MEFMI hosts a Webinar on Broadening the Investor Base of Government Securities

The COVID-19 pandemic has prompted governments in developing countries to focus on broadening the investor base of their domestic debt securities to enhance the resilience to shocks. A heterogeneous investor base, with different investment time horizons, risk preferences and trading motives is important for ensuring high liquidity and stable demand for government securities. When the investor base is diversified, governments can execute their funding strategies under a wide range of market conditions, including during crises situations such as those induced by the ongoing COVID-19 pandemic. While governments in the region have regularly adopted guidelines and principles for broadening investor bases for their domestic debt securities, implementation of the necessary reforms has remained a challenge. As a result, the pace of investor base diversification has remained slow compared to peers in other regions.

As part of its support to countries’ efforts to develop local currency bond markets, MEFMI hosted a Webinar on 30 June 2021 to explore some of the key policy questions for policymakers seeking to address constraints to broadening the investor base of their government securities. A total of 83 officials participated in the Webinar, drawn from 18 countries, including eleven (11) MEFMI member countries, namely Angola, Botswana, Kenya, Lesotho, Mozambique, Malawi, Rwanda, Tanzania, Uganda, Zambia and Zimbabwe. Other participants were from MEFMI technical and financial cooperating partners, namely Financial Sector Deepening Africa (FSD Africa), United Nations (UN), Trade and Development Bank (TDB), African Forum and Network on Debt and Development (AFRODAD), West African Institute for Financial and Economic Management (WAIFEM) and Collaborative Africa Budget Reform Initiative (CABRI).

The Webinar raised awareness on some key challenges that governments encounter when designing and implementing reforms to broaden the investor base for their domestic debt securities. Based on lessons drawn from regional and international experiences, the webinar explored strategies for consideration by countries in the region as they take initiatives to broaden the investor base of their domestic debt securities.

The Webinar was facilitated by four (4) resource persons, comprising Mr. Mike Williams (Independent Consultant and former Chief Executive Officer of the UK Debt Management Office), Mr. Cappitus Chironga (MEFMI Accredited Fellow from the Central Bank of Kenya), Mr. Sandile Mdlovu (Central Bank of Eswatini), and Mr. Samuel Arkhurst (Chief Economics Officer and Director of Ghana’s Treasury and Debt Management Division).