DPG Tanzania

Partnership & Main Tools

The Government of Tanzania and its Development Partners have continuous dialogue on Budget Support. The dialogue centers on actions for reducing poverty and improving social services as well as financial management systems.

The partnership and dialogue is based on a number of key documents and assessment tools, which are described below.

Key Documents

The cooperation between the Government of Tanzania and its Development Partners under Budget Support is defined in the Partnership Framework Memorandum (PFM), the latest of which was signed in 2011. The PFM sets out the principles and terms for the Budget Support partnership. The technical details of the cooperation are in turn outlined in the Technical Note.

The Technical Note and the Partnership Framework Memorandum together form the basis of all bilateral agreements on Budget Support between Development Partners and the Government of Tanzania. Both documents can be found in the Key Documents library.

Monitoring

The single most important event for dialogue between the Government and DPs during the year is the Annual Review, which is usually held in November. Previously, the policy discussion at the Annual Review was focused on the Performance Assessment Framework (PAF), agreed on jointly on an annual basis. In addition, since 2013, DPs have dialogue and make an assessment of the Underlying Principles of Budget Support twice a year. 

Underlying Principles

The criterion for Development Partners to give Budget Support to Tanzania is that Tanzania fulfills five Underlying Principles (UPs), which are defined in the Partnership Framework Memorandum. DPs make an assessment of the Underlying Principles twice a year, once before the Annual Review, and once before making firm commitments for GBS disbursements for the coming year. The five Underlying Principles are:  

  1. Continuing sound macroeconomic policies and management
  2. Commitment to achieving MKUKUTA II objectives and MDGs 
  3. Continually strengthened budgeting and public financial management systems 
  4. Continuing peace and respect for human rights, the rule of law, democratic principles, and the independence of the judiciary
  5. Good governance, accountability of the Government to the citizenry, and integrity in public life, including the active fight against corruption in accordance with the laws of the United Republic of Tanzania. 

Performance Assessment Framework (PAF)

Each year, the Government of Tanzania and DPs jointly decide on a number of indicators to use to measure performance in poverty reduction. The indicators are compiled into the Performance Assessment Framework, the PAF.

As part of reforming Budget Support and increasing aid efficiency, indicators for the PAF have been based on the National Strategy for Poverty Reduction (MKUKUTA II). More recently, other national priority frameworks such as the Five-Year Development Plan (5YDP) of 2011 and the Big Results Now! Initiative of 2013 have also been used as a basis for the indicators.

The PAF for 2013 had a total 37 Outcome Indicators and 12 Key Policy Actions. These were assessed and rated jointly at the Annual Review. There have been attempts to “slim” down the PAF, to make it more focused on key priorities, and to enable a good dialogue of key policy issues. The PAF for 2014 is considerably slimmer and more results-oriented, focusing on key government priorities.

Payments

Most Development Partners use two different forms of payments for their Budget Support disbursements: the base tranche and the performance tranche

The base tranche is the "basic" Budget Support payment, while the performance tranche is an additional payment that is made upon achievement of a limited number of key indicators. Not all Budget Support DPs use performance tranches, though the use of performance elements continue to rise.

To enhance the focus on development results, many DPs have decided to increase the part of Budget Support payments that is based on performance - that is, increasing the performance tranches.  

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