Public Financial Management Programme Zanzibar – Mid Term Review

The Project 

Norad made in 2006 a survey on the state of the PFM system in Zanzibar that identified areas of weaknesses in the overall credibility of the state budget, the revenue mobilisation, lack of integrated PFM Information and control systems, audit capacity and oversight capacity of the House of Representatives. At request from the Government of Zanzibar, Norway has provided project support to the Ministry of Finance and Economic Affairs in implementing important elements of Zanzibar’s Public Financial Management (PFM) reform programme. The objectives of the Norwegian support are to support the implementation of computerised human resource/¬payroll system, strengthened human resource capacity, debt management, systems for budgeting and monitoring, procurement management, and aid management. This Mid Term Review examines the progress the first 18 month of the project from July 2008 to the end 2009. The Norwegian grant agreement is to provide up to NOK 12.5 Million over a three year period.

Interesting Findings

The Mid Term Review findings are:

• The program is owned and controlled by the Government of Zanzibar and the project administration has generally been good.
• Performance of the support has so far been mixed.There has been a strong emphasis on training but the overall impact on performance of the training is unclear.
• The training activities should continue, especially on procurement and debt management. However a medium term capacity building plan for the whole ministry should be developed with appropriate training policies and annual training plan.
• Some activities should be dropped or transferred to other reform programs, such as Human Resource Management and payroll system, and personal incentive systems.
• The project absorptive capacity has been low in the first part of the programme period, and the budget execution has been far beyond planned. Several of the activities had unrealistic short time frames.
• It should be considered a change from bilateral project modality to participating in a basket program with other donors. Multiple sources of support cause problems of coordination and multiple monitoring arrangements.
• There is a lack of outcome indicators in the program. This limits the possibilities to evaluate the outcome of the program so far. The new Public Expenditure and Financial Accountability (PEFA) Framework assessment from August 2010 provides indicator ratings that can be used as baseline for monitoring of future progress. A full evaluation of the program may be made at the time of the next PEFA assessment (assumed 2013).
• Preparation of a Phase 2 of the program (from 2012) should commence. Compared with generally accepted standards the PEFA assessment conducted in 2010 identifies weaknesses especially in the procurement and the management’s use (follow up) of internal and external audit findings.