Enhancing Aid Effectiveness-Joint Assistance Strategy

1. Enhancing Aid Effectiveness-Joint Assistance Strategy DPG Orientation Seminar 12 September 2006

2. Paris Declaration-Framework for Aid Effectiveness: From donorship to ownership Partners set the agenda Aligning with partners’ agenda Using partners’ systems Establishing common arrangements Sharing information Simplifying procedures I. Global Aid Context Ownership (Partner countries) Managing for Results Alignment (Donors-Partners) Harmonization (Donors-Donors)

3. II. A Shifting Aid Environment in Tanzania • TAS (2002-2005): A framework to more effectively manage and improve predictability of external resources; restore local ownership and leadership • Progress achieved: Improved relationship in development cooperation; national capacity developed through core reforms (essentially PFM); new mechanisms adopted (PRS I; PER; MTEF); rationalization and increased national ownership of technical assistance; move from project to program aid and increasingly GBS • Outstanding Challenges: still widespread provision of off-budget financing (projects) impeding strategic budget resource allocation at national level, transparency & domestic accountability; parallel systems and procedures; uncoordinated Development Programme at LGAs; multiple missions, meetings and analytical studies • Scaling up TAS towards JAS to operate at a higher level of commitment to the principles of H&A by effectively aligning donor country assistance strategies with MKUKUTA and MKUZA. Further enhancement of national ownership and GoT wide leadership.

4. III. Joint Assistance Strategy (JAS) • Inclusive Dialogue • Idea of JAS emerged in TAS process in 2003/04 resulting from a joint GOT-DP study on rationalisation/ harmonisation of processes • Idea was taken further in GOT-DP consultations  formulation of a JAS Concept Paper end 2004 • JAS Consultative Meeting with domestic and international stakeholders in April 2005 • First draft JAS Document prepared by GOT in May 2005 • JAS Retreat with Directors of Policy and Planning in November 2005 • Outcomes of JAS Retreat incorporated into third draft JAS Document November 2005 • JAS discussion with Parliamentarians • JAS discussion with Zanzibar on 3rd draft • JAS Consultative Meeting with PSs and DPs in April 2006 – agreed on JAST principles

5. III. Joint Assistance Strategy (JAS) • JAS to emphasize: • Guiding framework of principles moving toward post Paris High-Level Forum • The principle of National Ownership and Leadership with broad-based stakeholder participation (CSO, private sector, local governments, Parliament) in identifying development goals and formulate strategies; • Country-led partnership representing a paradigm shift towards putting Tanzania in the driver’s seats/reduce the asymmetrical relationships and tensions in the donor-led approach. Ensuring that aid is aligned with GoT priorities. • Shift from external accountability to domestic accountability (Legislature, non-state actors – participation, quality) • Mutual accountability (to move towards better alignment and greater predictability in ODA disbursement)

6. III. JAS-Key Principles • Harmonisation and alignment around MKUKUTA/MKUZA and national budget • Align National, Sector and Local policies, strategies and processes with MKUKUTA/MKUZA and national budget • Align DPs support, strategies, and processes with national priorities (MKUKUTA/MKUZA), systems, procedures and processes • Mix of aid delivery modalities: • GBS: GoT’s preferred modality (currently 38% of total ODA); Current PRBS instrument evolving: more inclusive; focused on domestic accountability with PAF to be increasingly aligned to MKUKUTA Monitoring Master Plan and national instruments and processes • Basket funding (as a transition to GBS) to protect public reforms and/or thematic areas not yet mainstreamed in normal government activities • Direct Project Funding (under specific conditions; well aligned to national systems – for pilots and innovations & emergency aid)

7. Channel/Disburse ODA through Govt Exchequer and Budget System • Use of national procurement, accounting and auditing systems and procedures • Developing National Capacity • Supporting the building of sustainable human resource, technical and financial capacity in Tanzania institutions • Working closely with Govt to eliminate systems that historically detracted from this goal (i.e. separate or parallel PIUs, etc.) • Enhanced TA strategy • Demand driven, responsive to GoT needs and focused on capacity development • Increasingly untied from the source of financial assistance (focusing on value for money) • Procurement under Govt Leadership and using Govt system (I.e. pooled TA)

8. Better Division of Labour: • More effective division of labour among GOT agencies with clearly defined roles – lead agency in each sector/thematic area • Rationalise number of DPs per sector/thematic area and the number of sectors/thematic areas per DP • Concept of lead & delegating partner by sector & thematic areas (based on comparative & competitive advantages) • Dialogue: • Improving public policy choices, effectiveness in planning, budget management and public service delivery • High quality and regular dialogue under Govt leadership • Based on existing, national processes (i.e. MKUKUTA/MKUZA, PER, Sector Reviews, etc.) • Facilitating domestic and mutual accountability • On the basis of agreed DoL arrangements

9. III. JAS-Going Forward • Cabinet approval process– ascertaining GoT’s commitments • Joint JAS Working Group to carry out: Preparation of JAS Monitoring Framework and Action Plan immediately after the JAS Consultation and to be carried out into first quarter of FY 2006/07 • MoU/Commitments of Principles – Mutual commitments to JAS • JAS – dynamic and evolutionary process with emphasis on inclusiveness and dialogue

10. IV. Paris Baseline Exercise – Assessing where we are • Paris Baseline Exercise in Tanzania – concluded at the end of August, under GoT/MoF leadership in steering the process in Tanzania • Paris Indicators to inform the JAST progress – JAST Monitoring Framework, building on the Paris Indicators and the baseline exercise • Baseline exercise provides quantitative assessment on where we are: at the beginning of JAST Implementation • Opportunity for dialogue

14. IV. Paris Baseline Exercise –Challenges • Improving MTEF processes – ensuring aid alignment (reflected on budget) • TA/TC for capacity development through coordinated framework • H&A of processes and procedures • PIUs – systematic approach • Predictability • Reduction of transaction costs