launch report of the aid management platform: an analysis ... · government in terms of aid flows...

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Launch Repor t o f the A id Management P la t fo rm: An Ana l ys is o f the A id Por t fo l io fo r 2007/08 and 2008/09

THE UNITED REPUBLIC OF TANZANIA

MINISTRY OF FINANCE AND

ECONOMIC AFFAIRS

Launch Report of the Aid Management Platform: An Analysis of the Aid Portfolio for 2007/08 and 2008/09

August, 2010DAR-ES-SALAAM


i

THE UNITED REPUBLIC OF TANZANIA

MINISTRY OF FINANCE AND ECONOMIC AFFAIRS

Launch Report of the Aid Management Platform:

An Analysis of the Aid Portfolio for 2007/08 and 2008/09

August, 2010DAR-ES-SALAAM


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Table of ContentsAcknowledgement .......................................................................................................................... iiiList of Abbreviations ........................................................................................................................ iiiForeword ................................................................................................................................ ivIntroduction ............................................................................................................................. 1

Implementing the Aid Management Platform .................................................................................... 11.2 Objectives of Installing AMP System ........................................................................................ 11.3 Objectives of the Launch Report................................................................................................ 21.4 Future Reports ............................................................................................................................... 2

PART I : ODA Analysis for United Republic of Tanzania ...................................................... 31.0 Volume of Aid disbursed to Tanzania for FY 2007/08-2008/09 ................................... 32.0 Aid disbursed to Tanzania by Modality. ........................................................................ 43.0 Aid by Sectors................................................................................................................ 74.0: Compliance to JAST /Paris Principles........................................................................... 75.0: Aid Delivered Through Exchequer System for Financial Year 2008/09 ........................ 86.0: Development Partners Updating /Not Updating Data on Aid

Management Platform System ...................................................................................... 97.0: Aid Management Platform Road Map for Training MDAs for 2010 ........................... 108.0: Guidance Note .............................................................................................................. 12

8.1 Introduction ..................................................................................................................... 12 8.2 Purpose ............................................................................................................................ 12 8.3 Structure ........................................................................................................................... 12 8.4 Implementation of AMP is expected to: .......................................................................... 12 8.5 Roles and Responsibilities ................................................................................................ 13 8.6 Calendar : Schedule of Government and DPs Inputs into AMP ..................................... 14 8.7 Key Data Requirements ................................................................................................... 14 8.9 Projects Supporting Multiple Implementers .................................................................... 15 8.10 Official Development Assistance Related with NGOs .................................................... 15 8.11 Zanzibar ........................................................................................................................... 16 8.12 Governance ...................................................................................................................... 16 8.13 Staff turn-over and change of positions among DPs ..................................................... 16 8.14 UN Inclusion in the Aid Management Platform ............................................................. 16 8.15 Contacts for Support ....................................................................................................... 18

ANNEX I: National Budgeting Calendar/Process ....................................................... 19 ANNEX II: Calendar : Schedule of Government Inputs into the Aid Management Platform ..................................................................................... 209.0: Conclusions ................................................................................................................... 21 ANNEX: III .................................................................................................................. 21

Summary of PD Survey 2008 Results ........................................................................................ 21 Sector / Thematic Area Classification ........................................................................................ 22

PART II Analyis of data collected from AMP for Zanzibar .................................................... 23 1.0 Introduction ......................................................................................................... 23 1.1 Data Collection and Reporting ............................................................................ 23 1.2 Volume and Distribution of Aid .......................................................................... 24 1.3 Aid to Zanzibar, 2006/07 – 2008/09 ..................................................................... 24 2.0 Aid by Modality ................................................................................................... 25 3.0 Aid by MKUZA Cluster ...................................................................................... 27 4.0 Grant Aid by Sector ............................................................................................. 29 5.0 Aid Effectiveness ................................................................................................. 30 6.0 Aid through the Exchequer System ..................................................................... 30 7.0 Next Steps ............................................................................................................ 31


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Acknowledgement

The major source of information used in preparing this Official Development Assistance Report is the Aid Management Platform System. The efforts of staff of the External Finance Department and DPs focal points are highly acknowledged with gratitude for facilitating data entry in the system. Without their patience and cooperation, much of the quantitative analysis used in this report could not have been produced.

The findings in this report are based on the evidence that has been collected and analysed by Aid Coordination section staff. In all cases, DPs focal points have validated the data and to confirm the factual basis for the analysis that has been presented. We recognize, however, that in some instances, the data requires further validation. DPs focal points are strongly encouraged to continue to work with government to ensure the accuracy of the data that is presented in this and future reports.

List of Abbreviations

ACU Aid Coordination UnitAfDB African Development BankAMP Aid Management PlatformCSO Civil Society OrganisationDfID Department for International DevelopmentDP Development Partner DPG Development Partners GroupEC European CommissionFAO Food and Agriculture OrganizationFY Financial YearGBS General Budget SupportGoT Government of TanzaniaIFAD International Fund for Agricultural DevelopmentIFMS Integrated Financial Management SystemILO International Labour OrganizationJAST Joint Assistance Strategy for Tanzania JP Joint ProgrammeLGA Local Government AuthorityMDAs Ministries, Departments and AgenciesMDGs Millennium Development GoalsMKUKUTA Mkakati wa Kukuza Uchumi na Kupunguza Umasikini Tanzania MKUZA Mkakati wa Kukuza Uchumi na Kupunguza Umasikini ZanzibarMOFEA Ministry of Finance and Economic AffairsMTEF Medium-Term Expenditure FrameworkNGO Non-Governmental OrganisationNSAs Non State ActorsNSGRP National Strategy for Growth and Reduction of Poverty ODA Official Development AssistanceOPEC Organization of Petroleum Exporting CountriesRGoZ Revolutionary Government of ZanzibarSBAS Strategic Budget Allocation System TA Technical AssistanceUK United KingdomUN United NationsUNDP United Nations Development ProgrammeUNHCR United Nations High Commission for RefugeesUNICEF United Nations Children’s FundURT United Republic of TanzaniaUSAID United States Agency for International DevelopmentWFP World Food Programme


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Foreword

The Joint Assistance Strategy for Tanzania ( JAST), Paris Declaration and Accra Agenda for Action put emphasis on the publication of comprehensive, timely and detailed information about aid, in a form that is easy to access, will contribute to more effective aid, limit opportunities for corruption, and promote greater mutual accountability and ownership. Based on this objective, the government of Tanzania adopted the Aid Management Platform (AMP) as a tool to achieve this objective and anchored it in the Ministry of Finance and Economic Affair. Zanzibar has its own workspace in the AMP system and therefore this report has a section on Zanzibar. The launching of the AMP today is the culmination of more than one year of collaborative work by MOFEA URT, MoFEA Zanzibar, MDAs and Development Partners, with the technical support from the Development Gateway Foundation. The AMP will provide access to reliable data on aid in Tanzania for many stakeholders particularly MDAs,LGAs, Regions,NSAs, and DPs. This report is one kind of output that will be generated by AMP, and envisioned to be produced annually; other outputs include budget reports, disbursements reports, specific reports for missions/negotiations and project monitoring reports.

The report also focuses on the use of development assistance in supporting the implementation of the MKUKUTA/MKUZA. It is particularly concerned with the role of evidence based approaches in promoting a partnership that is centered on achieving development results. It considers broad trends and, based on the analysis of data from AMP source, provides policy prescriptions that will support effective aid management across the whole government.

The report, and the on-line Database from which much of the infromation and analysis is derived, therefore establishes an important link between aid and development results by disseminating information, promoting dialogue and emphasizing the accountability obligations for all of us.

It is our hope that the Report will stimulate posting quality information in the AMP system in order to facilitate quality analysis of data in the future, which is the ultimate objective of all stakeholders, including Government, DPs and NSAs.

Ministry of Finance and Economic AffairsDar es SalaamAugust 2010

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Introduction

Implementing the Aid Management Platform

1.0 The Aid Management Platform (AMP) is a web based application tool designed to enable better management and coordination of development assistance. It is a web-based database that can be used by both the Government and DPs in managing external resources, including planning, tracking and reporting of development assistance flows (General/Sector Budget Support, Basket Funds and Project Funds). AMP helps to manage development assistance according to national priorities, measure impact in line with the MKUKUTA/MKUZA and MDGs. It is also designed to monitor progress towards Paris Declaration objectives. It is customized to suit Tanzania country needs (i.e. MKUKUTA/MKUZA clusters and goals).

1.1 The Government of Tanzania (GoT) began piloting the AMP in January 2008. After a great deal of technical work, data collection, validation and discussion on how best to maintain the system, it is now operational and functioning as the official system for aid management in Tanzania. External Finance, Policy Analysis, Budget, and Accountant General Department staff and DPs Focal Points have been trained and granted access to the system for data entry, validation and report generation for their work space.

A guidance note for managing AMP is in place. The guidance note clarifies roles and responsibilities of Government and DPs on entry and validation of data in the system. It also makes it clear some of the main outputs; such as timely provision of accurate MTEF projections for the National Budget, and the regular publication of analytical reports on the aid portfolio. Both DPs and Government will be able to use the system to generate customised reports to meet their needs.

1.2 Objectives of Installing AMP SystemThe aim is to strengthen the capacity of the government to manage and coordinate aid effectively. Specific objectives are:i. To manage ODA in conjunction with Budget Process and Joint Assistance Strategy ( JAST);

ii. To facilitate reporting of DPs commitments / projections and actual disbursements on all ODA (to Government and NSAs) to MoFEA, increasing accuracy and data quality (‘visibility’ incentives of DPs to report on time;

iii. To allow all reports to be generated on demand, including on project/program results and outputs;

iv. To better capture DPs non-exchequer disbursements/payments to be accounted for ;v. To meet new monitoring and reporting needs on JAST, Paris indicators and Accra Agenda for

Action;vi. To increase transparency and accountability by introducing broad access to a data repository on

ODA-funded projects/programs.vii. Make ODA data visible online to different users through predefined access rights to AMP;

viii. Increase insight of DPs agencies and government institutions into each other’s work process status;

ix. Seek to capture and facilitate the involvement of implementing partners and NSAs in implementing ODA funded programs;

x. Explore the possibility of integrating the IFMS and AMP Systems, which may allow DPs agencies, MoFEA and MDAs to see IFMS expenditure data for on-budget ODA funded projects and basket funds so as; a) To increase DPs confidence in government systems through an improved data recording

and reporting system, and enhance government-led coordination, allowing the government to take even more control of their own development process;

b) To facilitate timely and comprehensive reporting; enable a comprehensive view of all aid resources within a country;

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c) To help monitor progress toward national development objectives; d) To reduce duplication of efforts and transaction costs associated with data collection and

processing;e) To standardize reporting terminology among government staff and DPs, allowing

harmonization of reports to multiple DPs; andf ) To link AMP with other existing systems such as SBAS, IFMS, RIMKU and PlanRep.

1.3 Objectives of the Launch Report

1.3.1 This launch report provides information on the historical data collected by GoT in the preparations for launching AMP. It provides an analysis of aid flows for the 2007/08 and 2008/09 Financial Years. Government may use this information to inform future policy making and negotiations with DPs on new aid programmes. It also provides important information for government in terms of aid flows in the national budget and off budget in order to prepare a comprehensive anticipated external resources envelope for more strategic and comprehensive government budget planning.

1.3.2 The launch report will demonstrate some of the analysis which may be run using the AMP. This is only a small selection of the possibilities, and as data coverage is expanded to include project disbursements and new data fields (such as region), a much wider range of analysis will be possible. Some Development Partners have not yet entered or verified information in the system1. We encourage them to enter the required data in order to strengthen the usefulness and reliability of the AMP System as a main source of the data and information on Aid in Tanzania.

1.4 Future Reports

1.4.1 This report is published now to coincide with the launch of AMP and will soon be followed by a series of annual reports that provide information on the just-finished financial year. The first such report, for the 2009/10 FY is expected to be published in October 2010. Comments on the structure and content of this report are warmly welcomed as an opportunity to improve future editions.

The AMP system is accessible for authorized users through http://amp.mof.go.tz/.

1 These development partners include: World Bank, Korea, China, Spain, Italy, Kuwait, ILO, UNIDO, WHO, UNESCO, FAO, UNAID, UNHABITAT & UNHCR

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PART I : ODA ANALYSIS FOR UNITED REPUBLIC OF TANZANIA

1.0 Volume of Aid disbursed to Tanzania for FY 2007/08-2008/09This section looks at the volume of aid provided to Tanzania by DPs in the 2007/08 and 2008/09 Financial Years. It focuses on the overall amount of aid provided.

TABLE 1.1: Volume of Aid Disbursed to Tanzania for 2007/08 and 2008/09

DPs 2007/08 (Tshs) % of Aid as Total 2008/09 (Tshs) % of Aid as Total

AfDB 50,134,178,488 2 161,271,079,983 8

BADEA 994,474,706 0 * 7,484,270,655 0 *

Belgium 13,545,716,466 1 3,918,190,443 0 *

Canada 17,507,900,663 1 79,926,004,939 4

China 26,496,245,748 1 - 0 *

Denmark 87,936,678,020 4 78,093,512,006 4

EC 181,117,313,310 9 153,316,285,994 7

FAO - 0 * 1,171,736,794 0 *

Finland 30,288,651,562 1 31,519,243,017 2

France 5,481,127,470 0 * 3,632,890,756 0 *

Germany 72,937,049,076 4 72,379,148,752 4

Global Fund 8,961,847,749 0 * 34,127,721,902 2

World Bank 727,905,155,926 36 609,324,872,350 30

IFAD 13,880,115,710 1 7,653,122,081 0 *

ILO 18,579,300 0 * - 0 *

Ireland 48,761,608,279 2 83,782,128,052 4

Italy - 0 * 407,677,804 0 *

Japan 38,485,280,693 2 71,635,744,881 4

Korea 382,488,982 0 * - 0 *

Netherlands 111,203,388,573 5 100,033,689,953 5

Norway 131,124,378,465 6 114,960,822,840 6

OPEC 1,924,621,209 0 * 7,979,884,888 0 *

Sweden 89,855,697,924 4 89,705,133,320 4

Switzerland 17,015,908,676 1 18,100,982,572 1

UK 305,381,862,536 15 267,764,067,769 13

UN Joint Programme

325,509,336 0 * 4,447,580,900 0 *

UNDP 4,000,306,327 0 * 9,525,902,291 0 *

UNHCR - 0 * 1,939,448,384 0 *

UNICEF 6,445,537,217 0 * 5,828,991,126 0 *

USAID 4,104,070,289 0* - 0 *

WFP 48,760,765,401 2 26,076,790,000 1

Total 2,044,976,458,113 100 2,046,006,924,462 100

Source: MOFEA AMP system

*Please take note on % of aid as total column to some DPs is 0 due to rounding of % figure

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This table shows how much support was provided to Tanzania in each of the last two completed financial years by each DPs. This report uses AMP data from piloting period which started in FY 2007/08. About Tsh 1.030 Billion more aid was provided in 2008/09 than in 2007/08, an increase of 0.001%. In both years, the World Bank was the largest DP, with more than double the volume and proportion of aid provided by the next biggest contributor, DFID, which provided a constant proportion around 14% of the total aids for two years. Only one DP increased the proportion of all aid they provided, AfDB who tripled aid, from Tsh 50 Billion to Tsh 161 Billion which is equivalent to an increase of 68%. Also Canada increased financing from 18 Billion to 80 Billion which is equivalent to 64%.

By contrast, the EC and World Bank both demonstrated slightly declines in the amount of aid they provided to Tanzania. The EC’s support to Tanzania declined from Tsh 181 Billion to Tsh 153 Billion, while World Bank’s fell from Tsh 728 Billion to Tsh 609 Billion.

Graph 1:1 Volumes of Aid by Type of Support, 2007/08 and 2008/09 (in millions Tshs)

Source: MOFEA AMP system.

The graph 1.1 shows that much of aid was disbursed in the form of grant financing in both years. It should also be noted that the correct value of technical assistance support to Tanzania is probably higher than what is captured above, as part of TA is embedded in either grant or loan. Unfortunately, information on TA is not available.

2.0 Aid disbursed to Tanzania by Modality.This section of the report looks at the distribution of aid by modality. The purpose is to inform policy making about aid distribution, with a view to help improving the alignment of aid to the MKUKUTA and MKUZA. Table 1.2 below, shows the overall level of aid provided in each modality,as well as the performance of each DP. Among the three modalities,more ODA was disbursed through GBS. The largest providers of GBS were UK and the World Bank, averaging about 20-30 per cent of total GBS over the two years. A notable shift to GBS is also seen in the aid trend for the European Commission, with the GBS allocation from 2007/08 to 2008/09 doubled.

Basket funds in both 2007/08 and 2008/09 amounted to 19 % of total aid. The largest providers of basket fund were the World Bank, the European Commission and Denmark. By contrast, project funds, amounted to 37 % for both two given years, the World Bank was the largest provider for project funds in 2007/08 followed by AfDB.

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3.0 Aid by SectorsTable 1.3 shows aid by sectors; this shows that in 2007/08 health sector received the largest amount of funds amounting to Tsh 149 billion equivalent to 13% of total DPs disbursements. While in 2008/09 Governance sector received the largest amount of funds, amounting to Tshs 248 billion equivalent to 21%. The next largest recipient sectors in both years are Infrastructure, Water and Education. However,some sectors such as Innovation & Technology, Environment, Gender are receiving less external resources.

Table 1.3: Aid by Sectors (In TZS)

Sector FY 2007/08 % ** FY 2008/09 %**

Agriculture 109,130,236,867 9 94,706,010,593 8

Energy and Minerals 23,291,019,084 2 74,356,147,211 6

Natural Resources and Tourism 11,547,578,024 1 63,532,230,461 5

Industry and Trade (including Private Sector)

50,043,794,310 4 27,809,426,943 2

Infrastructure 139,244,108,105 12 53,501,112,579 5

Innovations & Technology 735,742,658 0 23,889,363,815 2

Social Development 112,171,200,646 9 27,507,387,579 2

Water 115,058,797,608 10 130,016,968,961 11

Education 136,385,628,199 11 79,351,274,320 7

Environment 18,808,508,393 2 18,958,179,926 2

Gender 294,253,806 0 132,766,046 0

Health 149,739,491,878 13 148,674,426,271 13

HIV/AIDS 77,448,323,417 7 62,965,698,152 5

Humanitarian (incl refugees) 32,426,293,876 3 19,854,803,412 2

Governance 113,575,374,950 10 248,527,136,255 21

Development Administration 24,009,261,774 2 13,851,297,919 1

Legal 16,254,265,798 1 33,330,329,507 3

Public Financial Management 56,039,942,638 5 40,776,291,635 4

Total 1,186,203,822,032 100 1,161,740,851,586 100

Source: MoFEA AMP System

** These are percentages of specific sector support in relation to overall sector support.

4.0: Compliance to JAST /Paris PrinciplesThe JAST specifies a preference for GBS as the modality of aid delivery. It has been associated with greater ownership, harmonization, alignment, managing for results, mutual and domestic accountability. Table 1.4 shows which DPs have done the most to align their aid to the JAST principles. Six DPs provided more than 50 percent of their aid in the form of GBS – UK, Finland, Sweden, European Commision, Netherlands and Canada. UK has demonstrated a good example of adhering to JAST Principles by delivering aid through GBS by 94 percent, 13 DPs continued to provide aid through projects financing.

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Table 1.4: Aid Modality by DPs, 2008/09

DPs General Budget Support (%) of total modality

Basket Fund (%) of total modality

Direct Project Support(%)of total modality

AfDB 46 18 36

BADEA 0 0 100

Belgium 0 0 100

Canada 50 37 13

China 0 0 0

Denmark 30 23 47

EC 67 0 33

FAO 0 0 100

Finland 75 25 0

France 0 47 53

Global Fund 0 0 100

Germany 18 24 57

World Bank 30 19 50

IFAD 0 0 100

ILO 0 0 0

Ireland 30 69 1

Italy 0 0 100

Japan 34 9 57

Netherlands 52 48 0

Korea 0 0 0

Norway 41 8 52

OPEC 0 0 100

Sweden 74 7 19

Switzerland 35 40 25

UK 90 8 2

UN Joint Programme 0 0 100

UNDP 0 19 81

UNICEF 0 32 68

UNHCR 0 0 100

USA 0 0 0

WFP 0 0 100

Source: MoFEA AMP system

5.0: Aid Delivered Through Exchequer System for Financial Year 2008/09Table 1.5 shows the extent to which DPs are using Government budget execution procedures in delivering aid for Tanzania. The overall figures show that 71%2 of aid was delivered using the Budget Execution procedures of Government while 29% was delivered outside the Government budget execution procedures. The main challenge in this area for the DPs is to achieve the Paris Declaration target (77%) by 2010 to use government budget execution procedures.

Table 1.5: Use of Exchequer System by DPs for Financial 2008/09

2 The 71% results is similar with what was found during the 2008 Paris Survey see annex III

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DPs Use Exchequer System Not Use Exchequer System

Percentage on Exchequer

Percentage not on Exchequer system

AfDB 102,663,419,004 58,607,660,979 64 36

Badea 7,395,051,144 89,219,511 1 99

Belgium 377,944,921 3,540,245,522 10 90

Canada 79,201,298,331 724,706,608 99 1

Denmark 21,223,297,386 56,870,214,620 73 27

EC 146,979,495,225 6,336,790,769 4 96

FAO 32,936,800 1,138,799,994 97 3

Finland 31,519,243,017 0 100 0

France 3,149,126,388 483,764,368 87 13

Germany 19,843,568,547 52,535,580,205 73 27

Global Fund 24,930,982,272 9,196,739,630 73 2

World Bank 322,637,409,157 286,687,463,193 53 47

IFAD 2,998,652,518 4,654,469,563 44 56

Ireland 83,742,939,558 39,188,494 100 0

Italy 407,677,804 0 100

Japan 40,716,724,729 30,919,020,152 43 57

Netherlands 100,033,689,953 100 0

Norway 67,499,420,037 47,461,402,803 41 59

OPEC 7,153,391,674 826,493,215 90 10

Sweden 79,064,761,291 10,640,372,029 88 12

Switzerland 14,415,684,377 3,685,298,195 80 20

UK 262,741,070,148 5,022,997,621 98 2

UN Joint Programme

2,742,927,068 1,704,653,832 62 38

UNDP 8,707,988,528 817,913,763 91 9

UNHCR 1,939448,384 0 100

UNICEF 3,062,381,808 2,766,609,317 53 47

WFP 26,076,790,008 0 100

Total 1,458,682,616,538 587,324,307,924 71 29

Source :MoFEA AMP system

6.0: Development Partners Updating /Not Updating Data on Aid Management Platform SystemThe government piloted the Aid Management Platform System in 2008 by training of External Finance Department staff as well as DPs Focal Points. More than 1,200 projects/ programmes have been entered in the system through the partnership of Government and DPs. The table 1.6 shows list of DPs updating/not updating external resources in AMP. Even though , World Bank does not enter data into AMP System, the Government, World Bank and Development Gateway Foundation are working hard to link the Client Connection (World Bank System’s) with AMP to ensure data is updated automatically.

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Table 1.6: Development Partners Updating Data on Aid Management Platform System

S/N Development Partners Updating data on AMP

Development Partners not Updating data on AMP

1 AfDB China2 Belgium Brazil3 Canada Badea4 Denmark Global Fund5 Finland World Bank6 France India7 Germany OPEC8 Ireland UNAIDS9 Italy Spain10 Japan South Korea11 Netherlands12 Norway13 Sweden14 Switzerland15 USA16 UK17 IFAD18 EC19 UNFPA20 WFP21 ILO22 UNHCR23 UNEP24 WHO25 FAO26 UNESCO

7.0: Aid Management Platform Road Map for Training MDAs for 2010Mapping exercise to test strength of connectivity and usability of the AMP System in Ministries and DPs Agency Offices was conducted in March 2010. The test on strength of connectivity and usability showed good connection and informed the preparation of AMP Road Map for training MDAs in 2010.

Table 1.7: AMP Road map for MDAs training

Ministries and Agencies MonthsAug Oct Dec

State House Public Debt and General ServicesAccountant General’s DepartmentPrime MinisterVice PresidentRegistrar of Political PartiesMinistry of Public Safety and SecurityMinistry of Home Affairs-Prison ServicesCabinet SecretariatVice President OfficePresident’s Office-Public Service Management

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Ethics SecretariatMinistry of Foreign Affairs and International CooperationPrime Minister’s OfficeThe National ServiceJudiciaryMinistry of Justice and Constitutional AffairsThe National Assembly FundMinistry of Agriculture ,Food Security and CooperativesMinistry of Industry ,Trade and MarketingNational Audit OfficeMinistry of Education and Vocational TrainingMinistry of Lands, Housing and Human Settlements Development Ministry of Water and IrrigationMinistry of Finance and Economic AffairsMinistry of Home AffairsMinistry of Health and Social Welfare Ministry of Community Development, Gender and ChildrenCommission for Human Rights and Good GovernancePrime Minister’s Office-Regional Administration and Local GovernmentMinistry of Defence and National ServicesMinistry of Energy and MineralsLaw Reform CommissionIndustrial Court of Tanzania Electoral CommissionCommercial CourtMinistry of Labour, Employment and Youth developmentPresident’s Office Planning CommissionMinistry of Communication, Science and Technology Ministry of Natural Resources and TourismLand CourtAnti-Drug CommissionTACAIDS (Tanzania Commission for AIDSImmigration DepartmentPublic Service CommissionMinistry of Information, Culture and SportsMinistry of East African CooperationMinistry of Infrastructure DevelopmentMinistry of Livestock, Development and FisheriesNational Bureau of StatisticsBank of Tanzania

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8.0: Guidance Note

Guidance Note for Collection and Handling of Aid Information by Government and Development Partners through the Aid Management Platform System

8.1 Introduction

To date, information on Tanzania’s ODA has been maintained by means of an Excel spreadsheet. This system has been shown to be inadequate in responding to the different needs of stakeholders, and faces a number of challenges, including difficulties in collecting routine disbursement data from development partners, incomplete information for MTEF purposes, and inadequate information to monitor projects constrained by poor implementation progress, funding delays and irregularities. In sum, these constraints have led the Government of Tanzania to implement a new aid information system, the Aid Management Platform and to clarify and revise the rules and requirements regarding the provision of data on ODA flows.

In the JAST, Paris Declaration and Accra Agenda for Action, we agreed that greater predictability in the provision of aid flows is very important to enable Tanzania to plan and reduce poverty as highlighted in MKUKUTA/MKUZA. We will take the following actions to further improve the predictability of aid;

i. Tanzania will strengthen budget planning processes for managing domestic and external resources and will improve the linkages between expenditures and results over the medium term,

ii. DPs will provide full and timely information on annual commitments and actual disbursements so that Tanzania is in a position to accurately record all aid flows in the budget estimates and accounting system;

iii. DPs will provide each year, at country level, comprehensive estimates of aid flows they plan to provide over 3-5 year period;

iv. Tanzania and DPs we work together at the International Level to review ways of further improving medium term predictability of aid, including developing tools to measure it.

8.2 PurposeThis note and the attached National Budgeting Process/ calendars / schedules and operational Manual of Aid Management Platform, seek to establish a clear system in which the responsibilities of Government and DPs are clearly delineated in such a manner that as a matter of routine the AMP is kept up to date, maximizing its effectiveness as a tool for improving aid management.

8.3 StructureThis guidance note begins by summarizing the Government and DPs required inputs into the AMP. It then offers specific guidance note on what data is required to be entered into the system for certain data fields, before giving details on how certain types of project should be handled – specifically those for Zanzibar, and those with NGO components.

8.4 Implementation of AMP is expected to:1. Support MOFEA management of ODA in accordance with the Budget process and the Joint

Assistance Strategy for Tanzania ( JAST):i. Facilitate reporting of DPs commitments / projections and actual disbursements on all ODA

(to Government and non-state actors) to MOFEA, increasing accuracy and data quality (‘visibility’ incentives of DPs to report on time)

ii. Allow all MOFEA-required reports to be predefined and generated on demand, including on project/program results and outputs.

iii. Meet new monitoring and reporting needs on the JAST, Paris indicators, and new commitments made in Accra.

2. Increase transparency and accountability by introducing broad access to a data repository on ODA-funded projects/programs

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i. Make ODA data visible online to different users through predefined access rights to AMPii. Increase the analytical capacity of both DPs and Government on the volume, distribution and

effectiveness of ODAiii. Seek to capture the involvement of implementing partners and non-state actors in implementing

ODA funds and programs and facilitate their integration into Government planning processes.

3. Better alignment of aid through improved mapping of aid resources against MKUKUTA clusters4. Further progress on Division of Labour through sectoral / DPs based aid mapping5. Increase DPs confidence in government systems through an improved data recording and reporting

system, and enhance government-led coordination, allowing the government to take even more control of their own development process.

However, for the system to bear such results, high quality information must be entered into the database on a regular basis.

8.5 Roles and ResponsibilitiesThe roles and responsibilities for maintaining the AMP are clearly defined as in the diagram above. DPs and MOFEA Desk Officer Roles in providing inputs are clear. Outputs may be produced by any party. However, the main scheduled outputs, for the budget and annual aid portfolio reports, are the responsibility of the Aid Coordination Unit of the Ministry of Finance and Economic Affairs. Routine reports for specific purposes can be produced by any user of the AMP in each workspace to which they have access. All users will be granted reporting access to a workspace including all validation activities in the AMP. This means they will be able to design reports that include all activities from other partners, but not to edit any activities created by other DPs.

Roles and Responsibilities

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8.6 Calendar : Schedule of Government and DPs Inputs into AMPCalendar : ANNEX II relates the key activities to be undertaken by the Government to ensure that AMP is accurately and comprehensively populated with information. The workload is almost equally divided between data entry and data checking.

a) Actual disbursements for basket funds and budget support must be entered by the Aid Coordination Section into the system from information provided by the Bank of Tanzania on a monthly basis with a deadline of the 5th working day of the next month, and verified by DPs within 7 working days of the month following the month of disbursement (in the US Dollar);

b) Actual disbursements for project support are entered into the system by DPs on a monthly basis with a deadline for data entry of the 5th Working Day of the next Month. Verification of data will be done by desk officers at MOFEA within 7 working days of the next month (DPs’s currency);

c) MTEF projection data is entered into AMP in September each year by DPs in accordance to the budget calendar.

d) A monthly compliance report will be produced by the Aid Coordination Unit on the 15th of each month, to show the extent to which development partners are adhering to data provision requirements and shared by government and DPs through the DPG.

e) A detailed annual report will be prepared and issued in every October of each year.

f ) The role of GOT is to create the project name DPs shall contact Aid Co-ordination whenever there is a new project. Once project is created; DPs shall enter all other relevant informations, e.g implementing organizations, sectors,contact information etc

g) MDAs and LGAs will be responsible for entering actual disbursements for the direct project funding.

8.7 Key Data RequirementsFields in AMP that are frequently entered in incorrectly or omitted but are very important for using the system analytically include the following:

Actual Approval Date / Date of Agreement Signed: This is the date on which the project agreement was signed. If it was signed by the DPs and the Government on separate days, then the later date should be taken.

Actual Start Date: This is the date on which the project became active (when funds can be disbursed to the project). In many cases it is the same as the Date of Agreement Signed / Actual Approval Date. It is only different where there are conditions for effectiveness or the agreement makes it clear that the project only starts after a certain date.

Proposed Completion Date / Date of Actual Completion: This is the date on which the project is scheduled to close, according to the agreement.

Revised Completion Date / Current Completion Date: This need only be filled in if any extension to the project has been agreed or it is expected to close earlier or later than originally completed.

Status: The status should reflect the current status of the activity – whether it is ongoing, planned, has been cancelled or is closed (in the sense that no further disbursements will be made to the project).

Implementation Levels / Location: Projects in the AMP can be selected as implemented on a National Level, a Regional level or both. The implementation level should be selected. If the project is regionally implemented, the location can be selected using the ‘Implementation Location’ drop down menu. The precise location can then be added using the ‘Add Location’ button. This should be entered for all projects to allow analysis of aid by region and district in Tanzania.

Sector: To date the sector for each project has been entered in well: almost all projects have a sector allocated to them. For all new projects, this must be maintained, with the sector selected from the drop down menu provided, (see ANNEX IV - The Approved Sectors /thematic classification by Government in Consultation with Development Partners.)

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MKUKUTA / MKUZA Classification / National Planning Objectives: To improve alignment, it is necessary for all activities to be allocated an MKUKUTA/MKUZA Cluster. If the activity is not aligned to the MKUKUTA/MKUZA at all, this field should be left empty and the activity will be assumed to be not aligned. This field is often left empty, but is critical for analytical reasons. For Budget Support, the MKUKUTA/MKUZA allocation selected from the drop down menu in the AMP should simply be ‘MKUKUTA’/’MKUZA’ rather than any specific cluster.

Currency of Disbursements: It is critical to ensure that the correct currency for disbursements is selected, and to ensure that figures are entered in full. Common errors are the inclusion of a disbursement with the correct figure but the wrong currency (often US$ is selected when the actual currency is, for example, JPY). Another common mistake is accidentally adding an extra ‘0’ or even ‘000’ to the end of the figure, inflated the disbursement amount. Disbursement figures must be checked before they are saved.

Executing Agency: These fields are commonly left empty, but are crucial for budgeting and for fostering accountability. The Executing Agency is the agency who handles funds for the project. This may be the DPs agency themselves, if they make payments on behalf of an implementer themselves. In other cases, it may be an MDA, if resources are disbursed to the MDA to use for project activities. In cases where the funds are channeled through the Exchequer but transferred immediately and in total to an MDA, the Ministry of Finance and Economic Affairs (MOFEA) is not the executing agency. This is the MDA who receive the funds in bulk from MoFEA and decide how and when to use them. Only in cases where funds must be requested by the Implementing Agency (see below) from MoFEA for specific activities is the executing agency MoFEA.

Implementing Agency: The Implementing Agency is the agencies who manage the project activities. This may mean directly undertaking activities itself or managing agencies at one level lower who carry out the physical workload. It is the agency who has the overall remit to oversee activities and ensure that project objectives and outputs are achieved.

Failure to enter these data accurately will be noted by MoFEA as a failure to provide information on time.

Technical Assistance: Entered into the system as other disbursements /projection in the system by selecting Technical Assistance on funding option. DPs will be also responsible to report the expenditure/procurement of Technical Assistance in the system.

Humanitarian Assistance: can be captured like other project. However, in the identification section of AMP the tick box for ‘Humanitarian Aid’ must be checked, and in sector section the sector should be selected as ‘Humanitarian’.

8.9 Projects Supporting Multiple Implementers A project implemented by more than one MDAs/Regions/LGAs needs to be entered according to the number of implementers. This is for budgeting reasons to know the exact amount allocated. Therefore, the commitment, projections and actual disbursements for each implementer should be separated. Each line is created as a separate project, and should be named with the convention: ‘Project Name – MDA 1 Component’ (for example ‘Public Financial Management Reform Project – MOFEA Component’).

8.10 Official Development Assistance Related with NGOs The Development Partners will be responsible to report in the system all Official Development Assistance provided to Local NGOs, CSOs, and Private Sectors as well as International NGOs operating in Tanzania. This is very important to know the exact amount of official development assistance received in the country. Each project name should be created in the system and shown whether it is local NGO or international NGO support. Actual disbursements to Local NGOs and International NGOs for project support must be entered directly into the AMP by Development Partners on a monthly basis. Disbursements for each quarter must be entered into the system (in the DPs’s currency) within 5 working days of the next month following disbursement as per ANNEX II

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8.11 ZanzibarThere is a dedicated AMP workspace for the Ministry of Finance and Economic Affairs of Zanzibar, allowing them greater autonomy in data collection and analysis. Activities relating to Zanzibar should be reported as follows:

All loans relating to Zanzibar are to be reported as normal to the Ministry of Finance and Economic Affairs on mainland Tanzania for entry into AMP. These should, however, be clearly marked as for Zanzibar.

Grants which are solely to activities on Zanzibar should be reported to MoFEA Zanzibar for initial entry into AMP and thereafter updated with details of actual disbursements and projections in line with the calendar of DPs inputs into AMP attached here.

Where a grant has a component for Zanzibar and a component for mainland Tanzania it should be reported as two separate grants. The naming convention should be: ‘Name of Project – Zanzibar component’ and ‘Name of Project – Mainland Tanzania component’. The overall commitment of the project should be split between the two components based on the expected breakdown of disbursements. Disbursements should be entered into AMP in the appropriate project (Zanzibar component or Mainland Tanzania component) according to which region the disbursement is made for use in. Separate MTEF projections for the two components must also be made, and reported to the respective Ministries of Finance and Economic Affairs, and should be entered into AMP for each component.

8.12 Governance The management of the AMP is the responsibility of the External Finance Department of the Ministry

of Finance and Economic Affairs. However, its effective working requires the efforts of a number of stakeholders, notably the development partners, MDAs, Regions and LGAs. In order to encourage improved support for the system, MoFEA will institute a system of reporting on performance in meeting data requirements. This will take the form of a monthly table, circulated at the Development Partners Group, via DPG Secretariat. As all DPs will be using the AMP for analytical purposes, they should all be transparent about how up to date their information is. The format of the table will be as follows:

• For each DPs, the table lists whether actual disbursements were recorded in the AMP before the deadline, after the deadline or not at all.

• For each DPs, the table lists whether each additional data requirement has been met: budget projections, provision of information on new activities etc.

• For each of these additional data requirements, MoFEA will record if the data was complete or not.

Similarly, a report on the entry of budget support and basket funds will be produced, as well as the performance by MoFEA on inputting new activities reported by DPs. This will allow DPs to assess how up to date those sections that MOFEA have responsibility for are.

A simple disbursement report will also be produced by MOFEA in the AMP and circulated at each DPG meeting.

8.13 Staff turn-over and change of positions among DPs

To combat the effects of staff turnover and reorganization among DPs, an operations manual will be provided to MDAs, Regions, LGAs as well as DPs. Training will also be provided once per year to new staff on operational issues on AMP. However, new MDAs, Regions, LGAs as well as DPs staff can get introduction to the system by MOFEA/EFD as necessary. There is also a dedicated computer in MOFEA/EFD for MDAs, Regions, LGAs as well as to DPs to access AMP at faster connection speeds than available on the internet. Also MDAs, Regions, LGAs as well as DPs will be responsible to report officially to MOFEA /EFD in case of new staff working on AMP to enable old staff to be removed in the system and to register the new staff.

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8.14 UN Inclusion in the Aid Management PlatformUN Agencies have been highlighted as a group in AMP Platform , although each UN Agency will be responsible to update its own workspace for project information in the system. A detailed guidance note provides, specific plan required for ensuring that UN Agencies input data in the AMP. Some major points include:

a) Projects with portfolios with a total value of less than US$ 1 million should be collapsed into a single line when entered into the system,

a) For projects which supports activities in more than one sector. Each sector should be entered in a separate line in AMP;

b) Project with portfolio commitment value of more than $1 million should be reported as individual project;

c) Where UN agencies provide support to GoT and other partners within Tanzania through non-cash modalities such as direct payment to contractors, direct procurement (TA) on behalf of partners or assistance in kind, the cash equivalent of these funds should be reported in the AMP. Commitments , projections and disbursement should be reported according to the criteria laid out in the previous section.

d) Regional projects for Africa which include Tanzania can be grouped together by each agency as ‘Regional Projects and reported in AMP Platform, except in the following cases:

• Where a Regional project supports activities in more than one sector. In such cases, it should be separate reported on each sector;

• Where any single regional project has a commitment to Tanzania of more than $1 million. In such cases these activities must be reported individually. In case of any clarification UN Agency may consult the AMP Coordinator and the UN Desk Officer for advice.

Joint Programmes

There are two issues relating to joint programmes ( JP) that need to be clarified. Firstly, how other DPs country office contributions to the One UN Fund are dealt with, and secondly how joint programmes involving several UN agencies and the One Fund can be captured. Other DPs Country Contributions to the One Fund, Where a country office makes a contribution to the One Fund, the Government of Tanzania will simply report on the activities funded through the One Fund, without attempting to allocate such support to the source partners. In annual reporting, a note will be made at the first mention of the One Fund explaining who the funding partners are, and providing a link to their contributions. However, each DP’s support to the One Fund will not be counted in the DP’s own records in the AMP or during analysis as this would constitute double counting and lead to overestimation of support to Tanzania. The reasons for this position are as follows:

1. The funds provided by each DP to the One Fund are commingled. The One Fund is then used to support specific projects. It is not possible to allocate an individual DP’s support for the One Fund to the projects associated with the fund.

2. The Government of Tanzania is required to report on the direct source of all the funds used in providing development support to Tanzania. In the case of UN Joint Programmes this is the UN, not the ultimate funding source, whether it is another DP’s headquarters or another DP’s country office. This follows the same principle by which the Government of Tanzania report on all support from multilateral bodies.

3. The primary focus of the AMP is to improve the allocation and effectiveness of aid against MKUKUTA/MKUZA, JAST and Paris Declaration / Accra Agenda for Action principles. This requires that DPs and Government monitor where aid provided to Government and other implementing partners (including NGOs) goes, and the ways in which it is managed. It does not require tracing the ultimate source of funds, but only tracing where funds are used, and in what modalities. If DPs funding the One Fund require an acknowledgement of their contribution to the fund, this should primarily come from the UN itself. A short acknowledgement, drafted by the UN, can be entered into the MoFEA aid management report.

4. If DPs need an assessment of how their funding is best allocated, they can compare the performance of funds (on aid effectiveness grounds) directly provided to the Government of Tanzania with those administered by the One UN Fund using the report on the Aid portfolio produced by MoFEA.

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Joint Programmes

Having established that other DP contributions to the One Fund will not be counted, it becomes relatively simple to accommodate JPs within the AMP. The process will be as follows:

1. A new DPs will be created, named the ‘One UN Fund’. All JPs involving the One UN Fund will be created in the One UN Fund workspace.

2. For each JP, the UN Agency will report the details of the project in AMP as stipulated on project reporting standard on the above for MTEF projections, commitments and disbursements. In providing such data, the project title must begin with ‘One UN Joint Programme -’. The managing UN Agency must also report each of the other UN agencies who will contribute to this JP, including the commitments made by each agency.

3. The Ministry of Finance’s UN Desk Officer will then create the JP in the One UN Workspace, and will create funding lines for each UN Agency involved in the JP. Each agency will then be able to enter funding details into the AMP from their own workspace.

4. The Managing UN Agency will enter in details of disbursements from the One UN Fund. Other contributing agencies will enter details of disbursements made from their agencies.

5. In reports, this will be counted as a single project, but each contributing agency will have its funding counted separately. As such, when aggregating support for each agency, their support to each JP will be counted, but when looking at support by project, not separated by DP, the contribution of each DP to each project will be summed.

6. When the JP provides support to both Government and NGOs, two project lines must be created. For example, for a JP for education with support to both NGOs and Government, the Managing UN Agency must request that MoFEA create two projects, named ‘One UN Joint Programme – Education – NGOs’ and ‘One UN Joint Programme – Education – Government’.

7. The commitments, projections and actual disbursements for Government and NGO elements of the project must be reported separately by all contributing agencies. Thus, when the Managing UN Agency requests MoFEA create the project, it must list the commitment of each contributing agency to each element of the project. Contributing agencies enter separate MTEF projections and actual disbursements for the NGO and Government elements of each project.

8.15 Contacts for SupportFurther information on how to enter data into the AMP, and for technical issues on use of the system should be directed to: For United Republic of Tanzania Contact Persons: Ministry of Finance and Economic Affairs, External Finance Department, Aid Programming, Coordination and Monitoring Section

Mr. Alice Matembele, AMP Coordinator – Cell: +255 713 777 013E-Mail: [email protected]

or

Mr. Alex Mwakisu, Alternate AMP CoordinatorCell: 255 757 722 100E-Mail: [email protected];

Aid Co-ordination Unit: Direct line :022-2137792E-mail: [email protected] Revolutionary Government of Zanzibar Contact persons: Ministry of Finance and Economic Affairs, External Finance Department, Aid Coordination Unit,

Mr. Khatib Moh’d Khatib, Cell: +255 777 41 23 69,E-Mail: [email protected]

Mr. Ranil Dissanayake, Cell: +255 788 820 235E-Mail: [email protected]

The website address of AMP is htt://amp.mof.go.tz

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9.0: ConclusionsThis Report sets the ground for production of future reports on aid to Tanzania. The long term objective is to provide quality information that will contribute to improve the budgeting and plannining processes of external resources as well as directly supporting enhanced service delivery through the improved use of information systems. The data used in this report try to assess the distribution of external resources per modality, sectors and further assesses the degree of alignment of official development assistance to the sector classification. However this first report has some limitation on the side of analysis due to the fact that, the data used to write the report are actual disbursement figures only. The second Report will provide more detailed analysis, including data on approved estimates and commitments by Development Partners. This will facilitate the analysis on the Paris and JAST indicators and see the level of implementation of aid effectiveness agenda in Tanzania.

This Report is a practical example, that GoT has made efforts to build on the quality of data and to ensure that the use of this information system is managed efficiently. It is particularly notable, that the AMP has been customised to support routine monitoring as well as the production of practical and policy relevant reports.

The final conclusion of this Report must therefore be that commitment for updating the data in the system is the heart for endurance of the system for all stakeholders responsible.

ANNEX: III

Summary of PD Survey 2008 Results

Indicators 2006 Results 2008 Results 2010 TargetsIndicator 3: Aid flows are aligned with national priorities

95% 84% 95%

Indicator 4: Strengthened capacity by coordinated support

50% 61% 70%

Indicator 5a: Use of country PFM System 66% 71% 77%Indicator 5b: Use of procurement systems 61% 69%Indicator 6: Avoiding parallel PIUs 56% 27% 0%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% 85% 66%

ANNEX: IV

Sector / Thematic Area ClassificationSectors Based on New Dilogue

Sectors 1. Agriculture (including Livestock)2. Industry and Trade (including Private Sector Development)3. Water (incl. Sanitation)4. Energy and Minerals5. Natural Resources and Tourism6. Infrastructure (including ICT and Transportation)7. Health

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8. Education9. Legal (including Public Safety and Home Affairs, Humanitarian Assistance & Refugees)10. Lands and Human Settlements Development

Thematic Areas (incl. cross-cutting areas)1. Governance (incl. Public Service Reform Programme and Local Government Reform Programme,

domestic accountability, anti-corruption)2. Macroeconomic Management 3. Public Financial Management4. Environment5. Gender6. Employment7. HIV/AIDS8. Social protection 9. MKUKUTA Monitoring System10. Culture11. Innovations and Technology

Sectors and thematic areas under MKUKUTA - PER Cluster Working Groups (CWG)

MKUKUTA-PER CWG 1 – MKUKUTA Cluster 11. Agriculture (including Livestock and Fisheries)2. Industry and Trade (including Private Sector Development)3. Energy and Minerals4. Natural Resources and Tourism5. Lands and Human Settlements Development6. Infrastructure (including Transportation)7. Employment8. MKUKUTA Monitoring system9. Innovation and Technology

MKUKUTA-PER CWG 2 – MKUKUTA Cluster 21. Education2. Water (incl. Sanitation)3. Health 4. HIV/AIDS, Malaria and Tuberculoses5. Social protection6. MKUKUTA Monitoring system7. Environment8. Culture

MKUKUTA-PER CWG 3 – MKUKUTA Cluster 31. Legal 2. Governance (incl. Public Sector Reform Programme and Local Government Reform Programme,

domestic accountability, anti-corruption, Legal Sector Reform Programme)3. Gender4. MKUKUTA Monitoring system

MKUKUTA-PER Macro Group1. Macroeconomic Management2. Public Financial Management

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PART II Analyis of data collected from AMP for Zanzibar

1.0 Introduction This report provides a simple baseline understanding of aid provided to Zanzibar for the period

2006/07 – 2008/09. It will be followed by more comprehensive and analytical reports that offer more insight into the effectiveness of aid, trends in its use and the channels through which it is managed. This will require some further data collection, and collection of data over a longer period of time. This initial report provides some simple disaggregations and analysis of aid, to serve as a basis for policy discussions and further research into the development environment in Zanzibar. The aims of this report are:

• To stimulate discussion on the volume, direction and modalities of aid disbursements to Zanzibar• To provide a baseline for future time-series analysis of aid• To kick-start a regular sequence of aid publications designed to improve the transparency and

effectiveness of aid. In the future, this analysis will be supplemented by consideration of the impact and outputs of aid

programmes.

1.1 Data Collection and Reporting The Revolutionary Government of Zanzibar (RGoZ) has undertaken concerted work to collect

data from development partners active in Zanzibar on their activities on the islands since 2006/07. Responses have largely been good, though some important DPs have either not responded or been reluctant to provide data to RGoZ, The table below summarises the data collection experience:

This data was collected from development partners over the second half of 2009. It was entered into the Zanzibar workspace of the Aid Management Platform database in December 2009 – January 2010, and verified against the initial data submitted by DPs in February 2010.

While most DPs have provided data to Zanzibar, others have proven more difficult to engage. Non-resident DPs, such as BADEA and the Saudi Fund, have not provided information for use in the AMP despite e-mail and phone contacts. More disappointing has been the unwillingness of the World Bank to provide Zanzibar-specific data, arguing that provision of data to the URT is burden enough. They suggested that Zanzibar contact the URT to get data on World Bank activities to Zanzibar, but this level of disaggregation was not provided by them to the URT. The other main source of incomplete information is USAID. Though they have provided information on their portfolio of projects to Zanzibar, they have failed to provide details on actual disbursements of aid, despite repeated reminders and requests. Some other DPs have omitted some disbursements from the time period specified, including Finland, for whom disbursements made in previous years under the SMOLE project was omitted.

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Additionally, the data provided herein includes only grant support to Zanzibar. Loans, signed and guaranteed by the URT Government, are captured in the URT dataset. Technical work on the dataset will be undertaken that will allow full analysis of Zanzibar’s entire aid portfolio. In the mean time analysis restricted to aid in the form of grants is necessary. This is still likely to capture the majority of aid to Zanzibar.

It must be stressed, therefore, that this report does not yet have comprehensive coverage. Omissions are evident, and every effort will be made to rectify them. Regardless, it still provides a very useful starting point for analysis of the aid portfolio in Zanzibar.

1.2 Volume and Distribution of Aid

This section looks at the initial data collected by the Ministry of Finance and Economic Affairs on aid to Zanzibar. The data tables below exclude General Budget Support (GBS) so as to focus on aid provided to Zanzibar specifically; GBS is provided to the whole URT, and a section thereof is allocated to Zanzibar by the Union Government, rather than by development partners. Analysis including GBS is shown in the section on aid modalities only.

1.3 Aid to Zanzibar, 2006/07 – 2008/09 Table 1: Total Grant Aid Disbursed Directly to Zanzibar, 2006/07 – 2008/09

Note: This data excludes GBS negotiated as a percentage of the URT Government’s receipts. Source: AMP Zanzibar Workspace

Table 1, above, shows the absolute volume of aid disbursed to Zanzibar in the form of grants for each financial year between 2006/07 and 2008/09. The figures for 2006/07 and 2007/08 are incomplete, since some DPs did not provide backdated data for the full period information was requested for. As such, the magnitude of the trend observed should not be taken as exact. Going forward, RGoZ will seek to use information previously collected from MDAs to fill this information gap. However, this will require an intensive data reconciliation exercise to be completed first. Regardless of this, it’s clear that 2008/09 saw a much larger volume of aid disbursed to Zanzibar than previous years, almost triple the amount reported for 2007/08. This is largely due to the major Norway-funded project installing a sub-marine power cable to connect Pemba to the electricity grid of Mainland Tanzania, a project worth close to Tsh 50 billion.

Graph 1, below, shows which DPs provided the largest amount of grant support to Zanzibar in 2008/09. Due to their funding of the sub-marine cable, mentioned above, Norway is by a very large distance the largest DPs to Zanzibar in this period, providing Tsh 54.2 billion. This is well over five times the value of aid provided by the next largest DPs, KfW, who provided Tsh 8.2 billion. Denmark, who have a large presence in the health sector in Zanzibar are the next largest DPs. Taken together, the UN System disbursed Tsh 5.9 billion shillings (excluding IFAD), though this was dispersed across four UN agencies, of which UNDP provided the greatest volume of support, Tsh 2.9 billion while UNFPA provided the least: just Tsh 640 million. The AfDB grants had the smallest value out of those DPs who disbursed funds in 2008/09, but these figures should be interpreted bearing in mind that ADB grants captured here were supplemented by several concessional loans that Zanzibar benefits from.

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In total, bilateral grant aid in the form of projects amounted to Tsh 70.7 billion, while multilateral aid amounted to Tsh 7.7 billion. The large disparity mainly arises from the one large Norway project mentioned above.

Several DPs did not report their disbursements for 2008/09 though they have reported active projects in the period 2006/07 – 2008/09. These are Finland, the ILO, and WFP, and USAID. The World Bank is omitted from the analysis altogether, since they did not provide any data at all to RGoZ during data collection for AMP. Each of these DPs have provided support to Zanzibar in 2008/09, for example, Finland’s SMOLE I project and the World Bank’s BEST project. However, since the information was not provided to RGoZ, they are not captured in this report. Efforts will be made to rectify this in the future.

2.0 Aid by Modality Table 2, below shows the level of GBS in comparison to project support and basket funding for 2007/08. Data

for previous years is not presented, as incomplete data for project support, but complete data for GBS greatly skews the results.

Source: AMP Zanzibar Workspace

Development Partner

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Table 2: Development Support by Aid Modality, 2007/08, Excluding Loans

* GBS figures are taken from budget flash reports. The DPs is listed as URT Treasury since disbursements are made from the central pool of budget support provided to the URT Government, and thus cannot be split between individual DPs, who do not provide Zanzibar with any budget support at all directly.

Source: AMP Zanzibar Workspace, RGoZ Budget Department Flash Reports.

This table paints a very interesting picture of aid to Zanzibar. Of aid that is negotiated directly with the Revolutionary Government, 100% comes in the least-preferred modality of direct project support. No genuine Zanzibar baskets exist. Zanzibar instead receives some support from within general URT baskets. This functions from the RGoZ point of view as additional project support. Each URT basket may have only one or two activities for Zanzibar; these are implemented as stand alone activities on the islands. As such RGoZ receives none of the benefits of basket funding (increased fungibility of resources and rationalized and streamlined reporting and management requirements). For these gains to accrue to RGoZ genuinely Zanzibar-specific baskets are required. These may differ to those on the mainland since the volume of aid per sector may not justify a basket. However, baskets organized by MKUZA theme are certainly possible.

The balance between GBS and project support is quite different to that for the URT. In Zanzibar, GBS accounts for just under 30% of aid, compared with 70% for all grant-funded projects. This proportion would deteriorate if loan-funded projects are included in the analysis (loan-funded GBS is included in the above figures for 2008/09). The equivalent figures for URT support are: 39% for each of project support and budget support, with the remainder made up of basket funding. Given that 2008/09 was an exceptional year for project support, due to the sub-marine cable project, it is likely that Zanzibar’s balance between GBS and project support will be more even in other years, though still likely not as good as the URT position. Better project aid data is required before we can look at the time series evolution of this balance, but since GBS is negotiated by the Union Government and for the Union Government, it is unlikely that any specific pattern will emerge; Zanzibar’s project support and GBS are determined through quite different processes, which makes an assessment of RGoZ’s success in convincing DPs to use the most fungible (and by extension, the most trust-intensive) form of development support extremely difficult.

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Table 3, below looks at GBS from a different perspective. Zanzibar is supposed to receive 4.5% of the total volume of GBS provided to the URT. Using data from the Tanzania AMP and budget department flash reports, Table 3 looks at how closely we have achieved this proportion in the past.

Table 3: General Budget Support to Zanzibar as a Proportion of the Total to the Union Government, 2007/08 – 2008/09

2007/08 2008/09

Total URT Budget Support 615,294,293,762 640,737,759,882

Zanzibar Budget Support 26,286,000,000 30,493,959,713

Percentage 4% 5%

Source: AMP Government Management Workspace, Budget Flash Reports

Table 3 indicates that Zanzibar has received GBS grant for the two year as illustrated on the above graph. From 2009/10 onwards, Zanzibar will receive 4.5% of loan funded GBS as well..

3.0 Aid by MKUZA Cluster

For each of the three years data has been collected for, development activities in Zanzibar should have been guided by the MKUZA. For the purposes of this report and database maintenance, activities were associated to MKUZA themes by RGoZ staff directly, using knowledge of each DPs’s activities and the descriptive information on each project that was provided. RGoZ took a lenient view and assumed all activities that contribute to an MKUZA cluster are aligned to the strategy. A more stringent approach would specify that only funding of the exact activities listed in MKUZA would qualify as alignment, as the precise mix of actions was chosen to have a precise cumulative effect and to maximise effectiveness of the pursuit of the MKUZA aims. Table 4, overleaf shows aid by MKUZA cluster for the last two completed financial years.

In 2008/09, Cluster 1 (Growth and Reduction of Income Poverty) received by far the largest share of grant aid in support of MKUZA. This can largely be explained by the sub-marine cable funded by Norway. The next largest share of support was allocated to Cluster 2 (Improved Quality of Life and Social Well-Being), which is the social development cluster, encompassing health, education and sanitation activities. Cluster 3, Governance and accountability, was the least-well funded with just Tsh 2.8 billion.

If we ignore the distortionary effect of the sub-marine cable, we find that the pattern of disbursements is roughly similar for each year. Cluster 2, social development, receives the lions share of support, roughly double the volume disbursed to both other cluster’s combined. This is not surprising: many other African nations receive a disproportionately large slice of development support in the social development sectors: Malawi’s 2007/08 Debt and Aid Annual Report shows that social development disbursements amounted for 45% of all non-GBS aid, despite being just one out of five PRSP Clusters. Cluster 1 receives a larger share of development support in Zanzibar than Cluster 3, Governance, even after removing the sub-marine cable; this reflects both the importance of building Zanzibar’s economy and the fact that good governance and accountability need not be expensive activities to pursue, though they are very important.

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Table 4: Grant Aid to Zanzibar excluding Budget Support, by MKUZA Theme

Note: 2006/07 Data is omitted due to incompletenessSource: AMP Zanzibar Workspace

It is also instructive to note how many more DPs were active in Cluster 2 than in Clusters 1 and 3 in the period covered. 11 different DPs agencies (albeit several from the UN) were active in Cluster 2 in 2007/08 and 2008/09, compared with just 5 in Cluster 1 on the economy and 4 in cluster 3 on Governance. This is indicative of lower DPs interest in strictly economic development, a reaction from the dominance of this form of development work internationally in the 1980s and much of the 1990s. This reaction, while valid, seems to have gone too far, and now economic policies and projects are neglected compared to those in social development sectors. At root this is a problem of DPs coordination, and RGoZ will take a stronger hand in allocating DPs to different sectors to balance out their spending in the future, using the drive towards division of labour among DPs as the primary tool in achieving this. A change in the balance of aid modalities towards GBS and basket funds with greater flexibility would also allow RGoZ more power to address the observed disparities. Greater support to Zanzibar’s economic situation is needed if aid efforts elsewhere are to be sustainable in the long term.

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4.0 Grant Aid by Sector


MKUZA Theme is quite a high level of aggregation – only three such themes exist, so spending within each theme may display a great degree of variation. It is useful, therefore, to unpin aid to Zanzibar by sector. Graph 2, above, does this for 2008/09 using the same list of sectors used by the URT Government. Once again, the impact of the Norwegian sub-marine cable project is to distort the overall picture of aid by sector, causing Energy and Minerals as a sector to tower over all others. Removing this single project causes this sector to fall back to the middle ranks. The other immediately striking point is how many sectors received no aid at all during 2008/09. Some come up with no support because of incomplete information from DPs at the time of this report being drafted. For example the HIV/AIDS sector was supported by USAID, who failed to provide any disbursement information to RGoZ, and Gender has been mainstreamed into a number of other activities in Zanzibar, particularly the UN Joint Programme 5. Public Financial Management is supported through projects funded by Norway and the African Development Bank, but both are also classifiable in the broader categories of Governance and Economic Management. Private Sector Development is supported by the World Bank through BEST.

Other sectors are simply not applicable to Zanzibar, such as Humanitarian support (including Refugees). Excluding sectors where support is known to exist but not recorded here, and sectors not applicable to Zanzibar, the sectors which do not have a DPs presence seem to be:

• Human Resource Management• Innovations and Technology• Legal• Rural Development

Rural development, as distinct from agriculture, and Innovations and Technology are particularly worrying if support is absent, since both would contribute strongly to a stronger development process in Zanzibar.Among those sectors that do receive support, it is unsurprising that once we remove the impact of the sub-marine cable project the two most heavily funded sectors are both in the Social Development cluster, namely Water and Health. Education received surprisingly little support in 2008/09 – just Tsh 1.4 billion – though this is likely to be a result of the lack of information from USAID and the World Bank in this report. Both agencies are involved in the education sector. Nevertheless, given the few sectors in which aid is provided,

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even that amount of aid captured without these two DPs remains a significant investment relative to most other sectors. What is pleasing for RGoZ is that roads, agriculture and governance all feature strongly in the development portfolio. Both agriculture (directly) and roads (indirectly) are expected to be central to future economic prospects of Zanzibar, and governance initiatives will improve the Government’s capacity to reach its aims in attracting greater volumes of foreign aid and utilizing them more effectively.

5.0 Aid EffectivenessAt this early stage of data collection, very little aid effectiveness data is available. Aid effectiveness is commonly measured along two dimensions. Firstly, aid effectiveness is assessed along the lines of the principles of aid delivery and effectiveness that DPs and aid recipient countries agreed at the high level forums in Paris (2005) and Accra (2008), leading to the Paris Declaration on Aid Effectiveness and the Accra Agenda for Action. These conferences focused primarily, but not exclusively, on the mode of aid delivery; specifically, they sought to encourage DPs to deliver aid in such a manner that the Government can utilize it as effectively as possible, including enhancing its own management capacity to use scarce resources.

The second dimension of aid effectiveness, tackled more indirectly in Paris and Accra is measurement of progress on both micro- and macro- levels and attributing causation to aid programmes. Measurement of this kind of aid effectiveness is poor internationally, and while individual programmes may have good monitoring and evaluation systems to assess this, general assessments of micro-level effectiveness of aid in different countries are not common. Macro-level assessments of aid effectiveness have been attempted far more frequently, particularly using cross-country economic regressions, but different studies have produced wildly differing results; as such few countries and no regions have been able to produce definitive studies on the macro-effectiveness of aid.

It is the aim of RGoZ to use the data collected in AMP, and to collect further data directly from projects and sector ministries to improve the assessment of both dimensions of aid effectiveness in Zanzibar. The first dimension is easier to collect data on and analysis, as most of the data can be collected centrally from DPs or from Government itself. The second dimension will require collecting information more widely on physical implementation of projects, and their achievement of targets, as well as macro-level targets and achievement.

At present, only one aid effectiveness (delivery) analysis can be made, on the proportion of aid using the Exchequer systems.

6.0 Aid through the Exchequer SystemWhen collecting data from DPs, RGoZ requested that projects using the Government Exchequer System be indicated. Though economic governance and PFM activities are being undertaken to strengthen the exchequer system, Table 5, below, demonstrates how little these systems are currently used.

Table 5: Percentage of Project Grant Aid Disbursed Through the Exchequer System, 2007/08 and 2008/09


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It is immediately striking how few DPs are using Government systems, and how polarized use of these systems is. Out of 14 DPs known to be active in Zanzibar over the period covered only 5 used the Exchequer system at all in 2008/09, and one fewer did so in 2007/08. However, those DPs that did use the Exchequer system use it for almost all of their support to Zanzibar: the lowest percentage use of Exchequer systems above 0 was 65%, and the next lowest, 88%. This indicates that while the initial decision to use Exchequer systems as a channel for providing aid is difficult, once it is taken, DPs are comfortable using these systems for almost all of their support to Zanzibar. It should be noted that with the exception of the ADB, all other DPs using Government systems in Zanzibar were UN agencies.

7.0 Next StepsThe analysis presented above provides a primarily descriptive assessment of the aid environment in Zanzibar at present. It has been limited by the data so far collected, which does not yet cover all support to Zanzibar, and has not yet captured enough data points to make time series analysis feasible.

Despite these limitations, it provides an important starting point for analysis and discussion about Zanzibar’s aid portfolio. This hasn’t been possible to date because the data to strengthen arguments and inform discussion has been absent. The RGoZ efforts to collect and analyse aid data is, in this context, a potentially major development in aid effectiveness for Zanzibar.

The next steps in this work are to expand the data collection and analysis range to look at other issues in aid effectiveness, and to promote better communications with DPs. In particular, the following must be undertaken:

• Data on projections for project support must be collected, to allow analysis of predictability of aid• Data on other Paris Declaration indicators for Zanzibar specifically must be collected, such as the

number of PIUs, the use of procurement systems etc.• Aid dependency indicators will be calculated, using OCGS statistics, and those presented here• Related to this, a new dialogue structure governing Zanzibar’s aid relationship needs to be established,

in order to regularize the interactions between Government and DPs, to stimulate information sharing and ensure that aid is actively managed to maximize its usefulness.

These additional analyses and actions, as well as those presented above will then form the basis for an aid effectiveness strategy for Zanzibar, to ensure that aid resources are used as efficiently and with as much impact as possible, as well as to ensure that their level is maximized.

Department of External FinanceMinistry of Finance and Economic AffairsRevolutionary Government of ZanzibarAugust 2010

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MINISTRY OF FINANCE AND ECONOMIC AFFAIRSMadaraka Avenue

P. O. Box 9111, Dar es Salaam, TanzaniaTel: +255 22 2137792 | Fax: +255 22 2123924/21110326

launch report of the aid management platform: an analysis ... · government in terms of aid flows...

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