooded, with resultant heavy damage to road network. - The survey method is solely by way of visual inspection, and therefore prone to subjective interpretations which may differ from district to district and from survey to survey, depending on the surveyor. Government Vision for Roads Development 7.11 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. Road transport contributes about 5 percent to overall GDP while transport equipment comprises about 37 percent of the gross fixed capital formation. Road transport handles about 70 percent of internal freight traffic, 64 percent of transit cargo and is a major mode of passenger transport. 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 economy. 7.12 The Tanzania development vision 2025 accords very high priority to investment in infrastructure. In particular, the development of the road network is 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 improving the national road network. The Government considers 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 warrant a higher rate of growth of the economy. 7.13 The improved national road network envisaged would consist of roads that are good for vehicles under all weather 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. 116 7.3 ORGANIZATION AND MANAGEMENT OF THE ROAD SECTOR Current Situation 7.14 The responsibility of administration and management of the road network is currently shared between MOW and MRALG. However, from It July 2000, the new semi-autonomous road agency "TANROADS" will start taking over the MOW responsibilities, initially starting with road maintenance and later road development activities. Ministry of Works (MOW) 7.15 MOW solely manages the trunk and regional road network, and is mandated to plan, design, construct, improve and maintain these road networks, the strategy being to contract out to the private sector as many of these tasks as feasible. MOW is also responsible for the formulation of sectoral policies, strategic planning and management of the road network. This includes co-ordination of donor activities in the trunk and regional roads sector through CODAP (Co-ordination Office for Donor Assisted Projects). 7.16 The MOW is represented by a regional office headed by a regional engineer in each of the 20 regions of Tanzania mainland. The decentralized regional offices are responsible for the implementation of road maintenance, through grants allocated to them by MOW from the Road Fund. 7.17 The operating budget for MOW is allocated directly from the Central Government, since resources from the Road Fund are earmarked for maintenance, rehabilitation and upgrading of the road network. Ministry of Regional Administration and Local Government (MRALG) 7.18 The responsibility for maintenance and development of district roads which was previously under the Prime Ministers Office (PMO), was in FY 1999 transferred to MRALG. District roads include urban and feeder roads. The MRALG is responsible for allocating and distributing resources from the Road Fund to the local councils which implement road maintenance and development. The Road Fund 7.19 The government has adopted a new institutional structure for the roads sector. Under the new set up, the government has amended the Roads Toll Act in order to create a dedicated Roads Fund to be managed by a Road Fund Board. 7.20 The amended Roads Toll Act provides for ring fencing of revenues from the road toll so that they are used primarily for road maintenance works for trunk, regional, district and feeder roads. The Road Fund will be managed by the Road Fund Board, which will include private sector representatives to ensure that the interests of the stakeholders are addressed in the maintenance of roads. 7.21 The Road Fund is a special fund 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.70 per liter of fuel. The funds are collected by the oil companies at the time that the fuel leaves the bonded warehouse. TRA collects these funds from oil companies and deposit them in the Treasury account with the Bank of Tanzania. The Treasury then issues instructions to deposits these funds in the Road Fund Account of the Ministry of Works (70%) and the MRALG (30%) for 117 trunk and regional, and district roads respectively. Of the MOW allocations, only 10% may be used for development of the road network, while 90% is earmarked for maintenance operations. The responsibility of managing the Road Fund will be taken over by the Road Fund Board in the next financial year. 7.22 The Government has also established a semi-autonomous road agency TANROADS under the Executive Agencies Act. The road agency will be responsible for road maintenance and development of the road network currently handled by the department of roads of the MOW. Tanroads 7.23 TANROADS is made up of a Chief Executive (CE) who is in charge of four departments: Maintenance, Development, Technical, and Finance and Administration. The Chief Executive (CE) has been identified and has been in office since mid February 2000. The other four departmental positions will be filled in time for establishment of TANROADS in July 2000. The bulk of the staff to be employed by TANROADS will be recruited from within the MOW, where adequate skills are readily available. The "New" Ministry of Works 7.24 The ongoing institutional reforms have a bearing on the future role of MOW in the road sub-sector. The Road Fund Board will replace the Ministry of Works role of managing the resources from the Road Fund. Establishment of TANROADS on the other hand takes away the MOW responsibilities of maintaining, rehabilitating and upgrading the trunk and regional roads. 7.25 In view of these changes, the future role of MOW will be limited to policy formulation, strategic planning including donor co-ordination, and management of its agencies. The ongoing Local Government reforms will also change the nature of resource flows from the Central Government to local authorities. Under the new structure the funds for road maintenance will flow in the form of block grants to the Local Authorities. This will replace the current practice of allocating the funds through MRALG. 7.4 REVIEW OF EXPENDITURE PERFORMANCE FY 1997/98-FY 1999/2000 7.26 Tables 7.3 and 7.4 show the level of expenditure by the Ministry of Works in real and nominal terms over the last three years. The level of expenditure has fluctuated in both nominal and real terms. Table 7.3: MOW Actual PE and OC expenditures (Nominal prices, Tshs million) 1997/98 1998/99 1999/2000 Personal Emoluments 2,384 1,858 2,032 (PE) Other Charges (OC) 15,395 36,233 35,970 Total 17,779 38,091 42,002 Note: Other Charges include Road Fund releases to the Ministry of Works Figures for 1999/2000 are based on the approved budget Source: Ministry of Finance, Annual Recurrent Expenditure (Supply Votes) 118 Table 7.4: MOW Actual PE and OC expenditures (Real prices, Tshs million) 1997/98 198/99 1999/2000 Personal Emoluments (PE) 2,384 1,728 2,197 Other Charges (OC) 15,395 33,705 26,583 Total 17,779 35,433 28,780 Note: 1997/98=100 Source: PwC calculations based on budget estimates 7.27 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 as shown in table 7.5. In 1999/2000 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 rains. Table 7.5: Government allocation of resources to the Ministry of Works (Tshs million) 199,198 1998/1999 1999/2000 Budget Actual. Actual -Budget- .Ac1ual, Actual Appro'ed- %ai % of hudger _ as % of budget Budget- 11locallon to MOH* __ Development 3,952 2,500 (63%) - - - 4,000 Recurrent (of which) 23,046 17,779 (77%) 37,189 38,091 (102%) 38,002 PE 1,568 2,384 (152%) 1,932 1,858 (96%) 2,032 OC 21,478 15,395 (72%) 35,257 36,233 (103%) 35,970 Total 26,998 20,279 (75%) 37,189 38,091 (102%) 42,002 Source: Ministry of Works Appropriation Accounts for respective years and PwC calculations 7.28 In FY 1997/98, budgeted resources actual releases. As seen in Table 7.6, there are shortfalls in the non-salary expenditures (Other Charges). The ratio of actual PE allocations to budget was close to or above 100% except for sub-vote 103 (Policy & Planning). Sub- votes which typically require casual laborers (such as electrical and mechanics, roads, buildings) tended to exceed their budgeted PE. 7.29 The analysis of the resources for the FY 1998/99 shows a different picture: Overall, expenditure on non-salary expenditures (Other Charges); The shortfall is due to inclusion in PE for vote 701 in Vote 601. There were many cases of over-expenditure in most sub-votes, the largest being in Sub-vote 102 (Finance and Accounts). The over-expenditure is due to huge purchases of equipment and other fixed assets. 7.30 Table 7.6 shows the actual against budgeted resources across the sub-votes of the Ministry of Works. The concentration of resources to these departments reflect the priorities of the ministry. As seen from Table 7.7 the road sub-vote is given a top priority since it is the core function of the ministry. In all cases it received more than 90% of total resources. Prioritization across other sub-votes has tended to differ at the budgeting and the execution stage. The least priority was accorded to sub-votes 103 (Policy & Planning) and 102 (Finance & accounts), which received less than 2 percent of MOW resources. 119 Table 7.6: Allocation of Recurrent Budget to Various Sub-votes 1997/98 . . PE OC TOTAL Sub-Vote Acrual/Budget Actual/Budget Actual/Budget II1 83.74% 193.10% Ill 50 o 102 77.58% 1823.80% 486.8 103 51.79% 92.20% 70.40% 201 112.74% - 57.30% 301 104.74% - 52.60% 401 134.40% 4.30% 132.00% 501 121.89% - 45.90% 601 123.33% 74.87% 76.16% Total 115.63% 73.16% 76.78% 1998/99 101 178% 148% 162% 102 167% 13429% 5072% 103 51% 161% 127% 201 148% 22% 51% 301 47% 19% 41% 401 5% 148% 125% 501 117% 79% 85% 601 136% 78% 122% 701 0% 138% 128% Total 96% 142% 133% 1999/2000 101 86% 84% 78% 102 56% 81% 63% 103 109% 2% 5% 201 80% 44% 52% 301 89% 0% 35% 401 53% 75% 74% 501 60% 67% 65% 601 185% 0% 3% 701 0% 14% 0% Total 89% 5% 9% Note: PE figures include subventions, most of which go to capital transfer (CDA). Other sub-votes that receive subventions are the National Construction Council (NCC) under Trunk Roads and National Board of Materials Management (NBMM) under administration and general. Actual figures for 1999/2000 are for the period I" July 1999 to 12th April 2000 Source: Ministry of Finance: Annual Recurrent Expenditure (Supply Votes - Ministries) 120 Table 7.7: Share of Resources to Various Sub-votes of MOW - Budgeted versus Actual Allocation (%) 1997/98 - 1998/99 1997/98 PE OC TOTAL Sub-Vote Budget Actual Budget Actual Budget Actual 102 2.22% 1.49% 0.70% 1.67% 0.26% 1.64% 103 0.98% 0.44% 0.80% 0.10% 0.16% 0.15% 201 20.60% 20.09% 1.96% 0.00% 3.64% 2.70% 301 10.52% 9.53% 1.03% 0.00% 1.88% 1.28% 401 14.59% 16.96% 0.39% 0.02% 1.35% 2.30% 501 5.93% 6.25% 0.97% 0.00% 1.42% 0.84% 601 36.62% 39.06% 95.22% 97.45% 90.26% 89.60% Total 100% 100% 100% 100% 100% 100% 1998/99 Sub-Vote PE OC TOTAL Budget Actual Budget Actual Budget Actual 101 5.96% 11.00% 1.76% 1.84% 2.62% 3.19% 102 1.71% 1.84% 0.26% 24.17% 0.55% 21.04% 103 0.79% 0.42% 0.46% 0.52% 0.53% 0.50% 201 23.58% 36.36% 20.00% 3.09% 20.73% 7.99% 301 14.17% 6.94% 0.92% 0.12% 3.61% 1.13% 401 4.14% 0.20% 5.32% 5.55% 5.08% 4.76% 501 6.61% 8.05% 9.07% 5.05% 8.57% 5.50% 601 24.19% 34.07% 1.81% 0.99% 6.36% 5.86% 701 18.86% 0.00% 60.41% 58.67% 51.95% 50.02% Total 100% 100% 100% 100% 100% 100% 1999/2000 Sub-Vote PE OC TOTAL Budget Actual Budget Actual Budget Actual 101 6.06% 5.88% 0.40% 6.33% 0.70% 6.10% 102 2.64% 6.33% 0.06% 1.06% 0.20% 1.38% 103 0.56% 0.69% 1,05% 0.49% 1.03% 0.60% 201 21.71% 19.60% 4.04% 39.40% 4.98% 29.04% 301 12.16% 12.18% 1.06% 0.10% 1.65% 6.43% 401 1.11% 0.66% 1.40% 23.36% 1.39% 11.47% 501 11.89% 8.04% 1.70% 25.09% 2.24% 16.16% 601 24.63% 51.26% 90.25% 4.10% 86.78% 28.79% 701 19.25% 0.01% 0.02% 0.06% 1.04% 0.04% Total 100% 100% 100% 100% 100% 100% PE figures include subventions, most of which go to capital transfer (CDA). Other sub-votes that receive subventions are the National Construction Council (NCC) under Trunk Roads and National Board of Materials Management (NBMM) under administration and general. Actual figures for 1999/2000 are for the period l" July 1999 to 12th April 2000 Source: Ministry of Finance: Annual Recurrent Expenditure (Supply Votes - Ministries) MOW Expenditure on Roads 7.31 Over the past three years, government expenditure in the roads sector has focused mainly on three main areas: (i) Emergency maintenance of roads such as those damaged by 121 El-Nino rains during 1997/98; (ii) Roads maintenance of rehabilitated/upgraded network; and (iii) Implementation of priority rehabilitation and upgrading projects (ongoing projects under IRP). Table 7.8 compares resources budgeted for road maintenance and rehabilitation with actual disbursements. Table 7.8: Resources allocation for road maintenance and rehabilitation in Tshs 1997/98 1998/99 199912000 Budget Actual Actual Budget Actual Actual Approved Budget Road maintenance / Budget Budget Trunk Roads I 1,057 ",391 67'., 12, 25. 15,627 128o 37,251 Regional Roads 8,914 4,028 45% 15,310 8,982 59% 10,151 Total Maintenance 19,971 11,419 57% 27,560 24,609 89% 47,402 Road rehabilitation Trunk Roads 25,493 17,388 68% 42,622 29,264 69% 30,716 Regional Roads 1,937 2,010 1,805 Total Rehabilitation 25,493 19,325 76% 42,622 31,274 73% 32,521 GRAND TOTAL 45,464 30,744 68% 70,182 55,883 80% 79,923 Maintenance as % of total 37% 44% Rehabilitation as % of total 63% 56% Source: Ministry of Works 7.32 Table 7.8 shows that for the period 1997/98 and 1998/99 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. Actual allocation of funds for road rehabilitation was 76% and 73% of the budget in 1997/98 and 1998/99. As a proportion of the total budget, funds allocated for rehabilitation averaged 63% and 56% during the same period. Expenditure on Roads by Local Authorities 7.33 Information on expenditure on roads by local authorities is scanty. Records of the PMO/MRALG only show budgeted data. Very little is available by way of actual allocations to the roads sector. This is partly explained by (i) the infrequent changes in the parent ministry responsible for local governments. (ii) the fact that resources for road maintenance are in form of Road Fund allocations to local authorities through PMO/MRALG. Local authorities further provide negligible amounts out of own resources for road works. 7.34 During FY97 and FY98 the Government allocated to the PMO shillings 3.5 billion and 13.6 billion respectively for the purposes of maintaining the district roads network. This was equivalent to 14 and 30 percent of the total Road Fund collected for the two years respectively. The allocation for FY 97 was below the intended share of 20 percent. Beginning FY98 the Government decided to raise this share to 30 percent so as to increase the capacity of the local authorities to carry out maintenance work and rehabilitation/upgrading of district roads. 122 7.5 THE MTEF FOR THE ROADS SECTOR 7.35 This section presents the medium term expenditure framework (MTEF) for the Government's activities in the Trunk and Regional roads. It presents the Road Fund revenue projections and the distribution of these between maintenance and development activities. The projected financial resources are then compared with the proposed allocations in the budget guidelines followed by an overview of the Ministry of Works rehabilitation and maintenance programs over the period of this MTEF. Available resources are compared with the proposed programs with a view to identifying the financing gap. Options for meeting future financial requirements are discussed followed by a summary of budget strategy for the road sector over the next three years. Projections of Road Fund revenues 7.36 In order to determine the level of maintenance that could be carried out for FY 2000/2001-2002/2003 the revenues are estimated under two scenarios: 7.37 Base case scenario: where consumption figures contained in the budget guidelines are used. Low case scenario: is based on actual road toll collections for the period between 1s July 1999 to 31s" January 2000. These figures are based on TRA Road Toll reconciliation. The results of these estimates are shown in Table 7.9 overleaf. 7.38 The budget guidelines assumed a taxable fuel consumption of 831 million liters in 1999/2000. Analysis of these figures suggests that the consumption levels are projected to increase by 5% per annum over the three-year period. 7.39 In the low case scenario a total of Tshs.22,443 million2 was collected as Road Fund revenues up to 31st January 2000. These figures reflect a fuel consumption level of 546 million liters in 1999/2000. The corresponding figures for the remainder of the budget period have been projected using the rate of growth of fuel consumption derived from budget guidelines. Under this scenario the level of fuel consumption is between 62% and 66% of the projected consumption in the budget guidelines scenario. This trend illustrates a significantly reduced resource envelope for the roads sector, assuming identical growth rates as those used in the budget guidelines. 7.40 The above analysis indicates that Road Toll collection will be significantly below the projected values of the budget guidelines. For this reason, measures will have to be taken to either: enhance revenue collection, or readjust expenditure plans downward in accordance with the revenue shortfall. 2 Source. Sources from MOW indicates that total releases were 11,738, million up to the third quarter of 1999/2000. We have used TRA figures for the projections. 123 Table 7.9: Road Toll revenue estimates Based on consumption projected in budget guidelines 1999/2000 2000/01 2001/02 2002/03 MSP consumption (metric tons) 166,965 192,000 201,000 201,000 Conversion factor 1,359 1,359 1,359 1,359 MSP consumption (million liters) 227 261 273 273 Expected revenue from MSP (Tshs million) 15,883 18,265 19,121 19,121 AGO Consumption (metric tons) 503,790 554,000 581,000 581,000 Convertion factor 1,200 1,200 1,200 1,200 AGO Consumption (million liters) 605 665 697 697 Expected revenue from AGO (Tshs million) 42,318 46,536 48,804 48,804 Total consumption ( million liters) 831 926 970 970 Total Revenue from Road Toll (Tshs million) 58,202 64,801 67,925 67,925 Total collections (Tshs million)** 38,186 40,096 42,100 44,205 Implied Consumption (.million liters) 546 573 601 632 Low case estimates of consumed liters as % of budget 66% 62% 62% 65% guidelines Note. Collections up to 31V January 2000 Source: Ministry of Finance & PwC calculations from TRA Flush reports 7.41 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 - Limiting Road Fund resources to the maintenance of a strategic road network 7.42 Option 1: Controlling fuel smuggling and dumping. One of the main reasons for not getting the projected revenues from the fuel levy are illegal imports and dumping of petroleum products. In recent years there has been an increase in illegal imports and trading of fuel in western and northern parts of the country. Recent estimates by Oil companies show that illegal trade represents 25% to 30% of the total market, which translates directly into an equivalent loss of revenue from the fuel levy. This is partly due to liberalization of importation of petroleum products. 7.43 The government intends to introduce a bio-coding mechanism as a way of controlling fuel smuggling and dumping. Consultation with industry experts shows that the proposed measure will provide 20% additional revenue to the current collections. Based on this estimate, the likely revenue yield of the fuel levy is shown in table7.10. The level of funds generated with the proposed measures to stop the illegal trade in fuel would be sufficient to increase Road Toll revenue to the projected levels in the budget guidelines. Table 7.10: Projected revised revenue from control of fuel smuggling and dumping (Tshs million) I FY 99/00 FY 00/01 FY 01/02 FY 02/03 BG I Rev. BG Rev. BC Rev. BG Rev. Tutal Road roll 4o,4'6 ls~i 4 1 ,I1 49,604 43,555 il'loo 45,115 5-I13I collections Allocation to Ministry 28,333 34,000 28,936 34,723 30,489 36,586 31,581 37,897 of Works Source: PwC calculations from figures obtained from budget guidelines 124 7.44 However this measure is not enough on its own to bridge the financing gap in the recurrent budget. The government will need to adopt other measures. The proposed measures include changing the tax structure of the petroleum products. 7.45 Option 2: Changing the tax structure of petroleum products. An increase in the price of fuel may lead to increased incentives for smuggling and dumping of fuel products. The current price of fuel products in Tanzania is higher than in neighboring countries which is a major cause of illegal fuel imports and fuel dumping. Thus an increase in the price of fuel will worsen the situation. 7.46 In order to raise the fuel levy, a likely option is to change the tax structure of fuel products that currently contribute to the Road Fund. The fuel levy is charged on petroleum super (MSP), petroleum regular (MSR) and diesel (AGO). In addition to the fuel levy and excise duty, these products are charged the following taxes: - Windfall profit tax: Based on the price difference between import and locally refined petroleum. The refinery is currently not operational and is being privatized. - TPDC/TIPER margin: A subsidy to the oil refinery. With the liberalization of oil importation subsidies to the refinery and TPDC have been stopped. - Energy fund: Established to raise funds for the development of the Songosongo gas project which was completed in December 1999. 7.47 These taxes are no longer used for the purpose they were intended, but are currently part of the general government revenues. These revenue sources can be used to raise the fuel levy in order to meet the road maintenance requirements for trunk and regional roads. The level of tax revenue generated from these sources is shown in table 7.11 Table 7.11: Projected revenue from petroleum products (Tshs million) 2000/01 2001102 2002/03 Product rype MSP MSR AGO MSP MSR AGO NISP MSR AGO TPDC/TIPER Margins 7,102 0 18,095 7,435 0 18,977 7,435 0 18,977 Energy Fund 5,219 0 13,296 5,463 0 13,944 5,463 0 13,944 Windfall Profit Tax 25,707 0 79,909 26,912 0 83,803 26,912 0 83,803 Total Yield by Product 38,027 - 111,300 39,810 - 116,725 39,810 - 116,725 Total Yield 149,327 156,535 156,535 Source: Ministry of Finance, Oil companies & PwC calculations 7.48 Given the large revenue yield from these sources, the Road Fund should be allocated the amount of funds that are required to meet the maintenance and counterpart development budgets. 7.49 Option 3: Dedication of Road Fund to a strategic road network. The Road Fund is currently financing trunk, regional, district and feeder roads. This is a very long list for the Road Fund given the current revenue yields. Given that the funds for road maintenance are inadequate to cover the whole road network, it is unlikely that spreading the resources thinly will be effective. The on going rehabilitation work will bring on stream additional maintainable roads that will increase the burden on the Road Fund. 7.50 This option looks into the possibility of dedicating 100% of Road Fund resources to a strategic road network as opposed to the current 70/30 split between MOW and MRALG. 125 This implies reducing the scope of IRP II and devoting all resources to the strategic road network. 7.51 The strategic road network is defined in terms of the priorities of the traffic corridors that have been ranked in order of importance as shown under the Trunk Road section. 7.52 The ideal situation is obviously to increase Road Fund revenues to cover required maintenance costs. However, if this proves impossible, it may be relevant to consider dedicating the available Road Fund revenues to a strategic road network, and let maintenance of the remaining road network be financed from the national budget. This would ensure the protection of the heavy investment in these roads to date. The Road Fund revenues under this option would barely cover the paved road network in maintainable condition without including TANROADS operating costs. 7.53 Distribution of Road Fund resources between maintenance and development of roads. Table 7.12 and 7.13 show the distribution of the Road Fund resources between maintenance and development for the base case and the lower case scenarios, respectively. The funds are allocated according to the proposed distribution of Road Fund resources between maintenance and development expenditures set out in the Road Fund Act as well as the distribution between Trunk/Regional roads and District/Urban/Feeder Roads which is determined by the GOT. Relative proportions of these split are shown below. Maintenance of Trunk and Regional Roads: 63% Development of Trunk and Regional Roads: 7% Maintenance of District, Rural, Feeder Roads: 27% Development of District, Rural Feeder Roads: 3% Table 7.12 Funding from Road Fund according to budget guidelines estimates (TSh million) 1999/2000 2000/2001 2001/2002 2002/2003 Trunk/Regional Roads Maintenance 36,667 40,825 42,793 42,793 Rehabilitation 4,074 4,536 4,755 4,755 Total 40,741 45,361 47,548 47,548 District/Urban/Feeder Roads Maintenance 15,714 17,496 18,340 18,340 Rehabilitation 1,746 1,944 2,038 2,038 Total 17,461 19,440 20,378 20,378 Grand Total 58,202 64,801 67,925 67,925 Table 7.13 Funding from Road Fund according to low case estimates (TSh million) 1999/2000 2000/2001 2001/2002 2002/2003 Trunk/Regional Roads Maintenance 24,238 25,450 26,723 28,059 Rehabilitation 2,693 2,828 2,969 3,118 Total 26,931 28,278 29,692 31,177 District/Urban/Feeder Roads Maintenance 10,388 10,907 11,453 12,025 Rehabilitation 1,154 1,212 1,273 1,336 Total 11,542 112,119 12,725 13,361 Grand Total 38,473 140,397 42,417 44,538 Source: PwC calculations from TRA Flush Reports 126 7.54 The budget guidelines give a higher estimate of revenue yield from fuel levy but the actual collections up to January 2000 show that the likely yield may not meet the targeted yield. Taking this shortfall as a realistic scenario, table 7.13 suggests that the level of funding for road maintenance is likely to meet approximately 60% of the maintenance requirements. Ministry of Works Medium Term Expenditure Framework Objectives and Priorities 7.55 According to the budget guidelines for the period 2000/2001-2002/2003 the roads sector will continue giving high priority to the following areas: -Road maintenance of upgraded network; -Implementation of priority rehabilitation and upgrading projects; -Rehabilitation and maintenance of rural roads under local Government authorities jurisdiction under MRALG. Administration, Sector Management, and Non-road Activities 7.56 The management and regulation of the road sector and non-road related activities, are funded from the general budget. The budget guidelines provide the following projections for allocations to MOW for the FY 2000/01 - FY2002/03 as shown in Table7.14. Table 7.14 MOW Recurrent and Development allocations (TSh million) 200012001 200112002 2002/2003 Development allocations 5,000 6,000 6,000 Recurrent allocations 27,122 27,982 28,766 Total 32,122 33,982 34,766 Source: Budget Guidelines 7.57 Appendix A.7.2.1 - 7.2.4 shows the detailed breakdown of Ministerial Activities by sub-vote for the FYI999/2000 through 2001/02. The recurrent estimates take into account the re-organization of the Ministry and establishment of TANROADS, which will carry over the responsibility of managing the road network and implement road maintenance and rehabilitation activities. These changes have been incorporated in the FY 2002/02 and 2002/03 by reducing the PE for 601 and 701 sub-votes, based on their relative proportions in the overall ministry PE. As a result budgetary requirements of the MOW have declined by the amount of savings resulting from the establishment of TANROADS. Total savings are Tshs.1,368 million in FY 2001/02 and Tshs.1,423 million for FY2002/03. 7.58 In addition to the allocations from general budget IRP II funds have also been made available for the institutional strengthening and re-organization of the road sector management. With the establishment of TANROADS, MOW responsibilities will be limited to that of policy decisions, regulatory services and co-ordination of donor assistance. The latter is presently handled by the Co-ordination Office for Donor Assisted Projects (CODAP), which also is in serious need of institutional strengthening. IRP-I1 includes provisions for technical assistance to CODAP, but the procurement for this component has experienced considerable delays, and is now only envisaged to be in place at the end of Y2000. It is expected that performance, in respect of project implementation, will be substantially improved once TANROADS takes over the responsibility. 7.59 One of the major issues constraining road sector activities is the MOW debt to private sector contractors. This has threatened the execution of road works. The EU through the Structural Adjustment Facility IV has agreed to settle the accumulated outstanding debt up to 127 June 1998, which is Tshs.8,864 million (US$ 11,080,000). Since July 1998, there has been a further increase in the domestic debt from road sector activities. This is likely to add to the costs of road maintenance in future. Since this falls outside the EU structural adjustment grant, this debt requires additional financing measures. Rehabilitation and Upgrading 7.60 Table 7.15 shows a summary of the planned rehabilitation and upgrading activities by the MOW for the period of the Medium Term Expenditure Framework (Details are contained in Appendix A.7.2). Table 7.15: MOW Rehabilitation and Upgrading Program FY 2000/01 FY 2001/02 FY 2002103 GOT Donor GOT Donor GOT Donor USS 000 Tshs USS Tshs US5 000 Tshs USS Tshs USS Tshs USS Tshs mill 000 mill mill 000 mill 000 mill 000 mill Trunk Roads Rehabilitation 3,919 3,504 63,325 56,612 2,917 2,914 54,507 54,452 2,217 2,474 35,413 39,521 Upgrading 16,331 14,600 62,642 56,002 15,575 15,559 84,478 84,394 10,282 11,475 65,673 73,291 Emergency 365 326 8,881 7,940 0 0 0 0 0 0 0 0 Regional Roads Rehabilitation 4,808 4,298 13,060 11,676 3,160 3,157 6,985 6,978 2,911 3,249 5,129 5,724 Total 25,422 22,727 147,909 132,231 21,651 21,629 145,970 145,824 15,410 17,198 106,216 118,537 Source: Ministry of works 7.61 Most of the Ministry's rehabilitation and upgrading activities of trunk and regional roads takes place within the framework of the second Integrated Roads (IRP-II), which started in 1995, with the objective of rehabilitating and upgrading about 7,500 km of trunk roads and 7,400 km of regional and rural roads. Delays in implementation of the program has led to the restructuring in August 1998, incorporating some of the projects not realized under IRP-I and to include emergency rehabilitation of roads and bridges affected by the El-NINO rainfall. With the restructuring of the IRP II the project is now expected to be completed in 2004. The estimated cost of IRP-II is US$780 million of which GOT contribution is estimated at US$78 million. 7.62 Implementation of IRP-II has experienced substantial delays in the progress of physical works. One of the main obstacles has been the lack of capacity in MOW to procure and launch both consultancy services and actual works. The latest World Bank Aide Memoire (Nov. 99) shows that of the total IDA Credit of approximately US$170 million, only US$37 million has been committed of which only US$18 million was actually disbursed. A similar picture is applicable to the EU funded projects. The EU and IDA are the main financiers of IRP-II, contributing in aggregate more than 50% of the overall IRP-II budget envelope. 7.63 In addition, implementation of IRP has also been severely hampered by the lack of counterpart funds. Although there have been large commitments of funds to the road sector from donors mainly the World Bank and EU, actual disbursements have, however, differed widely from the budget, reflecting the inability of the MOW to access the funds. The key reason is the Government's failure to provide down payment of the full amount of counterpart funds. The World Bank in particular, requires a down payment of the full amount of counterpart funds related to a project component as a precondition to releasing their funds. Other donors require the government to complete compensation payments for road projects 128 that encroach on private property. However, the government has in many cases not fulfilled this obligation. This has caused considerable delay in implementing roads projects. 7.64 The government counterpart funds are estimated based on the donor financed projects that will be implemented in the next three years. The level of counterpart funds are then compared to the level shown in the budget guidelines and the low case estimate. These results are shown in table 7.16. Table 7.16 Comparison of required funds with available counterpart funds Requirements: 2000/2001 2001/2002 2002/12003 Donor funds (US$ 000) 147,900 146,000 106,200 Counterpart Funds (Tshs million) 22,727 21,629 17,198 Total 170,627 167,629 123,398 Available counterpart funds: Budget Guidelines (Tshs million) Budget Guidelines estimates 10% of Road Fund (base case) 2,894 3,049 3,158 General Development Budget 5,000 6,000 6,000 Total 7,894 9,049 9,158 Available counterpart funds: Low case estimates (Tshs million) 10% of Road Fund from (low case) 2,357 2,474 2,598 General Development Budget 5,000 6,000 6,000 Total 7,357 8,474 8,598 Deficit Budget Guidelines estimates (14,834) (12,580) (8,040) Low case estimates (15,371) (13,155) (8,600) Implementation capacity Budget Guidelines estimates 35% 42% 53% Low case estimates 32% 39% 50% 7.65 As seen in Table 7.16 the observed shortfalls in counterpart funds will constrain the implementation of the proposed development program. On the basis of projections from the budget guidelines, available counterpart funds will allow the implementation of 35% of the planned activities for FY 2000/01, 42% for FY 2001/02 and 53% for FY 2002/03. 7.66 In order for MOW to be able to implement the planned development program it will be necessary to increase the levels of counterpart funding. Available options are: - Change in the tax structure of fuel products that contribute to the Road Fund and temporary relaxation of Road Fund statute that only 10% may be used for development activities. This will allow absorption of funds generated from changing the tax structure of petroleum products. - Increase in the development expenditure from the national budget. - Reduction of the scope of IRP II or extension of the period of implementation, to align available counterpart funding with actual requirements. - An alternative to government raising the counterpart funding is to request donors to finance 100% of physical road works, hence leaving the government to concentrate on road maintenance. 129 Maintenance 7.67 It is quite clear that GOT is not, at present, in a position to avail to MOW the budget required to maintain the entire network in a good condition. As a consequence, MOW is forced to make the best of what is allocated, and the present approach dictates that: - In recognition of the enormous investment made in the paved road network, these roads that are in a maintainable condition (i.e. rated good or fair), should receive full maintenance in accordance with good engineering practice. - Unpaved roads in good condition must likewise receive full maintenance, with unpaved roads in fair condition will receiving only a portion of the required maintenance funds. - Roads in poor condition will as a general rule not receive maintenance, except emergency cases. 7.68 The unit rates to be applied to the maintainable road network are of the utmost importance, for budgeting purposes, but also to ensure that the maintenance done is according to the standards prescribed. The Unit costs used for deriving MTEF maintenance are shown below: Table: 7.17 Unit Rates for Maintenance Operations Road Road Surface type Intervention USS-kn Condition category Good Trunk Paved Routine 1,600 Unpaved Routine 1,000 Regional Paved Routine 1,600 Unpaved Routine 600 Fair Trunk Paved Periodic 60,000 Unpaved Periodic 22,000 Regional Paved Periodic 60,000 Unpaved Periodic 18,700 Poor Both Both Emergency 160 7.69 Assumptions used to calculate the average annual costs for maintenance operations together with the corresponding average annual maintenance costs are shown in Appendix A.7.1. These were used to estimate the overall annual budget requirement for the next three years as shown in table 7.18 (details are shown in Appendix A 7.4). 7.70 Required maintenance cost will increase from US$ 62.1million 1999/00 to US$ 69.7 million in FY 2002/03. The calculation is based on the currently envisaged implementation schedule for IRP-II. 7.71 Table 7.19 compares the financial requirements for the full implementation of MOW maintenance policy with projected Road Fund revenue allocated to MOW for maintenance purposes. In all scenarios there are shortfall between maintenance requirements and available funds. The observed shortfalls in allocated resources from the Road Fund will constrain the implementation of the proposed maintenance program. On the basis of projections from the budget guidelines, available resources will only allow the implementation of 46% of the planned activities for FY 2000/01, forty percent for FY 2001/02 and thirty seven percent for FY 2002/03. 130 Table7.18: MOW maintenance program FV99100 FY 00/01 FY 01/02 FY 02/03 Road Category Condition Surface Type (M USS) (M US$) (Ni USS) (M uss) Trunk Good Paved 23.6 25.9 29.1 30.8 Good Unpaved 4.2 4.5 6.5 6.8 Fair Paved 11.9 10.4 8.9 7.1 Fair Unpaved 15.4 14.9 16.7 16.4 Poor Both 0.5 0.5 0.4 0.4 Sub-Total Trunk Roads 55.6 56.3 61.4 61.4 Regional Good Paved 0.2 0.3 0.3 0.3 Good Unpaved 1.3 2.2 2.6 2.9 Fair Paved 1.6 1.6 1.6 1.6 Fair Unpaved 3.4 3.0 3.4 3.5 Poor Both - - - - Sub-Total Regional Roads 6.5 7,2 7.9 8.3 Grand Total US$ million 62.1 63.4 69.3 69.7 Grand Total Tshs million 49,704.0 56,697.5 69,230.7 77,829.8 Source: Ministry of works Table 7.19 Comparison of maintenance costs with resource estimates 12000/2001 2001/2002 2002/2003 Maintenance requirement 56,697 69,231 77,830 Budget guidelines resource estimate 90% of Road Fund (base case) 26,042 27,440 28,422 Low case resource estimate 90% of Road Fund (low case) 21,209 22,269 23,382 Budget guidelines shortfall (30,655) (41,791) (49,408) Low case resource shortfall (35,488) (46,962) (54,448) Implementation capacity Budget Guidelines estimates 46%1 40% 37% Low case estimates 37% 32% 30% Source: Ministry of Works Allocations to Regional Authorities 7.72 Table 7.20 show the proposed allocations of the Road Fund for the maintenance and rehabilitation projects for the roads under the jurisdiction of the local authorities. Comparison between the proposed allocation with the budget guidelines projections indicate that the proposed fund can implement over 90% of the proposed activities. Table 7.20 Proposed Road Fund Resources for the maintenance of District, Urban & Feeder Roads 19991/2000 2000/01 2001/02 2002/23 Maintenance requirement 9,888 10,628 10,851 9,541 Rehabilitation projects 1,648 1,635 1,669 1,735 Total 11,276 11,536 12,263 12,520 Resources from the Road fund 12,143 12,401 13,067 13,535 Implementation capacity 93% 93% 94% 93% Source: Budget Guidelines 131 7.73 Much as these figures appear to be adequate, they only represent the government contribution to the maintenance and rehabilitation of the local roads. There are three other sources of funding for maintenance and rehabilitation of district, urban and feeder roads. These are: Development funds from the MRALG; Donor funds for maintenance and development; and Own resources of the local authorities. 7.74 Due to unclear disbursement mechanisms and lack of proper records at MRALG and the local authorities it is difficult to assemble correct budget inputs for district roads. Local authorities own resources are estimated to be extremely limited. Records on donor funding for development/investment projects concerning district roads are scant. In view of this it is unlikely that the 30% contribution from the Road Fund is sufficient to cover the 50,000- kilometer road network under local authorities. Summary of the Budget Strategy for the Road Sector 7.75 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 7.76 The government will need to make a decision on dedicating the whole available Road Fund revenues to a strategic road network, and let maintenance of the remaining network be financed from the national budget. This is because the ongoing rehabilitation work will bring on stream additional maintainable roads that will increase the burden on the Road Fund. Conducting detailed annual road condition and traffic survey 7.77 It is necessary to have detailed annual road condition and traffic surveys to monitor the impact of road maintenance operations, and create a basis for selecting and prioritizing a strategic road network needing maintenance. Condition surveys should include visual inspection based on agreed to avoid subjective opinions. Putting in place measures to control fuel dumping and smuggling 7.78 These proposed measures to curb the malpractice of tax evasion and fuel smuggling should be strengthened and implemented as soon as possible. Assessment of impact of past maintenance efforts 7.79 In order for the government to make informed decisions on future maintenance and development policy there should be an impact assessment of past road maintenance operations, with particular emphasis on establishing whether all expenditure has created the desired benefits. Currently it would appear that the unpaved road network is deteriorating despite increased maintenance funding. Other measures 7.80 In order to go beyond the current resource framework and additional resources the following measures are proposed: 132 (i) Change in tax structure for petroleum products : The government will need to consider the possibility of changing the current tax structure for petroleum products so as to reduce the financing gap of recurrent expenditure and allow for a more flexible allocation of surplus fund to the development expenditure. (ii) Increase the level of counterpart funding through: Temporary relaxation of Road Fund statute that only 10% may be used for development activities; making substantial increase of the development expenditure from the national budget; reduction of the scope of IRP II or extension of the period of implementation and to align available counterpart funding with actual requirements Appendix A.7.1: Unit Cost Estimates for Road Maintenance 7.81 The following assumptions have been used to calculate the annual average costs for maintenance operations, and thus estimate the overall budget requirement. - For paved roads it is assumed that periodic maintenance will be required every 7 years - For unpaved trunk roads it is assumed that periodic maintenance is required every 5 years - For unpaved regional roads it is assumed that periodic maintenance is also required every 5 years. - For roads in poor condition (both paved and unpaved), a minimal amount of 160 US$ per km is required to keep open the communication along the road. On the basis of the above assumptions, the annual average maintenance cost for each type of road is calculated as follows: Average Annual Maintenance Costs Trunk Paved 10,200 Routine + 1/7* Periodic Unpaved 5,400 Routine + 1/5* Periodic Regiona Paved 10,200 Routine + 1/7* Periodic 1 Unpaved 5,400 Routine + 1/5* Periodic 133 APPENDIX A 7.2.1: ALLOCATION OF RECURRENT BUDGET TO VARIOUS SUB- VOTES 1999/2000 SUB-VOTE P.E O.C TOTAL Sub-Vore Proper Subventions SUB-VOTE 101 ADMINISTRATION 123 02',300 100,31500 4-1 1o.1lor >',3p I,80I.' 102 FINANCE & ACCOUNTS 53,591,700 21,446,900 - 75,038,600 103 POLICY & PLANNING 11,478,200 37,844,400 - 49,322,600 201 ELECTRICAL & 441,021,400 1,527,202,200 - 1,968,223,600 MECHANICS 301 SUPPLIES & SERVICES 247,082,200 372,500,000 - 619,582,200 401 CAPITAL TRANSFER 22,527,000 27,884,800 482,249,200 532,661,000 501 BUILDINGS 241,479,800 617,980,000 - 859,459,800 601 TRUNK ROADS 500,435,300 12,098,300 120,000,000 632,533,600 701 RURAL ROADS 391,166,200 4,729,900 - 395,896,100 TOTAL 2,031,809,100 2,721,991,000 646,749,200 5,400,549,300 ALLOCATION FROM ROAD FUND 601 TRUNK ROADS 15,583,150,000 15,583,150,000 701 RURAL ROADS 12,749,850,000 12,749,850,000 TOTAL-ROAD FUND 28,333,000.000 28.333.000,000 iGRAND-TOTAL 2,031,809.100 31,054.991,000 33.733,549,300 '-wurce klaniuirx ol 'Hork , Nini-ir% of Finance APPENDIX A. 7.2.2: ALLOCATION OF RECURRENT BUDGET TO VARIOUS SUB-VOTES 2000/01 SUB-VOTE P.E O.C TOTAL Sub-Vote Proper Subventions SUB-VOTE 101 ADMINISTRATION 157,474,940 180,087,720 30,000,000 367,562,660 102 FINANCE & ACCOUNTS 68,597,376 34,446,600 103,043,976 103 POLICY & PLANNING 14,692,096 59,844,500 74,536,596 201 ELECTRICAL & 613,442,050 1,497,000,200 2,110,442,250 MECHANICS 301 SUPPLIES & SERVICES 308,852,750 445,759,955 754,612,705 401 CAPITAL TRANSFER - - 501 BUILDINGS 359,094,140 908,981,400 1,268,075,540 601 TRUNK ROADS 600,557,180 15,398,500 140,000,000 755,955,680 701 RURAL ROADS 480,531,296 7,329,880 487,861,176 TOTAL 2,603,241,828 3,148,848,755 170,000,000 5,922,090,583 ALLOCATION FROM ROAD FUND 601 TRUNK ROADS 15,937,443,500 15,937,443,500 701 RURAL ROADS 13,039,726,500 13,039,726,500 TOTAL-ROADFUND 28,977170%000 8,977,170,000 GRAND-TOTAL 2.603.241.828 32,126.018,755 34.899,260,583 -.. r'C Mini,ir-.% . , %or., NIni .ir-ofI 1,n 3n,c 134 APPENDIX A.7.2.3: ALLOCATION OF RECURRENT BUDGET TO VARIOUS SUB-VOTES 2001/02 SUB-VOTE P.E O.C TOTAL Sub-Vote Proper Subventions SUB-VOTE IIII .ADMINISTRATIOIN 11,0105 4051 K.00,0110 "2ttofu3 11,161011 102 FINANCE & ACCOUNTS 71,000,000 25,000,000 - 96,000,000 103 POLICY& PLANNING 15,200,000 39,000,000 - 54,200,000 201 ELECTRICAL & 626,000,000 1,979,800,000 - 2,605,800,000 MECHANICS 301 SUPPLIES & SERVICES 311,000,000 375,000,000 - 686,000,000 401 CAPITAL TRANSFER - - 501 BUILDINGS 313,000,000 913,000,000 - 1,226,000,000 601 TRUNK ROADS 700,800,000 18,000,000 162,000,000 880,800,000 701 RURAL ROADS 603,000,000 10,700,000 - 613,700,000 TOTAL 2,800,000,000 3,500,500,000 204,000,000 6,504,500,000 ALLOCATION FROM ROAD FUND 601 TRUNK ROADS 16,761,057,500 16,761,057,500 701 IRURAL ROADS 13,713,592,500 13,713,592,500 TOTAL-ROAD FUND 1 30,474,650,000 30,474.650.000 GRAND-TOTAL 2,800,000,000 33,975.150,000 36.979,150.000 N c 11 1. r irun k. -.id . R -6iolijI RcO3-j, .rc ner .4 ho" .jB Ir tr-rn :remtor, .1 T \NIc- Q N Source: Ministry of Works, Ministry of Finance, PwC Calculations 135 APPENDIX A.7.2.4: ALLOCATION OF RECURRENT BUDGET TO VARIOUS SUB- VOTES 2002/03 SUB-VOTE P.E O.C TOTAL Sub-Vote Subventions SUB-VOTE Jll A .DKIIN IS T [-%"f ION . I Proper 102 FINANCE & ACCOUNTS 103 POLICY & PLANNING 17,000,000 42,000,000 59,000,000 201 ELECTRICAL & 638,000,000 2,049,603,802 2,687,603,802 MECHANICS 301 SUPPLIES & SERVICES 401 CAPITAL TRANSFER - - 501 BUILDINGS - 601 TRUNK ROADS 720,000,000 20,000,000 170,000,000 910,000,000 701 RURAL ROADS 603,000,000 12,700,000 615,700,000 TOTAL 2,143,000,000 2,269,303,802 215,000,000 4,627,303,802 ALLOCATION FROM ROAD FUN6 601 TRUNK ROADS 17,369,275,000 17,369,275,000 701 RURAL ROADS 14,211,225,000 14,211,225,000 TOTAL-ROAD FUND 31,580,500,000 31,580.500.000 GRAND-TOTAL 2,143.000,000 33.849.803.802 36107,803,802 N. .[e PE ior I rtjnk H..u ReZonal , .-J d o Fre nI It . .. -.ng; rorn m rejutri it T \ Ups Source: Ministry of Works, Ministry of Finance, PwC Calculations 136 Appendix A 7.3: MOW rehabilitation and upgrade program FY 2000/01 FV 2001/02 FY 2002/03 -¯ km _ GOT------ Donor - km GOT Donor km GOT Donor U'S$ T51l.5 U$ - lis$ USS Týihs T'S S h S'»' T;.h, 000 mill 000 mill 000 mill 000 mill 000 mill mill Trunk Roads ____ Rehabilitation 155 3,919 3,504 63,325 56,612 161 2,917 2,914 54,507 54,452 110 2,217 2,474 35,413 39,521 Upgrading 186 16,331 14,600 62,642 56,002 250 15,575 ^-i559 84,478 84,394 183 10,282 11,475 65,673 73,291 2 Emergency 425¯ 365 316 8881 7,940 _-__ 0 0 0 0 0 0 0 0 Regional Roads _________ ________ ______ _____ Rehabilitation 1195 4,808 4,298 13,060 11,676 784 3,160 3,157 6,985 6,978 635 2,911 3,249 5,129 5,724 Total 1961 25,422 22,727 147,909 132,231 1195 21,651 21,629 145,970 145,824 928 15,41 17,198 106,216 118,537 137 Appendix A 7. 4: Total Required Maintenance Funding for Trunk and Regional Roads FY99/00 FY 00/01 FY 01/02 FY 02/03 FY 03/04 Road Category Road Condition Surface Type Network Cost Network Cost Network Cost Network Cost Network Cost (km) (M USS) (kim) [(M USS) (km) (M USS) (km) (M US$) (km) (M US$) Trunk Good Paved 2,317 23.63 2,537 25.88 2,850 29.07 3,020 30.80 3,885 39.63 Good Unpaved 776 4.19 826 4.46 1,197 6.46 1,257 6.79 1,322 7.14 Fair Paved 1,163 11.86 1,023 10.43 869 8.86 699 7.13 411 4.19 Fair Unpaved 2,858 15.43 2,777 14.99 3,090 16.68 3,030 16.36 2,728 14.73 Poor Both 3,186 0.501 3,137 0.49J 2,294 0.36 2,294 0.36 1,954 0.30 Sub-Total Trunk 10,300 55.62 10,300 56.26 10,300 61.44 10,300 65.99 Roads Regional Good Paved 22 0.22 32 0.33 32 0.33 32 0.33 32 0.33 Good Unpaved 2,100 1.26 3,698 2.22 4,335 2.60 4,890 2.93 5,425 3.26 Fair Paved 156 1.59 156 1.59 156 1.59 156 1.59 156i 1.59 Fair Unpaved 5,731 3.44 5,049 3.03 5,579 3.35 5,749 3.45 5,749 3.45 Poor Both 16,691 0.00 15,7651 0.00 14,598 0.00 13,873 0.00 13,338 0.00 Sub-Total 24,700 6.52 24,700 7.17 24,700 7.87 24,700 8.30 24,700 8.62 Regional Roads Grand Total, Annual Maintenance Costs 62.13 63.42 69.30 69.74 74.61 Tshs million, at Budget Exchange Rate 49,704 56,697 69,2311 77,830 83,265 138 8. MTEF FOR THE WATER SECTOR 2000/01 - 2002/03 8.1 NATIONAL GOALS 8.1 Water is a vital resource for the development of the country's domestic, energy, agriculture, industrial and other sectors. In order to ensure the realisation of this, 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 wastewater disposal systems. 8.2 Various initiatives in economic development have had major implications for the overall sustainability of the water resources. Such initiatives include urban development, mineral and forestry development and exploitation, irrigated agriculture, and energy production. Since water is the major agent for Tanzania's social well being and productive activity, the Ministry of Water (MOW) has the responsibility of ensuring that the nation attains these objectives through wholesome management of the resource. Thus, the MOW will confine itself to overall management including the assessment and evaluation of water resources in terms of quantity and quality through a national water resources management policy. MOW will also put in place infrastructure for water resources information management fundamental for planning and water sector development. Sector actors may also develop specific water use strategies based on the National Water Policy. 8.2 VISION 8.3 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. 8.3 MISsION 8.4 The Mission of the Ministry of Water is to ensure water resources management and development is carried out in collaboration with all stakeholders in an economical, environmentally and socially sustainable manner. To fulfil this the MOW will undertake the following: Facilitation, co-ordination, monitoring and regulation of provision of water and sanitation services to the public with a gender perspective; Formulate a realistic, comprehensive, dynamic and gender sensitive water policy which take into account other related policies; and Develop competent sector professionals of high integrity. 139 8.4 MEDIUM TERM OBJECTIVES 8.5 The main focus for the water sector during 2000/01 - 2002/03 will be to rehabilitate and expand water and sanitation facilities, and install efficient management to 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) to ensure that the 1991 National Water Policy is revised and in place by year 2001; (ii) to facilitate an increase in the sustainable provision of adequate, safe and clean water for different social groups in rural areas from 48.5% population coverage in 2000 to 55% coverage by the year 2003; (iii) to facilitate the sustainable provision of adequate, safe and clean water for different social groups in urban areas from 68% coverage in 2000 to 75% coverage by the year 2003; (iv) to facilitate the development of urban sewerage and drainage facilities from 10% population coverage in 2000 to 25% population coverage by the year 2003; (v) to improve water resources monitoring infrastructure from 20% in 2000 to 40% by year 2003; (vi) to protect water resources in order to control pollution levels from 30% in 2000 to 10% by year 2003; and (vii) to develop professionals of high integrity with gender capacities for effective and efficient development and management of Water Sector from 60% in 2000 to 80% by the year 2003. 8.5 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. New hydrometric and meteorological stations will have to be installed in the rest of water basins. Also, groundwater resources monitoring network has to be established. (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. 140 8.6 MEDIUM TERM PRIORITIZED SERVICE DELIVERY TARGETS AND ACTIVITIES WITH RESPECT To POLICY OBJECTIVES OBJECTIVE 1: To ensure that the 1991 National Water Policy is revised and in place by year 2003 for Proper Coordination and Monitoring of Water Sector. Division/ Unit/ Board Targets and Related Activities Achievements (%, Qty) 2000/01 2001/02 2002/03 1. Policy and Planning Target 1: To have in place revised and gendered 1991 National Water Policy documents for proper 35% 70% 100% coordination and monitoring. Related Activities: Consolidate 3 policy components of the revised 1991 National Water Policy in collaboration with technical departments. Harmonize 3 policy components with other related policies. Hold a consultation meeting with gender experts to impact gender issues in the final draft of revised National Water Policy. Forward the final draft of revised 1991 National Water policies to Parliament for approval Disseminate and popularize the approved policy to stakeholders at all levels especially to women who are immediate primary stakeholders. Conduct water sector coordination and monitoring. OBJECTIVE 2: To facilitate the sustainable provision of adequate, safe and clean water to various social groups in rural areas from 48.5% population coverage in 2000 to 55% population coverage by the year 2003. Division/ Unit/ Board Targets and Related Activities Achievements (%, Qty) 2000/01 2001/02 2002/03 141 1 Rural Water Supply TARGET 2: To have in place rehabilitated malfunctioning and non-operative rural water supply schemes and 30% 65% 100% earth moving and drilling equipment. Related Activities: (i) Identify status of malfunctioning and non-operative water schemes and their level of rehabilitation. (ii) Carry out gender focused seminars/workshops to sensitize local authorities and communities to participate in rehabilitation and expansion activities. (iii) Carry our actual rehabilitation of water schemes and earth moving and drilling equipment TARGET 3: To have in place rural water supply schemes transferred/ owned by local authorities and communities. Related Activities: (i) To carry out sensitization workshops/ seminars to local authorities and communities, taking into consideration needs and roles of different social groups for effective management of rural water supply schemes 3 3 3 (ii) Assist in the formulation of gender sensitive legal water user entities . (iii) Monitor the effectiveness of community/different social groups ownership of the water user entities. 1 Rural Water Supply TARGET 4: To have in place new rural water supply schemes. 10 10 10 Related Activities: 40 40 40 Conduct needs assessment of different social groups based on demand response and affordability from local authorities and communities. Carry out survey and design of new rural water supply projects. Carry out sensitization workshop/seminars to local authorities and communities to participate in construction of new water schemes for effective. Carry out physical construction works. TARGET 5: To have in place rainwater harvesting technological units as an alternative and supplemental source of water supply for rural households. Related activities: Promote and create public awareness in the use of household rainwater harvesting. Build capacity at district and community levels in the construction of rainwater harvesting systems. 142 Physical construction of rain harvesting technological facilities/ units. 2. Water Resources TARGET 6: Identified and designated new sources of water for rural water supplies in Lake Victoria basin in 1 1 1 Management Kagera, Mwanza and Mara regions. Related Activities: Carry out hydrological and hydro-geological surveys. ii) Carry our onsite measurements and mapping of new water sources, qualitatively and quantitatively. 3. Water Laboratory Unit TARGET 7: Reinforcement of water labs to ensure good quality of water for rural water supplies. 3 3 3 Related Activities: Carry out rural water supply quality surveij lance. Construction of water labs in towns 4. Central Water Board/ TARGET 8: Construction of control gates and other alternatives to ensure efficient utilization of Rural Water 12 12 12 WRM Supplies. Related Activities: (i) Grant water rights to the legal water user groups, communities, local authorities and authorized rural water supply private operators. (ii) Control water pollution levels of rural water supply sources. 143 OBJECTIVE 3: To facilitate the sustainable provision of adequate safe and clean water to different social groups in urban areas from 68% population coverage in 2000 to 75% population coverage by the year 2003. Division/ Unit/ Board Targets and Related Activities Achievements (%, Qty) 2000/01 2001/02 2002/03 Urban Water Supply and Target 9: Support rehabilitation of under capacitated urban water systems including intakes, treatment plants, 12 12 12 Sewerage distribution mains and distribution networks. Related Activities: To identify the under capacity functioning of urban water works and their level of rehabilitation. Mobilize necessary resources for the rehabilitation work i.e. identification of contractors and consultants). To carry out rehabilitation activities. Water Resources TARGET 10: Identified and designated new sources of water in the Lake Victoria basin for Urban Water 1 1 1 Management Supplies for Kagera, Mwanza and Mara regions. Related Activities: Carry out hydrological and hydro-geological surveys. Carry our onsite measurements of new sources, qualitatively and quantitatively Central Water Board- TARGET 11: Water users (authorities) granted with water rights and water sources with minimum pollution to 5 5 5 WRM ensure efficient utilization of Urban Water Supplies. Related Activities: (i) Grant water rights to Regional Headquarter Water Supply and Sewerage Authorities /District Urban Water Authorities or Authorized Urban Water Supply Private Operators. (ii) Control sources of urban water supply pollution levels. 144 OBJECTIVE 4:To facilitate the development of Urban Sewerage and drainage facilities from 10% population coverage in 2000 to 25% population coverage by the year 2003. Division/ Unit/ Board Targets and Related Activities Achievements (%, Qty) 2000/01 2001/02 2002/03 Urban Water Supply and (i) Target 12: Support the ongoing rehabilitation of existing urban sewerage and drainage systems including 15% 20% 25% Sewerage construction of collection facilities and waste treatment oxidation ponds. Related Activities: Offer gender sensitive backstopping services to UWSAs. To carry out rehabilitation activities. Target 13: Support the extension of sewerage and drainage systems to uncovered parts of regional headquarters (towns) Related Activities: Offer gender sensitive backstopping services to UWSAs. 15% 20% 25% (ii) To carry out extension/ construction activities. OBJECTIVE 5: To improve water resources monitoring infrastructure from 20% in 2000 to 40% by year 2003. Division/ Unit/ Board Targets and Related Activities Achievements (%, Qty) 2000/01 2001/02 2002/03 Water Resources Target 14: To have in place an optimal and sustainable hydro-metric, meteorological and groundwater 27% 34% 40% Management resources monitoring network in water basins. Related Activities: To carry out rehabilitation of the existing (189) hydro-metric and meteorological and groundwater resource monitoring stations. To build capacity of water resources monitoring staff at basin levels. To strengthen the water resources database at National and Basin levels. To install new hydro-metric hydro-geological equipment (91) in water basins. OBJECTIVE 6: To Protect Water Resources in order to control pollution levels from 30% in 2000 to 10% by year 2003. Division/ Unit/ Board Targets and Related Activities Achievements (%, Qty) 2000/01 2001/02 2002/03 Water Laboratory Unit Target 16: To have in place proper water quality monitoring systems at point and non-point pollution sources in 24% 14% 10% all water basins. 145 Related Activities: Increase the number of water quality monitoring stations countrywide. Establishing water quality database. To build capacity of water quality monitoring staff at basin levels. Target 17: To have in place water quality standards as per the WHO guidelines countrywide. Related Activities: Undertake de-fluoridation studies and activities 30% 30% 30% Enforce water quality laws, regulation, rights and standards in water sources. Sensitize local authorities and community to protect water sources. OBJECTIVE 7:To develop professionals of high integrity with gender capacities for effective and efficient development and management of Water Sector from 60% in 2000 to 100% by the year 2003. Division/ Unit/ Board Targets and Related Activities Achievements (%, Qty) 2000/01 2001/02 2002/03 Administration and Target 18: To have in place a gender sensitive Human Resource Development Plan (HRDP) for the Ministry of I 1 General Water. Related Activities: To conduct a gender sensitive capacity needs assessment for the Ministry of Water. Carry out consultations with gender experts on human resource development planning. Target 19: Professional human resources resulted from execution of HRDP Relative Activities: To recruit essential staff for smooth succession with gender focus. To conduct on-job training To offer advance specialized skill/ training to essential staff taking into consideration gender balance. 72% 85% 100% 146 8.7 MEDIUM TERM OPERATIONAL TARGETS AND BUDGET ESTIMATES BY SERVICE/ OUTPUT LEVELS IN TsHs MILLION ADMINISTRATION AND GENERAL 2000/01 2001/02 2002/03 PE Administration and General 75.0 87.0 110.5 OC To complete annual performance reports for all staff in the Ministry by end of year. 3.9 5.0 3.4 To ensure timely process of staff as recommended and confirmed in 90 days. 8.2 5.6 6.5 "To ensure basic office working facilities e.g. utilities working all the times. 41.3 47.9 60.8 "To prepare and Implement Annual Training Program advanced and local courses. 32.5 37.7 47.8 To provide conducive working environment to all staff according to current regulations. 32.5 37.7 47.7 To ensure all used offices are thoroughly cleaned once each day. 10.1 11.7 14.8 To ensure that the Ministry transport and associate equipment are full operational. 14.4 16.7 21.2 "To ensure that all staff records are correct and updated including the preparation of Ministerial Seniority List. 4.1 4.8 6.0 To ensure timely facilitation of Parliamentary issues two weeks before sitting periods. 50.3 58.3 74.1 "_ To ensure that the Ministry maintains good public relations. 7.1 8.2 10.4 To provide necessary to the staff under Administration and General according to Civil Service regulations. 37.1 43.0 54.6 FINANCE AND ACCOUNTS PE Finance and accounts 29.4 34.1 43.3 OC To produce monthly flash report within 5 working days following the month end. 20.8 24.1 30.6 To produce Annual Appropriation Accounts within 4 months of the year-end. 7.2 8.4 10.6 "_ Issue all authorized payments within 2 working days. 3.2 3.7 4.7 Ensure all financial records are up to-date daily and monthly and properly kept. 4.8 5.6 7.0 Produce report for Public Accounts Committee (PAC) within specified time. 14.5 16.8 21.3 To provide necessary services to all staff under Finance & Accounts Section according to Civil Service regulations. 34.4 39.9 50.6 147 POLICY AND PLANNING PE Policy and Planning 16.8 19.5 24.7 OC To complete MTEF for the FY 2001/02 by the end of April 2001 and submit to Ministry of Finance for funding consideration 16.6 19.3 24.4 " To have in place 50% revised 1991 National Water Policy documents for Water Sector Co-ordination and Monitoring 13.9 16.1 20.4 Three (3) Staff under Planning and Policy Division to acquire various Computer and Data Management Skills and one staff continuing with postgraduate studies at IDM 20.5 23.8 30.2 Monitor and evaluate the performance of associated Executive Agencies, Parastatals, Basin Water Boards, Urban Water Supply and Sewerage Authorities and National Water schemes in the light of their Annual Performance Agreements, based on quarterly and an annual report, within a month of each quarter. 35.6 41.3 52.4 To carry out general administrative duties and meet operational costs for services to staff under Policy and Planning Division 23.7 27.5 34.9 according to Civil Service Regulations. To ensure availability, accessibility of correct gender desegregated and updated information on water and sanitation for effective, 24.8 28,8 36.5 efficient and sustainable management of water resources in the country. To scrutinize and prepare comments on Cabinet papers and other reports in order to provide technical inputs necessary for decision 5.6 6.5 8.2 making. WATER RESOURCES MANAGEMENT PE Water Resources Management 488.4 566.5 719.5 To collect Hydrological and Hydro-geological data from river gauging stations, rainfall stations, Meteorological stations and 115.0 133.4 169.4 Hydro-geological Regional offices. To perform geophysical surveys so as to attain 400 sites for deep well drilling. 48.9 33.2 38.5 To conduct training for employees 24.8 28.8 36.5 To provide services to employees according to Civil Service Regulations. 84.5 98.0 124.4 To co-ordinate international and local water related activities. 53.2 61.7 78.3 To disseminate Rainwater Harvesting technology. 13.9 16.1 20.4 148 To consolidate co-operation with other water related institutions for which our country is a member. 24.8 28.8 36.5 CENTRAL WATER STORE PE Water Central Store 5.8 6.7 8.5 OC To carry out general administrative duties 14.1 16.4 20.7 To meet operational costs for service provision 8.6 10.0 12.6 To purchase, stock, Distribute various good of water sector 35.8 41.5 52.7 To meet other office running costs & acquisition of equipment's 22.7 26.3 33.4 CENTRAL WATER LABORATORY PE Water Laboratory 67.2 78.0 98.9 OC To make sure water sources in the country are inspected in order to know the water quality states and to detect if there is any pollution 132.7 153.9 195.4 " To maintain water quality health standards 6.3 7.3 9.2 "6 To have a standard manual for water and waste water examination which will be used by all water laboratories in the country 8.3 9.6 12.2 "1 To check the quality of water treatment chemicals before they are recommend for use in water treatment works 2.1 2.4 3.0 To ensure that quality of waste water is within the required standard to check and establish the dosage of water treatment chemicals 31.3 36.3 46.1 To establish a standard manual for water treatment chemicals. 2.9 3.4 4.2 To give technical evidence in the court with regard to water sources pollution cases 5.8 6.7 8.5 To save employees who are under the Water Laboratories Unit as per laid down Government Rules and Regulations. 47.9 55.6 70.5 URBAN WATER SUPPLY AND SEWERAGE PE Urban Water Supply and Sewerage 655.5 760.4 965.6 OC to revise urban water supply and sewerage component with gender perspective by year 2002. 20.0 23.2 29.4 to support rehabilitation of under-capacitated urban water system including intakes, treatment plants distribution mains and distribution networks 30.0 34.8 44.1 to strengthen the 0 & M of urban supply and sewerage authorities 47.8 55.4 70.4 to support the ongoing rehabilitation and expansion of urban sewerage and drainage systems including construction of 45.0 52.2 66.2 collection facilities and waste treatment oxidation ponds 149 to support construction of new sewerage and drainage system to uncovered regional headquarter (UWSAs) 27.5 31.9 40.5 to carry out general administrative duties 50.1 58.1 73.8 CENTRAL WATER BOARD PE Central Water Board 32.7 37.9 48.1 OC To ensure that the 1991 National Water Policy is revised and in place by year 2003 9.2 10.7 13.5 " To facilitate the sustainable provision of adequate, safe and clean water to different social groups in rural areas from 48% 12.8 14.8 18.8 population coverage in 2000 to 55% population coverage by the year 2003. " To facilitate the sustainable provision of adequate safe and clean water to different social groups in urban areas from 68% 10.6 12.3 15.6 population coverage in 2000 to 75% population coverage by the year 2003 " To facilitate the development of Urban Sewerage and drainage facilities from 10% population coverage in 1999 to 25% population 20.4 23.7 30.0 coverage by the year 2003. " To improve water resources monitoring infrastructure from 20% in 1999 to 40% by year 2003. 8.1 9.4 11.9 " To Protect Water Resources in order to control pollution levels from 30% in 1999 to 10% by year 2003 13.4 15.5 19.7 To render appropriate services to all workers under the Central Water Board and Basin Water Offices in accordance to the rules and 26.3 30.5 38.7 regulations pertaining to the Civil Service. RURAL WATER SUPPLY PE Rural Water Supply 404.1 468.8 595.3 OC To revise the Rural Water Supply component of the National Water Policy with gender perspective. 32.5 37.7 47.8 " To develop a data Base for the sub sector and establish a mechanism of flow of information to all stake-holders 30.1 34.9 44.34 " To support construction of new Rural Water Supply 55.5 64.4 81.7 " To transfer ownership of Rural Water Supply schemes to user authorities and communities. 36.2 42.0 53.3 " To support rehabilitation of malfunctioning and non-operative Rural Water Supply Schemes, 234.7 272.3 345.7 To ensure offices, equipment and working tools are properly maintained and improved to enhance efficiency. 83.5 96.9 123.0 To prepare short and long term plans and budgets for sub-sector 8.6 10.0 12.6 To provide basic services to the employees 50.1 58.1 73.8 WATER RESOURCES INSTITUTE PE Water Resources Institute 82.6 95.8 121.6 OC To provide and maintain conducive environment for work and provide necessary apparel and implements. 8.5 9.9 12.5 " To perform general office work. 23.9 27.7 35.2 " To convene and attend important meetings and conferences 3.4 3.9 5.0 " To maintain buildings, grounds, amenities and equipment/machinery 60.7 70.4 89.4 " To keep vehicles in operation and have them maintained 8.2 9.5 12.0 " To meet utility service costs 8.1 9.4 11.9 " To conduct training of technicians and to cater for their welfare needs 128.0 148.5 188.5 150 To meet financial obligations of the employer to employees 31.1 36.1 45.8 To meet financial obligations arising from being a member to important national and international associations 1.0 1.2 1.4 DRILLING AND DAMS CONSTRUCTION PE Drilling and Dams Construction 203.9 236.5 300.3 OC To drill 400 deep bore holes and 170 shallow wells; rehabilitate HQ deep and medium wells; and to construct 14 Dams and 3-earth 11.7 13.6 17.2 fill Dams at sites to be identified To carry out general administrative duties and meet operational costs for services to staff, under civil servant regulations. 32.7 37.9 48.1 Rehabilitate 54 rigs, 3 earth moving equipment and 26 vehicles, buildings and computers 24.2 28.1 35.6 To train 5 staff so as to attain Trade Test Grade one, 4 staff to acquire various computer and Data management, 10 - operators to 7.7 8.9 11.3 attend modem equipment operation courses Procurement of new equipment, vehicles and tools 43.8 50.8 64.5 TOTAL OTHER CHARGES (OC) 2449.1 2841.0 3608.0 TOTAL PERSONAL EMOLUMENTS (PE) 2061.5 2391.3 3037.0 GRAND TOTAL FOR RECURRENT 4510.6 5232.2 6645.0 151 8.8 MEDIUM TERM DEVELOPMENT TARGETS By SERVICE OR OUTPUT DELIVERY LEVELS AND BUDGET ESTIMATES IN TSHS MILLION ADMINSTARTION AND GENERAL 2000/01 2001/02 2002/03 Target 18: To have in place a gender sensitive Human Resource Development Plan (HRDP) for the Ministry of Water. 4.0 4.8 2.8 Target 19: To execute HRD Plan for the Ministry of Water 14.0 15.0 19.0 RURAL WATER SUPPLY Target 2: To have in place rehabilitated malfunctioning and non-operative Rural Water Supply Schemes and earth moving 444.1 498.9 542.0 and drilling equipment. Target 3: To have in place Rural Water Supply Schemes Transferred/ owned by local Authorities and Communities. 75.0 82.5 90.7 Target 4: To have in place new rural water supply projects. 700.1 773.3 850.9 Target 5: To have in place rainwater harvesting technological units as an alternative and supplemental source of water supply 80.0 88.0 96.6 for rural households. POLICY AND PLANNING Target 1: To have in place revised and gendered 1991 National Water Policy documents for water coordination and monitoring. 94.7 104.2 96.5 WATER RESOURCES MANAGEMENT & CWB Target 6: Identified and designated new sources of water for Rural Water Supplies. 10.5 11.5 12.7 Target 8: Efficient utilization of Rural Water Supplies 40.0 41.5 43.6 Target 10: Identified and assess designated new sources of water for Urban Water Supplies. 10.4 11.5 12.7 Target 14: To have in place an optimal and sustainable hydro-metric, meteorological and groundwater resources monitoring network 396.5 436.1 474.3 in water basins. Target 11: To ensure efficient utilization of Urban Water Supplies. 25.0 30.0 35.0 CENTRAL WATER LABORATORY UNIT Target 7: Laboratory reinforcement to ensure good quality of water for rural water supplies. 35.33 38.8 40.0 Target 16: To have in place proper water quality monitoring systems at point and non-point pollution sources in all water basins 50.8 55.8 60.0 Target 17: To have in place water quality standards as per the WHO guidelines 5.0 6.0 10.0 URBAN WATER SUPPLY AND SEWERAGE Target 9: Support rehabilitation of under capacitated urban water supply systems including intakes, treatment plants, distribution 547.8 602.8 667.5 mains and distribution networks. Target 12: Support the ongoing rehabilitation of urban sewerage and drainage systems including construction of collection facilities 286.9 256.3 155.0 and waste treatment oxidation ponds. Target 13: To support extension/ construction of new sewerage and drainage systems to uncovered areas in regional headquarters 383.6 430.4 473.9 (UWSAs) TOTAL 3,268.7 3,558.9 3,761.8 152 8.9 MEDIUM TERM EXPENDITURE FRAMEWORK FOR 2000/01 - 2002/03 FOR THE WATER SECTOR TARGET DIVISION SERVICE CAPACITY BUILDING CAPITAL TOTAL INVESTMENT PE OC 2000/01 2001/2 2002/3 2000/01 2001/2 2002/3 2000/1 2001/2 2002/3 2000/01 2001/2 2002/3 2000/01 2001/2 2002/3 Administration & General 75.0 87.0 110.5 279.1 323.8 411.2 32.5 37.7 47.9 18.0 19.8 21.8 404.6 468.3 591.3 Finance and Accounts 29.4 34.1 43.3 84.9 98.5 125.1 0.0 0.0 94.3 0.0 0.0 0.0 114.3 132.6 168.4 Policy and Planning 16.8 19.5 24.7 140.7 163.2 207.3 0.0 28.8 0.0 94.7 104.2 114.6 252.2 286.9 346.6 Water Resources management 488.4 566.5 719.5 323.1 374.8 476.0 24.8 0.0 0.0 547.4 602.1 662.4 1383.7 1572.2 1894.4 Central Water Store 5.8 6.7 8.5 81.2 94.2 119.6 0.0 0.0 94.3 0.0 0.0 0.0 87.0 100.9 128.2 Central Water Laboratory 67.2 78.0 99.0 237.2 275.2 349.4 0.0 0.0 11.3 91.1 100.2 110.2 395.5 453.3 558.7 Urban Water and Sewerage 655.5 760.4 965.7 220.4 255.7 324.7 0.0 0.0 36.5 1218.3 1340.1 1474.1 2094.2 2356.2 2764.5 Central Water Board 32.7 37.9 48.2 100.7 116.8 148.4 0.0 8.9 0.0 0.0 0.0 0.0 133.4 154.7 196.5 Rural Water Supply 404.1 468.8 595.3 531.2 616.2 782.6 0.0 148.5 0.0 1299.2 1429.1 1572.0 2234.5 2514.1 2949.9 Water Resource Institute 82.6 95.8 121.7 145.4 168.7 214.2 128.0 0.0 0.0 0.0 0.0 0.0 356.0 413.0 524.5 Water Drilling 203.9 236.5 300.4 112.3 130.3 165.4 7.7 0.0 0.0 0.0 0.0 0.0 323.9 375.7 477.2 TOTAL 2061.4 2391.2 3036.9 2256.2 2617.2 3323.8 193.0 223.9 284.3 3268.7 3595.6 3955.1 7779.3 8827.9 10600.1 153  9. MTEF FOR THE AGRICULTURE SECTOR 2000/01 - 2002/03 9.1 INTRODUCTION 9.1 The Tanzanian economy depends on agriculture which contributes about 50% of GDP and provides 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 sector has forward and backward linkages to agro-processing, consumption and exports. The components of the sector include, food crops, livestock, and export crops (coffee, cotton, tea, cashew nut, tobacco, sisal, pyrethrum, cocoa, oil seeds and cardamom). The contribution to agriculture GDP of food crops, livestock and export crops is 55%, 13% and 8% respectively. Forestry, hunting and fishing account for an average of 6 percent of the GDP each. The General Performance Trend of the Agricultural Sector 9.2 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. The six main food crops (maize, rice, sorghum, millets, wheat and pulses) grew at an average of 3.5 percent and export crops at 5.4 percent per annum. Other components such as livestock, forestry and hunting and fishing have recorded growth rates of 2.7, 2.6 and 3.4 respectively (see Table 9.1). Table 9.1: Agricultural GDP (1996 - 1998) and Growth Rates (1985 - 1998) in constant 1992 prices) T.shs. Million GDP GROWTH RATES 1996 1997 1998 1985-90 1990/98 1985-98 1997 1998 Main Food Crops 323,093 269,890 350,268 4.3 3.0 3.5 -16.5 29.7 Other Food 136,465 140,268 144,212 3,0 2,8 2.9 2.7 2.8 Livestock 94,307 96,820 98,680 3.0 2.5 2.7 2.7 1.9 Export crops 67,236 64,180 77,422 1.8 7.7 5.4 -4.5 2.6 Forestry and hunting 45,615 46,846 47,429 2.7 2.6 2.6 2.7 1.2 Fishing 41,240 42,764 44,262 3.0 3.7 3.4 3.7 3.5 Agricultural GDP 709,952 662,782 764,270 3.5 3.3 3.3 2.4 1.9 Source: MAC: Agriculture Performance and Strategies for Sustainable Growth, 2000 154 9.2 CURRENT INSTITUTIONAL PERSPECTIVES Vision 9.3 On the basis of the National Vision 2025 for Food and Agriculture, the Ministry of Agriculture and Cooperatives (MAC) has a very clear development vision as outlined in MAC's Medium Term Strategic Plan 1999-2004. The Vision statement states that MAC, as a catalyst for agricultural and co-operative 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 environmentally friendly. Mission 9.4 In order to achieve the vision, MAC will promote efficient and effective services to the agricultural sector. The mission of MAC is thus to formulate sound policies, provide sound regulatory frameworks and support services as well as technical advice to farmers and private sector for a sustainable growth and poverty reduction. Objectives 9.5 The MAC objectives in respect to agricultural development are: - to review and formulate sound agricultural policies in order to ensure the right direction towards developing the sector; - to provide support services (research, extension, training, agricultural information and cooperative services) to farmers and other institutions in order to improve technological know how which will facilitate increased agricultural production, productivity and quality; - to provide regulatory framework and services in order to sustain agricultural industrial growth; - to provide technical services in agricultural farming (irrigation, range management, soil and water conservation, land use and planning and mechanization) in order to promote effective use of resources for sustainable agricultural development; - to develop human resource within the sector in order to increase the productivity of labor and to improve ability, awareness and morale; - to provide assistance to co-operative development particularly in areas of human resource development and institutional capacity building without impinging on their independence; and - to provide an enabling environment for private sector participation in agricultural production, processing and marketing. 155 Policies 9.6 The policy direction for agricultural and livestock development is stipulated in the Agricultural, and Livestock Policy of 1997. The policy is based on economic reforms to direct the economic system towards the free market economy with increased role for private sector participation, and the relinquishing by the Government of the major sectors of the economy including disengagement from commercial activities and direct production functions. The ultimate goal of the policy is the improvement of the well-being of the people whose principal occupation and ways of life are based on agriculture, most of whom are small-holder and livestock keepers who do not produce surplus. The policy sets national food security as the primary object and aims to improve national standards of nutrition by increasing output, food quality and availability. 9.7 To achieve the stated goals and objectives, the policy instruments have been employed to enable the agricultural sector to move towards the stated goals and objectives. These include the following strategies: (i) improve the agricultural extension and advisory services; (ii) raise the efficiency and reduce the cost of production through use of appropriate technology; (iii) regulate and control quality and standards of agricultural outputs and inputs; (iv) coordinate agriculture and livestock research to generate appropriate technology; (v) improve supervision and inspection of cooperatives (unions and societies); (vi) institute cost sharing in research and training activities; (vii) facilitate cooperative movement through intensive and extensive member education on obligations and rights; and (viii) train required manpower for their efficient and effective delivery of agricultural support services. 9.8 Detailed strategies for the implementation of the sector policies (Agriculture and Livestock and Cooperatives) have been prepared. 9.3 REVIEW OF BUDGETS PERFORMANCE (1997/98, 1998/99 & 1999/2000) AGAINST THE MISSION, PLANNED OBJECTIVES, POLICIES, STRATEGIES, TARGETS AND ACTIVITIES 9.9 General Budgetary Performance: Public expenditure in agriculture in Tanzania is channeled into the agricultural sector directly through ministries. These are MAC (responsible for the overall development of the sector), Ministry of Natural Resources and Tourism (forestry, fisheries and wide life) and the Ministry of Regional Administration and Local Government (MARLG) responsible for delivery of extension services. The allocation of budgetary resources directly into agriculture sector, therefore constitutes the sum of expenditure by MAC and related agricultural activities of these agencies. The combined expenditure of these agencies in 1997/98 and 1998/99 has averaged around 3.3 % of the total government expenditure. The share of MAC in the total government 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 fluctuated between 3 and 4 percent. In 1997/98, 1998/98 and 1999/2000, the share was 2.1, 4.1 and 4.3 respectively (see Table 156 9.2). The increase is due to allocation to credit programs and the Strategic Grain Reserve and this has effect on expenditure towards field activities. Table 9.2: Trend of Budget Allocation to the Ministry of Agriculture and Cooperatives (in Million TShs) Description 1997/98 1998/99 1999/2000 Actual Approved Estimates Expenditure Budget A: RECCURENT BUDGET 12,439.60 15,316.68 15,720.00 PE 8,200.73 8,331.63 8,210.00 OC 3,235.37 5,985.05 5,475.00 Special Allocation Agricultural Input Trust Fund 1,000.00 1,000.00 1,036.36 Strategic Grain Reserve 1,003.50 1,000.00 999.00 B: DEVELOPMENT BUDGET 4,525.00 21,850.00 28,700.70 Local 553.00 1,000.00 2,437.50 Foreign 3,965.00 20,850.00 26,263.20 C: TOTAL MAC BUDGET 16,964.60 37,166.00 44,420.00 D: RECURRENT SHARE OF MAC 74.0 41.0 35.0 E: DEVELOPMENT SHARE OF MAC % 12.0 4.4 8.5 Local 88.0 95.6 81.5 Foreign F: MAC SHARE OF GOVERNMENT BUDGET % 2.1 4.1 4.3 Source: MAC PER, 2000 Financial resources to the Agricultural Sector 9.10 The agricultural sector is financed by the government, development partners (bilateral and multilateral), NGOs, retention schemes, and contributions from crop commodity industries. However, as can be noted in the table above, the share of the budget allocated by the government to the sector has averaged around 3.7% in the last three years (1997/98 - 1999/2000). 9.11 The ministry has undertaken a number of initiatives so as to increase funding of the agricultural sector particularly in areas of research and inputs. These include: - a substantial progress in privatizing research activities for the main cash crop. Crop Development Funds have been established (coffee, cotton, tobacco) - setting revolving funds for seed multiplication - all tea research has been privatized through Tea Research Institute of Tanzania (TRIT). Privatization of tobacco and coffee research is in its final stages 9.12 Though there are no records to show how much has been contributed by NGO's and the private sector, they are both actively participating in financing the agricultural sector, especially in extension, irrigation, input procurement and distribution and development of livestock, and the provision of small credit to farmers both in cash and kind. 157 Achievements against Objectives and Targets 9.13 Achievements in MAC for the past three years can mainly be seen in institutional reforms but very little in meeting the targets set. Through the Agricultural Sector Management Project (ASMP), the Agricultural and Livestock Policy and other activities, the ministry pursued institutional reforms and the following activities are in progress. (i) A new organizational structure based on the core functions is in place and functioning (ii) Rationalization of MAC and decentralization of extension services to the councils. Over 7,000 staff have been re-deployed to the councils - Roles and working modalities between MAC and the Ministry of Regional Administration and Local Government have been prepared and agreed upon (iii)- Privatization of parastatals under MAC for increased production is on-going and the status is as follows: - All sugar estates companies (Kilombero, Mtibwa, TPC) have been divested, except Kagera - Tobacco Processing Plant - The Pyrethrum Crude Extract Plant - All Sisal estates and spinning mils of the defunct Tanzania Sisal Authority - All Tea estates except Dabaga and Maruku - Dairy Processing Plant (TDL). - Dairy farms under Dairy Farm Company (DAFCO) - Iwambi, Ruvu, Rongai. and Utegi except Kitulo, Ngerengere and Malonje - National Milling Corporation grain mills and godowns In addition, meat processing plant (TPL), cashewnut processing factories, other farms and ranches under National Agriculture and Food Company (NAFCO) and National Ranching Company (NARCO) are at various levels of privatization. (iv) Private sector development - Guidelines for private sector participation in research, extension training is in place - All tea research has been privatized - Several round table meetings with sector stakeholders for cereals, floriculture, tobacco and cotton industries have been held (v) Review and harmonization of the following Acts and Regulations have been completed. - The Plant Protection Act (1997) and regulations (1999) - The Sisal, Tea and Pyrethrum industries regulations (1997) are in place but need further updating (vi) Participating in TAS and HIPC initiatives (vii) Taking part in preparing the Poverty Reduction Strategy Paper (PRSP) 158 (viii) Programs/projects under implementation include: National Agricultural Extension Project (NAEP II) National Agriculture Research Program (TARP II) Agriculture Sector Management Project Agriculture Sector Program Support River Basin Management for Small-holder Irrigation Program Participatory Irrigation Development Program National Dairy Development Project Tanzania Livestock marketing Project Southern Highlands Extension and Rural Financial Services Project Livestock Disease Control Project Agriculture Training Institute Integrated Pest Management Project National Program for Food Security Soil and Water Conservation Project Actual Expenditure Against Budget 9.14 The overall trend in budget allocation to the MAC has been declining over the last three fiscal years. In 1999/2000, the total funds allocated to MAC was Tshs.44,420.0 million, about 2.2 percent of the overall government budget which is lower than the share in 1997/98 (2.4) and 19998/99 (2.6). The share of the budget allocated to MAC are shown in Table 9.3 Table 9.3: Agricultural Share of Government Budget (MAC) 1997/98 1998/99 1999/2000 Recurrent Expenditure 2.3 2.5 2.2 Development Expenditure 3.7 12.5 9 Source: MAC PER, 2000 Appendix 3.3 9.15 Actual release to MAC as compared with the approved budget over the recent years can be summarized as in Table 9.4. Table 9.4: Releases to MAC as Percentages of Approved budgets 1997/98 1998/99 1 1999/2000* Recurrent Expenditure 95.6 119.5 23.2 Development Expenditure (Local only) 68 241** 0.6 * Releases up December, 1999 ** Large share of expenditure was disbursed to Madibira irrigation project Source: MAC PER, 2000 Appendix 3.1 159 Problems/obstacles experienced and Proposed Solutions Problems cited include: 9.16 Late release of the approved funds from Treasury; insufficient funds allocated to implement the set targets; and late issuance of budget guidelines from the Center to the implementing agencies. Proposed Solutions 9.17 Timely release of approved funds from Treasury; release of fund in accordance with the approved budget; and early issuance of the budget guidelines from the center. 9.4 MEDIUM TERM EXPENDITURE FRAMEWORK (2000/01 - 2002/03) Medium Term Objectives 9.18 In the past few years, the nation has taken several measures to address the declining trend in agricultural production. Such measures include reviewing the agricultural sector policies, liberalization of crop marketing systems and creation of an enabling environment for private sector participation to invest in the agricultural sector. All these are aimed at ensuring food security and increased agricultural production. The Agricultural and Livestock Policy of 1997 states nine objectives for the development of the agriculture sector. But on the basis of the Medium Term Plan and Expenditure Framework these objectives have been reviewed in order to focus more on the mission of the Ministry. Thus the medium term objectives for the sector based on the MTEF planning model are: (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 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-products and residues to the local industries; (iii) To develop human resources within the sector and introduce new technologies in 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 efficiently by the private sector; specifically extension services, the access of all groups of people to land, credit and agricultural statistics and marketing information; and (vi) To encourage private sector to investment in agricultural sector 160 Policies and Strategies Policies 9.19 The sector goal and policy objectives as contained in the Agricultural and Livestock Policy and the Co-operative Development Policy of 1997 remain to be the pillars in re- defining the Ministry's role and the roles of the emerging private 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 from commercial activities and direct production functions in the agriculture sector. Strategies 9.20 Currently, there are two categories of agricultural sector strategies. The strategies to implement the sector policies (Agriculture, Livestock and Co-operatives), and the strategies to implement the MAC Medium Term Strategic Plan 1999 - 2004. Strategies to implement the 1997 Agriculture, Livestock and Cooperatives Policies 9.21 Two categories of the strategies have been recommended. They are: strategies addressing cross cutting issues/constraints and sub-sector specific issues as indicated in the policy documents. The sub-sectors include: support services (extension, research, training, agricultural information, cooperative services, irrigation, inputs, mechanization). 9.22 The draft strategies address the current situation and constraints facing the agricultural sector in general. These include: low agricultural production technology (low use of fertilizers, improved seeds, improved farm technology and improved breeds); dependence on rain-fed agriculture (land under irrigation is only 150,000 ha. while the potential is one million ha); Poor rural roads and marketing infrastructure; inadequate agro-processing infrastructure; Inadequate credit for agricultural production and marketing; low public and private investment in agriculture (rural roads, research, education, health, water); high post- harvest losses due to pests and poor handling; deficiencies in trade and marketing policies and comprehensive marketing information; prevalence of pests and diseases; climatic fluctuations, drought and floods in some years; low soil fertility; environmental degradation which result in water shortage, land degradation, soil erosion, drought and flood hazards; volatile markets; numerous and multiple taxes, levies and tariffs; and low purchasing power of the farmers. Strategies to implement the MAC Medium Term Strategic Plan 1999 - 2004. 9.23 The MAC strategic plan among other things aims at conducting systematic assessment of services to the agricultural sector and to improve its overall performance as a facilitating public institution. The plan identifies problems and constraints (discussed above) in the sector in general and recommends remedial actions to be undertaken and outlines the financial resources requirement for the achievement of the plan. The strategies include: (a) strengthening and providing regulatory and quality control services with a view to improve quality of agricultural inputs, services and farm produce; (b) devolution of production, extension and marketing oriented responsibilities to the local authorities and the private sector while maintaining MAC's functions; 161 (c) conducting and coordinating agricultural research contributing towards increased and sustainable productivity; (d) enhancing the institutional and stakeholder capacity to formulate sound agricultural policies, monitoring and evaluation and to carry out agricultural activities efficiently respectively. Components under this include: Improving and managing human resources with a view to enhancing efficiency in the provision quality services to stakeholders; Building capacity for provision of technical and extension services to meet demand for the stakeholder of the sector; (e) enhancing food security at aggregate and household levels through building capacity for co-ordination of food security programs and assessment of food security requirements and situation. A household food security and nutrition monitoring system has been prepared. This also involves maintaining emergency food reserve as a mitigation action for intervention in the event of disasters and crop failures; (f) building requisite capacity to control and address plant and animal pests and diseases outbreaks: (g) development of strong and efficient member based co-operatives at different levels in order to facilitate provision of credit and mobilization of saving and therefore overall development of rural sector; Medium Term Targets and Activities 9.24 The main targets to be implemented in the medium term in respect to the resources allocated to the Ministry are as follows: Sub -vote Service Delivery Targets Activities 101 1. Training and Development of staff Update staff list carried out Conduct training needs assessment Estimating training costs vs output Executing training 2. All staff confirmed and promoted by Prepare seniority list the year 2003 Identify individuals for confirmation and promotion Ensure performance reports are reviewed and compiled 3. Procurement and distribution Strengthen the capacity of procurement unit procedures improved by 2003 Streamline the procurement for MAC Internalize the procedure 102 1 Ensure proper utilization of funds Ensure all financial records are daily and properly allocated to MAC kept Produce monthly and quarterly mid year financial reports Produce Annual Appropriation Accounts within 4 months of the year end Implement routine audits in accordance with annual internal audit plan 2. Ensure all monthly reconciliation are Collect bank statement and compile prepared Reply of audit queries and other reports Sub -vote Service Delivery Targets Activities 103 1. Agricultural Statistics with respect to Expand database to include all aspects of gender properly collected and agricultural data and information by the year 2003 disseminated Introduce cost effective methods for routine data 162 collection by the end of 2002 Create awareness linkages to data producers and farmers through meetings, seminars, radio programs and news papers at all levels 2. Performance of the agricultural Conduct policy monitoring study annually sector, policies and strategies Prepare periodical reviews (quarterly, semi annual) monitored, reviewed and prepared Prepare annual implementation report for the sector Prepare sector policy paper Agriculture Sector Development Plan Conduct agriculture sector development study prepared by December, 2000 Stakeholders meeting held to discuss the report Prepare cabinet for the approval of the Plan 104 1. Conducting farmers training in Visit Farmers wings to monitor implementation of Farmers training wings on cost sharing curricular and provide guidance basis annually in the medium term To mobilize extension staff trainers and conduct workshops Supervision and follow up of training in farmers training wings 2. Cost recovery and cost sharing Develop and disseminate the guideline for cost mechanism established sharing mechanism Strengthen training institutes self help funds Sensitize stakeholders to contribute funds for training programme 3. Demand driven training curricular Mobilize stakeholders for curricula review developed by December, 2000 Prepare the agreed curricula and implement Conduct awareness raising campaigns Acquire data and information for Land Information Systems (LIS) 2 Develop and implement integrated Release biological control agents and monitor pest management Renovation of the existing rearing unit 3. Water management plan developed Updating and improving of irrigation sachems inventory Strengthen water users associations Train farmers on water management technologies Carry out continuous assessment 4 Farmers capacity in developing and Carry out training needs assessment on proper water managing irrigation schemes based on use management and maintenance of irrigation appropriate water utilization schemes technologies strengthened Develop training programme based on training need assessment Train water users on proper operation and maintenance of irrigation schemes Mobilize water user group to for water users Associations/Cooperatives 5. MAC human resources capacity in Conduct a study for capacity building plant protection strengthened by 2003 Train and recruit new staff in plant protection 6. Capacity for inspection and Provide phyto-sanitary service staff with surveillance strengthened annually appropriate equipment and facilities Operationalize aerial services 7. Guidelines for private sector participation in agricultural extension prepared and developed by December, 2000 301 1. Livestock of high genetic potential Establish baseline data on indigenous livestock as well as formulation of feasible (production, reproduction, health, off-take, etc.) feeding packages in beef and milk Develop feeding and management systems for production (from 1600 Its to 2000 Its of small-scale fed improved cattle milk yield lactation and 100kg to 250kg Evaluate the extent and causes of dairy cattle of carcass) developed and introduced reproductive wastage 2. Establish cost recovery mechanism Hold meetings with stakeholders strategies to 163 for agricultural research generate funds for activities 3. Promote private sector involvement Conduct meeting between research beneficiaries in agriculture research and research management and modalities Conduct joint research activities for both crops and livestock 4. 80% of research programmes utilize Field backstopping and monitoring farming systems methodologies Zonal exchange visits to share experiences Collaborative research to share experiences Carry out annual farming approaches workshop 5. Varieties of food crops (grains and Identify, collect and evaluate crop germplasm for on-grains) resistant to pests, disease drought resistant and drought released 6. Feeding packages for small scale Identify available feed resources feed improved cattle developed Evaluate and improve the feed Monitor and evaluate with farmers introduced feed packages 401 1. Increased formation and capacity Prepare the guidelines building of SACCOs, AMCOs, Conduct workshops for stakeholders LIMCOs and Co-operative Department Produce sufficient copies of the guidelines and questionnaires Conduct workshops to evaluate the proposed management guides for the SACCOs, AMCOs, and LIMCOs 2. Co-operatives managerial capacities Identify skill gaps improved and developed Design training programmes Conduct training Carry out continuous impact assessment Monitor and evaluate 3. Co-operative inspection Take inventory of skills gaps strengthened Design training programme for inspectors Train and recruit inspectors Provide adequate resources to facilitate inspection 501 Timely and accurate assessment of Conduct crop and rainfall data collection and data national food security situation and on crop area forecast giving early warnings Conduct field surveys for preliminary crop forecast and final crop forecast Data processing and to produce and disseminate early warning reports Maintain the reporting network 601 Range land survey, demarcation and Identify pastoral grazing lands pasture development carried out Assess forage productivity in demarcated areas Harmonize and mobilize pastoralists and agro- pastoralists Develop stocking rate guides Resources Needed for 3 Years (Recurrent and Development) 9.25 The resources needed to finance the prioritized MAC activities for the three years are shown on Tables 9.5 and 9.6 for recurrent and development expenditures respectively. Priorities 9.26 In view of the new developments (TAS and PRSP), and given the current limited resource ceilings and allocations, the priority areas of the MAC that require government funding should form core functions. In this regard, the agriculture sector priority areas that critically need government budgetary allocation for 2000/2001 through 2002/03 are as follows: 164 (i) Strengthening policy formulation, analysis, review and monitoring of agriculture sector development through: Formulation of a Comprehensive Sector Development Plan. The concept behind is to have a Comprehensive Sector Investment Plan (SIP), which will encompass all key aspect of the agricultural sector. Terms of Reference for the plan are being developed. All stakeholders to be involved in the formulation of the plan. Co-ordinate and implement current MAC policy initiatives (e.g., Agriculture Development Strategies) taking into account the Budget, PER, TAS initiative, together with the Highly Indebted Poor Countries (HIPC) initiative, so as to ensure agriculture policy consistency and address inadequacies in local counterpart funding versus donor funding. Continue reviewing of relevant acts and regulations so as to minimize regulatory controls and bureaucratic hurdles and make them transparent to all stakeholders. (ii) Strengthen agricultural data and information system by: 9.27 Improving a mechanism for agricultural data collection, preparation, analysis, processing, and dissemination; 9starting GIS, website and promotion material for the agriculture sector; and facilitating and developing agriculture information program for potential private sector investors. (iii) The rehabilitation of research, extension and training facilities 9.28 Encourage private sector participation in providing extension services to the farmers with cost sharing where feasible. The existing research-extension linkage; particularly in the planning and execution of on-farm trials together with farmers will be strengthened. The extension service will reinforce the group approach in farmer consultation, message delivery and problems solving and will facilitate the addressing of farmers problems such as development issues i.e. agricultural inputs, transport and credit which impact on the adoption of extension recommendations and messages. The development of technical packages for dissemination by extension officers to farmers and livestock keepers will also be implemented. (a) Research and Extension 9.29 The main objective of research services is to establish efficient, cost-effective and sustainable research services in the country capable of developing appropriate and environmental sound technological packages to the farming community. Government finance should at most be directed to research activities on food crops and farming system research activities and on cash crop for the purpose of filling shortfalls (gaps). The strategic vision of the second phase of the research program is to make research more user-oriented and demand driven. Sustainable and more budgetary sources of research funding will be sought (e.g. tax/levies) from industrial commodities, revenue retention and bilateral donor participation. Research-extension-farmer linkages will be strengthened through joint planning, budgeting and implementation of agreed research agenda. (b) Training 9.30 Training will concentrate on Supply of competent and confident agricultural, livestock and cooperative personnel to cater for public, private and self-employment in the agriculture sector. Specific training strategies will include: 165 - Rehabilitation and improvement of the learning environment within colleges; - Systematizing enhancement of cost-sharing mechanisms; and - Changing training modules to suit private sector interests and demands. (iv) Enhance institutional reforms and capacity building in MAC through: Setting up of relevant institutional organizations horizontally as well as vertically. For example regulatory bodies, strengthening of cooperatives, local government reforms and facilitating sustainable private sector participation in all areas. (a) Regulatory Strengthening To improve regulatory and quality control services in the MAC for supervision, review and updating legislation governing the development of the agricultural sector and other legal and regulatory responsibilities. (b) Strengthen Cooperatives Provide cooperative legal instruments which ensure accountability of cooperative leadership to members and sanction in case of non-compliance. Increase efficiency, transparency and accountability of cooperative leadership. Focus on primary societies empowerment. Provide education and training to cooperatives supervisors, inspectors and members Promote sustainable development cooperatives for cooperatives to operate efficiently in the liberalized market economy, MAC will strive to strengthen by 50% of existing societies through intensive promotional techniques. There is a need for the existing 400 registered cooperative societies to be fully reformed and operate efficiently. Establish an efficient and effective cooperative, regulatory framework, M & E system and inspection. Reduce the de-registration and liquidation period. (v) Complete and consolidate the ongoing agricultural development projects Complete and consolidate the following ongoing projects, which already have contractual agreements. Agriculture Sector Management Project Development of Livestock Markets Agriculture Sector Program Support Agriculture Training Institutes Participatory Irrigation Development Program River Basin Management & Irrigation Project Madibira Small-holder Irrigation Project Soil and Water Conservation 166 Integrated Pest Management Tanzania Agriculture and Research Project (TARP II) National Dairy Development Project Livestock Disease Control Coffee/Cotton Market Development and Trade Pan African Control of Epizootic (vi) Support Sustainable Agricultural Development Activities 9.31 Continue with public funding agriculture support activities, which promote and facilitate environmentally sustainable economic growth and sustainable development in the agricultural sector resulting in: food security, raised nutritional status of people in the rural areas, higher income for the rural people, growth in agricultural exports, and environmentally and sustainable use of land resources. (a) Food Security 9.32 Intensification of food crop production, which will necessarily involve adoption of improved agricultural technologies and farming practices that will: Improve management of SGR to enable Government intervention during food crises. Promote food production (cereal and non-cereal). Efficient early warning systems. Improve community education and awareness on nutrition and health. Encourage cultivation of drought/disease resistant crops. Promote food processing and storage technology. Promote traditional storage at the village levels. (b) Plant and Animal Diseases 9.33 Livestock diseases control and diagnostic services. Objective is to minimize the prevalence of animal diseases and mortality of livestock and protect the consumers from infectious and diseases originating from animals. The diagnostic services aims at controlling all types of livestock disease with emphasis on epidemic diseases and establishing an effective field reporting system for disease outbreaks. Intensification of plant and crop protection services and reduction of post- harvest losses. (c) Irrigation Services and environmental conservation Improve irrigation services. (d) Environmental Conservation Promote land and water conservation investments. Promote sustainable use of generic resources. Generate and disseminate new technologies for agricultural productivity with sustainable natural resource management. 167 The 3 -Year Budget 9.34 Allocated expenditures for the three year budget are shown in Table 9.7 9.5 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. More public resources for basic education, basic health, rural roads and water resources will lead to higher agricultural growth and poverty reduction. The thrust is to make agriculture the engine of growth in Tanzania. 168 Table 9.5: Resources Needed for Three Years (2000/01 -2002/03): Development Expenditure (in Tshs) Sub-vote/Project 2000/01 2001/02 2002/03 Local Foreign Local Foreign Local Foreign 103 -POLICY & PLANNING 4437 Agriculture Sector Management Project 30,000,000 800,000,000 4552 Tanzania Livestock Marketing Project - 1,695,000,000 - 1,695,000,000 - 1,695,000,000 4457 Agriculture Sector Program Support 50,000,000 2,682,000,000 100,000,000 3,624,000,000 100,000,000 3,624,000,000 4406 Agriculture Training Institutes 180,000,000 - 398,000,000 - 420,000,000 - Coffee/Cotton Market Development and Trade - 942,000,000 50,000,000 316,000,000 100,000,000 350,000,000 Total Sub-vote 103 - OP DEVELOPMENT 6465 River Basin Managed and Smallholder Irrigation Improvement 416,000,000 3,248,000,000 885,000,000 3,275,000,000 400,000,000 3,200,000,000 Participatory Irrigation Development Programme Madibira Smallholder Irrigation 298,696,000 1,618,000,000 325,000,000 500,000,000 300,000,000 6474 Soil and Water Conservation project 316,800,000 938,000,000 - - - 4456 Integrated Pest Management 96,152,000 253,000,000 96,000,000 196,000,000 - 4426 National agriculture Extension Project (NAEP 11) 74,000,000 420,000,000 100,000,000 - 6493 Kitivo Irrigation Project 393,400,000 3,054,000,000 450,000,000 6,705,000,000 450,000,000 Special Programme for Food Security 135,000,000 - Total Sub-vote 201 301 Research and Development 2261 Tanzania Agriculture Research Project (TARP 11) 233,000,000 4,649,000,000 94,000,000 2,058,000,000 103,000,000 1,730,000,000 Total Sub-vote 301 601- Livestock Development 4506 Livestock Dairy Development 176,000,000 1,490,000,000 180,000,000 1,340,000,000 200,000,000 1,223,000,000 4540 Livestock Diseases Control 107,000,000 785,000,000 169,000,000 890,000,000 180,000,000 900,000,000 Pan - African Control of Epizootic - 925,000,000 100,000,000 925,000,000 150,000,000 1,223,000,000 Total Sub-vote 601 GRAND TOAL VOTE 43 2,553,000,000 20,905,000,000 2,948,000,000 19,864,000,000 3,200,000,000 13,092,000,000 Source: Extracted from the Guidelines for the Preparation of the Medium Term Plan and Expenditure 2000/01 -2002/03 169 Table 9.6: Resources Needed for Three Years (2000/01 -2002/03): Recurrent Expenditure (in '000' Tshs) SUB-VOTE 2000/2001 2001/2002 2002/2003 S/N PE O.C Total PE OC Total PE OC Total 101 Administration & General 175,752 851,690 905,690 958,690 Subventions to Institutions-Internal (TPRRI, RUBADA, Freedom From Hunger Campaigns) 102 Accounts & Finance 43,264 42,010 77,681 97,641 103 Policy & Planning 93,000 247,050 251,985 277,461 104 Agricultural Training 903,063 258,452 346,306 305,516 Institutes 201 Crop Development 911,004 1,620,240 1,481,982 1,597,509 203 Research and Development 867,832 387,678 544,976 545,908 401 Co-operative Development 87,828 152,880 180,815 211,887 Internal Subventions (Co-operative College & COASCO 501 Food Security 73,560 807,206 1,085,454 1,244,776 601 Livestock Development 552,440 337,000 367,431 331,431 TOTAL RECURRENT 3,708,690 3,708,786 7,413,476 3,866,786 5,293,662 9,160,448 3,866,786 5,557,820 10,424,606 *Includes: Agricultural Inputs Trust Fund **Includes: Strategic Grain Reserve (SGR) Source: The Guidelines for the Preparation of the Medium Term Plan and Expenditure 2000/01 -2002/03 170 Table: 9.7. The Three Year Budget: Recurrent and Development - Local (2000/01 - 2002/03) (in '000' Tshs) SUB-VOTE 2000/2001 2001/2002 2002/2003 S/N PE O.C Total PE OC Total PE CC Total 101 Administration & General 175,752 851,690 905,690 958,690 Subventions to Institutions-Internal (TPRRI, RUBADA, Freedom From Hunger Campaigns) 102 Accounts & Finance 43,264 42,010 77,681 97,641 103 Policy & Planning 93,000 247,050 251,985 277,461 104 Agricultural Training 903,063 258,452 346,306 305,516 Institutes 201 Crop Development 911,004 1,620,240 1,481,982 1,597,509 203 Research and Development 867,832 387,678 544,976 545,908 401 Co-operative Development 87,828 152,880 180,815 211,887 Internal Subventions (Co-operative College & COASCO 501 Food Security 73,560 807,206 1,085,454 1,244,776 601 Livestock Development 552,440 337,000 367,431 331,431 TOTAL RECURRENT 3,708,690 3,708,786 7,413,476 3,866,786 5,293,662 9,160,448 3,866,786 5,557,820 10,424,606 TOTAL DEVELOPMENT 2,555,330 2,948,710 3,200,000 GRAND TOTAL VOTE 43 9,968,806 12,109,150 13,624,606 *Includes: Agricultural Inputs Trust Fund **Includes: Strategic Grain Reserve (SGR) Source: The Guidelines for the Preparation of the Medium Term Plan and Expenditure 2000/01 171 10. MTEF FOR THE MINISTRY OF JUSTICE AND CONSTITUTIONAL AFFAIRS 10.1 INTRODUCTION An overview of the Public Legal Sector 10.1 The Government of the United Republic of Tanzania has embarked on economic and political reforms since the last half of the last decade. The political reforms took shape in 1992 when far-reaching constitutional amendments were enacted in order to open the doors to multiparty democracy. The economic reforms were introduced in order to liberalize trade and provide for an open market economy. In particular, the reforms were and still are, intended to create a microeconomic and macroeconomic environment and to provide an appropriate institutional infrastructure relating to property rights, rule of law and good governance which attract a strategic long term investment for economic growth, poverty eradication and a basis for implementation of the National Development Vision 2025. 10.2 It is a cardinal principle of the Constitution of the United Republic of Tanzania to unflinchingly uphold the rule of law. In a developing state like ours, this can be secured only if there is established and maintained in the country, an efficient, fair and transparent system of justice. Such a system 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 unequivocally committed to institute and expeditiously execute the reform and development of the legal and judicial service in the country, and to rapidly enhance accessibility to justice for all the people without discrimination of any sort. Constitutional Mandate of the MJCA 10.3 The economic and political reforms are implemented by the Government throughout its various Ministries which the President established under Article 55 of the Constitution. The Ministry of Justice and Constitutional Affairs is one of such Ministries and its duties and functions, like those of any other Ministry are outlined under Government Notice No. 720 of 1995. Such functions and duties are enumerated as: the administration of justice under Judiciary and Attorney General's Chambers. Viz. public prosecution of criminal cases, constitutional affairs and human rights, legislative drafting, control of prosecutions, international negotiations and international treaties and conventions, agreements, extradition's and international mutual assistance in criminal matters, official receiver, public trustee, bankruptcy, probate and administration, 172 registration of births and deaths, marriages, library and research services. In summary, the Ministry, through the Attorney General's Chambers, acts as a legal advisor to the Government and its agencies or organs, administers justice through the Judiciary and undertakes research on laws through the Law Reform Commission. 10.4 The economic liberalization and democratic expansion have greatly enlarged the functions and duties enumerated above. The reforms, include the restructuring and privatization of public enterprises and parastatals. Democratization has necessitated the introduction of multi-partism, a process which has realized a degree of awareness and demands of human rights by the public and civil society. This trend of things is likely and is expected to advance in future. The consequence of this development would be increased civil and constitutional litigation. The Government, the Ministry of Justice and Constitutional Affairs, in particular, must be prepared to respond appropriately to these expanded functions and duties. Vision, Mission of the MJCA. 10.5 In order to discharge the above-mentioned obligations efficiently and effectively the Ministry has set out its vision, mission objectives, targets and priorities for the next three years. The vision of the Ministry is accessible and timely justice for all. The mission upholds and is commensurate with the attributes of the National Vision 2025, inter-alia, good governance, rule of law integrity and moral uprightness. In line with the overall vision the mission of the Ministry is the development of social justice, equality and rule of law through quality and accessible legal services underpinning the basic values of 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, accessibility and affordability of legal service for all citizens, efficient and timely resolution of disputes, transparency and accountability. In summary, a stable and sustainable legal system that will support the National Vision 2025 which envisages sustainable development and prevalence of peace and security. 10.2 REVIEW OF EXPENDITURE PERFORMANCE Government Expenditure on MJCA 10.6 The MJCA, has for a long-time 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. The severe under - budgeting is largely a result of a historical but unrealistic and arbitrary baseline. (The small budget allocation to the MJCA is as shown in Table10.1). 10.7 Although the role and functions have continued to expand due to the reforms and other changes, the budget resources have remained stagnant and the baseline enhanced. 173 Table 10.1: Actual Government Expenditure on MJCA, 1997/98 and 1998/99 (Million Tshs. and Percentages) Item 1997/98 1998/99 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 Recurrent 1.21 1.3 1.4 1.3 Expenditure MJCA Share in Total 0.11 0.05 0.13 0.01 Development Expenditure MJCA share of Total 0.77 1.08 1.5 1.2 Government Expenditure Source: Ministry of Finance Files Note: Data from MJCA indicate that the ministry's recurrent expenditure for 1998/1999 was only 7306.5. 10.8 According to Table 10.1 the share of the Ministry of Justice in the total government actual expenditure increased only marginally from 1.08% in 1977/98 to 1.2% in 1998/99. But part of the increase was 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 1997/98 to 0.01 in 1998/99. A large part of it came from donors. 10.9 The smMl development expenditure in the MJCA is, however, largely due to the policy that has for some years now been adopted by the government i.e. focusing on the cluster of priorities for development budget allocation. The judiciary has been included in the priority list only recently. 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. Allocations within the MJCA 10.10 The small budget in the MJCA is allocated and spent independently in the three departments based on their different functions. Each department operates under its own vote. 10.11 Table 10.2 shows that within the ministry, the budget expenditure is distributed into the three independent departments. The judiciary department got the largest share, over 70%, of the budget for the 1997/98 and 1998/99 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%. Most of the expenditure in the departments was directed into recurrent expenditure with only the AGC department having some small development 174 Table 10.2: Distribution of MJCA Expenditure by Departments (million Tshs) Department 1997/98 1998/99 1999/2000* 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 Department'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 Development Expenditure 0.00 0.00 Department's share of MJCA Expenditure 81.6% 72.4% Source: Budget Estimates Documents for the respective years. Actual expenditures for the period between July 1999 and January. expenditure. The other two departments had no development expenditure during the two fiscal years. Recurrent Expenditure by Departments and Zones 10.12 Table 10.3 analyses recurrent expenditure of the various sub-departments and zones in each of the three departments of the MJCA. Such analysis reveals the areas in which recurrent expenditure was actually made and in reference to the roles which the Ministry of Justice is expected to play in the country particularly during reforms. 10.13 The judiciary department's expenditure is distributed into various sub- departments and zones. In general the proportion of personal emolument (PE) expenditure dominates (with a share of more than 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 negative in the sense that while the staff are paid salaries they do not have equipment and facilities to enable them perform their duties efficiently. 10.14 Overall, in the two fiscal years (1997/98) and 1998/99) 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 1998/99 approved budget (i.e. government 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 expenditure, 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 1998/99 by 286% from the approved expenditure of 175 TABLE 10.3: Breakdown of Actual Recurrent Expenditure in the Judiciary Department (TShs. Million and Percentages) Sub-Dept./Zonal 1997/98 1998/99 Budget 1999/2000 Approv ed/ Actual ____ ____(%) Expenditure % of PE % OC % Expenditure % of PE % OC % Estimates % of PE % OC % 1998/99 Total Total Total 1. Administration 2017.7 44.7 29.8 70.2 2333.3 44.1 28.8 71.2 986.1 12.4 14.1 85.9 286.4 and General Expenditure 2. High Court 17.9 0.4 73.2 26.8 61 1.2 19.5 80.5 266.3 3.4 7.1 92.9 66.4 3. Court of Appeal 20.3 0.4 32.5 67.5 61.4 1.2 11.6 88.4 130.9 10.7 15.3 84.7 97.5 4. District Courts 0 0.0 0.0 0.0 120.2 2.3 0.0 100.0 146.3 1.8 60.4 39.6 149.3 5. Primary Courts 629.9 14.0 100.0 0.0 805.7 15.2 75.1 24.9 3495.8 44.0 56.5 43.5 43.6 6. Arusha Zone 132 2.9 86.3 13.7 168 3.2 67.9 32.1 419.8 5.3 166.7 7. DSM Zone 289.5 6.4 91.2 8.8 330.7 6.3 78.5 21.5 437.3 5.5 76.3 23.7 135.3 8. Dodoma Zone 107.7 2.4 83.3 16.7 126.9 2.4 67.0 33.0 189.7 2.4 66.2 33.8 105.8 9. Mbeya Zone 222 4.9 89.6 10.4 243.6 4.6 79.5 20.5 223.7 2.8 71.4 28.6 105.3 10. Mtwara Zone 129.5 2.9 82.6 17.4 124.4 2.4 83.6 16.4 251.1 3.2 74.5 25.5 110.5 11. Mwanza Zone 215.6 4.8 86.1 13.9 244.3 4.6 78.7 21.3 291.6 3.7 78.0 22.0 99.6 12. Tabora Zone 284.6 6.3 88.5 11.5 184.8 3.5 130.5 -30.5 314.5 4.0 67.0 33.0 96.3 13. Tanga Zone 95.8 2.1 84.6 15.4 108 2.0 66.2 33.8 178.0 2.2 67.5 32.5 113.2 14. Bukoba Zone 112.8 2.5 80.5 19.5 115.1 2.2 75.5 24.5 153.9 1.9 62.4 37.6 164.2 15. Songea Zone 111.8 2.5 85.4 14.6 123 2.3 76.7 23.3 200.9 2.5 68.1 31.9 119.1 16. Moshi Zone 128.2 2.8 85.6 14.4 140.3 2.7 73.6 26.4 253.6 3.2 77.2 22.8 106.8 17. Total Recurrent 4515.3 100.0 62.9 37.1 5290.7 100.0 53.7 46.3 7939.5 100 51.8 48.2 116.4 Expenditure I I I I I Source: MJCA's Budget Estimates for respective Department 176 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. 10.15 The other casualty in this regard was the High Court where its actual recurrent expenditure for the 1998/99 was only 66% of the approved budget. A slight decline in the corresponding shares was observed for the Court of Appeal, and 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 department's recurrent actual expenditure of Tshs.5290.7 million for 1998/99 was higher, 116.4% than the approved expenditure. The increase was 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 1999/2000 however has addressed this problem by giving more weight to primary courts with a share of 44% of the department's total recurrent expenditure. 10.16 Part of the differences between the actual and approved recurrent expenditure arises from the fact that the government has been injecting funds, for example in 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. Additional funds received by the Judiciary department in 1998/1999 are summarized in Table 10.4. 10.17 Due to fund shortages, court proceedings were postponed at all levels, in the January - February 1999 period. In March 1999, therefore, the government released some Tshs.496 million so as to ensure continuation of court proceedings in the country. Debt clearing has been a positive step in enhancing confidence particularly among tenderers and so chances for them to continue offering their services/output, which are important in the functioning of the department. As shown in Table 10.4 such additional funds were included in the department's OC expenditure in few areas. Such inclusion has an impact in making the department appear as if it had large OC while this was not the case. 10.18 With regard to the AGC, an additional reallocation of Tshs.180,393,500 was made in the 1998/99 fiscal year on top of the department's total OC and PE approved estimates of Tshs.969,654,200. Finally, 1999/2000, the LRCT also received an additional approval of Tshs.26 million for carrying out a study on traffic laws in Tanzania. 10.19 The actual recurrent expenditure for the AGC department as shown in Table 10.5 indicates that the other charges (OC) expenditure dominates with an overall share of over 70 percent. However, this dominance should not be taken as an indication of the adequacy of OC funding. Given the overall small budget the OC funding is extremely below the actual needs. Further, the small PE proportion partly results from a combination of very 177 Table 10.4 Additional Funding of Activities in the Judicia Department for 1998/99 Activity or Purpose Amount (Tshs, million) Date 1. Paying debt (Arrears) 50 July 88-Dec.98 2. OC, Fuel for Judges and Budget Documents 37 3. Debt (Arrears) (tender) 80 4. OC - Vehicle for a Retired Judge 15 5. Case Proceeding after Jan-Feb. 1999 Postponement 496 March 1999 6. Debt (Arrears) (staff) 39.1 7. Areas to Court Assessors 450.1 8. OC - for Kinondoni Court building 50 9. Debt (Arrears) (tender) 1.7 10 Rehabilitation - Lushoto Institute of Judicial Administration 120 11. Debt (Arrears) 5.3 12. Debt (Arrears) (including Tshs.50 mill. for Kinondoni court. 67.4 13. Debt (Arrears) - IDM 30.1 14. Debt (Arrears) 37.0 15. Medical Expenses 12.2 16. Purchase of 6 vehicles for Judges 130.8 17. Debt (Arrears) 11.0 Total 1,632.7 Source: Judiciary Department's Files low remuneration and existence of few staff in the AGC department. Overall the department had about 355 employees both on the pay roll and not on the payroll as at January, 1999 compared to judiciary, which had 7,093 employees, both on and not on the pay-roll as at January 1999. Due to fewer employees the AGC department's PE as a proportion of total expenditure was smaller than that of judiciary, which had more employees. In the AGC department between July 1999 and January 2000 about Tshs.538.6 million or 46.6% of the approved recurrent expenditure of Tshs.1,156.1 million for the fiscal year 1999/2000 have been spent. Out of these 25.9% is for PE and 74.1% is for OC reflecting the same trend of relatively larger shares of OC. 10.20 The recurrent expenditure for the AGC department more than doubled from Tshs.890.0 million in 1997/98 to Tshs.1,929.3 million in 1998/99. However a larger (44.8%) part of the increase was for the expenditure for the white paper exercise. At the same time the traditionally core sub-departments i.e. public prosecution, legislative drafting, civil and international law and administrator general suffered remarkable decreases in their respective shares. The recurrent expenditure for the Public Prosecution sub-department declined from a share of 25.9% in 1997/98 to 14.5% in 1998/99, while that of Legislative Drafting fell from 7.4% to 2.7%, Administrator General from 11.7% to 9.5% and that of Civil and International Law from 6.8% to 1.9%, respectively. These sub-departments (except Legislative Drafting) also suffered in terms of budget releases which were below the approved budget. The ratio of actual to budgeted expenditure was about 70%, 77% and 48% respectively for the Administrator General, Public Prosecutions and Civil and International Law. At the same time the sub-department of constitutional Affairs and Human Rights, which had no budget allocation in 1998/99 received significant (Tshs.864.6 or 44.8% of the department's total recurrent expenditure) for the white paper exercise. These again were funds outside the original budgets. The core - activities of the department continued to suffer from gross under funding. In this particular case, political interests seem to have overridden the interests of ensuring social and economic justice to Tanzanians. 178 TABLE 10.5: Breakdown of Actual Recurrent Expenditure in the Attorney General's Chamber (TShs. Mill.) Sub-Department 1997/98 1998/99 1999/2000* 1998/99 Expenditure % of PE % OC % Expenditure % of PE % OC % Approved % of PE % OC % Actual/ Total Total Budget * Total Approved 1. Administration 427.8 48.1 13.1 86.9 512.0 26.6 15.1 84.9 349.0 30.2 32.1 67.9 180.2 2. Administrator 104.2 11.7 58.6 41.4 183.6 9.5 34.1 65.9 250.1 21.6 24.4 75.6 69.9 General 3. Public 230.8 25.9 34.8 65.2 280.1 14.5 29.7 70.3 385.9 33.4 21.1 78.9 77.2 Prosecution 4. Legislative 66.0 7.4 28.5 71.5 52.4 2.7 30.5 69.5 62.6 5.4 36.4 63.6 134.7 Drafting 5. Civil and 60.7 6.8 21.5 78.5 36.6 1.9 24.7 75.3 84.7 7.3 21.8 78.2 48.0 International Law 6. Constitutional 0.5 0.1 100.0 0.0 864.6 44.8 0.0 100.0 23.8 2.1 13.9 86.1 ( ) Affairs & Human Rights 7. Total 890.0. 100 32.7 74.23 1929.3 100 22.7 77.3 1,156.1 100 25.9 74.1 188.3 Recurrent Expenditure Source: MJCA's Budget Estimates for respective Departments Note: PE= Personal Emolument OC= Other Charges Expenditures for the Period July 1999 to January 2000 179 TABLE 10.6: Breakdown of Actual Recurrent Expenditure in the Law Reform Commission (Tshs. Million) Department 1997/98 1998/99 1999/2000* 1998/99 Expenditure As % Expenditure AS % of Approved AS % Actual/ of OC OC Budget of OC approved 1. Personnel Expenditure 22.2 26.3 39.5 92.6 2. Training 2.1 2,6 0.8 1.3 1.7 2.1 160.0 3. Transport, Traveling, 3.5 4.4 5.3 8.8 9.2 11.6 155.9 Conference & Committees 4. Government Hospitality 0.6 0.7 1.4 2.3 0.6 0.8 155.6 5. Office Expenses 19.4 24.2 25.5 42.4 17.8 22.4 147.4 6. Printing, Information & 1.2 1.5 0.3 0.6 3.7 4.6 17.7 Advertising 7. Consumables Supplies & 5.7 7.1 8.3 13.7 4.8 6.1 251.5 Stationary 8. Maintenance & Minor 18.4 22.9 7.5 12.4 10.2 12.8 84.3 Works 9. Consultancy and Technical 4.9 6.1 2.3 3.9 26.1 32.8 17.7 Services 10. Other (2100 & 2200) 2.0 2.5 7.0 11.7 4.5 5.7 89.7 11. Losses 0 0 0 0 0.0 12. Acquisition of Equipment 22.4 28.0 1.4 2.3 0.3 0.4 70.0 and other Fixed Assets 13. Seminar & 0 0.4 0.6 0.5 0.6 ( ) Conferences 14. TOTAL 102.4 100 86.5 100 118.9 99.2 15. PE as% of Total 21.7 30.40 33.2 16. OC as % of Total 78.3 69.60 66.8 100 Source: MJCA's Budget Estimates for respective Departments Note: PE= Personal Emolument; OC= Other Charges * Expenditures for the Period July 1999 to January 2000 180 10.21 The proportion of PE (21.7% and 30.4%, respectively) in actual recurrent expenditure in the law reform commission of Tanzania as shown in Table 10.6 is also small compared to that of OC (78.3% and 69.6%, respectively) expenditure for the fiscal years of 1997/98 and 1998/99. The law reform commission of Tanzania is being supported by donor funds mainly from DANIDA, UNICEF and UNDP, while the Government of Tanzania has been giving very little OC funding. The commission also had until February 2000 few staff and this partly contributed to the small proportion of PE expenditure. For the period July 1999 to January 2000 the commission's recurrent expenditure totaled Tshs.44.5 million or 37.4% of the approved budget of Tshs.118.9 million for the 1999/2000 fiscal year. Out of these the shares for PE and OC have been 51.3% and 48.7%, respectively. The higher share of PE for actual expenditure compared to the approved budget indicates that most of the recurrent financial difficulties on the part of Government have led to a concentration of funding on PE at the expense of OC. About 58.0% of the approved budget for PE has been released while less than 50% has been released for OC when more than half of the fiscal year 1999/2000 has elapsed. 10.22 Between 1997/98 and 1998/99 overall PE expenditure increased while OC expenditure decreased for the commission. However, OC expenditures in some sub- votes increased during the period e.g. for transport, travelling and conferences government hospitality, office expenses (electrical bills, water etc.), consumables, supplies and stationery and in seminar conferences. On the other hand the decrease occurred in two key sub-votes, namely, consultancy, research and technical services and in printing, information and advertising. This decrease affected negatively the efficiency of the commission, which is basically a research organization in legal aspects. The decrease is further seen in the small amount of funds released/spent in the two sub-votes shown by the small actual and approved recurrent expenditure ratios of only 17.7% in both cases. Increases in expenditure should have been directed to these core sub-votes and if it is a question of staff shortages then funds could be reflected as unutilized. The staff shortage problem has been eased since February 2000 with the recruitment of 11 new legal researchers bringing the number of researchers to 15 against the 17 required researchers. It is expected that the number of completed researches by the commission will increase from one to three per annum. With this new development a major constraint continues to be financial which influence the quality research output. 10.23 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 sector, which include such other sectors as social services, infrastructure and agriculture. 181 Table 10.7: Development Expenditure on MCJA (TShs. Million and %) 1997/98 1998/99 1999/2000 Approved Actual Budget ctual Budget MCJA Development 331.9 24.4 248.9 4.9 Expenditure of which (i) Local (%) 0 0 0 (ii) Foreign 100 100 100 100 Governments Total 300,548.6 51718 187,277.8 82,894.7 Development Expenditure MCJA share of Total Development Expenditure 0.11 0.05 0.13 0.01 Expenditure by Departments Attorney General Chamber Total 310.9 24.4 248.9 4.9 Share Of MJCA 93.7 100 100 100 Judiciary Total 21.0 Nil. Nil. Nil. Share of MJCA 6.3 0 0 0 The Law Reform Commission Total Nil Nil Nil Nil Share 0 0 0 0 Source: MJCA's Budget Estimates for respective Departments 10.24 Most of the development funding to the MJCA as shown in Table 10.7 has been coming from the donor community. The World Bank for instance issued support of US $ 632,771.3, 183,193.88 and 522,043.2 to the MJCA for the fiscal years 1996/97, 1997/98 and 1998/99 respectively. Contribution from Donors 10.25 Since 1992 donors have shown interest in supporting this sector. In particular donor support in the legal sector has been increasing with issues like the need for rule of law, gender, good governance, and human rights. The UNDP, UNICEF, USAID, World Bank, ODA, SIDA, CIDA, Germany and DANIDA have been supporting this sector in various ways. The USAID for instance, supported various training program in the judiciary. In the 1997/98 and 1998/99 fiscal years USAID provided Tshs.324.4 million for that purpose. UNDP provided Tshs.4.8 million in 1997/98 and Tshs.49.0 million in 1998/99 - 1999/2000, for research equipment acquisition, respectively to the Law Reform Commission of Tanzania. DANIDA is also giving support to the Law Reform Commission. So far DANIDA has committed about Tshs.800 million to the Law Reform Commission out of which in 1999/2000 (May 1999 to December 1999) about Tshs.100 million has been utilized for both research and equipment acquisition. Out of these Tshs.80 million have been used for importing vehicles while only Tshs.20 million was used for OC purposes. The World Bank, DANIDA and the Government of Tanzania have been supporting the establishment and operation of the commercial court. 182 10.26 At the initiative of the World Bank, ODA, DANIDA, CIDA, SIDA and NORAD funded a sector study in order to identify the deficiencies of the legal sector and recommend remedial measures. The study was coordinated and controlled by a task force, which submitted its recommendations to the government in 1996. The report documented the changes needed to reform the Legal Sector. 10.27 The government approved nearly all the recommendations and developed a Legal Sector Reform Program medium term strategy and action plan 2000 - 2005. The strategy was presented to donors for consideration on 8th December, 1999. The donors, however, have now requested a detailed action plan and cost estimates on strategy. The plan is expected to be presented to donors in March, 2000. 10.28 The World Bank through the Tanzania Financial and Legal Management Upgrading Project (FILMUP, TDA CR 2413TA, the Legal Sector Component) provided financial support to the sector. Pending a detailed sector study, the support was intended to relive the more pressing needs for the sector including training in international and local development in law, library materials, up dating of legal publications, office equipment and review of the legal and regulatory framework taking into account the changes brought by reforms in the country. 10.29 The support given by donors is very crucial in assisting the Tanzanian legal sector to realize the objectives of social and economic justice in a reformed and democratic environment while at the same time ensuring that human rights are respected. Further assistance includes constructing and rehabilitating office and court buildings, e.g. Kinondoni court building and commercial court building, support to both pre-service and on the job training including training in more specialized areas as mentioned above, acquisition of equipment (e.g. computers) and improvement in the library services particularly by assisting in the acquisition of materials for specialist areas e.g. international legal journals. More support is still needed on acquisition of up - to date editions on various works for contracts, company law, bankruptcy law, law of trusts and law of receiverships. Donors have also been supporting seminars and training programs. More support through NGO's also is still needed to educate masses on various issues of anti-crimes behavior, human rights, democracy and possibilities for alternative mechanism for settling petty disputes outside the courts. All this support has helped to enhance capacity building in the public legal sector as they focus on human resource development and improved the working environment through ensuring availability of working tools and an enabling working environment. The support for educating masses is quite useful as it has the potential of reducing crimes in the country as well as reducing the pressure on courts. Performance Indicators of the MJCA Efficiency Measure 10.30 Given the nature of operations of the MJCA, it is not easy to measure the relationship between output and inputs. However, looking at the relationship between actual, approved estimates and disbursement, it is shown that expenditure is equivalent to 183 disbursement and also actual expenditure does not differ significantly from the approved expenditure for all three departments. Table 10.8: Actual Expenditure versus Approved Expenditure in the MJCA (Million Tshs) 1997/98 1998/99 1999/2000* Department (a) Attorney General's Chamber (i) Actual Expenditure 914.4 1933.39 528.7 (ii) Approved Expenditures (iii) Actual as % of Approved Estimates 79.3 80.6 107.7 (iv) Actual as % of Disbursement 99.8 99.9 (b) The Law Reform Commission (i) Actual Expenditure 102.4 86.5 44.5 (ii) Approved Expenditures (iii) Actual as % of Approved Estimates 101.1 99.2 74.8 (iv) Actual as % of Disbursement 100.1 99.9 (c) Judiciary Department (i) Actual Expenditure 4515.3 5290.7 2,244.2 (ii) Approved Expenditures (iii) Actual as % of Approved Estimates 130.5 98.8 57.0 (iv) Actual as % of Disbursement 97.7 100 Source: Ministry of Finance * Recurrent Expenditures for the period July 1999 to January 2000 10.31 The financial problem is so serious that it has led to the failure of the judiciary department to run court sessions, which are primary activities of the department. In the first half of the 1999/2000 financial year total actual expenditure of the judiciary was only 57% of expected expenditures. All though the ratio of total actual expenditure to approved expenditures was 131% and 99 % respectively in 1997/98 and 1998/99, approved expenditures are far from the department's actual requirements. Table 11.9 indicates resource inputs against research and reporting outputs in the LRCTT. 184 Table 10.9: Efficiency indicators: Law Reform Commission of Tanzania 1997/98 1998/99 1999/2000 Inputs Expenditure Expenditures Expenditures s As% Of As % Of As % Of Total Total Total Number of Employees 20 (3) 22(4) 33 (17) Personal Emoluments 22,225,965 21.7 26,284,972 30.4 39,522,800 33.7 Consultancy Fees Research 4,935,00 0.5 2,326,769 2.7 26,000,000 22.2 Printing Costs & Advertisement 1,227,985 1.2 349,720 0.4 1,680,000 1.4 Seminar & Conferences 350,000 0.4 - 0 Total Commission Expenditure 102,431,395 100 86,424,416.9 100 117,154,500 100 Outputs Projects on Which: * Reports Completed 1 - 1 * Discussion papers or draft reports Completed 1 2 2 *Progress Made - 1 3 _ 2 Source: Law Reform Commission of Tanzania Notes: The table identifies major items of expenditure, which contribute directly to the achievement of the objectives of the Law Reform Commission of Tanzania. It is not possible to measure resource inputs devoted to each individual project. In any case, projects vary so much in size and scope that the data would be of little value. The number of projects worked on varies from year to year, due to a number of factors, including the number of projects currently being given high priority. In the year 1998/99 Three projects were in progress. These are the Paralegal, Traffic Law and the Labor Law. The Labor Law Report was completed in 1999/2000. The other two are still in progress. Number of Employees in brackets indicate the number of Researchers out of total employees. 185 Effectiveness 10.32 Given the type of data available, effectiveness can only be measured by looking at the ratio of actual workload carried out to planned workload. For the AGC department it is difficult to measure effectiveness, since activities are performed as need arises. 10.33 For the Judiciary department, effectiveness can be gauged by looking at the planned versus performed Court of Appeal sessions and the number of criminal cases filed versus decided in different zones (1997-98) as proxies. 10.34 Available records show that the planned court of appeal sessions were performed in Dar es salaam in 1997 and 1998 only. One session of the two planned were performed for each of the Zanzibar and Mwanza Zones respectively. The one session performed in Mwanza had only one judge where as in principle the session must be attended by three judges. In the year 1999, no session was performed in Dar es Salaam and Tanga zones out of the planned 5 and 1 session respectively. One session was performed out of the two planned for Arusha, Mbeya, Zanzibar and Mwanza Zones, and in Dodoma one session was performed as planned. In general in 1997 only half of the 18 planned court of Appeal sessions were actually performed while in 1998 and 1999 the situation deteriorated further as only a third of the such planned (15 for each year) were actually performed. For those sessions, which were not performed as planned, the main reason was lack of funds to run them e.g. allowance and transport costs for the judges, drivers and typists. The situation is even worse at the lower level courts. Table 10.10: COURT OF APPEAL SESSIONS FOR THE YEAR 1997-1999 D'Slaa Arusha Dodoma Mbeya Zanzibar Mwanza Tanga m Planned 7 2 1 3 2 2 1 Performed 7 Nil Nil Nil 1 1 (1 Judge) 1997 Planned/ 1 0 0 0 0.5 0.5 I Performed Ratio Planned 5 2 1 2 2 2 1 Performed 5 Nil Nil Nil Nil Nil Nil 1998 Planned/ 1 0 0 0 0 0 0 Performed Ratio Planned 5 2 1 2 2 2 1 Performed Nil 1 1 1 1 1 Nil 1999 Planned/ 0 0.5 1 0.5 0.5 0.5 0 Performed , Ratio Source: Judiciary Files 186 Table 10.11: CRIMINAL CASES FILED, DECIDED AND PENDING FOR THE PERIOD 1997-1998 ZONE 1997 1998 Filed Decided Pending Decided/ Filed Decided Pending Decided/Filed Filed (in %) ( in %) ARUSHA 223 171 62 77 316 265 125 84 DODOMA 219 102 117 47 127 60 102 47 DSM 242 160 282 66 320 241 354 75 BUKOBA 72 14 58 19 199 36 62 18 MOSHI 173 34 149 20 221 95 106 43 TANGA 123 86 47 70 127 82 61 65 MTWARA 138 54 61 39 135 99 65 73 MBEYA 291 173 218 59 288 266 177 92 MWANZA 434 107 207 25 387 221 166 57 TABORA 252 69 184 27 245 210 314 86 SONGEA 294 101 193 34 287 94 152 33 TOTAL 2461 1071 1578 44 652 1669 1668 63 Source: Judiciary Files 10.35 Only 44% and 63% of the criminal cases filed in 1997 and 1998 respectively were decided, and about 68% and 57% of the filled civil cases filed in 1997 and 1998 respectively were decided. Outcome Indicator 10.36 The outcome measure is based on the qualitative assessment of the legal services in the country. Officials in the MJCA view that the corruption problems in the legal sector motivated by the unsatisfactory remuneration of the personnel in the legal sector as observed by the Warioba report are still not dealt with. On top of that, the commercial court sessions are run without assessors due to lack of funds to pay them thus making the courts questionable. 10.37 The main activities of the law reform commission are to conduct research on different legislation in the country and provide recommendations for amendments and or formation of new legislation where they are lacking. On average the commission has been producing at least one research report per year. In 1997, the commission dealt with the 40 pieces of legislation, which were considered by the Nyalali commission as oppressive, unconstitutional and outdated and conducted research on only twenty six (26) pieces of legislation. The remaining set of twelve (12) pieces of legislation are for Tanzania Zanzibar over which the Law Reform Commission of Tanzania has no jurisdiction and two others (2) are still being dealt with. The Government of Tanzania financed this project. In future, the output of the LRCT is expected to be boosted, as more researchers are now available. 187 10.38 In the year 1999/2000, the Law Reform Commission of Tanzania (LRCT) produced a report on the Special Sex Offence Act, a research project initiated by the LRCT but which was picked and pushed prematurely to the parliament by the Ministry of Women and Children together with other women pressure groups. Consequently legislation on sex offence was enacted by the parliament but differs with the LRCT's final report recommendations. This might lead to amendments in line with the recommendations made in the LRCT's research/project report. 10.39 A labour law research report financed by UNICEF is almost ready. Preparations for a Traffic Legislation report are also underway. 10.40 Other legislation already studied by the LRCT include the succession law and the abortion Law. Recommendations have been put forward but not yet implemented, pending sorting out issues pertaining to social beliefs. For instance the recommendations in the succession law are against the Islamic faith, and the abortion law is against Christianity and pro-life groups. 10.41 A number of other laws need to be looked into and be updated and this requires enough researchers and funds to conduct surveys. A service or report also requires that a record keeping system be prepared in order to track LRCT's services users. Work Process Indicator 10.42 The three departments in the MJCA are entirely independent, however, as far as work process is concerned each department depends in one way or another on the other department in order to execute their duties. Consequently lack or inadequate financial resourses, inefficiency or ineffectiveness in one department automatically affects execution of duties in the other two departments. 10.43 Justice administration in the country is hindered by a small budget especially OC allocated to the three departments and the timing of disbursement. All three departments face lack of stationary especially paper and files, which are very crucial inputs to their process of providing justice services in the country. 10.44 In the AGC department, for instance, a lot of paper is needed to prepare and produce bills, which are discussed in the parliament. It is estimated that bills in the parliament account for almost 90% of papers used to produce different documents brought to the parliament. Not only that, all cases that are filed in the high court have to go through or originate from the Attorney General Chamber. Lack of papers and other resources hinders the processing of various cases and obstructs justice. The situation is even worse in the Judiciary Department where lack of financial resources makes it hard to provide justice administration services in the country. 188 10.3 REVIEW OF PROBLEMS AND PRIORITIES Tanzania's Development Vision 10.45 The vision of the Ministry of Justice and Constitutional Affairs is a component part of the Tanzania's Development Vision and Long Term Development Strategy (Vision 2025) which, among other things, aspires to 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; people centered development; economic and social justice; equal opportunity for all citizens to participate in and contribute to the development of the nation, paying attention to minority and disadvantaged groups in society; a strong, diversified, resilient and competitive economy which can effectively cope with the challenges of the development goal and confidently adapt to changing market and technological conditions in the increasing liberalized and globalized world economy; and sustainable development endeavor on inter-generation equity basis such that future generations benefit from the protection of natural resources of the country by the present generation. 10.46 The Ministry's Vision, which upholds, and is also commensurate with the attributes of the Vision 2025, aspires to have a society in which there is: speedy dispensation of justice; affordability and access to justice for all social groups; integrity and professionalism of legal officers; enhanced independence of the judiciary; and a legal and regulatory framework, and jurisprudence of high standards, which are responsive to social, political, economic and technological trends at both national and international levels. Characteristics of the Tanzanian Legal Sector 10.47 In general, the Tanzanian legal sector is characterized by the following defects: - Managerial problems e.g. problems in the supervision of lower level courts; - 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 environment for all public institutions in the legal sector. 189 Major Issues 10.48 Given the defects of the Tanzanian legal system, the main issues, which at present must be addressed, are: updating and harmonizing the legal and regulatory framework; enhancing the independence of the judiciary and integrity of legal officers; strengthening the management and co-ordination of legal sector institutions; enhancing the competence and motivation of personnel in public legal institutions; 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 a new liberal constitution regime; enhancing access to legal services for the poor and disadvantaged; developing and maintaining an enabling and conducive work environment for public legal officers. 10.49 In addition to addressing these problems, reforms 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: - - the changing social culture of the people due to urbanization and expanding and intensifying interaction with other cultures, for example, requires a more dynamic family law; - the new pluralistic democratic political environment coupled with the movement towards participatory management of socio-economic development; - the expanding and institutionally complex private 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 - the rapidly growing electronic commerce creates many business transactions not requiring the use of ordinary paperwork. Thus, the nature of evidence admissible in courts must be redefined. Major Problems Financial Constraint 10.50 The budgetary resource allocation to the MJCA has always been far too low to enable the ministry perform its functions effectively. In all the three departments, the approved budget for 1999/2000 is less than 60% of the budget requirements for 2000/2001. Specifically the corresponding percentages are 42, 47 and 57 for the AGC, LRCT and the Judiciary respectively. The financial constraint prevents the judiciary from exercising a necessary judicial technique of transferring judges, magistrates and court clerks, to ensure that they do not get unduly attached to any particular locality. The problem of under-funding in the MJCA has been the fundamental source of other problems, such as staff shortage, low pay, lack of office space and equipment, and corruption. 190 Shortage of Staff 10.51 This problem, which is very serious, especially in the AGC department is to a large extent, due to the financial constraint. As a result of the financial constraint, staff recruitment stopped in 1996/97 and was lifted in 1998/99 for replacement only. For the LRCT it has been a question of filling vacant posts rather than replacements. Due to low pay, again, arising as a result of the financial constraint, it has been very difficult to retain the staff. The trained and experienced staffs have left the public legal sector to join the private sector. 10.52 In the AGC department, where the problem is most acute, only heads of divisions and departments are experienced professional lawyers. In the judiciary department, there is shortage of judges, magistrates (due to retirement, death and exodus to private sector) and primary court magistrates. The problem is so serious that, there are districts where only one magistrate covers several primary courts. According to the MCJA Budget Speech (1999/2000) the primary court magistrates fall short of about 700 magistrates compared to the number of existing primary courts. In the AGC department there is a shortage of 105 lawyers and 24 vacant places for other cadres of staff. In the Law Reform Commission of Tanzania, there was until recently a critical shortage of the key staff - researchers. 10.53 Recent economic and political developments also account for the shortage of staff, especially the specialized staff. Promotion of a liberalized market economy and the introduction of a liberal socio-political regime have expanded the role of the public legal sector, and have brought up new challenges that demand specialized legal expertise, which at present are in short supply. For example, there is serious shortage in the following critical areas: prosecution of white collar crimes, e.g. crimes in international financial transactions, drug related crimes, and money laundering; constitutional litigation; civil litigation; and international law and international commercial arbitration. Lack of Training 10.54 There are two levels of this problem. The first level is the pre-service training. At present there are two major institutions, which are training lawyers, that is, the Faculty of Law of the University of Dar es Salaam and the Institute of Development Management, Mzumbe, Morogoro (IDM). Graduate from these institutions are very few, compared to demand, and sometimes the quality of training is inadequate. For example, the 9-month course at IDM trains only a few primary court magistrates. Court clerks, normally form IV leavers, do not have job related training at all. The Lushoto Institute of Judiciary Administration was intended to train primary court magistrates and also for updating them and also train and offer certificates for court clerks. The shortage of funds and the small intake have made the institute almost non-operational. The Lack of well- trained personnel is reflected in poor administrative and technical skills, which contributes substantially to delays in the administration of justice. Low Pay 10.55 Salaries and wages in the public legal sector are very low. In spite of the pay reform, which has been carried out, salaries and wages for the legal staff are still very 191 low. In fact the consolidation of salaries and allowances have reduced the take home of some staff. The salaries are relatively low compared to salaries and wages of the legal staff in the neighboring countries. For instance, the salaries for a Tanzania Chief Justice, Supreme Court Judge and High Court Judge are less that 25% of salaries of their counterparts in Uganda and Zimbabwe. The gap is even wider when compared with counterparts in Seychelles. The same pattern of remuneration differences is observed among top legal officers. Poor remuneration in the sector lowers the morale of workers, and in most cases it has been the main source of corruption. Poor State of Office Buildings, Office Equipment and Office Supplies 10.56 Shortage of office space is one of the serious problems hindering smooth performance of the public legal sector, particularly the judiciary department, and more specifically the primary courts. Even when there is office space, office buildings, in most cases, are dilapidated and lacking even basic maintenance. The offices are also overcrowded. For example, the current High Court and Court of Appeal building, which was originally planned to have facilities for only three judges, now supports offices for 15 judges. 10.57 Office equipment such as computers, word processors, photocopiers, and printers are also inadequate. There is an acute shortage of stationery, which is a critical input in all three departments. In the judiciary department, stationery is a critical input from the stage of court hearing to court proceedings up to the judgement of the case. In the judiciary department, where this problem is most serious, it has paralysed most of activities. The serious shortage of stationery, particularly paper, is increasingly becoming an inducement and excuse for soliciting bribes by some dishonest legal officers. Corruption 10.58 Corruption by dishonest legal officers not only hinders the dispensation of justice, but also tarnishes the image and diminishes the integrity of the legal system. Shortage/Poor Library Facilities 10.59 Inadequate library facilities of reasonable standards are one of the critical constraints facing the legal sector. This problem is most critical in the Tanzania Law Reform Commission. In the libraries basic legal materials are so deficient that libraries are virtually non operational. There is an acute shortage of basic materials such as law reports, materials on international business transactions, textbooks on constitutional law, law reports of Commonwealth countries on constitutional law, and textbooks on international and white-collar crimes. Up- to date law literature and legal reports are also very important to judges and magistrates who need them critically to research on various issues related to the cases they may be handling. By doing so judges and magistrates would avoid giving hastily, incorrect and un-researched judgements. 192 Priorities 10.60 In order to realize the objectives of National Development Vision (Vision 2025) there is need to address the following priorities: The fundamental priority is to increase the funding of the MJCA. To improve the work environment for the personnel. This will include issues such as improvement of supply of work materials and tools (including supply of office equipment and stationery. The enhancement of the legal registries, improvement of stocking and management of libraries and extension of automation of evidence recording. If implemented the overall impact of this is to speed up dispensation of justice. To improve remuneration, payment to court assessors, allowances and other approved benefits to judges, and magistrates To develop and implement strong in-service training programs for the legal professionals and other personnel. The training could focus in three main areas namely, the induction training for recent and all new recruits, continuing education and refresher course; and training in specialist skills such as commercial law, arbitration, legislative drafting, corporate law, and international crime. Recruitment of more staff to fill in the vacant position. To procure vehicles for supervision functions at zonal, and district levels. This will help ensure that the integrity and professionalism of legal officers particularly of primary courts are maintained and ensure that High Court sessions are conducted. To establish and up date the legal Database and information systems. To help in the planning and budgetary exercises, and in monitoring and evaluation exercises and the achievement of a high standard of the legal and regulatory framework through references to correct actual data or information. Availability of up to date law books, law reports, and computers (for record keeping) is thus essential. To rehabilitate and furnish and equip court buildings and offices for judges, magistrates, regional courts, and regional offices of state attorneys. To improve pre-service training in the country. by supporting financially the revision of curriculum vitae and strengthening of the concerned training institutions To educate the masses about various legal aspects including issues of human rights and democracy and also implement and strengthen the Para-legal education program being studied by the Law Reform Commission of Tanzania. The Program aims at training retired officials such as court magistrates, court clerks, messengers court assessors and teachers, to act as advocates and legal advisors at a primary court level. To strengthen the commercial court 193 10.4 PROJECTION FOR FUTURE BUDGETS 10.61 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 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. Table 11.13 presents the projection of budget allocation to the MJCA during 2000/2001-2002/2003. Table 10.12: Expenditure Projections For the MJCA (Million Tshs) Judiciary Current Financial Year Projections Projections Projections Item 1999/2002 2000/2001 2001/2002 2002/2003 a) Recurrent Expenditure 7947.4 9934.3 12417.8 15522.3 i) Personal Emolument 4145.5 5181.9 6477.3 8096.7 ii) Other Charges 3832.9 4791.1 5988.9 7486.1 Sub Total 7978.4 9973.0 12466.3 15582.8 b) Development Expenditure 797.8 997.3 1246.6 1558.2 Sub Total 797.8 997.3 1246.6 1558.2 Overall Total 8776.2 10970.3 13712.8 17141.0 Attorney General Chamber Current Financial Year Projections Projections Projections Item 1999/2000 2000/2001 2001/2002 2002/2003 a) Recurrent Expenditure 1156.1 1445.1 1806.4 2258.0 i) Personal Emolument 299.4 374.3 467.8 584.8 ii) Other Charges 856.7 1070.9 1338.6 1673.2 Sub Total 1156.1 1445.1 1806.4 2258.0 b) Development Expenditure 385.4 481.8 02.2 752.7 iii) Foreign 385.4 481.80 02.2 752.7 Sub Total 385.4 481.8 02.2 752.7 Overall Total 1541.5 1926.9 2408.6 P010.7 Law Reform Commission of Tanzania Current Financial Year Projections Projections Projections Item 1999/2000 2000/2001 001/2002 2002/2003 a) Recurrent Expenditure 117.2 146.5 183.1 228.9 i) Personal Emolument 39.5 49.4 1.7 77.1 ii) Other Charges 77.7 97.1 121.4 151.8 Sub Total 117.2 146.5 183.1 228.9 b) Development Expenditure 11.7 14.6 18.3 22.9 Sub Total 11.7 14.6 18.3 22.9 Overall Total 128.9 161.1 201.4 251.8 Source: Budget Estimates for the Judiciary, A.G. Chamber, and The Law Reform Commission of Tanzania and Own Computations. N.B Since there were no figures for development expenditure for 1999/2000, development expenditure has been calculated as 25% of the Total budget for The A.G Chamber, and 105 of the budget for the Judiciary and the Law Reform Commission. 194 10.62 The projection shows that the total budget allocation for recurrent expenditure for the ministry is projected to increase from TShs.10446.6 million in 1999/2000 to TShs.12259.1 million, TShs.16322.8 million and TShs.20403.5 million in 2000/2001, 2001/2002 and 2002/2003, respectively. The allocation for the judiciary is projected to increase from TShs.8776.2 in 1999/2000 to TShs.10970.3 million, TShs.13712.8 million, and TShs.17141.0 million in 2000/2001 2001/2002 and 2002/2003, respectively. For the A.G Chamber the allocation is projected to increase from TShsl541.5 million in 1999/2000 to TShs.1926.9 million, TShs.2408.6 and TShs.3010.7 million in 2000/2001 and 2002/2003, respectively. The allocation for the Law Reform Commission is projected to increase from TShs.128.9 million in 1999/2000 to TShs.161.1 million, TShs.201.4 million and TShs.251.8 million in 2000/2001 2001/2002 and 2002/2003, respectively. 195 ATTORNEY GENERAL'S CHAMBERS 2000/2001 2001/2002 20002/2003 Actual Per Difference Actual Per Difference Actual Per Difference Required Ceiling Required Ceiling Required Ceiling 1001 Admin. PE 65,519,615 65,519,615 - 65,519,615 65,519,615 - 65,519,615 65,519,615 - OC 385,386,100 168,698,700 216,690,400 412,363,127 180,507,609 231,855,518 437,104,915 193.143,142 247,961,773 Total Sub Vote 450,905,715 234,218,315 216,690,400 477,882,742 246,027,224 231,855,518 502,624,530 258,663,057 247,961,773 1002 Finance PE 16,023,480 16,023,480 - 16,023,480 16,023,480 - 16,023,480 16,023,480 OC 47,945,674 28,544,700 19,400,974 51,301,871 30,542,829 20,759,042 54,379,983 22,004,585 32,375,398 Total Sub Vote 63,969,154 44,568,180 19,400,974 67,325,351 46,566,309 20,759,042 70,403,463 38,028,065 32,375,398 2001 Admin. Gen. PE 106,583,242 106,583,242 - 106,583,242 106,583,242 - 106,583,242 106,583,242 - OC 170,000,000 170,000,000 - 181,900,000 181,900,000 - 192,814,000 192,814,000 - Total Sub Vote 276,583,242 276,583,242 - 288,483,242 288,483,242 - 288,483,242 288,483,242 - 2002 Public Pros. PE 119,679,939 119,679,939 - 119,679.939 119,679.939 - 119,679.939 119,679.939 - OC 1,394,133,218 261,466,200 1,394,133,218 1,491,722,543 279,768,834 1,211,953,709 1,581,225,896 296,554,964 1,284,670,931 Total Sub Vote 1,513,813,157 381,146,139 1,394,133,218 1,611,402,482 399,448,773 1,211,953,709 1,700,905,835 416,234,9093 1,284,670,931 2003 Legsl.Drft. PE 29,561,518 29,561,518 - 29,561,518 29,561,518 - 29,561,518 29,561,518 - OC 171,566,800 41,674,594 129,892,206 183,576,476 44,591,816 138,984,660 194,591,065 47,267,325 147,323,740 Total Sub Vote 201,128,318 71,236,112 129,892,206 213,137,994 74,153,334 138,984,660 224,152,583 76,828,843 147,323,740 3001 Civil & Intrn. 20,990,134 20,990,134 - 20,990,134 20,990,134 - 20,990,134 20,990,134 - PE 380,087,540 68,459,056 311,628,484 406,693,668 73,251,190 333,442,478 431,045,288 77,646,261 353,449,022 OC 401,077,674 89,449,190 311,628,484 427,683,802 94,241,324 333,442,478 452,035,422 98,636,395 353,449,022 Total Sub Vote 4001 Cons.& H. Rht PE 9,973,680 9,973,680 - 9,973,680 9,973,680 - 9,973,680 9,973,680 - OC 70,917,200 16,819,000 54,098,200 75,881,404 17,996,074 57,885,074 80,434,288 19,076,110 61,358,178 Total Sub Vote 80,890,880 26,792,680 54,098,200 85,855,084 27,969,754 57,885,074 90,407,968 29,049,790 - Reserch & Libr. PE 10,763,160 10,763,160 - 10.763,160 10,763,160 - 10,763,160 10,763,160 - OC 45,292,400 6,157,312 39,135,088 48,462,868 6,588,324 41,874,544 51,370,640 6,983,623 44,387,017 Total Sub Vote 56,055,560 16,920,472 39,135,088 59,226,028 17,351,484 41,874,544 62,133,800 17,746,783 44,387,017 TOTAL VOTE PER (Ceiling) 379,094,768 TOTAL VOTE OC (Ceiling) 761,819,562 TOTAL VOTE (Ceiling) 1,140,914,330 196 JUDICIARY 2000/2001 2001/2002 2002/2003 SUB ADMINISTRATI Actual Required Per Ceiling Deference Actual Per Ceiling Deference Actual Per Ceiling Difference VOT ON Required Required E I. 101 Administration 980,000,000 749,340,100.00 230,659,900.00 1,038,800,000. 794,300,506.00 244,499,494.00 1,090,740,000. 834,015,531.00 256,724,469.00 00 00 2. 201 High Court 500,000,000.00 210,335,361.00 230,659,900.00 530,000,000.00 222,955,482.00 307,044,518.00 556,500,000.00 234,103,256.00 322,396,744.00 3. 202 Court of Appeal 3250,000,000.00 115,776,000.00 234,224,000.00 371,000,000.00 122,722,560.00 248,277,440.00 389,550,000.00 128,858,688.00 260,691,312.00 4. 203 Arusha Zone 250,000,000.00 77,583,100.00 172,416,900.00 265,000,000.00 82,238,086.00 182,761,914.00 278,250,000.00 86,349,990.00 191,900,010.00 5. 204 Dar es Salaam 390,000,000.00 123,681,600.00 266,318,400.00 413,400,000.00 131,102,496.00 282,297,504.00 434,070,000.00 137,657,620.00 296,412,380.00 Zone 6. 205 Dodoma Zone 300,000,000.00 94,752,600.00 205,247,400.00 318,000,000.00 100,437,756.00 217,562,244.00 333,900,000.00 105,459,643.00 228,440,357.00 7. 206 Mbeya Zone 300,000,000.00 94,752,600.00 205,247,400.00 318,000,000.00 100,437,756.00 217,562,244.00 333,900,000.00 105,459,643.00 228,440,357.00 8. 207 Mtwara Zone 300,000,000.00 94,752,600.00 205,247,400.00 318,000,000.00 100,437,756.00 217,562,244.00 333,900,000.00 105,459,643.00 228,440,357.00 9. 208 Mwanza Zone 300,000,000.00 94,752,600.00 205,247,400.00 318,000,000.00 100,437,756.00 217,562,244.00 333,900,000.00 105,459,643.00 228,440,357.00 10. 209 Tabora Zone 390,000,000.00 123,681,600.00 266,318,400.00 413,400,000.00 131,102,496.00 282,297,504.00 434,070,000.00 137,657,620.00 296,412.380.00 11. 210 Tanga Zone 250,000,000.00 77,583,100.00 172,416,900.00 265,000,000.00 82,238,086.00 182,761,914.00 278,250,000 00 86.349,990.00 191,900,610.00 12. 211 Primary Court 2,300,000,000.0 1,495,861,200. 804,138,800.00 2,438,000,000. 1,585,612,872. 852,387,128.00 2,559,900,000. 1,664,893,515. 895,006,485.00 0 00 00 00 00 00 13. 212 District Court 1.500,000,000.0 414,637,315.00 1,085,362,685. 1,590,000,000. 439,515,553.00 1,150,484,447. 1,669,500,000. 461,491,330.00 1.208,008,670.0 0 00 00 00 00 14. 213 Bukoba Zone 250,000,000.00 77,583,100.00 172,416,900.00 265,000,000.00 82,238,086.00 182,761,914.00 278,250,000.00 86.349,990.00 191,900,000.00 15. 214 Ruvuma Zone 300,000,000.00 94,752,600.00 205,247,400.00 318,000,000.00 100,437,756.00 217,562,244.00 333,900,000.00 105,459,643.00 228,440,357.00 16. 215 Moshi zone 2500,000,000.00 77,583,100.00 172,416,900.00 265,000,000.00 100,437,756.00 164,562,244.00 278,250,000.00 105.459,643.00 172,790,357.00 197 SUMMARY OF THE MINISTRY OF JUSTICE AND CONSTITUTIONAL AFFAIRS BUDGET BASED ON MTEF 2001/01-2002/03 Law Reform Commission VOTE 59 2000-2001 2001-2002 2002-2003 ACCORDING TO PE 54,665,640.00 54,665,640.00 54,665,640.00 CEILING OC 100,289,602.00 106,306,978.00 112,685,397.00 ACTUAL PE 101,076,583.00 101,076,583.00 101.076.583.00 REQUIREMENT OC 199,491,600.00 213,456,012.00 226,263,373.00 PE - DIFFERENCE OC 99,201.998.00 107,149,034.00 113,577,979.00 198  11. LAND SECTOR MTEF 11.1 INTRODUCTION National Vision 2025 11.1 Under the National Development Vision 2025, among other things, the country's economy is envisaged to change from being primarily dependent on agriculture with low productivity to that of an economy dependent on both an industrial sector and modern agriculture with high productivity. It is also envisaged to develop a nation with wide tertiary/service sectors both in urban and rural areas. 11.2 Among the critical components of the Vision 2025 are the following: attaining economic and social justice; satisfying basic needs of the people, eradicating poverty and assuring productive employment opportunities; ensuring sustainability of the development endeavour on intergeneration equity basis, such that the present generation derives benefits from the rational use of resources of the country without compromising the needs of the future generation. Purpose 11.3 It is from the above National Development Vision 2025 that the Ministry of Lands and Human Settlements Development takes its place as a manager of one of the scarce resources critical to the attainment of the Vision 2025. 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 utilisation account for over 80% of Tanzania's GDP. The sector also provides more than 85% of national employment. 11.4 Generally, land is the foundation of all market economy societies. All market economies have a formal system of land administration, which, besides security of ownership and tenure, provide the basis for property taxation, land reforms, and the implementation of land use policies. Efficient land administration systems also permit the integration of records of land ownership, land values and land use with economic data in support of overall economic planning. 11.5 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. Some economic policies touching on land resource utilisation which were taken in the past met limited success because they lacked legal backing. Rapid population increase 199 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 total population of Tanzania. Problems 11.6 Among the many problems of land management experienced in rapidly urbanising 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 administration to the extent of not knowing what is going on in the market, - Wide breach of land use regulations by developers and the inability of public authorities to enforce regulations, - Inadequate and uncoordinated land information, and - Emergence of a parallel, unofficial and poorly understood and documented lands delivery system. 11.7 These problems, to a larger extent emanate from inadequate investments into the land sector over several decades. 11.8 As long as Tanzania continues with structural adjustment programmes, the rate of urbanisation is likely to increase and its attendant problems are likely to get worse. The challenge ahead therefore is in seeing to it that this expansion takes place in a more orderly and environmentally more satisfactory manner than has hither to been possible. Solutions to urbanisation problems depend, to a greater extent, on a land policy, which is supportive of an active land market. 11.9 To support economic reforms currently being undertaken, Tanzania has now given legal backing to reforms that will enhance security of tenure to the majority. First, in 1995, Tanzania adopted a new Land Policy and second, enacted two Acts of Parliament, namely, The Land Act No. 4 of 1999 and The Village Land Act No. 5 of 1999 to promote the aspirations and principles of the National Land Policy. The documents are to be made available to the general public and public awareness campaign conducted. Stakeholders Analysis 11.10 The Ministry of Lands and Human Settlements Development serve the general public. Customers vary from Government institutions to private institutions, investors inclusive. The ministry aspires to deliver excellent services but there are compelling circumstances for doing otherwise. Some being those of poor record keeping, poor land administration and management, shortage of qualified personnel and working tools. The 200 ministry endeavours to attain and sustain competence and excellence in performing its basic functions so as to meet stakeholders expectations as follows: S/N STAKEHOLDER EXPECTATIONS R Government and its institutions Provision of surveyed land, H 1. administrative maps, technical advice and equipment, policy guidelines and land use plans. 2. Villages Village maps, security of land tenure, policy guidelines and land use plans M 3. Urban Population Security of land tenure, maps, open spaces for leisure, provision of serviced land H 4. Private surveyors and valuers Approval of maps, and valuation reports M 5. Investors Security of land tenure, maps, serviced land and policy guidelines M 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 administration and management Poor record keeping Demand for plots being greater than supply Delay in the issuance and registration of titles Inability to provide serviced land Unmanaged urban population growth in relation to town planning and in the provision of housing services Slow speed in the provision of housing services in the rural areas Mission 11.11 The main mission of the Ministry of Lands and Human Settlements Development can thus be summarised as follows: To administer and manage land (ownership, value, use etc); to provide effective and efficient land delivery services; to administer and regulate cadastral surveys hydro-graphic surveys and mapping activities in the country; to create enabling environment and institutional framework to support human settlements development process. 201 Objectives 11.12 To facilitate realisation of the mission of the Ministry of Lands and Human Settlements Development, the budget plan covers over a period of three years with the following key set of objectives: excellency in service delivery; increasing revenue collection; creation of an effective institutional and financial framework for the development of sustainable settlements. Strategies Publicise 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 land register and data bank system To improve 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 with urban dwellers to improve the management of urban towns and cities To promote research and development in technologies for low cost housing construction To promote the establishment of building finances societies. To create a free from corruption working environment 11.2 REVIEW OF 1999/2000 PERFORMANCE Operational objectives: 1. Ensuring excellency in service delivery 2. Promoting appropriate use of Land Resources so as to increase revenue by 31% 3. Creation of an effective Institutional and Financial Framework for the Development of Sustainable Settlements. 202 Operational Targets: Objective 1: Excellency in service delivery TARGET BUDGET ACTUAL 1999/2000 TO MARCH, 2000 To have in place a training programme 238,934,134.00 168,913,822.00 To establish an open system for 10,352,000.00 4,814,000.00 dealing with the public To ensure that basic facilities are available including rehabilitation of 787,959,705.00 412,884,004.00 buildings To take stock of employees records and entitlements 515,326,776.00 304,714,800.00 To ensure smooth running of two Ardhi Institutes 364,194,200.00 197,925,000.00 To Formulate, Co-ordinate and Monitor Ministerial socio-economic 31,666,000.00 14,290,000.00 programmes and policies in addition to establishing Land Information Management System and Computerise Land and Valuation records Objective 2: Promoting appropriate use of Land Resources so as to increase revenue by 31% TARGET BUDGET ACTUAL TO 1999/2000 MARCH, 2000 To ensure Revenue collection and 400,183,341.00 238,409,000.00 expenditure control To make Land Rent rates known 6,460,000.00 2,864,000.00 To prepare and issue valuation reports 25,500,000.00 2,771,000.00 for 1,500 properties 2,000,000.00 4,882,000.00 To finalise valuation manual for Land country wide 130,995,500.00 0.00 To pay compensation in Tegeta and Tabata areas in DSM Ensure that different types of maps are 199,264,947.00 138,024,709.00 available 40,000,000.00 39,580,000.00 To undertake ground photo 133,036,797.00 97,400,000.00 To survey plots in Babati, Mbezi & Mbweni 203 Objective 3: to create an effective Institutional and Financial Framework for the Development of sustainable settlements TARGET BUDGET ACTUAL 1999/2000 TO MARCH, 2000 To prepare a comprehensive Human Settlements Policy Framework to guide settlements growth and management 20,000,000.00 2,089,000.00 To undertake Research and disseminate information on affordable building 28,300,000.00 16,657,000.00 materials 11.13 Total approved budget for the year 1999/2000 was shillings 2,934,173,400 or shillings 2,040,499,268 after expenditure cut. Total amount spent to March 2000 was shillings 1,627,472,336. 11.14 In all the objectives 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 1998/99 or had attained 75% of the 1999/2000 estimated level. Budget Estimates for year 2000/01 11.15 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) as follows: VOTE 48RESOURCE REQUIREMENTS* SUBVOTE 12000/01 T2001/02 2002/03 1001 878,690,000.00 1,063,214,900.00 1,222,697,135.00 1002 716,240,000.00 866,650,400.00 996,647,960.000 1003 121,188,000.00 146,637,480.00 168,633,100.00 2001 1,004,177,000.00 1,215,054,170.00 1,397,312,300.00 2002 830,880,000.00 1,005,364,800.00 1,156,169,500.00 2003 130,000,000.00 157,300,000.00 180,895,000.00 3001 600,810,000.00 726,980,100.00 836,027,100.00 3002 145,645,000.00 176,236,500.00 202,672,000.00 3003 124,960,000.00 151,201,600.00 173,881,800.00 TOTAL 5,486,086,000.00 6,488,810,750.00 7,364,115,235.00 1 *NOTE: Projected resource allocations by Government Excludes private sector and donor contributions. 11.16 A report on Land Resources Management Program issued in March,2000 proposed financial requirements to the extent of Shs. 935,790,091,000.00 over the next ten years. The report further proposed 10% of this amount to be contributed by Government and the balance of 90% by Donors and the private Sector. According to the 204 proposal, government needs to invest Shs.13.7 bilion. In the year 2001/02 and Shs.13.27bil. in 2002/03. Both these investments are for Other Charges ("OC") only. 11.17 The Ministry realizes the constraints against obtaining of the proposed investments and therefore focuses on narrower but more realistic targets as indicated in the matrix above. Donor and private sector support to back up government financial projections and proposals as contained in the Land Resources Management Program document referred to above (already circulated to key stake holders and donors) is extremely vital. Such focusing has taken account of the following priority sequence:- - components that are pre-conditions for operationalization of the new land laws e.g. Public awareness preparation of regulations, guidelines forms and manuals, capacity building and institutional frame-work. - projects that facilitate basic planning across sectors e.g. updating of township maps, preparation of basic topographic maps and preparation of physical land use plans. - projects that facilitate poverty reduction and promote sound economic management e.g. provision of planned sites, creation of Land Fund and regulation of spontaneous settlements. Implementation of some of the components has already started. 205