- July 2, 2021
- Posted by: admin
- Category: Current News
Economic crises such as the one caused by the ongoing COVID-19 pandemic have consistently drawn attention to the need for developing countries to develop their local currency bond markets (LCBM). Deeper and efficient government securities markets, a key segment of LCBMs, play a key role in reducing financial vulnerability to shocks and enabling governments to finance critical economic and fiscal policy measures. These markets can also support monetary policy implementation and act as an important source of information for policymakers. When they are developed, LCBMs become more stable and less risky sources for financing development priorities, an important factor in making debt more sustainable.
While governments in the Sub-Saharan African region have regularly promoted and adopted guidelines and principles to develop LCBMs, their translation into specific reforms has remained a challenge. As a result, most LCBMs have remained relatively underdeveloped compared to peers in other regions. As part of its support to member countries’ efforts to develop their domestic debt markets, MEFMI, in collaboration with the IMF and World Bank offered a virtual course on LCBM development from 31 May – 4 June 2021.
Thirty-eight (38) officials from 10 MEFMI member countries, namely Angola, Botswana, Eswatini, Kenya, Lesotho, Malawi, Mozambique, Uganda, Zambia, and Zimbabwe were trained. The training enhanced their capacity to use an indicator-based diagnostic framework to assess the level of development of their respective markets along each of the specific building blocks of LCBM development, namely money market; primary market; investor base; secondary market; financial market infrastructure; and the legal and regulatory framework. This assessment helped the countries to identify the building blocks that require more attention while exploring potential reforms to further strengthen the basic functionalities in these building blocks. Participants also learned from experiences and good practices of peer countries. These experiences contributed to several insightful discussion points that will prove useful in defining reforms as countries contemplate further initiatives to deepen their LCBM.
The course was facilitated by eight (8) resource persons, namely Mr. Guilherme Pedras and Obert Nyatawa (IMF); Mr. Michael Papaioannou and Peter Katz (IMF experts); Ms. Cindy Paladines and Gonzalo Martinez Torres (World Bank); Mr. Laszlo Buzas (World Bank expert); and Mr. Tiviniton Makuve (MEFMI).