Public Expenditure Review
Tanzania’s Public Expenditure Review (PER) process provides a forum where working groups comprising of representatives from the Government, Development Partners, academia, the private sector and civil society organizations agree on an analytical agenda to improve GoT spending, finance analytical studies, and guide the implementation of study recommendations. The overall objective is to improve fiscal policy formulation and management.
The Government and Development Partners agreed in 2012 to revitalize the PER process. As a result, a Champions' Group has been established with the responsibility to define and approve an analytical work program of the PER process as well as ensure its dissemination to key policy makers as part of the budget cycle. A Secretariat has also been put in place to support the implementation process. The following document sets out the key processes for the PER:
The Champions’ Group under the chairmanship of the Permanent Secretary, Ministry of Finance, was created with the mandate of approving the analytical agenda, delivering key messages from analytical outputs and evaluating the process. Other members include the Governor of the Bank of Tanzania, Executive Secretary of the Planning Commission, Permanent Secretary of the Prime Minister’s Office, the Deputy CEO of BRN, the World Bank Country Director, the GBS Chair, EC Ambassador, UN Resident Representative, the CEO of COSTEC as a representative of research organizations in the country, a representative from the Private Sector Foundation, and a representative from the NGO Policy Forum.
The PER Secretariat is headed by the Deputy Permanent Secretary (Ministry of Finance) and consists of staff from the Government and representatives of Development Partners:
PER Completed Studies
There is currently an ongoing program of PER studies. The section below lists the number of completed studies.
Public Investment Operational Manual (completed February 2015)
The Public Investment Management Operational Manual aims to guide government officials who are preparing project and program proposals by setting out the standard procedures and methods for project appraisal.
- ToR: Development of Public Investment Operational Manual (March 2013)
- PIM Inception Report
- Public Investment Manual
Pension Liabilities in Tanzania (completed in December 2015)
The social security system in Tanzania is characterized by a relatively large number of social security funds serving a small subset of the population. Direct government liabilities to the pension funds are substantial, in part reflecting delayed reimbursements from Government. The purpose of this study is to assess pension liabilities both now and forward looking. It will look at the consequences of pension liabilities and the potential impact on the Tanzanian economy. The study proposes a set of short and medium term actions for discussion and implementation by Government. This includes a sensitivity analysis of the parameters of the Public Service Pension Fund and how the outstanding government liability could be reduced.
Contingent Liabilities in Tanzania (completed December 2014)
The management of contingent liabilities in Tanzania is an essential component of fiscal risk management. This study establishes the magnitude of contingent liabilities becoming actual liabilities and the associated fiscal risks. It looks at the likely consequences and proposes a set of recommendations to manage the fiscal implications. It links closely with the pensions study.
- ToR: Contingent Liabilities in Tanzania
- Contingent Liabilities Interim Report
- Contingent Liabilities Final Report
Managing Payment Arrears in Tanzania (completed November 2014)
In recent years the Government of Tanzania has incurred large payment arrears estimated to TSh 807 billions as of June 2011. This impacts negatively on government finance by reducing the resources available for financing the delivery of goods and services. The arrears study aims to find solutions to avoid reoccurrence of payment arrears in order to improve the credibility of budget execution. It establishes the level and sources of payment arrears, identifies challenges facing the Government in ensuring timely payment, identifies the impact of accumulated arrears, proposes options to reduce arrears and makes recommendations to prevent the reoccurrence of payment arrears.
Fiscal inequities study (completed April 2014)
The overall aim of the fiscal inequities study is to provide detailed evidence of PFM challenges in LGAs to inform ongoing reforms at local and central government level, and ultimately contribute to improving the quality and impact of expenditure programs. In broad terms, the fiscal inequities study examines the effectiveness of recurrent funds; and analyses unequal fund transfers.
- ToR: Fiscal Inequities Study
- Inception Report
- Inception Report Presentation
- Final report (for annexes please contact the PER Secretariat)
- Presentation of Draft Report
- Presentation of Kigoma Case Study
Agricultural Subsidies (completed March 2014)
This study assesses the performance of the agricultural inputs support program (NAIVS) and assesses how the program has contributed to increased production, productivity and profitability of the Tanzanian farming/agriculture. It looks at the sustainability of these investments. The Government are in the process of developing an action plan to implement the recommendations from this study.
Tax Exemptions (completed October 2013)
This study provide a comprehensive assessment of the overall tax exemptions provided in Tanzania and takes stock of the effectiveness and efficiency of the exemptions implemented over the last decade. The main objective of the study is to inform the policy and decision makers in the Government on the costs and benefits of tax exemptions in Tanzania. The study will also point to international best practice, which can be adopted to minimize unnecessary losses of revenue as a result of the application of tax exemptions and propose reforms to increase tax revenue. A short additional study has been completed in 2014 which looks at tax incentives at the company level. Please contact the PER Secretariat for more details.
- ToR: Managing Tax Exemptions in Tanzania 2012
- Inception Report for Tax Exemptions in Tanzania Study (May 2013)
- Tax Exemptions Study - Final Report and Briefing Note (October 2013)
- Tax Exemptions Study - Options Paper
Rapid Budget Analysis (annual)
As part of the PER process, the DPs led by the World Bank put together an annual rapid budget analysis with data input from the Government. The RBA is designed to assess the alignment between the approved budget, the executed budget and the MKUKUTA/FYDP priorities; and assess the consistency between expenditure outturn and approved budget.
PER 2010: Budget Analysis, Value for Money in Education & Public Investment Diagnostic (completed September 2011)
The 2010 PER focused on budget analysis, value-for money in education and public investment diagnostic. This was prepared by the Ministry of Finance and Development Partners PER Macro Group. The report can be found here.
Nutrition PER (completed January 2014)
Although not commissioned under the PER process, the nutrition sector working group has recently completed a PER on Nutrition. The report can be found here.
PER Ongoing Studies
PPPs in the Transport Sector
PPP is an important instrument for the Government to attract public private investment and to improve public services. The PPP study will inform decision makers on the potential pipeline of PPP projects in the transport sector and how best public funds can be used to support them. It will look at how scarce resources can be used most effectively to leverage private investment and to provide value for money. The study will examine how PPP projects should be selected, how to fast track procurement, criteria to allocate public funding and the decision process for allocation. The study will point to best practices and tools which can be adopted to prioritise PPP projects, specifically in the transport sector. There is a clear link to the public investment operational manual. The study will be funded from the PER basket and completed by July 2016. .
Assessment of Non-Tax Revenues in Tanzania
Non-tax revenues form an important component of the domestic revenue base. However, their contributions in overall domestic revenue remain consistently low. The non-tax revenues study will examine how to improve non-tax revenues by estimating their potential and assessing the possibility to expand the non-tax revenue base whilst maximizing economic benefits. It will estimate the non-tax revenue potential in natural resources and public and statutory corporations. It will also propose measures for increasing the collection of non-tax revenues in these two areas whilst maximizing the economic benefits of non-tax revenues. The is procured by DFID and a first draft has been completed. The study will be finalized by April 2016.
Efficiency Gains in Infrastructure Investments
This study aims to improve value for money in the Government’s infrastructure spending by identifying whether past and future investment costs in infrastructure are good value for money compared to others in the region. It will examine unit costs, project completion time, quality and procurement procedures to assess infrastructure spending and identify any weaknesses and lessons learnt for future projects. The focus will be on transport, water and energy. The study will be completed by the World Bank by July 2016.
Implications of National Accounts Revisions (GDP Rebasing) on Macroeconomic Variables and Poverty Dynamics
The objective of this study is to determine the implications of the revised national accounts estimates to the macroeconomic variables, poverty dynamics and government frameworks and processes. It will update the Government’s existing Macroeconomic Model using the revised statistics. The work will link the macroeconomic and fiscal data to micro data to analyze the medium term prospects of pro-poor growth impacts of government expenditure programs. The study will be funded by the World Bank and DFID and completed by July 2016.
Climate Change and Environment
The aim of this study is to examine the trends and allocation of government expenditure in climate change and environment to assess the extent to which Government spending is in line with both global and national environmental priorities. It will examine the level of funds allocated to address mitigation and adaptation challenges including those identified by the National Strategy for Growth and Poverty Reduction. The study will be financed by the PER basket and be ready by July 2016.