Move to establish debt liability monitoring system underway

Finance and Economic Affairs Ministry is set to launch a new debt management office that will consolidate fragmented debt management functions and strengthen capacity by the year end.

The new office, according to International Monetary Fund (IMF), will compile data on government debt guarantees on a quarterly basis to improve the monitoring of debt liabilities.

"A second focus will be on strengthened institutional arrangements to appraise and select public investment projects," IMF said in its July country report issued last week.


The Breton Wood institution said the existing procedures under which the Planning Commission provides a fragmentary assessment of investments does not provide strong assurances on value for money in public borrowing.

"An issue of particular concern (has) given planned large investments in the gas pipeline and prospects for other sizeable infrastructure projects in coming years," the statement indicated. 

The new debt office, which the country lacked, will also oversee coordination between the relevant departments in the central bank and treasury will also be strengthened to improve the consistency of external debt data.

"The government intends to take steps to raise Tanzania's debt management capacity from its current 'low' rating," IMF said. 

Previously, the ministry of finance website shows, an institutional framework was dealing with debt management. It included the three debt management functions-front office, middle office and back office.

Mzumbe University's Dar es Salaam Business School Dr Honest Ngowi said the establishment of the debt office was a positive move that will act as one stop shop for the country's debt. "It is a good move in assuring first class public finance management," Dr Ngowi told the 'Daily News'.

Meanwhile, according to IMF the country's debt sustainability assessment (DSA) has been updated to reflect new borrowing activities. The DSA reflects the lower-than-projected debt outturn at end of last fiscal year, upward revisions to GDP, and updated public sector borrowing projections.

"The updated DSA shows Tanzania's risk of debt distress remaining low," IMF said. The borrowing figures include two loans to parastatals in the context of the energy crisis-government borrowing of 1.25 billion US dollars (about 2.0tr/-) for the Tanzania Petroleum Development Corporation (TPDC) pipeline.

Another was government guarantees for a 135 million US dollars (about 216bn/-) external commercial credit to the power utility, TANESCO.

Treasury has requested that the three year policy support instrument (PSI) ceiling on contracting external non-concessional borrowing (ENCB) be increased to 1.77 billion US dollars (about 2.83tr/-) up from an initially programmed 1.5 billion US dollars (about 2.4tr/-).
Sources: The Daily News,http://www.dailynews.co.tz, reported by Abduel Elinaza
Share on Google Plus

About Abduel Elinaza

This is a short description in the author block about the author. You edit it by entering text in the "Biographical Info" field in the user admin panel.