MEFMI / IMF / World Bank Collaborate on LCBM Workshop

Deeper and more efficient domestic securities markets play a key role in reducing financial vulnerability to shocks while enabling governments to finance their development programmes. Governments in Sub-Saharan African countries, including the MEFMI region, have regularly promoted and adopted policies to develop their local currency bond markets (LCBM).  However, most of the countries remain relatively underdeveloped compared to peers in other regions. Though broad guidelines and general principles to develop LCBMs are readily available, their translation into specific reforms is a complex process that requires multiple and interdependent policy actions from a broad range of stakeholders.

Against this background and 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 regional workshop on LCBM development.  The workshop which was held virtually from 22 February to 4 March 2022 aimed at strengthening participants’ knowledge of the building blocks and sequencing of reforms for LCBM development. It also provided a platform for participants to learn from the experiences and good practices of peer countries.

Specifically, the workshop discussed the enabling conditions and the six (6) building blocks for LCBM namely, money market, primary market, secondary market, investor base, financial market infrastructure, and legal and regulatory framework. It also covered the LCBM framework used to assess the market development stage, common challenges and identified possible remedies for designing policy recommendations that support the development of the market.

A total of 53 officials participated in the workshop, of which 32 were male while 21 were female. Participants were drawn from Central Banks, Ministries of Finance, Planning and Economic Development and National Treasury from 12 MEFMI member countries namely Angola, Botswana, Eswatini, Kenya, Lesotho, Malawi, Mozambique, Rwanda, Tanzania, Uganda, Zambia and Zimbabwe.

The workshop was facilitated by MEFMI Fellows and Staff as well as a pool of experts from the IMF, World Bank, Rand Merchant Bank-RMB, and Abu Dhabi Investment Authority. The lectures were complemented by country presentations, plenary discussions and case studies on the application of the LCBM framework.

The workshop enhanced the knowledge of officials from MEFMI member countries on LCBM development. MEFMI expects the participants to apply the knowledge gained to design policies and strategies for developing LCBMs in their respective countries.

By Cristina Dimande