Tanzania - Country Procurement Assessment Report (Vol. 3 of 3)

Page 1 TANZANIA COUNTRY PROCUREMENT ASSESSMENT REPORT (CPAR) EXECUTIVE SUMMARY April 30, 2003 Operational Quality and Knowledge Services Africa Region Page 2 Tanzania CPAR - Executive Summary April 30, 2003 - ii - TANZANIA COUNTRY PROCUREMENT ASSESSMENT REPORT (CPAR) EXECUTIVE SUMMARY Introduction 1. The Tanzania Government has long realized the importance of public procurement to the economic development of Tanzania and hence to the fulfillment of key objectives within the national Poverty Reduction Strategy. To this effect, Tanzania was one of the first countries in Sub-Saharan Africa to enact a law modeled on the UNCITRAL model law. Since 1996, when the first CPAR was carried out, the Government has been working closely with the World Bank and other development partners to enhance the economy and efficiency of its procurement system and to make it more transparent and accountable. 2. The Government has long acknowledged that there is rampant corruption in Tanzania and has been fighting hard to reduce it. It is estimated that at the national level about 20 percent of the government expenditure on procurement is lost through corruption, mainly through kick-backs and bogus investments that have to be written off. 1 Considering that public procurement accounts for about 70 percent of the entire government expenditure budget 2 , this translates to a loss of TShs 300 billion (USD 300 million) per year, enough to finance the combined annual recurrent budgets of the ministries of health and education. Clearly such a loss is economically unsustainable. Major losses occur in construction and supply contracts, which are the major avenues for corruption, particularly at the local government level. 3 The need for enhancing the transparency of the procurement system cannot therefore be overemphasized. 3. The main objective of this CPAR is to determine the compatibility of national procurement law and practices with the principles of economy and efficiency and with international procurement practices. The findings and recommendations of this work will not only help the Bank and other development partners to ensure that sound procurement practices are followed in the programs and projects that they finance but also in the programs and projects financed by the Government