MEFMI Trains Officials on Managing International Sovereign Bond Portfolios

Mobilising sufficient resources has been a challenge for low-income countries, including those in the Sub-Saharan Africa region. Official development assistance has been declining, while commitments to provide more aid have largely remained unfulfilled as donor countries have  scaled down development assistance budgets. This has made the need for governments to mobilise additional and more sustainable development financing through other sources imperative. In the last decade, the international debt market has become a prominent source of funding for some countries in the region such as Angola, Kenya, Namibia, Rwanda and Zambia. Other countries are also contemplating debut issuances to finance their development priorities.

While access to international capital markets can help countries to diversify their borrowing options, it also changes the nature of risks that governments are facing. For instance, countries get exposed to volatile global market sentiment and increased scrutiny. In addition, governments also have to deal with a range of stakeholders with different preferences and motives, such as lead managers, rating agencies and international investors. Since access to international debt markets is a relatively new phenomenon in the region, sovereign issuers rely on outsourced international advisors for managing international sovereign bond transactions as in-country knowledge and expertise is still limited. This has cost and risk implications on countries’ public debt portfolios.

MEFMI conducted an e-Learning course on International Sovereign Bond Issuance as part of efforts to support countries close this knowledge gap, and mitigate potential vulnerabilities that could arise from international sovereign debt portfolios. The course was held from 6 July to 28 August 2020. A total of 73 officials from MEFMI Member States (Angola, Botswana, Eswatini, Kenya, Lesotho, Malawi, Namibia, Rwanda, Tanzania, Uganda, Zambia, and Zimbabwe) participated and successfully completed the course.

The training enhanced participants’ understanding of strategic and operational issues in international sovereign bond issuance. With this knowledge, the participants are expected to interact effectively with different stakeholders in the international market for better outcomes, and manage cost and risks of their public debt portfolios to safeguard debt sustainability.

The course mentors were Ms. Felister Kivisi, an official of the Trade and Development Bank who is also a MEFMI Graduate Fellow; Ms. Nell Scott, a Partner at Orrick, Herrington & Sutcliffe LLP; Mr. Eyitayo Netufo, Director of Debt Capital Markets at Rand Merchant Bank UK; and Mr. Tiviniton Makuve of the MEFMI Secretariat.

Prepared by Tiviniton Makuve