Statement by CSOs on the PRSP Progress Report.
Prepared at a pre consultation meeting on the Consultative Group meeting held in Dar es Salaam. 6^th September 2001.

Civil Society views on the CG Process

First we commend the Government and its development partners for creating more opportunity for Civil Society Organizations (CSOs) to participate and comment on the different strategies and plans toward poverty reduction in Tanzania. In particular, we are grateful for the CG special session for consultations with CSOs which broadens Civil Society participation.

 This is evidence of government’s acknowledgement of CSOs wide range of expertise in analyzing and understanding of poverty, based on extensive local experience in all regions of the country.  However, that resource, knowledge and experience has not been effectively used under the current arrangements for policy consultation.

 We take note that CG discussions are one part of a wider process of negotiations and planning which includes the Poverty Reduction Strategy Paper (PRSP), the Tanzania Assistance Strategy (TAS), the Medium Term Expenditure Framework (MTEF), the Public Expenditure Review (PER) and the Poverty Reduction Growth Facility (PRGF). However while we acknowledge there has been limited participation on the part of the PRSP, there has virtually been no participation on the part of PRGF/PSAC-1- process, which has a bearing on the success of PRSP. The PRGF stipulates the conditionalities imposed on the Government by its development partners, principally the IMF and World Bank. In this regard, because the PRSP is linked to the PRGF, we are even tempted to step back and question the value added from our participation in consultations over these strategies because it appears we are just called upon to rubber stamp faire accompli agreements. In particular, we are concerned that the “informal” discussions with civil society representatives take place after the formal meeting.

We stress that in order for civil society to contribute effectively, there should be institutional mechanisms for consultation at earlier stages of these processes, so that civil society inputs can be properly prepared to inform the deliberations of the formal CG meetings. 

Comments on the PRSP progress Report

We recognize:

The value added by the PRSP, the progress made to-date, the stabilization of economic indicators at the macro level where the inflation rate has gone down and the adequate level of international reserves that has been maintained.

 Improved transparency on public revenue and expenditure at macro level though this exercise still needs to be improved at decentralized levels.

 The introduction of the micro finance policy  to reach the poor who have no access to credit.

The rationalization of the tax system, which has started with this year’s government budget, to reduce duplication of taxation thus strengthening the profitability in agricultural production, which is the backbone of our economy.

Recent efforts by the government to initiate a multi-sectoral response to the HIV/AIDs pandemic. The epidemic has far reaching and deep impact on the economy as a whole and priority sectors, leading to a reverse of previous achievements in poverty alleviation. We call upon the government to prioritize the response to HIV/AIDS as a priority among priorities

Concerns

Meaningful civil society engagement in these processes requires access to relevant and adequate information, in good time.

It is difficult to obtain a clear picture of the overall impact of current financing arrangements on poverty reduction.  This constrains our ability both to comment on strategic changes and to assess progress under the PRSP.  In particular, we are concerned that new loan agreements are being concluded at a rapid rate, without adequate public consultation. After a few years, by current trends, Tanzania will be as heavily indebted as it was before HIPC 2.

The current basket funding of PRSP, (PRSP resource envelop) is not transparent on HIPC saving expenditure.  This system does not allow tracing and track-down of the actual amount of debt relief savings disbursed to sectoral/decentralized levels, thus making it difficult to measure its actual impact.

While appreciating the improvement in transparency on revenue and expenditure at macro level (through the MTEF/PER processes), we are still concerned that there is no accountability in reporting back on actual expenditures, which have been disbursed, to decentralized levels.

The ongoing process of structural adjustment, particularly privatization has to be looked at carefully and made more pro-poor.  Privatization should avoid adverse social impacts such as massive retrenchment and acceleration of poverty in general (i.e. through reducing access of the poor to the essential services offered by public utilities). We also note that macro economic and structural reforms are being done with inadequate safety nets to cushion negative impact on the poor. TASAF and SELF, which are mentioned in the PRSP progress report as safety nets,  are not broad enough in their geographic coverage and their focus is limited and narrow in scope.

Recommendations:

The mandate of the Poverty Monitoring System, which has been institutionalized as part of monitoring the PRSP, should be extended to also monitor the PRGF and PSAC-1.

Civil Society Organizations should be given access to relevant documents on macro-economic policy and structural reforms, and agreed aid/loan conditionalities (e.g. the PRGF document).

Civil Society participation in all relevant discussions/decision on social and economic reforms at all levels (i.e. macro, sectoral, loan agreements and budget support) CSOs were only invited as observers in the formal CG meeting. 

The government should institutionalize mechanisms to consult the public, may be through the parliament, before acquiring new debt in order to justify the heavy burden it will place on Tanzanian citizens.