Promoting good financial governance in Tanzania

Project description

Title: Promotion of good financial governance in Tanzania
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ) (cofinanced by the European Union and the Swiss Agency for Development and Cooperation).
Country: Tanzania
Lead executing agency: Ministry of Finance and Planning
Overall term: 2016 to 2020

Context

The Tanzanian Government is determined to drive forward industrialisation in the country.

Accordingly, it puts great emphasis on increasing domestic revenue mobilisation and implementing fundamental reforms in the area of public finance. Increased government accountability and citizens holding government to account, play an essential role in ensuring that potential tax revenue increases are actually utilised for the country’s development.

The insufficient exploitation of the tax potential, shortcomings in internal and external financial control, the inadequate implementation of audit recommendations provided by the National Audit Office of Tanzania and unsatisfactory exchange between taxpayers and public sector decision-makers pose an obstacle for the realisation of Tanzania’s development agenda.

Objective

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

Approach

The project supports the Tanzanian Government’s reform efforts in that it promotes accountability in the area of public finance. To achieve this goal, it works in four closely related fields of action:

Improving external audit: The project concentrates on strengthening the individual and institutional capacities of the National Audit Office of Tanzania to plan and carry out extended audits of accounts. Audits in specialised fields including the drafting of audit recommendations are supported.

Strengthening the internal audit system: The project provides training courses and tutored learning to strengthen the internal audit units of selected ministries and local authorities. It provides substantial support in the form of organisational and technical advice to the Internal Auditor General’s Division at the Ministry of Finance.

Supporting the system of own local revenue: Aiming to increase local revenue, the project advises 15 selected local government authorities on how to manage the income they receive in an efficient and transparent manner. Providing on-the-job training and coaching sessions for local officials helps to improve procedures for taxpayer registration and tax collection.

Enhancing social accountability: The project promotes the exchange between citizens and the government both at local and at the national level. It supports civil society partners in developing accessible information products on public finance issues, which are distributed to public decision-makers, the media and citizens.

In conceptual terms, the project builds on the previous experience and successes of two completed projects, namely Support to the National Audit Office of Tanzania (2012-2015) and Support for Local Governance (2008-2014). Combined financing comes from the European Union and the Swiss Agency for Development and Cooperation (SDC), two development partners with which the project works together in partnership.

Results

  • The National Audit Office of Tanzania has successfully included municipal procurement processes that are particularly susceptible to corruption in its annual audits and consistently reports to the parliament.
  • With the support of the project, the Internal Auditor General’s Division has developed a problem and solution-oriented reform package for the public internal audit system.
  • The increasing use of digital revenue collection and the greater integration of IT solutions have significantly enhanced efficiency and therefore also boosted the income of the local authorities.
  • Participants in local dialogue mechanisms - supported collaboratively by local civil society and the project - report an improvement in the exchange between citizens and their elected representatives on issues of local revenue policy.