CONCEPT NOTE FOR THE TANZANIA DEVELOPMENT COOPERATION FRAMEWORK

1. CONCEPT NOTE FOR THE TANZANIA DEVELOPMENT COOPERATION FRAMEWORK November, 2012

2. 1. Background • Two major landmarks in GoT-DP cooperation • the Tanzania Assistance Strategy (TAS 2002-2005) • Joint Assistance Strategy for Tanzania (JAST 2006-2011) • Both aimed to formalize GoT-DP cooperation into a framework for effective aid coordination and harmonization • New coordinating mechanisms are being created in various government ministries including MoF (traditional aid), PMO (PPP), Foreign Affairs (South-South Cooperation), President’s Office Planning Commission (Partnership for Growth) and sector ministries • A new framework is needed : • To sustain past efforts • To expand the agenda to include new partners and other forms of development cooperation that have emerged in recent years • To bridge the financing gap/meet financing requirements reflected in FYDP, MKUKUTA II, and MKUZA II

3. 2. New Framework for Development Cooperation • Apart from the traditional GBS, Baskets and Projects, the new modalities include Sector Baskets, Area Based Programs, Vertical or Global Funds, PPP and other forms of foreign investment. • The new situation is going to require new institutional arrangements, procedures, systems and coordinating mechanisms: • Coordination and institutional arrangements: • Collective dialogue • Aid information management and monitoring • Aid policy

4. 3. New Development Cooperation: Questions which need answers • New realities and BUSAN Outcome: • the traditional donors are not living up to their agreements and obligations, with several OECD donors not abiding by the PD Agenda • A growing number of non-OECD countries do not accept the OECD-DAC approach (BRIC countries) • Private sector, vertical funds, philanthropic foundations, etc. are playing an increasingly important role • How best can we bring most of them under a unified and coherent development cooperation framework?

5. 3. New Development Cooperation: Questions which need answers • Emerging Donors • BRIC countries – Brazil, Russia, India and China, and others interested in scaling up investments in and trading with Tanzania and African in general • Provide crucial sources of capital for African countries, new markets for African commodities, and access to affordable new technology • Reducing Transaction Costs to GoT would require mainstreaming the new comers in the Club. How best can this managed?

6. New Development Cooperation: Questions which need answers • New Development Models • Area/corridor-based approach, e.g. SACGOT, which is a complex, multi-donor, private sector, and multi-dimensional phenomenon. • This is a pilot approach, but there is lots of enthusiasm around it. What coordination challenges need to be addressed in the New DCF?

7. New Development Cooperation: Questions which need answers • Traditional modalities experienced changing trends: a steady increase in baskets; sharp rise in the project modality; GBS fluctuating. Will this pattern change significantly in the medium term?

8. The Way Forward • CN is a forerunner to the preparation of the new DCF (JAST-II) • CN and the DCF documents are subject to a wide consultative process to enhance their quality, but more importantly, to deepen inclusiveness and country ownership • The timeline is that the DCF document should be finalized by mid-December 2012, to be followed by the approval process through relevant authorities of the country

9. Questions for DPs • 1. We are suggesting that DPs sign an MoU like they did with JAST. Is this acceptable to DPs? Any reservations or conditions? • 2. In the current arrangement, what are the main shortcomings on the government’s side? What kind of provision needs to be in the new DCF to ensure that the DPs abide by their commitments to provide “predictable” ODA funds to the government? For example, will performance criteria help to get the government back on track?

10. Questions for DPs (con’t) • 3. Coordination and Dialogue: We suggest that the government establish new coordinating mechanisms that reflect the new multi-stakeholder character of external resource flows, and yet ensure simplicity and efficiency in operation. • The apex would be in the proposed Inter-ministerial Advisory Board based in Planning Commission with representatives from MoF, PMO, MDAs, etc,. with aspects of aid coordination serviced from ACU • Elements: Retain DPG, establish special platforms, revitalize Development Cooperation Forum, streamline Sector/Thematic Working Groups, Private Sector forum?

11. Coordination Structures: National Advisory Board Secretariat (ACU) Aid Coordination Unit: aid effectiveness agenda, knowledge sharing and collaboration between EF & PO-PC Dialogue Mechanisms: Development Cooperation Forum DPG Platform Special Platforms (SSC, Private sector, SAGCOT) Working Groups (Cluster, Sector/Thematic) Annual National Policy Forum (ANPD) Coordination Structures & Dialogue Mechanisms

12. Questions for DPs (con’t) • Coordination Structures are the sole responsibility of government to organize, convene, invite, manage, etc. • 4. Dialogue: Dialogue mechanisms, although jointly attended by DPs, should also be coordinated by GoT. • To improve dialogue, participants should come better prepared (key reports for discussion, research, PAF instrument, sector reports, etc.) which, together with the above changes in structure, should result in better quality dialogue

13. Questions for DPs (con’t) • Working Groups: What needs to be retained? JAST WG? Sector WGs? GBS WG, etc? cluster Sector/Thematic WG around Clusters • 5. External Resource Policy: One missing element is the absence of a clear policy statement outlining the government’s principles for mobilizing, receiving and managing external finance. • The main elements are contained in the ODA Operational Manual, but the government’s policy statement is missing

14. Comments?