Member States Urged to Anchor Debt Management Policies on Sound Macroeconomic Frameworks

MEFMI organized a regional workshop on Public Debt and Macroeconomic Management in collaboration with SADC from 18 to 27 May 2015 in Victoria Falls, Zimbabwe. The workshop was officially opened by the Director of Human Resources in the Reserve Bank of Zimbabwe (RBZ) Mr. Elliot Rwatirera.

The main objective of the workshop was to equip Government and Central Bank officials with requisite skills to enhance their effectiveness in providing sound advice on how public debt portfolios could be managed within the framework of fiscal prudence and broader macroeconomic goals.  It also aimed at equipping participants with knowledge on the inter linkages between public debt and macroeconomic management as a basis for developing and implementing sound debt management policies and strategies.

In his opening remarks, Mr. Rwatirera commended MEFMI for responding in a timely manner to the regions’ need for enhanced capacity on managing public debt within the broader macroeconomic policy framework. He noted that, until the mid-1990s, most developing countries conducted public debt operations without regard to its impact on macroeconomic performance, thus leading to unsustainable debt levels. In this regard, Mr. Rwatirera said that it is important for member states to anchor debt policies on sound macroeconomic frameworks in order to achieve long-term debt sustainability and sustainable economic growth. He noted that there are policy trade-offs and inter-linkages between public debt and other spheres of macroeconomic management that must be understood in order to formulate and implement macro-economically consistent and fiscally sustainable debt management strategies and policies. He, therefore, urged participants to tap into the vast experience and expertise availed by the workshop to enhance their capacity to provide sound economic policy advice. He said that this was the only way for ensuring that economies remain resilient in the face of any external shocks such as those arising from the Eurozone debt crisis.

Mr. Rwatirera also commended the partnership between MEFMI and SADC’s Committee of Central Bank Governors (CCBG) in this capacity building activity, noting that such coordinated interventions help to reduce a duplication of roles among service providers. He also hailed MEFMI for utilizing Fellows as main facilitators in the workshop, adding that this demonstrated the Institute’s confidence in their expertise. In this regard, Mr. Rwatirera urged MEFMI to continue developing regional expertise as a means to gaining sustainable and self-generating capacity.

The Director of the MEFMI Debt Management Programme, Mr. Raphael Otieno, also spoke during the opening ceremony. Mr. Otieno acknowledged the hospitality that MEFMI receives from the Government of Zimbabwe and the Reserve Bank of Zimbabwe. He reiterated MEFMI’s commitment in pursuing its objectives and ideals of building sustainable capacity in the region. Regarding the workshop, the Director noted that the training course on Public Debt and Macroeconomic Management was being offered for the first time following participants’ feedback during previous capacity building activities and also after the Institute had noticed that there was little interaction between officials working on public debt, fiscal and monetary issues. He said that the lack of interaction among practitioners has compromised the effectiveness of policies, resulting in sub-optimal policy outcomes. Mr. Otieno also noted that participants were coming from varied backgrounds and therefore urged them to take advantage of this diversity to share their country and work experiences. 

The workshop targeted debt management officials and macroeconomists in Ministries of Finance and Planning as well as Central Banks in the MEFMI and SADC regions. A total of 34 participants attended the workshop, 32 from ten (10) MEFMI member states and two (2) from non-member states (Madagascar and DRC) participated as part of the partnership with SADC.

he workshop was facilitated by three (3) MEFMI Fellows and two Secretariat staff; Messrs Nebson Mupunga (Graduate Fellow, Reserve Bank of Zimbabwe), Johnson Nyella (Accredited Fellow, Bank of Tanzania), Cappitus Chironga (Graduate Fellow, Central Bank of Kenya), Raphael Otieno and Tiviniton Makuve (MEFMI Secretariat staff).

The main outcome of the workshop is that participants had a deeper understanding of how public debt and macroeconomic policy instruments operate, how they reinforce one another, how policy tensions arise and the need for policy coordination. It is expected that they will utilise this knowledge and skills to improve public debt and macroeconomic policy management.