THE UNITED REPUBLIC OF TANZANIA
MINISTRY OF FINANCE
ACTION PLAN FOR IMPLEMENTATION OF
THE NATIONAL DEBT STRATEGY (NDS)
JULY 2005- JUNE 2008
MAY, 2005
1.0 INTRODUCTION
The Ministry of Finance (MoF), the President’s Office, Planning and Privatization
(POPP), the Bank of Tanzania (BOT) and the Attorney Generals Office together are
the executing agencies for the National Debt Strategy (NDS).
The two-year anniversary of the NDS provides an opportunity to assess how well the
NDS is currently being implemented; what strengths and weaknesses have the last two
years revealed in the legislative and regulatory framework, in the decision-making
processes and in the institutional support surrounding NDS implementation. It was
decided that a methodical current state assessment should be carried out with some
external assistance. The Macro-Economic and Financial Management Institute of
Eastern and Southern Africa (MEFMI) was commenced in July 2004, to facilitate and
assist in carrying out the required current state assessment; and in formulating a set of
recommendations and action plan that would lead to full NDS implementation.
Feedback received through the NDS decision-making mechanisms – more specifically
from the Technical Debt Management Committee (TDMC) and the National Debt
Management Committee (NDMC) – has indicated that improvement was required in a
number of areas, notably in the quality of the analysis, policy advice and data, and
more important in the coordination of effort and sharing of information among the
participating organizations. Picking up on this feedback, MEFMI then advised that
the best way to proceed was to bring together participants from all organizations
involved in NDS implementation at a consensus-building workshop, where the current
difficulties and challenges could be brought forward and solutions identified. MEFMI,
in collaboration with International Debt Management – a consultancy organization
based in Botswana – facilitated a three-day workshop, which made use of change
management tools such as the Problem Structure Analysis (PSA) and the Logical
Frame Approach (logframe) to help participants through plenary and group sessions
to:
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 Diagnose the weaknesses in the current situation and the underlying causes;
 Formulate actionable recommendations; and
 Propose an Action Plan which leads to full National Debt Strategy implementation.
.
This report puts forward a plan to address the issues impeding full NDS
implementation, based largely on the discussions which transpired during the
workshop. This action plan is organized as follows. Background information on the
Tanzania debt experience and context follows in the next section. A brief assessment
of the current strengths and weaknesses is then presented. This sets the stage for the
NDS Targets, recommendations and the attendant Action Plan. The recommendations
focus at first on the legislative and regulatory framework; then to the institutions and
any shortfalls in capacity, or in other technical or human resource areas. An action
plan and timelines for the implementation of capacity-building initiatives are also
presented.
2.0 HISTORICAL BACKGROUND ON DEBT STRATEGY EFFORTS IN
TANZANIA
During the mid 1980s, Tanzania experienced a succession of economic crises
combined with external shocks and natural calamities. Together they resulted in
severe economic setbacks (manifested by high rates of inflation, and shortages of
Foreign exchange among others) which led the Government fail to honour its external
obligations and accumulate external debt arrears. Tanzania’s ratio of Net Present
Value (NPV) of debt to Export shot above 150 percent of heavily indebted poor
countries (HIPC) thresholds, underscoring the reality of an unsustainable external debt
position. Accordingly, Tanzania was categorized as a HIPC country by the
international community and became eligible for debt relief under the Enhanced
Highly Indebted Poor Countries (EHIPC) initiative and accompanying Paris Club
Arrangements, launched in 1996 by the Bretton Woods Institution to help the heavily
indebted poor countries to reduce their huge debt burdens. Tanzania is now a PostHIPC country in that it signed its seventh Paris Club Agreement for debt rescheduling
in 2001 and is implementing a Bank/Fund-supported economic program, in the
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context of the National Strategy for Growth and Reduction in Poverty (NSGRP) –
“Mkukuta”, the successor to the Poverty Reduction Strategy (PRS).
Recently
Tanzania has witnessed macroeconomic stability and sustained economic growth.
Sustainable public debt strategies have been the cornerstone of fiscal management
aimed at the attainment of long term development and poverty reduction.
The Government’s commitment to restoring long-term debt sustainability in support
of fiscal and macroeconomic stability, led to:
 The launching of the Tanzania External Debt Strategy in 1999, prior to the
country’s accession to the HIPC Debt Initiative, followed by a more holistic
National Debt Strategy (2002).
 Amending the Loans, Guarantees and Grants Act (1974) in 2003. and
 Promulgating the supporting Regulations to the LGGA 1974.
 Launching of NGSRP/MKUKUTA.
 Building of debt data
base on CS-DRMS at the Bank of Tanzania and the
Accountant General Department
According to Tanzania’s current legal and regulatory framework:
 All borrowing authorities have been vested with the Minister of Finance, subject to
ceilings established in the Government’s annual fiscal framework, and risk
tolerance statement, which are subject to annual approval by the Parliament;
 The Minister of Finance is mandated to present an annual financing plan, debt
strategy and public debt statement during the Budget Speech;
 Specific legal action is prescribed in the event of violations;
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 The mandates and terms of reference of the NDMC and TDMC are recognized
formally – the former being confirmed as a high level inter Ministerial debt
advisory committee supported by the TDMC and a secretariat;
 The need for concordance with other intersecting financial management legislation
and regulation is recognized – such as the Public Finance Act (2001), Procurement
Act (2001), and Treasury Registrar’s Ordinances (1959).
The organizational set up for public debt management encompasses the following
institutions and committees set out below, with their key roles in debt management
spelled
out:-
 Parliament annually approves borrowing ceilings, borrowing plan and to whom the
debt statement must be presented;
 Cabinet approvals the amount debt strategy, as part of the Budget Policies to
whom the debt strategy is presented;
 The National Debt Management Committee (NDMC) This is the high-level
advisory committee to the Minister of Finance, and it is supported by the Technical
Debt Management Committee (TDMC) and a secretariat;
 The Ministry of Finance, notably the Policy Analysis, External Finance, TreasuryRegistrar, Stock Verification, Budget, legal Services and Accountant General’s
Departments; plays the front, middle and back office functions.
 The Bank of Tanzania (BoT) plans the middle, front and back office function in
aspects of both domestic and external debt.
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 President’s Office, Planning and Privatization (POPP), is mandated to review and
assess the merits of specific project financing proposals in relation to national
policy and other development priorities; and,
 Attorney General’s Chambers, which provides legal advice and legislative drafting
support
The executing agency for the NDS may therefore be referred to as “Debt Policy and
Management Office” which, is made up of a number of organizations, which together
perform the following “Front”, “Middle”, and “Back Office” functions:
 Front Office – using systems and procedures, risk management parameters,
debt limits and borrowing guidelines and benchmarks already established with
the support of the “Middle Office performs the resource mobilization and debt
service functions for both external and domestic debt.

Middle Office; performs a variety of functions, largely of a planning, policy
and analysis and coordination nature. These functions are shared among the
Policy Analysis Department (PAD) of the Ministry of Finance, the Treasury
Registrar of the MOF, the Economic Policy Department (EPD) of the Bank of
Tanzania and the President’s Office for Privatization and Planning.
Back Office is involved primarily with debt recording, management and accounting
and audit functions. These functions are carried out by the Accountant General’s
Department of the MoF, the Debt Department of the BOT, with inputs from the
External
Finance
and
Treasury
Registrar
5
Departments
of
the
MoF.
3.0 CURRENT STATUS OF THE NDS IMPLEMENTATION
Since the NDS inception in year 2002 there are various attempts to implement as
hereunder:
i).
Debt strategy paper has been prepared in line with Annual Debt Sustainability
Analysis (DSA) and presented to the Parliament as annex to the annual budget. It
serves as a guideline for new financing and debt service of Government debt
obligation for the particular financial year.
ii).
The existing LGG Act No. 30 of 1974 was amended in 2003 and its regulations
prepared and gazetted as regulatory framework for implementation of the NDS.
However, Regulations need to be amended, to reflect the clear responsibilities of
various departments in the Ministries and Institutions.
iii).
Sensitization of the NDS implementation have been done by way of Circular to
MDAs, Seminars to the Members of Parliament and discussions in various fora
at a national and an international level.
iv).
Continued enforcement of LGG Act 1974 by ensuring the authority to borrow
and manage public debt vested solely to the Minister for Finance. In that respect
no new loan has been contracted or debt restructure without the approval by
Minister for Finance as advised by the NDMC. However currently check up
mechanism of checking whether the amount of debt contracted in the year are
within the limit set in the budget need further improvement. Moreover, there is
still a practice of circumvent the proposed procedure for contacting the loans not
accommodated in the annual plan budget.
v).
The NDMC and TDMC have been operationalized as per LGGA. However, the
expertise and skills on the risk management and analysis which have a negative
impact to the NDMC to make decision based on non-comprehensive analysis
reports need to be imparted to technical and secretariat to NDMC
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vi).
Government Securities has been restructured from short term Maturity
instruments to the medium and long terms and the Bond Market Development
Committee (BMDC) has been established. The primary focus is to monitor
monthly issuances of Treasury bonds to meeting the Government’s rollover
targets and promoting capital market development. The deliberations of the
BMDC feed into the Monetary Policy Committee (MPC) monthly meetings at
the Bank of Tanzania and inform the planning process for setting liquidity mopup targets.
vii).
The new version of CS-DRMS (i.e CS-DRMS 2000+) has been installed and the
migration process has been arranged at BOT and MOF-ACGEN with additional
new sites at MOF-PAD and POPP to allow timely availability, accuracy and
quality of analysed debt data. This also aimed to the recording the Domestic
Debt (both securitised and non-securitised debt) and achieve compatibility to
other new development in the debt management and Government financing
modules.
viii).
The Study to determine the level of contingent liability was held in 2003 and the
regular validation, recording in excel sheet and settlements has been done by
ACGEN and TR.
ix).
Efforts have been made to build capacity by ways of recruiting new staffs,
training, procurement of new working tools and incentives that trigger staff
retention.
4.0 CURRENT STATE ASSESSMENTS
4.1 A structured current state assessment exercise was carried out in the fourth
quarter of 2004, with the assistance of MEFMI, where the aforementioned
“Problem Structure Analysis” tool was applied to identify the current problems
associated with NDS implementation and their root causes. A cryptic
representation of findings is presented as Annex II. Briefly the main findings of
the consultant are as follows:
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-
Tanzania is well served by the existing legislative and regulatory framework
and decision-making mechanisms (NDMC, supported by TDMC), and thus, the
current framework does not represent a serious impediment to NDS
implementation. Nonetheless, a few technical readjustments are indicated.
-
There are number of problems on the implementation side, however: both at
the upstream end (in macro- and micro- policy making), as well as at the
downstream end (in debt management operations and record keeping and
information sharing), which attest to a misunderstanding of, or lack of
consensus on, the assignment of roles, and functions to the various
participating organizations, and a poorly coordinated effort among them.
-
Debt data housed at both the BOT and Accountant General Department are not
fully validated and reconciled; gaps in information flows compound the
problem of completing, validating and reconciling the various data sets.
-
Execution is further impeded by human resource capacity constraints;
-
Some piecemeal capacity-building initiatives are being carried out but not in
the
context of a comprehensive strategic plan.
4.2 Gaps and Flaws in the Functioning of the “Debt Office” in Tanzania
4.2.1 Front Office Activities:
 External Finance Department of the Ministry of Finance is mandated to
mobilize external resources (both loans and grants); given a particular external
resource target, it is mandated to liaise with development partners and canvass
contributions intended to achieve these targets within the prescribed external
resource envelope. It is also mandated to maintain an accurate and timely
database on Donors commitments and disbursements, at an aggregate and at a
detailed level, for grants and loans and according to projects of programs; inyear tracking and follow-up is also prescribed. However, an assessment of
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borrowing proposals against the borrowing limits is not currently being carried
out. There is also no systematic mechanism for full capture of financing
disbursement data through the project implementation phase, and data provided
by development partners do not match on-site reporting. Data on projected
grants and loans are not collected according to the prescribed fiscal framework
preparation cycle.
 Treasury-Registrar Department of the MoF mobilises domestic resources in
respect of semi-autonomous regulatory agencies and public enterprises. This
entails a review of business plans and a detailed analysis and assessment of
proposals for financing, on-lending and loan guarantees submitted to the
Ministry of Finance for approval. The Department must analyse the business
case for all financing proposals and within the context of the requesting
agency’s overall financial situation and management; and it must ensure that
the Government’s overall debt ceiling will not be breached before advising
TDMC and NDMC on whether a recommendation to proceed is warranted. At
present, there are few staff members of the Department with the full set of
skills in advanced financial analysis to carry out the required analysis and
assessment of project risks and Government exposure.
 External Sector Department of the POPP is responsible for analyzing
proposals for project financing put forward by sponsoring MDAs, in much the
same way as the Treasury Registrar Department is mandated to analyse and
assess financing proposals submitted by agencies and parastatals and determine
whether a recommendation for support is warranted. Currently, as in the case of
the Treasury-Registrar Department these financial analyses are not currently
being carried out due to the combination of an unclear and overlapping
mandate and gaps in human resource capacity. At present, the PAD in the
Ministry of Finance carries out a limited, vetting exercise, focused on
establishing whether or not loan concessionality thresholds have been met and
whether the projects fall within the Government’s high-priority sectors. Lack of
experience and formal training in financial analysis impede the preparation of
in-depth “business case” assessment.
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 Macro – Economic Division of the POPP is mandated to provide all the
macro projections.
 Domestic Market Department of the BOT mobilizes domestic resources on
behalf of the Government and for the BOT’s liquidity management purposes by
participating in the Domestic financial markets and provide a link to the
Monetary Policy Committee of the Bank of Tanzania and the Bond Market
development Committee. The operations of the department closely link up with
the department of Accountant General.
4.2.2 Middle Office Activities
 Policy Analysis Department of the MOF is mandated to coordinate the
preparation of debt sensitivity and debt sustainability analyses with the Debt
Department of the BoT; from this it is mandated to develop sound debt and
financing targets and to prepare the attendant External and Domestic Debt
Strategies and financing plans that: will minimize fiscal costs and risks; will
guide debt management operations carried out by the Back Office. It is also
mandated to coordinate the activities of the secretariat which supports the
TDMC and NDMC. However at present systematic sensitivity analyses and
sustainability analyses and develop sound debt targets and the associated
financing plans is done on the partial basis due to human resource constraints.
 The Debt Department at the BOT is mandated to provide policy advice
regarding the management of sovereign debt. It is also called upon to
participate in the development of strategies and in discussions with creditors,
including in a Paris Club, non-Paris-Club and HIPC context.
 Budget Department in cooperation with the PAD and POPP manages the
budget preparation process, in particular the preparation of the MTEF, Budget
Guidelines and resource allocations under the PRS and now the NSGRP.
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Proper budget planning and execution depend on sound projections and
management of debt service obligations, both domestic and foreign.
 Legal Services Department of the Ministry of Finance is mandated to provide
legal advice to the Debt Office in conjunction with the Attorney General’s
Chambers; and it is responsible for the drafting of all legal instruments for
approval.
 The Treasury Registrar Department is mandated to advise TDMC and NDMC
on the merits of each proposal brought forward seeking that the Government
issue a guarantee or borrows on the behalf (using an on-lending facility) to a
public enterprise or a local government.
4.2.3 Back Office
 The ACGEN Department and Bank of Tanzania are mandated to record and
validate debt data; and to execute payments, settle accounts, and maintain
accurate records on all matters related to public debt and associated
transactions. The data are used to produce reports containing detailed and
aggregate projections for interest payments (domestic and foreign) and debt
amortization payments. On the instructions of the Middle Office, it submits
payment instructions to the Foreign Market Department at the BOT and the
requisite amount of local currency so that foreign currency debt service
obligations can be externalized.
 The Treasury Registrar Department is mandated to record all data and to
maintain a
comprehensive database (covering amounts owed, currency,
instrument, maturity structure, schedule of debt interest and principal
repayment obligations, terms) for all elements of Parastatal debt, and of debt
guaranteed by the central Government, and funds acquired through on-lending
(from the Government) to the public entities. The Department is also mandated
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to carry out watching brief and normal due-diligence activities and provide upto-date risk assessment on this actual and contingent debt.
5.0 PRIORIT AREAS FOR THE NDS IMPLEMENTATION PLAN FOR THE
PERIOD OF JULY 2005 THROUGH JUNE 2008
Based on Current State Assessment of NDS implementation since its establishment in
2002, the Government‘s 3-years Plan for NDS implementation (2005-2008) is target
to achieve the following four (4) priority areas: (see a detailed Action Plan as Annex
I)
1. To achieve sustainable domestic and external debt level by;
i).
Basing all borrowing decision on sound and prudent analysis,
ii).
Soliciting maximum debt relief from creditors,
iii).
Promote Development of the Domestic financial Markets, and
iv).
Ensuring timely settlement of domestic arrears and claims
2. To build Institutional Capacity and Partnerships through;
i).
Undertaking Capacity Needs Assessment for the debt management
units,
ii).
Filling human resource gaps; provide effective human resource
management; and institute innovative performance-based retention
incentives,
iii).
Addressing gaps in key skills sets
iv).
Identification and addressing other required inputs (including
conducive work environment)
v).
3.
Strategic NDS review and update
To have reliable debt information for effective decision making by
having an integrated and synchronized country debt data management
system
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4.
To achieve Best Practice in the Legal and Institutional Framework and
its enforcement., achieved through
i).
Modernization of Legislation,
ii).
Disseminations of legislation and circulars, and
iii).
Improved coordination and Inter-Institutional linkages.
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ANNEX I
NDS IMPLEMENTATION PLAN FOR THE PERIOD OF JULY 2005 – JUNE 2008
STRATEGY
(IES)
1
ACTIVITIES
2
OUTCOME (TARGET)
3
TIME FRAME
4
RESPONSIBLE
INSTITUTION
5
MONITORABLE INDICATORS
6
OVERALL OBJECTIVE 1: TO ACHIEVE SUSTAINABLE DOMESTIC AND EXTERNAL DEBT LEVEL
1. To base all
borrowing
decision on
sound and
Prudent
analysis
To hold a minimum of 4
NDMC meetings and 12
TDMC meetings to consider
borrowing and guarantee
applications
- Achieve Total Debt Servicing not
exceeding 30% of annual recurrent
revenue
Continuous
MOF-PAD, BOT,
ACGEN, LS, CEF,
TR, DSV, CB
-Achieve debt/GDP ratio less than
70% by 2008
Annual and Quarterly Debt report
NDMC and TDMC reports
DSA report
- Achieve Foreign/Total Debt less
75% by 2008
- Achieve Floating rate debt/total
government securities outstanding
less 25% by 2008
- achive NPVD/XGS less than
150% by 2006
-Prepare the appraisal criteria in
collaboration with PAD & POPP & DLS and approved by
NDMC by March, 2006
-Compute Borrowing /
Guarantee ceilings prior to
budget guidelines based on
legal requirements and NDS by
May annually
- Achieve Smooth redemption
profile of government securities
-Have the Vetting criteria approved
by NDMC by March, 2006
- To limit level of committing
Government to debt
by March, 2006
by end May every
year
-To have accurate, consistent and
dynamic borrowing strategy
by October 2006
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MOF-PAD
MOF-PAD
Vetting criteria approved by NDMC
- Borrowing/Guarantee ceilings report
Report on Borrowing/Guarantee
ceilings in Budget annually
-Review the Borrowing
/Guarantee ceilings and debt
risk analysis stipulated in
Budget annually and NDS for
consistency, accuracy &
validity and amended
accordingly by October 2006
To guide NDMC to adhere
criteria and ceilings when
evaluating borrowing requests
including risk / sensitivity
analysis
MOF-PAD, BOT,
ACGEN, AG, LS
Circular to MDAs
To enforce the
Borrowing/Guarantees procedure
To enforce the
Borrowing/Guarantees procedure to
MDAs
MOF-PAD, POPP, BOT, ACGEN
Quarterly Debt Report (QDR)
by June 2005
MOF-PAD
Circular to MDAs
from June, 2006
MOF-PAD,
ACGEN, CEF, TR,
DSV, BOT, PO-PP
Annual DSA and Portfolio Review
reports
MOF – PAD,
BOT, ACGEN
QDR
MOF-PAD, TR,
DSV, ACGEN,
CEF, BOT, PO-PP
Approved Quarterly debt and NDS
reports by NDMC
By end-Nov 2005
-To monitor path to sustainable debt
level
-Minimise exposure to debt
portfolio
Risk / sensitivity analysis
produced quarterly for NDMC
to review from June, 2006
Develop performance
monitoring system for NDS Quarterly debt and NDS reports
developed and submitted to
NDMC by PAD
Annual DSA and Portfolio Review
reports
Continuous
Issue Borrowing/Guarantees
procedure directives by MOF
through by the end-Nov 2005
Produce DSA and Portfolio
Review reports by PAD by
June 2005 and thereafter
annually
Reviewed NDS report
To have a system of assessing
action plan and NDS
implementation
By end Dec 2005
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2. Obtain
maximum debt
relief
Ensure Paris Club VII bilateral
agreements concluded as
envisaged
MOF –PAD*
-Achieve debt/GDP ratio less than
70% by 2008
by end Dec. 2008
- Achieve Foreign/Total Debt less
75% by 2008
by end Dec. 2008
- Achieve Floating rate debt/total
government securities outstanding
less 25% by 2008
by end Dec. 2008
- Achieve Total Debt Servicing not
exceeding 30% of annual recurrent
revenue
by end Dec. 2008
Solicit debt relief in line
with HIPC Initiative and track
its realization (Bilateral and
Multilateral) and other debt
relief by writing letters and
negotiating
-To achieve the envisaged debt
relief
by end Dec. 2006
MOF –PAD
- To have Non PC debt relief on PC
and HIPC comparable terms by end
December 2005
by end Dec. 2007
MOF –PAD, AG,
BOT, ACGEN
Prepare a Strategy for
negotiating and settling debt
with non-Paris Club creditors
by end-Jul 2005 by PAD and
systematically applied
thereafter
-To have a standard negotiation
position with Non Paris Club
creditors
By end July 2005
MOF-PAD, BOT
- Foreign/Total Debt less 75%
MOF –PAD
MOF –PAD
- Floating rate debt/total government
securities outstanding less 25%
-Total Debt Servicing not exceeding
30% of annual recurrent revenue
-Smooth redemption profile of
government securities
- Signed bilateral agreement with PC
VII creditors
QDR also stipulating debt relief to Non
PC creditors
Country’s negotiating strategies with
the rest of Non Paris Club creditors
To have Non Paris Club bilateral
agreements concluded
-Attain debt sustainability
To conclude debt settlement with
non-Paris Club creditors
Budget Speech and its execution report
- To have Non PC debt relief on PC
and HIPC comparable terms by end
December 2005
Evaluate and pursue other
international initiatives (e.g.
IFF Facility, IDA-local
-Debt/GDP ratio less than 70%
By end end Dec
2005
-To finance most of budget need
from domestic sources or in local
currency.
By end Dec. 2008
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MOF-PAD, BOT,
ACGEN
Report on evaluation of other
international initiatives
QDR
currency borrowing option) on
an ongoing basis by PAD
-To contain debt portfolio
MOF-PAD, BOT,
ACGEN
NDS Report
By end Dec. 2005
QDR
3.To promote
development of
the domestic
financial
markets
MOF-PAD, BOT,
ACGEN
Prepare strategies of dealing
with the Commercial and
private debt
Debt buyback and refinancing facility
Develop, implement, monitor
and evaluate securities and
financial markets strategy
Achieve Floating rate debt/total
government securities outstanding
less 25% by 2008
By end Dec. 2006
MOF-PAD, BOT,
ACGEN, TR
- M&E Report for financial markets
- Achieve Total Debt Servicing not
exceeding 30% of annual recurrent
revenue
By end July 2007
BOT, PAD, TR
-Security Market report
Introduce National Personal
Savings Scheme and broaden
public participation in securities
market
- Achieve Smooth redemption
profile of government securities
By Dec 2007
BOT, PAD, TR
Participate in consultative
meetings and the preparation of
policy papers
To defend and make clear on policy
and strategy issues on debt
Continuous
MOF-PAD, BOT,
ACGEN, LS, CEF,
TR, DSV, CB,
Convene stakeholders
workshops to develop
awareness
-To further widen the participation
of the stakeholders
continuous
MOF-PAD, BOT,
ACGEN, LS, CEF,
TR, DSV, CB
NDS Report
-Number of CG meeting participated
Number of policy papers
-Number of workshop convened
- Number of stakeholders workshops
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4. To ensure
timely
settlement of
domestic
arrears and
claims
Settle new suppliers’ arrears
through ministries’ budget;
To have effective budgetary control
as per cash budget system
Pay off balance in BOT
revaluation account (exchange
losses)
To eliminate Government pressure
to domestic market borrowing for
financing rollovers
Provide adequate cash cover
provision to BOT to prevent
accumulation of exchange
losses on debt service
externalization
To minimize cost of debt service
arising from delays and under
provisioning
Budget execution report and QDR
Relief the Government for burdens
that may trigger rise in tax rates
To exposure of Government to
contingent liability
Security Market Operational Report
Fund payments on nonsecuritised debts from term
borrowing in the market;
continuous
MOF-PAD, TR,
ACGEN, DVS,
Budget execution report
BOT Annual report
To have an accurate record of
domestic debt
Prevent build–up of non
securitised debts in future
Record debts taken over from
parastatals explicitly on the
Treasury books (i.e. Domestic
Debt Report)
To comply to Public Finance Act
2001
To have a streamlined report
A joint annual statement of outstanding
parastatal sector liability
The Treasury Registrar (TR)
and PSRC to prepare a joint
annual statement of outstanding
parastatal sector liability
Monthly statements of other nonsecuritised debts
TR
Produce jointly (ACGEN &
TR) monthly statements of
other non-securitised debts for
14
the Minister and subject to his
approval; record the same in the
Domestic Debt Report.
ACGEN
OVERALL OBJECTIVE 2: BUILD INSTITUTIONAL CAPACITY AND PARTNERSHIPS
1.To undertake Needs
Assessment
2. Fill HR gaps; provide
effective HR management;
and institute innovative
performance-based retention
incentives
3. Address Gaps in key Skills
Sets
3. Continued
Participating organizations
review:
- workplan priorities
- Staffing needs
- skills set reqs defined, staff
assessed, and gaps in skills
sets identified
Strategic recruitment drive;
secondments from BOT;
Institute sound management
practices
Workplans,
organization of work
completed;
HR Needs and
training gaps
identified with all
NDS tasks captured
Increased
staff
levels, incl. at senior
levels,
as per
reviewed org. charts
Provide tailored NDSspecific training and
strategic assignments
a. Windows and Office Suite
for officers from all Offices
Proficiency
achieved:
- computer literacy
in entire Debt Office
b. CSDRMS 2000+
for all organizations, &
complementary IT-training
in CS-DRMS
b. Debt Office
proficient in its CSDRMS area, (able to
record, retrieve data,
prepare reports,
simulations &
forecasts
Within PFMRP
timeframe for
MoF; 2005 year
end
PFMRP
resources
In stages, from
mid-2005
to
end-2007
MoF budget
& PFMRP
resources
Department Heads
and PFMRP
Component 1
Manager
Documentation
of
workplan,
proposed org chart, HR and skill
set gaps
PAD coordinates
and
all
organizations send
ready officers
All debt properly recorded in the
system by end 2005
PFMRP
resources
By mid-2006
PFMRP
resources or
MoF
Budget
15
c. Debt Pro for all
organizations involved in
DSA preparation
d. macro-fiscal forecasting
for all organizations, using
Financial Programming
framework
e. Analysis of financial
statements and project
analysis: for middle office
(PAD, T-R, POPP)
f. financial market
institutional development
g. auditing
4. Identify & address other
required inputs:
(including conducive work
environment)
5. Strategic NDS review and
update
- Assessment of needs for
other key inputs to NDS
implementation:
- equipment;
- software;
- library with reference
material;
-training room
- office space;
- other inputs
Institute strategy to address
needs
Carry out seminar bringing
together heads of NDS
participating departments
c. all organization
know what inputs
responsible for in
DSA exercise
d. Prepare
macroeconomic
assumptions used in
DSA scenarios
e. Assess finances of
parastatals, loan
requests; & to assess
projects
f. Promote fin mkt
development &
broaden range of
available
instruments
g. verify/validate
contingent debt &
complete dataset
b, c, d, by end
2005
- by 2006, reduced need for
external consultants in DAS
preparation
e, f, g from end
2005 to 2007
All key inputs to full
effective NDS
implementation are
addressed
Assessment
completed by
Dec. 2005 for
input in MoF’s
MTEF 06-07
allocation and
implementation
by then
Conduct
situation
analysis and update
the
NDS,
its
coordination,
decision-making &
capacity-building
mechanisms
By end 2005
16
MoF budget
& PFMRP
resources
MoF budget
or PFMRP
resources
Heads of
participating
organizations with
leadership support
PST, with CPAD
support
OVERALL OBJECTIVE 3: TO HAVE RELIABLE DEBT INFORMATION FOR EFFECTIVE DECISION MAKING
3.0 To have an integrated
and synchronised Debt Data
Management system
3.1 Facilitate
institutionalization of debt
data office including the
transfer of responsibility for
public debt information
from BOT to MOF
3.1 Source of
official debt data
both domestic and
External be
identified and
adopted by the
NDMC
By Dec 2005
3.1 Centralized
Public debt
database within
ACGEN
By June 2006
3.2 Recording existing
Domestic Contingent debt
in the CS-DRMS 2000+ by
ACGEN
3.2 Determine the
level of Contingent
debt and its impact
to the whole
public debt
portfolio
By June 2006
3.3.Parastatal/Agency debt,
statutory payments/arrears
and on-lending agreements
captured in reporting
framework by ACGEN
3.3 Determine the
level of Parastatal
debt and Arrears
and its impact to
the whole public
debt portfolio and
budgeting
By June 2006
3.4 Local government
debt/statutory
payments/utility arrears
captured in reporting
framework by ACGEN
3.4 Determine the
level of local
government
debt/statutory
payments/utility
June 2006
3.1 PAD,
ACGEN, BOT,
EFD
3.1 A coordinated and reliable source
of debt data.
3.2 TR,
ACGEN, PAD
and DSV
3.2 Centralized and reconciled debt
database
By Dec 2005
3.3 TR , DLS
and ACGEN
3.4 TR , CB and
ACGEN
17
3.3 CS-DRMS Generated contingent
Debt Reports
3.4 CS-DRMS Generated Public
Corporation Debt Reports
arrears captured in
reporting and its
impact to the
whole public debt
portfolio and
budgeting
3.5 Guidelines and standard
format for debt reporting
formulated and adopted by
NDMC
3.5 A standardized
debt information
and Reporting
Dec. 2005
3.6 Data base migration
(from CS-DRMS 7.2 to
2000+) and reconciliation
completed between BOT
and MOF
3.6 Quality
Consolidated and
reconciled Debt
Data
June 2006
3.7 Decision be made by
the Authority on regular
data transfer of audited and
verified contingent
liabilities from TR to
ACGEN for records in the
system
3.7 Ensure regular
recording of
contingent debt.
Sept. 2005
3.9 The Existing and new
Domestic Debt and grants
be recorded in the CSDRMS 2000+
3.10 Record in CS-DRMS
all unrecorded and new
Actual Disbursement data
registered by EFD and
ACGEN
3.11 Implement all Debt
3.9 Consolidated
Debt Database
centralized under
ACGEN
3.10 Monitoring of
new borrowing
and Actual
disbursement both
grants and loan
3.5 ACGEN, TR
and PAD
3.6 MOF
3.5Quarterly Parastatal/Agency
Contingent Debt Reports
3.6 The Guidelines/Policy and format
document
3.7 NDMC Report
3.7 MOF, BOT
3.9 Government policy in place on
transferring of Contingent debt
Sept 2005
3.9 CEF,
ACGEN, BOT
3.10 Monthly status report on new debt
instruments shared between front
and back office and other data
users
Dec 2005
18
3.10 BOT EFD,
ACGEN, DLS
and PAD
3.11 Consolidated Reports from the
Cancellation Agreement and
any debt restructuring made
in CS-DRAMS 2000+
System produced by ACGEN
3.11 Determine the
amount of Debt
relief and its
impact in the Debt
portfolio
Dec 2005
3.11 BOT,
ACGEN, PAD
and COMSEC
3.12 BOT, EFD
and ACGEN
3.12. Monthly Reports on new
disbursements from CS DRMS
produced by ACGEN
3.13 CS-DRMS/ ACGEN Official
Reports
3.13 BOT, EFD
ACGEN and
PAD
OVERALL OBJECTIVE 4: TO ACHIEVE BEST PRACTICE IN THE LEGAL AND INSTITUTIONAL FRAMEWORK AND
ITS ENFORCEMENT.
1.1
Modernization of
Legislation.
2.1. Review the relevant
laws with a view to
synchronizing and
updating them.
3..1 Approved
recommendations by
cabinet.
4.1 June
2007.
6.1 PAD, LS, TR, SV,
ACGEN, CEF, CB and
AG.
7.1 Task force formed; cabinet paper.
1.2.
Dessimination of
legislation and
circulars.
2.2.Amend laws as per
approved review
recommendations.
3.2 comprehensive and
synchronized legislation
on external and domestic
debt with clear
procedure for dealing
with violators.
4.2.June2008.
6.2. PAD, LS, SV,
ACGEN, CEF, and AG.
7.2 Consultancy contract for revision of
laws, ENACTED Amendments.
6.3.DLS
7.3 Approval of circular by NDMC.
2.3.Circular on current
legislation issued to
MDAs.
1.3. Improve
coordination and
Inter-Institutional
linkages.
3.3 all MDAs adhere to
provisions of legislation.
2.4 Inter –institutional
taskforce chaired by
CPAD to study current
coordination and
institutional
responsibilities and
3.4 clear institutional
functions and
information sharing and
dissemination
responsibilities.
4.3 June 2005
and Aug
2008.
19
recommend
improvements.
2.5 Continue holding
TDMC/BMDC and
NDMC regulary.
4.4.Sept
2005.
3.5 Debt management
issues discussed and
decisions made.
6.4. PS-MoF
Continuous
20
7.4 Taskforce with TOR formed by July
2005.
Annex II: Problem Structure Analysis
Unsustainable Longterm Socio-Economic
Development
Poor Functioning of Debt
Policy & Management
System in Tanzania
Unconsolidated &
unreconciled debt
data
BOT and MOF have
different databases
Irregular debt data
reconciliation
Borrowing decisions
not based on sound
analysis
Mismatch of capacity
in debt policy & mgt.
Institutions
Debt targets and
financing plans
not based on
DSAs
BOT has longer
history of capacity
building in this area
Lack of culture
of critical
analysis
Capacity in MOF
varies widely across
departments;
Borrowing
decisions are not
centralised
through NDMC
Limited capacity in
Financial Analysis in
T-R and in POPP
Different debt data
capturing points
Data on debt
guarantees and onlending not
consolidated &
entered in single
database
Insufficiently
equipped
middle office
Concentration of
Capacity in Key
Officers
21
Debt restructuring not
in line with HIPC and
NDS expectations
Debt relief is not as
frontloaded as desired
Low level compliance
Non-Paris Creditors
Donors have own
conditions/standards
of loan format
Weak institutional
Framework for
restructuring
domestic debt
Overlapping of
Roles and
Responsibilities
Lack of
enforcement of
Legal Framework
Lack of Periodic
review /adjustment
of Roles
Lack of
Memorandum of
Understanding
Conflict of Interests
among Stakeholders
0