Promoting good financial governance in Tanzania


Good Financial Governance - Longido, Arusha
Good Financial Governance - Longido, Arusha © GIZ

The Good Financial Governance (GFG) project supports the public finance system by strengthening the provision of and demand for accountability as well as enhancing domestic revenue mobilisation to increase local development. GFG builds capacity at national and sub-national level, including of civil society and the private sector. The project enhances Swiss support to state institutions that are more efficient and effective, inclusive and increasingly free of corruption. 

Country/region Topic Period Budget
Tanzania
Governance

Public finance management
Domestic revenue mobilisation
01.08.2020 - 31.01.2024
CHF  8’625’000
Background

Tanzania has made steady, but slow, progress in improving its public finance system and reducing donor dependency. The country is regarded as a macroeconomic pillar of stability in the region. The Gross Domestic Product (GDP) has grown by 5-7% / year for the past decade. 

However, lack of reliable, credible annual budgets and deficient accountability mechanisms remain obstacles to this progress. There is evident willingness to improve the management of public resources at local and national level. External and internal public audit bodies continue to grow in capacities.

One key concern is their limited political independence in line with increasing centralization and shrinking civic and political space in the country. There is also an overall trend towards less transparency and an increased share of budget is spent without prior parliamentary approval while sector budgets, especially in social sectors, remain underfunded.

Objectives The public finance system is strengthened in accordance with the principles of good financial governance, specifically efficiency, transparency and accountability leading to improved allocations for delivery of services that benefit the wider population, especially women.
Target groups

Direct target groups:

  • Central Government departments: NAOT, IAGD at Ministry of Finance and Planning (MoFP)
  • President’s Office-Regional Authorities and Local Government (PO-RALG) and 15 selected LGAs
  • Tanzania Revenue Authority (TRA)
  • 2 national Civil Society Organizations (CSOs)

Indirect target groups:

  • Citizens in 15 targeted LGAs through District Business Councils (DBCs) and the Women, Youth and People with Disabilities Fund (WYPDF) dialogues
Medium-term outcomes
  1. The NAOT increasingly performs its role as a supreme audit institution efficiently.
  2. Conditions for an effective internal audit function are improved in line with the Ministry of Finance and Planning (MoFP)'s strategy for further development of the internal audit system in the public sector of Tanzania.
  3. The capacities for efficient and transparent management of local government revenue sources are increased.
  4. Dialogue between administration and citizens on transparency and accountability of public funds at national and local level are improved.
Results

Expected results:  

  • NAOT discussed with relevant parliamentary committees 12 comprehensive audits or specialized audits of public entities.
  • The internal audit reports for 17 internal audit units of ministries, departments, and agencies (MDAs) and local government authorities (LGAs) meet international standards.
  • In 15 partner LGAs, the number of registered businesses paying service levy increased by 30 %.
  • In 15 partner LGAs, 80% of 400 participants consulted perceive an improvement in the dialogue between LGAs and the population.


Results from previous phases:  

  • The National Audit Office of Tanzania (NAOT) introduced and rolled out comprehensive audits to 33 Local Government Authorities (LGAs) out of which six were discussed in parliament.
  • A specialized audit manual for the Bank of Tanzania was developed and used.
  • An audit strategy for the Internal Auditor General Division (IAGD) for the improvement of the sector was developed and endorsed.
  • Own revenues of 10 LGAs increased by 123% (against a target of 50%).
  • A gender study identified higher fiscal burdens for women traders to access public goods and services.
  • 92% of participants (43% female) in district consultative dialogues in 5 LGAs indicated an improvement in government-citizen dialogue.


Directorate/federal office responsible SDC
Credit area Development cooperation
Project partners Contract partner
Foreign state institution


Other partners
German Ministry for Cooperation (BMZ) and European Union (EU)
Coordination with other projects and actors

Public Financial Management Reform Programme (PFMRP) (budget support);

Swiss Agency for Development and Cooperation (SDC) supported initiatives: Social Accountability Programme (SAP), Support to Anti-Corruption, Health Basket Fund (HBF) and the Tanzania Social Action Fund (TASAF);

SECO initiatives:  IDI-Supreme Audit Institutions (SAI) program and AFRITAC-East; a technical assistance program supporting revenue administration headquartered in Tanzania

Budget Current phase Swiss budget CHF    8’625’000 Swiss disbursement to date CHF    3’702’251
Project phases Phase 2 01.08.2020 - 31.01.2024   (Current phase) Phase 1 01.02.2015 - 31.07.2020   (Completed)