Government of Somaliland (GoSL)

Domestic Revenue Mobilization and Public Financial Management Capacity Strengthening Project

(P151492)

(CONSULTING SERVICES – INDIVIDUAL CONSULTANTS)

Macro-Economic Technical Advisor Economist – Economist

Terms of Reference (TOR)

Terms of Reference (TOR)

     1. Background

The Government of Somaliland has received Additional Financing from the World Bank towards the implementation of the Domestic Revenue Mobilization (DRM) and Public Financial Management (PFM) Capacity Strengthening Project. The overall project development objective (PDO) is to ‘strengthen systems of domestic revenue mobilization, expenditure control and accountability in Somaliland.

Somaliland public financial management reforms has been improving since the establishment of the contemporary Somaliland in 1991. In addition, significant improvements have been done for the current years mainly due to changes in various Legislations and Regulations. These legislation and regulation changes include the Constitution, Public Finance and Management Law No 75/2016, Somaliland Financial Regulation, and Comprehensive Operating, Accounting and Procedures Manual 2019 developed Pursuant to the Public Finance and Management Law No 75/2016. These new legislations, regulations, policies and manuals provide the Budget process in line with international best practices.

Consistent with its National Development Plan II, the Government of Somaliland (GoSL) is in the process of reviewing its revenue laws, regulations and procedures and undertaking reforms and modernization efforts to ensure enhanced efficiency and optimal productivity. As part of its continuous improvement drive, the GoSL through the Domestic Revenue Mobilization (DRM) and Public Financial Management (PFM) Capacity Strengthening Project, requires the services of a technical adviser in Macroeconomic and Statistical Department, Ministry of Finance.

The Country needs to develop a macroeconomic and fiscal framework. This is necessary for improving the predictability and reliability of revenue and expenditure forecasts based on government economic policies. In addition, macroeconomic and statistical capacity of the department must be improved to ensure a more efficient of resources use and management of public resources.,.

Finally, to complete the primary strategy of PFM Policy as well as PFM acts, Somaliland needs to;

1. Establish a macroeconomic model to provide both short-term and medium-term forecasts
2. Improve the current macroeconomic database and core economic indicators/data.

Establishment of macroeconomic model and source of economic indicators will provide reliable preparation of a 3-year fiscal framework of aggregate macroeconomic projections consistence with vision of 2030. In addition, a macro fiscal framework is important for the successful implementation of the National Development Plan II and in pursuing medium term fiscal and monetary policies that ensure stability and induce strong private sector growth.

     2. Objective (s) of the Assignment

The main objective of this consultancy is to hire an expert to articulate and formulate and, a macroeconomic and fiscal model for Somaliland for forecasting and decision purposes.  The specific objectives of this assignment are;

1. To articulate, formulate and structure, a macro-fiscal forecasting model. The model needs to integrate all the segments of the national economy (real economy, fiscal, financial and external sector).
2. To provide all macroeconomic modelling information for development of the macroeconomic database.
3. To build the technical capabilities and capacities of the Macroeconomic and Statistics Department staff

     3. General Scope of the Assignment/Work

The technical macro-economic advisor will be working with the Macroeconomic and Statistical Department in the Somaliland Ministry of Finance Development. The scope of the consultancy assignments includes:

• Designing and constructed the macro-fiscal forecasting model for the Somaliland economy.
• Assisting national data assessment and analysis by; providing data gaps within the national economy and sectors.
• Identifying the data input and the database that would be used to solve various model’s equations
• identifying the uses of different deflators for different type of variables, within the overall model’s framework.
• Obtaining, organizing and cleaning and structuring data to complete macroeconomic database development, with a   substantive   and statistically viable size of observations (number of time series/historical years), as well as handling higher degree of statistical reliability and efficiency.
• Providing technical training of the macroeconomic modelling and macroeconomic framework including forecasting and scenario analysis.
• Building technical capacity of the Macroeconomic and statistical department staff.

     4. Key Deliverable

Following   are the expected   outputs   in developing   the economic models:

1. Inception Report (hard copy for each study with electronic copy), which includes, among others, lie work plan that identifies in detail the theoretical framework, possible set of indicators, approaches and methodologies to be utilized in the development of the model, detailing the data requirements, anticipated bottlenecks and proposed solutions)
2. Consultative Meetings, which includes consultative discussion with M&SD staff.
3. Interim Report, containing the result of the preliminary set of indicators and preliminary outputs/runs.
4. Draft Final Report, which integrates the final inputs, comments and recommendations from M&SD, and contains the detailed specifications of the short term and medium-term macroeconomic model including the operations manual) (With Final Model}
5. Presentation (hard copy for each of the study with electronic copy and the economic models), to the Minister, Directors and M&SD official and staff for evaluation, and comments.
6. Capacity Building for at least 12 M&SD Staff, which includes presentation of theory, estimation processes, trouble shooting and updating of the model, if necessary, preparation of lecture materials, and initial operations manual).
7. Revised Final Report, which takes into account  the final  comments  from M&SD , and includes  the technical   description  of the final  model,  limitations  of the model, assumptions   and parameters used, lessons learned  during the training,  revised  final user’s manual  on data gathering  and processing,   step- by-step  procedure  for running  each of the models  with illustrative  examples   showing  the results  of the simulations).
8. Technical Advisor for each project is expected to provide orientation/briefing on each of the output reports mentioned above to the concerned personnel of the M&SD, as needed.
9. Assign M&SD technical staff counterpart who will work closely with the consultant;

     5. Qualification Requirements.

The consult should have the following qualifications and experience to carry out the assignment.

1. MA in Economics; PhD in Economics is preferred
2. At least 10 years’ experience in macroeconomic analysis and public financial management;
3. Demonstrated experience developing Excel-based macroeconomic projection tools for governments;
4. Training and facilitation experience in macroeconomic projection;
5. Experience working in Sub-Saharan Africa;
6. Fluency in English and communication skills;
7. Ability to proactively seek and recommend sound policy initiatives;
8. Demonstrated ability to transfer skills and knowledge to others.

     6. TA Required Deliverable

     7. Reporting and other Deliverables

The Technical Advisor will report to the Director General Ministry of Finance and the Director of Macroeconomic and Statistics as well as PFM coordinator.

     8. Duration of the Assignment

The assignment is expected to take 12 months with possibility of extension, depending on the performance evaluation of the TA.

     9. Location of the Assignment

The duty station is Hargeisa, Somaliland, the Ministry of Finance shall provide the technical Assistant with a suitable office space and internet services.

     10. Facilities to be Provided

The Ministry of Finance will provide the technical advisor with office facilities, internet connectivity, essential utilities, office services, stationery and office supplies and use of a computer, printer, scanner and photocopying etc. In addition, Ministry of Finance will make available to the Technical Advisor copies of all the documents the Technical Advisor may need to discharge his functions; and will assist the Technical Advisor in liaising with all agencies of government and sector ministries under the project and with other agencies of government on matters related to the project.  The project will also provide transport to the Technical Advisor as required for their official duties.

     11. Procedures Applicable for Selection/Methodology 

1. The Individual Technical Advisor will be hired on the basis of the World Bank’s Guidelines for Selection and Employment of Consultants (January 2011). The contracted Technical Advisor will take a position at the Ministry of Finance.
2. A Technical Advisor will be selected in accordance with the Individual Selection method set out in the Technical Advisor Guidelines.
3. Applications letters must be delivered in a written form to the address below or by e-mail by or in a written form in three (3) hard copies. Application letters received later than specified date shall not be considered. Electronic applications must be copied to all shown email addresses and must clearly specify the name of the assignment being applied for.

Government of Somaliland (GoSL)

Domestic Revenue Mobilization and Public Financial Management Capacity Strengthening Project

(P151492)

(CONSULTING SERVICES – INDIVIDUAL CONSULTANTS)

Treasury Single Account Technical Adviser 

Terms of Reference (TOR)

A.   Background

Government of Somaliland recognized a need for a PFM reform strategy to utilize public funds towards meeting the NDP goals, and ultimately those of Vision 2030. Therefore, in 2013, the MoF formulated a five-year Somaliland Public Financial Management (PFM) Reform Strategy (2013-2017), to improve the government’s capacity and systems to utilize public funds, towards meeting the NDP goals and those of Vision 2030.

The Somaliland-led PFM Reform Strategy and Action Plan identifies the priorities for reform, provides a structured and sequenced framework to carry out specific reform activities, guide the mobilization of resources, and improve coordination as well as sustainability of the reforms aimed at strengthening PFM systems. The vision is to “achieve the highest possible efficiency, transparency and accountability in the allocation, management and use of public finances to meet the GoSL’s development and economic growth priorities”.

The broad objectives of PFM are to achieve overall fiscal discipline in the allocation of resources to priority needs and efficient and effective delivery of public services. A solid and strong PFM system is a tool to minimize fiscal waste and support the effective and efficient use of taxpayers’ money. Strengthening core fiscal systems has been a long-standing priority of the World Bank and other international development partners. GoSL has therefore received funding from the World Bank to strengthen its public financial management capacity.

The World Bank through the Multi-Partner Fund PFM Capacity Strengthening Project has committed to compliment the GoSL in its PFM reform agenda. The project development objective is to establish and strengthen institutional capacity for the management of public funds in the central finance agencies and targeted sectors. The PFM Capacity Strengthening Project comprises of the following four components:

Component 1: Strengthening Tax Policy and Inland Revenue Administration System;

Component 2: Strengthening Capacity for PFM Control and Accountability;

Component 3: Rapid Response Facility;

Component 4: PFM reform Oversight, Coordination and Management;

The Government of Somaliland has received Additional Financing from the World Bank towards the implementation of the Domestic Revenue Mobilization (DRM) and Public Financial Management (PFM) Capacity Strengthening Project. The overall project development objective (PDO) is to ‘strengthen systems of domestic revenue mobilization, expenditure control and accountability in Somaliland.

Consistent with its National Development Plan II, the Government of Somaliland (GoSL) is in the process of reviewing its revenue laws, regulations and procedures and undertaking reforms and modernization efforts to ensure enhanced efficiency and optimal productivity. As part of its continuous improvement drive, the GoSL requires the services of a technical adviser in the implementation of cash management policy and treasury single account.

The GoSL therefore wishes to use part of the funds allocated under the Domestic Revenue Mobilization (DRM) and Public Financial Management (PFM) Capacity Strengthening Project to pay for the services requested in this Terms of Reference.

B.    Treasury Single Account (TSA)

Treasury Single Account (TSA) is a financial policy to consolidate all inflows and outflows of government accounts into one single account that makes possible efficient management and control of government cash resources in banking arrangements

Legally, requires the General Revenue Fund to be maintained at the Central Bank of Somaliland (CBSL), and shall act as the Treasury Single Account (TSA) for the Government. Financial regulations underpinning Somaliland PFM Law clearly prescribes usage of TSA arrangement for all national government agencies.

The objective is to progressively improve the technical capacity to handle PFM processes in an efficient manner.

Current Status: The Accountant General Office (AGO) has conceptualized and designed a TSA framework that will be operationalized alongside the Cash Management Policy. A TSA is a prerequisite for modern cash management. It involves the consolidation of all gov­ernment cash balances into a single account at the Bank of Somaliland. This consolidation allows the Ministry of Finance (MoF) to minimize the volume of idle balances in the banking system, with consequent cost savings.

For this assignment, PWC which worked in sub component 1.1 and 1.2 of pillar 3 of PFM had developed a number of deliverables. This consultancy engagement developed a number of manuals that are to be implemented, among these are Standard Chart of Accounts (SCOA), Comprehensive Operations and Accounting Procedures Manual (COAPM), Treasury Single Account (TSA) Conceptual Design, Cash Management Policy, Financial Regulations etc. 

The company developed a Treasury Single Account (TSA) Conceptual Design which graphically shows current and future (when the TSA is implemented) banking arrangement, and follow charts about funds transfer and payment processes. All these processes in the flow charts are online that is to be supported by the SL-FMIS and the Core Banking System deployed at Somaliland Central Bank.

Operationalizing TSA, envisaged TSA bank account or set of linked bank accounts, the Government will make all transactions of receipts and payments and gets a consolidated view of its cash position at any given time. Along with the TSA, the purpose of the Cash Management Policy is to ensure the use of the most economical and effective cash flow techniques in financing Government programs and operations.

C.   Objectives of the Assignment

The overall objective of this assignment is to provide technical support and advisory services to the implementation of TSA under the PFM Capacity Strengthening Project with specific focus on having a unified operational and automated structure of government bank accounts under TSA as well as the compliance with the PFM Law (Law No.75/2016) and related financial regulations.

A unified TSA enables a consolidation and optimal utilization of government cash resources, to have a better cash flow planning and cash management technique by the Ministry of Finance, Office of Accountant General and Central Bank of Somaliland.  This will also enable to make easy and simplify fund releases and payment process of budgetary allocations to MDAs timely and efficiently.

D.   Scope of Work

TSA Technical Advisor’s key activities relating above objectives will include the following:

Implementation:

1. Provide technical assistance to the Office of Account General (OAG), Department of Budgeting and Planning-MoF and Bank of Somaliland on the implementation of TSA and cash management systems.
2. Rigorously study current system of government cash management and government bank account arrangements and then design better cash management methods.
3. With the concept of TSA, develop action plan to start and implement active cash management.
4. Review developed TSA Conceptual design and cash management policy and develop a comprehensive road-map and attendant action plans for implementation.
5. After study, recommend most appropriate design.
6. Prescribes business processes, user and technical requirements in making virtual accounts as described in the TSA conceptual design.
7. Work with the Bank of Somaliland and AGO; advice on the establishment of and capacitate cash management unit and assist them enable efficient use of modern TSA for robust cash planning and forecasting.
8. Work with system developers (SL-FMIS and Core Banking System) and advice technically in the deployment, installation, and automation of TSA and Cash Management operations.
9. Review legal and regulatory frameworks and chart of accounts in the establishment of TSA operations and its various accounts under this TSA in the Central Bank.
10. Closely work with implementation committees (steering and technical committees) in their subsequent implementation activities.
11. Support Government develop the formation documents to support the establishment Cash Management Committee (CMC) and Cash Management Technical Committees (CMTC). The formation documents will include Cash Management Committee Ministerial Order (outlining objectives, membership and mandate) and TORs (composition, roles and responsibilities)

Monitoring:

12. The Advisor will draw-up a monitoring framework and periodically monitor and assess the state of implementation particularly focusing on qualitative improvements;
13. The Advisor will review improvements in institutional capacity and training, overall adaptation, improvements in TSA and Cash management processes and systems, controls and reporting, and improvements in all aspects of the TSA necessary to meet the overall objectives.
14. Resulting from this process, the Advisor will determine areas that may lag or new areas that require attention, make recommendations for improvements and raise issues (technical or otherwise) that may impede progress.

Post Implementation:

15. The Advisor will develop a plan by which the GoSL will gradually take over full support of its PFM Systems to reduce the GoSL dependency on external consultants, increase ownership and allow GoSL to manage with the limited resources. Suitable officers / employees should be identified and trained to make this happen. This plan shall be discussed with the Ministry of Finance and Bank of Somaliland and approved by the Minister of Finance for implementation.
16. In drawing up this plan, the Advisor will among others:
    • Assess the state of readiness of institutions to take over in terms of staff capacity, process weakness, etc.
    • Determine actions and time required to cover the gaps for example in terms of training, staff recruitment, etc.
    • Determine work plans and milestones to implement these actions.
17. Perform such other duties as may be assigned from time to time with the context of the GoSL PFM reform program.

E.    Expected Result and Key Deliverables

It is expected that, by working closely with his/her counterparts and ensuring that the counterpart is exposed to international financial management practices, that the technical assistant transfers his/her skills, and ultimately ensures that the counterpart is fully capacitated to perform the his/her day-to-day directorate responsibilities. 

Performance will be specifically measured against the following key deliverables:

• A comprehensive baseline report (Inception Report) and work plan
• TSA implementation action plans
• Updated TSA user manual
• Periodic monitoring reports and their implementation.
• Appropriate TSA and CMP training skills/knowledge transfer and capacity development for Bank of Somaliland and Account General Office staff
• Technical coherence and harmony of the TSA under the MoF, AGO and Bank of Somaliland.
• Appropriate procedures that commercial banks and the Bank of Somaliland feed themselves e.g. migration of cash, payments, receipts, charges etc.
• Templates that report to the Bank and the Ministry of Finance and Accountant General’s Office.
• Procedures solving difficulties during migration to a full adoption.
• Quarterly progress report and
• End of assignment report.

F.    Qualifications, Experience and Competencies

Competencies

The GoSL requires a qualified individual consultant with experience in implementation of Treasury Single Account and Cash Management Systems and extensive and previous hands on experience in the implementation of TSA.

TA must have good communication and writing skills, fluent in English, high level of interpersonal and relationship-building skills and using practical techniques for change management in a fragile state environment.

Knowledge

• Be knowledgeable in Public Financial Management and Banking Arrangement particularly TSA and Cash Management Systems with a university degree in finance/Accounting/banking.
• Must be chartered accountant, CPA, ACCA or equivalent certifications.
• A postgraduate degree in relevant field of study will be an advantage.

Experience

• At least 7 years’ experience in the area of public financial management, including experience with PFM reform processes at a senior level.
• Must have extensive experience in carrying out similar assignments particularly banking arrangements, treasury single account arrangements and cash management systems.
• Must have accomplished similar assignment (Implementation of TSA and Cash management) in comparable socioeconomic country.
• Experience in training and capacity building in modern use of TSA and Cash Management.

G.   Required Deliverable

H.   Experience Contract and Reporting Arrangements

The TSA Technical Assistant will be full-time and hired against a time-based contract for 12 months and thereafter renewable, upon satisfactory performance.  The TA will report to the Accountant General as Component Implementation Team lead accountable for TSA deliverables under the project and will provide continues updates to Bank of Somaliland and PFM Coordination unit -MoF.

The TA will closely work the assigned counterpart from Bank of Somaliland, Accountant General Office and Department of Planning and Budget of Ministry of Finance, and provide skill transfer for sustainability.

The TA shall submit the reports summarized below, for the respective period. All documents/reports will be issued in English, submitted in both hard and electronic copies.

1. Monthly Progress Reports: The TSA and CMP Technical Assistant shall prepare monthly concise reports with the relevant information on progress, and emerging challenges.
2. Annual Progress Reports: The TSA and CMP Technical Assistant shall prepare annual concise reports with the relevant information on progress, highlighting achievements, emerging challenges and recommendations to ensure a successful TSA and CMP implementation.
3. Final Report: Before the end of the assignment, the TSA and CMP Technical Assistant shall submit a final report detailing all the activities undertaken. The report will outline achievements and challenges and lessons learnt.