Mozambique Receive Training on Public Debt Management

In recent years, the Ministry of Finance and Economy in Mozambique has made significant progress in building debt management capacity. This includes setting up a dedicated Public Debt Management Office organized in line with best practices as well as staff recruitment and training, and debt database validation. As part of the efforts to strengthen debt management capacity, the Ministry requested the MEFMI Secretariat for technical assistance in training officials on various aspects of public debt management. In response, a MEFMI mission visited Maputo, Mozambique, from 1st to 12th August 2016 to conduct back-to-back workshops on Foundations of Debt Management and Debt Management Performance Assessment (DeMPA). This was the first phase of debt management trainings scheduled for August and September 2016. 

The training was officially was opened by the Permanent Secretary in the Ministry of Economy and Finance, Mr. Domingos Juliao Lambo. In his remarks, the PS commended MEFMI for providing capacity building support to Mozambique since 2005 when the country became a member of the Institute.

He said that a number of officials both in the Ministry of Finance and Bank of Mozambique attended the MEFMI activities, leading to improvements in the knowledge and skills of staff as well as adoption of best practices in the areas of macroeconomic and financial sector management, including public debt.

Speaking on behalf of MEFMI, the Programme Manager in the Debt Management Programme, Mr. Stanislas Nkhata, commended the Ministry for being committed to capacity building in debt management. He noted that the landscape for public debt has changed significantly over the last decade, citing the emerging sources of financing which are associated with high costs and risks. In this regard, he said that it is imperative for governments to build capacity to manage these costs and risks to avoid a recurrence of debt distress. He also thanked the Government of Mozambique for its strong support to MEFMI.

The training on Foundations of Debt Management aimed to nurture and equip participants with requisite skills to enhance their effectiveness in managing public sector debt in Mozambique. It covered the following topics: loan cycle; macroeconomic theory for borrowing and relationships between debt and the macroeconomic accounts; sources of external finance; external debt concepts and calculations; domestic debt concepts, issuance processes, instruments and calculations; debt restructuring; management of contingent liabilities; public debt sustainability; designing a Medium Term Debt Management Strategy (MTDS); debt records and reporting; and legal and institutional framework for public debt management.

The objective of the training on Debt Management Performance Assessment was to equip officials with knowledge on assessing debt management performance through application of the DeMPA methodology developed by the World Bank. Topics covered included: introduction to the DeMPA methodology, highlighting its evolution from 2007 to date; governance framework for debt management; coordination between public debt management and macroeconomic policies; external and domestic borrowing and related financing activities; and, debt records and operational risk management.

A total of 29 participants attended the training, of which 19 were female, representing 66 percent of the total. The training targeted to junior and middle level officials from the Ministry of Economy and Finance, Bank of Mozambique and the Mozambique Stock Exchange. Five resource persons facilitated the training, namely: Messrs Tiviniton Makuve, Lekinyi Mollel and Stanislas Nkhata of the MEFMI Secretariat and Mr. Leslie Mkandawire and Ms. Josephine Tito of the Ministries of Finance in Malawi and Zimbabwe, respectively.

The main outcome of the training was that it equipped participants with requisite skills to enhance their effectiveness and efficiency in managing public sector debt in Mozambique. The training also imparted practical skills required to conduct a debt management performance assessment as espoused in the DeMPA methodology as well as designing debt management reforms.