Your Organization Newsletter Date Volume 1, Issue 1 DMF News Issue 26 January 2017 The eighth annual DMF Inside this issue stakeholders forum will Mark your calendars: DMF Forum focus on the significant 2017 Pg. 1 challenges public debt managers in developing Agence UMOA-Titres (AUT) joins and emerging markets are DMF as a new IP Pg. 1 now facing. The event will facilitate DMF Activities for the period Oct. discussion on crucial issues to Dec. 2016 Pg. 2 such as increasing debt and fiscal vulnerabilities, man- Technical Assistance Missions Pg. 2 aging fiscal risks from con- tingent liabilities and new DMF Training Activities Pg. 3 sources of financing availa- Other DMF Activities Pg. 5 ble to developing countries. Debt Management Practitioners’ Program update Pg. 5 Agence UMOA-Titres (AUT) Joins DMF as a New Implementing Partner DMN webinar Pg. 6 The DMF community continues to International Debt Statistics 2017 grow, most recently with the appoint- edition Pg. 6 ment in September 2016 of Agence UMOA-Titres (AUT) as a new Imple- Non-DMF Activities Pg. 7 menting Partner (IP). AUT is the central Pakistan: Advancing Subnational agency for coordinating the issuance of Debt Management Pg. 7 treasury bills and bonds in the regional market by the governments of WAEMU Afghanistan: Moving Forward with countries—Benin, Burkina Faso, Cote Efforts to Strengthen Public Debt d’Ivoire, Guinea-Bissau, Mali, Niger, Sen- Management Pg. 7 egal and Togo. AUT was established in March 2013 following a decision by the World Bank Treasury Debt Manage- ment Events Pg. 8 WAEMU Council of Ministers to speed the emergence of a harmonized trans- Forthcoming Mission and Training national market for government securities, in order to support the financ- Activities Pg. 8 ing needs of member countries in line with their medium-term debt man- agement strategies. The regional market already has become an important source of funds for WAEMU countries, and prospects are bright for further DMF Newsletter expansion. As an IP for the DMF, AUT will enhance the ability of the program to deliver technical assistance to Afri- can francophone countries which have been active recipients of DMF support. In acknowledging the appointment, Mr. Adrien Diouf, Director of AUT, said “We look forward to collaborating with the World Bank and other DMF partners to strengthen debt management capacity and institutions, so that government debt can be managed effectively, along- side sound macroeconomic policy making and fiscal planning.” DMF Activities for the Period October - December 2016 Technical Assistance Missions Medium-Term Debt Management Strategy (MTDS) >>Togo. At the request of the Togolese authorities, a joint World Bank-IMF team visited Lomé, Togo, over November 3-15, 2016. UNCTAD and DRI contributed as implementing partners. The Minister of Finance, Mr. Sani Yaya, underlined the government's desire to contin- ue to strengthen its debt management capacity, practices, and policies. Officials of the Ministry of Economy and Finance attended capacity building trainings on the de- velopment of a medium-term debt management strategy. In Togo, the National Public Debt Committee (CNDP) is responsible for elaborating the government's debt man- agement strategy, and the MTDS document is annexed Togolese, WB-IMF teams at MTDS sessions, Lomé to the annual budget law. Several members of the tech- nical secretariat of the CNDP participated in the work- shop, including staff from the Treasury, Budget, Plan- as including updates to the country’s debt management strat- ning, and Economics departments of the Ministry. egy; debt management audits; coordination with macroeco- nomic policies and cash management practices. Debt Management Performance Assessments (DeMPA) >> Sao Tome and Principe. A World Bank team visited >>St. Vincent and the Grenadines. At the request of Sao Tome from November 14 to 22, 2016, with the pur- the authorities, a joint World Bank—Eastern Caribbean pose of conducting a follow-up DeMPA exercise to as- Central Bank (ECCB) mission visited Kingstown, St. sess progress made since the previous DeMPA and Re- Vincent and the Grenadines, between October 31 and form Plan missions of 2011. The team met with Mr. November 4, 2016, to assess progress in debt manage- Américo de Oliveira Ramos, Minister of Finance and ment since 2010, when the ECCB had undertaken a first Public Administration (MoFPA), advisors to the Minis- DeMPA exercise. A second objective of the visit was to ter and Directors of the relevant departments in the evaluate current performance against the revised MoFPA; officials from the Central Bank, the Director of DeMPA criteria as of July 2015, relative to the method- the Treasury, and the Head of the Public Debt Manage- ology in place for the previous evaluation. The mission ment Office. Discussions were also held with other rele- met with a wide array of officials from the Ministries of vant government agencies, and private banks to complete Finance, Public Service, National Security, Legal Affairs the assessment. The mission’s main findings were dis- and Grenadines Affairs; the Ministries of Economic cussed in a wrap-up meeting with senior level policy Planning, Sustainable Development, Industry, Trade, makers. Of note, Sao Tome and Principe debuted two T- Information and Labor; the Office of the Accountant bill issuances, in June, 2015 and in February, 2016. And General and the Office of the Director of Audit, and with the government remains committed to: (i) implement the Statutory Bodies including St. Vincent Electrical Services debt framework law; (ii) prepare a national debt manage- Limited, and Social Security, as well as with the Bank of ment strategy; (iii) prepare a debt management proce- St. Vincent and the Grenadines. dures manual; (iv) update the existing debt database in the debt management system; and (v) strengthen overall The assessment helped to track progress with ongoing debt management capacity. efforts to include all debt records in a centralized debt recording system. A positive development was the draft- >>St. Lucia. A team comprised of World Bank and ing of a procedures manual. The DeMPA also ECCB staff visited Castries, St. Lucia, to work with the facilitated identification of areas for improvement, such authorities in undertaking a DeMPA exercise over No- 2 Issue 26 vember 14-18, 2016. The effort was targeted towards debt management strategy MTDS and debt sustainabil- updating views found in the previous DeMPA assess- ity analysis. The sessions were tailored to the expressed ment carried out in 2010. The timing of the visit, fol- needs of the DMD, and delivered using Tajikistan’s lowing recent elections which yielded change in the fiscal and debt data. national government, provided both challenges and opportunities for those participating in the DeMPA DMF Training Activities evaluation: shifts in Ministerial positions and organiza- tional structures led to some uncertainty regarding the DeMPA e-Learning profile of debt management operations; at the same time, the transition offered a chance to take a fresh look The fifth offering of the DeMPA e-learning course was at current practices and how these might evolve under delivered over October 3 to November 4, 2016, using new circumstances. The team was able to interact with the Open Learning Campus (OLC) platform. The pro- a large number of Ministry of Finance/DMO manage- gram has been developed and produced in collabora- ment and staff, as well as representatives of agencies tion with the World Bank’s OLC, with funding provid- with close involvement in debt management processes. ed by the DMF and the South Korean Trust Fund. The Partners from the ECCB provided useful insights from online course comprises core readings, as well as multi- the perspective of the regional central bank. A follow- media presentations summarizing principal messages, a up video conference took place in mid-December, al- set of interactive quizzes, a series of hypothetical case- lowing discussion of preliminary results of the exercise based assignments and a final assignment that builds on and possible next steps with a wider group of senior the cases. policymakers. Participants in the course originated from across a wide –and diverse set of countries, including Bangladesh, Chad, the Dominican Republic, Guyana, India, Indo- nesia, Maldives, Moldova, Mongolia, Namibia, Niger, Nigeria, Papua New Guinea, Rwanda, Samoa, Sierra Leone, Tanzania, the United Kingdom and Zimbabwe. To earn certificates of completion for the e-DeMPA program, participants were required to finish the coursework successfully, including a final assignment that requested design of a reform plan to improve debt management performance for a hypothetical country. Medium-Term Debt Management Strategy (MTDS) >>St. Kitts and Nevis. The World Bank and IMF in collaboration with the ECCB, delivered a workshop on analyzing the cost and risk characteristics of a govern- St. Lucia DeMPA exercise, group photo, Castries ment debt portfolio, and developing a medium-term debt management strategy, in Basseterre, St. Kitts, over Debt Management Reform Plan November 21-29, 2016. The workshop was one compo- nent of a multi-month training program organized by >>Tajikistan. A World Bank team visited Dushanbe the ECCB for a cohort of technical-level officials from over December 5- 14, 2016, to undertake a Debt Man- the finance ministries of Eastern Caribbean Currency agement Reform Plan in close cooperation with the Union countries. All of the participants will soon be authorities. The mission was joined by World Bank taking up posts in the debt management units of their country economists and by a representative from Debt countries. The attendees gained experience in analyz- Relief International, an implementing partner within ing and interpreting cost and risk indicators, in as- the DMF. Following an earlier DeMPA the team sessing trade-offs between potential financing strategies worked jointly with the Debt Management Department and the consistency of various strategies with medium- of the Ministry of Finance (DMD), and drafted a medi- term policy objectives and constraints, and in drafting a um term reform plan to guide an agenda of key im- memorandum to ministers to recommend a strategy for provements in debt management practices for the Min- approval. A workshop on the DeMPA framework is istry of Finance. Staff of the DMD were also provided planned for the same cohort during 2017. with training sessions on formulation of a medium term 3 DMF Newsletter >>Japan. The World Bank, IMF and the Japan Interna- tional Cooperation Agency (JICA) jointly organized an advanced workshop on developing an effective MTDS in Kobe and Tokyo, Japan over December 12–22, 2016. The training aimed to strengthen and broaden partici- pants’ knowledge of debt management, as well as im- prove their analytical capacity. This workshop targeted mid-level officials from Bangladesh, Malaysia, Mongo- lia, Pakistan, the Philippines and Vietnam, working in the finance or economic ministries (specifically, the debt departments), and central banks with direct involvement in the design of a debt management strategy. By the end of the workshop, based on own-country data, partici- pants developed and presented their country-level Joint WB/IMF/JICA MTDS training, Tokyo, December 2016 MTDS. These will be submitted for review and approval by senior policymakers upon return to country—and presented to the full set of participants, examining key hoped to increase awareness of debt management tools. assumptions, change in risk ratings and factors support- The workshop also involved sharing of Japanese experi- ing these. Survey returns highlighted a strong apprecia- ence in sovereign- as well as prefecture level subnational- tion for the quality and content of the course; at the same debt management practices in the country. time a number of attendees suggested that the ‘MAC’ DSA be incorporated in DMF-supported training pro- Debt Sustainability Analysis (DSA) Training grams more prominently as well, as countries move pro- >>Malaysia. A joint World Bank-IMF team provided a gressively toward improved access to global financial week-long training program covering the framework and markets. application of the Low-Income Country (LIC) DSA at Annual Borrowing Plan for Issuance of Government the Bank’s Training Center in Kuala Lumpur over No- Securities (ABP) vember 7-11, 2016. More-than 20 representatives from countries in East- and South Asia, the Asian Develop- >>Senegal. The World Bank and IMF-AFRITAC West, ment Bank (ADB) and selected World Bank staff partici- together with Agence UMOA-Titres, a new DMF imple- pated in the sessions. These featured presentations and menting partner (Newsletter cover page), delivered a discussion of the theoretical underpinnings of the frame- workshop on developing and executing an annual bor- work, and a full three days of hands-on practical exercis- rowing plan for implementing the government's MTDS. es using the excel-based tool for the LIC-DSA. The ADB Participants in the workshop were technical-level offi- representative offered a well-received discussion on the cials from the Treasury Departments and Debt Manage- development bank’s application of the DSA in its lending ment Units of the Ministries of Finance of the eight decisions for LICs. At the end of the sessions, results of WAEMU countries—Benin, Burkina Faso, Cote d’Iv- the applied exercises produced by smaller groups were oire, Guinea-Bissau, Mali, Niger, Senegal, and Togo. Officials from Guinea-Conakry and Mauritania also par- ticipated. Topics covered during the workshop included the choice of financing instruments, issuance mecha- nisms, the construction of an auction calendar, buyback and exchange operations, the role of primary dealers and development of the investor base. Looking forward, workshops on the LIC-DSA and the DeMPA frame- works are scheduled for the WAEMU countries over the first half of 2017. LIC-DSF training, Kuala Lumpur, November 2016, group photo. 4 Issue 26 Other DMF Events and related, October - December 2016 Debt Management Practitioners’ Program: Update on September –December 2016 developments Two participants in the Debt Management Practitioners Program (DMPP), Messrs. Stephane Mady of Cote d’Ivoire and Ismael Mama of Benin, completed their 3-months stay at the World Bank at end-December 2016. Final results of practical undertakings and research efforts were presented to a webinar linking debt management specialists and staff of the Macroeconomics and Fiscal Management Global Practice on December 13. The DMF group would like to express their sincere thanks to these debt managers for their extraordinary efforts while working with us, and wish them success in future endeavors- as part of an expanded network of DMPP alumni. Mark Thomas, Practice Manager, Macroeconomics and Fiscal Management, the World Bank Group, awarding certificates of completion to Ismael Moussa Yamkalla Mama from Benin (left) and Bahi Stephane Mady from Cote d’Ivoire (right). Mr. Ismael Moussa Yamkalla Mama, Director of Mr. Bahi Stephane Mady, Head of Strategy Service, Strategy in the Debt Management Office of Benin, Public Debt Office, the Ministry of the Economy took part in several activities related to the develop- and Finance of Cote d’Ivoire, participated in the ment of a medium-term debt management strategy, DeMPA mission to St. Vincent and the Grenadines, the government securities market, operational risk where he “… understood the fundamental im- management and application of the DeMPA meth- portance that the debt manager should place on the odology. During November he participated in a joint methodology of this evaluation.” During his stay, World Bank-IMF MTDS mission to Togo; Mr. Ma- Mr. Mady made use of opportunities to complete ma also completed the DeMPA e-learning course, the DeMPA e-learning course and the online DSAx and as part of his DMPP project, presented on es- course developed by the IMF and World Bank. Of tablishing a link between the medium-term debt particular focus for his DMPP project, Mr. Mady management strategy and annual borrowing plans, presented on the application of the Government outlining the principal challenges for Benin Securities Market Development tool (GSDM) for the case of Côte d'Ivoire. 5 DMF Newsletter Debt Managers Network (DMN) Webinar At a DMN webinar held on December 14, Dr. Brian Pinto, consultant with the World Bank and the African Develop- ment Bank, presented the results of a new working paper from the latter institution’s ADF Policy Innovation Lab, on Debt Sustainability Implications of Hardened MDB Lending Terms to African Countries . The ADF Working Paper may be found here . The paper underscores that there is growing tension between donor countries facing increasing economic challenges at home, and African countries needing growing volumes of development finance for public investment and social pro- grams. Reconciling this supply-demand imbalance might require MDBs to harden lending terms: donors could be per- suaded to supply more funding if terms are less concessional, and African countries may receive less concessional fi- nance than in the past. A concern is that hardened lending terms might cause a new round of debt sustainability prob- lems for African countries. From findings for eight Sub-Saharan African countries, the study finds that hardened lend- ing terms will not be a pivotal factor in causing debt sustainability problems for the large majority of countries exam- ined. However, it is important that larger volumes of financing be made available at ‘hardened rates’ to offset increas- ing costs of alternative (commercial) finance. International Debt Statistics 2017 Edition is Now Available from the World Bank The World Bank Group’s International Debt Statistics (IDS) 2017 presents statistics and analysis on the external debt and financial flows (debt and equity) for the world’s economies for 2015. The IDS includes over 200 time -series indi- cators from 1970 to 2015 for most reporting countries, and pipeline data for scheduled debt service payments on exist- ing commitments to 2024. IDS presents regional analysis of debt trends, and notes that the combined external debt stock of countries in the Sub-Saharan Africa region (excluding South Africa) continued on an upward trajectory in 2015, increasing by a large 7.5 percent. This is in marked contrast to a decline in external debt stocks reported by oth- er low-and middle-income countries (LMICs) over the same period. The aggregate figure masks individual-level dif- ferences in the pace of debt accumulation, with some countries in Sub-Saharan Africa recording the fastest rising ex- ternal debt levels of any LMICs. For more information and access to the database, click here. 6 Issue 26 Non-DMF Activities: Capacity Building and WB Treasury Debt Management Events Pakistan: Advancing Subnational Debt Management Subnational DeMPA workshop participants and World Bank staff group photo, Lahore. Pakistan has been advancing debt management support for subnational governments, financed through the De- partment for International Development of the United Kingdom with World Bank support. Developments in- clude setting up Debt Management Units in the Governments of Sindh and Punjab provinces. And capacity building for staff has been undertaken through local trainings on the Subnational debt management perfor- mance assessment in Lahore (October 26-28, 2016), and on formulation of debt management strategies in Ka- rachi (October 31 – November 2, 2016). Sixteen government officials from all sub-nationals of the country at- tended both trainings. In addition, support is being provided to Sindh Province to strengthen understanding of requirements for debt data as will be required for developing the analytic foundation for a medium term debt strategy. Contributed by Mehwish Ashraf, Economist, and Syedah Mohsina Atiq, Consultant, Macroeconomics and Fiscal Manage- ment Global Practice, the World Bank Group. Afghanistan: Moving Forward with Efforts to Strengthen Public Debt Management The World Bank is providing debt management tech- nical assistance and training to Afghanistan. This includes support to undertake a debt sustainability analysis (March 2016) and understanding the ele- ments for developing a debt strategy. The Govern- ment of the Islamic Republic of Afghanistan (GoIRA) has been making substantial progress with a broad range of macroeconomic and public financial management reforms since the fall of the Taliban, in 2001. GoIRA has recognized the importance of estab- lishing a sound institutional and policy framework and building up debt management capacities as pre- requisites for increased external and domestic bor- rowing. These include, developing a sukuk market for domestic budgetary financing. Contributed by Tobias Haque, Senior Economist, Macroe- conomics and Fiscal Management Global Practice, the Ministry of Finance and Da Afghanistan Bank staff complete hands - World Bank Group. on training exercises as part of MTDS training 7 DMF Newsletter World Bank Treasury Debt Management Events Forthcoming Mission Activities (From January 2017 ) Government Debt and Risk Management Day  Senegal: Joint MTDS Jan. 16 — On October 18, 2016, the World Bank Treasury marked the fifth 27, 2017 anniversary of the Government Debt and Risk Management (GDRM) Program with a stocktaking seminar for participating  Liberia: Joint MTDS, Jan. 30 — countries in Washington, DC. The seminar provided a forum to dis- Feb. 10, 2017 cuss the impact, delivery and future of the program and allowed for  Lesotho: MTDS Baseline Feb. round-table discussions on the most demanded services: design and 13—24, 2017 implementation of debt management strategies and contingent liabil- ities management. Click here to learn more about the event.  Mozambique: DeMPA Feb. 15—24, 2017  Kosovo: MTDS Feb. 22 — Sovereign Debt Management Forum March 3, 2017 Over October 19-20, 2016, the World Bank Treasury hosted the eighth Forthcoming Training Events Sovereign Debt Management Forum in Washington, D.C., with over (January 2017 onwards ) 210 participants from more-than 70 developing and emerging market countries, 10 international organizations, as well as international ex- perts and representatives from the private sector. The Forum reviewed  MTDS Workshop, Geneva, Switzerland, Feb. 6—10, 2017 recent trends and developments in sovereign debt management and provided debt managers with the opportunity to share their experienc-  DSA Training, Arusha, Tanza- es. Speakers explored this year’s theme- “Sovereign debt management nia, Feb. 6—15, 2017 in emerging markets: Is the party over?” -highlighting the challenges of the current environment and discussing possible response from the  DSA Training (AUT): Dakar, debt management community. The Forum also brought into focus a Senegal, Feb. 27—Mar. 3, 2017 range of technical issues associated with implementing sound practic-  DeMPA e-learning: Mar. 6— es in public debt management. April 7, 2017 Click here for the detailed agenda, presentations and video recordings of the Forum sessions.  DSA Training, Abuja, Nigeria, Mar. 6—10, 2017  MTDS Advanced (Spanish): Mexico City, Mexico, Mar 6— 17, 2017  DeMPA Training (AUT): Da- kar, Senegal, May 22—26, 2017 8 Issue 26 DMF News Debt Management Facility (DMF) Newsletter Issue 26, January 2017 The World Bank The DMF Newsletter is published quarterly and is dis- Group tributed to debt management practitioners from develop- 1818 H Street NW, ing countries, donors, DMF implementing partners, civil Washington, DC society organizations, and private sector firms. The newsletter aims to share DMF work plans, lessons On the web learned, and news and developments related to debt www.worldbank.org/debt management. Email Mark Thomas mthomas1@worldbank.org Abha Prasad aprasad@worldbank.org Elliot (Mick) Riordan eriordan@worldbank.org DMF II Donors Austria Telephone Germany (202) 473-5809 The Netherlands Fax Norway (202) 522-3740 The Russian Federation Switzerland 9