MEFMI Countries Urged to Design Forward-Looking Borrowing Policies and Strategies

MEFMI, in collaboration with the World Bank and International Monetary Fund (IMF) conducted a Regional Training on Debt Sustainability Analysis from 16 to 20 February 2015 in Nairobi, Kenya.

The main objective of the training was to impart knowledge and develop skills on the use of Debt Sustainability Analysis tools.  The workshop, which was the second component of the course that began in November 2014 through e-learning using IMF’s portal, focused on the IMF/World Bank Debt Sustainability Framework (DSF).

A total of 26 participants attended the workshop of which 15 were female, representing 58% of the total. The main target group was mid-level officials responsible for public debt analytical functions in the Ministries of Finance and of Economic Planning as well as in the Central Banks.

The training was officially opened by Mrs Esther Koimett, the Acting Director General of the Directorate of Public Debt Management, on behalf of the Principal Secretary of Kenya’s National Treasury. In her remarks, Mrs Koimett observed that the workshop was being held at an opportune time because most countries including those that received debt relief under the Heavily Indebted Poor Countries (HIPC) Initiative and the Multilateral Debt Relief Initiative (MDRI) are still faced with significant debt management challenges.

She said that developing countries are faced with a practical dilemma on how to meet their large development needs through borrowing while at the same time minimising the risk of quickly accumulating debt to unmanageable levels. She noted that this problem is compounded by the fact most countries have increasingly turned to semi-concessional and commercial creditors as alternative sources of financing while domestic debt is also increasing rapidly. In this regard, Mrs Koimett urged the MEFMI member states to design forward-looking borrowing policies and strategies so as to ensure long term debt sustainability, consistent with sustainable economic growth and development.

The training drilled participants on the use of the IMF/World Bank debt sustainability analytical tool known as the Debt Sustainability Framework (DSF), covering its theoretical underpinnings as well practical applications. On the last day, participants presented the main conclusions from the case studies of debt sustainability analyses followed by rich “question-and-answer” sessions and discussion after every presentation. This approach proved to be superior to using generic hands-on exercises from the perspective of learning intensity and incentives.

The training was rated highly by participants both in terms of the quality of delivery by the resource persons as well as the effectiveness of the training materials. About 96 percent of participants indicated that they found the workshop to be very practical and relevant to their work. In this regard, MEFMI expects that participants will use the knowledge and skills gained from the workshop to improve their national borrowing policies and strategies.