DMF NEWS 83730 Issue 14
DMF News
Issue 14,
Oct. 2013
NEWS IN THIS ISSUE
New Resources Updating IMF-WB Public Debt DMF strengthens sovereign debt
Conference materials available from the Management Guidelines management in Africa
Berlin DMF Stakeholders’ Forum of May 2013 Economic and financial developments have The Debt Management Facility (DMF) helped
include the complete set of 30 presentations changed the financial landscape since the fund the application of the Debt Management
(pdfs) covering key issues in debt Guidelines were first adopted in 2001. In Performance Assessment (DeMPA) to 10
management. Knowledge Briefs prepared response to a request from the G-20 Finance countries in eastern and southern Africa. Most
for the Forum by World Bank staff are also Ministers and Central Bank Governors, the countries meet minimum scores on most
accessible, including such topics as: ‘Nuggets IMF and the World Bank began a process to indicators.
on Debt Management: What have we update the Guidelines. In June, the First Page 2
learned from 74 DeMPAs.’ Links to related Consultative Meeting on the Guidelines led
websites here. to a small working group of debt managers Multilateral development banks
Research: “Public Debt Management in the
that will update the Guidelines following a discuss debt issues
program set forth in a terms of reference. Representatives from ten multilateral banks met
Plurinational State of Bolivia,” by DMPP- This process is now underway.
alumni Jaime Garron, Bolivian Ministry of in Washington, D.C., in July to discuss debt-
Development Planning/ Viceminister of related issues and challenges related to the rise of
The initiative stems from a 2013 survey of non-concessional borrowing by countries.
Public Investment and External Financing,
debt managers that found that certain Page 2
and a debt management consultant with
principles needed to be updated, including:
CEMLA.
coordination between debt Debt Management Practitioners’
Debt Management FAQs (frequently asked
questions): We asked the experts… What is a
management policy and fiscal policy Program
and monetary operations; Six government officials will come to D.C. this FY
primary market for government securities? debt managers’ input into financial to receive training in debt management. The
How can this market be improved, and what sector regulation affecting government three-month training increases diagnostic skills
is the role of the debt manager in the debt markets; and promotes cross-country knowledge-sharing.
development of an active primary market?
debt portfolio risk mitigation measures Page 2
Find answers here:
and contingency planning, including
http://siteresources.worldbank.org/INTDEBT
DEPT/Resources/468980-
the build-up of cash buffers; Recent DMF activities
managing the risk of capital flows and DMF meetings, DMF missions, Debt Reform Plans
1379000347738/FAQ_DebtManagement.pdf
non-resident investors; and and DMF Training.
conducting stress testing on sovereign
Call for topics. We are looking for debt portfolios, among others. Page 2
interesting debt management topics that
could serve as agenda items for DMN The timeline for the working group runs
webinars for the coming year. We through end-January 2014. By then, Upcoming DMF activities
comments will have been solicited on Forthcoming DMF missions.
welcome your ideas. Some topics
suggested at the July 18, 2013 DMN proposed updates to the Guidelines; a draft
Board Paper will be reviewed and cleared by Page 3
meeting: debt reporting, auditing of debt
management performance, cash IMF and World Bank staff. Consideration of
management, and contingent liabilities. the updates by the IMF and WB boards is
Please send suggestions to anticipated before the end of the first quarter
eriordan@worldbank.org. of 2014.
DMF NEWS | Issue 14 2
DMF strengthens sovereign operational risk management Ms. Stella Ntezityayo Rusine, Rwanda; Ms.
strategies, in the overall context of Tiba Kisonga, Tanzania; and Mr. Martin
debt management in Africa business continuity plans; and Nsubuga, Uganda), while the two others
Since its inception, the Debt Management
Debt reporting, particularly an come from Kosovo and Vietnam (Mr. Alban
Facility (DMF) has been instrumental in
inadequate meeting of statutory Fetahu, Kosovo and Ms. Thi Thu Hien
carrying out diagnostic assessments of
obligations for comprehensive coverage Nguyen, Vietnam). The DMF work program
strengths and weaknesses in sovereign debt
of public sector debt, including includes training in the three areas of debt
management for 10 out of the 13 countries
publication of debt-related statistical management – debt management
that are members of the Macroeconomic and
bulletins. performance assessments, preparation of
Financial Management Institute of Eastern
medium term debt management strategies
and Southern Africa (MEFMI). The countries As a first step towards addressing these and designing debt management reform
covered in the region so far include Malawi, gaps, most countries have been assisted
plans, plus a country mission and the
Mozambique, Lesotho, Namibia, Swaziland, under the DMF to develop Debt opportunity to prepare a paper on debt
Zambia, Rwanda, Uganda, Tanzania, and Management Reform Plans, which are
management in their own country. The
Zimbabwe (Namibia and Swaziland were currently at varying stages of objective of the program is to facilitate
financed by the World Bank). implementation. Some recipients of DMF
sharing of knowledge and experience while
assistance have indicated that exposing the debt managers to cross-country
The diagnosis, conducted through
implementation of reforms could be
application of the Debt Management practices.
expedited if the DMF’s mandate were
Performance Assessment (DeMPA) tool and
its accompanying guide, has found that most
extended to include the provision of support Recent DMF Activities
for ‘down-stream’ activities. Recipients have DMF Meetings
countries in the region broadly meet the
also indicated the need to consider widening The Debt Manager’s Network (DMN)
minimum scores for 10 out of the 15 debt
the DMF support to include debt Virtual Meeting on Debt Management
performance indicators. Among the good
sustainability analysis, for which demand Performance Assessment (DeMPA) – A
outcomes are: effective debt management
remains strong among low income countries. Retrospective, July 18th, 2013
structures; evaluation of debt management
This will greatly complement the MTDS- The participants discussed the importance of
strategies; coordination of debt
related activities that are currently sound diagnostics of existing debt
management with fiscal and monetary
supported. management practices and institutions for
policies; sound domestic market and external
identification and further implementation of
borrowing activities; and maintenance of -Cornilious Deredza, Program Officer, Debt
Management, MEFMI reforms in debt management. Many experts
good debt records. However, many
expressed strong appreciation for the
indicators still fall short of the minimum
requirements. The following areas require
Multilateral development application of the DeMPA tool to evaluate
further attention: banks discuss debt issues in existing weaknesses in debt management
practices, and to promote better
The legal framework, mainly due to
Washington DC, July 2013 coordination with fiscal and monetary
inadequacy of legal instruments for Representatives from ten multilateral policies. Specific experiences with the
delegation of ministerial borrowing and development banks (MDBs) participated in application of the DeMPA tool and initiation
debt management powers, as well as the meeting, which was hosted by the World of reforms were presented by Mr. Baba Musa
undefined objectives, strategies and Bank, while two bilateral creditors attended (Director, WAIFEM), Mr. Mark Willis
purposes for borrowing; as observers. Discussions ranged across a (Program Manager, DMFAS, UNCTAD), and
Loan guarantees and on-lending, traced wide agenda of debt-related issues, from Ms. Juletta Jeffers, (Deputy Director, Eastern
to lack of documented policies or weak broader challenges such as the “changing Caribbean Central Bank (ECCB)). And an
policies and procedures for paradigm of concessionality,” to more innovative approach to monitoring reform
management of these liabilities; specific topics, such as “revisions to the implementation was shared by Nigeria and
Cash flow forecasting and management DSF,” the framework used to conduct Debt the ECCB, which included development of a
of cash balances, with a number of Sustainability Analyses. MDBs are facing reform monitoring grid and self-assessment
countries yet to move to more frequent large issues--as are the IFIs—including the of the achieved results using the DeMPA
and shorter term forecasting, and to declining availability of grant financing, and tool. The meeting was attended by 40
adopt single treasury accounts to stem the challenges brought by the trend of participants from the Africa and Latin
idle cash balances tied to use of many countries looking to markets for loans and America and Caribbean regions, along with
government bank accounts; towards non-concessional borrowing. representatives from WAIFEM, CEMLA,
Audit, which has fallen short on both MEFMI, UNCTAD, and the World Bank.
frequency and comprehensiveness, as it Debt Management
The Debt Manager’s Network (DMN)
has not covered the entire spectrum of Practitioners’ Program Virtual Meeting on Debt management and
debt management performance; Six government officials from debt Debt Sustainability, September 25th, 2013
Data security, for which either management offices will be coming to The participants discussed the
procedures for data recording and Washington this FY14 for a three-month complementarities and conceptual
systems access and control have tended period to participate in the Debt differences between debt management and
to be inadequate, or the frequency or Management Practitioners’ Program (DMPP) debt sustainability within the fiscal and debt
procedures for backing-up and storing under the DMF at the World Bank. Four of policy formulation framework. The network
data have fallen short--including the selected candidates are from Sub- members had an opportunity to learn from
weaknesses in segregation of staff Saharan Africa (Ms. Mamonjiarison country-specific experiences of Georgia,
duties, staff capacity-building plans and Volatantely Randrianjanaka, Madagascar; Malawi, Tanzania and Sierra Leone. These
DMF NEWS | Issue 14 3
countries had carried out the debt mission was to transfer knowledge and the course was to familiarize attendees with
sustainability analysis, formulated explicit or facilitate a structured approach to future the capacities and institutions at the central
implicit medium term debt management borrowing decisions and debt management government level based on the DeMPA
strategies, and illustrated the inter-linkages strategy development. methodology. Some 37 professionals from
between these two exercises. The Gambia, Ghana, Liberia, Nigeria and
>> Azerbaijan. At the request of the Ministry
Four country representatives shared their Sierra Leone took part in the training. The
of Finance, a World Bank mission, in
experience with debt management and debt mix of debt managers and auditors allowed
collaboration with UNCTAD, visited Baku
sustainability in their respective countries: specialists to exchange ideas and better
during September 15-26, 2013. The mission,
Ms. Nino Shanshiashvili, Deputy Head, Public understand their counterparts’ roles. The
which was financed by the Debt
Debt and External Financing Department, course included country-specific
Management Facility, worked closely with
Ministry of Finance, Georgia; Mr. Louis Loti, presentations in the areas of debt- and cash-
staff of Public Debt Management Agency
Deputy Director, Debt Management Division, management made by representatives from
(PDMA) of the Ministry of Finance (MoF) and
Ministry of Finance and Economic Planning, each attending country. Participants also
met relevant government and public sector
Malawi; Mr. Nicolaus Shombe, Senior learned about the Debt Manager’s Network
representatives. The main objective of the
Economist, Policy analysis department, initiative of the World Bank, with many
World Bank/UNCTAD team was to help build
Ministry of Finance, Tanzania; Mr. Charles requesting to be included in forthcoming
analytical capacity to execute a structured
Conteh, Head of Public Debt Unit, Ministry of network activities.
approach to debt-management strategy
Finance and Economic Development, Sierra
formulation.
Leone. The meeting was attended by more Forthcoming DMF-funded
than 25 participants from ECA, Africa and Debt management reform plans
LAC regions and from representatives from 2 Reform Plan missions were undertaken.
activities
WAIFEM, CEMLA, MEFMI, UNCTAD, and the >> Niger. A World Bank technical assistance
DMF Meetings
WB. mission visited Niamey over September 4-13,
DMN Virtual Meeting: Topic: Government
2013, to work with authorities to develop a
DMF Missions Debt Recording, November 27, 2013 (9:00
Reform Plan in the area of public debt
During the period under review, 3 MTDS AM EST)
management. The Reform Plan builds on the
missions were undertaken.
findings of a DeMPA report for Niger (April DMF Training Events
>> Liberia. A World Bank mission, in
2012) and on discussions held during the WAIFEM MTDS Training: October 21-25,
collaboration with WAIFEM, visited Monrovia
mission with government entities involved in 2013, Accra, Ghana
over July 9-17, 2013 to engage in technical
debt management for the country. The team DRI MTDS Training (francophone): October
assistance using the joint World Bank-IMF
met with several departments of the Ministry 28 – November 1, 2013, Dakar, Senegal
Medium-term Debt Management Strategy
of Finance, as well as the Ministries of MEFMI MTDS Training: November 4-13,
(MTDS) framework. The MTDS toolkit was
Planning and Foreign Affairs. And 2013, Mombasa, Kenya
applied to Liberia in cooperation with a team
discussions were held with BCEAO and the IMF/World Bank MTDS Training: December
of representatives from the country’s
Auditor General. The mission also met with 9-13, 2013, Joint Vienna Institute, Vienna,
Ministry of Finance and Central Bank.
the representative of donors, many of whom Austria
Liberia’s nominal debt-to-GDP was 30
are active in supporting reforms in Niger’s
percent at the end of FY2012-13, and the
public financial management. Forthcoming DMF Missions
outstanding stock of debt is comprised of
>> Federation of Bosnia and Herzegovina. Burkina Faso: MTDS Follow-up. September
highly concessional loans. It is expected that
The World Bank fielded a Debt Management 23 – October 2, 2013
there will be substantial amounts of
Reform Plan mission to Sarajevo, Federation Bangladesh: Second DeMPA. September 29
concessional finance available within the
of Bosnia and Herzegovina (FBH) during – October 7, 2013
medium-term timeframe. The mission
September 10-19, 2013. The main objective Sao Tome/Principe: MTDS Baseline.
included hands-on training in the preparation
of the mission was to develop a detailed and September 30 – October 10, 2013
of debt data for analysis, and the
sequenced reform plan for federal debt Seychelles: MTDS Baseline. October 1- 9,
quantitative analysis of (i) cost-risk
management. This objective was achieved in 2013
implications of the debt portfolio, and (ii)
close cooperation with the authorities at Bosnia/Hgvna: DeMPA. October 9-18, 2013
trade-offs among different debt issuance
both federal and central government levels. Ethiopia: Reform Plan. October 22-31, 2013
strategies.
The team identified three priority reform Cape Verde: MTDS Baseline. October 23-31,
>> Djibouti. The World Bank, in collaboration
areas for debt management in FBH: (i) debt 2013
with UNCTAD, visited Djibouti during
management strategy; (ii) domestic debt Armenia: DeMPA. October 29 – November 8,
September 5-12, 2013. The mission shared
market development and cash management; 2013
the joint World Bank-IMF MTDS framework,
and (iii) operational risk management. In Tanzania: MTDS Follow-up. November, 14-
and applied it to Djibouti in collaboration
addition to the reform plan formulation, the 21, 2013
with representatives from the country’s
mission held training activities on areas of Madagascar: Reform Plan. November, 2013
Ministry of Budget, Ministry of Finance, and
debt management strategy formulation, Togo: Reform Plan. December 2-13, 2013
Central Bank team. In the process, the
debt risk indicators, cash management and Republica Srpska SN: DeMPA. December 4-
mission provided training on data
operational risks. 13, 2013
preparation, basic cost-risk analysis, and
preparation of a debt management strategy DMF Training Pakistan: MTDS Baseline. December 9-19,
document. Djibouti is embarking on a public >> Nigeria. A DeMPA Training Workshop was 2013
sector-led growth strategy based on large held over August 12-16, 2013 for a large Liberia: MTDS Follow-up. December, 2013
infrastructure investments. Against this group of debt managers and external Nigeria: MTDS Follow-up. December, 2013
evolving fiscal backdrop, the objective of the auditors in Lagos, Nigeria. The objective of
DMF NEWS | Issue 14 4
Debt Management Facility (DMF) Newsletter
DMF News Issue 14, October 2013.
The World Bank The DMF Newsletter is published quarterly and is provided to
debt management practitioners from developing countries,
1818 H Street NW donors, DMF implementing partners, civil society organizations,
Washington, DC and private sector firms. The newsletter aims to share DMF work
plans, lessons learned, and news and developments related to
On the web: www.worldbank.org/debt
debt management.
Email:
Abha Prasad:aprasad@worldbank.org
Elliot Riordan:eriordan@worldbank.org
Ivana Ticha:iticha@worldbank.org
Economicpolicyanddebt@worldbank.org
Telephone:
(202) 458-7266
Fax:
(202) 522-3740
The Donors
The DMF’s donors are Austria, Belgium, Canada, Germany, The
Netherlands, Norway, Switzerland, the African Development Bank
and the European Union/European Commission.