Background

Sound practice requires that Governments develop and implement debt management strategies in order to minimize the costs and risks associated with their debt portfolios. The past decade has seen the development financing landscape tremendously evolving with new funding options emerging. The structure of the debt portfolios in most developing and emerging countries, including those in the MEFMI region, is increasingly shifting from concessional borrowing dominance to increased reliance on semi and non-concessional sources. There is also a shift towards more reliance on domestic debt markets. Despite the changes in the funding landscape bringing on board diversified funding sources for government, they have also created new challenges and risks for managing the flows, which calls for active debt management in the borrower countries through formulation and effective implementation of debt management strategies. However, there are knowledge and skills capacity gaps in this area in most of the MEFMI member countries.

MEFMI, IMF and the World Bank will offer a training on Medium Term Debt Management Strategy and Annual Borrowing Plan to address this gap. The training will among other things, focus on how to develop a debt management strategy, including identifying the objectives and scope for debt management, identifying funding sources, assessing the costs and risks associated with alternative borrowing strategies, assessing the performance of a range of alternative strategies as well as designing an annual borrowing plan and auction calendar.

Objectives

i. To impart knowledge and skills to participants on the use of the IMF/World Bank MTDS and ABP Analytical Tools (AT) to develop debt management strategies and annual borrowing plans.

Course Content

This course covers:

i. Overview of the debt management strategy formulation and introduction to the MTDS Analytical tool; ii. Identifying the objectives and scope for a debt management strategy; iii. Formulating different market risk scenarios (baseline and shock scenarios); iv. Identifying and assessing different financing sources; v. Designing and assessing alternative financing strategies using the MTDS analytical tool; vi. Strategy selection; vii. Developing an annual borrowing plan and auction calendars, including a walk-through on the use of the ABP analytical tool; and viii. Implementing the MTDS and ABP.

Target Group

This course targets middle-level officials from Ministries of Economy, Finance, Economic Planning and Development, and Central Banks responsible for middle office functions of debt management.