Documentof TheWorld Bank FOROFFICIALUSEONLY ReportNo. 35568-TZ THE UNITEDREPUBLICOFTANZANIA NATIONAL STRATEGYFOR GROWTHAND REDUCTIONOF POVERTY AND JOINT IDA-IMFSTAFFADVISORY NOTE March24,2006 This document has a restricted distribution and may be used by recipients only in the performance o f their official duties. Its contents may not otherwise be disclosed without World Bank authorization. INTERNATIONALDEVELOPMENT ASSOCIATIONAND INTERNATIONALMONETARYFUND THEUNITEDREPUBLIC OFTANZANIA National Strategy for Growth and Reductionof Poverty (NSGRP -MKUKUTA) Joint Staff Advisory Note Prepared bythe Staffs o fthe IMFand IDA Approved by DavidNellor andMichael T. Hadjimichael (IMF) andGobind T. Nankani (IDA) March 24,2006 I.OVERVIEW 1. The Government of the UnitedRepublic of Tanzania completed its National Strategy for Growth and Reduction of Poverty (NSGRP, commonly referred to by its Kiswahili acronym MKUKUTA) inJune 2005. This document serves as Tanzania's second Poverty Reduction Strategy Paper (PRSP) covering a period o f five years and replaces Tanzania's PRSP 2000/01-02/03. Building on its predecessor and a review process based on analytical work and consultations with stakeholders and civil society, the MKUKUTAi s broader, more inclusive and outcome-based. 2. The revision of the first PRSP was based on a one-year consultation process led by the government as well as by other stakeholders' involving the general public. Consultations were broad based, within the executive, at the sub-national level, with Members of Parliament, and with other stakeholders. Participatory methodologies vaned and included the use o f telephone, television and radio programs, a website, workshops, group discussions, a questionnaire, annual Poverty Policy Week events, round table meetings, analytical studies and reports, and public meetings. A draft strategy based on first-round consultations was sent to lead-stakeholders for comments and published on the internet. The MKUKUTAdescribes in Chapter I11the consultation process as well as issues that arose from the participatory process. 3. The MKUKUTA emphasizes accelerating private-sector led growth by building a competitive economy supported by efficient government. Attention i s focused on actions to stimulate the private sector response, including addressing Other stakeholders who ledconsultations were the Association of Local Authorities of Tanzania (ALAT) and civil society organizations, which covered 553,549 participants. infrastructure and human resource capacity constraints, strengthening the business environment, and encouraging export diversification. The strategy identifies three outcome clusters: (i) growth and reduction of income poverty; (ii) improvement of quality o f life and social well-being; and (iii) good governance and accountability. The MKUKUTA adopts an outcome-based approach in contrast to the priority sector spending approach under the first PRSP. The "outcomes-approach" stresses inter-sector linkages and synergies and encourages cross-sector collaboration. It also emphasizes the need to institutionalizeparticipation andbetter mainstreaming cross-cutting issues. 4. This Joint Staff Advisory Note (JSAN) provides staffs' analysis and advice on key priorities for strengthening the MKUKUTA and for ensuring effective implementation. This JSAN comes at a time when the newly elected Government of Tanzania is in the process o f re-organizing the administration, o f clarifying its priorities, ando f finalizing MDA strategic plansandbudgets. It also comes at a time where a severe drought, an energy crisis and imminent exposure to avian influenza require considerable attention and resources to mitigate their impact on human welfare and economic performance. The staffs realize that this is likely to have an impact on the weight that can be given to some o f the issues raised in this document and that Government needs time andspaceto consolidate itself andto addressthese various emergencies. 11. POVERTYDIAGNOSIS 5. MKUKUTA presents a careful poverty diagnosis building on available evidence from the Household Budget Survey, Labour Force Survey and the Participatory Poverty Analysis. The staffs subscribe to MKUKUTA's view that high income growth embedded inanenvironment o f good governance is needed to sustainably reduce income poverty and to improve service delivery. As Tanzania is characterized by low incomes and low income inequality, broadly shared growth will have to be the main engine for poverty alleviation. 6. The staffs welcome that MKUKUTA objectives are consistent with the MDG targets and that Tanzania aims to achieve them by 2010. Tanzania has (almost) achieved the MDG for universal primary education already and significant progress has been made in reducing income poverty, malnutrition, child mortality and gender inequality inprimary education. Despite this progress it may be more difficult to achieve all MDG targets by 2010 or even by 2015. Significant challenges remain in achieving environmental sustainability andinachieving healthtargets including the targets for child and maternal mortality and for combating diseases like HIV/AIDS and malaria. High economic growth and a commitment to improve public service delivery remain imperative to keep Tanzania on a path towards achieving the MDGtargets. MKUKUTA strikes a careful balance between these objectives. The staffs concur with government that this balance needs to be maintained if Tanzania i s to achieve and sustain the MDG objectives inthe future. - 2 - 7. The staffs share government's concerns about rural-urban and inter-and intra regional disparities in income poverty and service delivery. Whereas urban growth will benefit those living in rural areas via migration, transfers, wage effects and the demand for rural products, rural-urban inequalities will need to be addressed consciously. Poverty incidence in Dar es Salaam, for instance, is a third o f that in Dodoma and Singida. The recently released Poverty and Human Development Report 2005 and the 2002 Population and Housing Census have highlighted the existence of even greater inequalities in poverty and service delivery at district level. For instance, under 5 child mortality varies from a low o f 58 per 1000 in Arusha to more than four times that in Mbeya. Such divergence i s found in many areas including in HIV prevalence, vaccination coverage, malnutrition, access to clean water, primary school enrollment and studenuteacher ratios. To address these inequalities the decentralization process needs to be hlly supported andbudget allocation formulae and staffing policies may have to be reviewed. Improvements in routine data collection are needed to track progress inaddressing these inequalities. 8. Policies to support agricultural growth require special priority. Popular sentiment supported by recent participatory analyses suggests little progress in rural poverty reduction. Poverty projections by the staffs using sectoral GDP growth estimates show that if Tanzania is able to sustain high levels o f agriculture sector growth, this is likely to lead to a significant reduction in overall poverty. As agriculture is the sector with the lowest growth rates and as most poor people depend on subsistence agriculture for their livelihood, increasing agricultural labor productivity through commercialization and value addition is not only key for rural poverty reduction it will also act as catalyst for the development o f the (informal) rural non-farm sector. Improving agricultural productivity requires making progress with implementing the agricultural sector strategy, promoting innovation, value addition and crop and region specific approaches and ensuring greater market access andremoving obstacles to doingbusiness. 9. Clear lead agencies and associated mandates are needed to address cross cutting issues. MKUKUTA recognizes various cross cutting issues including HIV/AIDS, environment and gender relations. Others include orphans, malnutrition or social protection. The staffs support MKUKUTA's vision o f cross-sectoral coordination within the clusters but also consider that without an explicit identification o f those responsible for results in these cross cutting issues and an explicit mandate to act progress may be limited. 10. Demography merits greater attention. MKUKUTA does not explicitly discuss demography. Yet duringthe MKUKUTA period Tanzania's population will increase by 4 to 5 million people. Such a highpopulation increase dilutes the impact GDP growth has on household welfare, poses challenges for youth employment and creates tension between resource requirements needed for private consumption and those available for private investments. This tension i s exacerbated by the fact that almost half (48 percent) of the population is now in the dependent age groups with the young requiring primary and secondary education and the old seeking health care. Therefore, considerable additional public investments are required to maintain the status quo in public service delivery, making improvements in access or quality a whole different challenge. A - 3 - longer-term vision on demography and its impact on economic growth, youth employment, household welfare and the government's ability to deliver quality social services is needed. 111. PRIORITYACTIONS AND CRITICAL AREAS FORSUCCESS A. MACROECONOMICFRAMEWORK 11. The macroeconomic framework underlying the MKUKUTA is consistent with its poverty reduction objectives. The staffs welcome the Government's commitment under the MKUKUTA to maintain sound economic and financial policies consistent with the objective for GDP growth o f 6 to 8 percent per annum and continued implementation of the supporting structural andinstitutional reform measures. To achieve further acceleration o f economic growth while maintaining low inflation and macroeconomic stability, the MKUKUTA correctly emphasizes the need to address key impediments to growth within a consistent and stable macroeconomic framework through improved mobilization o f public resources and their efficient use, effective management of liquiditypressures emanating from highaid inflows, sustained financial sector reform, and promotion o f an environment conducive to private sector economic activity. Going forward, it will be important to further develop strategies identified inthe MKUKUTA in order to translate the stated policy objectives into actionable plans. 12. The MKUKUTA recognizes that achieving the authorities' ambitious targets will require significant amounts of foreign assistance over the medium term as well as a careful management of aid inflows. The staffs believe it will be important that the authorities, in consultation with development partners, prepare a medium-term quantitative framework underlyingthe MKUKUTA based on costing andprioritization of the intervention strategies needed to reach the MKUKUTA objectives and resolve the outstanding issues related to the estimation o f the financing requirement. Having such framework in place would also facilitate the authorities' requests for hture or scaled-up donor assistance. Inthis context, it is essential that the authorities prepare for a variety o f future scenarios depending on the cope o f resources -both donor support, anddomestic revenue -as well as a proper assessmento f the economy's absorptive capacity. 13. Achieving the MKUKUTA's objectives will also require increased devolution of spending to lower levels of government. Such devolution should be accompanied by capacity building at the local government level, including through fully integrating the LGAs into the budget preparation and execution process and strengthening the efforts to obtain detailed monthly expenditure reports before releasing further funds to LGAs. - 4 - B. INTEGRATIONOFMKUKUTAINNATIONAL SYSTEMS 14. Developmentand implementationof the MKUKUTA has taken place in the contextof a significantoverhaulof nationalplanningand budgetingsystems aiming at comprehensiveresultsbasedmanagement ,increaseddomestic accountabilityand greater alignment and harmonizationof external financing. Inthe staffs' view, the Government has taken very seriously the task o f building national planning and budgeting institutions which fully integrate MKUKUTA, recognizing the need for ownership not only of the policy content but also o f the instruments andprocesses for its effective implementation. In parallel with developments in the planning and budget system, the Government has pursued an ambitious program for integration o f external financing within national systems, while also attempting to carry through both reforms in a form which builds domestic accountability. 15. Extensiveconsultationin development of the MKUKUTA has been part of a broader effort in recent years to encourage greater participation in national planning and budget systems. Participation inthe budget process has been developed through the annual public expenditure review, which has included particular focus on linkage between MKUKUTA and the budget. Sector reviews with broad stakeholder participation have been a means of making implementation more accountable, and the Government is in process of extending the use of such reviews across the principal MKUKUTApolicy areas. The staffs consider that Government's sustainedefforts inthis area could be consolidated by developing a more explicit national strategy for enhancing domestic accountability, including clearer ground rules on representation inparticipatory processes, clarity on the relation between participatory processes and more formal accountability systems such as Parliamentary process, more explicit design of the role o f sector reviews within national systems, and strategies for enhancing accountability at local level. The broader program o f enhancing domestic accountability will also need to include more effective use o f client service charters, addressing the issues identified in the report on State o f the Public Service, and development o f the successor program to the National Anti Corruption Strategy andAction Plan(NACSAP). 16. Withinthe Tanzanian system, the MKUKUTA provides a highlevel statement of priority public actions, while more detailed activities linked to specific resource allocations are developed inlower level planninginstruments, insector plans and agency level strategic plans. Linkage through these levels and planning to specific resource allocations is achieved through the Strategic Budget Allocation System (SBAS), which requires each agency to link proposed allocations back to specific MKUKUTA objectives, based on agency level strategic plans. Interministerial task forces have reviewedinitial implementationo f the new system to ensure effective coordination across government. Revisions inthe system have been captured ina new Strategic Planningand Budgeting Manual. The Government is currently developing the system further to ensure that the national monitoring framework is fully aligned with SBAS and reflected in the Medium term expenditure framework, which provides the principal instrument for translating the MKUKUTA into specific prioritized operations. - 5 - 17. Inpractice, the Government has chosen to rely on development of instruments within the existing national planning and budgeting system in order to implement a prioritized and costed translation of the MKUKUTA, rather than using a MKUKUTA specific implementation framework and costing exercises as the main instruments for implementation. A MKUKUTA implementation framework i s under preparation, but is currently envisaged as a consistency check for the coordination o f sector plans rather than a prerequisite for MKUKUTA implementation. This approach emerged pragmatically as the outcome of the authorities' efforts to avoid parallel planning processes and ensure that MKUKUTA is integrated within a comprehensive national planning and budgeting system. 18. The staffs appreciate the challenge and risks which the government has taken on in attempting such comprehensive redesign of nationalplanningsystems. The triple challenge of developing results based planning and budgeting systems, harmonization o f external financing and enhancement in domestic accountability represent an ambitious and highly demanding agenda of institutional change, especially ina context where design must take account ofsevere domestic capacity constraints. The program has required considerable experimentation and pragmatic innovation and an intensive program o f institutional reform. The work is incomplete, there are important design choices still to be made, and it is likely to take several more years to develop systems which provide an integrated and mutually supportive solution to all three objectives. The staffs strongly support the Government's consistent efforts to avoid parallel systems for MKUKUTA implementation andits systematic attempt to implement its policies through the development o f integrated national systems. The staffs also consider that the distinctive choices made in Tanzania so far are likely to offer useful lessons for PRSP countries facing similar challenges. 19. Nevertheless, there are challenges. Using the existing planning system in implementationmakes sense, but the quality of existing cluster and sector level plans for MKUKUTA is quite variable. Particularly critical is the lack o f effective translation of the broad commitment to growth in the MKUKUTA into a coordinated strategy which could ensure consistency across sector plans and drive a prioritized public investment strategy. The MKUKUTA's operational targets of improving infrastructure and enhancing the enabling environment for private sector-led growth will require increasedpublic spendingon physicalinfrastructure,includingroads andtransport gateways,andthe provisionof electricpower andwater. Itwill be important that such infrastructure spending be done within the fiscal framework and in the context of a consistent macroeconomic and regulatory framework and subjected to solid costing and prioritization and strong coordination among ministries and development partners. The staffs view this as one of the weakest aspects o f MKUKUTA implementation at this stage. 20. More work is needed on streamlining the classification o f activities inthe MTEF and the cross link to MKUKUTA categories, to ensure maximum transparency. Finally, while the staff recognize the rationale for costing the MKUKUTA through the medium term expenditure planning process, it will be important to complete the costing of activities which lie beyond the present MTEFhorizon. - 6 - 21. The Government has pursued an ambitious approach towards reorienting external financing to maximize alignment with the MKUKUTA through development of a Joint Assistance Strategy. In parallel, general budget support has been redesigned to clarify the linkage with MKUKUTA implementation, based on a Performance Assessment Framework aligned with MKUKUTA cluster objectives. This has entailed requiring broader sector coverage and the introduction o f additional review processes to ensure enhancedmonitoring o f sector results. However, the synergy between the JAS and the parallel reforms in the planning and budgeting system has not yet been maximized- inparticular the potential o f the Budget GuidelinesMTEF preparation as an instrument for ensuring consistency between external financing and the MKUKUTA could be developed much further. IV. POVERTYMONITORINGAND EVALUATION 22. Tanzania has a relatively well functioning Poverty Monitoring System (PMS). Under the first PRS I,the PMS produced two analytical Poverty and Human Development Reports (a third was released inFebruary this year), organized the publicly accessible Policy Poverty Week, updated PRS indicators and produced APRs. The PMS is under revision and will be tailored to MKUKUTA needs. One of the objectives is to integrate MKUKUTA monitoring closer with existing monitoring, planning and budgeting processes. The staffs support this effort and appreciate the ongoing explorations to achieve this objective. One way to do so would be to reserve MKUKUTA monitoring and the associated MKUKUTA indicators exclusively for high level impact and outcome measures and to refer indicators reflecting sector outputs, processes and inputs to sector strategies. This would align MKUKUTA monitoring with the view that MKUKUTA implementation and costing are operationalized through existing sector strategies andthe budget process. 23. High level MKUKUTA impact and outcome indicators will have to be complementedwith sector level indicators of inputs, processes, outputs and sector outcomes. A link between sector outcomes and MKUKUTA outcomes will need to be established.Without such link MKUKUTA outcomes may track results for which no one in particular can be held responsible. In its presence planning and budgeting decisions can be informed by sector outcomes as well as their contribution to MKUKUTA's goals and objectives. Both would act as incentive to make greater use of data inpolicy planningand reporting. Under SBAS requests for funding already have to be made with reference to MKUKUTA goals and outcomes. The challenge is now to assure feedback from MKUKUTA and sector outcomes to sector planningand budgeting andto overallbudget allocations. 24. Results management needs an institutional home responsible for strengthening monitoring, for tracking results over time and for linking them to reporting, planning and budgetingprocessesas incorporated inthe budget guidelines, MTEF, the PEFAR process, sector reviews as well as the needs o f monitoring the JAST and PRBS. A working group with members from MoF, PO-PSM, PO-PP, PO-RALG, - 7 - VPO and the PMO was established last year in an effort to harmonize MKUKUTA, strategic planning and MTEF. To date the working group has focused on planning and budgeting leaving monitoring, evaluation andreporting for the future. With the process of identifylng MKUKUTA indicators ongoing, the staffs encourage the working group to also address the latter issue. 25. To facilitate an outcome basedapproach improved data production is needed for monitoring as well as program evaluation. Problems with routine data are well known and discussed inthe MKUKUTA document. Less well known are limitations o f the existing household survey program. MKUKUTA's poverty and growth diagnosis was hindered by the absence o f a recent HouseholdBudget Survey (the last was carried out in 2000/1). Without a new HBS it remains hardto assess whether poverty inrural areas has declined or to improve the reliability o f GDP estimates. The staffs therefore support proposals for higher frequency data collection such as an annual cycle o f household budgethcome and expenditure surveys. The staffs also support greater attention to program evaluation which would allow assessing progress in service delivery and assessing the impact and distributional consequences o f programs like TASAF, fertilizer subsidies, the Secondary Education Development Program, the Rural Water Program and major infrastructural investments. 26. The staffs consider the initiative to develop a Tanzania Statistical Master Plan (TSMP) comprising national and sector strategic statistical plans and costed implementation plans an important step towards resolving Tanzania's data problems. Once developed the TSMP should enhance national ownership in statistics, rebalance the attention paid to social, economic and financial statistics, improve data access and availability, rationalize financing arrangements and improve the effectiveness of the data production system. To be fully effective, the TSMP will need to include an appraisal of the existing statistical legislation, consider the formation o f a statistical cadre and review the institutional structure and staff incentives o f the national statistical bureaus. To be successful the TSMP will require highlevel support from government and full commitment fromNBS andOCGS management. V. CONCLUSIONSAND ISSUESFORDISCUSSION 27. Bank and Fund staffs consider that the MKUKUTA provides a comprehensive framework for growth and poverty reduction in Tanzania. Development o f the MKUKUTA has built on experience with the previous PRS, giving greater attention to results, an important broadening o f the policy focus towards the preconditions for growth and an ambitious attempt to integrate the broad policy thrust within comprehensive national systems for implementationandmonitoring. 28. The staffs believe that the consistent effort to develop MKUKUTA implementationandmonitoring through integrated national systems is a major strength o f the program. The parallel efforts to develop results based planning systems, harmonization o f external financing and strengthened domestic accountability potentially - 8 - define an effective andmutually reinforcing approach to implementation. It i s also highly ambitious. K e y gaps exist in the planning framework, especially the lack o f clarity on growth strategy and the consequent weakness in coordination o f key infrastructure investments. The integration o fthe planningsystem needs to be expressed more clearly in the medium term expenditure plan, and the MTEF also needs to be used more aggressively as an instrument for achieving the ambitious harmonization goals for external financing inthe Joint Assistance Strategy. 29. Do Directors support the staff view that the MKUKUTA represents an effective strategy for growth andpoverty reduction inTanzania? Do Directors agree on the staffs recommendation that Government o f Tanzania (a) maintains its effort to implement MKUKUTA through development o f unified national systems (b) strengthens the strategy underpinning MKUKUTA's growth objectives, including more effective prioritization o f infrastructure investment and (c) strengthen its program for developing domestic accountability, including at local levels of government. - 9 - THE UNITEDREPUBLICOF TANZANIA NATIONAL STRATEGY FOR GROWTHAND REDUCTIONOF POVERTY (NSGRP) VICE PRESIDENT'S OFFICE June 2005 L i s t of abbreviations AIDS Acquired Immune Deficiency Syndrome ALAT Association of Local Authorities of Tanzania CBO Community BasedOrganization COBET ComplementaryBasic EducationinTanzania cso Civil SocietyOrganisations (this includesNGOs, CBOs and FBOs) DHS Demographic andHealth Survey DSA Dissemination, SensitisationandAdvocacy FBO FaithBasedOrganization GDP GrossDomesticProduct H B S HouseholdBudgetSurvey HIPC Highly IndebtedPoor Countries HIV HumanImmuno-deficiencyVirus ICT Information and CommunicationTechnologies ICBAE IntegratedCommunity-basedAdult Education ILFS IntegratedLabour Force Survey IMCI IntegratedManagement of Childhood Illness IF IntegratedFrameworkfor Trade Development JITAP Joint IntegratedTechnicalAssistanceProgramme LGA LocalGovernmentAuthority LGCDG LocalGovernmentCapitalDevelopmentGrants LGRP Local GovernmentReform Programme MAFS MinistryofAgriculture andFoodSecurity MFAIC MinistryofForeignAffairs andInternationalCooperation MDNS Ministry ofDefence andNational Service MCDGC MinistryofCommunityDevelopment,GenderandChildren MCM Ministry ofCooperatives andMarketing MCT Ministry ofCommunicationsandTransport MDA Ministry,Department,Agency MEM Ministry ofEnergyandMinerals MHA MinistryofHomeAffairs MIT MinistryofIndustriesandTrade MJCA Ministry ofJusticeandConstitutionalAffairs MLHS Ministry ofLandsandHumanSettlement M L Y D S MinistryofLabour,Youth DevelopmentandSports MNRT MinistryofNaturalResourcesandTourism MOEC MinistryofEducationandCulture MOF Ministry of Finance MOH MinistryofHealth MOW MinistryofWorks MSTHE Ministryof Science, Technology andHigherEducation MTEF MediumTerm ExpenditureFramework MWLD MinistryofWater andLivestock Development NACSAP National Anti-Corruption Strategy andAction Plan N B S National Bureauof Statistics NDC National DevelopmentCorporation N D S National Debt Strategy NEMC National Environment Management Council NGO Non-GovernmentOrganisation NIP National Institute ofProductivity NPES National PovertyEradication Strategy NSGRP National Strategy for Growth and Reductionof Poverty PER PublicExpenditureReview PFM ParticipatoryForestryManagement PHAST Participatory Hygieneand SanitationTransformation iii PHDR Poverty andHumanDevelopment Report PMMP Poverty MonitoringMaster Plan PMO Prime Minister's OEce PMS Poverty Monitoring System PO-PP President's Office-Planning and Privatisation PO-PSM President's Office-Public Service Management PO-RALG President's Office-RegionalAdministration and Local Government PO-SH President's Office-State House PPA Participatory Poverty Assessment PRBS Poverty Reduction Budget Support PRS Poverty Reduction Strategy PRSC Poverty Reduction Support Credit PRSP Poverty Reduction StrategyPaper PSRC ParastatalSector Reform Commission SDI/DCs Spatial Development Initiatives/ Development Corridors SMES Small andMediumEnterprises SEDP SecondaryEducation Development Programme SIDO Small Industries Development Organisation SBAS Strategic BudgetAllocation System TACAA Tanzania Civil AviationAuthority TACAIDS Tanzania Commission for AIDS TANROADS Tanzania RoadsAgency TAS Tanzania Assistance Strategy TATEDO Tanzania Traditional Energy Development and Environment Organization TBS Tanzania Bureau o f Standards TDTC Technology Development and Transfer Centre TFNC Tanzania FoodandNutrition Centre THA Tanzania Harbours Authority TIC Tanzania Investment Centre TIP Trafficking inPersons TMTP Tanzania Mini-Tiger Plan 2020 TRA Tanzania RevenueAuthority TRC Tanzania Railways Corporation TSED Tanzania Socio-Economic Database TTCL Tanzania Telephone Company Limited TUCTA Trade Union Congress of Tanzania VETA Vocational EducationTraining Authority VPO Vice President's Office Table of contents CHAPTER I:Introduction...................................................................................................................... BACKGROUND......................................................................................................... 1 1.1 1 1.2 Context o fthe strategy...................................................................................................... 1 CHAPTER 11:POVERTY STATUS AND CHALLENGES ...................................................... 1.3 Outline ............................................................................................................................. 3 2.1 Introduction.............................................................................................................. 2.2 Income Poverty ........................................................................................................ 2.2.1 Geographic disparities ...................................................................................... 2.2.2 5 7 8 Non-income poverty....................................................................................................... Employment status ........................................................................................................... Infrastructure and science andtechnology ................................................................. Urbanpoverty, formal andinformal sectors .............................................................. Perspective o f agriculture andother productive andservice sectors ........................... 2.2.3 2.2.4 2.3 9 2.4 11 2.4.1 Health services........................................................................................... Education and illiteracy .............................................................................. 2.4.2 2.4.3 12 H N andAIDS ........................................................ Survival andnutrition ............................................................................................. 2.4.4 ......................................... 13 2.4.5 Vulnerability .................................................................................................................. Water and environmental health ............................................................................. 13 2.5 14 2.6 CHAPTER In:CONSULTATION PROCESS AND ISSUES .................................... Cross-cutting issues ................................................................................... 3.1 Introduction............................................................................................... 3.2 Cumulative experience inparticipatory approaches......................................................... 17 3.3 19 Issuesfrom nationwide stakeholders' consultations .................. Overview ofthe process ................................................................................................. 3.4 ................................ 20 3.5 Issues from internal consultations ....................................................................... 3.6 22 CHAPTER IV: FRAMEWORK OF THE STRATEGY ................................................................... Challenges ahead............................................................................................................ 23 4.1 Introduction.................................................................................................................... 23 4.2 Principles of the strategy................................................................................................. 23 4.2.1 National ownership ......................................................................... 4.2.2 Political commitment ...................................................................... 4.2.3 Commitment to macroeconomic and structural reforms .......................................... 24 4.2.4 Local partnerships ................................................ Sector strategies, linkages and collaboration ........................................................... 25 4.2.5 ........................................ 25 4.2.6 Harmonised assistance .................................................................... 4.2.7 Equity............................................................................................. 4.2.8 Sustainablehumandevelopment ............................................................................. 26 4.2.9 Macro-micro linkages.................................... ..................... 27 4.2.10 4.3 Major clusters o f poverty reduction outcomes ................. Mainstreamingcross-cutting issues ........................................................................ ................ ..27 27 4.3.1 Growth andreduction o f income poverty ............. ....................................... 28 4.3.2 Governance and accountability....................................................................... Quality of life and social well being ....................................................................... 31 4.3.3 4.4 Prioritisation and sequencing .......................................................................................... 32 4.5 CHAPTER V: THE STRATEGY .................................................................................................... Major cluster outcomes and defiiitions ........................................................................... 33 34 5.1 Introduction.................................................................................................................... 34 5.2 Policy environment ......................................................................................................... 34 5.3 Cluster goals, targets and strategies ................................................................................. 35 5.3.1 Cluster I: 36 41 Cluster 111:Governance andAccountability ............................................................ Cluster 11:Improvement o f quality of life and social well-being .............................. Growth of the economy andreduction inincome poverty ........................ 5.3.2 5.3.3 49 V CHAPTER VI: IMPLEMENTATIONARRANGEMENT ......................................................... 6.1 Institutions...................................................................................................................... Introduction.................................................................................................. 6.2 55 6.3 Roles andresponsibilities ......................................................................................... 6.3.1 Non-government actors .......................................................................................... MDAs andLGAs ............................................................................................. 6.3.2 57 6.3.3 58 58 PMS CommunicationStrategy............................................................................... Harmonisation and rationalisation ofnational policy processes ....................................... Development Partners ............................................................................................ 6.4 6.5 6.6 Management and organizational issues ....... 6.7 Mainstreaming cross-cutting issues ................................................................................. 60 6.8 Capacity development needs.................................................................................. 6.8.1 Training requirements ................................................................................... 6.8.2 61 Technical assistance ............................................................................................... Systems development ............................................................................................. 6.8.3 61 CHAPTER VII: MONITORING AND EVALUATION OF THE STRATEGY ............................... 62 7.1 Introduction.................................................................................................................... 62 7.2 62 Objectives ofthe Poverty Monitoring System ................................................................. Status of the Poverty Monitoring System: challenges and lessonslearnt .......................... 7.3 63 7.4 Strategy for monitoring and evaluation ........................................................................... 64 7.4.1 64 65 Evaluation.............................................................................................................. Monitoring............................................................................................................. Institutional arrangements ...................................................................................... 7.4.2 7.4.3 65 7.4.4 66 Implementationmechanisms........................................................................................... Linkages to other monitoring and evaluation systems ............................................. 7.5 66 7.6 CHAPTER VIII: NSGRP FINANCING STRATEGY .................................. Monitoringtools and deliverables ................................................................................... 66 8.1 Introduction.................................................. 8.2 NSGRP financing framework ................................................. Review ofPRS(P) financing framework ................................. 8.3 8.3.1 Basic considerations....................................................... 8.3.2 NSGRP financing strategy.............................................................................................. Estimation of financing requirements .............................................. 8.4. 71 8.5 Risksrelatedto NSGRP FinancingFramework ............................................................... 72 vi ListofTables Table 2.1: Major categories of impoverishing factors from Tanzania PPA (2002103) ....................... 14 33 Table 6.1: Proposed Annual Process Cycle ...................................................................................... Table 4.1:Definitions of terms and examples .................................................................................. 59 Table 8.1: Budget Frame(2004/05 -2007/08) ................................................................................. 71 Figure 2.1: Trends andtargets o f income poverty reduction: headcount* (%) by 2010 ....................... ListofFigures Figure 4.1: Major clusters o f poverty reductionoutcomes................................................................ 5 27 Box 3.1:Weaknessesassociatedwith consultations for PRSV). 2000 .............................................. ListofBoxes 17 24 Box 5.1: Summary of cluster broad outcomes and goals .................................................................. Box 4.1: Some o fthe on-going structural andinstitutionalreforms .................................................. Box 5.2: Operational targets for ensuring sound macro-economic management ............................... 35 36 Box 5.4: Operational targets for improving food availability and accessibility ................................. Box 5.3: Operational targets for promoting sustainableandbroad-based growth .............................. 37 Box 5.5: Operational targets for reducing income poverty of menandwomen inrural areas ............39 39 Box 5.6: Operational targets for reducing income poverty o fmenandwomen inurban areas ...........40 Box 5.7: Operational targets for provision o freliable and affordable energy to consumers ...............41 Box 5.8: Operational Targets for ensuring equitable accessto quality primaryand secondary technical and vocational education ..................................................... education for boys and girls, universal literacy among women and men and expansion o f higher, ........................ 42 Box 5.9: Operational targets for improved survival, health andwell-being of all children and women and of especially vulnerable groups......................................................................................... 44 Box 5.10: Operational targets increasedaccessto clean. affordable and safe water, sanitation. decent shelter and a safe and sustainable environment andthereby, reduced vulnerability from environmental risk .................................................................................................................. 46 Box 5.11:Operational targets for adequate social protectionandrights of the vulnerable and needy groups with basic needs and services......................................................................... Box 5.12: Operational targets for effective systems to ensure universal access to quality an 49 Box 5.13: Cluster I11- Goals andtargets for governance and accountability ............... affordable public services........................................................................................................ CHAPTER I:BACKGROUND 1.1 Introduction The National Strategy for Growth and Reduction of Poverty (NSGRP) is a second national organizing framework for putting the focus on poverty reduction high on the country's development agenda. The NSGRP is informed by the aspirations of Tanzania's Development Vision (Vision 2025) for high and shared growth, highquality livelihood, peace, stability and unity, good governance, high quality education and international competitiveness. I t is committed to the MillenniumDevelopment Goals (MDGs), as internationally agreed targets for reducing poverty, hunger, diseases, illiteracy, environmental degradation and discrimination against women by 2015. It strives to widen the space for country ownership and effective participation of civil society, private sector development and fruitful local and external partnerships in development and commitment to regional and other international initiatives for social andeconomic development. The NSGRP builds on the Poverty Reduction Strategy Paper (PRS(P)) (2000/01-02/03), the PRS Review, the Medium Term Plan for Growth and Poverty Reduction and the Tanzania Mini-Tiger Plan 2020 (TMTP2020) that emphasize the growth momentum to fast-track the targets o f Vision 2025. The NSGRP is expected to last 5 years, Le. from 2005/06 to 200940. The end point o f the strategy coincides with the targets o f the National Poverty Eradication Strategy (NPES - 2010); it is two thirds of the way towards the MDGs (2015) and 15 years towards the targets of Vision 2025. The longer- term perspective (5 years) is consideredto be a better time frame than that o f three years. It allows for a more sustained effort o f resource mobilisation, implementation and evaluation o f the poverty reductionimpact. The strategy requires increased commitment and resources from domestic stakeholders and development partners inthe medium term. To increase the effectiveness of aid, Tanzania will pursue the principles laid down by the Tanzania Assistance Strategy (TAS) and Joint Assistance Strategy (JAS) for harmonisation alignment o f aid modalities. 1.2 Context of the strategy Therehas been improved economic performance at the macro-level inthe past six years. GDP growth rate consistently rose reaching 6.2 percent in2002. National Accounts estimates show that the growth rate dropped to 5.6 percent in 2003 due to drought that led to reduced food supplies and decreased power supply. In 2004 there has been a remarkable rise to record 6.7 per cent GDP growth rate. During the same period, inflation has been undercontrol. The annual inflation rate was 4.4 percent in 2003 compared to 6 percent in2000. The rate increased from 4.0 percent inJuly 2003 to 4.6 percent at the end of March 2004 due to drought and the sharp rise inoil prices. Foreign reserves reached 8.9 "months o f imports" compared to 6.3 "months o f imports" in 2000. At the end o f March 2004, the 2 reserves could cover imports of goods and services for about 8 months, which is above the target o f 6 months. The nominal exchange rate is market-determined with interventions limited to smoothing fluctuations. Increases in investments in infrastructure such as roads, telecommunications, mining and tourism have been recorded owing to increased inflows of foreign direct investments (FDI) and domestic revenue effort. Progress has been noted in the social services and public support services. Significant improvement inperformance is evident inareas such as primary education and road network. Overall, the current levels of delivery of services require M e r improvements in quantity and quality, which calls for sustainedinvestments inall sectors. These positive results reflect years o f enduring structural reforms in a stable social-political environment, underpinned by implementation o f the three years o f the PRS(P) which focused more on priority social sectors. A number o f challenges remain, including maintaining socio-political stability as the country strives for still higher economic growth, equity and improved quality o f life. The target GDP growth rate for the NSGRP is estimated to be 6-8 percent per annum over the period 2005-10. However, policies will be requiredto ensure that the pattern o f growth i s pro poor and benefits at the macro-level are translated into micro-level welfare outcomes. The PRS(P) was linked to debt relief under the enhanced High Indebted Poor Countries (HIPC) initiative. Debt relief and other resources were mainly channelled into "priority sectors" o f education, health, water, agriculture, rural roads, the judiciary and land. Spending on these areas was considered to have greater impact on poverty reduction. However, the resources were not sufficient, for the "priority sectors" to achieve the envisaged goals and targets over three years. To that effect, poverty and inequality levels are still high. Hence, it will requireall sectors and much more resourcesto bring about growth that is required to reach the targets o f poverty reduction outcomes in this strategy. For this reason, the NSGRP adopts the "outcomes-approach" which counts on the contribution of all sectors towards specific outcomes on growth, improved quality of life, good governance and equity. The approach encouragesinter-sector collaboration indevisingmore efficient ways o f achievingthese outcomes. The strategy pays greater attention to further stimulating domestic saving and private investment response, infrastructure development, humanresource development, increased investments inquality education, science and technology and use o f Information andCommunication Technologies (ICTs), a competitive knowledge-based economy and an efficient government. In addition, the strategy seeks to: Deepen ownership and inclusion in policy-making processes by recognising the need to institutionalise participation rather than a one-off event. Public debate on growth, equity and 3 governance issues will continue throughout the five years o f the strategy, along with arrangements for monitoring and evaluation; Pay greater attention to mainstreaming cross-cutting issues - HIV and AIDS, gender, environment, employment, governance, children, youth, elderly, disabled and settlements; and Address discriminatory laws, customs and practices that retard socio-economic development or negatively affect vulnerable social groups. ' There has been, in the meantime, improved understanding of the characteristics o f poverty such as levels and geographic pattern o f poverty and inequality and vulnerability. The emerging poverty issues and strategic options have been included. These have increased pressure for results and additional financing requirement. Embarkingon a "new approach" presents formidable challenges. Foremost of these, relate to setting criteria for prioritisation as part of implementation planning. Criteria that will guide prioritisation will be informed by, among others, the on-going commitments; quick win strategies with immediate and wide or broad coverage o f the poor (e.g. governance reforms, micro-credit, child nutrition, malaria and HIV andAIDS, water programmes, agricultural productivity, trade, communications and others); and those that demonstrategreater inter-dependencebetweedamong sectors. The policy packagesand indicative "groupings" for collaboration of sectors and other actors towar d specific outcomes and targets (see Annex) were arrived at through sector consultations. Activities and associatedbudgeting will be done as part o f the PER/MTEF and sector development review processesbased on the desired outcomes o f theNSGRP. Mobilisation of domestic resources will be accelerated through improvement in tax administration, enhanceddomestic savings and mobilisation o f community and private sector resources.Inaddition to seeking more foreign aid, the Government will ensure that the objectives of debt sustainability, and macroeconomic stability, are attained, and business-environment conducive to private sector development and foreign investments is inplace. The NSGRP emphasises accountability inthe use of both domestic and foreign resources. 1.3 Outline The NSGRP has eight chapters. Chapter I1 presents the status o f poverty and challenges ahead. Chapter 111 outlines the consultation process while Chapter IV spells out the fiamework of the strategy. Chapter V outlines the strategy in details. Implementation arrangements are discussed in Chapter VI and monitoring and evaluation in Chapter VII. Chapter VI11 presents the financing arrangementsfor the strategy. `Throughout the text, these include children, persons with disabilities, youths (unemployed, youths with unreliable income and female youths), and elderlypersons, people living with long illness and HIV and AIDS, women (widows, other women who are not able to supportthemselves). Drugaddicts and alcoholicscanalso be included. 4 CHAPTER 11:POVERTY STATUSAND CHALLENGES 2.1 Introduction This chapter retrospectively describes the status of poverty in Tanzania. It revisits income poverty, status o f employment, non-income poverty, vulnerability and cross-cutting issues. Explicit reference i s made to the rural-urban, regional and gender disparities, income inequalities and how income poverty overall is related to productive and economic service sectors. The complementarities of activities that reduce income and non-income poverty should be born in mind since, for instance, higherincomes imply ability ofhouseholds or anationto afford better social services. Aspects ofnon- income poverty are also presented, briefly showing the current situation, recent performance and desired outcome(s), direction o f change, or the challenge(s) aheadfor the NSGRP. 2.2 IncomePoverty The prevalence o f income poverty i s still high in Tanzania. According to the Household Budget Survey o f 2000/01 the proportion o f the population below the national food poverty line is 18.7 percent and that below the national basic needs poverty line is 35.7 percent. Comparing these results with those o f the Household Budget Survey of 1991/92 there has been a small decline in the proportion o f the population below the national poverty lines. Basic needs poverty decreased from 38.6 percent to 35.7 percent and food poverty from 21.6 percent to 18.7 percent. Poverty remains overwhelmingly inrural areas where about 87 percent o f the poor population live. It is highest among households who depend on agriculture. As the population is growing, the absolute number o f the poor raises concern. There is also a big disparity between urban and rural poverty for both food and basic needs poverty. The HBS 2000/01 results reveal growing income inequality as measured by a rise in the Gini-coefficient from 0.34 in 1991/92to 0.35 in2000/01. Figure 2.1 shows the NSGRP (2010) targets of reducing basic needs income and food poverty by 2010basing on the 2000/0 1 H B S estimates o f poverty incidence (or head count ratio) - the proportion of people living below the basic needs and the food poverty lines respectively. The targets are shown for rural and urban areas. As noted earlier, the NPES envisioned halving poverty by 2010 while MDG (1) targeted halving the proportion ofpeople livingbelow the national poverty line by 2015 with 1990 as base. The IDT/MDG Tanzania report (2001), for instance, estimates the 2015 target o f halving the proportion of people living below the national poverty line at 24.2 percent, being half o f 48.4 percent estimated from the 1991192HBS. Attaining the NSGRP target o f 24 percent (for basic needs) by 2010 is, therefore, ambitious. It will require a highand fast growth rate o f GDP, faster inrural than inurban 'Details of the poverty status can be found in recent analyses and reports, particularly the Poverty and Human Development Reports (2002, 2003), the Household Budget Survey 2000/02, the 2002/03 Tanzania Participatory Poveror Assessments (TzPPA), the 2002 Population and Housing Census main report, and the National Accounts (2002 and2003). 5 areas. The paths in Figure 2.1 are not "straight lines" due to growth-retarding factors such as HIV and AIDS, external market conditions and other domestic shocks. Figure 2.1: Trends and targets of income poverty reduction: headcount" (YO)by 2010 35 - 30 h - 25 - 27 r,25.8 * * 12.9 * I I .6.6 0 I 2000/01 NSGRPby 2000/01 NSGRPby 2010 ,1 I 1I 2010 I Rural Urban The modest decline in poverty is associated with the low annual average per capita real growth of only 0.6 percent during the 1990s. According to the National Accounts, growth was faster in manufacturing, construction, mining and quarrying, as well as inwholesale, retail and hotels, than in agriculture, However, though vital, most of these activities are urban-oriented. Henceforth, it is important to devise strategies that will enable these sectors to widen livelihood opportunities to the poor. To that effect, initiatives to support rural-oriented sectors will be emphasised to enpower the rural populations to increasetheir productive capabilities. 2.2.1 Geographic disparities Indicators of income poverty, human capabilities, survival and nutrition andthe HumanDevelopment Index (HDI), clearly shows growing rural-urban divide. There are also disparities across and within regions and districts in poverty status. Disparities are explained by the pattern in the distribution o f population, endowment in natural resources, climatic conditions, as well as in the distribution o f infrastructure, such as transport, schools and health facilities. The challenge i s to identify potentials in the poorer districts and regions for possible new investments and, through the budget allocations, improve provision o f infrastructure and social services inthe most disadvantaged areas. 2.2.2 Perspective of agriculture and other productive and service sectors Income poverty is closely related to growth in the productive and services sectors. Sector-based constraints precipitate income-poverty to the extent that they limit growth in the sector(s) and hence adversely affect the provision o f services that reduce non-income poverty. The challenge is how to make sectors, individually andcollectively, contribute more to poverty reduction. 6 Agriculture is the lead sector, accounting for 45 percent of GDP and about 60 percent of export earnings in the past three years. It is the source o f food and raw materials for industries. It also provides livelihoods to 82 percent o f the population. Recently, the sector has registered average annual growth rates o f 4.8 percent compared the average growth o f 3.1 percent during 1998 to 2000. The constraints to rural growth are largely related to those in the agricultural sector, broadly defined to include livestock and bee-keeping. The constraints include low productivity o f land, labour and production inputs; underdeveloped irrigation potential; limitedcapital and access to financial services; inadequate agricultural technical support services; poor rural infrastructure hindering effective rural- urban linkages; infestations and outbreaks of crop; animal pests and diseases; erosion o f natural resource base and environmental degradation. Others include gender relations, weak producers' organizations, poor coordination and limited technological capacity, depressed prices for primary commodities in global markets and insecurity with respect to property rights to land and its use as collateral for credit. Some nuisance taxes and levies have beenreduced but further steps are neededto reduce administrative fiats that often constrain marketingof agricultural output. Diversification into non-farm activities in rural areas has not been very helpful since these activities are small in scale, often taken up as coping strategies. Ingeneral, they are scattered and less amenable to organisation than inurbanareas. They face constraints that are similar to, though often worse, than those faced by SMEs inurban areas. Efforts are requiredto impart organisational and entrepreneurial skills to rural inhabitants to turn non-farm activities into viable sources o f livelihoods. The industrial sector grew by 8.6 percent in 2003 compared to 8 percent in 2002 (Economic Survey 2004); but the increase has not beenuniform across industrial establishments. The constraints include domestic supply-constraints, low technological capacity and intense competition from imports. Low backwardand forward linkages to agricultural production through agro-processing and value-addition to other primary products diminish the direct contribution of the sector to the reduction o f income poverty through creation of employment opportunities. The natural resource sectors contributed an average of about 5.7 percent of GDP, with fisheries showing the highest growth rate and substantial increases in export earnings. This does not include contributions of natural resources in providing energy and water as well as tourism. However, the presentuse o f natural resources is unsustainable (e.g. wanton tree-felling for charcoal production, bad farming methods that precipitate soil erosion, bad fishing methods). This precipitates poverty by eroding sources o f livelihoods and destroying environment. The challenge is to implement policy and enforce mechanism for sustainable exploitation o f the resources. There has not been adequate encouragement o f community participation inidentifying, planningand implementing steps to protect natural resourcesand environment or effective enforcement o f existing regulations and by-laws. 7 Mining is one of the fastest growing economic sectors in Tanzania. In 2003, it grew by 17 percent compared to 15 percent in 2002. This growth was propelled by heavy investments in mineral exploration and production. Artisanal and small-scale mining is increasingly becoming dynamic as it provides alternative economic opportunities to the rural communities. There is need to balance the livelihood requirement of artisanal miners with the economic objectives of the large-scale operators. Currently, backward and forward linkages are not strong enough for local value-addition and employment creation. Serious poverty concerns have been raised regarding the impacts on environment, tensions over landrights and labour relations inareas where mining activities are being undertaken. The challenge ahead is to ensure that investments benefit the wider economy by giving particular attention to disadvantagedregions. Tourism has developed rapidly since the mid-eighties. It is now an economically significant sector (12 percent GDP) that has grown at an averageof 6.7 percent over the last four years. Tanzania is ranked as the 5' top tourism income earner in Africa with annual receipts o f US$739 million (WTO, 2001).3 However, apart from the indirect impact of increased revenue to government, growth intourism has not led to direct reduction o f income poverty. Barriers that hinder communities to access and benefit fromnaturalresources(e.g. wildlife) need to be addressed. 2.2.3 Urban poverty, formal and informalsectors Urban poverty is evident in households with low and unreliable incomes, the unemployed, urban vulnerable groups and those inthe informal sector. Urban poverty has brought to the spotlight stress on urban public facilities and services. Urban poor live in congested, mainly un-surveyed areas, overcrowded residences and on streets (especially street children). These areas lack safe and reliable water and have poor waste management and lighting. Trade liberalisationhas prompted an influx into to urbanareas of a vast number of petty traders mainly youth aged20-29. The PHDR (2002) estimates 92 percent o f these have primary level education but no formal skills training. They lack capital and business premises. In many municipal areas the informal sector includes also men and women engagedinsandmining, quarryingand lime makingto support the growing construction industry. The rise in unplanned settlements and crime remain a challenge to urban planning. These strain the government capacity to provide adequate security and social services. Settlements development, land surveying, propagation of simple construction technologies for affordable housing, urban waste or environmental management and slum upgrading stand out as other key challenges. Regularisation and titlingof land is expected to facilitate residents' use of their landand property thereon (dead capital) as collateral with which they may obtain credit from banks and building societies for socio-economic investment. 'WorldTourism Organisation(2001), TourismMarket Trends,Africa, WTO, Madrid 8 The Small andMediumScale Enterprises (SMEs) are found inawide range ofproductive sectors and services including commercial activities, both formal and informal. They are carried out mainly by the private sector. Though most SMEs are found inurban areas, smaller-scale non-farm activities inrural areas require policy attention. They lack adequate finance and technical and managerial skills, infrastructure, market information and business contacts with external markets. Small businesses also face unfriendly and variable administrative impediments to business licensing. A credible, enabling policy environment is needed to enable the informal businesses to formalise their enterprises. This requires a change inmindset of the bureaucracy toward private sector development. In pursuing these concerns, special emphasis should be directed at addressing inequalities between rural and urbanareas (e.g. interms o f micro-credit institutions and access to other economic services) andgender imbalances(interms of accessto assets suchas landandcredit). 2.2.4 Infrastructure,science and technology In recognition of the need to improve the economic prospects of the productive sectors and social services, there is needto improve provision o fphysical infrastructure. Levels andquality o f transport, communications and energy services are generally poor and thus constraining growth. Rural areas lack road network and rural telecommunications, which inturn limit creation of new opportunities for markets, employment, and trade (domestic and foreign). The situation in rural areas also constrains actions towards social outcomes (e.g. delivery of and quick access to medical attention, schools, courts and markets) or trade). Rail, marine, air and road transport networks need to be expanded and maintained to international standards. Whereas the central government assumes the responsibility for such bulk investments in infrastructure, community-based initiatives need to be encouraged for smaller-scale labour-based road initiatives, to alleviate acute communication problems inrural areas. In addition to community-based initiatives, public-private partnership in the provision of infrastructure will be promoted. Efforts need to be stepped up in support of increased access and application o f Information and Communication Technologies (ICTs) as a critical "soft" infrastructure that acceleratesproductivity in the productive and service sectors, in government, business, teaching and SMEs development. Problems of access to ICTs include low literacy rates, low incomes and limited number o f service providers. The recent rise in the use o f ICTs including mobile telephone is still dominantly urban- oriented and needs to be directed to rural areas as well. Energy is critical for the attainment of the NSGRP and MDG targets. It is important for productive activities in industry, agriculture, transport and water supply and in the provision o f social services such as education and social services. However, effective energy supply falls short o f the required levels and quality (considering environmental effects o f certain sources, such as firewood). Unreliable and high cost power has also discouraged private investments. Inrural areas there are no alternative 9 energy sources that would reduce the burden on women and children and health hazards (e.g. from smoke) or the unsustainable exploitation of forestry resources. Constraints include lack of adequate investments inthe energy sector and of affordable alternative energy technologies. Higher education, Science and Technology are vital for innovative technological advances that increase returns and productivity inall sectors. The challenge i s to increase financing and expanding higher education and research,paying due attention to quality inorder to develop a labour force that is creative and globally competitive. In order to make a dent on poverty reduction through higher education, science and technology, it requires provision o f quality education from early childhood to higher levels and research activities that are tailored to the local environment. Linkages between higher education, S&T and R&D institutions and local communities in agriculture, industry, SMEs, trade and social development etc. have beenweak and needto be strengthened. 2.3 Employmentstatus An areaofpolicy concern is that ofhighrates ofunemployment andunderemployment. Measurement of unemployment in Tanzania is not a simple one. There are few economic opportunities in rural areas, reflected rather as underemployment than unemployment. Unemployment stands at 2.3 million (1.3 million women and 1.O million men) equivalent to 12.9 percent o f the labour force. Employment- to-population ratio (the proportion o f the target population that is employed) is 76 percent nationally. The ratio is lower inurbanareas (58 percent) thaninrural areas (81 percent). Unemployment i s worse among the youth, including the educatedyouth. Employment opportunities for people with disabilities are limited and special support for them inthe work place is frequently lacking. According to the Integrated Labour Force Survey (2001/02), the total labour force (age 15 years and above) has increased from 11.2 million in 1990/91 to 17.8 million in2001. This implies that 6 50,000 new people have been entering the labour market every year. Wage and salary employment has been expanding at much lower rate, estimated at 40,000 persons per annum. So the majority o f the new entrants into the labour market enter through self-employment largely in agriculture and the informal sector. The ILFS shows that the female contribution is higher at 50.6 percent but predominates in agriculture and petty trading, with significant disparities inother types o f employment, which tend to be male domains (e.g. construction and transport). The HBS also found that women with the same qualifications as menearned less andthis disparity increasedwith educational level. I t is encouraging to note that households have been diversifying their economic activities. Although income from agriculture is dominant, some 40 percent of rural household income originates from farm and off-farm employment. Opportunities for expanding and diversifying rural incomes from natural resources are not realised in part due to bureaucratic and legal hurdles. The proportion of rural households who derive incomes from more than three sources is 65 percent. The trend is already towards increasing employment in non-fann activities in the rural areas. However, this is happening 10 too slowly and without coordination and support. This trend can be reinforced through more deliberate policy interventions. On- and off-farm earnings need support from both a strong agricultural sector and other rural sectors including forestry, wildlife, fisheries andtourism. On average, labour productivity and incomes are lower in the rural areas than in urban areas. Those who are self-employed in agriculture and other sectors are not always productively engaged to hll capacity. According to the ILFS, the rate o f underemployment was 11.2 percent in2000/01, up from 4.3 percent in 1990/91.Under-employment occurs inall areas; but over the last decade, the situation has become worse inrural than inurbanareas. This has contributed to the unsustainable explo itation o f natural resources e.g. inmining, forestry and fishing. The under-employed people work on own or family fmslshumbas. Nevertheless, they are ready to work if more work was available during the off-season. Work undertakenby women to sustain households is not considered inthe calculation o f unemployment and under-employment. Efforts to enhance employment opportunities and training have to recognise the contributiono f and the burden currently borne disproportionately by women. Formal salary/wag e employment constitutes a small proportion o f total employment in Tanzania. Because o f the public sector reform the share of formal employment inthe public sector has declined. There has also been a drop in government and parastatal employment, from 5.2 to 2.5 per cent of adults. On the other hand, there has been a rise inemployment inprivate sector and self-employment, which are now the main activities of 40 percent o f adults in Dar es Salaam and 31 percent in other urbanareas. Labour participation rate o f the economically active population in 2000/01 was 68 percent in the urban areas. The national average is 80 percent. In rural areas, labour participation rates vary considerably from 77 percent in April-June to 88 percent in January-March (ILFS 2000/01). These variations reflect seasonality and indicate the employment potentials if existing opportunities are fully utilized and new ones are created. There is need for understanding the dynamics of the local labour market as one of the transmission mechanisms, for creating opportunities for people to participate in the growth process. Efforts to promote private sector development are in line with this endeavour of employment creation. In spite of international conventions and programmes, child labour, as distinguished from children's work inthe household, is prevalent and worst inrural areas. The Child Labour Survey 2000/01 found that children in labour were 1.2 million. The worst forms o f child labour are in four major sectorsiareas: commercial agriculture; mining and quarrying; domestic service, and commercial sex. A related problem is trafficking in persons (TIP). Trafficking is most often internal, girls being trafficked for domestic labour and forced prostitution. While some victims are trafficked outside the country, others are brought into the country. For the victims, mostly girls and women, the root cause is poverty. The perpetrators exploit the weak economic position of the victims, porous borders, weak 11 legal enforcement and corruption. Financial constraints reduce the capacity of authorities to prevent TIP and protect and rehabilitate the victims. Strategies to reduce poverty should address the core causes of TP, supported by effective monitoring and prosecution of TIP "rings". TIP across the borders is often related to trade in contraband, including drugs and arms, which contribute to increasedcrime. 2.4 Non-income poverty 2.4.1 Education and illiteracy Most indicators in education have registered improvement inthe three years of PRS(P) as a result of implementing the Primary Education Development Programme (PEDP). Gross Enrolment Rate reached 105.3 percent and 106.3 percent in 2003 and 2004 respectively, compared to only 77.6 percent in 1990. Net Enrolment Rate (NER) attained in 2003 and 2004 is 88.5 percent and 90.5 percent respectively, compared to 58.8 percent in 1990. However, the pace of transition to secondary schools is low, despite the growth of private secondary schools. There are also large gender disparities inenrolment at secondary andtertiary levels. The vulnerability of girls to cultural belief andcustoms, early pregnancies andsexual abuse remainchallengesto enrolment andcompletion of schooling. Illiteracy remains high. About 28.6 percent of Tanzanians cannot read and write in any language. There is more illiteracy among women (36 percent) than men (20.4 percent). The PRS target o f eliminating illiteracy by 2010remains challenging particularly for ruralwomen. 2.4.2 Health services The strategy aims at reducing infant mortality, child mortality, malaria related mortality and maternal mortality. Many poor people, children and women in particular, die without ever accessing a health fa~ility.~Equitable and sustained access to care, support and treatment are essential to improve the well-being and life expectancy o f people living with HIV and AIDS, but issues pertaining to finances, infrastructure, human, and logistical weaknessesneed to be resolved first, so as not to hrther weaken an already constrainedhealth system. Trends in health service outputs during the 1990s show a mixed picture. There have been some successes in immunization coverage o f children, in TB treatment and in the accessibility to contraceptive. There exists a huge burden o f disease across all age groups. Interventions are required to check the decline in the proportion o f births attended by trained medical personnel, the continued poor nutritional status of under fives, and the fact that almost 90 percent o f all child deaths are due to preventable causes - malaria, pneumonia, diarrhoea, malnutrition and complications o f low birth weight; andHIV andAIDS. Eightout of ten childrendie at home andsix ofthemwithout any contactwith formal healthservices. 12 The proportion o f births that were attended by trained personnel and those that took place in health facilitiesdeclined. At the same time, urban-rural disparities increased. This has implications on both infant and maternal mortality - both have not changed. Consequently, the poverty reduction targets and MDGs are far from being achieved. Contraceptive prevalence increased and child vaccination rates show a small net increase. There have been steady improvements in vaccination rates since 2000, with an impressive coverageof 90 percent by 2002, thus surpassingPRS targets. Improvements inTB treatment completion ratesare also encouraging.Ruralareas andthe poorremain disadvantaged both in terms of outcomes and service uptake. The availability o f drugs has increased, but some continuing deficiencies and particularly the cost of drugs still make them unavailable to some people at the time o f illness. Immunization levels have increased but there are still large disparities, which require a more targeted approach inthe delivery o f preventive and curative health services. It is thus important to ensure that health services are accessible to the poor population and the quality o f services is improved. Also important is the need to strengthen the routine data collection system to generate indicators for measuring health service delivery and keeping records and data usingICTs for easy processing and dissemination. Key obstacles in provision of and access to health services include long distances to health facilities, inadequate and unaffordable transport systems, poor quality o f care, weak exemption and waiver system to the sick who unable to access health care at a fee, shortage of skilled providers and poor governance and accountability mechanisms. 2.4.3 Survival and nutrition Survival indicators o f poverty are not encouraging. No substantial progress was made inthe reduction of infant and under-five mortality and maternal mortality. There are indications o f slight increases in recent years, probably related to HIV and AIDS pandemic. HIV and AIDS pandemic have a wider implication for other indicators such as life expectancy. It is also important to note that highrate o f infant and childmortality is due to continuinghighprevalence o fmalaria As for nutrition, Tanzania has identified four nutritional disorders as being of public health concern: (i)proteinenergymalnutrition(PEM)(ii) nutritional anaemia (iii) dine deficiency disorders (IDD) io and (iv) Vitamin A deficiency (VAD). Other nutritional disorders include obesity, chronic diet related non-communicable diseases, and deficiencies o f some vitamins and minerals. The challenges include: increasing food intake by raising feeding frequency and consumption of high energy dense foods, increasing consumption of hits and vegetables, which are rich in vitamin A and iron, combating diseases notably malaria and measles, diarrhoea, H I V and intestinal parasites. Other challenges include: addressing the unequal distribution o f resources and services, the inadequate household food security, inadequate caring capacity o f the vulnerable groups and inadequacies in 13 quality and quantity o f the provision o f basic services including health, education, shelter, water and sanitation. In addition, there is a needto address the social and cultural factors related to gender. Whereas considerable development has been made in the management and control o f nutrition problems, there has been much less progress with regard to improvement o f nutritional status o f children, especially the under-fives. With 44 percent o f children being moderate to severely stunted, chronic malnutrition remains a widespread problem, indicating problems on the general health status of children. There are also significant disparities in the levels o f under nutrition between rural and urban areas on one hand, and between children from poorer and richer households on the other. The children from rural households are more malnourished than their urban counterparts. Child's care arrangements are neededto ensure more frequent feeding o f young children. In light o f the recorded success o f LMCI strategies for reducing child mortality, it might be useful to roll out the I M C I throughout the country, including community-1MCI and reducing women's workload especially during pregnancy. Equally important is the promotion o f processing and utilization o f nutrient rich foods particularly inthe ruralareas. A good sound nutritional status is now more urgent and critical in the advent of increasedprevalenceofHIV andAIDS. 2.4.4 HIV and AlDS An increaseinHIV andAIDS prevalence,over the last decade hasfurther aggravatedthe health status by eroding the HDI and future prospects of Tanzanians. It has undermined the foundations for development and attainment of the Millennium Development Goals and national targets. It is important to build a deeper understanding o f the pandemic through awareness campaigns so as to contain further spread and minimize its impact. Indeed, prevention campaigns have succeeded in raising people's awareness, but this has not translated into required behavioural changes. Though there is increasing awareness about HIV and AIDS, minimizing the risk of tran smission requires that the poor statusofyoung menandwomen be addressedandelevated through making it easier for them to access useful advice and services on how best to protect themselves against HIV and AIDS. Prevention o f mother-to-child transmission o f HIV is also an important strategy for reducing infant and under-five mortality. 2.4.5 Water and environmentalhealth Focus has been on increasing access to clean and safe domestic water especially for the rural population, to reach 55 percent of the rural population by 2003. Improved rural water supply coverage has increasedto 53 percent inJune 2003 up from 49 percent in2000 and 50 percent in2002. About 47 percent o f rural households are still using unprotected sources o f drinking water. Long dist ances to sources of drinking water inrural area entail heavy workload on women and children. A majority o f ruralhouseholdshave latrines, but they lack proper hygienic use andmaintenance. 14 Urban water supply coverage increased from 68 percent in December 2000 to 73 percent in June 2002. However, increasing costs of domestic water is of growing concern for the very poor, especially inunplannedurban settlements.Poor sanitation is evident inurban areas, where around 90 percent of the households have to resort to on-site solutions. Flooding, due to inadequate drainage, exacerbates the problem even further. Sanitation facilities at public institutions are often inadequate and do not meet standards set by government. Coverage of sewerage services increasedfrom 10 percent in 2000 to 17 percent in 2003 in urban areas, but pollution control and solid waste management systems are not adequately developedto protect public health, well-being andthe environment. There i s a close link between water supply and waterborne diseases such as cholera, water-based diseases such as bilharzias, malaria and water-washed diseases such as scabies and trachoma in areas with poor sanitation facilities. One o f the challenges is to expand water and sanitation services inrural and urban areas. Other challenges are, to reduction o f the incidence o f diseases on the one hand, and education to the stakeholders on how to avoid situations that predisposethem to water -related /water- borne diseases on the other hand. Community-awareness campaigns and participation in water and sanitation programmes andregulations to enforce environmental andhealth safeguards inindustry and extractive activities such as mining, logging and fisheries will limit water and air pollution and related diseases. 2.5 Vulnerability A number o f qualitative surveys have beencarried out in recent years, covering income poverty, non- income poverty and vulnerability, Specifically the Participatory Poverty Assessments (PPA) and Policy and Service Satisfaction Survey (PSSS) provide insights on people's perceptions of poverty and effects of public policies and institutional changes and governance on their livelihoods, The Participatory Poverty Assessment (TzPPA) (2002/03), for instance, has brought up more qualitative information on various dimensions o f vulnerability and more understanding o f vulnerable social groups (footnote I), impoverishing forces andprotection andrisk management (Table 2.1). Forces that leads to impoverishment are grouped into six categories, namely economic, environmental, governance, socio-cultural, health and life cycle factors. Respondents frequently referred to wrong policies and effects on environment, bad governance andthe macro economy. Category Description Environment Weather extremes (e.g. flooding, drought), stresses from gradual degrading o f forest, soils, fisheries and pastures; health effects and loss o f confidence in future well-being jMacroeconomic National economic decisions such as privatisation, elimination of subsidies on I' conditions inputs, cost sharing in health, reduced spending on agricultural services, ~ i employment, rural livelihoods, costs and access to social services. i Coercion, extorti on, all forms o f corruption, unsatisfactory taxation (multiple taxation, coercive tax collection methods); political exclusion 15 1IIll-health Malnutrition, injury, diseases, KIV/AIDS, other physical and psychological ' disabilities tifecycle -linked Ill-health,risks and social marginalisation resultingfrom one's age, with the old, ~ conditions youths andchildrenbeingparticularly vulnerableto special problems Cultural beliefs and Impoverishment resulting from cultural norms / traditional belief, di minishing 1 jpractices I their freedomof choice and action - e.g. those discriminatingwomen andchildren 1 Source: adapted from United Republic of Tanzania, 2004, Vulnerability and Resilience to Povert?, 2002/03 Tanzania Participatory Poverty Assessment: Main Report Dar es Salaam The sentiments expressed in the recent PPA on policy changes, like public sector reforni, trade liberalisation, and privatisation correspond to those expressed in earlier PPAs, particularly the 1995 PPA and the rural survey by REPOA (1998). There are concerns about the pace, manner and circumstance in which privatisation and trade liberalisation has been carried out e.g. loss o fjobs, loss of markets or sales as a result of cheap imports, specific sector reform measures such as cost-sharing inhealth or education. The majority of people inrural areas also pointed to problems in agricultural marketing. But there are also others who see opportunities in trade liberalisation and other market reforms. Nevertheless, bureaucratic barriers still stand out as main impedimentsto entrepreneurship, particularly o f the SMEs. Licensing procedures, complicated tax system, corruption and harassmento f small businessesare emerging from the PPAs and, infact, from the consultation process, as issues that inhibitrealization ofthe benefits of marketand sector policy reforms. They also undermine efforts to, formalize the informal sector and those of attracting domestic and foreign investment. Bureaucracy and corruption, crime and absence of peace and tranquillity scare away large domestic and foreign investments. It is in this context, why governance and accountability form a key pillar of this strategy. The government will keep on explaining clearly to the public the effects of the on-going reforms and other policies. To the extent possible, inclusive or participatory policy processeswill be institutionalised to create space for the voices o f all people with aim to avoid distortions in policy intentions and implementation. 2.6 Cross-cuttingissues Cross-cutting issues relate to the factors that cut across sectors and social groups (often) negatively impacting on income and non-income poverty. Such factors include imbalances in gender relations, environmental issues and H I V and AIDS. Neglect of young people and children has implications for current and future development of children. Gender biases infavour ofmales, for instance, interms of land (property) ownership or girls' access to higher education add to the pains of poverty by reducing current and prospective earnings of the females. In this regard, eradicating these biases is a critical challenge. Environmental concerns arise not only in the productive sectors but also in the provision and utilisation of economic services (e.g. energy) and human settlements. Poor communities and households usually do not carry out "environmental impact assessments". As a result, poverty 16 increases as environment and natural resources get destroyed. Interventions are required to halt such trends over land and water-based resources. Likewise, HIV and AIDS erode productivity, and reduce the number and effectiveness manpower. They also increase dependence in addition to that posed by the natural population growth rate, the orphans, the elderly and retirees, people with disabilities and the unemployed. Bad governance costs productive time and resources (time lost in pursuing denied or delayedjustice) as shown, for instance, through the Participatory Poverty Assessments (PPAs). Although generally data on the cross-cutting issues are scanty, links to poverty are clear, they magnify causes or manifestations of poverty. To that effect, affected stakeholders and advocacy agents (for environment, mother and child, the elderly, and people living with disabilities, the youth) are becoming more assertive inthe quest for change in attitude and policy towards these issues so as to get them properly addressed inthe strategies to reduce income andnon-income poverty. 17 CHAPTER 111: CONSULTATIONPROCESSAND ISSUES 3.1 Introduction The consultation process for the PRS Review started during the Poverty Policy Week o f October 2003 (PPW 2003),and ended with the PPW of November 2004 (PPW 2004). The process sought to deepen participation in and ownership of the strategy by actors at different levels o f Government, the citizenry - poor and non-poor, the civil society, communities and development partners. Deepening participation and consensus building on the way forward has been necessary to ensure sustainability of and enhance confidence inthe strategy that can make a difference. The issues emerged during the consultation process; evidence on poverty, and inequality inthe country consolidated the focus o f the strategy on growth, equity, improved governance andsocial well -being. This chapter highlights the main issues that emerged from the consultation process and which influenced the design of the strategy. Lessons from the previous processes are also presented, to demonstrate that the consultations for the NSGRP reflect cumulative learning. The issues are presented at two levels o f consultations-internal (within government) and nationwide (all stakeholders') consultations. 3.2 Cumulative experience in participatory approaches Reflecting on the participatory experience from the preparations of PRS (P), the TAS and indeedthe NPES, the consultations for the NSGRP sought to make wider coverage of the actors and poverty issues. The three PRS Progress Reports also presented issues for consideration for the second generation PRS. That is the NSGRP. During the three years o f the PRS (P) key internal consultations between Government, Development Partners and CSOs continued through the PER review process and cross-sectoral meetings. Subsequently, the government engaged stakeholders inmapping out the one-year long PRS review process, particularly in developing and agreeing on the PRS review guide, identiEying different levels o f stakeholders for broader consultations at sub-national levels and modalities and timeframe for the consultations. The guide spelled out the objectives, principles and focus of the review. The PRS Review aimed at improving a number o f specific weaknesses (see, for instance, Box 3.1) to make the consultations for the NSGRP more elaborate and inclusive than the previous cases o f national policy processes. Box 3.1: Weaknesses associatedwith consultations for PRS(P), 2000 18 Withinthe humanrights context andto ensuringmeaningful participation of the poor, the consultation process emphasised the need to: redress the structures of discrimination that generate and sustain poverty; expand civil and political rights; caution against retrogression and non-fulfilment of minimum core obligations; and strengthen institutions through which policy-makers can be held accountable for their actions. Hence, the consultation process sought to reflect the following attributes: Rights: ensuring atmosphere of freedom o f opinion, information, media, and association and campaigning; stakeholdersgiven an opportunity to participate fully in the entire PRS cycle. Structures: collecting views from the grass root level to the national level; implementation of the strategy through decentralisation structures, hence the central role o f local government. Legitimacy: Parliament to be fully involved in the consultations and approval o f the strategy; CSOs and other stakeholdersto organise and ensure that their concerns are included; Capacity: Need for increased capacity building for stakeholders at all levels so that they effectively contribute in the PRS cycle - i.e. imparting analytic capabilities and information for the stakeholders to identify needs and priorities, monitor and critically scrutinise performance o f those entrustedwith responsibilities to lead. 19 3.3 Overview of the process The consultations aimed to address weaknesses and to get the public informed. There were frank deliberations on the constraints to growth and about governance concerns. The outreach was wider andtime was longer thaninthe previous consultation processes. Nevertheless some stakeholders stili felt time was not sufficient. It was agreed that public debate needed to be formalised and continue over the entire period of the strategy. For the purposeof highlightingkey issues two levels o f consultations may be identified : (i) Nationwide consultations, mainly at sub-national level and involvement of the Members of Parliament. (ii) Internal consultations i.e. within government and between government and other stakeholders, including development partnersat the national level. Deliberations were carried out through the PER review meetings, cross-sector meetings and government-donor and government-civil society consultations andthe Poverty Policy Week. The first round of nationwide consultations was planned early inDecember 2003 with the meeting of the lead-stakeholders. It was followed by series of training of trainers' workshops for the facilitators who were then deployed in the country. The Association o f Local Authorities o f Tanzania (ALAT) played a significant lead role. District level consultations were conducted through workshops in which representatives from district council secretariat, faith based organizations and the aged, children, youth, women, personswith disabilities, persons livingwith HIV and AIDS, widows, orphans, CBOs, and CSOs, private sector, trade unions and informal sector were all invited and participated; village level consultations were undertaken through the Village Assembly. Consolidated views were forwarded to the regional headquarters and compiled to form the regional report. Communication was achieved through: workshops, seminars, radio programmes, TV broadcasts, fliers, interviews and music were applied. A special questionnaire was prepared and circulated throughout the country. About 500,000 questionnaires were distributed throughout the country and on the Internet. Members o f Parliament were involved through Parliamentary committees andthrough special seminars. Reports of the first-round consultations were consolidated into the first draft that was sent back to lead-stakeholders for scrutiny and comments. The draft was also widely circulated through Internet and its summary translated into Swahili. Inthe meantime infernal government consultations continued to show the importance ofthe shift from "priority sector approach" to the "outcome-oriented approach". Notably, the inter-ministerial 'The questionnaire asked for answers to three questio ns: (i) observed significant changes in relation to the poverty in the last 3 years; (ii) main bottlenecks to poverty reduction; and (iii), the recommendations on what factors must be incorporated in the future PRS. Apart from those received from within th e country, feedback was receivedfrom, among others, Tanzanians living inUnited State of America, the UnitedKingdom, Australia, andScandinaviancountries. 20 consultative workshop convened in August 2004 provided an opportunity for sector ministries to identify key areas of inter-sector linkages and establish modalities for fostering them in the implementation of poverty reduction. The meetingreviewedthe outcomes, operational strategies and interventions. Possible coordination mechanisms for implementation, monitoring and evaluation were also considered. The meeting served also as medium for consensus building and for furthering national ownership. Further deliberations on the second draft were made during the National Workshop in September 2004. The National Workshop brought together representatives of government and non-government actors including the CSOs. The workshop further ingrained the consensus around the strategy. Critical contributions from the different lead-stakeholders noted the need for the strategy (document) to be more inclusive, particularly in articulating more distinctly the special needs o f the vulnerable groups, such as people with disabilities in service delivery. Issues o f governance frequently came up and it became clear that implementation o f the strategy would critically depend on the quality o f governance. The comments were used to improve the draft that was then presented at the Poverty Policy Week inNovember 2004. The policy week climaxed the consultation process. It focused mainly on implementation arrangements, monitoring and financing as suggestedinthe draft. The main objective o f the PPW was to build further consensus, foster ownership, increase awareness and deepen understanding o f the NSGRP. Outputs of the Poverty Monitoring System in Tanzania were also made public. Further comments from the PPW on specific issues that still needed attention - in the second draft -were addressedto develop the final draft of the NGRP. 3.4 Issues from nationwide stakeholders' consultations The poverty concerns raised from these consultations were on average similar. They focused on the following: the constraints related to agriculture, markets, remoteness, education, health, and corruption, low or inadequate pay, lack o f jobs, unfavourable working conditions and relations, lack o f facilities or provisions for people living with disabilities, inadequate benefits for the retirees and vulnerable groups, land issues for pastoralists, HIV andAIDS. Concerns were also raised on the lack of credit facilities for agriculture and small businesses and lack of water. In rural areas the problem related to long distances and time to the nearest source o f safe water, schools, markets or police station. The managemento f water schemes that were set up with donor or government support andthe burden to women and children, who usually fetch water for household use, were M e r raised as areas for concern. Inurban areas, the problems related to irregular supplies and billing of water and stress on existing public services particularly in unplanned, congestedparts o f towns and cities where most ofthe poor live were raised. 21 Presentations o f the main causes and manifestations of poverty as well as governance concerns were similar to those raised in the Participatory Poverty Assessments. Indeed, the questionnaire that was distributed to all stakeholdersregardless of their education, region, employment status, gender or any other backgrounds came up with similar issues. However, ranking of the different concerns differed across regions, districts, location (proximity to road, natural resource such as water), age sets, social groups and gender o f the respondents. This poses a challenge for policy makers - that o f reducing these disparities while ensuring that growth is highandbroad-based. Analysis conducted by the National Bureau of statistics (NBS) on the questionnaires shows great anxiety on issues o f governance and corruption. These were stated as red tape, harassment by tax collectors and town / city officials, corruption, violent crime, un-enforceable contracts, weak courts, bad norms or customs, perverse external influence on values, "unfilled promises" made by their leaders or representatives, nepotism, and favouritism ingiving micro-credit services (apart from the urban bias). Some expressed doubts whether their problems or grievances were ever forwarded to higher authorities for action. They also pointed out a need for community education in areas of sanitation, civic rights and protection ofpublic property by the people entrustedwith it. Inorder to improve delivery ofjustice and combat crime there were calls for increasingthe size ofthe police force and construction o f more police posts and courts to reduce long distances to stations and court premises. The need for the police and justice system to have well-trained employees and equippedto combat international crime - in drugs, terrorism, hightech-fraud (e.g. money laundering) andhumantrafficking was also raised. It was stressedthat peace and security played a critical role in attracting investments. 3.5 Issues from internal consultations Deliberations revolved around the institutional andprocessweaknessesthat neededto be addressedin thenew strategy, including: Linking formerly "non-priority sectors" to poverty reduction outcomes, recognising that all sectors contribute to growth and poverty reduction; Capacity constraints of managing the PRSPMS at central and local government levels; Harmonization of national policy processes and alignment o f sector development strategies and plansto the NSGRP; Progresson hannonisation and alignment o f aid to national development agenda and processes; Enhancing partnershipsbetween and among sector ministries; The need and how to mainstream cross-cutting issues; Linkages between key international and national developmental initiatives and aspirations as espousedin Tanzania's Vision 2025, the Medium Term Plan for Growth and Poverty Reduction, the PRS Review andthe Millennium Development Goals (h4DGs). 22 The main echo of the internal consultations was that steady growth neededto be reflected strongly in the NSGRP and that governance had to be f m l y addressed, without losing sight of social developmentobjectivesfrom the previousPRS(P). 3.6 Challengesahead As the consultation process drew towards the PPW, most stakeholders were of the opinion that the NSGRP was more comprehensive and the review process more inclusive and open than in the previous cases. National ownership, which underpins the preparation of NSGRP, was lauded. The bold decision to adopt the "outcome-oriented approach" was highly commended. The attempts to relate the strategy with the budget, core reforms and on-going sectoral reforms and to mainstreamthe MDGs andcross-cuttingissues were also notedwith appreciation.The following issues were posedas critical challenges for the new strategy: Strategicprioritisation and sequencing of interventions; Enhancinginter-sectorcollaborationand linkagesand tapping synergies; Linkage withthe budget; and Costing, especially in view of the anticipated benefits in resource saving and more efficient realization of the desiredpoverty reductionoutcome. These issues will receive attention in implementation planning and linkages with the P E W T E F process and budgetingand through further analytic work on costing of cost-effective implementation strategies. Capacity building at the level of central government and local-based institutions and organizations right from the lower echelons of the village upwards and in the context of the Local Government Reform Programme, will receive, increased attention. This also entails continuous and timely flow of right information and services between the macro and the micro-level decisionmaking institutions. - Such institutions include: households, firms, communities, and CSOs,faith-based organisations and cooperatives. The importance of efficient Local Government, improved governance structures, attention to gender balance, special needs of the people living with disabilities and other cross-cutting issues were emphasisedand underscored. Other challenges include improvementincollection, analysis and use of data at lower levels; addressing broad inequalities among regions and districts; and disseminationof information and sensitisation. Translationof the NSGRPinto Swahil iand its disseminationto district andvillage levelswere further underscored. 23 CHAPTER IV: FRAMEWORK OFTHE STRATEGY 4.1 Introduction This chapter presents the framework of the strategy. It presents the major building blocks including the principles and on-going reforms. It elaboratesthe major clusters of desired outcomes for poverty reduction, namely, (i) growth and reduction of income poverty; (ii) improved quality of life and social well-being; and (iii)good governance and accountability. It is recognised that while growth i s necessary for poverty reduction, it is not sufficient. Equity and conditions that foster it are equally vital. 4.2 Principlesof the strategy The strategy observes principles that will guide its interventions and actions with a view to ensuring integrity of the strategy. The purpose is to have a strategy that is well understood by all stakeholders for them to actively play their part. Whereas some o f the principles are critical during the preparation o fthe strategy, others will apply during implementation, monitoring and evaluation. 4.2.1 National ownership The strategy is viewed as a vehicle to scale up national ownership of development process toward the attainment o f the national development agenda articulated in the Vision 2025 and subsequent policy initiatives. The strategy encourages participatory mechanisms at national and local levels. It seeks to be more inclusive by explicitly taking on board the various contributions of all actors. Efforts have beenmade to improve the quality and depthof participationthrough consultation processes. The NSGRP will be accompanied by a communication strategy to ensure efficient transmission of policy signals between the government and stakeholders and thus engender a true exchange of information. Parliament and local governments will be critical inpicking and acting on the messages. A proposal to institutionalise public debate throughout the implementation of the NSGRP has been adopted. Strengthening policy formulation and implementation and harmonising different national policy- making processes is critical for national ownership. Inthis regard, the strategy recognises the need to increase capacity building for policy making, analysis and evaluation at local and central levels of government. Capacity building needs of the private sector, civil society and community levels will also be addressed to enhancetheir effective participation inthe policy processes. 4.2.2 Politicalcommitment Political will and commitment to continued democratisation and human rights will be increased and sustained. Moreover, political stability and consistency in policies are imperative and form basis for accountability of Government to the citizenry and development partners. 24 4.2.3 Commitment to macroeconomic and structural reforms Predictable macroeconomic environment: Fiscal and monetary sector reforms will be maintained to ensure a stable and predictable macroeconomic environment underpinnedby low inflationrate, increased domestic savings and investment, exchangerate stability and sufficient foreign reserves. Structural and institutional reforms: continued market, structural and institutional reforms: Box 4.1 shows some ofthe major current structural and institutionalreforms: Box 4.1: Some of the on-going structural and institutional reforms 25 following the consensus of s&ikcholders; tiv) review and revision of cxyort -inipoit prwdutts to reduce tin= costs and corruption relawd ousts; and (v) design and implement.atiuii of a program for enhancing access to coinniemal courts by SMISs;(vi) A Better RegulationUnit (I3HlJ)establishd as a supportise unit for monitoring ittipiernoitation of the Business Environment Snengtheningin 'I'anzania (l31Sl'). A draA work plan lbr the C'oirmmial Dispuw Iksolutron (('IN) coinpmenl under IIES'T is being finalid. I'anmialidswtiormed the legal framework for rqulatorq inutltutioirs that is currently being esah1isht.d. fie effwtiveness of these regulatorr) institutions, especially givcn the current oversight arrangements, needs to ix closel~monitored. Continue arrh (.'it il Senice Keflmit and funher iii,lnuic efficiency and quality of public administratioil services 0Public Financial Management Heform Pwgranime (YFMHP) Staying focused on ai-easot' budget arid accounting wfomis, external resuun'es mani.igenimt, Inueurenient,rxtrrnal audit, investnirnt riwnuyenient and information technology. IFMS to be strengthened by expanding winputenzation SySltm tu cover all local gowmment; to track expenditure disbursenients and expenditure on real time; impwernents to be made to inrmal auditing funLiion by putting in placea d i t committees In all MDAs; tmprovanents in the , NationalAudit Uffice (NAU)are uiii~envay. C'ontlnue with impiementatiun of Local Government Reform Programme (LGRP) lncludiiig (i): ; establislinient of Local Oorcrnii~ntAuthority (I.CiA) Tender Bwds in compliance with the Local i j 1ji Govemitient Regulations, 2003 [ii)rolling out (IFMS) to LGAs alreuly implementing tlie Epicor softwarr and soon to be extendedto all other 1,CAs; (iii)fiscal years for Gennii wd Local Governments have been ; integraed with erect from 2M)4/05 (July-June); {iv) transfers (grants) to rhe District Councils based on a : ! new fomiula used in allocating recurrent expiiditores for heaith and education wcturs a1 district I evel,/ and for all srclors a! disnict level in respect ut' development budgets. All transfers to IXiAs tu be liarnionised with new formula-based systems for recurrent and IAoCdl (h~vrrniiwntCapital ikvelol)nient j ;, Grants(1,WIXi) as basis for equitable distributiona t'resources across regionsanddistricts. . ". ." .. .." ." _-......... .~~ 4.2.4 Sector strategies, linkages and collaboration The strategy recognises the roles and importance o f existing specific sector development strategies andor reform programmes.6 It encourages sectors to explore areas of collaboration in the pursuit of specific poverty reduction outcomes. Such collaboration will lead to more efficient attainment of desiredpoverty reduction outcomes. Promotion of inter-sector linkages will make possible realisation of backwardand forward linkages inthe economy, increasedemployment and cost saving. 4.2.5 Local partnerships The strategy will enhance the space for local stakeholders, including citizens, communities, civil society and the private sector in policy dialogue, implementation and evaluation o f the impact of development initiatives. Specifically, the Government will assist LGAs in providing enabling conditions for: These reforms include the Local Government Reform Programme (LGRP), Public Financial Management the Legal Reform Programme (LRP), Health Sector Reform Programme/ Health Sector Strategic Plan (2003 - Reform Programme (PFMRP), Public Service Reform Programme (PSRP), National Anti -Corruption Strategy, 2008), Education Sector Development Programme (ESDP), Rural Development Policy, Rural Development Strategy, Agricultural Sector Development Strategy (ASDS) and its implementation framework, the Agricultural Sector Development Programme (ASDP), Co -operative Development Policy 2002, Land Reform Programme, the National Informationand Technology Policy, the National ICT Strategy, the Small Enterprise Development Policy, the National Empowerment Policy, National Employment Policy, Ministry of Energy and Natural ResourcesStrategic Plan, the National DisabilitiesP olicy, among others. 26 D Private Sector Development (PSD); community-based initiatives and partnership with civil society organisations; and R Scaling up private-public partnership consultation mechanisms in promoting the participation of the private sector in businessparticularly inthe provisiono fpublic services. 4.2.6 Harmonisedassistance I Agreed principles of development partnership relating to harmonisation and alignment of aid modalities, as set inthe Tanzania Assistance Strategy (TAS and TAS Action Plan), Independent Monitoring Group (IMG), and the new Joint Assistance Strategy (JAS) will be pursued towards increased aid effectiveness, strengthened accountability and mutual trust, and eventual reduced dependency. Tanzania will also pursue the 2003 Rome Declaration, the 2005 Paris Declaration on Aid Harmonisation, andthe 2004 ShanghaiConferenceon Scaling-up Poverty Reduction. The strategy will mainstream regional and international commitments, including the Millennium Development Goals (MDGs) and international commitments in areas of social services like education, children, environment, human settlements and peace and ~ecurity.~ The need for capacity development interms o f humanresources(expertise), institutional capacity and financial resources inorder to effectively carry out these commitments are imperative. 4.2.7 Equity The basic tenet is that growth is necessary but not sufficient for poverty reduction. To that effect, equity issues needto be taken on board as well. Tanzania needs fast but equitable growth, focusing on reducing inequalities, increasing employment and enhancing livelihood opportunities for the poor . Equitable growth will entail improving accessto anduse of productive assets by the poor, addressing geographic disparities and ensuring equal anduniversalaccess to public services. 4.2.8 Sustainablehuman development The strategy is committed to ensuring that development activities today do not adversely affect the development needs of future generations. Emphasis is on sustainable use of the country's natural resources and avoiding harmful effects on the environment and on people's livelihoods. It also advocates for people-centred development. African UnionMaputoDeclaration2003 and Dar es Salaam Declarationon Agriculture and Food Security in the SADC Region2004; NEPAD, BrusselsPlanof Action for socialand economic development, World Sumit on Sustainable Development(WSSD), the Tokyo InternationalConferenceon African Development (TICAD), World Food Summits (1996 and 2001), those related to governance, human rights such as the Convention for the Eliminationof All Formsof DiscriminationAgainst Women(CEDAW), SADC Gender Declaration, Beijing Platformfor Action, Eliminationofthe Worst Formof Child Labour; among others. 27 4.2.9 Macro-micro linkages The strategy will aim at strengthening commitment to decentralisation, increasing efficiency o f public institutions at all levels o f government and ensure a two-way information flow andresponse from and between central government and local governments. The strategy also envisages efficient operation of marketsfor labour, capital and goods. Further,policies should be designedto ensure that the benefits of growth in high-growth sectors such as mining, industry, and tourism are transmitted to the poor in form of increased livelihood opportunities e.g. supporting supply-linkages with local producers. 4.2.10 Mainstreaming cross-cuttingissues Goals and interventions relating to the cross-cutting issues have been included inthe three clusters of the strategy. Implementation and monitoring plans for the NSGRP include specific actions on mainstreaming and development of indicators for the cross-cutting issues. It is also recognised that inter-sectoral collaboration is possible as well as within the cross-cutting issues. 4.3 Major clusters of poverty reductionoutcomes Analyses of the poverty profile strongly support the views from the consultations about the factors that precipitate poverty in Tanzania. Poverty has many dimensions, often caused and reinforced by underlyingunequal distribution of resources, incomes and opportunities. The strategy identifies three major clusters of poverty reduction outcomes: (i) growth and reduction of income PO verty; improvement of quality of life and social well-being, and (iii) good governance(Figure 4.1). Each cluster contains specific goals and actions; and many o f these are interrelated and support each other. lnterventions to address inequalities are included ineach cluster. Figure 4.1: Major clustersof poverty reductionoutcomes. 28 One of the major conditions for poverty reduction is high economic growth. In general, growth depends on the quantity and quality of inputs including land and naturalresources, capital, labour and technology. Quality of inputs implies embodied knowledge, which i s a basis for innovation, technologicaldevelopment, increases inproductivity and ultimately, competitiveness. There is a strong relationship between the three clusters; and indeedbetween productive and service sectors. Growth leads to higher incomes, thus reducing income poverty, assuming equitable distribution. Higher incomes enable households to improve human capabilities through better education, health, nutrition, and shelter, i.e. social well-being. Humancapability is, inturn, one of the critical sources of long-term growth. Also, growth enables the government to collect morerevenue for provision ofpublic services such as health, education, administrationand infrastructure. Governance, on the other hand, provides conditions within which growth, well-being and poverty reductiontake place.A social-political environment is requiredthat ensures equalaccessto productive resources, social services andhumanrights. Therefore, equity applies to all the three major clusters. 4.3.1 Growth and reduction of incomepoverty 4.3.1.1 Sourcesof growth The following are identified as major sources of growth that Tanzania will needto focus on: (i)Investmentsinhumancapability -provision of quality education, health and nutrition to the population. Towards having an internationally competitive labour force, more resources will be channelledto improving the quality and expandingsecondary, higher andtechnicaleducation. (ii)Investments in physical capital - will focus on efficient and cost effective provision of infrastructure for transport, power, ICT, with special attentionto opening up rural areas and areas with economic potentials inorder to address regional inequalities. (iii)Increases infactorproductivity -focusingontechnologicalchange with particular attentionto rural / agriculturalproductivity and its associatedlinkageswith industry. (iv) Implementationof the Tanzania Mini -Tiger Plan2020 which aims at fast track development by promoting investment through establishment of Special Economic Zones (SEPZ) with special incentivesto accelerate growth. (v) Private sector development (PSD): domestic firms, including SMEs, will be supported and encouraged to be innovative, pay attention to product development, quality and appropriate marketing strategies that make them competitive and capable of responding to global market conditions. The enabling factors for PSD, which are also in line with the strategies for the TMTP2020 include: 29 Addressing entrepreneurshipdevelopmentneeds for rural private producers (on farm and non - farm), ago-based industries, urban-basedSMEs, formal and informal enterprises; Ensuring access to resources (finance, land, water); technological and managerial skills including marketing; market information andcontacts; Facilitating linking-up of domestic producerswith local and foreign R&D institutions; Creating fair competition to ensure level playing field; a smooth and stable administrative and regulatory framework, guaranteeing personal and property rights and security and enforcement of contracts; Provision of basic infrastructure such as utilities, water, power, transport and ICTs at competitive prices inrural andurbanareas. (vi) Domestic trade: domestic trade has been liberalised and inter-regional/district barriers removed. However, domestic traders need to develop competitiveness prowess, innovativeness, adherence to schedules and standards, and confidence to venture into neighbouring country markets and oversees.The Private Sector Development enabling factors (iv above) apply. The government will scale up reduction o f administrative hurdles due to complicated licensing and taxation system, harassment by tax and local administration; replace them by simple, "one-stop'' mechanisms to reducethe high"costs o f starting and doing business" due to red tape. (vii) Trade development towards a diversified and competitive economy: this principle aims at linking international trade to domestic productive and competitiveness potentials inclose association with development of the private sector and domestic trade. This entails: D The National Trade Policy (NTP) will provide a guide on fostering innovative and competitive capacity o f the economy, addressing supply-side constraints, diversification of the "export basket" by stimulating value-added activities, investments in export-oriented activities and boost the competence o f private sector participation in regional and world markets. I Implementationo f the NTP will require a recognition and exploitation o f inter-sector linkages and complementary policies includingthose related to infrastructure, productive sectors, trade inservices(e.g. tourism, transittrade) andinstitutional facilitation. Furthering economic diplomacy to market abroad Tanzania's products, tourist attractions and other service export, attracting foreign investments and assisting Tanzania's investors to be able to invest abroad. (viii) Trade-related assistance - including Joint Integrated Technical Assistance Programme (JITAP) and Integrated Framework for Trade Development (IF) and others in support o f private sector participation in domestic and international trade, will be tappedto increase the capacity of domestic producers, particularly SMEs and rural producers in processing, packaging, financing, 30 managerial and marketing skills and information about international market standards, patenting, shelf-life, labelling andother conditions. (ix) Foreign direct investment (FDI): the strategy will foster conditions that attract more FDIwith a view to realizing the gains in form technology transfer and increased productivity and diversification of the structure o fthe economy. A stable investment and regulatory climate will be ensured. Issues related to the choice o f technology, strategic links with local firms and higher learningandR&D institutions, technical capabilities andreadiness of local firms and labour -force to adapt technology would be examined. (x) Foreign assistance: the ambitious targets set in the NSGRP implies that high amounts o f foreign assistance will be sought in the medium term, and that the principles o f harmonised assistance will apply. 4.3.1.2 Broad-based growtlz and equity (xi) Improving access to and ability to use productive assets (e.g. land, finance) for the poor, for example, those in small-scale agriculture and rural non-farm activities, SMEs and groups such as women and youths. Micro-finance services will be expanded and land access rights ensured for bothmen andwomen and for small and large-scale producers; (xii)Addressing geographic disparities by identifying economic potentials of the disadvantaged districts and supporting exploitation o f these potentials andraising returns and productivity inthe poorer districts / regions. "Spatial development and development corridor" planning approaches will be employed. This is also consistent with the objectives of the Special Economic Zones (SEZs) o fthe TMTP (2020). (xiii) Equal and universal access to public services - physical infrastructure and social services - through the budgetary financing of social programmes and support to community-based initiatives considering the special needs ofthe vulnerable groups. Financial sector reforms and specific micro-finance programmes targeting poor areas and the poor groups (e.g. women, youths, unemployed etc), budgetary allocations for social programmes (HIY and AIDS) for vulnerable groups and the "formula-based" allocation system (see Box 1 in respect of LGRP and PFMRP) are among the policies toward equity. The tax system can be used to establish equity, however, too highor harshtax levels andmethods will act as disincentive to growth. 4.3.1.3 External shocks and disastermanagement Growth must be strong enough for the economy to withst and shocks o ftwo kinds: (i) shocksexternal due to adverse terms of trade and erratic commodity prices which mainly require macroeconomic policy management and (ii)shocks that are due to natural and man-made disasters causing losses o f life and property, as well as, destruction o f the environment. The common hazards in Tanzania 31 include epidemics, pest infestation, droughts, floods, major transport and industrial accidents, refugees and fires. These shocks require definitive policy and resources to manage (e.g. prevent, mitigate, andrespondto). a 4.3.2 Quality of life and socialwell being The second cluster addresses human capability, survival and well-being. A social protection framework becomes necessary to address vulnerability and provide for social security, health insurance, and specific vulnerable groups, like orphans, people living with HIV and AIDS, people with disabilities andthe elderly. Improvement o f quality o f life and social well-being dependon the provision, affordability and access to quality food and services like education, information, health, water, HIV and AIDS treatment and prevention, and social protectionprogrammes. Inaddition, life is improved for people who are living in a clean and protected environment, for example, free fi-om air and water pollution or free from mosquito breeding sites. For services to be available both to the users and providers it is critical that the country generatesincome through a development processthat allows for broad-based growth. The size (level), distribution o f income at individual and national level, prices, and the cost o f services all affect availability and utilization o f services. It is recognized that improved quality of life enablessociety to engage hlly inproduction processes - where both men and women have equal opportunities. Productivity is also increased and sustained when the environment is protected and natural resourcesutilised in a sustainableway. 4.3.3 Governance and accountability The third cluster provides the bedrock for the first and second clusters. In order for broad-based growth and improvement o f quality life and social well being to take place, good governance has to prevail. The focus on governance centres on economic structures and processes such as use o f public resources (financial, information and natural resources), management systems, personal security, tolerance and inclusion, and participation in decision making.Participation is achieved through local government reform processes, school committees, cooperatives and farmers associations and ensuring that the structures and systems o f governance are representative and accountable. Human rights, a fimctioning and fair justice system and war against corruption are key elements o f this cluster. Reduction o f poverty and improved quality o f life require effective, transparent and accountable use of resources in a fair and corruption free system. Information on policies, legal framework, laws and public finances are all important. NSGRP recognizes public access to information as a humanright as well as a key means to facilitating effective policy implementation, monitoring and accountability. * The National Disaster Management Policy (1990) and the National Operational Guidelines for Disaster Management (1"ed, 2003) address strategies to manage disasters in Tanzania with details on institutional arrangementandresponses. 32 The cluster further addresses issues of effective public administration in order to ensure that systems o f government are managed openly and in the interests o f the people they serve. The National Governance Framework and specific on-going reforms including: Public Service Refonn Programme (PSRP), Local Government Reform Programme (LGRP), Public Financial Management Reform Programme (PFMRP), the Legal Sector Reform Programme (LSRP), and Financial Sector Reform and sector specific reforms are among the necessary measures aimed at contributing towards good governance outcomes, improved public services delivery, better economic management, positive cultural change and democratic development. In the same spirit, the private sector and civil society will also be expected to demonstrate accountability to the people - i.e. private sector corporate responsibility and civil society's accountability to the people. 4.4 Prioritisation and sequencing The three major clusters o f desired poverty reduction are all equally important. In principle the strategy, at best, gives indicative areas of possible collaboration betweedamong sectors or actors. It encourages sectors and actors to explore areas for possible collaboration for specific outcomes. As a way o f prioritising or sequencing of actiondactivitiedprogrammes given limitedresource envelope, sequencing and therefore, linkingup the strategy to the budgetaryallocation system over the five year period, sectors will be guidedby the following considerations: P On-going strategies/programmes/activities that were initiated during the PRS (P) within the priority sectors and are identified inthe NSGRP - e.g. PEDP, BEST, ROADS, ASDSIASDP, the judiciary, land, Health Sector Strategic Plan. These are taken as on-going commitments; a New strategies/ programmes that build on the on-going strategies /programmes - e.g. Secondary EducationDevelopment Programme (SEDP); i New quick win strategies/programmes/activities- with immediate and wide impact such as micro-credit, child nutrition, malaria and HIV and AIDS, problems o f the vulnerable groups; b Cluster strategies/programmes/activitiesthat have iarge "multip lier effects", that is, covering more people, larger area or more issues, such as water programmes, agricultural productivity, trade, ICT programmes and employment; 8; Clusters strategies/programmes/activities that address more than one NSGRP outcomes, for example, governance reforms, and demonstrate greater inter-dependence betweeniamong clusters/strategies/sectors with possible saving on resources as a result; t Clusters strategies/programmes/activities that contribute to implementation and capacity development particularly at local government and community levels such as LGRP and the Local Government Capital Development Grants (LGCDG); ZJClusters strategies/programmes/activities that address regional imbalances; and 33 8 Cluster strategieslprogrammesiactivities for mainstreaming cross-cutting issues. The consultation processes on policy and budget between the government and non-state actors will make good use of these considerations. The purpose of the consultation is to enable stakeholders to provide policy and programme inputs that inform the budget process. 4.5 Major cluster outcomes and definitions The strategy framework identifies broad outcomes for each cluster under which a set of goals are defined with an associated set of specific operationul targets with timeframes. For each operational target, specific interventions / activities or actions are identified. It is possible to trace these actions to sectors and other actors that are responsible for implementation toward a givenmajor cluster or broad outcome. Definitions of these terms, with examples, are given inTable 4.1, Table 4.1: Definitions of terms and examples Term Examples Broadoutcomes: Wider longer-term sectoral or national outcomes Tanzania would like to realise as specified in national policies such as Vision2025: e.a. Improvedquality bflife and socialwell beingof&a1 population. Goals Outcomeaimed at achieving one of the broad outcomes. This does not necessarily need to have a timeframe and target, eg e Reduce child andmaternalmortahty Operationaltarget Outcomes that have speclfic timeframes and target eg lk Reduceinfantmortality from 95 (1000) in2004 to 50 (1000) in20I O Improvedaccessto clean and safe water from 53%in2003 to 65% in2010 of rural populahonand73% to 90% in urbanpopulahon Reducethe HIV prevalencefrom 11% in2004to 10%in2010 betweenages of 15-24years. Increasedproportionofthepopulationhavingan accessto electricityinrural areas from less than 2% to 15%by the year 2015 Cluster strategies Activities that dgfferentactors will do in order to deliver intended operational outcome/target eg Immunisationof children Community programmeon improvednutritionfor children's health Improvedruralroads for access to healthcare facilihes andmarkets Constructionof protectedwater sources in villages Use of fuel efficient stoves and reductionin indooralr pollution E Use low-cost electnficahontechnologies for electrifyingruralremote areas fr Apply renewableenergies ( e.g solar, wind, micro hydro, etc ) for decentralised electricity generation Institutereproductive healthandHIViAIDS preventionprogrammesinpnmary andsecondaryschools The NSGRP specifically sees a possibility of different sectors and actors working together toward specific outcomes; this also came up in the course of the public consultation during the preparation o f the NSGRP. Information about actions and targets is useful for M e r purposes of costing, monitoring and evaluation. 34 CHAPTERV: THE STRATEGY 5.1 Introduction This chapter presents the strategy details on how the core NSGRP outcomes are going to be achieved. I t reflects the concerns of stakeholders and on going economic and social reforms and sectoral and district programmes. It also aims at fostering greater linkages and collaboration among different actors. Details include: specific broad outcomes, goals andoperational targets for the three clusters, MDAs and LGAs and other actors are key implementers through their respective strategic plans and programmes. They will align to the NSGRP by addressing the core NSGRP outcomes. Sectoral linkages and collaboration will lead to efficient attainment of the broad outcomes. On the basis of consultations, areas o f collaboration, whereby different actors will contribute to specific goals or targets ofthe strategy, were identified. These details are included inthe Annex. 5.2 Policy environment The Government is determined to stay the course of economic and social reforms and maintain improved macroeconomic stability. Inthe course o f the NSGRP, real GDP is expected to reach the average growth rate of 6-8 percent per annum between 2005/06 and 2009/10 consistent with the aspirations o f Vision 2025. Domestic revenue mobilisation effort will be accelerated and external support utilized to increasethe capacity for steady growth. Government will continue to adhere to the objectives o f the National Debt Strategy (NDS) and seek firther debt relief from the Paris Club and Non-Paris Club Creditors as agreed under the HIPC programme. Projections for 2005/06-2009110 assume improvements in the productivity of agriculture and other productive and economic service sectors, tourism and mining and a strategic trade regime fostering international competitiveness, promoting private sector development and implementation of policies inrespect of the SMEs, micro- finance and cooperatives. Continued attention will be paid to equitable allocation o f public resources, better public finance management and fiscal discipline keeping in focus budget execution, procurement and audits, public service reforms and the necessary Parliament oversight. Capacity buildingneeds at the level of central and local government will be pursued andgood governance, accountability and humanrights adhered to with a focus on the impact onthe poor. The Government will continue to support social sector reforms in education, health andwater. Social welfare and social protection programmes for the vulnerable groups will be covered adequately to reduce risks to vulnerability. Efforts to address budgeting and financing o f gender imbalances and other cross-cutting issues will be scaled up. Political reforms will be continued in order to create an 35 enabling political environment necessary to unleashpolitical support for growth and attainment o f the MDGs,NEPADtargets as well as all other regional and international commitments. 5.3 Cluster goals, targets and strategies Box 1summarises broad outcomes andgoals relatedto the three major clusters. Box 5.1: Summary of cluster broad outcomes and goals 36 Specific targets and strategies associated with each goal for each of the three clusters. The Annex traces the same cluster goals and identifies areas of collaboration. 5.3.1 Cluster I:Growth ofthe economy and reductionin incomepoverty The broad outcome that will guide the strategy is achieving and sustaining broad-based and equitable growth. Reduction of poverty requires sustained high growth rate of GDP of at least 6-8 percent per annum over the next decade. In this regard, focus will be on scaling up investments towards modemising small, medium and large-scale agriculture for increased productivity and profitability, promoting off-farm activities, including small and medium size enterprises with part icular emphasis on agro-processing. The strategy also gives particular attention to trade, services and marketing infrastructure, and creating conducive environment to attract private investment. Support to the fast growing sectors like tourism and mining will be scaled up and geared towards promotion o f employment and appropriate labour relations. Safeguards will be devised to protect the environment fiom undue depletion caused by such activities. Six specific goals are listed in Box 5.1: operational targets and strategies for eachgoal are briefly summarised inthe subsequent sections. 5.3.1.1 Ensuringsound economic management Sound management of the economy requires sustained actions that maintain a stable and predictable macroeconomic environment in order to achieve a sustained high growth rate o f the economy and to generate rational response to market signals. These conditions are essential for sustained long-term private investment. NSGRP pays special attention to sectoral linkages and complementaritie s and areas that are drivers ofpro-poor growth. Operational targets for this goal are summarised inBox 5.2. Box 5.2: Operationaltargetsfor ensuring sound macro-economic management Sound economic management is to be achieved through maintaining macroeconomic stability; strategies to that effect include the following: rn Sustaining efforts to contain inflation to a level comparable to that o f major trading partners by pursuing prudentfiscal andmonetary policies as well as increasing production; rn Ensuring that monetary policy continues to focus on price stability, narrowing the gap between deposit and borrowing rates, improving the commercial banking sector, expanding credit to th e private sector, and maintenance o f market-determined exchange rate (exchange rate stability) and adequate foreign exchangereserves. 37 Achieving improvement in the current account of balance of payments; through promotion of export trade for both traditional and non-traditional exports, with a view to reducing aid dependence, and facilitating expansion of enterprises, especially ShEs inexporting activities. Assessing macroeconomic effects of aid inflows on the real exchangerate and on the composition of public spending to prevent problems like the "Dutch disease" and deficient absorptive capacity. Implementing trade policy that maximizes the benefits and minimizes risks o f globalisation while continuing to advocate for fair trade. Continuing to strengthen tax policy andadministration reforms, Deepening financial sector reforms, in particular implementation of priority reform measures under the Financial Sector Assessment Programme (FSAP), updating legislations, improving access to credit and strengthening supervision. Implementing policies, strategies and programmes that create employment opportunities as well as creating environment that encourages self-employment, the aim being to halve unemployment rate between by 2010. 5.3.1.2 Promotingsustainableand broad-based growth Inthe post 1990periodTanzania has managedto reversethe low, and insome years, negative growth rate of the economy experienced in the 1980s. Despite this achievement, there has not been a corresponding fast and significant reduction in the incidence of poverty. Different socio-economic groups have not felt the benefits of improved growth equally. Detailed growth strategies, which require multi-sectoral actions, will be developed within the context of public-private dialogue. Under the NSGRP both sources and patterns of growth will be broad-based. Operational targets for this goal are summarised inBox 5.3. Box 5.3: Operationaltargets for promotingsustainableandbroad-based growth Sustainable and broad based growth can only be realised through accelerated GDP growth and widening the spectrum of actors in the economy, particularly the informal sector, SMEs and the cooperatives. It entails: (i)strengthening o f the link between agriculture and industry; (ii) raising 38 contribution o f other sectors to GDP; (iii)preventing the negative impacts on environnient and people's livelihoods (iv) promoting technological innovations, communication, physical infrastructures such as roads, ports, railway lines and storage facilities; and (v) promotion of regional equity in development is another important dimension for broad-based growth. The TMTP2020 strategic actions address the objective of growth through creation o f attractive sites for both domestic andforeign investors so as to accelerategrowth inproduction, per capita incomes, export earnings and employment inthe SEZs. Achievement o f sustainableandbroad-basedgrowth will incorporate the following strategic actions: Promoting investment in the productive and services sectors with a view to increasing productivity and enhancingjob creation; Empowering Tanzaniansto mobilise savings and investments through, among others, sale of units by the UnitTrust o fTanzania, ParastatalSector Reform Commissionandthe Capital Markets and Securities Authority and other initiatives; Implementing BEST programme, maintaining a predictable business environment and protecting property rights; Implementing TMTP 2020 Modemising andexpanding physical infrastructures through enhancedpublic -private partnership; Promoting R&D andpatenting of proventechnologies including support to R& D institutions; Increasing the number of irrigation schemes and area under irrigation and promoting rainwater harvesting; Increasing productivity and profitability in agriculture through technological innovations such as use o f improved high-yielding and pests-, disease- and drought-resistant varieties, improved tools and equipment and better soil and water management, improved extension services, training and promotion o f Integrated Pest Management (IPM); Promoting efficient utilization of rangeland, empowering pastoralists to improve livestock productivity through improved access t o veterinary services, reliable water supply, recognizing pastoralism as sustainable livelihood; Promoting use of ICT, expanding communication networks and supporting institutions which facilitate appropriate and environmentally friendly technology development and transfer; Promotingappropriate productionandprocessing technology; Promoting regional equity through appropriate investment incentives and refocusing public expenditure; Involving communities inconstruction, maintenance and management o f rural roads; Updatingminingpolicy and legislation and developing and promoting enabling environment for investment inmineral value-addition; 39 Attracting investment in coal and natural gas development and increase contribution o f coal and natural gas to GDP. 5.3.1.3 Improvingfood availability and accessibility Availability of food, both in required quantity and quality is an important aspect o f humanwell -being and its absence is a manifestation of poverty. Food insecurehouseholds,whether for lack of stocks or income for purchasing food, are vulnerable to all sorts o f ills, with women and children often being more at a disadvantage. Food security is attained through increased per capita production o f food- crops, having adequateincome and ensuring that intimes o f shocks enoughreserves are maintained to minimise vulnerability. At the national level the Strategic Grain Reserve (SGR) is intended to cater for shocks that lead to food insecurity. Operational targets for this goal are summarised inBox 5.4. Box 5.4: Operational targets for improvingfood availability and acqssibility ___- e Increasedfmd crops production fioni 9 niillion tons in 2003/04 so 12 nullion tuns in 2010. v e MaintainedSjrtrreyic Grain lleservc of at least 4 irionth of national f d tquiiement. _- I The following strategies will be implemented in order to ensure availability and accessibility o f food inbothurbanandrural areas: Providing targeted subsidy to selected food crops, identifying and promoting modern farming technologies especially inrural areas and providing support for increasedutilisation of improved technologies for crop and livestock production Identifyingresearch activities and promote food storage technologies/ facilities and enhance agro - processing as well as environmentally friend1y farming technologies and practices especially for rural areas. Improvingstock management and monitoring o f food situation Undertaking a review of the maize supply chain, management and monitoring o f emergency food supplies, including further clarification ofregulationandmeans ofenhancing trade. Improving road network connectivity to facilitate flow o f food crops 5.3.1.4 Reducing incomepoverty of both men and women in rural areas While income poverty has generally declined between 1991/92 and 2000/01 as revealed by the 2000/01 HBS, the reductionhas been relatively higher inurbanthan inruralareas. Within rural areas women have been even more disadvantaged.Efforts will be steppedup to reduce the proportion o f the rural population below the basic needs poverty line from 38.6 percent in 2000/01 to 24 percent by 2010; and food poverty line from 27 percent in2000/01 to 14percent by 2010. Operational targets for this goal are summarisedinBox 5.5. Box 5.5: Operationaltargets for reducingincomepov erty of men and women in rural areas 40 The strategy for achieving this goal requires a broad range o f actions inproduction and productivity, improvedmarketingand diversification insources of income andruraltransformation, including: Providing reliable, affordable and efficient energy and alternative ruralenergy schemes; Enhancing life-skills and entrepreneurshiptraining for ruralpopulation; Increasing access to rural micro-financial services for subsistence farmers, particularly targeting youth and women; promote and sustain community-based savings and credit schemes such as SACCOS and revolving funds; Strengthening cooperatives and Export Credit GuaranteeFundfor cooperatives and other farmers' organisations; Investing inrural infrastructure to facilitate marketing of rural produce; Supporting production o f crops with highreturns; Promoting off-farm activities and value-addition schemes to primary agricultural, fishing, forest, wildlife and livestock products through agro-processing SMEs and cooperatives; Scaling up community development initiatives e.g. community-based rural road construction and enhancemento f programmes such as SIDO, TASAF and SELF that focus at micro level. 5.3.1.5 Reducing incomepoverty of both men and women in urban areas Although poverty is mainly a rural phenomenon in Tanzania, the severity o f poverty in urban areas calls for special attention. Like their women counterparts in rural areas, urban women are also more disadvantaged.Inthis regardprogrammes will be scaledup in order to reduce the proportion o f urban population below the basic needs poverty line from 25.8 percent in 2000/01 to 12.9 percent by 2010; and below the food poverty line from 13.2 percent in 2000/01 to 6.6 percent by 2010. Operational targets for this goal are suminarised inBox 5.6. Box 5.6: Operationaltargets for reducingincomepoverty of men and women in urban areas The approachto reaching this goal will involve measurestargeting access to credit, settlements, skills and entrepreneurshipdevelopment and employment. The specific strategies will include: 41 0 Supporting SMEs and the informal sector in accessing financial services, and implementing land use and management plans; 0 Promoting self-employment and improving quality o f labour through apprenticeship and entrepreneurship programmes as well as vocational training; 0 Ensuringreliable supplyofessentialutilities, including energy andwater and sanitation. 5.3.1.6 Provision of reliable and affordable energy to consumers This goal aims at contributing to the quality of life by ensuringreliable power supply to consumer - households and investors alike. It aims at promoting rational and efficient use o f power as developing andpromoting indigenous energy sources. There will be a needto increase the proportion o frural and urban population with access to electricity and a reduced proportion of population depending on biomass energy for cooking from 90 percent in2003 to 80 percent in2010. Operational targets for this goal are summarised inBox 5.7. Box 5.7: Operationaltargets for provisionof reliableandaffordable energy to consumers The specific strategies to achieve the targets include: U-dating regularly the power systems master plan; expedite implementation o f power projects according to the Power System andRural Energy Master Plans and finalise restructuring o f power sub-sector; 0 Issuing of guidelines and regulations for reduction of energy intransportation, transmission and distribution losses reviewed andenforced; privatise generation and distribution; Developing and promoting utilization o f indigenous energy resources and diversification of energy sources; Promoting on-shore and offshore petroleum exploration. 5.3.2 Cluster 11: Improvement of quality of life and social well-being The Government recognizes the central role of social service sectors in achieving the gqal of improving quality of life and social well-being. Efforts have been made to increase expenditure on pro-poor social services, but the intendedlevels of resourceshave not been fully realised. There is an urgentneed, therefore, to increasefundingto the social service sectors. The NSGRP will put emphasis on the desired outcomes that can effectively reduce vulnerability. Greater attention will be paid to equity and quality issues inthe delivery of social servicesrecognisingthe role o f LGAs as the primary providers of services at the local level. Attention will also be paid to clean and healthy environment. 42 The disparities between the rich and poor, cross-age groups and between urban and rural citizens in accessing and use o f social services will be minimised. The strategy on the non-income side of the poverty reduction strategy will be guided by the following two broad outcomes: Improved quality of life and social well being, with particular focus on the poorest and most vulnerable groups; and Reduced inequalities (e.g. education, survival, health) across geographic, income, age, gender and other groups. In line with the concerns of the stakeholders and the overarching orientation of Vision 2025 and NPES, the focus on non-home poverty strategy aims at achieving five goals (Box 5.1 above). The following sections describe operational targets and strategies to achieve these goals. 5.3.2.1 Ensuring equitableaccess to quality primary and secondary educationfor boys and girls, universal literacy among women and men; and expansion of higher, technical and vocational education Operational targets (Box 5.8) address early childhood development, increased enrolment, and opportunities for children with disabilities, improved learning environment and access to and quality of education, adult education, and improvement and expansion of vocational and higher education. Box 5.8: Operational Targets for ensuring equitable access to quality primary and secondary education for boys and girls, universalliteracy among women and men and expansion of higher, technical and vocational education 43 Considerable progresshas been made under the Primary Education Development Programme (PEDP). Inthe first years of PEDP implementation focus was on enrolment expansion, classroom construction, and teacher engagement and deployment, Issues o f quality improvement inprovision of teaching and learning materials have also beenemphasized. InsubsequentyearsofPEDP, moreemphasiswill begivento quality focusing on in-service andpre- service teacher training, teaching / learning materials, and system-wide management improvements. The thrust o f the current strategy comprises increasing both gross and net enrolment of boys and girls inprimary schools; and increasing enrolment ofchildren with disabilities and other vulnerable groups inprimaryschools. The SecondaryEducation Development Programme (SEDP) will compl ement the PEDP. Expansion of the post-primary education system will also increase the chances o f children from poor families and children with disabilities attending secondary school. The strategy also aims to increase enrolment o f boys andgirls in secondary education. It put more emphasis on improvement of the attendance rate in primary and secondary education for both Government and non-Government schools. Measures to improve learning environment, increase the number and improve the quality o f teachers for both primary and secondary education forms critical ingredients to the strategy. . Since children are sexually active at an early age, effective measures will be taken to control the spread o f HIV and AIDS through the education system aimed at protecting children and combat HIV andAIDS as well as poverty. Concerns regarding the performance (and retention) of girls during their final years o f primary education and throughout secondary education are well recognized. More attention will be given to improved retention and performance of girls in primary and secondary education. Focus will be on ensuring equitable access, improving quality and strengthening governance inprimary education and expanding access to quality secondary, vocational, adult non-formal education and higher education. 44 The Government will maintain its current policy of abolishing primary school fees and related contributions. It will make sure that well-trained and motivated teachers are equitably deployed and adequately supported to perform effectively, with a special incentive package for teachers to work in hardship or remote areas. A wide range of initiatives will be identified and implemented towards supporting a safer, gender sensitive, children-fi-iendlyand more conducive environment for efficient and effective delivery of education, including: Implementation of improvedteaching and learningenvironments at all levels; Promoting effective involvement of school committees and teachers in quality assurance and monitoring; Modifying the existing curricula, teacher training, assessment and examination, and school inspection to promote critical, creative and skill-based learning that is o f use to school leavers in securing their livelihoods; Providing effective HIV and AIDS life-skills educatioii to all primary and secondary schools, and out o f school youth programmes; Institutingspecific interventions to increasegirls' retention andperformance inprimary especially in secondary schools, such as hiring of trained and motivated female teachers, and improving gender dynamics inclassrooms andwithin the school environment. The Government will increase fimding and implementation o f a cost-effective and sustainable strategy for increasing adult literacy especially among rural women and strengthening the cultural and ethical dimensions o f education. Vocational, technical and higher education will be expanded. Support will be increased to higher education, technical and R&D institutions, especially where the institutions address development needs o f the local environment and contribute to enhancing the country's international competitiveness inknowledge creation and propagation. 5.3.2.2 Improved survival, health and well-being of all children and women and especially of vulnerablegroups Operational targets to be achieved by the year 2010 (Box 5.9) are grouped under six categories: infant and childhealth; child nutrition; maternalhealth; HIV/AIDS; andhumanresourcesandmanagement. Box 5.9: Operational targets for improvedsurvival, health an d well-being of all children and women and especially of vulnerable groups - A. Infant & C'biM Health --~_.-II__ e Reducedinfarit morzalily fkoiii 95 in 2002 tu SO in2010 per I,Oo1)live htnhs Kafu~wd (ufllier five) niolaaliiy from I54 to 79 1112010 per 1MH) live birr 115 s K d u ~ whospital-bawdmalwie-related iwrtaiity atiiotigst under& fnm 12% in 2W2 to 1390 1112011) l 8.C'hildNutrition Keduwdprwalmceof sluntriigin under fives frurti 43 8 o/uto20% 11120IO kdiiced pre\alencr:of wasting in under fives fwnt 5 4% to 2 % in 2010 45 Addressing existing barriers and increasing access to high quality care, particularly for women and children in the rural areas, are a priority in this strategy. The Government will therefore increase financial, human and technical resources in the health sector to target the needs o f under-served populations, including the vulnerable groups. A critical assessment o f the human resource development strategy in the health sector was carried out with a view to identifying gaps in health workers skills and designing and implementing a practical plan for their immediate capacity building inkey areas, The strategicplanfor the healthsector 2003-2008will beimplementedfully. Emphasis will be placed on public health and primary preventive strategies,loand implementation of universal and cost-effective basic health services. In addition, critical issues o f mortality and morbidity among the poor will be addressed. Examples o f these include: IMCI, nutrition, maternal health care/emergency obstetric care, malaria prevention and treatment, diarrhoea diseases, TB, HIV andAIDS, and accident victims ftom roads, railways, water transport and others. Giventhe burdenof morbidity and mortality due to malaria, particularly for children and pregnant women, the Government will take urgent steps towards exploring cost-effective options for more effective control o f malaria. With regards to HIV andAIDS andrelated morbidity, the Government will implement the following specific measures: Targeted interventions to slow down the rate of new infections and protect the estimated 90 percent HIV free people in the community; provide full and equitable access to treatment for STIs; ensure broader, systematic and affordable access to family planningservices, inparticular to These includefamily planning, adolescent reproductivehealth, antenatal care, emergencyobstetric care, post - natal care andnewborncare. loFor example, broadaccess and use of ITNs, use of safe and clean water, hygienicsanitary measures: targeted nutrition education and supplementationfor pregnant women and undernourishedchildren, promoting sound feeding and weaning practices for infants, promoting greater awar eness and emphasise cost"effective interventionsfor reductionofwater -relateddiseases, includingenvironmentalhealth. 46 condoms; promote and expand equitable access to VCT services; and ensure safe blood transfusion anduniversal precautions. Scale upproven non-ARV interventions, for example TB prevention and treatment, andtreatment o f opportunistic infections inpeople livingwith HIV and AIDS. Investigate and promote equitable, sustainable and cost-effective access to ARVs, with an emphasis on ARV prevention o f mother to child transmission (PMTCT+) through a rights based approach that includes the well being of the mother; and make certain that rolling out the treatment plan is done ina well-coordinated andwell-costed national plan. Link community-based initiatives to facilitate the continuity of care framework so as to provide long-term care and management o f chronic conditions such as HIV and AIDS, tuberculosis, diabetes, and cardiovascular diseases. Identify and integrate specific measures (e.g. access to family planning services, improved maternal health care) to address gender inequalities and address the increasing HIV infection among women. Continued prioritisation o f policy and actions remains essentialto all poverty reduction and national development efforts. These include: financing to reduce HIV transmission and its impact on the welfare of those affected, with a special focus on girls, young women, the aged, young children, orphans andpersons with disabilities who increasingly face the impact o f HIV and AIDS. 5.3.2.3 Increased access to clean, affordable and safe water, sanitation, decent shelter and a safe and sustainableenvironmentand thereby,reduced vulnerabilityfrom environmentalrisk Operational targets (outcomes) to be achieved by the year 2010 are sumniarised inBox 5.10. They are grouped under five broad headings: water; sanitation and waste management; pollution; planning and humansettlements; andvulnerability andenvironmental conservation. Box 5.10: Operational targets increased access to clean, affordable and safe water, sanitation, decent shelter and a safe and sustainable environment and thereby, reduced vulnerability from environmentalrisk' 47 Adequate sanitation and sustainable access to safe and clean water and shelter play a critical role in supporting livelihoods and ensuring health. There are disparities inaccess to water betweenurban and rural areas, across regions and even within districts. Measuresthat will be pursued include expanding andmaintain existing protected-water sources, properly maintaining sanitation facilities and ensuring facilities at public institutions are adequate and meet Government guidelines. Poor people rely heavily on natural resources (land, forests and water) and are most vulnerable to external shocks and environmental risks, including drought and floods. It is important to check over - exploitation o f natural resources and environmental degradation. The government will reduce vulnerability to environmental risk through checking soil erosion and deforestation and reducing environmental pollution. Strategies will be put in place to mitigate effects o f natural disasters, halt desertification and promote water conservation practices. Sustainable use o f natural resources through community-based natural resource management and enhanced district level planning will be pursued. Village titling and issuance o f Certificate of Village Land will assist communities secure tenure over natural resourcesand encourage participatory forestry and wildlife management. The government recognizes the slow pace in town planning and quality housing in rural areas. The supply ofnew houses inurbanareas is outstripped by massive mal-urbanmigration, and where such housing is available, it is o f low quality, in a poor environment and with inadequate or no access to essential utilities o f clean water, electricity, roads and sewerage lines. Measures will be taken to ensure improved access to and quality of such services as well as improved urbanplanning, surveying andtitlingto ensureaccessto plots by the poor andvulnerable groups. 5.3.2.4 Adequate social protection and rights of the vulnerable and needy groups with basic needs and services Growing numbers o f children are vulnerable to the shocks and stresses occasioned by poor living conditions, malnutrition and illhealth. The effects of HIV and AIDS and gender discrimination are particularly challenging to the prospects of girls. HIV and AIDS orphans, youths and old people, particularly women, and people living with disabilities constitute vulnerable groups for whom extreme poverty is often compounded by exclusion and discrimination. Children and women are most vulnerable to the multiple effects of poverty, particularly in rural areas. Food insecurity, limited access to health and education and a heavy workload increase women's vulnerability to poverty. To 48 address these issues, nine operational targets have been identified and grouped under four broad headings (Box 5.11). Box 5.11: Operational targets for adequate social protection and rights of the vulnerable and needy groups with basic needs and services A range of specific measures will be identified and implemented. A comprehensive policy on vulnerability and social protection will be developed and enforced. The objectives o f the policy include: to harmonise the implementation o f programmes; to increase the scale o f most cost-effective programmes and to improve joint monitoring and evaluation of progress. Specific measures will be implemented to assist inprotecting those most vulnerable from falling deeper into poverty, including: measures to ensure children are protected from exploitation, abuse, and violence; to promote access to quality social services, credit and to transfers and pensions; to increase the scale o f effective micro and area-basedschemes, social insurance and social assistanceprogrammes. Support will be provided to HIV and AIDS-affected households headed by children and other orphans, the aged and young women. Simultaneous interventions will be implementedto reduce stigma and discrimination against people living with HIV and AIDS. To ensure that all interventions are sustained and meet the priority needs of the poorest, communities will be fully involved in designing and in effectively instituting appropriate social protectionmeasures at that level. Likewise, the capacity of local authorities will be strengthened to facilitate the identification o f vulnerable persons and provide them with appropriate supports. 49 5.3.2.5 Effeive systems to ensure universalaccessto quality and affordablepublic services Functioning and well-equipped public facilities (schools, health facilities, availability o f clean and safe water, etc), including adequate, motivated and competent human resources, i s a prerequisite to improving the quality o f life and for promoting the well being of all Tanzanians. This calls for increased provision of essential inffastructure, planned and serviced human settlements and skilled personnel. There is also a need to forge effective partnershipsbetween the government, LGAs, CSOs and the private sector. Seven specific operational targets (Box 5.12) are grouped under five broad headings: roads; schools and health facilities, social services; access to health facilities; a nd, partnerships andplanning. Box 5.12: Operational targets for effective systems to ensure universal access to quality and affordable publicservices The Government will increase absolute resources for basic public services and ensure that a basic infrastructure in terms o f facilities, equipment and materials, well-trained, competent and motivated human resource, referral structures, a network o f passable roads and railways are in place. The strategy also will ensure that health facilities are improved and are accessible and drugs are made available throughout the year. The Government will forge partnership with all other stakeholders, including; CSOs, private sector and Faith Based Organisations (FBOs), in the provision of quality social services. 5.3.3 Cluster 111: Governance and Accountability Inthe areaofGovernanceandAccountability the NSGRP aims at achievingfour broadoutcomes: Goodgovernance andthe rule of law are ensured; Leadersandpublic servants are accountable to the people; 0 Democracy, political and social tolerance are deepened; and 50 Peace, political stability, national unity and social cohesion are cultivated and sustained. Seven goals have been identifiedfor this cluster. To each goal there is one or two operational target@) (Box 13). Box 5.13: Cluster 111 Goals and targets for governance and accountabil ity - Whereas strategies specific to each goal (and targets) are also described in the next section, possible areas of collaboration are inthe Annex. 5.3.3.1 Structures and systems of governance as well as the rule of law are democratic, participatory,representative,accountableand inclusive The first goal i s to develop structures and systems o f democratic governance that are participatory, representative, accountable and inclusive. The operational target for this goal is to ensure representative, inclusive and accountable governance institutions operating at all levels. Strategiesto achieve this target will include: scaling up and follow up on the implementation of all the components of the National Framework on Good Governance; improving the capacity o f all representative bodies; and strengthening local level governance institutions while focusing on increasedparticipation and representation of women, children, youth, and people with disabilities and other vulnerable persons in all governance structures. Other strategies include: maintaining and ensuring separation o f powers between the executive, judiciary and legislation; and enforcement and 51 harmonisation of policies and laws relevant to land and natural resourceutilization and management. The latter will include undertaking surveys and issuing of certificates for ownership to relevant villages and individuals with a view to improving security of tenure. Capacity development for local authorities to implement and oversee governance reforms remains critical to the success o f good governance reforms. The gender issues will be mainstreamed into policies, plans, budgets and implementation mechanisms including gender monitoring and indicators for good governance. 5.3.3.2 Equitable allocation of public resources with corruptioneffectively addressed The second goal addresses a need for equitable allocation o f public resources and effective control of corruption. This goal has two operational targets: (i)Publicresourcesareallocated,accessibleandusedinanequitable,accountableandtransparent manner; and (ii)Instituteeffectiveregulationsandmechanismsregardingpettyandgrandcorruption. Towards the fvst target, strategies will include built-inequity andparticipationprinciplesinthe PERs, and ensuring access and use of natural resources with clear emphasis on the needs of the poor. Effective mechanisms are needed to make people aware o f official Government policies regarding public financing and official charges as well as their entitlements through civic education and dissemination o f information. Systems and institutions o f accountability, ethics and transparency of government and non-government officials, including political parties will be strengthened. Adequate supervision o f Local Government Authorities (LGAs) for accounting, financial reporting and auditing functions will be strengthened. Also, public involvement in the preparation, formulation and monitoring o f the NSGRP and budgets will be deepened, including capacity development for routine data system. All transfer mechanisms to LGAs, including villages and mitaa for recurrent and development funding, will be harmonised with the formula-based recurrent grant and Local Government Capital Development Grant (LGCDG) systems to provide a single national process that emphasizes equity, transparency and accountability, andrewards performance improvement. The second operational target focuses on petty and grand corruption. The strategies will include strengthening existing institutions and mechanisms (e.g. PCB) to operate independently and take effective and swift action as well as enforcement o f the NationalAnti-Corruption Strategy and Action Plan (NACSAP). LGAs and MDAs will imdertake concrete actions to develop capacity for managing resources, reduce and monitor corruption within their respective sectors. Also, measures will be taken to deepen engagement o f media and civil society in policy processes and to protect and promote the independence of the media. The government and other key actors will provide information on the budget allocations, disbursements and uses o f funds at district, ward andvillage level. 52 5.3.3.3 Effective public service framework in place to provide foundation for service delivery improvements andpoverty reduction The third goal focuses on establishing effective public service framework as a foundation for improvement in service delivery and reduction of poverty. Two operational targets have been identified. The first is to ensure the administrative systems of government are managed transparently and in the interests o f the people they serve; the second is to institutionalise and implement decentralisation by devolution so as to enhance public ownership o f the poverty reduction process. Strategies will include strengthening the Public Service Reform Programme with particular attention to transparent recruitment based on merit, ethics, skills and ability, institutional rules and incentives, institutional management, cost effectiveness, and customer service and responsiveness. Regular service delivery/client satisfaction surveys will be carried out to monitor quality o f public services. Measures will be taken to strengthen monitoring and evaluations to ensure performance indicators are tracked against objectives and targets in each MDA. To that effect, actions w i l l be taken to develop, implement and monitor feedback on Client Service Charters and end-user surveys in each sector; as well as to promote public-private-NGOs partnership in the provision o f services. The need to hire qualified personnel in key sectors who are trained, motivated, equitably deployed and supervised is critical. This calls also for the needto increase and rationalize remuneration o f civil servants in order to fairly compensateworkers andto reduce corruption. The government policy of decentralisation by devolutionwill continue to be implementedthrough the LGRP. This entails devolution o f increasing responsibilities for service delivery to LGAs, including village and mitaa that have to be empowered and their capacity builtto carry out their roles as set out inthe Policy Paper on Local Government Reform (1998). 5.3.3.4 Rights of thepoor and vulnerablegroups areprotected andpromoted in thejustice system The fourth goal focuses on the protection and promotion o f the rights o f the poor and vulnerable groups in the justice system. The operational target for this goal is to ensure timely justice for all, particularly the poor andvulnerable groups. The strategies to achieve the target will include strengthening the judicial system; extending coverage of the legal reforms and continued review of succession, inheritance, customary, marriage Acts and' laws that address the rights o f children, women, girls and other vulnerable groups such as people with disability. In addition, the legal aid for vulnerable groups will be availed. Strengthening monitoring mechanism within the police force, prisons andjudicial systems will ensure that assessments o f the performance of these institutions are undertaken. The juvenile court system will be reviewed t o make sure it i s driven by best interest of the child, and covers all regions. Government and other key actors will scale up the fight against all forms o f abuse, including trafficking inpersons (TIP), discrimination 53 against women and children, and other vulnerable groups. Improvement of facilities, infrastructure andtraining of law enforcers (police and courts) to combat TIP andrelated crime will be steppedup. 5.3.3.5 Reduction of political and social exclusionand intolerance The fifth goal i s the reduction o f political and social exclusion and intolerance. The operational target aimed to achieving this goal is development of political, and social systems as well as institutions that allow for full participation o f all citizens, including the poor andvulnerable groups. The strategies to achieve the targets include: designing and implementing campaigns to inform people of their rights, responsibilities, and address all forms o f abuse, intolerance, discrimination and stigma. Moreover, dialogue on human rights, reduction of poverty and peace will be promoted among political leaders and faith based organizations. Legislation requiring employers to utilize equal opportunity employment policies will be enforced. Other measureswill include analysis o f excl usion o f vulnerable persons within key review processes (e.g., health and education sector reviews), institution o f reliable mechanisms of complaints of citizens to ensure people are protected from retribution andintimidation. Review the legislation and special provisions that categorically definethe rights of people with disabilities and measures that need be taken, when these stated rights are infringed. 5.3.3.6 Improved personal and material security, reduced crime, eliminate sexual abuse and domestic violence The sixth goal aimed at achieving the broad outcomes i s to improve personal security, reduce crime, and eliminate sexual abuse and domestic violence. The desired operational target is to ensure that Government institutions and agents namely the police, courts and prisons observe human rights and ensure justice and security for all. Strategies to achieve the target include: (i)instituting niechanisms to fully implement community - sentencing policy and emphasizerehabilitative rather thanpunitive approach to prison; (ii)enhancing capacity by training and equipping of police to combat crime, terrorism, illicit business, trading -in- persons, drug-trafficking, money laundering etc. (iii)involving communities in combating these vices; (iv) training the police and other law enforcers on human rights; (v) addressing security needs of vulnerable groups that require differential measures o f protection, including children, youths (particularly girls), women: people living with disabilities, people living with HIV and AIDS and the elderly. The capacity ofjudges, magistrates and state attorneys to handle a large number of cases will be increased. Efforts will be made to increase awareness of people about their Constitutional rights, right to public information and women's rights, including protection of women against violence and right to seek redress and access to justice. The prosecution system and coordination of Ward Tribunals will also be streamlined and strengthened. 54 5.3.3.7 National culturalidentities enhancedandpromoted The seventh goal aims at promoting national cultural identities. In order to achieve this goal, the required actions are to develop and operationalize policies, strategies and legal fi-ameworks for cultural, moral andnational language development. The strategies to achievethis include reviewing of existing policies, strategies and legal framework; establishing and supporting institutions that promote cultural identities and national integrity; and integrating moral education into school activities. Also, Swahili language will be locally and internationally promoted as part ofthe strategy. 55 CHAPTER VI: IMPLEMENTATIONARRANGEMENT 6.1 Introduction This chapter explains the implementation arrangements for NSGRP, which include institutions, roles and responsibilities, harmonization and rationalization of key national processes, a need for a communication strategy, managementand organizational issues and capacity development. 6.2 Institutions The outcome-based approach adopted in NSGRP brings to the fore issues o f cross-sector collaboration, inter-linkages and synergies in achieving priority outcomes. The key local actors that will implement the strategy include central government ministries and LGAs, independent departments and agencies (MDAs), private sector, Civil Society Organizations (CSO) and Communities. Parliament will play an oversight role over the government in the implementation process. Likewise, the Development Partners (DP) will play a supportive role in the implementation o fNSGRP. Based on the synergies and inter-linkages, key actors are grouped into five broad sectors or areas of collaboration: (i)the macro sectors; (ii)productive sectors; (iii) service sectors; (iv) economic social service sectors; and (v) public administration sectors. The cross-cutting issues have been mainstreamed into the NSGRP broad clusters. Mainstreaming will further be taken up by individual sectors. Macro sectors The areas o f collaboration include macro policy frameworks, cross-sectoral issues and coordination and supervisionlmonitoring at national and local levels. Major areas include financial mobilisation and management, particularly fiscal and monetary issues at central and local government levels as well as policy coordination. Private sector and civil societies will be involved in a consultative process on macro policies. Productivesectors The areas o f collaboration include public and private investments, markets and regulatory institutions, communication, employment and cross-cutting issues. Key sectors include: agriculture, mining, trade and industry, with particular attention to small and medium enterprises (SMEs). Main actors in this area include the private sector and the government, which will play an enabling role in selected areas ofproduction. Social service sectors These sectors include education, health, water and sanitation. The possible areas o f collaboration include improvement in access o f quality and equity in delivery as well as social protection. The 56 actors to be involved are LGAs, private sector, central government ministries and civil society organizations, including the faith-based ones. Economicservices sectors These include roads, construction, transport and communication, energy, water, lands, storage facilities and Information and Communication Technology (ET). The possible areas o f collaboration are investment, joint ventures, regulatory framework, and employment, infrastructure and cross - cutting issues. Actors include the respective central government ministries and LGAS, the private sector andthe community at large. Publicadministrationsectors The areas of collaboration include policy guidelines, administration of law, peace, security protection of humanright and stability. The actors include Central Government ministries and LGAs. Parliament The Parliament will maintain its oversight role over government ministries based on the current structure of Parliamentary select committees, which is by sector. Membersmay be included inspecial working groups where appropriate. 6.3 Roles and responsibilities The following are the roles and responsibilities o f key institutions inthe implementation of NSGRP. 6.3.1 MDAs and LGAs MDAs andLGAswill have the following responsibilities: Coordinating the NSGRP and Poverty Monitoring System and work closely with other actors to ensurethat progress inachieving poverty reduction outcomes is monitored and evaluated. Facilitating the interface between the national poverty monitoring system and Local Government M&E on different aspects of monitoring and ensure cross-cutting issues are adequately coordinated and mainstreamed during the implementation o f the NSGRP. Establishing and incorporatingNSGRP priorities inthe guidelines for the preparation o f Medium - Term andAnnual PlanandBudget. Mobilizing, allocating andmonitoring o f financial resourcesmade available to NSGRP actors. The Ministry responsible for public service management in collaboration with other actors within the government will coordinate capacity building and skills development programmes. The sectoral ministries will be responsible for policy guidance, supervision, coordination, implementation and monitoring activities, which are contributing towards achievement of particular poverty reduction outcomes in their sectors and across sectors. They will also be responsible for identifying detailed priority activities (sectoral and cross-cutting) that will be taken up during the implementation of the NSGW. Ministry responsible for local government will coordinate implementation of programmes at regional and district level. It will also be responsible for capacity buildingmeasures at the local government levels. On the other hand, the ministry will lead in collection and dissemination o f data from grassrootslevel to the national level and vice versa. At the district level, LGAs (district/town/municipaVcity councils, village/ mtaa) will plan and implement programmes within their areas o f jurisdiction, in collaboration with other actors, including communities andhouseholds through participatory process. 6.3.2 Non-government actors Findings from consultations identified key roles for non-Government actors in achieving desired outcome o f poverty reduction. Communities Communities will participate in planning, implementation and monitoring community activities supported by government and other actors. Communities will also monitor quantity and quality of services delivered to them. Mechanism will be developed to enable communities to make leaders, local authorities and central government accountableto the people they serve. Private sector The private sector has an important role to play in achieving poverty reduction outcomes because of its central role as the engine for economic growth. The government i s reducing its role to core functions o f policy formulation, economic management, provision o f economic and social infrastructure, and legal and regulatory framework, maintenance o f law and order as well as selected areas o fpublic-private sector partnership.The factors that hinder the active private sector participation inthe economy will be addressedthroughfriendly trade and investment policies. Civil Society Organizations The civil society organizations are key actors in poverty reduction. Their roles and responsibilities will include: building local capacity and empowering communities; participating in monitoring and evaluation at national and community level; mobilizing and enhancing community participation; and mobilizing community resources for poverty reduction. CSOs w i l l advocate for accountability of its members and government to the people. CSOs will work closely with the government ministries and local authorities to ensure that cross-cutting issues are included and implemented in the sectoral and district plans. 58 In order to improve the effectiveness of civil society organizations there is a need to review and strengthen the organizational and management frameworks at national, regional, district and community levels. 6.3.3 DevelopmentPartners Development partners will continue to work closely with key local actors in addressing poverty reduction outcomes. According to the thrust o f the Rome and Paris Declarations, Tanzania Assistance Strategy and Joint Assistance Strategy, the development Partners will use the existing agreed national systems and processes to provide additional financial, technical and other support in the implementation of the poverty reduction strategy geared to the achievement o f the Millennium Development Goals. Development Partners will also fa cilitate capacity building initiatives within the poverty reduction framework as well as participatinginmonitoring and evaluation. 6.4 Harmonisationand rationalisationof nationalpolicy processes There are several key nationallevelprocesses, namely: - NSGRP and Poverty Monitoring System (NSGRP/PMS); Public Expenditure Review (PER), Budget Guidelines and Medium Term Expenditure Framework (MTEF); and Tanzania Assistance Strategy (TAS), Poverty Reduction and Growth Facility (PRGF), Poverty Reduction Budget Support (PRBS), Poverty Reduction Support Credit (PRSC) and Joint Assistance Strategy (JAS). The key actors including government will ensure that all these key processes are appropriately sequencedand properly timed in order to provide adequate linkages and synergies among them. The NSGRP and Budget processes are at the centre of all processes.The NSGRP outputs will feed into the PER process, which again informs the preparations of budget guidelines. The budget guidelines inform sectoral budgets and MTEFpreparations. TAS/JAS process will also inform the PER process on external assistance. There are, among Development Partners, efforts to hannonise and rationalise processes by encouraging joint missions and reviews. Bilateral partners and multilateral organisations that are directly supporting the Government budget through the PRBSPRSC facilities have streamlined required actions by applying the same Performance Assessment Framework and carrying out joint reviews under the PAF. Development Partners themselves have reorganised themselves so as to provide internal coherence amongst themselves in the context of TAS/JAS and the Rome and Paris Declarations. In that way, they will be seeking to harmonise or reduce missions and reporting flameworks and making it possible for the Government to have ample time to concentrate on core activities. With regard to PRGF, the IMF will continue with its efforts to align their review missions 59 with the budget cycle and coordinate with other development partners. The harmo nized calendar will bereviewed andsharedwidely. The ProposedAnnual Cycle is shown inTable 6.1. Table 6.1: Proposed Annual Process Cycle */ Strategic Issues coveredby PRSB/PRSC BudgetReviewin September;performanceissue coveredby PERExternal ReviewinFebruary /**PRGF Meetingsto be linkedwith key PRBSPRSC processes; IMFhassignalledits readinessto alignits reviewmissions withthe governmentbudget cycle andto coordinateactivitieswith other developmentpartners. One o f the preconditions for harmoniiation andrationalization is the establishment o f strong national systems such as the PER, the poverty reduction strategy and sector reviews as well as sustained reforms o f core programmes. Support by development partners in these reforms has been substantial. However, there is need for increased efforts in building and strengthening local capacities in the MDAsandLGAsresponsible for takingthe reforms forward. 6.5 PMS Communication Strategy The government i s committed to opening up and maintaining channels of communication with key stakeholders, including MDAs, private, sector civil society organizations and vulnerable groups, communities and Development Partners, with a view, to create a sense o f national ownership and enlist broad participation. The PMS communication strategy will be a tool for reaching stakeholders as well as an effective feedback mechanism. It will facilitate opportunities for debate, dialogue and 60 sharing of knowledge to strengthen the development and implementation of poverty reduction strategy. The strategy will complement existing communication interventions. 6.6 Management and organizational issues Management and organizational needs o f the NSGRP will also be addressed. The PER and NSGRP work will be organized in a manner that sector inter-linkages and synergies are realized. This will require, for example, moving from sector-based PEWreviews to cross-sector collaboration based PENreviews, e.g. health reviews can be combined with water and education. Structures and incentive systems will be put in place to enable the cross-sector collaboration mechanisms to work effectively andefficiently. 6.7 Mainstreamingcross-cuttingissues Inorder to adequatelymainstream cross-cutting issuesstepshavebeentakento integrate themintothe NSGRP. The next step is to mainstream the cross-cutting issues into sector strategies and programmes. Sectors will revisit their sectoral development plans in light of the NSGRP and PER through sector working groups, in collaboration with the NSGRP Cross-cutting Working Group. Furthermore, local authorities will also have to revisit their plans in light o f the NSGRP and mainstream cross-cutting issues into their district development plans. 6.8 Capacity developmentneeds Following the shift from priority-sector to outcome-based approach, implementation of the NSGRP will demand change inmindset, orientation of skills, work processes, instruments,procedures, staffing and institutional set-up to support cross-sector collaborations in order to achieve shared poverty reduction outcomes and the Millennium Development Goals. Capacity building for harmonising and achieving greater policy coherence and synergy, between the NSGRP and other processes, will be an imperative. Capacity building needs o f the private sector, civil society and communities will be identified and addressedso that they can more effectively engage inthe policy processes.The reform processeswill continue to be a framework within which capacity issues will continue to be addressed. 6.8.1 Training requirements Priority will be given to training of key actors in central and local governments, civil society and private sector indesigning, implementation andmonitoring of pro-poor policies and strategies. Tailor- made sensitisation programmes and enhancement training modules, to suit the requirements o f different cadres will be prepared in collaboration with training and research institutions. Moreover, capacity building o f the actors at district level is critical, given the role o f local governments in implementation o f the NSGRP. These will be addressed through Local Government Reform Programme (LGRP), poverty monitoring process, as well as other interventions. 61 6.8.2 Systems development The budget process o f resources allocations and monitoring systems will be designed to capture priority goals, operational targets and cluster strategies. The NSGRP articulates the cluster strategies and intervention packages, which will enable actors like MDAs, local governments, private sector, communities and CSOs, to further prioritise and sequence the actions/activities in their respective areas of operation. The Ministry of Finance has developed a software system (SBAS), which makes it possible to linkthe resources allocation to MDAs as per NSGRP targets. Inaddition, the PMS will be reviewed to enable better reporting on progress made towards achieving agreed poverty reduction outcomes andMDGs. Efforts will be made to improve the routine data and functioning o f monitoring and evaluation system at all levels of local government. Focus will be on developing integrated management information systems. 6.8.3 Technical assistance Following the study on technical assistance, the Government will develop Technical Assistance Policy. The required technical assistance(TA) will focus on building capacity for poverty reduction. The key actors, including the government, will ensure TA is usedproperly to buildnational capacities with a view to improving quality o fthe capacities of individuals, institutions, and systems. 62 CHAPTER VII: MONITORING AND EVALUATION OF THE STRATEGY 7.1 Introduction Monitoring implementation of NSGRP and evaluation of progress will be done under the Poverty Monitoring System (PMS), which was establishedinthe year 2001 and i s now operational. The PMS is guidedby the over-arching principles of the NSGRP and is based on challenges and lessons learned inmonitoringthe PRS(P), andthe fact that there are new developments associatedwithNSGRP. Inview ofthese developments,there are new demandson the PMS, which require review of both the indicators and the institutional set-up. The review o f the institutional arrangements will focus on capacity building measures and mechanisms for ensuring efficiency and effective delivery o f the expected outputs. This will be done inthe process of developing the Poverty Monitoring Master Plan inlinewiththeNSGRP. The revision o f the PMSPMMP i s intendedto: B hprove data collection, reporting and use; and align the indicator-monitoring programme to fit the new focus on priority outcomes including addressing cross-cutting issues. Through this programme the strategy for strengthening the routine data collection will also be finalized and implemented to ensure that data are available for monitoring and evaluation. Review the institutional arrangements in view o f the challenges and lessons learnt in operationalization o f the PMS and close any existing gaps. I Provide mechanism for evaluation ofthe NSGRP strategies. 68 Integrate the targets ofthe NSGRP and MillenniumDevelopment Goals fully into the PMS. 7.2 Status of the PovertyMonitoringSystem: challengesand lessons learnt The monitoring activities o f the PMS have been coordinated by four Technical Working Groups of the System: Censuses and Surveys, Routine Data Systems, Research and Analysis; and Dissemination, Sensitisation and Advocacy. During the life o f the PMS the Surveys and Censuses Group was able to generate and make initial analyses o f the survey data, according to its work programme. The Routine Data Group concentrated on capacity building o f data collectors. Analysis and firher research into areas where knowledge gaps were observed was also done according to scheduleunder the ResearchandAnalysis Technical Working Group. The Combination o f the collection o f survey data and additional data from routine data collection systems and further research work and analyses done under the Research and Analysis Technical Working Group enabled the production of the three Progress Reports (2000/01, 2001/02, 2002/03) and two Poverty and Human Development Reports of 2002 and 2003. The results o f the monitoring system were disseminated using different methods, including printing of the main documents and 63 distribution, production o f popular versions, organisation o f annual Poverty Policy Weeks, and production of Newsletters, posters and radio programmes, and through the poverty monitoring website. There are, however, critical challenges that need to be addressed in the second cycle o f monitoring progress and evaluating outcomes and impact of the NSGRP. The Routine Data system Technical Working Group has not yet succeeded to pull together data from routine systems o f sectoral ministries. More efforts will be directed towards strengtheningthe M&E system at all levels of local governments and linking it with the PMS. General sensitisation o f the different stakeholders across sectors and particularly in areas where data are collected, to make good use o f the information generated, for decision -makingremains one o f the important success factors and challenge to the system. More innovative ways o f disseminating the information generated and sensitisation o f the general public will be sought through the development of a Communication Strategy for the NSGRP and Budget. The revised PMS will also, more than in the past, focus onthe evaluation ofthe clusters ofstrategies. In addition, funding for the major surveys and strengthening the capacity of the key actors in local governments to collect, analyse and use data as well as ensuring quality of data collected remain critical. Indeed, there is a need to ensure that the Poverty Monitoring System responds to NSGRP requirements and remains relevant and effective in tracking progress o f implementation. Outline d below are the objectives of the PMS. The outline is designedto meet the new demands o f the NSGRP. The strategy for meeting the objectives i s also addressed. 7.3 Objectives of the Poverty Monitoring System The PMS i s a national system designed to meet informationneeds of different stakeholders including: policy makers, civil servants in the central government, local government officials, civil society organisations, research and academic institutions, external development partners, the media and the general public. The specific objectives of the system are: (i) To ensure timely availability of data. (ii) To ensure proper storage, easy access anduse by different stakeholders. (iii) To analyse data and disseminatethe findings to stakeholders. (iv) To promote evidence-baseddecision makingat all levels through monitoring and an increased attention to evaluation. (v) To ensure that targets o f global initiatives (eg. MDGs) to which Tanzania is committed to are integrated into the system and localised. 64 To achieve these objectives, the PMS will: Focus on monitoring implementation and evaluating progress inall the three major clusters o f the NSGRP outcomes i.e. growth and reduction of poverty, improved quality o f life and social well - being as well as governance and accountability. Increase attention to monitoring at all levels, particularly making linkages between PER process andPublic Service Management. Process monitoring will also take place where appropriate. Create more space for on-going evaluation. Link with the M&E system of the local governments and other systems to ensure adequate provision o f more disaggregated data so as to facilitate monitoring at all levels (regional, district, ward, village and mtuu),while still focusing on national level monitoring. Expand national census and survey programme to ensure greater coverage of indicators for monitoring performance, to include agriculture and (SME) business surveys andindustrial output. Expand the Tanzania Socio Economic Database (TSED) through additional thematic seminars to derive data for NSGRP monitoring for all sectoralgroups, regions and districts. Strive to collect and analyse more qualitative information and increase participatory monitoring through PPAs, poverty maps and social atlas and other methodologies. It will also possess a more guided research and analysis programme to evaluate change in or progress towards the desired outcomes o f the NSGRP. Complete integration o f the MDG targets and indicators into the NSGRP indicators set and into the TSED. Review the pooled fund arrangement together with its manual and explore further funding opportunities for the donor community to pool its funds and consolidate input for poverty monitoring, and for government to obtain funding through general budget support. 7.4 Strategy for monitoringand evaluation The strategy will consist o f a multi-pronged approach o f special institutional arrangements. It will target data collection, analysis, storage, dissemination and communication and strategic linkages with other monitoring systems. Itwill also work for improved fknding modalities. 7.4.1 Institutionalarrangements The PMS institutional capacity will be strengthened to deliver the expected outputs and ensure sustainability o f the monitoring and evaluation activities. Special measures will be taken to strengthen capacities in areas where performance is observed to be weak. These arrangements will be necessary as all sources of information, including the surveys and censuses, routine administrative data and research and analysis will be captured, analysed, disseminated and evaluated under this single system, to ensure its robustness. 65 7.4.2 Monitoring Indicators: The revised list of indicators that was developedto meet the information needs of different stakeholders at the national level will continue to be used. However, the indicator set will be reviewed to meet additional information requirements necessitated by the new developments in NSGRP. Indicator setting will be done using the inter-sectoral approach that pervades the implementation of the NSGRP. M D G targets and indicators will also be addressed by the PMS to enable sustained reporting on these global indicators. Data Collection and Storage: Emphasis will be placed on data quality and the routine administrative data systems will be strengthened and hannonised accordingly. The census and survey programme will be expanded to include other data that are currently not being collected. This is expected to include the conduct of business surveys. The development of TSED will continue as a way of providing a one-stop centre and reliable storage with easy access to the information and data. Data Analysis: The current PMS has a strong research and analysis component and has so far conducted various studies including Participatory Poverty Assessment. This component will be retained and further mandated to expand its analytic capacities and to employ qualitative methodologies to further explore topics of critical importance to poverty reduction. The Povert y and HumanDevelopment Report, which is now beingproduced, will also become more focused and will target in-depth researchissues such as HIV and AIDS and other areas o fvulnerability. Data Dissemination and Communications: The PMS will have a dissemination, advocacy and sensitisation strategy that is operational through a communications mechanism, designed to manage inter-sectoral linkages. It is currently important to the NSGRF' andprovidingmechanism for receiving continuous feedback from the regions, districts, wards, villages, hamlets and mitaa. The strategy is intended to improve communications for advocacy of the NSGRP, MDGs and PMS, facilitate understanding o f the PMS indicators and increase participation at all levels. 7.4.3 Evaluation Evaluation will be done at three levels. First, internal evaluation will continue through the production of the Poverty and Human Development Reports (PHDR) and the PER process. Second, additional space will be created for on-going evaluation mechanisms through Participatory Poverty Assessments and other methodologies such as service delivery reports and other qualitative assessments, particularly of the reform programmes (e.g., public sector reform and local government reform). Third, a comprehensive review, informed by annual progress reports produced under national consultative processes, will take place at the end o fthe NSGRP period in 2010. 66 7.4.4 Linkages to other monitoring and evaluation systems The monitoring strategy will pay particular attention to linkages with other monitoring and evaluation systems to ensure that the different monitoring systems at different levels inform each other. Operationally, the emphasis will be on generating relevant data to meet the information needs o f different stakeholders and creating awareness of the available information for its effective use in planning and decision making. Specifically, the PMS will: Strengthen linkages with the Local Government M&Esystem. Enhance use of information at local authorities -district andtown councils. Align andharmonise regionalandsectoral needs for information andfor greater coherence within the national monitoring system. Harmonise outputhnformation from Public Expenditure Review (PER) reports with the PMS output indicators. It will be important to track targets set for indicators and feed results back for actual policy makiig. 7.5 Implementation mechanisms The PMS will be implemented through: An institutional structure comprising Technical Working Groups, the NSGRPPMS Technical Committee andthe National Poverty Monitoring Steering Committee. The Terms o f reference for these institutions will be elaboratedina revised PMMP. Priorities set for the (multi-year) national census and survey programme as they relate to the monitoring indicators. A rationalized and harmonized system o f routine data collection at the national and regional levels. Capacity development at the local government level for data collection, analysis and usage. Guidelines for determining researchpriorities that will include outcome and impact evaluations of the poverty reduction outcomes. Dissemination plans targeted to key stakeholders such as the national and regional government, LGAs and civil society. A communications strategy. A pooled-hd arrangement for managingthe PMS activities. 7.6 Monitoring tools and deliverables Output and deliverables of the PMS I1will be: Annual ProgressReport, using PMS output to both indicate progress and update the NSGRP, thus making the NSGRP a livingdocument. 67 Bi-annualPoverty andHumanDevelopment Reports -utilizingdata from the PMS and also from its commissioned research and evaluations. It will also focus on in-depth analysis of critical issues such as HIV andAIDS. Analytical reports on surveys and censuses. A rolled out TSED to all sectors andto regions and districts andupdating relevant indicators and the metadata. MDGReports (2001 and2005). A communications strategy with an interactive element to facilitate ongoing feedback from stakeholders. The poverty monitoring website www.povertvmonitorinmo.tz with links to the national website will be used as part o f the monitoring mechanism of the PMS and a key tool in the communications strategy. 68 CHAPTERVIII: NSGFW FINANCINGSTRATEGY 8.1 Introduction This chapter assesses the financing implications o f reaching NSGRPtargets. It revisits key features of PRS (P) financing framework and related challenges; and then presents the financing framework for the NSGRP, methodology for estimating financing requirements and the financing strategy. Mobilisationo f resourceswill place emphasison domestic sources, particularly the contribution of the private sector and community-based initiatives as well as government and foreign assistance, with a long-term objective o f reducing aid dependence. Implications of the financing framework interms of macroeconomic stability and management as well as the risks associated with external shocks and natural calamities are also highlighted. 8.2 ReviewofPRS(P) financingframework The approach followed to derive financing estimates o f PRS (P) was to estimate the government's budgetary requirements of priority sectors and priority activities within them. The priority sectors were Education, Health, Water, Agriculture, Roads and Judiciary, plus HIV/AIDS as a cross-cutting issue. Lands sector was added later to the priority sector list, while the Judiciary was broadened to include all departments under the Ministry of Justice and Constitutional Affa irs and the Ministry of Home Affairs -all underthe umbrella name - JusticeSystem. The costing o f priority interventions was basedpartly on the analysis o f recurrent cost implications of sector programmes and inputs from the PER and MTEF. The cost of health, education, water and roads was based on an estimate of the basic unit of service. The estimates o f remainder o f the sectors were based on PEWMTEF estimates. From these estimates financing requirements were derived for the medium term subject to availability o f the resource envelope. The estimation o ffinancing implications of implementing PRS (P) presented a number o f challenges: The information available was often insufficient to determine the unit cost, especially in the social sectors where inputs and outputs are hardto measure. Weak link between policies, actual costs and resource allocations - mainly because costs o f most policies were unknown. They also complicated the estimation process. The financial implications o f poverty-reducing interventions within "non-priority sectors" were not explicitly considered in PRS (P). As such, the financing plan was not comprehensive. The interdependent nature o f the PRS (P) goals and institutional arrangementsthat guided resource allocation (through the MDAs) made financing delineated by sector less meaningful. 69 The financing strategy under PRS (P) centred on government budgetary allocations to priority sectors and activities. This was complemented by donor support through basket financing, direct project funds, as well as contributions by private sector, communities, NGOs andother stakeholders. Poverty- reducing interventions outside the priority sectors were financed through allocations to "other priorities" (e.g., energy) inthe general government budget. 8.3 NSGRPfinancing framework 8.3.1 Basic considerations The estimation o fNSGRP financing builds on the PRS (P) approach, while tryingto address some o f the weaknesses noted above, but focusing more on costs of attaining specific outcomes. Recognises that some of the targets/outcomes are multi-sectoral or interdependent thus requiring clear identification o f cross-sectoral interventions andtherefore financing needs. UnderNSGRP, the financing ofpoverty interventions will continue to dependmainly on domestic resource mobilization efforts. Although the Government has shown resolve to reduce dependency on foreign financing, this source of financing will remain crucial in supplementing domestic resources for the foreseeable fiture. The government will continue to urge donors and other stakeholdersto direct their support to poverty-reducing interventions. Inview of the fact that implementation of NSGRP interventions is not limitedto Government, it includes the private sector, CSOs/NGOs and communities. Thus establishing the total financing requirements for implementing the NSGRP requires going beyond MDA requirements. Other sources of financing will involve contributions from the private sector and CSOs (mainly in service provision), communities, and households. In order to estimate overall required resources by all actors the needs-based methodology will be used. However, this costing exercise will require more time than the MDAs, NSGRP-BAS. NSGRP financing requirements are estimated under the assumption that the economy will grow by 6-8 percent annually over the medium term and maintained at same level for the remainder of the NSGRP period. This i s important for domestic mobilization targets to be realized. Other basic assumptionsunderlying these projections are: - reduction of consumer price inflation to 4.0 percent by end-June 2005 andthereafter maintain it at 4.0 percent or below, consistentwithmajor trading partners; I controlling the expansion o f broad money supply @I2) with GDP growth and consistent inflationtargets; and, I maintainingforeignreservesaboveavalueequivalentto 6 months o f imports o f goods and services. 70 Finally, it is assumed that the sustained macroeconomic stability will increase resilience of the economy to external shocks andnatural calamities. GFS classification is used to link the budget and poverty-reducing interventions identified under each cluster strategy andtargets. 8.3.2 Estimationof financingrequirements Methodology: There are various approaches to costing PRS(P) financing requirements such as the Millennium Project Approach, the World Bank MAMs, and others. The choice of the methodology used to estimate NSGRP requirements was dictated by: Government decision to move from priority sector-basedto outcome-based NSGRP; Needto make an explicit link between NSGRP strategies andthe budget; Limited time between finalisation of NSGRP and preparation of the 2005/06 budget, which will beginimplementing the NSGRP; Wide variation in available datahiformation needed to apply the various methodologies (some sectors had PERreports, well-costed MTEFs, strategic planswhile others did not); Consideration that NSGRP is a rolling document to be revised by learning from implementation; The methodology for preliminarycosting o f the NSGRP involvedthe following main steps: Regrouping o f all NSGRP cluster strategies by Vote and identification of those that have expenditure implications. Each MDA matched its MTEF targets and strategic objectives drawn from strategic plan with NSGRP cluster strategies, making sure that NSGRP cluster strategies are also consistent with performance codes (GFS) provided by the Ministry ofFinance. MDAs use their existing MTEFs to identify activities and related input costs needed to meetaparticular target consistent with NSGRP cluster strategies. Each MDA estimated its total resource requirements (unconstrained) using a Microsoft Access software system called Strategic Budget Allocation System (SBAS) based on inputs from step (iii).Requirements for other MTEF targets (Other-NSGRP targets) and other strategic objectives were estimated ina similar manner. Estimation o f resource requirementsfor LGAs and regions was done based on historical ratios between allocations/transfers to them andtotal resource availability. Overall the Budget Guidelines Committee using the macro version o f SBAS aggregated resourcerequirements. Development of a financing strategy - distinguishing between sources, funding and emerging gap. 71 8.4. NSGRP financingstrategy Like PRS (P) the fmancing strategy for NSGRP assumes that the public sector will play a critical role inthe implementation of the strategy to invigorate the participation of the private sector -the engine of growth. However, attempts to quantify the contribution and financing requirements of other actors (private sector, NGOs, andcommunities) require more time and data. Overall projected resources for the implementation of NSGRP -related interventions and other government commitments is basedon the Medium Term Plan and Budget Framework for 2005/06 - 2007/08 (Table 8.1) while ensuringconsistencywith macroeconomic targets. Table 8.1: BudgetFrame (2004/05 -2007/08) Tsh. Million 2004/05 I__-- 2806181 ._ 2007108 II Budget Profeetions Projestious I - -_ -- ,3%5,669 I ~ " L [.TOTALRESOURCES 3,347,535, 4,103,144 --__- 4,56I,l 57_ --- I_-- I_ _ " _I Domesticrevenue 1,739,288 1,983,125 2,26 1,168 2,580,582 Programmeloanandgrants 434,476 822,358 834,392 846,603 Projectloansandgrants 587,441 788,135 819,840 831.837 BasketSupport Loans 109,956 73,281 66,801 2,799 Basket SupportGrants 160,488 199,405 197,024 164.680 HIPCrelief IDA, IMF andADB 74,664 1 11,503 98,669 103,454 NonBankBorrowing 0 0 0 0 BankBorrowing 231,111 115,018 77,774 31,201 Adjustment to cash 0 0 0 0 PrivatisationFunds 10,115 10,420 0 0 -- - 11.TOTAL EXPENDITURE I --43 03,i 44 4,355,669 42561,157 RECURRENTEXPENDITURE 2,255,948 2,744,955 2,933,829 3,174,753 CFS 481,175 556,3 S8 564,805 60S,700 Debt service 317,825 208,377 309,048 329,780 Interest 168,438 145,017 177,261 184,006 Amortization 149,387 333,360 131,787 145,774 Others 163,350 257,981 255,757 275,980 RecurrentExp.(excl. CFS) 1,774,773 2,f 88,597 2,368,024 2,568,993 olw Salaries &wages 55 I,]59 ha1,897 759,344 845,980 Other Charges 1,193,248 f ,358,415 1,565,291 I,h67,141 DesignatedItems 30,366 148,285 43,390 55,872 ExpenditureFloat PaymentofArrears 0 0 Contingency 0 DEVELOPMENT EXPENDITURE 1,091,591 I,358,189 1,422,840 1,386,404 Local 233,705 297,469 339,IB 387,087 Foreign 857,886 l,[%i0,72t 1,083,665 999,3 17 I_ __1-- I_ ource: Ministry o fFinance 72 Public financing o f NSGRP interventions are projected to increase by 3 percent of GDP annually to cater for increases in expected expenditures, taking into account a gradual increase in domestic revenue mobilization and donor support at 2 percent of GDP annually. The Government will strive to aggressively accelerate domestic revenue mobilization (through further tax reforms, improvement in tax administration and collection and clamp down on tax evasion) without unduly distorting economic activities. Domestic revenue is projected to increase from about 13.8 percent o f GDP in2004/05 rising gradually to 14.6 percent in2007/08. Thereafter domestic revenue is projected to increaseto 15.5 percent by the end of 2008/09. Estimated donor contributions are based on historical trends and will be updated as donor pledges and commitments are submitted to the Government through the PER process. Total external support including HIPC relief is projected to decline from 14 percent of GDP in 2004/05 to 11percent in2007/08'in line with indicative figures of donor support. On more optimistic view, it is expectedthat development partnerswill honour their promises, made in Monterrey and other meetings, to scale up levels o f resource disbursement, particularly in outer years ofthe implementation ofthe NSGRP - avehicle for achieving MDGs. Unresolvedchallengesrelatedto estimation of financing requirementsfor implementing NSGRP: 0 Treatment o f donor funds (how can these be aligned with government priorities) 0 Alignment of money going through basket funds with "new" outcome -based (non-sectoral) priority interventions How to synchronize formula-based grant allocation to LGAs (which is sectoral) with outcome-basedinterventions approach. 0 Quantification ofthe magnitude and direction o f contributions by private sector, communities, andother stakeholders. 8.5 Risks related to NSGRPFinancingFramework 'I'he Tanzania economy remains vulnerable to high aid dependency to the extent that a substantial amount o f its budget will continue to depend on donor support over the immediate future. As such it will be necessary to guard against adverse effects on competitiveness, Dutch disease effects, debt sustainability and the Government's fiscal position by ensuring more effective use of development assistance and focusing on strengthening of institutions to enhance the absorptive capacity. Overall macroecononiic stability and financing o f the first year of NSGRP could potentially be affected by strategic government expenditure needs such as the forthcoming general election. However, Government commitment to enforce expenditure discipline and adherence to monetary policy targets will be maintained through continued implementation o f key reforms (PFMRP, LSRP, LGRP, PSRP, etc). 73 Adverse developments in the global economy and unforeseen natural calamities could thwart the financing ofNSGRPdependingonthe ability ofthe economyto adjust or hedgeagainstsuch events. The financing gap is large and is unlikely to be fully filled by the projectedresources. This i s also compoundedby unpredictability of development assistance (evidencedby wide divergence between donor pledgesicommitmentsand disbursements) and low revenue base given the current structure of the economy\dominatedby subsistence and informal activities. Inaddition to the desire to reduce aid dependency over the mediumtermthe Governmentwill also striveto maintainfiscal prudence. H E .- *2E '5; 8 v1 .E M rnJ t 8 a" 8 a 'S Y P P $8 3zE I- I a5 a 8 vi l- -7- I I w 2 t? fij a .- 2 f3 0 .E +e s z s 3 M 'E 4 2 ii 3 % c W E 2 u '5i 8 B p P .-0I 8 m "8,P !i % I s W 8 B 'a B I H (A .E M .E M .E e be .% b c aI I 4 _I i ! c C r 9t Y 4 a5i I l l I I I I I I I I , I I I e- n , 4 l- n B W E P 8B E CI 8 3 9 s2 a -e 0 m 0 C n C MAP SECTION