1 Minding the Gaps Comparing Uganda and Tanzania Tim Williamson Centre for Aid and Public Expenditure Overseas Development Institute

2 Comparing Tanzania and Uganda There are many similarities between the two countries –2 nd Generation PRS, improving and evolving Poverty Monitoring Systems –Years of budget reform (MTEF, IFMIS etc) –Aid dependant, with strong accountability demands from donors –Dominant executive, with relatively weak domestic accountability systems …different trajectories of ownership of the PRS….. –Tanzania increasing with iterations of the PRS –Uganda strong coalition of interest around PEAP early on, but political ownership less evident now. …and very different approaches to linking policy/the PRS to the budget, and reporting

3 How do the lessons from Minding the Gaps apply in Uganda and Tanzania? 1.Focus on strengthening and harmonization of existing processes and adopt a gradual approach to reform 2.Support from within: High level ownership of policies, a challenge function within the executive and clear sector roles. 3.Foster incentives for integration 4.Keep it simple

4 Lesson 4: Keep it Simple 1990s: Two contrasting approaches to introducing the MTEF –Tanzania chose to move to full programme budgeting and activity based costing in the MTEF –Uganda adapted its existing budget presentation, by grouping institutions by sector and a simple use of performance indicators … and differing outcomes in terms of budget-policy link –In Tanzania very detailed agency MTEF documents, but difficult to see the overall policy – budget link. –In Uganda arguably it is easier to see policy links in budget documentation, despite a less sophisticated system. –Quality of sector/MDA submissions vary in both cases & there is need to focus on operational efficiency in both cases

5 Lesson 3: Foster Incentives for Integration: Linking Reporting to Decision Making Processes Both have new ideas for PRS reporting. But what role does PRS reporting play in domestic decision making? –Are the plans largely addressing donor accountability concerns? –Can they inform domestic policy decisions/accountabilty? …but the decision making process around the budget is a key entry point for reporting –E.g. in Uganda there is use of performance analysis and information in budget documentation, but less so in Tanzania ….and so are sector policy processes in Uganda –In Uganda Annual Sector Performance Reports feed into well established Sector Review Processes….but not linked to budget. What about PRS clusters and pillars? –In Tanzania the focus is on PRS clusters. Good for addressing cross cutting issues, but accountability and decision making?

6 Lesson 2: Build Support from Within Start with making the budget policy oriented The Strategic Budget Allocation System (SBAS) in Tanzania –a sophisticated domestically conceived system to link the budget to the PRS –but would it all have been necessary if MDA MTEFs were already well linked to policy; and the PRS was structured in a way that made it easy to interface with the budget (e.g. sectors not clusters)?

7 Lesson 2: Build Support from Within Sectors, Cabinet and the Budget Process Strategic Phase in both Tanzania and Uganda –but budget challenge still weak Cabinet and involvement in reviewing the MTEF/Budget Strategy and the Budget –Cabinet given explicit choices in Uganda, but appears a fait accompli in Tanzania –No cabinet committees to review the budget in either country, so extensive scrutiny is not likely In Uganda Parliamentary Budget and Accounts committees increasingly active.. –How can they be supported?

8 Lesson 1: Strengthen and Harmonise Existing Processes & Gradual Approach A Gradual Approach? Tz’s budget formulation reforms too sophisticated early on – address fragmentation first? –PRS+MTEF+Performance budgeting+Strategic Planning all at once….. Uganda simpler approach to budget formulation reform –But financial management dimension has lagged behind Strengthen and Harmonise existing processes In Tanzania new initiatives were added to an already fragmented system……... In Uganda PRS initiatives were built on existing systems. This helped with coherence (but is this changing?).

9 …and finally The Primacy of Political Ownership Tanzania and Uganda demonstrate that the domestic policy agenda is dynamic…. ….to maintain ownership any framework for linking the PRS to the budget must be flexible and relevant to current policy.