The Prerequisites for an Effective External Debt Management: The Tanzania Experience
Adam M. Mwandenga (The Institute of Finance Management, Dar es Salaam)
Download Article | Published On 01/07/1996

Abstract

Tanzania's external debt has grown unchecked since mid 1970s. T le country's capacity to repay external debt did not match; neither was it considered in the loan procurement process. Pragmatism requires chat tile count'?' re-examine its commitment to external debt management by taking prerequisite measures that operationalize effective debt management. Some of tile essential ingredients for this management are: (i) Centralized location of all information on external borrowings, contributing to a sound data base. Such locus be given sufficient powers, status ad authority to enforce reporting requirements and to implement debt policies. (ii) Clearly laid out institutional arrangement for loans procurement, utilization monitoring and effecting debt se1Vice payments selectively. (iii) Clear co-operation and co-ordination among the various parties involved, particularly the Treasury, Planning Commission, and Central Bank through the Debt Co-ordination Committee and Debt Management Committee. (iv) Search for feasibility of reversing the debt accumulation process in the context of debt management for economic development. One feasible area being widening of private sector's access to resources from tile international financial system; and use of bonds as an instrument in debt finance. These and other related issues are raised, albeit 'briefly in this paper.

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