MEFMI conducted a regional workshop on Quantitative Methods and Analysis for Debt and Reserves Management from 3 to 14 November 2014 in Ezulwini, Swaziland.  The workshop was officially opened by Ms. Khabonina Mabuza, Principal Secretary in the Ministry of Finance, Swaziland. The workshop equipped participants with practical skills required to understand fixed income concepts, yield curve analysis, risk and return concepts. In addition, participants garnered knowledge on how to apply these concepts in the effective management of their debt and reserves portfolios through application of concepts such as duration. The workshop also allowed participants to understand the use of derivatives in the management of a portfolio to hedge against risks.

In her remarks, Ms. Mabuza commended MEFMI for responding to the capacity needs of the region and urged MEFMI Secretariat to continue to be dynamic and conduct training that addresses emerging challenges in debt and reserves management. She reminded participants of the 2008/2009 financial crisis.  She stated how financial institutions and governments with inadequate or no Assets and Liabilities Management (ALM) strategies were ruthlessly punished by the financial markets, resulting in severe losses due to exposure to changes in interest rates, defaults and the turbulent equity markets.  

Ms Mabuza highlighted the fact that MEFMI member countries are still facing numerous challenges although they managed to navigate through the stormy waters of the global economic and financial crisis. She said governments continue to face increased market exposure of their net foreign assets and debt portfolios, especially given the expanding access to domestic and international capital markets. Ms. Mabuza stressed that in moving towards an Asset and Liability Management approach, Governments should be able to collect data on the main financial and non-financial assets such as reserves and liabilities and develop simple and user-friendly models for analysing and reducing mismatches under different types of scenarios.She commended the Bank for International Settlement (BIS), African Development Bank (AfDB), the South African Reserve Bank (SARB) and the Reserve Bank of Malawi (RBM) for releasing their officials to facilitate the workshop, a move that greatly supported MEFMI’s capacity building endeavours.     

The workshop which was analytical in nature was designed to develop skills on quantitative methods and essential financial and statistical calculations. The general objective of the workshop was to provide hands-on training on ALM techniques, practices, advanced applications, risk analysis techniques and risk mitigation measures.

The target group for the workshop was junior to middle level staff in Financial Markets, Reserves and Debt Management Departments in Central Banks and Ministries of Finance. Officials in Research or Statistics Departments involved in sovereign debt and reserves analytical functions were also targeted. A total of 38 participants, from 13 MEFMI countries participated in the workshop, including two MEFMI Candidate Fellows. Out of the 38 participants, 13 were female, representing 34% of the total.

The workshop was facilitated by one regional resource person, one MEFMI Fellow, MEFMI staff and two international resource persons provided on gratis by technical cooperating partners.  The workshop facilitators were Mr. David Bolder (BIS), Ms. Jeanette Sejamoholo (SARB), Mr. Omar Sefiani (AfDB), Mr. Rodrick Wiyo (MEFMI Accredited Fellow), Mr. Raphael Otieno and Ms. Michelle Mutinda (both from the MEFMI Secretariat). In addition, a local medical expert, Ms. Alice Tembe, made a presentation to raise awareness on HIV/AIDS among the participants.

Group exercises and discussions were conducted after each of the presentations to ensure crystallization and application of the concepts. The case study brought together theories and reinforced the definitions and methodologies covered during the presentations. It included discursive questions that sought to highlight a broad understanding of the link between debt management and reserves management and the applicability of many of the concepts employed in reserve management. The case study was partly facilitated by the Candidate Fellows to prepare them for some of the tasks they will undertake once they graduate.