Paris Declaration Survey Results 2008 Ministry of Finance and Economic Affairs GBS Annual Review 2008 24th November 2008 Joint Assessment Effort: GoT URT SMZ Development Partners: UNDP Germany Japan USAID Ireland Independent Consultant: From the Government of RSA

Overview Paris Declaration Surveys are an opportunity to assess progress in JAST Implementation 2008 survey undertaken between January - March 2008 Assesses performance during FY 2006/07 33 Donor Agencies, including 12 UN agencies, participated in the survey A Joint (GOT/DPs) Task Force managed the process GoT took lead of the survey process by fully involving other stakeholders Survey 2008 served as an input to the Accra High-Level Forum III 2008 Survey for monitoring Paris Declaration is an opportunity to assess the progress on Aid Effectiveness as implemented under the Joint Assistance Strategy for Tanzania (JAST) The survey was undertaken between January-march 2008 covering FY 2006/07 33 Donor Agencies, including 12 UN participated in the survey Joint Task Force was formulated in order to manage the process and review questionnaires for analysis and consistency GoT took lead of the survey process by fully involving other stakeholders Survey 2008 served as an input to the Accra High-Level Forum III

Summary of PD Survey 2008 Results Overall Assessment: Improvements Good progress in Coordinated TA/TC, Use of procurement system, Programme-based Approach, Joint Missions/Analytic Works Indicators 2005 Baseline 2008 Results 2010 Targets Indicator 3: Aid flows are aligned with national priorities 90% 84% 95% Indicator 4: Strengthened capacity by coordinated support 50% 61% Indicator 5a: Use of country PFM System 66% 71% 59% Indicator 5b: Use of procurement systems 69% N/A

Summary of PD Survey 2008 Results (cont’d) Indicators 2005 Baseline 2008 Results 2010 Targets Indicator 6: Avoiding parallel PIUs 56 27 19 Indicator 7: Aid is more predictable 70% 60% 85% Indicator 9: Use of common arrangements or procedures 55% 61% 66% Indicator 10a: Joint Missions 17% 24% 40% Indicator 10b: Joint Analytic Work 38% 86% Ownership is critical to achieve development results – MKUKUTA/MKUZA sets national priorities, and national budget is the primary means for MKUKUTA/MKUZA implementation Government systems are being strengthened through a number of reforms (PFM systems, MKUKUTA Monitoring System, etc.) JAST provides a framework for mutual accountability while IMG reinforce mutual accountability

Key challenges – National Budget Process However, a number of key challenges still remain. National budget process 2008 survey results showed the decline from 90% (2006) to 84% ( 2007) Significant variance between actual disbursement, scheduled disbursement and what was reflected in national budget (particularly for projects) Channeling through Exchequer - Most of the project disbursements have not been made through the Exchequer System ODA in National Budget through Exchequer Actual ODA Disbursement to GoT USD 1,403 Million USD 988 Million (745 Million in GBS and 395 Million in Basket) USD 1,680 Million Total ODA on budget - USD 1,403 Million Total ODA through PFM - USD 1 140 Million Total ODA disbursed - USD 1,680 Million Only 71% of ODA disbursed to the GoT sector was channeled through the Exchequer

Key challenges (cont.) National budget process – issues emerging Compilation of complete and reliable projections from DPs and MDAs on project figures for the MTEF Projects constrained by numerous prior action and in-year performance assessments Delay of release of funds from the Exchequer to implementing agencies was noted as one of the major concerns DPs internal rules, regulations and procedures constrain some DPs to use the GoT system Disbursement through Exchequer is a priority to strengthen the accountability within Government and use of the national budget as the main framework for implementation of national development strategies National budget process – issues emerging Difficulties for MOFEA to obtain complete and reliable projections from DPs and MDAs in particular for the project figures of the MTEF, which constrains the ability to plan activities and budget resources for the entire three-years MTEF period Projects constrained by the dependence of disbursements on implementation progress, various prior action and Development Partner procedural requirements and in-year performance assessments, which often lead to funding delays and irregularities The provision of more reliable projections for project support by DPs as well as accurate confirmation of expected project funds by MDAs and Regions are constrained by project planning and implementation cycles that do not follow the Government budget calendar Delay of release of funds from the Exchequer to implementing agencies was noted as one of the major concerns – This may be due to the lack of communication between DPs and GoT agencies and within the Govt. The disbursement is made within 5 days if all the procedures were followed timely DPs internal rules, regulations and procedures constrain some DPs to use the GoT system Disbursement through Exchequer is a priority to strengthen the accountability within Government and use of the national budget as the main framework for implementation of national development strategies

Key challenges (cont.) D-Fund Issue D-Funds pose challenges in terms of recording direct disbursement adequately in the Government system The survey highlighted that only 20% of D-Fund was captured through exchequer system Channeling D-Fund directly by DPs to MDAs, Regions and LGAs Some MDAs, Regions and LGAs fail to report the actual expenditure of D-Fund to MOFEA with per donors disaggregation The issue around D-Fund affects improvements in aid predictability D-Fund is mainly to accommodate disbursements that cannot be made through the Exchequer System (i.e. TA, In-Kind contribution) Efforts are needed by DPs to channel cash disbursement through the Exchequer System

Key challenges – Aid Predictability 2008 survey result indicated a decline in predictability, from 70% to 60% Gaps between scheduled and actual (accounted for) disbursements relate to project funding modality and to some extent basket funding Actual disbursements not recorded in the GoT system poses problems in terms of accountability as well as predictability Projects constrained by numerous prior action and in-year conditionalities

Key challenges Parallel PIUs The Survey indicated improvement (from 57 to 27) But difficult to assess whether this improvement was due to phasing out of PIUs or integrating PIUs into GoT structure Inconsistent definition of PIUs applied to the Survey (i.e. NGOs or private company managing programmes, etc) PIUs still pose challenges in terms of capacity development Need more vigorous and common approach to address this issue to map existing PIUs and consider which one is parallel v.s. integrated Transaction Costs Seen improvements in reducing transaction costs? (PER/PPW followed by GBS AR!!) Uncoordinated missions and analytic work that are not aligned to national processes still happen, and impose a burden on GoT capacity

Way Forward Agreed from Accra HLF-3 Progress has been made but not enough Three urgent actions recommended by HLF 3 to meet 2010 Paris targets Country ownership is key. Building more effective and inclusive partnerships to foster mutual accountability Development results and accountability Country ownership is key. Developing country governments to take stronger leadership in their own development policies, Engage with their parliaments and domestic stakeholders in shaping their policies. Donors to support to Government by respecting countries’ priorities, investing in their human resources and institutions, Making greater use of country systems to deliver aid, and increasing the predictability of aid flows. 2. Building more effective and inclusive partnerships. Emerging development actors—middle-income countries (e.g. China ,Korea), global funds, the private sector, civil society organizations make valuable contribution to ODA The need to work in more inclusive partnership of all development actors to strengthen coordination for the greater impact on reducing poverty. 3.Development results and accountability . Joint development efforts of GOT &DPs should result in translating into positive impacts on people’s lives. GOT &DPs to account to each on the development outcomes and each one is accountable to their respective parliaments and citizens.

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