Albanian Treasury Directorate's Double Crisis Challenges

Challenges of a double crisis for Albanian Treasury Directorate Presented by: Alma Beja, General Director of Treasury

Background The first Covid 19 case in Albania was officially identified on 9thof March 2020. Albania was already suffering the shock of earthquake of 26thNovember 2019. General Directorate of Treasury is responsible for budget execution, liquidity management, accounting and financial reporting of the government, as such it was ranked on institution of primary importance during quarantine . Having a structure of 250 employees in 36 districts who had to be present at work everyday the social challenge was the main one. On behalf of the economic challenge it should be noted that during 2020 a fund of 29 billion ALL was allocated for earthquake purposes and a fund of 13.5 billion was allocated for Covid -19 direct distribution as war wages . Revenue reduction was approximately 60 billion ALL.

Main challenges DPTH Human Recourses Health protection and meantime assuring work continuity. Communication with main Institutions and reporting Law and Instruction Liquidity and funding Determination of key reporting issues and prioritization. Determination of main information to be received by General Directorate of Treasury Determine the new law / regulations for Covid 19 purposes only. Complying with existing laws and respecting deadlines. Payment prioritization Daily forecasts updates. Continuous collaboration with Debt and Liquidity Committee to assure financing. Identification of key people and structures. Make sure all the requirements anti Covid were met. Identification of people that can work online

Financial actions: Instruction on payment prioritization 24 March 2020 Change on Law on budget 2020. Deficit was increased from 39.6 billion All to 68.6 billion All to reflect revenue reduction due to Covid-19 An expense of 6.5 billion All was included as direct transfer to employees of small business closed due to Covid-19. Act 6 dt. 21 March 2020 Two year bond issuance in local market of 100 million Eur. 06.04.20 21 Change on Law on budget 2020. Another expense of 7 billion All was included as direct transfer for economic assistance to unemployed individuals due to Covid-19 15 dt. Act 15 Aprill 2020 Approval of the state loan guarantee 11 billion All with commercial banks for the salaries of businesses, whose activity has been affected by government decisions in the management of the situation created by COVID-19" April 2020 Rapid financing instrument of 139.3 million SDR was approved by IMF 16.04.20 20 The second state guarantee for the amount of 15 billion All, in favor of commercial banks operating in the territory of the Republic of Albania, part of the guarantee scheme that will enable lending to traders and companies to provide the necessary working capital and investment funds to support the recovery of trading activity that has been affected by the situation created by COVID-19. May 2020 A new 7 year 650 million Eur international Bond at a coupon 3.5% 09.06.20 20 Change on Law on budget 2020 Deficit was increased from 69.6 billion All 132.9 billion All to reflect revenue reduction due to Covid-19 Act Nr. 28 date 02.07.20 20 Act No. 34 date Change on Law on budget 2020.

Conclusions Crises needs fast and well thought strategies: It is important to create a respond to crises team, to determine clear responsibilities and objectives for each of them and follow them on daily bases. Needs for funds should be clearly determined through daily forecast and continuous exchanging information with main stakeholders. We established a daily/weekly meeting with (Macro Directorate (Tax and Customs Directors), Budget, Debt) Intensify collaboration and exchange of information with Central Bank, commercial banks, international organizations, rating agencies. (Central Bank Representatives are part of our meetings of Debt and Liquidity Management Committee). What we need to think back and improve? In case of Treasury systems IT infrastructure doesn t answered to pandemic request for remote working during quarantine. Our laws/instructions needed revisions after crisis, they don t have clear clauses to put in action when crisis hits. Transparent reporting on Covid-19 and earthquake reconstruction requires resources and effort.