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1611116 1MEFMI organized a regional workshop on Domestic Debt and Financial Markets Operations and Management from 17 to 28 October 2016 at Nairobi Safari Club Hotel, Nairobi, Kenya. The main objective of the workshop was to develop practical skills needed to effectively manage domestic debt and ensure efficiency in the issuance of government securities and their trading in the secondary market. A total of 42 middle to senior officials in Ministries of Finance and Central Banks from MEFMI’s member states attended the workshop. MEFMI’s technical cooperating partners, the World Bank, the African Development Bank (AfDB), Financial Sector Deepening (FSD) Africa, and Thomson Reuters collaborated in facilitating the workshop.

 


This was a unique workshop that covered not only theoretical underpinnings of domestic debt and financial markets but also shared the latest analytical tools available in this area. Among the tools shared with participants is Thomson Reuters’ EIKON system which can be used by the authorities to get the latest market information and projections of key economic and market variables. The system can also be used for pricing and issuance of debt instruments. The participants were also taken through Excel based models for estimating the yield curves. In addition, participants were taken through another Excel based analytical tool for developing issuance plans.

 

1611116 2The first week of the workshop focused on training on key concepts in domestic debt, techniques and processes for issuing domestic debt instruments, pricing of instruments and analysis of yield curves. Participants were given practical case studies to work on, especially on auction simulation and pricing domestic debt instruments to reinforce concepts and methodologies covered during the presentations.This was followed in the second week by hands-on training on developing an issuance plan for governments’ domestic debt securities using the World Bank’s Excel based Analytical Tool.

The workshop enhanced participants’ knowledge and skills on the techniques and processes for pricing and issuing domestic debt instruments; and developing issuance plans that are consistent with medium-term debt management strategies. The workshop also provided a platform for peer learning, with participants sharing their experiences in developing domestic debt markets.


The workshop was officially opened by Dr. Patrick Njoroge, Governor of Central Bank of Kenya. In his remarks, Dr. Njoroge commended MEFMI for the timely response to the region’s need for enhanced capacity in domestic debt management and financial markets development. He underscored the need for building sustainable capacity in this area, given that many of the countries in the MEFMI region are increasingly tapping into domestic debt markets to finance development priorities. He urged MEFMI to continue supporting member countries’ efforts to develop local currency bond markets and make domestic debt a reliable and stable source of financing development.


1611116 3In pursuing this objective, Dr. Njoroge was quick to caution countries against losing sight of the need to keep overall public sector debt at sustainable levels. He observed that it is too soon to forget the painful experiences that countries went through with the heavy external debt burden that eventually was relieved through Highly Indebted Poor Countries (HIPC) and the Multilateral Debt Relief (MDRI) initiatives. As domestic debt markets assume the complementary role in government financing, Dr. Njoroge underscored the need for countries to ensure that the responsibilities of key institutional players are clearly defined, taking any pertinent country circumstances into account. In conclusion, Dr. Njoroge urged participants to create an amicable learning environment and frankly share experiences and different perspectives from their countries.

 

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