RAPID BUDGET ANALYSIS 2009 Presentation for the PPP/PER Annual Consultative Meeting 20/11/2009 Joint work of DPs

Presentation Outline Macro-fiscal framework Budegt Allocation Impact/ equity 2

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 Global crisis  The FY09/10 budget was developed in the relatively difficult circumstances of a major international crisis that led to a growth slowdown in Tanzania.  The rescue package  The Government responded adequately to the crisis by identifying a narrowly-targeted and time-bound rescue package, while acting to counteract the macroeconomic effect of the slowdown by modestly expanding budgeted public expenditures.  Improve the reliability of the fiscal framework More prudent and grounded forecasting of revenue More robust estimaters of Budget Support DPs need to avoid last minutes changes or additonal conditions. 4

Ensure better balance between current consumption and capital investment : 5

2009/10 Overall budget by Economic Nature of Spending 6

MKUKUTA cluster allocations as % of total expenditure (including LGA transfers and MDA wages) Prioritize additional resources towards MKUKUTA 7

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Overall share of LGA spending : Increase from 21% in 2008/09 to 23% in 2009/10 11

 MKUKUTA: Prioritize MKUKUTA allocations in line with increase in total expenditure, while paying attention to quality of expenditures  Capital v.s Current: Increase allocations for capital investment, in line with MKUKUTA objectives for growth  Allowances: Control proliferation of allowances in MKUKUTA Sectors  Sectors: Continue to increase allocations to key sectors while paying attention to sectors expenditure composition and quality of expenditures  Maintenance policy: Increase the share of infrastructure maintenance in health and education budgets.  D by D policy : Continue to strengthen the implementation to reach the 25% objective of LGA transfers. 12

MDAs development budget, release and expenditure 13

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 Improve budget execution, especially development budget, through Improving capacity to plan and execute large capital investment projects in key sectors Continuing to improve cash flow and procurement plans in key sectors Implementing and monitoring improved cash flow and procurement plans Improve quality of aid submissions and predictability by DPs  Address inequity issue among districts Fast track and implement proposed national incentive scheme Allocate equalization grant to underserved LGAs Allocate PE according to formula/desired postings. 15

ASANTE SANA 16