THE Bank of Tanzania (BoT) has launched an online system for bidding of government securities (GS), which has been described as the first of its kind in the East African region.
BoT Governor Prof Benno Ndulu told reporters in Dar es Salaam that the GSS puts the country ahead of other economies in the region, saying the homegrown system offers a combination of online bidding and Central Depository Services (CDS).
"This is a home-made system, it realy works," said Prof Ndulu, while teasing those who believed the country cannot produce high quality products. He added: "The bank had to improve the old GSS so that it conforms to international best practices, keeping pace with technological advancement."
He said that the old system faced several challenges, adding that it was not interactive, did not comply fully with fax and telephones, while traders had to personally present bidding forms.
"In spite of the challenges, the old GSS performed well in the past 13 years, but was defeated by technological advancement," BoT Director of Financial Market Mrs Judith Ndissi said.
BoT's Director of Management Information System Edward Makwaia said by developing the system the central bank has saved millions of US dollars.
Meanwhile, Prof Ndulu said the economic outlook was considerably good saying the government revenues have surpassed normal expenditure in 2011/12 fiscal year where 7.2tr/- were collected against 6.9tr/- of normal expenditure.
"Total grants during the past budget accounted for only 21 per cent while borrowing from Breton Woods and others accounted for 11 per cent. But the real impact was not felt on the entire budget as donors' support was 72 per cent," he said.
During the previous fiscal year the government received 1.7tr/- as donor support compared to 2.5tr/- of total pledges. The most suffered vote was development expenditure. BoT's Director of Management Information System Edward Makwaia said by developing the system, the central bank has managed to save millions of shillings, saying the software would have cost a minimum of 300,000 US dollars (about 480m/-).
"The software can cost up to one million US dollars (about 1.6bn/-), plus servicing fees, which is not less than 100,000 US dollar (about 160m/-) yearly," he said. Tanzania Securities Chief Executive Officer Moremi Marwa said that apart from increasing efficiency and transparency, it was high time the central bank combined the CDSs of BoT and Dar es Salaam Stock Exchange.