The World Bank has called for monitoring on proliferation of allowances in the civil service, particularly in relation to the National Strategy for Growth and Reduction of Poverty (NSGRP), or MKUKUTA as it is known in its Kiswahili acronym.
Presenting a public expenditure review on the rapid budget analysis in Dar es Salaam last week, World Bank economist Emmanuel Mungunasi observed that said duty-facilitating allowances stood at 350bn/- while remunerative allowances totaled 325bn/- over the past three years.
He further noted that a big chunk of the allowances were paid to officials based in Dar es Salaam working for government ministries, department and agencies, while a smaller amount was channeled to local government authorities in the regions.
“There is a need to control this proliferation of allowances in the MKUKUTA sector… (and) also explicitly target the wage bill to GDP (gross domestic product) ratio.
“But the emphasis should be on duty facilitating allowances such as sitting, daily and training allowances, rather than remunerative allowances which are stipulated in the contracts of the employed civil servants,” Mungunasi said.
He also noted that the 2009/2010 financial year government budget was developed in relatively difficult circumstances underpinned by a major international crisis that led to a growth slowdown in the country.
“The government responded adequately to the crisis by identifying a narrow-targeted and time-bound rescue package, while acting to counteract the macroeconomic effect of the slowdown by modestly expanding budgeted public expenditures,” the economist stated.
Taking into account that uncertainty due to the global credit crisis remains high, he challenged the government to be more prudent and grounded when forecasting revenue, and to identify equivalent expenditure cuts.
While also calling for robust and accurate estimates of budget support on the part of the government, Mungunasi took to task development partners for last-minute changes or additional conditions for release of funds.
The public review shows amongst other things that the government is committed to economic growth and poverty reduction, with roughly 70 per cent of the budget allocated towards MKUKUTA.
However, a closer look reveals that stated priorities and actual spending are not aligned.
Mungunasi also called for a better balance between current consumption and capital investment, and the need to continue increasing allocations to key sectors, while paying attention to sector expenditure composition and quality expenditures.
According to the World Bank economist, the bottom line is that although government commitment to poverty reduction and economic growth is commendable, discrepancies between policy, planning and budgeting on the one hand, and actual expenditures on the other, are hampering progress in achieving policy objectives.