- November 19, 2020
- Posted by: admin
- Categories: Current News, debt management
Local currency bond markets (LCBM) are a vital source of stable and sustainable government financing. Developing LCBM is increasingly becoming a priority for most countries, not just to support development but also strengthen resilience to shocks such as the COVID-19 pandemic.
Despite the manifold benefits of deep and liquid LCBM, few countries across Sub-Saharan Africa, including those in the MEFMI region, have succeeded to develop them. As a result, most have remained largely illiquid, and the private sector continues to pay high premia for capital, reducing potential investment, job creation and economic growth. Potential investors are deterred by high transaction costs and risk, leaving a large part of household savings in the informal sector. The low savings and financial exclusion partly explain governments’ inability to fully implement development programs using domestic resources.
As part of its support to countries’ efforts to build the capacity required to implement reforms that promote the development of government securities markets, MEFMI offered an e-learning course on LCBM during the period 14 September to 30 October 2020. The course mentors were Mr. Leonard Thotho, a MEFMI Accredited Fellow from the Central Bank of Kenya and Mr. Tiviniton Makuve of the MEFMI Secretariat.
A total of 58 officials from eleven (11) MEFMI member states, namely; Angola, Botswana, Kenya, Lesotho, Malawi, Mozambique, Rwanda, Tanzania, Uganda, Zambia, and Zimbabwe, participated in the course. The course enhanced participants’ capacity to identify key constraints and understand reforms needed to support the development of domestic debt markets in their countries. They are expected to develop tailored actionable plans that identify, prioritize, and guide the implementation of reforms in their countries.
Given the high response to the call for nominations, MEFMI plans to re-run the course in 2021 and also support member counties to implement reforms on LCBM.
Prepared by Tiviniton Makuve