State of Macro-fiscal Policy Framework and Public Financial Management in Tanzania

A Research Agenda Tanzania has since the 1990s undertaken a comprehensive reform agenda focusing on several areas including macro-fiscal and public financial management policies that address systems and processes that form fiscal structures. This focus had as its broad objective to contribute to the achievement of macroeconomic stability and sustainable and inclusive growth and poverty reduction, within a framework of fiscal sustainability. While the objectives of fiscal policy are similar across countries, country specifics make it necessary to have fiscal frameworks that take into consideration specific country characteristics and challenges. In the Tanzanian case critical challenges around revenue, expenditure, financing and debt management have been prominent in the process in view of their importance in achieving macroeconomic development and social needs. Thus, some areas of focus have included macro-fiscal targets such as debt-to-GDP, tax-to-GDP, and expenditure-to-GDP. The focus has also been on openness in the budget process to enhance transparency and accountability, and on fiscal decentralization as it relates to the inter-governmental fiscal relations. The understanding has been that having a good framework in place provides the foundation for good budgeting including its credibility and sound fiscal policies that ensure fiscal sustainability and macroeconomic stability, with a view to bringing about overall development to the country.