GBS Coordination Group Meeting

GBS Coordination Group Meeting

20th February 2007 at the PRBS Secretariat: 8:00 - 10:30 am

Minutes

Attending

Martin Saladin Chair (Swiss Cooperation)

Sarah Furrer Swiss Cooperation

John Piper DFID

René Van Nes EC - Delegation

Erik Jonsson Embassy of Sweden

Trond Augdal Embassy of Norway

Machiko Tsubura Embassy of Japan

Honda Sunichiro Embassy of Japan

Max Von Bonsdorff Embassy of Finland

Martha Kabiru Embassy of Ireland

Stephen Potter CIDA/CHC

Cam Do CIDA/CHC

Wilberforce A. Mariki AfDB

Goodluck Mosha Embassy of the Netherlands

Haika Mmbaga IMF

Chelaus Rutachuchurwa IMF

Theresa Smout UN Res

Yuko Suzuki DPG Secretariat

Oswald Leo PRBS Secretariat (Minutes)

Pauline Mrosso PRBS Secretariat

Agenda

Agenda

1. Adoption of Previous Minutes and Agenda

2. Opening of the PER process and Way Forward / Follow-up on the Work Programme

- Presentation of a proposal by the Joint GBS Secretariat for a GBS Work Programme

- Issue Paper for the HoC

- Discussions

3. Budget

- Budget Execution Report

- Budget Guidelines

4. Up-dates

- IMF

- PRSC consultations in Tanzania

- PEFAR

5. AoB

1.  Agenda and Minutes of the Previous Meeting

The meeting was chaired by Mr. Martin Saladin – Swiss Cooperation. The CG members endorsed the minutes from the last CG meeting held on 23rd January 2007 and adopted the Agenda.

2.  Opening of the PER process and Way Forward / Follow – up on the Work Programme

The Secretariat presented the PRBS issues paper on Challenges in Making the PRBS Work better. For details See Annex1: PRBS Issues Paper – Challenges in Making PRBS Work Better- Internal PRBS Discussion Paper and Annex 2: Presentation on PER Process and Way forward

The presentation focused on challenges in making the PRBS facility work better, new development and avenues for Government-DP dialogue, and provided some recommendations to improve the current dialogue structure. The challenges included inter alia:

·  lack of regular dialogue between the DPs and the GoT;

·  sub-optimal functioning of the PER process;

·  poor quality of dialogue across sectors and TWGs;

·  insufficient participation amongst domestic stakeholders;

Following the PER main meeting on 8th Feb; there is a potential for opening the PER process to become the main vehicle of dialogue with DPs and other stakeholders to encompass reform, policy and poverty reduction discussion. Currently the work on sector and thematic area classification is ongoing inside the Government for the implementation of the JAST.

The paper suggested the following in order to improve the dialogue structure:

·  Encourage the Government to spell out clear vision, structure and commitment

·  DPG/PRBS group to support the reogranisation of the PER process

·  Encourage and support the DPG to take lead in ensuring the PER process functions

·  Recommend and suggest PEFAR to look at the functioning of the PER and linkages with PRBS

·  Identify bottom lines and minimum requirements to guarantee functioning of the PRBS

·  Support a pragmatic approach in the transition period phase to ensure follow-up and alignment with PER- CWGs (see proposal by the Joint GBS Secretariat)

In order to operationalise the pragmatic approach the Joint Secretariat proposal supports the alignment with Government processes to reduce transaction costs, use as much as possible the dialogue structure at reform, sector, and cluster level and the GBS annual review to focus on key issues only. (See Annex 3: The Secretariat Work plant).

The coordination group supported the conclusion of the PRBS Discussion Papers and the pragmatic approach proposal on Joint Work Programme and recommended to HoC to endorse both products, taking into consideration following comments:

·  Due importance to be given to continuous monitoring and follow-up of the implementation of mutual commitments as outlined in the Partnership Framework Memorandum. Reference to this could be included in Work Programme.

·  The current PER architecture is an ambitious project which has not functioned in the past. There is a need to create space for the Government to clarify its vision of the process (Is the opening of the PER a shared vision or a MoF agenda? The PAF builds on domestic processes- How do domestic stakeholders view the process?). A thorough analysis is required to explain why the PER process has not functioned in first place; assess options on the way forward. The analysis could help recommend how best the process can function as well as defining the incentive for the Government to ensure the process functions. The PEFAR exercise can contribute in clarifying some of these aspects.

·  The importance for DPG to partner with Government on the opening of the PER if it is to become the leading dialogue structure between DPs and Government was underlined. This is an opportunity for GBS partners to support DPG in rationalizing and implementing the JAST.

·  The functioning of sector dialogue is key to effective functioning of the PER process which would take on board the “GBS agenda”. The on-going work of classification of sectors in clusters is essential. At the same time, it is important to consider at this stage the cluster lead and composition of Cluster Working Groups in light of the possibility of non-GBS donors taking lead in clusters.

Þ  The CG members to bring up written comments on the discussion paper by the end of the week 23rd February 07 to feed into the HoC discussions ;

Þ  The CG endorse the PRBS Discussion paper and the pragmatic proposal on the Joint GBS work Programme and recommends HoC to endorse both products

3.  Budget

Budget Execution Report

There are complaints from sector persons in different agencies that the funds from the treasuryonly comethrough to the sectors very slowly. The IMF informed the CG members that while treasury has transferred funds to MDAs in accordance with estimates the line MDAS have not been able to spend the funds. It has not been possible to establish the source of the problem as the budget execution reports for quarter1 and quarter2 are not posted in the Government website. The BER provide by MoF are too aggregated to provide sufficient information on sector allocation and expenditure. It was suggest for a small team of economist composed of Cam Do, Max Von Bonsdorff, Allister Moon, John Piper and Oswald Leo to carry out analysis of the budget execution for quarter 1 and quarter 2 and inform the wide CG meeting and the HoC discussions.

It was further reported that contrary to agreement in the last Annual Review the Government has not been able to report on expenditure outturn by using the SBAS.

Budget Guidelines

The budget guidelines will be shared with the Chief Secretary on 23rd February 06 and the treasury will inform of the status thereafter. The BG are expected to be finalized in Mid March 2007. The CG members expressed concerns on the delays from the Government in sharing the BG in a timely manner to allow fruitful discussion around the BG.

Þ  It was emphasized to remind the Government at higher level of the commitment and the responsibilities of the Government under the MoU in ensuring fruitful dialogue on MTEF, budget guidelines and budget execution reports by guaranteeing timely availability of the documentation to necessary stakeholders

Þ  A team of economists from the CG group (Cam Do, Max Von Bonsdorff, Allister Moon, John Piper, and Oswald Leo) to carry out analysis of budget execution for the period ending December 2006 and inform the wider CG members and HoC discussions. The analysis is to be finalized by 1st March 07

4.  Updates

IMF

Ms. Haika from the IMF informed the CG members that the 6th review under the PRGF is completed and the three year PSI has been approved. The IMF staff mission is scheduled for 26th February to 6th March 2007. Towards the end of mission (6 March) Mr. Robert Sharer from the IMF headquarter will meet the PRBS group to discuss issues of particular relevance to the GBS partners.

Þ  Mr. Robert Sharer from the IMF headquarters will meet the PRBS group to discuss issues of relevance to the PRBS partners

PRSC Consultation in Tanzania

The representatives from both the recipient and IDA discussed the PRSC-5 actions and triggers for PRSC-6. During the consultation some issues of concern were highlighted. The issues around the energy sector were of particular difficulty. To achieve implementation of the TANESCO Financial Recovery plan will require the firm commitment of the Government to implement a comprehensive package of reforms, aimed at expanding investment, increasing efficient and quality of service and ensuring operational viability of TANESCO. The Government agreed to provide the SBAS based information for the detailed assessment of the consistency of the FY07 budget with MKUKUTA. It was suggested to share the outcome of the PRSC consultations to the wider group. Also, as the group looks forward to further harmonization the review processes around the PRBS Annual Review and the PRSC consultations. For future PRSC consultations it was also recommended for the WB to associate the Senior Economist of the PRBS Secretariat.

Þ  CG recommends sharing of the outcome of PRSC consultation with the wider PRBS group members and to enhance harmonization of review processes among the PRBS/PRSC donors

Þ  It was recommended to associate the Senior Economist of the PRBS Secretariat to future PRSC consultations.

PEFAR

The Government is expected to respond on the shared PEFAR outline by tomorrow (21st February 2007)

The concept paper on budget scenario analysis to be ready by end February 2007. The concept paper is a product of the joint work with DPGs across sectors.

5.  AoB

The Audit report for the quarter ended September 06 reports disbursements by Norway and Sweden only. Disbursements by Japan, UK., the World Bank, Ireland and Finland are not reflected in the report. The PRBS Secretariat will make a follow-up and update the PRBS group accordingly.

Þ  The PRBS Secretariat to follow-up of unreported disbursements for the first quarter of financial year 2006/07 and update the PRBS group

The next coordination group meeting is scheduled on 20th March 2007

______

Summary of Next Steps:

Þ  The CG members to bring up comments on the discussion paper by the end of the week 23rd February 07 to feed into the HoC discussions; CG recommends HoC to endorse the paper.

Þ  The Government to be reminded of commitments under the MoU in ensuring fruitful dialogue on MTEF, budget guidelines and budget execution reports by guaranteeing timely availability of the documentation to necessary stakeholders;

Þ  A team of economists from the CG group (Cam Do, Max Von Bonsdorff, Allister Moon, John Piper, Oswald Leo) to carry out analysis of budget execution for the period ending December 2006 and inform the wider CG members and HoC discussions the analysis to be finalized by 1st March 06;

Þ  Mr. Robert Sharer from the IMF headquarters will meet the PRBS group on 6th March in order to discuss issues of relevance to the PRBS partners;

Þ  CG recommends sharing of the PRSC consultation with the wider PRBS group members and to enhance harmonization of review processes among the PRBS/PRSC donors

Þ  The PEFAR concept paper on budget analysis scenario to be ready by end February 2007

Þ  The PRBS Secretariat to follow-up unreported disbursements in the Audited Report for the first quarter of 2006/07

Annex 1: PRBS Issues Paper – Challenges in Making PRBS Work Better

Internal PRBS Discussion Paper

This PRBS issues paper intends to outline current challenges for the PRBS group and avenues for the way forward, taking into consideration recent developments on the dialogue structure between the Government of Tanzania and Development Partners.

The redesign of PRBS in 2005 built on the premise that budget support decisions should draw on analysis arising from existing Tanzanian processes, involving the full range of DP engagement with GoT on MKUKUTA implementation, budget and public financial management. The Annual Review was therefore designed to build on and draw from key sector and reform processes which were identified in the PRBS PAF as ‘underlying processes’.

Due to the absence of a functioning and harmonized dialogue structure between DPs and Government along the structure of the MKUKUTA, the PRBS group together with Government has relied on Thematic Working Groups (TWGs) to bring together issues from the sector, reform and cluster level, in preparation of the Annual Review. Although the Annual Review 2006 did generate high-level policy dialogue on a limited number of key issues, a number of inherent challenges in the system became apparent.

Challenges:

1)  Dialogue, monitoring and review at MKUKUTA cluster level has failed to materialize. Ad hoc TWGs are an artificial and transaction-intensive substitute for dialogue which could take place throughout the year, if only PRBS partners could have aligned to a functioning Government-led dialogue structure.

2)  The PER process intended to provide such a dialogue structure but has not functioned and delivered: cluster level dialogue has not taken place in a satisfactory manner and buy in into the process from line MDAs is questionable; the scope of the PER currently remains unclear.

3)  The quality of dialogue between DPs and GoT varies across sectors, thematic areas and TWGs with some Development Partners now questioning Government's incentives and commitment to the current dialogue arrangements.

4)  The PRBS process at the TWG and PRBS Annual Review level did not include sufficient participation of other domestic stakeholders such as civil society or Parliament.

5)  An important underlying process, the MKUKUTA Annual Implementation Report did not feed into any of the dialogue processes. Linkages with the MKUKUTA monitoring system still need further strengthening.

6)  As a result, there is a potential risk the PAF will no longer be aligned with the MKUKUTA indicator set. The GBS process could thus become a separate universe in itself, replacing Government structures and reports instead of strengthening them.

New developments and avenues:

In the Main PER meeting of 8 February 2007, the Government Chair reiterated and spelled out a vision of using the PER structure as the main vehicle of dialogue with Development Partners and other stakeholders (civil society is part of the PER). It was proposed that the agenda of the PER should go beyond public expenditure and budget issues to encompass a wide range of reform, policy and poverty reduction discussions (covering the PRBS agenda). The PER Cluster Working Groups (CWGs) would have the strategic role of coordinating, harmonising and rationalising cluster dialogue. The CWGs would build on the inputs from the sectors.