Stakeholders want special office to handle public debt

Establishment of a Central Public Debt Management Office is the key to better management of government borrowings and the national debt stakeholders have said this while the government maintains it is already setting up a department in the Ministry of Finance for the purpose.

Challenging the government to establish the debt management organ, Tanzania Coalition on Debt and Development (TCDD) cautioned that failure to manage the national debt, the country will suffer dire socio-economic impacts.

Addressing journalist yesterday in Dar es Salaam, TCDD Executive Director Hebron Mwakagenda, said the central public debt management office can help reduce the skyrocketing debt citing that the country’s public debt stock stood at 29.3trn/- as of March, 2014 , having increased by 4.68trn/- since the same period last year.

He explained that while there are two committees charged with monitoring the national debt, the National Debt Management Committee (NDMC) and the Technical National Debt Management Committee (TNDMC) the two organs are also tasked with other duties and management of the national debt is an additional task.

He said the two organs are stretched beyond capacity and as such, ‘there have been cases of unauthorised persons contracting loans without consent of the Finance Minister.

“Lack of a unified public debt management office and a central database, has resulted in the government failing to recover 281m/- from M/s Ginaac Industries Ltd and 44m/- from Mansoons Ltd both of which no longer exist,” Mwakagenda alleged.

He cited the Controller and Auditor General (CAG) report of 2012 saying the government had issued guarantees to public and private enterprises above the set borrowing ceiling amounts and according to him, in 2010 alone, over 711.8bn/- was borrowed and is now the government’s burden.

“Had there been a central debt office, such anomalies would be effectively detected and addressed,” he emphasised.

He said the coalition recommends the training of more staff to manage the proposed unified public debt office and strengthen the national loans, guarantees and grants Act, 1974.

“As it currently stands, the legislation does not state the caliber of public officers to whom the finance minister can delegate loan negotiation and contracting powers and it neither prescribes any sanctions on unauthorised officer(s) who impersonate the minister and fraudulently contract loans on his behalf,” the TCDD Executive Director said.

“The Act is also equally silent on what action should be taken on fraudulent companies or individuals,” he added.

He also said the coalition calls upon the government to make public debt contracting transparent and conduct auditing.

“The national debt and its management are serious issues of national security,” he cautioned.

In its finding, the coalition established that there has been lack of political will to establish a debt management office, he said and attributed it to indiscipline and non-compliance with accounting and procurement standards.

“Violation of professional legal accounting and procurements, standards and regulations … loan contracting by anonymous cum unauthorised public officers, exceeding guarantee ceilings, charging expenditures to wrong accounts and misreporting debt accounts, all these are challenges that the Central Public Debt Management Office would handle,” he concluded.

However, in a related development, Finance Minister Saada Mkuya yesterday said that, her ministry is already in the final stages of setting up a department to deal with the national debt.

According to Mkuya, the finance ministry had earlier this year received directives from the State House on how to best manage the matter and is now working on outsourcing qualified staffs.

“This will mean all debt which were either under the central bank (BoT) or the treasury, will now be coordinated under a unified department in the ministry,” she said.