Promoting good financial governance in Tanzania

Project description

Title: Promoting good financial governance in Tanzania
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Co-funded by: Switzerland and, the European Union
Country: Tanzania
Lead executing agency: Ministry of Finance and Planning
Overall term: 2016 to 2023

Context

Public financial management reforms are a key driver for enabling economic growth, improved service delivery and overall development in the country. Tanzania’s economic and development vision is to transform Tanzania into a semi-industrialised middle-income country with a high level of human development by 2025. Consequently, the country places great emphasis on increasing domestic revenue mobilisation and implementing fundamental reforms in the area of public finance. Enhancing the supply of and demands for accountability is vital to ensure that potential tax revenue increases are utilised for the country’s development.

Objective

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

Approach

The programme follows the holistic “Good Financial Governance” (GFG) approach by engaging in different areas of public financial management, while actively fostering synergies between its different fields of action. By applying a capacity-development strategy based on assessments of partners’ needs, the programme conducts on- and off-the-job training and delivers organisational development expertise. It aims at improving stakeholder capacity and ownership to promote a sustainable application of results by the partners beyond the end of the programme cycle.

To achieve this goal, the GFG programme works in four closely related fields of action:

Improving external audit by building up the individual and institutional capacities of the National Audit Office of Tanzania (NAOT) as the supreme audit institution.

Consolidating the internal audit system by providing strategic and organisational advice as well as targeted capacity building measures to strengthen the internal audit units of selected ministries and local authorities. 

Supporting the system of own source revenue by aiming to increase local revenue. The GFG programme advises selected Local Government Authorities (LGA) on how to better manage own revenues in an efficient and transparent manner. Data management and improvement of quality and consistency of revenue data are the key work streams. 

Enhancing social accountability by promoting dialogue between citizens and the government both at the local and national level. The programme promotes gender equality and mainstreaming by building the capacities of the “Women, Youth and People with Disability Fund”, which funds small-scale business projects for disadvantaged groups.

Results

The GFG programme empowers central actors along the accountability chain, thus systematically increasing transparency, efficiency and accountability in Tanzania.

• GFG supported the Internal Auditor General’s Division (IAGD) in elaborating a national “Strategy for the further development of the internal audit system in the public sector of Tanzania”, which was officially adopted on 23 December 2019. This is an important milestone for improving the internal audit system in Tanzania. 
• With respect to external auditing, GFG supported NAOT in its efforts to professionalise auditors using newly developed manuals to audit Tanzania’s Central Bank and the Tanzania Revenue Authority (TRA). NAOT had also rolled out 43 comprehensive audits of LGAs. 
• Own-source revenue increased by 123 per cent in 10 partner districts from 2014 to 2019. 
• Digital recording of revenues and the electronic generation of invoices has considerably improved the efficiency of local revenue collection. 
• At local level, GFG successfully contributed to improving the dialogue between representatives of the state, private sector and civil society. More than 1,200 citizens attended dialogue meetings with local officials. In five partner LGAs, 92 per cent of participants reported that the dialogue between local administration and citizens had improved. In addition to that, with GFG’s support, five partner LGAs published 15 citizen-friendly reports on the utilisation of revenue from local sources.

Last update: April 2021