| (a) Why is an inventory
of public debt required?
A complete inventory of all public sector
borrowing is required to enable details of each loan to be stored
[more]
(b) What are the data
requirements for a loan database? [more]
A spreadsheet package
is the first option that should be considered where the loan numbers
are small and the portfolio not complex [more]
Why is an inventory
of public debt required?
A complete inventory of all public sector
borrowing is required to enable details of each loan to be stored,
the data to be retrieved for each loan individually or in aggregate
as required for loan operations and reporting, and data analysis
for debt and risk management.
What are the data
requirements for a loan database?
The data requirements for a loan database
are
(i)
Basic loan details and the terms of repayment from each loan agreement
and prospectus.
(ii) Forecast and actual disbursement data.
(iii) Forecast and actual debt service payments covering principal
and interest payments, commitment fees, and service and other
charges.
(iv) Exchange rate data for each relevant loan currency into the
domestic currency and interest rate data for loans subject to
variable interest rates.
What
documents should be collected to enable a database to be built up?
The documents necessary to
build up a loan data base are
(i) Contractual: Agreement/Prospectus;
Legal Opinion; Correspondence relating to other conditions preceding
effectiveness; Loan Effectiveness; Amendments to agreement covering
loan amount, scope, and extension of terminal date etc.
(ii) Disbursements: Forecasts of Disbursements; Withdrawal Applications;
Disbursement Notices containing information on the date, currency
and amount; and Quarterly/Monthly Summaries of Disbursements.
(iii) Payments of Principal, Interest, Commitment Fees and Other
Payments: Forecasts of Actual Payments of Principal, Interest,
Commitment Fees and Other Payments; Invoices from Creditors; Payment
Orders; and Payment Advices.
What
is the information that a loan database is expected to produce?
The information that
a loan database is expected to produce are:
(i) The annual public
debt service payments due for making payments on time and their
management.
(ii) Aggregate and detailed data on debt service payments due
on government debt required to make budgetary provision for servicing
this debt and those arising from government guarantees in default.
(iii) Aggregate data on the country's principal, interest, and
other payment obligations on the total external debt required
annually for preparing balance of payments projections.
What are the options
available to a country that wishes to computerise its loan data?
A spreadsheet package
is the first option that should be considered where the loan numbers
are small and the portfolio not complex. The second is custom
designed software. The ability to undertake the latter will depend
on the availability of systems and programming skills to develop
the software and maintain it in the context of rapid improvements
in information technology globally. A third option is off-the-shelf
software available from technical assistance agencies. The CS-DRMS
software is provided by the Commonwealth Secretariat under its
technical assistance programs to member countries. Those outside
the Commonwealth can obtain it commercially through the Crown
Agents in London. The DMFAS software is provided by the UNCTAD
and can be obtained under the technical assistance programmes
of the United Nations Development Programme.
What are the types
of contingent liabilities that could occur that affect the level
of public debt outstanding?
Explicit
contingent liabilities are legal obligations of the
government to make a payment if a particular event occurs. They
do not arise unless the event or trigger occurs. The types of
liabilities range from government guarantees for non-sovereign
borrowings, various types of loans e.g. agricultural and small
business loans, private investments and insurance schemes such
as deposit, crop and flood insurance.
Implicit
contingent liabilities are also dependent on the occurrence
of an event but are not recognized as liabilities until after
the event and the government is willing to take on the obligation.
The stability of the financial system represents the most serious
implicit contingent liability and could involve significant outlays
of budgetary resources once a decision to assume the obligation
is made.
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