## Framework Administered Account for Selected Fund Activities: East Africa Regional Technical Assistance Center (AFRITAC East) Subaccount

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### Background and purpose
- In March 2009, the Fund established a new Framework Administered Account to administer external financial resources for selected Fund activities (the “SFA Instrument”).
- The financing of activities under the terms of the SFA Instrument is implemented through subaccounts within the SFA.
- The AFRITAC East subaccount would be the third subaccount under the SFA.
- This paper requests Executive Board approval to establish the AFRITAC East subaccount under the terms of the SFA Instrument.
- AFRITAC East has a proven track record to provide focused, flexible, and responsive technical assistance (TA) in a cost-effective manner.

### Activities and thematic focus
- The center’s activities will continue to focus on six key areas representing common policy challenges to member countries, including those related to increased regional integration:
  - (i) tax and customs policy and administration;
  - (ii) public financial management;
  - (iii) monetary policy and operations;
  - (iv) financial sector supervision;
  - (v) economic and financial statistics; and
  - (vi) macro-fiscal analysis.
- The resources of the Subaccount will be used to finance capacity building, training and related activities, consistent with the purposes of the Fund for identified beneficiaries of AFRITAC East.

### Beneficiaries and contributors
- Beneficiaries of AFRITAC East are member countries in the East Africa region, which include:
  - Eritrea, Ethiopia, Kenya, Malawi, Rwanda, Tanzania, and Uganda.
- Resources of the Subaccount will consist of amounts contributed to the Subaccount by donors and beneficiary countries of AFRITAC East, (“Contributors”), and earnings that accrue as a result of the investment of these amounts (net of any costs associated with such investments).
- Additional beneficiary members of AFRITAC East may be added with the consent of the Managing Director and the concurrence of Contributors.

### Essential terms and conditions for Contributors (as established by the Managing Director)
- Each Contributor will consent to the essential terms and conditions of the Subaccount before the Managing Director may accept the Contributor’s resources into the subaccount.
- Resources will be placed in the Subaccount by each Contributor after signature of a Letter of Understanding between the Contributor and the Fund. Contributors may transfer resources from any bilateral subaccount under the SFA into the AFRITAC East subaccount.
- Contributors may join the Subaccount at any time. A Contributor’s consent to the essential terms and conditions of the Subaccount shall constitute the Contributor’s ex ante concurrence to any additional Contributor joining the Subaccount on the latter’s consent to the same essential terms and conditions.
- A Contributor may withdraw from the Subaccount, and receive a retransfer of its net contributions, without precipitating the termination of the Subaccount.
- To help defray the expenses incurred by the Fund in the management of the Subaccount that it will finance, reimbursement equal to 7 percent of the expenses financed from the Subaccount will be paid to the Fund from the Subaccount.

### Implementation and approval
- Contributions to AFRITAC East since its establishment in 2002 have been administered through the Framework Administered Account for Technical Assistance (“FAA”).
- With the new funding cycle for AFRITAC East starting in November 2009, AFRITAC East will be administered solely under the SFA.
- The essential terms and conditions of the Subaccount are consistent with the terms of the SFA Instrument, and the activities to be financed from the Subaccount are consistent with the purposes of the Fund.
- It is proposed that the Executive Board approve the establishment of the Subaccount.

*Prepared by the Legal and Finance Departments, and the Office of Technical Assistance Management. Approved by Sean Hagan, Andrew Tweedie, and Alfred Kammer. September 15, 2009.*

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_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2009/_091509a.pdf_