REPORT ON THE IMPLEMENTATION OF THE TANZANIA TRADE INTEGRATION STRATEGY (TTIS) 2009 – 2013 FRAMEWORK PROGRAMME FOR THE PERIOD

JANUARY – DECEMBER, 2010

PROJECT NO: TZA-10-00059424: CAPACITY BUILDING FOR TRADE DEVELOPMENT AND INTEGRATION IN TANZANIA

1.  Introduction

As a least developed country (LDC) as classified by the United Nations, Tanzania is a member of the Integrated Framework for trade-related technical assistance (IF). The IF was established in October 1997, at the WTO High-Level Meeting on LDCs' Trade Development. The IF is a multi-agency, multi-donor programme established in October 1997 at the WTO High Level Meeting for the purpose of assisting LDCs to expand their participation in the global economy thereby enhancing their economic growth and poverty reduction strategies. Agencies participating in the IF include: IMF, ITC, UNCTAD, UNDP, World Bank and the WTO. The specific objectives of the IF are to mainstream (integrate) trade into the national development plans (such as the Poverty Reduction Strategy Papers (PRSPs) of LDCs and to assist in the co-ordinated delivery of trade-related technical assistance in response to needs identified by the LDC. The mainstreaming work is financed through the IF Trust Fund which was established for the purpose.

  • An essential part of the IF process is the preparation of the Diagnostic Trade Integration Study (DTIS); an analytical foundation for policy recommendations and actionable trade related technical assistance (TRTA)/ capacity building interventions. Tanzania undertook the DTIS in 2004 which was endorsed by a National Validation Workshop in 2005. The DTIS provided an action matrix comprising policy reform measures and capacity strengthening activities to serve basis for trade related technical assistance and support.
  • A DTIS Prioritization Workshop held in September 2006 recommended trade-related assistance to be focused on three priority sectors, namely: (i) Agriculture (traditional export crops: coffee, cotton, cashews and tea); (ii) Agriculture (non-traditional export crops: horticulture, floriculture and fruits); and (iii) Tourism backward linkages. In June 2007, the Cabinet approved the DTIS, including the Action Matrix, and mandated the Ministry of Industry, Trade and Marketing (MITM) to oversee its implementation.

In parallel with the process of Cabinet approval of the DTIS and the Action Matrix, the Ministry of Industry, Trade and Marketing developed .an implementation strategy, the Tanzania Trade Integration Strategy (TTIS), 2009-2013 Framework Programme, which maps all ongoing and planned trade/related projects and programmes and a so called gap analysis. In March 2008 the TTIS as endorsed by the tripartite stakeholders, namely: the Government of Tanzania, Development Partners and the Private Sector.

Simultaneously, the “Capacity Building for Trade Development and Integration in Tanzania” was developed in December, 2007 for the purpose of supporting institutional capacity building in ministries, departments and agencies (MDAs) and strengthening the capacity of exporters to comply with technical and sanitary and phytosanitary (SPS) standards in the tourism and horticulture sub-sectors. This project was funded through the IF Trust Fund Window II to the tune of US$ 1,000,000. In addition, the project aimed at preparing the ground for a larger scale implementation programme of TTIS.

In May, 2009, a Memorandum of Understanding for subscribing to the TTIS as a single framework was signed by the Government, Development Partners and the Private Sector.

This report provides an account of implementation of Tanzania Trade Integration Strategy for the year 2010; including activities undertaken under the Capacity Building for Trade Development and Integration in Tanzania project. The report begins with a brief description of the TTIS framework followed by an account of the implementation of activities under the capacity building for trade development and integration in Tanzania project, delivery of outputs and the financial status as per December 31st, 2010.

2.  TTIS framework

The purposes of the TTIS are briefly to provide a Single Framework for trade sector development and all current or planned Aid-for-Trade interventions; to provide a Mechanism for Coordination of trade sector development initiatives and trade related development assistance, and to provide a Mapping of Current development needs and priorities within the Tanzanian trade sector, the role of current or planned bilateral development assistance, and possible areas for intervention for a Multi-Donor Basket Fund and for Enhanced Integrated Framework (EIF) resources.

The main objectives of TTIS are twofold: Enhancing Tanzania’s Capacity to Manage Trade Policy and Strategy and Aid-for-Trade and Strengthening and Expanding a Competitive Export Supply of Goods and Services from Tanzania.

TTIS Implementation Mechanism structure includes a National Steering Committee; a Technical Committee, a Coordination Unit based in the Ministry of Industry and Trade (MIT) and a Network of Sector Trade Policy Analysts drawn particularly from sector trade lead ministries (STLM), departments, agencies and the private sector. At the base level of the structure are the various implementing agencies. TTIS implementation mechanisms are to form part of the regular activities of MIT and the Government machinery as trade is expected to become one of the key pillars of MKUKUTA. As such TTIS is to be implemented through Planning and Budget Guidelines fully mainstreamed in MTEF.

The TTIS financial mechanism is divided into two parts: Direct Funding will be made through a Multi Donor Basket Fund, Integrated Framework Window II, and the Enhanced Integrated Framework Tier 1 and Tier 2 projects and Government of Tanzania (GoT) resources. This will be implemented through the general budget support system (GBSS).

Indirect Funding and Funding Coordination would involve parallel development assistance for trade sector development activities that operate outside the formal GBSS.

As a Single Framework, TTIS will also coordinate delivery and use of these resources use to ensure good synergies and avoid duplication among all resources provided by DPs.

3.  Implementation of the Capacity building for trade development and integration in Tanzania project

The project has five intended outputs; supporting the implementation of several priority activities of the DTIS Action Matrix. The project was scheduled to run for two years at a budget of US$ 1,000,000.

The project was approved for funding under the IF Trust Fund Window II in January, 2008 when it was signed by the Government (Ministry of Finance and Economic Affairs), the executing agent (MITM) and UNDP on behalf of Development Partners. However, funds were not released until September, 2008 at which point MITM received Tsh 256,113,707 (approx USD 250,000). As a result of the late disbursement of funds culminating into delays in project implementation in early 2010 MITM requested for an extension of the project until December 31st, 2010. A “virtual” Local Project Appraisal Committee meeting was held by the end of March, 2010, resulting in the approval of the extension.. Therefore, during the year January-December, 2010 MITM continued utilizing part of USD 1,000,000 to implement outstanding activities. The activities undertaken in 2010, in view of achieving the five intended outputs, were as follows:

3.1. TTIS Coordination and Implementation Mechanisms in Place in MITM and MDAs

The main elements of the Coordination and Implementation Mechanism were already set up in 2008. The Trade Integration National Steering Committee, comprising of Permanent Secretaries from from relevant sectors was inaugurated in May, 2008 while a net work of sixteen Sectoral Trade Policy Analysts drawn from various MDAs and the provate sector was constituted in July 2008. This network, the TTIS Coordination Team and representatives of the development partners (DPs), particularly those who contribute to the TRTA, combine to form the Trade IntegrationTechnical Committee (TITC). The TITC held its first meeting in July, 2008.

During 2010, the TTIS Technical Committee held two meetings as did the Trade Integration National Steering Committee. Also during the year under review, both Committees have been expanded to include members from Zanzibar – two in the National Steering Committee and three in the Technical Committee. Other activities undertaken under this output included:

The TTIS Coordination Office participation in various review and project planning meetings for projects and programmes falling under the TTIS framework;

Participation in strategic fora such as the Sector Thematic Working group on Industry and Trade such as programming of the Trade Policy and Standards component of the EU-funded Trade and Agriculture Support Programme (TASP);

Participation in various policy/strategy seminars; such as the High-Level Meeting on AfT for EAC countries, the HODECT inauguration meeting and a World Bank Group consultative meeting on a new Trade Strategy.

The TTIS Coordination Office was strengthened and the modus operandi of the TTIS Technical Committee and communication with the Sector Trade Policy Analysts further elaborated. There is still need, however, to further strengthen the TTIS Coordination Office and the Sector Trade Policy Analysts in their respective capacities. This has been taken into account in the development of a program component, to be included in the Trade Sector Development Program, on “Strengthening GoT’s Management and Implementation Capacity of Aid-for-Trade.

3.2 Capacity building plan for MITM and MDAs

Under this output, it was foreseen that a Trade Coordination Capacity Needs Assessment would be undertaken in MIT and relevant MDAs. This could not be undertaken in year 2010 as it was not considered as a high priority, given the limited human resources and time left in the project. However, the TTIS Coordination Office provided substantial inputs towards developing the Terms of reference (ToR) for Trade Capacity Needs Assessment to be undertaken under BSPSIII.

Furthermore, the TTIS Coordination Office supported and participated in the annual meeting and training of regional and district trade officers and training on Project Cycle Management in Zanzibar

3.3 Compliance of technical and SPS standards in tourism, horticulture, livestock and fisheries enforced

Under this output, three pilot interventions implemented by MDAs and the private sector have been supported by the project. These were;

3.3.1 The Hotel Classification exercise in Dar Es Salaam and Coastal regions, implemented by the Ministry of Natural Resources and Tourism in 2009.

3.3.2 Enhancing Market Competitiveness of Horticultural Crops from Smallholder Farmers in Tanzania”, implemented by TAHA; and the “Enhancement of Livestock and Fisheries Production and Productivity”-project, implemented by MLDF.

Implementation of the TAHA-project, focusing on capacity building on SPS issues to small scale horticultural farmers and exporters, was launched in March, 2009.

TShs 33,750,000, equalling approximately 70 percent of the project funds, was disbursed in March. Balance of the funds was released upon submission by TAHA in October, 2009, and although there were some details and supporting of a report on the implementation of the project. TTIS Coordination Office undertook a field trip for physical follow-up and monitoring on the project. Report on the monitoring exercise is annexed to this report as Annex 1. In November, 2010, TAHA submitted the Final Report ( Annex 2) of the project.

A major achievement of the project was the accreditation to GlobalGAP standards of six producer groups and connecting them to the market through contracts with an exporter – Home Veg Ltd. According to self-assessment by the smallholder farmers, the project has led to increased incomes and possibilities to venture into other businesses. Also, the trained farmers have been able to act as role models to other farmers in the area.

3.3.3 The third project implemented with the support of the IF Trust Fund Window II aimed at promoting commercial and sustainable production of livestock and fisheries products to meet domestic demand, promote food safety and increase exports. The project was implemented under the coordination of the Ministry of Livestock Development and Fisheries (MLDF) at a total cost of Tshs 135,000,000 released in two tranches; the first tranche of TShs 94,500,000 disbursed in January, 2010 and second tranche of TShs 40,500,000 which was disbursed in August, 2010 against a progress report received in June, 2010 (Annex 3).

From 19 - 24 July, 2010 a monitoring team comprising experts from the Ministry of Livestock Development and Fisheries (MLDF), Ministry of Industry, Trade and Marketing (MITM) and District Councils of Mpwapwa, Chamwino and Iringa Rural carried out participatory monitoring in villages in Iringa and Dodoma regions where the TTIS project is implemented. The monitoring report is attached as Annex 4.

The final report would be submitted after a similar monitoring exercise is undertaken for projects implemented in Mwanza and Shinyanga Regions.

3.4 Formulation of the Trade Sector Development Programme (TSDP)

During 2010, an important share of the activities were geared towards bringing forth the Trade Sector Development Programme (TSDP), expected to be one of the main implementing vehicles of the TTIS. Dr. Thierry Noyelle, an international consultant, was hired to assist in the formulation of the TSDP document. The TTIS Coordination Office participated in the preparation of the Terms of Reference (ToR) for hiring the consultant. The ToRs were approved by the Ministerial Tender Board (MTB).

Protraction in the procurement of the consultant delayed the formulation of the TSDP and establishment of the Basket Fund, and hence could not become operational during the Financial Year 2010/2011.

The international consultant undertook his first mission to Tanzania under the contract in November, 2010. During the mission, the TTIS Coordination Office worked with the Consultant in taking stock of the status of various project proposals submitted for development of the TSDP and of related projects/programs in order to identify the appropriate focus of the TSDP initial work plan.

The consultant produced a draft outline of the program document which was presented to the Technical Committee and MIT Management in December 2010. With the support of the Coordination Office, the consultant also held meetings with relevant MDAs for the purpose of refining the proposlas into more comprehensive bankable component proposals for funding under the Basket Fund. The consultant submitted a revised draft of the TSDP document towards the end of December 2010 which was shared with members of the Technical Committee. The Draft TSDP Document identified eight strategic objectives clustered around two main components. The components with related strategic objectives are:

(A)  Enhancing Tanzania’s Capacity to Manage Trade Policy and Strategy and Aid-for Trade; with 4 strategic objectives, namely:

i. Mainstreaming of Trade through Policy and Government Expenditure;

ii.  Strengthening Government’s Management and implementation of Aid-for Trade (AfT);

iii.  Strengthening the private sector’s Capacity to Participate in Trade Policy and Strategy Formulation;