## Framework Administered Account for Selected Fund Activities: Africa Regional Technical Assistance Center South 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”).
- This paper requests Executive Board approval to establish the Africa Regional Technical Assistance Center South (AFRITAC South) Subaccount (the “AFRITAC South Subaccount” or the “Subaccount”) under the terms of the SFA Instrument.
- The Managing Director has established essential terms and conditions of the Subaccount with respect to the nature, design, and implementation of the activities to be financed from the Subaccount.

### Scope and focus of AFRITAC South activities
- AFRITACs provide focused, flexible, and responsive technical assistance (TA) in a cost-effective manner.
- AFRITAC South activities will focus on 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) debt management and financial markets development and supervision;
  - (iv) economic and financial statistics.

### Beneficiaries
- The beneficiaries of AFRITAC South are member countries in Southern Africa, which include:
  - Angola, Botswana, Comoros, Lesotho, Madagascar, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, Zambia, and Zimbabwe.
- Additional beneficiary members of AFRITAC South may be added with the consent of the Managing Director and the concurrence of the Contributors.

### Contributors and resources
- The resources of the Subaccount will consist of amounts contributed to the Subaccount by donors and beneficiary countries of AFRITAC South (“Contributors”), and earnings that accrue as a result of the investment of these amounts (net of any costs associated with such investments).
- 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 South.
- Contributors may transfer resources from any bilateral subaccount under the SFA into the AFRITAC South Subaccount.

### Essential terms and conditions (summary of a.–f.)
- a. Composition and use of resources:
  - Resources consist of Contributor amounts and investment earnings (net of investment costs).
  - Used to finance capacity building, training and related activities for AFRITAC South beneficiaries.
- b. Consent prior to acceptance:
  - 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.
- c. Formalization of contributions:
  - Resources will be placed in the Subaccount by each Contributor after signature of a Letter of Understanding between the Contributor and the Fund.
- d. Joining the 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.
- e. Withdrawal rights:
  - A Contributor may withdraw from the Subaccount, and receive a retransfer of its net contributions, without precipitating the termination of the Subaccount.
- f. Fund management reimbursement:
  - 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.

### Consistency and recommendation
- 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 J.R. Rosales; February 10, 2011.*

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_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2011/_021011.pdf_