1. MPA 609: PUBLIC BUDGETING AND FINANCE
TOPIC: An outline and discussion of the various steps
in a budget cycle. Are there emerging trends?
Country of choice: Tanzania
Presenter: ROBIUS BAGOKA
REG #: 201406516
16th February, 2015
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2. Outline
1. What are government budgets?
2. Disparities characteristic between government budgets and other budgets
( Households and business budgets).
3. Tanzania National budget cycle (Major phases)
4. Stakeholders involved in the National budget cycle
5. Local government budget cycle in Tanzania and stakeholders involved
6. Laws and regulations governing the budget process in Tanzania
7. Current emerging trends in Tanzania budget cycle
8. Challenges encountered in budgeting process
9. Conclusion
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3. 1. What are government budgets?
o Government budgets; involves estimates of expected incomes and operating expenses
for a given government unit (units) over set period of time (McCaffery et al, 2001).
o Also government budgets entails matching resources and needs so that the collective
choices are well resourced (Ibid).
o Government budgets affects the lives of every citizen directly or indirectly; it impact
certain societal groups such as elderly, children, the poor, women, rural dwellers just
to mention a few (International Budget Partnership, 2010).
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4. 2. Characteristics of government budgets from other types of budgets
(households and business).
Government budgets are characterized by a various budgetary actors; For example the
bureaucrats, executive budget officers, legislators, interest groups, individuals (Rubin,
2010).
Government budgets are vulnerable to the environment; For example: the economy,
election, natural disasters (floods, diseases, droughts) also change in public opinion will
mean change in budgets.
Lastly, government budgets are subject to various constraints; For example legal
obligations to repay debts, limits imposed by public opinion, rule and regulations, the
constitutions, laws e.t.c (Rubin, 2010).
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5. 3. Tanzania National budget cycle
3.1 What is the budget cycle?
 Budget cycle is an yearlong, annual process, meaning that different government units are
always working on the budget (Policy Forum, 2008).
• It involves a number of ongoing activities in a cycle throughout the year, essentially the
determination and re-allocation of resources and their uses for achieving government
objectives (Mpina, 2013).
• The budget cycle comprises of stages which feed into one another in a circular process,
meaning that various phases of the budget cycle (process) overlap each other(Policy
Forum, 2008) ;
• At any given time and point in a year there are may be multiple phases of the budget cycle
occurring at once (Ibid).
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6. 3.2 Major phases of the National budget cycle
1. Budget Formulation
(November-May)
2. Debating and Approval /
(Authorization)
(June-August)
3. Budget Execution
(July-June)
4. Oversight and Control
(Audit and Evaluation)-
Ongoing
Source: (Policy Forum, 2008) and Ministry
of Finance and Economic Affairs (2013).
Figure 1: National Budget cycle
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7. 3.2….Description of budget cycle (phases)
1. Budget Formulation (November-May)
 Formulation of budget policy and resources projections
 Planning and preparation of budget guideline
 Estimation of revenue and expenditure and scrutiny of estimates by Parliamentary sub-committee and
Inter-Ministerial Technical Committee
 Cabinet Approval of budget estimates
2. Debating and Approval / (Authorization) (June-August)
Presentation of Budget speeches
Debate in full Parliament
Budget voted into law
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8. 3.2….Description of budget cycle (phases)
3. Budget Execution (July –June)
 Central government releases money to government units and or districts
 Services delivered (services are either delivered or not provided efficiently and where needs are meet or
neglected (McCaffery et al, 2001).
4. Monitoring, Control and Evaluation (Ongoing/ Continuous)
 Periodic reporting and follow-up is carried out (MoFEA, 2007)
 Internal audits are also conducted by internal audit departments within the implementing agencies
 External audit is carried out by the Controller and Auditor General’s office within three months of the
closer of financial year
 The Public Account Committee (PAC) and Local Authorities Accounts Committees (LAAC) undertake
the public expenditure tracking, physical projects inspections and evaluation (Policy Forum, 2008)
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9. 4. Stakeholders involved in the National Budget cycle
oTanzania Revenue Authority (TRA),
oPresident and Cabinet,
oMinistry of Finance and Economic Affairs,
oBudget Guidelines Committee (includes representatives from MOFEA, Public
Service Management, and the Prime Minister’s Office - Regional
Administration & Local Government PMO-RALG),
oDonors, Parliament, Controller and Audit General, Private Sectors and Civil
Society, Individuals e.t.c (Policy Forum, 2008).
Each actor play its own role in budget preparation and or execution at National Level.
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10. 5. Figure 2: Local government budgeting process in Tanzania
(November)
1. Budget guidelines are issuesd by
PMORALG
(January)
2. LGAs communicates Indicative
Planning Figure to WDC and VC
(February-March)
3. Villages plans prepared and
approved by VC, these Planns are
compilled by WDC and submitted
to LGA
(district council)
March-April
4. Ward Plans are reviewd and
combimned with LGA recurrent
budgets
April
5. LGA planns reviewed by council
planning committee and submitted
to full council for debate and
approval
April-May
6. LGA plans are submitted to
Regional Secretariat for review and
consolidated with Reginal plans and
submitted to PMORALG
May
7. LGA plans and budgets are
consolodated into a single
PMORALG and submitted to
Parliament
June-July
8. PMORALG are debated and
approved by the Parliament
August-September
9. Final LGA budgets are
communicated to LGAs and
disbursement begins, wards and
villages are also informed on thee
final budget and implementation of
project begins
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11. 6. Laws and regulations governing the budget process in Tanzania
 The constitution of the United Republic of Tanzania Article Number 135-144-
(indicates how the mandate prepares the budget and present to the Parliament);
 The Public Financial Act of the year 2004 – (provides legal framework to the budget
system with regard to revenue, expenditure control and accountability);
 The Annual Finance Act (AFA);
 The Annual Appropriation Act (provide powers for reallocation of funds between votes
(Ministries) );
 The Public Procurement Act of the year 2004 - (provides legal framework for
procuring goods and services using public funds);
 The Local Government Finance Act No 9 of 1982 (Amended by Miscellaneous Act
No 6 of 1999)-guides Local Government Authorities in preparing their annual estimates,
revenue collection and expenditures (MoFEA, 2007).
The above laws and regulations regulate formats, timing and processes or procedures as
well as allocation of formal powers and rights in the budget cycle (Mpina, 2013).
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12. 7. Current emerging trends in Tanzania budget cycle
Overview
o Tracing back from the 2007/2008 global economic crunch there has been increased vulnerabilities in
Tanzania’s macro-economic framework involving the rise in inflation rate above the government target of 5%
which put much pressure on external balance of payments (URT, 2008).
o The reduction in foreign funding (Aid) alerted for sensitive monetary policy and effective, efficiency
redistributive budget
o The adjustments of salaries in agriculture, education, health and water in LGAs in 2008/2009 reaching 21.4%
was lower that of its previous year 2007/2008 (URT, 2008).
o Open Budget Index Survey (OBI-2012); it show that in Tanzania the Citizens are provided with only some
information on the national budget and financial activities during the financial year.
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13. 7. … Current emerging trends in Tanzania budget cycle
Trends
• Change in time frame for budgeting (from 2013/2014) (Debating and Approval) that starts from April
to June instead of May to August
• Changes in debating and approval of budgets that currently it starts with individual respective
ministries instead of the National Budget as it was previously
• Changes in Parliamentary regulations in 2013, that allows the debates and approval of the budgets
before 30th June of the financial year, this provides the government and the public enough time to
implement the approved budget and start immediately on the 1st of July
• Establishment of the Parliamentary budget committee that give chance to examine careful the
budget before it’s presented in the Parliament
• The establishment of parliamentary budget committee has provided a useful ink between the Civil
Society Organizations (CSOs) and other stakeholders in the budgetary process (Policy Forum and
Mpina, 2013).
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14. 8. Challenges encountered in budgeting process
o Budget deficiencies and setting of priorities for funding,
o Budget reallocation, which may cause divergence from its original budgets,
o Deficiency in procurement procedures
o Lack of parliamentary budget office
o Delay on release of revenue books
o Dependent budget
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15. 9. Conclusion
 The government budgets are important devices or tools for policy implementation
decisions to achieve the social, economic, political objectives as well as ensuring public
accountability.
 Stages within a budget cycle feed into one another in a circular process,
 Multi-stakeholders (individuals and public institutions) are involved in national budget
preparation and implementation (execution)
 The formulation of Local Government Reform Program in 2007 in Tanzania
(Decentralization ( D-by-D) and Opportunities and Obstacle to Development (O and OD)
at LGA level ) involves a diversity of actors in budgetary process at Local government
level
 There is a body of laws and regulations that govern the formulation and execution of
National and Local government budget process.
 The current trends in the budget cycle has widens the chance for open budgetary process,
increased transparence, public accountability and service delivery.
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