MEFMI Attends Commonwealth Debt Management Forum

The development financing landscape has evolved significantly over the past decade and half due to the emergence of new funding options from non-traditional creditors and commercial sources. There has been a massive public debt accumulation in most developing countries owing to high fiscal deficits induced by large infrastructure needs. In the  Commonwealth countries, almost half of the member states are carrying debt to GDP burdens of over 60 per cent and nearly a quarter having debt over 80 per cent. Most of this debt is being contracted on semi-concessional and commercial terms, thus raising concerns about long-term debt sustainability concerns.

In an effort to explore strategies for effective public debt management, the Commonwealth Secretariat held a Public Debt Management Forum from 5 to 6 June 2019 in London, United Kingdom. Held under the theme “Public Debt Management – Transition and Innovation”, the Forum sought to provide a platform for debt managers from Commonwealth member states to discuss emerging issues and challenges in public debt management, share experiences and propose innovative ways of addressing these challenges. The event was also attended by international and regional technical assistance providers including MEFMI which was represented by Ms. Josephine Tito.

The Forum was officially opened by the Commonwealth Deputy Secretary-General, Dr Arjoon Suddhoo. In his remarks, Dr. Suddhoo urged governments in Commonwealth Member states to ensure that future growth and development is based on stable and responsible borrowing and efficient debt management. Based this call, delegates at the Forum discussed and highlighted the following: the need to ensure high data quality for debt management policy formulation, strong and comprehensive legal frameworks for managing public debt, prudent use of borrowing proceeds, improving transparency in debt management operations and addressing the rising contingent liabilities.

Another highlight of the event was the Launch of the Commonwealth Meridian, a new debt recording and management system which is set to replace the Commonwealth Debt Recording and Management System (CS-DRMS). The new state-of-art system is web-based and aims to help countries to proactively manage their public debt portfolios in response to the changes in the development finance landscape. In addition to traditional loans, grants and debt securities, the system caters for more types of instruments such as Islamic bonds, accounts payables/receivables, insurance and pensions, financial derivatives and special drawing rights. The system is developed on a new technological platform, and is simpler, versatile and provides more and upgraded features to better support countries to formulate, implement and monitor their debt management strategies. To date, the new system has been piloted in nine (9) Commonwealth countries, including Kenya in the MEFMI region. Following this launch, MEFMI will collaborate with the Commonwealth Secretariat to assist client institutions to migrate to the new system, including ensuring that debt data is validated prior to migration.