Good financial governance – accountability and mobilisation of state revenue

Since 2008, Tanzania’s GDP has showed a sustained growth rate of around 7%. However, this manifest economic development has shown little effect in improving performance as measured by key development indicators. Deficient accountability mechanisms are acknowledged as crucial obstacles. Domestic revenue is increasing but still below potential and the locally collected revenue constitutes only 5% of the total revenue. This is due to lacking capacities to collect taxes at local level and unwillingness of the population to pay because of perceived and real misuse of public funds by officials. Experience shows there is scope and willingness to improve accountability and transparency of public resource management at local and national level. National organisations such as the Internal Auditor General (IAG) and the National Audit Office (NAO) are key actors to enhance accountability of public resource management at central as well as local level. Citizens, even poor ones, are ready to contribute to local resource mobilization if they can expect useful services in return.

The public finance system is strengthened in accordance with the principles of good financial governance, specifically transparency, efficiency and accountability.

Direct target groups:

• Staff of specialized central Government organisations: the National Audit Office (NAO), the Internal Auditor General’s Division (IAG) at Ministry of Finance (MoF)
• Prime Minister’s Office-Regional Authorities and Local Government (PMO-RALG) and 10 selected local governments
• Association of Local Authorities of Tanzania (ALAT)
• Members of parliament of selected parliamentary committees
• Institute of Tax Administration
• 1 CSO working on social accountability

1. The National Audit Office (NAO) increasingly performs its role as a supreme audit institution efficiently;
2. Conditions for an effective internal audit function are in place;
3. Capacity for efficient and transparent management of local government revenue sources is increased;
4. Conditions for a dialogue between administration and citizens on transparency and accountability of public funds at local level are improved.

Risultati principali attesi:  

• The NAO will have submitted five audit reports on comprehensive audits of accountability and audits in specialized areas to the relevant parliamentary committees.
• The internal audit reports for five ministries, departments, and agencies (MDA) and local government authorities (LGA) meet international standards.
• The annual domestic revenue of ten LGAs has risen.
• In five LGAs, 2/3 of the participants in a consultation mechanism perceive an improvement in the dialogue between the local government and population.

Risultati fasi precedenti:  

• The now closed GIZ programme  “Support to Local Governments” (SULGO) demonstrated that providing targeted technical assistance to local governments can result in more revenues and increased transparency and accountability despite a deficient legal framework.
• The SDC supported social accountability programme demonstrated that LGAs are willing to improve their accountability if there is a proper dialogue with the communities on the roles and responsibilities of the “demand” and “supply” side, and LGAs are supported to become more transparent.
• Ongoing support to the National Audit Office (NAO) helped to improve the quality and coverage of audits, but also illustrated that this support needs to be embedded in a more systemic approach more proactively including the auditees.

German Ministry for Cooperation (BMZ) and European Union (EU)

Public Financial Management Reform Programme (PFMRP); coordination with SDC supported initiatives: Social Accountability Programme (SAP), Health Basket Fund, Transforming Tanzania’s Charcoal Sector (TTCS); within Swiss administration: with seco’s initiatives to support Public Financial Management (e.g. AfroSAI – African Supreme Audit Institutions; ATAF - African Tax Administration Forum)

Fase 1 01.02.2015 - 31.07.2020   (Completed)