The United Republic of Tanzania President’s Office – State House

1. The United Republic of TanzaniaPresident’s Office – State House Reforming Tanzania’s Public Sector: An Assessment and Future Direction Presented at DPGs Meeting 11th February, 2014

2. Presentation Outline • Introduction • Background and context • Cross-cutting reforms: key outcomes • Sector reforms: key outcomes • Major factors affecting levels of results • Current status of cross-cutting reforms • Proposals on future direction • Reform actions in the short and medium term • The management of the reform process • Current cross-cutting reforms-Next steps • Current sector reforms-Next steps

3. Introduction • The team was tasked to undertake a comprehensive assessment of public sector reforms and propose a way forward - paying particular attention to cross-cutting reforms • Reforming organizations is a continuous process due to internal and external dynamics • The public sector reforms focused on addressing: (a) institutional bottlenecks – systems and processes (b) building and strengthening infrastructure - e.g. roads & service delivery points

4. Objectives • To assess the efficacy and adequacy of public sector reforms (cross-cutting and sector reforms) implemented since 1990s – design and implementation arrangements • To propose a framework for improving the way future reforms should be managed with a view to making them contribute to the realization of the objectives of FYDP, LTPP (2011/12-2025/26) and National Vision 2025

5. Approach and Methodology A mix of research methodologies were used for data collection: • Review of documents • Face to face interviews • Focus Group Discussions

6. Structure of the Report The report is structured as follows: • The Main Report – overall assessment and future direction • Three annexes: (i) cross-cutting reforms (ii) sector reforms, and (iii) Review of literature on public sector reforms in developed and developing countries to distil lessons for Tanzania

7. Public Sector Reforms: Background and Context • The study provided information on reforms since independence with a view to situating the reforms being examined in their proper historical contexts • The earlier reforms focused on building systems, processes and capacity to deal with the situation of a newly independent state • The reforms were anchored on developmental philosophy which, if viewed in contemporary era, would be referred to as a ‘developmental state path’.

8. Public Sector Reforms: Background and Context Results of Initial post-independence interventions were mixed • New institutions were created and their capacity enhanced, including an expanded bureaucracy • Significant improvements in the delivery of social services (Reduction of adult illiteracy rate, health etc) • Over-expansion of the role, scope and responsibilities of government – leading to a crisis in resources, unethical conduct, etc.

9. Public Sector Reforms: Background and Context Responses to the crisis • Abandonment of the developmental state • Adoption of the SAP related macro-economic reforms • Scaling down the role and scope of government • Privatization of state enterprises • Cost-containment measures in government operations including retrenchment • Parastatal and Public Sector Reform Programme and Civil Service Reform Programme were established

10. Public Sector Reforms: Background and Context • The SAP related reforms failed to arrest the deterioration in service delivery. • The Government adopted a new reform strategy with two features: • Strengthening systems and processes • Developing and strengthening infrastructure

11. Public Sector Reforms: Background and Context • Feature One: Cross-cutting reforms dealing with systems and processes • Feature Two: Sector related reforms focusing mainly on infrastructure

12. Cross-cutting Reforms: Key Outcomes • The assessment emphatically shows that between the mid 1990s todate the Government machinery (systems and processes) improved significantly as a result of the reform interventions.

13. Cross-cutting Reforms: Key Outcomes • Improvements in public finance management • Increased access to financial services • Improved management of public records • Enhanced pay levels for public service staff • Reformed pension system • More autonomous local government authorities • Increased access to, and timely dispensation of justice • Increased number of women in senior positions • Increased partnership between state and non-state actors have led to more robust prevention and combating of corruption • Reduced crime due to strategies implemented under relevant reforms • Transforming the TIC into a “one-stop centre”

14. Sector Reforms: Key Outcomes • The assessment emphatically shows that between the mid-1990s todate there has been significant improvements in social service infrastructure (education, health , roads, water services, etc,) as a result of deliberate reform interventions.

15. Sector Reforms: Key Outcomes • Expansion of health service facilities leading to increased access and reduced morbidity and mortality • Expansion of tertiary training institutions and medical schools leading to reduced deficit of qualified health professionals and technical staff • introduction of National Health Insurance Fund (NHIF) and Community Health Fund (CHF) • Improved access and equity to education, leading to expansion in Gross Enrolment Rate (GEN) and Net Enrolment Rate (NER) at all levels of the education ladder • Increased pass rate in Primary School Leaving Examinations (PSLE) from 22% in 2000 to 58.3% in 2012 resulting into significant improvement in the quality of education • Increased proportion of population that has access to clean and safe water • Increased number of irrigation schemes that have led to higher production • Increased use of demonstration farmsleading to adoption of better-quality agricultural technologies and inputs, resulting into more yields per hectare • Improved seeds, availability of fertilizers and mechanization leading to higher yields • Formalization of unplanned urban settlements in cities like Mwanza and Dar es Salaam • Increasing the number of surveyed villages and delivering Certificates of Customary Right of Occupation (CCROs)

16. Major Factors Affecting the Level of Results The assessment shows that the reforms would have achieved better results than they did. The factors that affected the results include the following: • Alignment and congruence of objectives • Governance arrangements • Mainstreaming management of reform implementation • Coordination of reforms across government • Cross-cutting and sector–specific reforms’ linkages and, • Financing cross-cutting reforms

17. Current Status of Cross-cutting Reforms • The reforms were to be implemented through a broadly common approach- • Developing systems, processes and tools by a lead agency • installing the systems and tools in MDA AND LGA under the direction of a lead agency, and • Institutionalizing the same in MDAS and LGAs • Of the 8 reform programmes one has been completed and graduated, the rest have had the systems, processes and tools developed and installed but they have not yet been fully institutionalized. The details of the current status of implementation for each reform programme are in the Report.

18. Proposals on Future Direction of Public Sector Reforms The Team’s recommendations on the strategic future direction of Tanzania reform efforts are influenced by: • Tanzania’s development frameworks – Vision 2025, Long Term Perspective Plan, Five Year Development Plan and Big Results Now (BRN) Initiative (ii) Lessons Learnt from the Assessment of Public Sector Reforms-what to take forward / what to avoid • Developments in the internal and external environmental dynamics - Internally- a demand for more and better services; a vibrant and informed pressure groups (CSOs) - Externally- questions about relevance of NPM reforms, market-driven economy, the developmental state model (lessons from the Asian Tigers)

19. Proposals on Future Direction of Public Sector Reforms (cont..d) Strategic direction of future reforms Taking into account the factors that should influence the future direction of reforms, the Team’s recommendations are in three categories: • Issues requiring reform action in the short and medium term, • The way reforms should be managed in the future; and • Actions to take with regard to the current reform programmes.

20. Proposals on Future Direction of Public Sector Reforms (cont..d) Strategic Direction of Future Reforms (cont..d) Issues requiring reform action in the short and medium term • Strengthening the machinery of government (systems, processes and procedures); • Enhancing efficiency and effectiveness in Government operations; and • Addressing endemic and systemic issues of an ubiquitous nature.

21. Reform Action in the Short and Medium Term (a) Strengthening the machinery of Government The Team and many of the stakeholders feel that: • Currently efforts to improve systems, processes and procedures at the “centre of government” ministries tend to be duplicated • Government is not operating in strategically integrated manner and there is limited sharing of information in MDAs and LGAs • Government operational procedures are long-winded and constrain service delivery.

22. Reform Actions in the Short and Medium Term It is recommended that a major reform actions using a Task Force mode be undertaken focusing on: • Harmonizing interventions aimed at improving systems, processes and procedures across government using ICT; • Developing central databases to support the management and integration of government records using ICT; • Effective use of the inherent potential embedded in the National ICT Broadband Backbone, (“MkongowaTaifa”); and • Strengthening the e-Government Agency to enable MDAs and LGAs undertake many functions in strategically integrated manner.

23. Reform Actions in the Short and Medium Term (Cont..d) (b) Efficiency and effectiveness in Government operations • spiraling cost of running government; (ii) weaknesses in the management of public servants (iii) problems associated with structure of government and its agencies. Reform interventions should focus on; (i) A review of current areas of government operations with a view to identifying and removing redundant/duplicative agencies and functions, and (ii) Assessment of current areas of government expenditure with a view to rationalizing the expenditure budget. I - A Task Force mode should be used.

24. Reform Actions in the Short and Medium Term (c) Endemic and systemic issues of an ubiquitous nature These include: (i) corruption, (ii) dwindling accountability and (iii) incipient lawlessness These require frontal integrated approaches involving the state, non-state and citizens as actors, setting performance targets with specified timeframes and timelines through consultative processes. - A Mass Campaign Mode should be used

25. The Management of the Reform Process Future direction of reforms should want to address the pitfalls that undermined implementation effectiveness of the current reform programmes. The Team recommends the following measures in six areas:

26. Management of the Reform Process • Designing reforms The programme architecture of future reforms: • Should be comprehensive, clearly stating the objectives, the interventions to be undertaken, the governance and management arrangements as well as the M&E/results frameworks. • Should devolve the management of reforms in the leadership and staff of the implementing institutions - MDAs. • Should include interventions which address organizational constraints related to the work environment (facilities including offices and equipment) should be considered to be part of the reform agenda.

27. Management of the Reform Process • Implementation Mode • Preferably use the mainstreaming approach. • Where conditions make it necessary to adopt the project management unit mode, provision for moving from that mode to mainstreaming, in an expeditious manner, should be included in the programme design.

28. Management of the Reform Process (iii) Governance (lead agency, committee etc) The use of the committees to dialogue and ensure coordinated decision making is a healthy practice and needs to be continued and strengthened. • Decisions on the choice of lead agency should not be taken lightly; agencies chosen to play that role should have a number of qualities including institutional and human resource capacity and capability as well as earned authority.

29. Management of the Reform Process • Financing • The Government should take primary responsibility for financing reforms soft reforms (systems, processes and tools) • The Government should treat the costs of systems and processes related reforms as capital expenditure and make provision for meeting such costs in its development budget.   • The Development Partners and Government continue to use the basket funding mode • To ensure sound financial management, implementation arrangements for future reforms should put in place well articulated financial management frameworks. • The Development Partners be persuaded to meet costs related to improvements of work environments when they fund soft reforms.

30. Management of the Reform Process • Monitoring and Evaluation In developing future reform programmes, robust M&E frameworks should be a necessary component. At the same time, Government should consider taking steps to address its capacity deficiencies that would otherwise constrain efforts to develop and use robust M&E frameworks.

31. Management of the Reform Process (vi) Coordination of Reforms The Team recommends that, in future the mandate and role of the RCU should be to: • Act as the “Think Tank” when it comes to public sector reforms across government – providing expert advice with regard to all activities in the reform cycle. • Periodically review reform programmes’ design and liaise with reform programme managers with a view to identifying overlaps, conflicts and possible areas for creating synergy; • Monitor and evaluate progress in programmes implementation and ensure they operate effectively and efficiently; • Devise mechanisms for the overall coordination of public sector reforms; and

32. Management of the Reform Process Coordination of Reforms (Contd) • The RCU be vested with authority to call to account each of the Accounting Officers to perform their respective roles in steering the reform agenda under their jurisdiction; • The Unit should play the innovative role of a Change Agent in terms of diagnosing critical areas that require reform interventions at sector and national levels; • RCU should undertake research on good practices and emerging reform issues as well as use networks in order to be able to better guide Government institutions on reform implementation; • RCU should serve as a resource centre/one stop shop for local and international researchers and practitioners in the area of public sector reforms;

33. Management of the Reform Process Coordination of Reforms (Contd) (ix) The Head of the Reform Coordination Unit should be a Permanent Secretary level person; (x) The institution’s staffing profiles and levels be expanded to a minimum of six multi-disciplinary policy level experts, with sound analytical competencies; (xi) The Unit should be organized as a learning organization that will adapt and respond to changes in the reform environment. Initially it may be organized around a number of clusters; and (xii) RCU should be provided with adequate support staff, equipment and facilities including a resource centre.

34. Current Cross-Cutting Reforms-Next Steps 1. Public Service Reform Programme PSRP has successfully developed and installed most of the systems and process related interventions that were planned over the last two phases. It is recommended that: • At the end of the current phase, a follow-up programmatic packaged PSRP phase may not be necessary. However, in making this recommendation, the Team is conscious of the fact that many of the tools and systems have yet to be institutionalized, while a few have yet to be developed, installed and institutionalized. (ii) Activities related to institutionalization should be the primary responsibility of the respective MDAs and LGAs. The lead agency (PO-PSM) should be responsible for encouraging, cajoling and providing advice, backed by the legal and institutional instruments. (iii) The activities related to the tasks of both MDAs/LGAs and the lead agency should in most cases be undertaken as part of their regular operational functions and may not require reform funding.

35. Current Cross-Cutting Reforms-Next Steps Public Service Reform Programme (Contd) Regarding the reform interventions that are yet to be installed, the Team recommends that: (iv) PO-PSM should undertake the installation of Performance Contracting system. The installation may take 2-3 years, require additional technical expertise from outside government to augment the in-house expertise. It will therefore require special funding. In installing it, the Team advises that synchronization with Big Result Now initiative to attain synergy should be given careful thought. (v) Planned activities related to leadership and accountability should be reviewed, with a view to accommodating them, as appropriate, in a multi-pronged effort

36. Current Cross-Cutting Reforms-Next Steps 2. Public Financial Management Reform Programme PFMRP has been implemented for more than ten years. The development and installation of systems has been successfully undertaken in MDAs and LGAs. It is recommended that: • PFMRP IV be reviewed to establish planned interventions that are focusing on institutionalization of tools and systems which have already been successfully installed at the centre, in MDAs and LGAs. • The institutionalization processes of these tools and systems should be the responsibility of the respective institutions. • MOF’s responsibilities in that regard should be to encourage, advice and cajole backed by the legal and institutional instruments.

37. Current Cross-Cutting Reforms-Next Steps Public Financial Management Reform Programme (Contd) • PFMRP Phase IV should focus on securing coordination and synergy among the various interventions being implemented by multiple parties. • The current programme should invariably aim at integrating some of the systems as well as replacing, developing, upgrading and installing new systems. The Team is conscious that this process will be tortuous and will take time. It will also require special funding; fortunately there is already provision for that in the sense that Phase IV has adequate funding.

38. Current Cross-Cutting Reforms-Next Steps 3. Local Government Reform Programme This programme has been implemented for over 15 years. It has significantly enhanced the capacity of LGAs and D-by-D is now embedded in Tanzania’s governance system than it was fifteen years ago. The Team recommends that: • At the conclusion of the current phase of LGRP the reforms need not be undertaken using the programmatic packaged mode. Other mechanisms for undertaking reforms should be explored. • The institutionalization of the tools, systems and processes be carried out by the LGAs with PMO-RALG focusing on encouraging and cajoling them, backed by the legal and institutional instruments

39. Current Cross-Cutting Reforms-Next Steps Local Government Reform Programme (Cont..d) (iii) There are two sets of unfinished business: (a) institutionalization of tools and systems; (b) the results achieved through the three dimensions of D-by-D (i.e., administrative and HRM decentralization, fiscal decentralization, harmonization of laws) require more work to be done. It is further recommended that: (iv) Administrative decentralization: Government take serious measures to translate the spirit of devolving authority for human resource management function to LGAs.

40. Current Cross-Cutting Reforms-Next Steps Local Government Reform Programme (Cont..d) • Fiscal Decentralization: Given the fact that service delivery invariably takes place at the LGAs and Lower Local Government Authorities (LLGAs) levels, more resources should be channeled to those levels than is presently the case. • Harmonization of laws: Activities in this area should be treated as an urgent matter and an Inter-Ministerial Task Force should be set up to undertake the task in an expeditious manner.

41. Future Direction – Current Reforms Local Government Reform Programme (Cont..d) • The implementation of the remaining LGRP issues that are related to the three dimension of D-by-D should be undertaken as part of the regular functions of PMO-RALG. Supplementary would be required to compliment internal resources. • A Fund to meet the costs of supplementing in-house resources (finance as well as expertise) be made available to PMO-RALG. • PMO-RALG sets up a special project focusing on empowering and building the capacity of the Lower Local Government Authorities (LLGAs), the Villages and the Mtaa where service delivery actually takes place across the country.

42. Future Direction – Current Reforms 4. Legal Sector Reform Programme The programme has been under implementation for 14 years. There is broad agreement. On the overall, the implementation of the legal sector reforms has significantly contributed to improvements in access to justice and timely dispensation of the same. It is recommended that: • Given the fact that the LSRP interventions were undertaken by different institutions in legal sector domain, the development and installation of the systems was undertaken by each institution, the responsibility for institutionalization of the systems and tools to make them part of the legal sector culture, should be retained by the respective institutions. It is the view of the Team that this intervention needs not be undertaken within a framework of a programmatic packaged mode.

43. Current Cross-Cutting Reforms-Next Steps Legal Sector Reform Programme (Contd) • the current phase be extended for at least one year to enable the completion of the outstanding activities • activities related to institutionalization of the tools and systems be undertaken by the respective agencies as part of their regular operations • the Tanzania Police Force Reform Programme (TPFRP) be given time and resources to complete the planned interventions.

44. Current Cross-Cutting Reforms-Next Steps 5. Business Environment Strengthening for Tanzania As the current phase is coming to an end most of the planned interventions have been implemented and positive results have been attained. Two critical issues require concentrated attention (i) land management issues and (ii) the ‘soft’ constraints to expanding regional trade. The Team recommends that: A further phase at the conclusion of the current one to address the unfinished business. The design and approach of that phase may take a cue from the experiences of implementing the phase which is just being completed. • as well as give attention to the three issues raised overleaf. The design and approach of that phase may take a cue from the experiences of implementing the phase which is just being completed. • The current phase be extended for at least one year to enable the completion of the outstanding activities • At the end of the extension, the Team recommends that activities related to institutionalization of the tools and systems be undertaken by the respective agencies as part of their regular operations. • the Tanzania Police Force Reform Programme (TPFRP) be given time and resources to complete the planned interventions.

45. Current Cross-Cutting Reforms-Next Steps 6. National Anti-Corruption Strategy and Action Plan The programme has been implemented for more than ten years. Most planned interventions were developed and largely installed in the respective institutions. Overall, there has been progressive improvement; the general public say that corruption is not abating. The Team’s view is that despite the commendable efforts over the last decade, corruption is progressively becoming an endemic, ubiquitous and cancerous scourge. It has underlying causes that have not been unearthed and therefore addressed. A new phase is in the offing for the NACSAP. The Team recommends that: • Funding for the new phase be availed • Effort be directed to unearthing and addressing the underlying causes • Resources should be directed to unearthing underlying causes • A multi-pronged frontal nation-wide mass campaign to fight the scourge should be launched.

46. Current Cross-Cutting Reforms-Next Steps 7. Second Generation Financial Sector Reform Programme Most of the planned interventions were implemented and positive results realized. The Team recommends that in future attention should be directed at: • Removing the stumbling blocks constraining the smooth functioning of the sector should be continued and strengthened • The thrusts of this programme be synchronized with those of the “Tanzania Government Roadmap for Improvement of Business Environment and Investment Climate” • Activities related to this programme should be undertaken as part of the Bank of Tanzania’s regular functions and need not get funding from donor institutions

47. Current Sector Reforms-Next Steps • Health Sector: The focus should be on: • continuous improvement of access • quality and equity in health services • improving the quality of human resources in health facilities • strengthening health management information systems at all levels • facilitating the achievement of health insurance for every citizen of this country

48. Current Sector Reforms-Next Steps • Agricultural Sector • transforming peasants, who do not treat farming as business, into farmers. This may result in some of the peasants choosing the route of becoming workers; • encourage Big Business Enterprises (BBEs) and Small and Medium Enterprises (SMEs) to invest in large scale agricultural production; (iii) develop and strengthen backward and forward linkages within the agricultural sector to create value addition through agri-businesses; (iv) take measures to reduce reliance on rain by moving into irrigation, supported agricultural production; and (v) build human resource capacity.

49. Current Sector Reforms-Next Steps • Education Sector • The reforms should continue with strategies of increasing enrolment at all levels of the education ladders, and • There is also an urgent need to place a lot of effort on strategies designed to improve the quality of education.

50. Sector Reforms: Future Direction • Water Sector Reforms in the water sector should put emphasis on • infrastructure expansion; • rehabilitation and development for water sources conservation; • water harvesting and storage; • increasing access to affordable clean and safe water, sanitation, sewerage and hygiene; and • empowering water users associations to be in-charge of water projects.