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Donors and Dodoma: The International Challenge to Tanzania’s Parliament by Maya Prabhu

With a constitutional referendum scheduled for April 2015 and a general election due in October, Tanzania is at a crossroads. In the second of a series examining the country’s political landscape at this critical juncture, we consider the adverse consequences for Bunge, Tanzania’s parliament, of the country’s heavy dependence on overseas aid. Find the first instalment here.

‘Parallel Accountability’ & structural distortion

“The people who have the right to hold our government to account is the parliament of Tanzania… Why then should this right be taken by civil servants of donor countries? They are a mini-parliament attempting to control our executive, which, in my opinion, is quite wrong.” John Cheyo, 22 October 2014

‘Parallel accountability’ describes the state of affairs arising from a government’s simultaneous responsibility to its citizens – through elected representatives in parliament – and accountability to foreign donors financing a significant proportion of the annual budget. Among other things, it fuels a detrimental “rivalry between donors and parliament.”

During 2007-11, an average of 33% of Tanzania’s budget (see table, p.62 of 2014-15 Budget speech), and as much as 80% of the country’s development spending, was provided by international donors. In 2011-13, official development assistance paid for 22% of the budget on average; in 2014-15, aid will still fund a sum equivalent to what the government aims to raise from domestic debt markets. Under these financial circumstances, donor influence over Tanzania is, to a certain extent, inevitable. At a meeting in London this October, parliamentary Budget Committee member and former chairman of the Public Accounts Committee (PAC) John Cheyo, explained: 

“It’s one of the unfortunate parts of being a donor-dependent country. That is why we hope, with revenue coming from the gas and mining sectors, we will be in the position where all monies can be in the hands of government, and Parliament will continue to have the responsibility of scrutinising and approving budgets.”

There is growing recognition among donors and Tanzania’s leadership that the manner in which aid is administered determines the degree of political distortion.

Aid politics behind closed doors

In his contribution to ARI’s 2008 publication, ‘A Parliament with Teeth, John Cheyo wrote, “the mere presence of donors in Tanzania has in some way diluted the power of parliament. It has diluted democracy.” At our meeting in October 2014, Cheyo gave the example of a tendency among donors to retract promised funding in response to ‘misbehaviour’. On these occasions pre-emptive actions by donors can undermine, rather than reinforce, the role of parliament in scrutinising the executive and taking appropriate action. As we argued in the first piece in this series, Bunge has a strong track record of confronting public controversy and holding wayward ministers to account.

The conduct of donors erodes parliamentary power in other ways. Despite donor initiatives to strengthen parliament, ODA flows to Tanzania – as in many other countries – are discussed and negotiated behind closed doors with the executive. With both donor representatives and government located in Dar es Salaam, Bunge, in Dodoma, is too often left out of the loop.

Cheyo identifies a glaring anomaly in the delivery of aid here. As a member of Tanzania’s delegation to the Accra High Level Forum on aid effectiveness in 2008, he left the conference confident that there was broad agreement amongst participants on the need to strengthen national accountability institutions. However, as highlighted by a recent inquiry by the UK’s International Development Committee into DFID’s commitment to parliamentary strengthening, many donors fail to appreciate the potentially counteractive effects of the way poverty alleviation and democracy assistance programmes are agreed and delivered.

Away from General Budget Support 

The delivery of donor assistance in Tanzania is changing, as it is elsewhere. General Budget Support (GBS), by which foreign funds are made available to the government to spend as it sees fit, is shrinking both as a proportion of annual budget expenditure and of total external assistance. In 2011-12, US$369m was pledged as GBS to Tanzania; in 2014-15, the budgeted sum is US$280m.

In John Cheyo’s view, this is cause for concern. He feels that GBS enables parliament to perform its oversight function better than project finance, which is externally controlled and not subject to parliamentary scrutiny at all. He explains:

“Under GBS all the monies from a donor or donors go into the government’s consolidated fund. They are managed by the government of Tanzania. They are declared to parliament, and to the public, in an Appropriation Bill. This process enables an entirely different chain of accountability, which forms part of a more open process.”

For donors, the impact of GBS is more difficult to track than project aid; from the perspective of parliamentarians, there is a risk that GBS supports an unsatisfactory status quo and artificially – and unfairly – strengthens the executive. In Tanzania, some argue that GBS is tantamount to supporting corruption.

Following the creation of the Budget Committee two years ago, Bunge’s role in the budgeting process grew. Reducing the proportion of funds dispersed through GBS and increasing the proportion allotted to project finance will constrain parliament’s ability to influence and oversee the disbursement of donor funds. GBS has presented an opportunity for MPs to interact with donors in a way that project finance does not.

If a move away from GBS – partly a response to growing international demand for measurable targets – occasions an increase in short-term project funding, it will also compromise financial predictability. This can only hamper longer-term planning by budget-makers, and undermine gains with respect to “ownership” of the development agenda.

Donors and Dodoma: the outlook

Back in 2008, the efforts of Cheyo and others to secure a role for parliamentarians in the donor reporting process made him optimistic. Development partners had agreed on the need to share more information with MPs. GBS documents were made accessible to Dodoma. Cheyo thought the challenges of parallel accountability could be solved altogether by routing the process of donor accountability through Bunge, an amendment he considered structurally sensible: “accounting officers in government are accountable to parliament.” In October 2014, however, it was clear that his hopes have not been fulfilled. Donor-government relations are still managed in much the same way, substantially bypassing or excluding parliament. MPs were dismayed at the way donors had handled the emerging IPTL scandal.

Following allegations that Tanzanian government officials authorised fraudulent payments worth US$124m to private energy company IPTL, a group of 12 donors suspended a total of US$493m of general budget support. Assurances from donor representatives that the funds will be released as soon as the Government of Tanzania has responded to the recommendations of the Controller and Auditor General (CAG) did little assuage the doubts of parliamentarians regarding the legitimacy of the funding freeze. In October 2014, Budget Committee representatives told us that Bunge had not been consulted ahead of the donors’ decision, and were unanimous in depicting the action as premature. In their view, the IPTL affair had not yet been properly investigated and reported upon. Cheyo explained his misgivings about donors attempting to hurry along publication of the CAG’s report: “If anything, the originators – the PAC – can write to the CAG and ask why it has taken so long. If you start interfering with the work of the CAG and prematurely predicting results from the investigation, where is the independence of the auditing body?”

There has been some progress towards formalisation of Dodoma’s relationship with donors in the wake of the Budget Committee’s creation two years ago. According to Cheyo, “a very interesting interaction between the Budget Committee and the [donor] General Budget Support group” has begun, although the focus on redrafting the constitution this year has proved disruptive and the full potential of the exchange remains unrealised.  Talks between donors and government are still held “behind closed doors”, says Cheyo; “we only hear the end result when action has been taken.”

“Share the annual report with the Budget Committee”, Cheyo urges Tanzania’s development partners, referring to the yearly review of donor financing convened by the government and development partners. “They will highlight to [parliament] what the issues are, and we will follow up. That is our job.”

Future blog posts in this series will examine Tanzania’s response to the IPTL scandal and the potential impact of a new constitution.

by Maya Prabhu, Communications and Research Associate, Africa Research Institute

Home page image: political cartoon from IPP media