Technical Assistance to Design Public Debt Management System — Institutional Capacity Building Project, Sao Tome and Principe

REQUEST FOR EXPRESSION OF INTEREST

COUNTRY: DEMOCRATIC REPUBLIC OF SAO TOME AND PRINCIPE

PROJECTS: INSTITUTIONAL CAPACITY BUILDING PROJECT

GRANTS Nº: IDA-V1240

CONSULTING SERVICES:

T.A. TO DESIGN PUBLIC DEBT MANAGEMENT SYSTEM AND SOFTWARE SOLUTION FOR DEBT SERVICE FORECAST AND REPORTS

REFERENCE Nº 64/C/ICB/2020

The Government of the Democratic Republic of São Tomé and Príncipe has received a grant from the International Development Association toward the cost of the Institutional Capacity Project managed by AFAP, and intends to apply part of the proceeds for a Technical Assistance to Design Debt Management System and Software Solution for Debt Service Forecast and Reports.

The Individual Consultant to be hired will help the Debt Management Office (DMO) of STP to design a DMIS with the requirements described in the ToR (Annex A). The output of this work will be the description of the business and functionalities that will allow IT specialists to develop a system for the DMO.

The Consultant is expected to produce detailed business rules (including diagram and flow charts) for DeM (Debt Management) processes in the following three core functions:

a. Recording, validating, and maintaining debt data;

b. Producing payment projections; and

c. Generating inputs for reports, including portfolio and risk indicators.

The Project Administration and Fiduciary Agency (AFAP) having the status of the projects implementing agency that handles funding from the World Bank now invites eligible Individuals Consulting (“Consultants”) to present Curriculum indicating their interest in providing the Services. Interested Consultants should provide information demonstrating that they have the required qualifications and relevant experience to perform the Services. The evaluation criteria are:

• Advanced degree (at least at master’s level) in economics, finance, business, engineering, or related field;

• At least 10 years of experience working with public debt management at an advisory or executive capacity;

• Fluency in Portuguese and in at least one of the following languages: English, Spanish, or French;

• Experience working with government officials, especially in low capacity environments.

The attention of interested Consultants is drawn to Section III, paragraphs, 3.14, 3.16, and 3.17 of the World Bank’s “Procurement Regulations for IPF Borrowers” dated July 2016 and revised in November 2017 and August 2018 (“Procurement Regulations”), setting forth the World Bank’s policy on conflict of interest.

A Consultant will be selected in accordance with the Individual Consultant method set out in the Procurement Regulations.

Further information can be obtained at the address below during office hours: 08:00 to 13:00 hours (Sao Tome and Principe local time) Monday to Friday.

Expressions of interest must be delivered in a written form to the address below (in person, by mail, or by e-mail) by May 15, 2020 until 11:45 AM (Sao Tome and Principe local time).

Agência Fiduciária de Administração de Projetos

Caixa Postal 1029,

Edificio do Afriland First Bank, 2º Andar

Avenida Kwame Nkrumah

S. Tome, S. Tomé e Príncipe

Phone: + 239 222 52 05

E-mail: [email protected]

[email protected]

[email protected]

Aneex A

Terms of Reference

Annex A

Terms of Reference for Technical Assistance on Debt Management System

• Background

• The Government of São Tomé and Príncipe has received a grant from the International Development Association to carry out the Institutional Capacity Building Project (ICBP). The subcomponent 2.1 of the project is aimed at improving budget credibility, and this Terms of Reference (ToR) refers to activity III.2.4. – improving debt management.

• São Tomé and Príncipe reached the completion point of the HIPC/ MDRI (Highly Indebted Poor Country/ Multilateral Debt Relief Initiative) initiatives in 2007. This process triggered some initiatives to improve Debt Management (DeM) in the country such as the approval of a public debt framework law in 2013.

• Another much needed improvement is the implementation of a Debt Management Information System (DMIS) to help the government to record and maintain debt contracts, calculate and make debt service payments, generate reports, among other functions.

• There have been several attempts to install a DMIS in STP since 1998. The first attempt was to install a DMIS called DMFAS, owned by UNCTAD. At that time, the maintenance requirements of the system prevented its success. Later, and with the same result, an attempt was made to install the debt management system known as CS-DRMS, owned by the Commonwealth Secretariat. These systems, while proven useful elsewhere, required very high levels of maintenance that had been proven impossible in STP. The objective now is to develop a simple computer application locally to increase ownership and capacity, including for supportive maintenance. Over time, the system could be expanded and upgraded if need arises.

• The STP debt portfolio is comparatively simpler than other debt structures, which is the typical object of off-the shelf systems. It is composed mostly of concessional debt contracts with multilateral and bilateral donors, government payments arrears to local suppliers, loans from domestic banks, and short-term domestic bonds normally held by local banks. The current debt portfolio has approximately 45 external debt contracts with 21 lenders and one Treasury Bill issuance. The main domestic arrears are with the energy company and the fuel supplier. The latest debt statistics bulletin is attached as an annex.

• Objective

• The objective of this ToR is to hire an individual consultant with expertise on DeM and development of debt recording systems, to help the Debt Management Office (DMO) of STP to design a DMIS with the requirements described in the following section. The output of this work will be the description of the business and functionalities that will allow IT specialists to develop a system for the DMO. This description will be annexed to the ToR for the DMIS software development. The consultant is also expected to be available to answer any question and provide clarification to any doubt that might arise in the process of developing the system based on the design proposed. The Consultant will also develop a Procedures Manual on public debt management.

The consultant will remotely follow the software development process, clarifying any questions that will be asked by the local software programmer and will validate the system after entering data on public debt.

After validation, the consultant should together with the programmer, organize training for users of the software and public debt managers.

• Scope of work

• The consultant is expected to produce detailed business rules (including diagram and flow charts) for DeM processes in the following three core functions:

• Recording, validating, and maintaining debt data;

• Producing payment projections; and

• Generating inputs for reports, including portfolio and risk indicators.

• These business rules will constitute the design of the proposed module DMIS and will be given to the software company tasked with developing the actual DMIS. The DMIS will focus on transaction processing, generating information for debt settlement, reporting, and debt strategy tools serving debt management core functions. For debt strategy tools, it refers to an output file that would contain the cash-flows on a loan-by-loan basis[1].

• Coverage of the system. The design of the DMIS should cover both external and domestic debt issued by the central government, autonomous and sovereign government entities, and the complete array of instruments used by the DMO. The system should cover also guarantees and payment arrears from the government provided these last two types of liabilities are to be financed through typical debt instruments such as securities and contracts.

• Stakeholders. The main user of the DMIS system will be the DMO, however, the system should allow for access from the Central Bank of STP (BCSTP), the Treasury Department, if the DMO allows to grant access to specific levels

• Data integrity. The consultant needs to run cross checks to verify the integrity of the data prior to the project starting point. The tests would consist, but not exclusively, in (i) Check if the Outstanding Balance = Disbursement – Amortization, (ii) ∑ Future Amortization = Outstanding Balance, (iii) Outstanding Balance = Disbursed amount + future disbursements, (iv) Stock = Outstanding Balance + accrued Interest, (v) Last amortization date must not be before last disbursement date, (v) Existence of outstanding balance and concomitant interest accrued.

• The following paragraphs lists the main processes and characteristics in each core function.

• Recording, validating, and maintaining debt data. This function covers the processes of inserting new debt instruments in the DMIS, monitoring and recording financial events that affect the stock and maturity, validating the data to ensure proper control, and maintain the data making the adjustments in accordance to disbursements, payments, any other event, observing calendar and contractual terms (including penalty payments).

• Producing payment projections. This function covers the ability of the DMIS to produce a schedule of debt service payments for the whole portfolio, showing upcoming payments (broken down by principal, interest, and fees), due dates, and the currency and amount of payments. The projections should extend until the last payment of the longest outstanding contract and allow for different scenarios for variable inputs such as exchange rate, interest rate, etc. The accuracy of the payment estimates will depend on the complexity of debt instruments and parameters definition, to be