Tanzania - Public Service Reform Program Project

Report No. PID7728 PID7728.TXT Project Name Tanzania-Public Service Reform Program Region Africa Sector Public Sector Management Project ID TZPE60833 Borrower Government of the Republic of Tanzania Implementing agency Mr. Joseph Rugumyamheto, Permanent Secretary Civil Service Department Dar es Salaam, Tanzania Tel: (255+51) 130122 Fax: (255+51) 113084 Date this PID prepared May 14, 1999 Projected appraisal date June 1999 Projected Board date October 1999 Country and sector background 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 failed. By then also, the public expenditure framework had expanded far beyond what the Government could afford. Public administration had become characterized by underfunding and overstaffing. Civil servants were increasingly demotivated 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. In response to that situation, in 1991 the Government launched a Civil Service Reform Program (CSRP) but actual implementation only started in 1993. The overall objective of the program was to achieve a "smaller, affordable, well compensated, efficient and effectively performing civil service". Despite the impressive achievements in terms of structural and institutional reforms, there is still much to be done to translate these results into improved service delivery to the people of Tanzania. Against this background, the Government opted for a more comprehensive program with a longer-term perspective, the Public Service Reform Program (PSRP). The PSRP 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. . Phase 1 of the program (2000-2004) will: (i) 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. Phase 3 (2009-2011) will bring about quality improvement practices. Project objectives The program development objective over these twelve years is to enable the public service to deliver efficiently and effectively the Government's economic and social programs on a continuous and sustainable basis. In the medium-term (Phase 1), this development objective will be underpinned by the policy shift to institutional pluralism (decentralization, executive agencies, private sector participation) in service delivery and the strategic theme to deliver quality public services under severe budgetary constraints. The Government envisages that the PSRP will deepen the institutional reforms started under the nearly completed CSRP. It is also planned that the PSRP will 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, including ministries and departments, in structural changes; and (ii) reinforce the changes in structure to redefined roles within that management process. Project description The PSRP will support the consolidation of the on-going cost-containment and institutional reforms initiated under CSRP. The CSRP had a fairly comprehensive program covering the following components: Restructuring and private sector participation; Executive Agencies Development; Management Information System; and Leadership, Management Development and Governance. The PSRP will retain these initiatives but shift the focus to: (i) institutionalizing a strategic process to sustain these structural reforms; and (ii) achieving capacity improvement in the quality of public services. To this end, the Phase 1 of the PSRP (the Project--2000-2004) will add two components to the components initiated under CSRP: (i) Performance Improvement; and (ii) Programs Coordination, Monitoring and Evaluation. Project financing Component Indicative Costs (US$ M) Performance Improvement 20.0 Restructuring and Private Sector Participation 5.0 Policy Coordination, Monitoring and Evaluation 5.0 Leadership, Management and Governance 10.0 Total 40.0 Project implementation -2-  The timeframe for implementation of the first phase is 2000-2004. The following implementation arrangements will be in place; Committee of All Permanent Secretaries to steer program implementation: The overall institutional coordinating 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 Coordination--IMTC) chaired by the Chief Secretary to the President/Secretary to the Cabinet/Head of Public Service. Inter-Ministerial Working Group to facilitate technical coordination with other programs: An Inter-Ministerial Working Group (IWG) chaired by the Permanent Secretary (PS), CSD will be established to ensure technical coordination of all key public sector reform programs. Membership of the IWG will include the Deputy Permanent Secretaries in the central ministries, the Director of Policy (CSD), the Accountant-General, and the Commissioner for Local Government. Primary Implementation Responsibility and Accountability vested in Ministries, Departments and Agencies (MDAs): 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 reform secretariat have since been mainstreamed into the Civil Service Department, Office of the President, while implementation has been transferred to the management of the MDAs. Accordingly, the Permanent Secretaries and chief executives of other MDAs will each be required to specify, promulgate and manage public service reform goals and implementation in their respective organizations. The PS 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 coordination, 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 implementation. In this regard, a high priority activity will be training top public service managers in change management. Through such instruments as service delivery surveys, the Program Coordination, Monitoring and Evaluation Component (managed by CSD) and the IWG will identify necessary public services improvements and progress achieved. The findings will be reported to the leadership of the public service (the Chief Secretary, the IMTC and the President). At the same time, political leadership in ministries will be sensitized to their roles under a new performance management system that stipulates annual performance agreements between the Chief Secretary and their respective Permanent Secretaries. Project sustainability Weak macroeconomic performance and fiscal deficits over extended periods have underpinned the initiative and drive for public service reform in most countries, including Tanzania. Bloated, weak and poorly performing public services have been major issues in economies plagued by fiscal deficits and negative or low growth. 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 -3 -  on the purpose and goals of public service reform. There is a high 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; and Fostering broad-based support for the reform agenda. Lessons learned from past operations in the country/sector The development of the program strategy has drawn heavily on the lessons of experience with the implementation of the nearly completed Civil Service Reform Program (CSRP) including: Political sponsorship and commitment to the reform was narrow and not sufficiently overt; Little sense of ownership and commitment to reforms in MDAs; Reform program goals and strategies were either little known, or perceived by key stakeholders, including political leaders, public servants and opinion leaders, to be negative and/or as having remote consequences; Limited capacity for change management in MDAs; No clear incentives for the institutions and individuals achieving reform objectives; Weak monitoring and evaluation of program implementation, outputs and outcomes; Weak coordination with sector development reforms; and Resources for program implementation not readily available, resulting in disruption in the implementation process. Project Benefits The PSRP seeks to improve the performance of the Government in service to all citizenry, communities and the private sector. It will benefit all society by improving the quality, efficiency and effectiveness of public services. The project will also 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. Furthermore, the program will ensure that taxpayers receive from the Government value for money, through strategic, transparent and accountable use of resources by public service managers. In addition, the project will promote integrity in the public service. It will also benefit public servants by enhancing their pay to correspond to their competence and performance, promoting meritocracy and fairness in public service appointments, improving their work environment and promoting their public image. Environmental Assessment Category Rating: C The information contained in this PID is based on the findings of the IDA team which pre-appraised this project in November 1998. Contact Points: The InfoShop -4-  The World Bank 1818 H Street, N.W. Washington, D.C. 20433 Telephone No. (202)458 5454 Fax No. (202) 522 1500 Team Leader, Denyse Morin (AFTI2) (202) 473-9732 - 5 -