THE UNITED REPUBLIC OF TANZANIA

MINISTRY OF INDUSTRY, TRADE AND MARKETING

TANZANIA TRADE INTEGRATION STRATEGY 2009-2013 FRAMEWORK PROGRAMME

ANNUAL REPORT FOR JULY, 2009 - JUNE, 2010

INTRODUCTION

The quarter from January to March, 2010 concentrated mainly on preparatory activities aimed at bringing forth the Trade Sector Development Programme (TSDP) and Basket Fund and assuring that outstanding activities under the current project be implemented. Major activities included following through on the single source procurement process (in line with government procurement procedures) in order to have a contract for the development of the TSDP document, undertaking a monitoring mission to Arusha, consulting with the EIF Executive Secretariat on outstanding and upcoming activities under the IF Window II project and staking out the way forward on the TSDP together with MITM Management and Development Partners.

With the above stated objectives in mind, the TTIS Coordination Office performed the following:

SUBMISSION AND EVALUATION OF REQUEST FOR PROPOSAL TO FORMULATE THE TDSP

Following approval of the Terms of Reference by the Ministerial Tender Board on 31st December, 2009 the Standard Request for Proposal was submitted to the international consultant on the 4th of January, 2010 along with information regarding the set deadlines for submission of proposal, evaluation, negotiation and contract signing. The MTB set the dates and events as follows: (i) Standard Request for Proposal to be forwarded to the consultant (4/1/2010); (ii) Evaluation of proposals (6/2/2010); (iii) Approval of Evaluation (8/2/2010), followed by negotiations up to 12/02/2010; (iv) Contract signing (19/02/2010); and (v) Contract period from 19th Feb to 18th March, 2010.

Following a standard process of evaluation, the MTB sat on the 22nd of February and decided the proposed consultant could, in principle, be awarded the contract. According to government procurement rules, however, there was first to be a period of negotiation on the terms of the contract. There were some serious concerns that the time schedule proposed by the consultant would make it difficult to have the TSDP and Basket Fund ready for implementation in the Financial Year 2010/2011 as foreseen. The TTIS Coordination Office was therefore instructed to make the time schedule a major item for discussion in the contract negotiations.

MISSION TO ARUSHA FOR MONITORING AND CONSULTATION WITH STAKEHOLDERS

From 24th to 27th of January, the TTIS Coordination Office undertook a monitoring and follow-up mission to Arusha. The purpose of the mission was twofold: 1) to undertake a physical monitoring exercise with regards to the support provided to TAHA under he IF Window II project for capacity building of smallholder horticultural producers and exporters on SPS compliance and 2) to make a follow-up on a meeting held with TPRI on 27th August, 2009 and get the status of implementation of the issues that were agreed upon during that meeting.

The Coordination Office met with TAHA Management to discuss the progress in implementing the “Enhancing Market Competitiveness of Horticultural Crops from Smallholder Farmers in Tanzania”-project and get some further details and clarifications on the progress report received on 30th October, 2009. The Coordination Office also made some site visits to the growers, exporters and associations which are being supported by TAHA through this project. A report on this monitoring exercise is attached as (Appendix 1).

The meeting with TPRI focused in particular on the need to harmonize National Quality Institutions and the way forward to get this process started. It was agreed that the National SPS Committee meeting should be convened as soon as possible. The meeting also discussed the need for capacity building identified by TPRI and the status of project proposals submitted for the TSDP- and SECO programmes. Minutes of the Meeting can be found attached as (Appendix 2).

MEETING WITH DAIMA ASSOCIATES AND CONSULTATIONS WITH EIF EXECUTIVE SECRETARIAT ON PREPARATION OF DTIS ZANZIBAR

Looking at the status of implementation of the IF Window II project as per the beginning of 2010, one of the major activities still outstanding was conducting the Diagnostic Trade Integration Study for Zanzibar. In view of getting this activity started, the TTIS Coordination Office therefore met with consultants Daima Associates in January to get a briefing on the findings of a previous preparatory mission undertaken by them on behalf of MITM. Consultations have also been made with the EIF Executive Secretariat (EIF ES) on what assistance they can provide in undertaking the study and any particular advice they would like to give on the process. Correspondence with the EIF ES on this and other matters can be found attached as (Appendix 3).

MEETING BETWEEN MITM/TTIS AND DELEGATES FROM THE SWEDISH EMBASSY

The meeting was held on 16th February, 2010 with the purpose of having an update on the TTIS implementation and the formulation of TSDP. Also it aimed at introducing Mr. Peter Cederblad from Sida Headquarters in Sweden, who will be working on Trade related Development Cooperation in Tanzania in collaboration with Mr. Love Theodossiadis (based at the Sida office in Tanzania).

The meeting discussed the current status and the way forward for developing the TSDP and Basket Fund Mechanism. The Coordination Office informed that MITM was currently in the process of evaluating the technical and financial proposal from the international consultant recruited by single source procurement. There was concern that the time schedule proposed by the consultant would make it difficult to have the TSDP ready for implementation via the Basket Fund in the financial year 2010/2011. It was suggested that the TTIS Coordination Office was to immediately start working on the Basket Fund Mechanism by looking at documents for other similar Basket Fund Mechanisms operated by other ministries so that the TTIS Coordination team might be able to identify important features to emulate and lessons learned.

Other issues discussed were the implementation status of IF Window II project and the institutional setup regarding SPS issues in Tanzania. It was noted that the SPS Committee was inaugurated and held its first meeting on 21st August 2009 and will soon hold its second meeting to discuss issue related to SPS. The SPS Committee is an advisory body composed of technical experts from various institutions dealing with SPS related issues and it conforms to the WTO requirements as stipulated in the WTO Multilateral Agreements on SPS Measures. On the implementation status of the IF Window II project, the meeting was informed that the main outstanding activities to be carried out before the end of 2010 are i) conducting the DTIS for Zanzibar, ii) holding awareness raising sessions in MITM and other MDAs, iii) conducting trade capacity needs assessments of selected MDAs, and (iv) preparing the TSDP alongwith M&E and Basket Fund mechanisms.

The Development Partners were asked to commit themselves in contributing to the Multi Donor Basket Fund and make their pledges known before the start of the Government’s Financial Year so that their pledges can be put into the Medium Term Expenditure Framework. However, it was made clear that it is difficult for the Development Partners to commit themselves especially on huge amounts of money without the TSDP being in place; rather a risk assessment exercise should be undertaken before any commitment is done. However, the Donor Facilitator agreed to consult with other DPs at the next Development Partner Group meeting to see if other donors (other than Sida and Danida) would be interested in subscribing to the Basket Fund and if they could indicate a figure. Minutes of the meeting is attached as (Appendix 4)

MEETING BETWEEN TTIS COORDINATION OFFICE AND THE DEVELOPMENT PARTNERS

The meeting was held on 22nd February, 2010 as a follow-up to the previous meeting and detailed discussions on some issues. At the same time, the meeting was also used to provide an update to the UNDP representative on the progress made so far and the resolutions made during the previous meeting.

It was mentioned that there has been some correspondence between the EIF Secretariat in Geneva and TTIS Coordination Office on how to access EIF Funds for capacity building in order to strengthen implementation of TTIS. It was noted that the IF Window II Funding is due to close by December and therefore, submissions of project proposals on capacity building should be done as soon as possible in accordance with the EIF format in writing.

The meeting was also informed about the launching of the “Diagnostic Trade Integration Study (DTIS)” for Zanzibar for which it was noted that consultation between TTIS Coordination Office and Daima Associates has been made. Agreement was reached that the Zanzibar DTIS Action Matrix will be incorporated into the TTIS Logical Framework rather than being formulated as a stand alone programme document. It was insisted that there should be closer collaboration and cooperation between the Government of Tanzania and the Revolutionary Government of Zanzibar in conducting the study.

Regarding the development of the TSDP Basket Fund Mechanism, it was unanimously agreed that there is a need to consult with experts in the Ministry of Finance and Economic Affairs who are conversant with the formulation of Basket Fund Mechanism. These experts can provide useful guidance as they must have been involved in developing other Basket Fund Mechanism for different types of donor funded programmes. The DPs informed that they are willing to facilitate the procurement of an M&E expert for the TSDP, one possibility being through Danida’s BSPS III funding. Minutes of the meeting is attached as (Appendix 5)

THE WAY FORWARD FOR DEVELOPING THE TSDP AND TTIS BASKET FUND

During the discussion, it was noted that the international consultant, Dr. Thierry Noyelle, would not be able to abide by the deadline suggested by MITM, that is April, 2010. Hence, The TTIS Coordination Office had to look for other alternative courses of action for the formulation of the TSDP. The motivation for finding alternative solutions came from the finding that the TSDP document had to be ready by April, 2010 in order for the Basket Fund to be operational during the Financial Year 2010/2011. Pro and cons for each alternative to develop the TSDP Document were considered. The suggested alternatives are as follows (Appendix 6): -

i.  Plan A – Moving ahead with the International Consultant according to his proposal

ii.  Plan B – Putting together a Technical Team of dedicated experts to develop the TSDP before the end of May, 2010

iii.  Plan C – Extending the deadline to the next Financial Year i.e. 2011/2012

The TTIS Coordination Office sought guidance from MITM Management on which option to chose and following a consultative meeting with the PS-MITM it was concluded the TTIS Coordination Office should opt for Plan C, which meant missing the deadline for making the Basket Fund operational during the Financial Year 2010/2011. Following this decision, the TTIS Coordination Office felt a need to consult with DPs on the modalities for the ensuing process, and whether to continue with the international consultant or not.

BRAINSTORMING MEETING WITH THE DEVELOPMENT PARTNERS

The meeting was held on 29th March, 2010 at the Swedish Embassy drawing members from MITM/TTIS Coordination Office, Sida, Danida, EC, WB and SECO. The meeting aimed at discussing and agreeing on common objectives, milestones and deadlines for the coming 15 months period, including the preparation of a one (1) year project proposal for implementation and funding before the TSDP and Basket Fund is operationalized. This entails the identification of core problems and challenges that need to be solved and addressed during the said 15 months period.

Among major issues discussed were (i) the need to identify human resources needed in MITM for the coordination and implementation of the TSDP; (ii) One or two project proposals submitted can be re-submitted for implementation and funding during the 15 months period; and (iii) identifying and setting up, through MoFEA, financial arrangement through which finances will be channeled during the FY 2010/2011 before the Basket Fund mechanism becomes operational in July, 2011.This arrangement will also serve as a learning experience for the larger programme.

It was discussed how the DPs could assist in bringing forth the required elements for setting up the TSDP Basket Fund and how the current Terms of Reference for developing the TSDP document could be modified or complemented by other Terms of References’ to procure the services of M&E and Basket Fund experts. It was further discussed how the establishment of a Basket Fund would mean for the Coordination and Implementation Structure and the future roles of the Technical and National Steering Committees.

From DPs side, it was also felt that the mandate of TTIS-CO needs to be clarified or reviewed, especially when it comes the implementation of the TSDP. Also the question on mandate of the TTIS-Coordination Office inside and outside MITM was raised. It was noted that currently TTIS Coordination Office is a section under DPP and that it cannot hold another MDA accountable when it comes to implementation of the TSDP since experience from BEST have shown that this is difficult.

Minutes of the meeting are currently being prepared with a view to agreeing on a roadmap for the Way Forward on the TSDP and its Basket Fund, including all the necessary steps to be undertaken by both MITM and DPs and specific deadlines.

PREPARATION OF THE TTIS ANNUAL REPORT ENDING DECEMBER, 2009

Among the requirements set for monitoring and evaluation of TTIS 2009-2013 Framework Programme activities is the preparation of the progress report on quarterly as well as on annual basis. Therefore, after preparation of the quarterly report the TTIS Coordination Office prepared an annual report from January to December, 2009. The annual report is attached here as (Appendix 7)

SUBMISSION OF REVISED ANNUAL WORK PLAN 2010 AND REQUEST FOR EXTENSION OF THE IF WINDOW II PROJECT

In December, 2009 a draft Annual Work Plan for the IF Window II project had been submitted to the UNDP, Trust Fund Manager, for further discussions. On March 10th, 2010 the TTIS Coordination Office was requested to submit a final, official version of the Work Plan, taking into consideration the time that has elapsed since the submission of the draft version and the actual availability of funds as of that month.