MEFMI Conducts Training on Public Debt Operational Risk Management

The COVID-19 pandemic highlighted the need for developing countries to adopt and implement robust operational risk management frameworks and tools in macroeconomic management, including public debt management. Operational risk is defined as “the risk of loss resulting from inadequate or failed internal processes, people, and systems or from external events” (BIS, 2003).

Following the outbreak of the pandemic in 2019 and the implementation of travel restrictions by countries, most debt management functions and operations were put on hold as staff worked from home. The measures implemented to stop the spread of the pandemic limited debt managers’ access to debt management systems to record transactions, process debt payments, and validate debt data. In some countries, auctions of domestic securities were affected and analytical work such as debt sustainability analysis could not be conducted. Further, the absence of business continuity plans created a significant risk to effective public debt management in most countries.

Against this background, MEFMI conducted a virtual regional workshop on Public Debt Operational Risk Management, from 13 to 17 March 2023. The workshop aimed to assist member countries in dealing with disruptions in debt management operations, which may occur due to unforeseen events such as the loss of access to debt management information systems, and the recent COVID-19 pandemic, among others.

The workshop provided participants with information on conceptual issues of operational risk management in public debt as well as a practical step-by-step process of developing business continuity plans. Ultimately, it enhanced the capacity of country officials to formulate frameworks for managing and mitigating operational risk in public debt ass well as to build resilience when faced with similar crises in the future.

A total of 127 officials drawn from the debt management and IT departments of Ministries of Finance and Central Banks of eleven (11) MEFMI member countries, namely, Angola, Botswana, Lesotho, Kenya, Malawi, Mozambique, Rwanda, Tanzania, Uganda, Zambia and Zimbabwe participated in the workshop. There was also participation of officials from the Office of the Auditor General in Kenya. Of the total workshop participants, 58 (46%) were female.

The workshop was facilitated by five (5) resources persons namely Messrs. Stephen Ssendikaddiwa and Ian Storkey, both independent consultants, Ms Joanne Allin and Ms Difie Mensah, from the Commonwealth Secretariat as well as Mr. Lekinyi Mollel, a MEFMI Accredited Fellow from the Bank of Tanzania.

Prepared by Josephine Tito