5 April 2005JAS Consultative Meeting, Dar es Salaam1 Joint Assistance Strategy Presentation by Peniel M. Lyimo, Permanent Secretary, Ministry of Finance, Tanzania

5 April 2005JAS Consultative Meeting, Dar es Salaam2 Presentation outline 1. Introduction - why do we need JAS? 2. Objectives of JAS 3. Government commitment to development and poverty reduction 4. Basic Principles of JAS – Division of labour – Funding instruments and arrangements – Dialogue structure – Risk mitigation – Monitoring and evaluation of JAS 5. Conclusion

5 April 2005JAS Consultative Meeting, Dar es Salaam3 1. Introduction – why do we need JAS?  The Government of Tanzania (GOT) and her Development Partners have made considerable progress in building effective partnerships on the basis of country ownership, harmonisation and alignment under the TAS  But transaction costs in delivering and managing development assistance remain high and progress needs to be extended to all levels of Government and Development Partners – Separate/individual Development Partner country strategies – Multiplicity of approaches in aid delivery  GOT wishes to consolidate existing efforts in ownership, harmonisation and alignment and move the development partnership to a higher level under a single framework for development cooperation – a Joint Assistance Strategy  JAS initiative is part and parcel of reforms commenced in the early 1990s

5 April 2005JAS Consultative Meeting, Dar es Salaam4 2. Objectives of JAS  JAS aims to contribute to achieving Tanzania’s development and poverty reduction goals articulated in the National Strategy for Growth and Reduction of Poverty (NSGRP) and the Zanzibar Poverty Reduction Plan (ZPRP) through the production of external financing plan  It aims to strengthen national ownership and Government leadership of the development process and improve aid effectiveness through harmonisation of Government and Development Partner processes, alignment of Development Partner support to Government priorities, systems and processes, and managing for results  It aims to facilitate mutual accountability  It intends to adopt a unified country strategy

5 April 2005JAS Consultative Meeting, Dar es Salaam5 3. Government commitment to development and poverty reduction National development and poverty reduction goals  GOT is committed to achieving national development and poverty reduction goals laid out in the National Vision 2025, the Zanzibar Vision 2020, the National Poverty Eradication Strategy (NPES), the NSGRP and ZPRP  Under JAS, Development Partners will support national poverty reduction and development strategies, national and sector policies and reform programmes

5 April 2005JAS Consultative Meeting, Dar es Salaam6 3. Government commitment to development and poverty reduction (cont.) Harmonisation of Government strategies and processes  GOT will harmonize NSGRP and ZPRP and align all sector strategies and policies and local government activities with these two strategies  GOT will ensure strategic resource allocation to the implementation of NSGRP/ZPRP and strengthen the annual PER/MTEF process  GOT will harmonize all processes at national, sector and local government level around NSGRP/ZPRP and national budget

5 April 2005JAS Consultative Meeting, Dar es Salaam7 3. Government commitment to development and poverty reduction (cont.) Capacity building  GOT is committed to strengthening human and institutional capacity at all levels of Government and across non-state actors  Two key areas of focus are public financial management and public service delivery  Development Partners will support GOT capacity building efforts in ongoing public sector reform programmes, e.g. PFMRP, PSRP, LGRP, LSRP  Technical assistance will be used for capacity building rather than project/programme execution. It will be demand driven, untied from the source of finance and procured openly by the Government

5 April 2005JAS Consultative Meeting, Dar es Salaam8 4. Basic Principles of JAS 4.1.Division of labour - Development Partners  Development Partners concentrate on only few sectors/thematic areas in line with NSGRP/ZPRP  A ‘lead partner’ leads and coordinates other ‘delegating partners’ activities in a sector/thematic area and sub-sector  The ‘lead partner’ represents ‘delegating partners’ in communication with Government  Development Partners outside a particular sector/thematic area can act as co-financers of activities in that sector/thematic area  Development Partners coordinate and harmonize their activities within and across sectors/thematic areas and align them to Government systems and processes

5 April 2005JAS Consultative Meeting, Dar es Salaam9 4. Basic Principles of JAS (cont.) 4.1.Division of Labour - Development Partners (cont.) Selection criteria and process  Development Partners’ areas of focus and roles as lead or delegating partners will be based on their comparative advantage in terms of established expertise in a particular sector/thematic area or sub-sector and not funding capacity  Other factors to determine areas of focus/Partner roles:  Development Partner agency capacity  Established relationships with Government and other Partners  Appropriate total number of Partners in a sector/thematic area depending on its size, nature and needs  Development Partners’ willingness to cooperate / recognize and trust the ‘lead partner’  Distribution of delegating and lead responsibilities among Development Partners

5 April 2005JAS Consultative Meeting, Dar es Salaam10 4. Basic Principles of JAS (cont.) 4.1.Division of labour - Development Partners Selection criteria and process (cont.)  Areas of focus and lead/delegating roles of Development Partners will be determined under GOT leadership in close consultation with Development Partners  Specific terms of reference including a code of conduct for lead and delegating partners will be agreed upon 4.2. Division of labour - Government  GOT will work towards more effective division of labour between central and line ministries and local government and will assign lead institutions in each sector/thematic area

5 April 2005JAS Consultative Meeting, Dar es Salaam11 4. Basic Principles of JAS (cont.) 4.3.Funding instruments and arrangements Aid modalities  GOT prefers General Budget Support (GBS) because of its benefits over other instruments in terms of  Promoting national ownership and leadership in budget management and resource allocation  Enhancing total budget/expenditure contestability  Shifting Government accountability from donors to citizens Chapter 7, Articles 135 and 136 of the Constitution of URT  Consolidated Fund  Appropriations from the CF by the Parliament  Enhancing transparency and accountability of public expenditures  Contributing to Development Partner harmonisation and alignment process  Focusing dialogue on strategic issues  Improving predictability of inflows  Strengthening the budget process

5 April 2005JAS Consultative Meeting, Dar es Salaam12 4. Basic Principles of JAS (cont.) 4.3.Funding instruments and arrangements (cont.)  GBS to attain 70% of development assistance in the medium-term (budget support including basket funds currently at 55%)  Common/Sector basket funds should be used as transition measure to GBS  Direct project aid High potential of using parallel systems Projects should adhere to the following principles:  Projects support national and sector priorities, strategies and programmes  Projects are integrated in sector and local government budget processes  Project documents explain why the project approach is necessary or appropriate  Projects operate within Government structures, systems, regulations and procedures  Focus on capital/physical infrastructure expenditures

5 April 2005JAS Consultative Meeting, Dar es Salaam13 4. Basic Principles of JAS (cont.) 4.3.Funding instruments and arrangements (cont.) Commitment and disbursement arrangements  All external resources will be integrated into the Government budget and Exchequer system  Development Partners will report to GOT the full amount of funds committed and disbursed to GOT and non state actors in a timely and reliable manner  Commitments will be made for a three year MTEF period through annual PER process and year to year variations will be minimized  Disbursements for all aid modalities will be in line with commitments, made through the Exchequer, and be frontloaded in the first half of the financial year

5 April 2005JAS Consultative Meeting, Dar es Salaam14 4. Basic Principles of JAS (cont.) 4.3.Funding instruments and arrangements (cont.) Procurement  GOT procurement systems will be strengthened with the support of Development Partners so as to attain international standards (BEST PRACTICES) and will be used for all aid modalities. Accounting and Auditing  Development Partners will use Government accounting and auditing procedures and systems and support GOT in strengthening them in order to attain international standards  GOT will provide reliable and timely accounting and auditing reports to Development Partners

5 April 2005JAS Consultative Meeting, Dar es Salaam15 4. Basic Principles of JAS (cont.) 4.4. Dialogue Structure  Dialogue is an important instrument to guide the JAS process and to achieve effective development co- operation in line with the principles of national ownership, alignment, harmonization, managing for results and mutual accountability.  Dialogue between GOT, Development Partners and domestic stakeholders will follow a range of ‘good practices’ including: dialogue under GOT leadership; inclusion of a wide range of domestic stakeholders; rationalized consultative processes; clear demarcation of different fora; predictable, open and frank dialogue based on better planning, organization and advance communication; information sharing etc.

5 April 2005JAS Consultative Meeting, Dar es Salaam16 4. Basic Principles of JAS (cont.) 4.5. Risk mitigation  Institutional and operational risk due to lack of GOT and Development Partner capacity of implementing JAS - mitigation through JAS awareness among GOT agencies, comprehensive capacity building and incentive changing initiatives, Development Partner change of practices and attitudes towards GOT and development cooperation, more decentralization/delegation to country offices/HOC, stronger role of non-state actors.  Volatility of Development Partner support due to GOT inability to meet funding requirements and Development Partner unwillingness or inability to provide funding as a result of domestic financial pressures or political events - mitigation by agreement between GOT and Development Partners on expected actions in such events

5 April 2005JAS Consultative Meeting, Dar es Salaam17 4. Basic Principles of JAS (cont.) 4.5. Risk mitigation (cont.)  Fiduciary risk arising from public expenditure not properly accounted for, not used for its intended purposes, and not representing value for money - mitigation by on-going efforts to strengthen financial management and accountability systems, on- going anti-corruption measures, M&E of PFM and accountability systems, policy dialogue, diagnostic reviews.  Assessments to date  ROSC – Fiscal Transparency (2002)  HIPC/PEM-AAP (2001, 2004)  PER external evaluation/PEFA (annual)  CFAA (2001)  CPAR (2002)  FRA for provision of GBS (2004)  GBS Evaluation (2004)  Revised PFMRP

5 April 2005JAS Consultative Meeting, Dar es Salaam18 4. Basic Principles of JAS (cont.) 4.6. Monitoring and Evaluation of JAS  Keeps track of GOT and Development Partner performance under the JAS  Reviews progress in implementing agreed JAS commitments and specifies actions for further improvement  Monitoring categories: ownership, alignment, harmonization, managing for results as guided by MKUKUTA, operational functioning of JAS and mutual accountability

5 April 2005JAS Consultative Meeting, Dar es Salaam19 4. Basic Principles of JAS (cont.) 4.6. Monitoring and Evaluation of JAS (cont.)  M&E by two groups: Government, Development Partners, non-state actors:  Annual M&E by using a JAS monitoring matrix with indicators drawing from those of the Paris Declaration and outputs from other review processes – output: JAS annual implementation report  Comprehensive mid-term and final review – output: mid-term and final review reports Independent Monitoring Group (IMG):  Mid-term and final assessment of JAS with a view to facilitating mutual accountability – output: IMG report

5 April 2005JAS Consultative Meeting, Dar es Salaam20 4. Basic Principles of JAS (cont.) 4.7. JAS Action Plan  JAS Action Plan will specify how to put JAS principles of division of labour, funding modalities, dialogue, etc. into practice in the short- to medium-term

5 April 2005JAS Consultative Meeting, Dar es Salaam21 5. Conclusion  The current proposal of JAS has been developed through consultations between GOT, Development Partners and non-state actors  We hope that all Development Partners support the Joint Assistance Strategy and look forward to continued fruitful consultations on further improving the presented proposal of the JAS