COVID-19 Pandemic Aggravates Public Debt Risks 

Public debt in the Sub-Saharan African region has increased significantly in the last decade, raising concerns among policymakers, international financial institutions and other stakeholders of a looming debt crisis. The public debt-to-GDP ratio for the region was estimated at 56.6 percent by end of 2020 from about 34.3 percent of GDP in 2011. The high debt accumulation has increased debt service, thereby reducing the fiscal space for implementing poverty reduction and development interventions. Debt sustainability analyses conducted by MEFMI and the IMF/World Bank indicate elevated risks of debt distress in several countries in the medium to long term. The COVID-19 pandemic has aggravated these risks.  

These developments highlight the need for Governments to put in place sound macroeconomic policies, robust debt management strategies, greater controls, and enhance transparency and accountability in the use of borrowed resources. The latter requires strengthening the oversight roles of internal and supreme audit institutions. Debt Management Performance Assessments (DeMPA) conducted in MEFMI member countries between 2012 and 2019 highlighted gaps in the auditing of public debt transactions and processes.  Specifically, they indicated that most governments were not conducting performance audits of debt management operations. In order to address the deficiencies highlighted above, MEFMI offered an e-learning course on Public Debt Audit from 9 November to 11 December 2020.  

The course enhanced the capacity of audit staff to conduct comprehensive auditing of public debt management transactions and operations. It also introduced participants to conceptual issues in sovereign debt management, performance standards and sound practices in auditing public debt. The course, which brought together public debt as well as internal and supreme audit officials, provided a platform for them to share their experiences in this area. 

A total of 29 officials (14 females and 15 males) from nine (9) MEFMI member states, namely; Angola, Botswana, Kenya, Malawi, Namibia, Rwanda, Tanzania, Zambia, and Zimbabwe, participated in the course. Ms. Josephine Warega mentored the participants.  

MEFMI plans to offer country–specific interventions in this area in order to enhance transparency and accountability in public debt management. 

Prepared by Joesphine Tito.