The World Bank mission team comprised of Memes/ Messrs. Lilia Razlog (mission lead, PRMED, WB), Antonio Velandia (FABDM) and Ying Li (Consultant, WB), joined by Juan Carlos Vilanova, Debt Relief International (DRI), who conducted a Government Debt Management performance Assessment (DeMPA) evaluation for Republic of Armenia.
... See More + At the request of the authorities, the mission took place from October 29 to November 8, 2013. The team worked closely with the main counterparts at the Ministry of Finance (MoF), NASDAQ-OMX, Chamber of Control (CoC), as well as the officials from the other government agencies and the Central Bank of Armenia (CBA). The mission team benefited from excellent cooperation of the Public Debt Management Department (PDMD) of the Ministry of Finance, other line departments of the MoF, CBA, Ministry of Justice, and other government and private partners.
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The DeMPA is a methodology for assessing public debt management performance through a comprehensive set of indicators spanning the full range of government debt management functions.
... See More + The DeMPA tool presents debt performance indicators along with a scoring methodology. This report pertains to a debt management performance assessment of Ethiopia in 2013, and provides an overview of strengths and weaknesses in government debt management. The following are the significant findings of this assessment: 1) no formal debt management strategy in place, although significant progress has been made over time; 2) there is good coordination and information sharing between the fiscal and monetary authorities and the debt managers; 3) There are documented procedures for external and domestic borrowings as well as for on-lending and loan guarantees; 4) an efficient single treasury account is not yet in place, and surplus cash is invested at low rates; 5) there is an understanding of operational risk but not yet a formal framework for operational risk management; and 6) there are complete and timely debt records for all central government debt and guarantees, with appropriate evaluation and disclosure of information on total central government debt management operations.
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This report includes the following headings: delivery of the work program; Debt Management Performance Assessment (DeMPA) in International Development Association (IDA)-eligible countries; Medium-term Debt Management Strategy (MTDS) in IDA-eligible countries; bank-assisted debt management reform plans; other fund Technical assistance (TA) in debt management training; debt management capacity building in Middle Income countries; overview of the MTDS framework; overview of DEMPA framework; and overview of bank-assisted debt management reform plans.
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Madagascar's central government debt stood at around 30 percent of gross domestic product (GDP) in 2011. Due to political developments in 2008-2009, the Acting government of Madagascar has limited borrowing opportunities from both external and domestic lenders.
... See More + This situation is expected to change after the upcoming general elections planned for mid-2013. The legal framework for government debt management is unclear in some parts and in general underdeveloped. Thus, for 2013 fiscal year, the Parliament has authorized the government to borrow internally and externally for the implementation of various development projects. There are no specific debt management objectives, no requirement to develop a debt management strategy, and no evaluation process reflected in the primary legislation. An important step has been taken by reorganizing the Public Debt Directorate (PDD) of the Ministry of Finance and Budget as the Principal DeM entity of the government. It manages both external and domestic debt, and takes part in all loan negotiations. Yet to be prepared is a debt statistical bulletin and a comprehensive DeM strategy. There was one external compliance audit prepared in 2011 for the period of 2006-2008, but no performance audits. The final audit report was developed in 2012, but is not made public. There is no formal or informal debt management strategy in Madagascar. There is also no evaluation and disclosure of information on public government debt management. The debt statistical bulletin, prepared during 2012, is still in a draft form.
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The DeMPA is a methodology for assessing public debt management performance through a comprehensive set of indicators spanning the full range of government debt management functions.
... See More + The DeMPA tool presents debt performance indicators along with a scoring methodology. This report pertains to a debt management performance assessment of Nigeria in 2012. Areas with very high scores include the managerial set-up, evaluation of debt management operations, as well as domestic and external borrowing practices. There have been substantial improvements in management of operational risks, demonstrated by the availability of procedures manuals and data security and back-ups, and in debt reporting.
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At the request of the authorities, the World Bank prepared a new evaluation of Public debt management in the normative (CAR) using the instrument of Performance Evaluation regarding Debt Management commonly known as DeMPA.
... See More + The latter is based on a normative methodology, precise and structured systematically to assess a comprehensive set of 15 indicators performance with 35 dimensions, which cover the entire cycle of public debt. The conclusions of this evaluation show that in the second evaluation following the 2008 assessment, the Government has made progress in strengthening the management of public debt. However, these advances are not very noticeable through scoring. The scale of most of the actions over the last three years although they were essential was not sufficient in relation to the requirements of the methodology of DeMPA and performance indicators in general remain dissatisfied with respect to the minimum requirements of the instrument. In addition, the activity management of public debt is still limited in Central African Republic complicating therefore, the same year of assessment and many dimensions have not been noted. This activity has focused primarily on establishing an arrears clearance plan and negotiation of consolidation and rescheduling of external and domestic debt. However, this observation should not underestimate the efforts of the authorities in the field of debt management. The measures to be implemented to remedy some of the weaknesses include: (i) publication awards from both these departments; (ii) the start-up of the Committee National Public Debt; (iii) a review of the composition of the Technical Monitoring Unit of the Liquidity in order to ensure better coordination between the organizations involved in the management of Cash (already taken into account by the authorities on October 19); (iv) the acceleration of validation of arrears and especially the validation of accumulated arrears in late 2010; (v) staffing of phone lines and Internet access to the Directorate of Debt and Investments; and (vi) the transfer of debt data through the System Notification of Debt of World Bank. The findings of this new assessment shows that progress on debt management has been made by the Government since 2008, but that these advances will not transpose systematically improved diagnosis and notes. See Less -
This paper states that at the request of the authorities, the World Bank (WB) has carried out a second evaluation of management of the public debt of Mali after the one which was conducted earlier.
... See More + The 2008 assessment, based on the methodology of the assessment tool performance in terms of debt management (DeMPA) developed by the World Bank, was conducted from 30 November to 9 December 2011. The results of the evaluation of the management of public debt leave significant assets, including legal and regulatory framework that is relatively comprehensive and coordination of debt management with macroeconomic policies. However, the revival of the work of the National Committee of public debt, reconciled with coordination between the management units of the debt, methods supported cash flow forecasting, and policy and strategy of substantial debt imply significant improvements of performance of debt management in Mali.
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During February 2-14, 2008 a World Bank team comprised of Per-Olof Jonsson and Frederico Gil Sander traveled to Sao Tome e Príncipe to undertake an assessment of the government's debt management capacity and institutions using the Debt Management Performance Assessment Tool (DeMPA).
... See More + The DeMPA is a methodology for assessing government debt management (DeM) performance through a comprehensive set of indicators spanning the full range of DeM functions. The assessment reveals that despite notable progress since the inception of the debt office in 2004, overall Sao Tome Príncipe meets the minimum requirements set out by the DeMPA only in the fields of evaluation of debt management operations and coordination with monetary policy. The Government does not meet the minimum requirements in the other indicators. The gap between existing practices and the minimum requirements is narrow in some areas. Among the areas for improvement where greater effort is required to reach good practices, the mission identified the legal framework and the managerial structures as key priorities in a reform program.
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This study shows that performance in terms of debt management has been weakened by recurrent political and institutional crises experienced by the country in recent years and has had a negative impact on the State's ability to both mobilize external financing and to honor its financial commitments.
... See More + The accumulation of external arrears has increased by extension of the depletion sources of funding. However, the government recently initiated numerous actions contributing to a more serene climate at home with the establishment of democratic governance, developing a program of poverty reduction and regularization of arrears. This more favorable environment will soon pave the way for more substantial outside funding, especially following the accession of the Comoros to the enhanced Heavily Indebted Poor Countries (HIPC), and therefore requires the full attention of the authorities to implement better management of public debt. This evaluation is part of this perspective. Overall, performance in terms of debt management in the Comoros is satisfactory in all three of the following areas: (i) coordination with fiscal policy, including the integration of forecasts and actual payment of debt service in the preparation and monitoring of budget, (ii) coordination with monetary policy focused on the management of statutory advances granted by the Central Bank of Comoros (BCC), and (iii) procedures for payment of service external debt.
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General Economy, Macroeconomics and Growth Study 70852 JUN 01, 2011
This study shows that performance in terms of debt management has been weakened by recurrent political and institutional crises experienced by the country in recent years and has had a negative impact on the State's ability to both mobilize external financing and to honor its financial commitments.
... See More + The accumulation of external arrears has increased by extension of the depletion sources of funding. However, the government recently initiated numerous actions contributing to a more serene climate at home with the establishment of democratic governance, developing a program of poverty reduction and regularization of arrears. This more favorable environment will soon pave the way for more substantial outside funding, especially following the accession of the Comoros to the enhanced Heavily Indebted Poor Countries (HIPC), and therefore requires the full attention of the authorities to implement better management of public debt. This evaluation is part of this perspective. Overall, performance in terms of debt management in the Comoros is satisfactory in all three of the following areas: (i) coordination with fiscal policy, including the integration of forecasts and actual payment of debt service in the preparation and monitoring of budget, (ii) coordination with monetary policy focused on the management of statutory advances granted by the Central Bank of Comoros (BCC), and (iii) procedures for payment of service external debt.
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General Economy, Macroeconomics and Growth Study 70852 JUN 01, 2011
From November 8 to 17, 2010, a World Bank team undertook a Debt Management Performance Assessment (DeMPA) mission to Tirana, Albania. The mission's objective was to prepare a comprehensive assessment of government debt management functions by applying the DeMPA methodology.
... See More + This report presents the results of the assessment, based on the December 2009 version of the DeMPA tool. The assessment reveals that Albania meets the requirements for the A score in eleven dimensions assessed the B score in five dimensions, the C score in twelve dimensions, and the D score in five dimensions. Of more than 50 countries assessed by the World Bank under the DeMPA program so far, Albania stands out as one of the few which has sound debt management practices in the largest number of areas as defined by the DeMPA methodology. Albanian economy is highly dependent on remittances. Sectors that rely on remittances construction, wholesale and retail, and other services together account for over 60 percent of the country's Gross Domestic Product (GDP) and has been the backbone of the country's strong growth. Large capital inflows (remittances, official assistance, and some foreign direct investment) have resulted in a steady appreciation of the country's currency. The DeMPA focuses on central government debt management activities and closely-related functions, such as the issuance of loan guarantees, on-lending, cash flow forecasting, and cash balance management. Thus, the DeMPA does not assess the ability to manage the wider public debt portfolio, including implicit contingent liabilities.
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General Economy, Macroeconomics and Growth Study 63631 JUN 01, 2011
A World Bank mission visited Kazakhstan from July 15-23, 2010, to undertake a comprehensive assessment of debt management operations using the Debt Management Performance Assessment tool (DeMPA).
... See More + The DeMPA report provides an overview of strengths and weaknesses in government debt management in Kazakhstan, as evaluated at end-July, 2010. The scores demonstrate that areas of strength clearly outnumber areas where policies and practices fall short of minimum standards for effective debt management. Areas of strength include the legal framework, governance, and operational risk management, coordination with fiscal and monetary policies, as well as debt recording and reporting. Such strengths are impressive, taking into account the relatively low debt level and modest recourse to both domestic and external borrowing. However, many areas displaying relatively low scores would benefit from attention and reform. This need is most pressing in the context of developing a medium-term debt management strategy, which would involve outlining the preferred composition of debt based on cost-risk analyses, and would provide guidance not only for the governments borrowing but also for market development.
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General Economy, Macroeconomics and Growth Study 69667 MAY 18, 2011
At the request of the authorities, the World Bank (WB) has prepared an evaluation of the Debt Management Service of Burkina Faso. The Debt Management (DeMPA) first report was published in 2008.
... See More + The DeMPA assessment in 2011 points out that there was much progress by the Burkinabe government. Compared to the 2008 report, Burkina Faso has made many advances in the treatment of: a) governance and strategy development; b) the registration and publication of information on debt with the distribution of a newsletter Quarterly Statistical; c) the operational risk management with the availability of a manual of procedures for all activities on debt management and capacity building of staff; d) forecasts of cash flow through vision calls for a more timely expenditure and investment has improved programming of Cash Flows; and e) loans and financial activities with a plan to issue bonds whose amounts and dates are set well in advance. However, significant weaknesses still persist regarding; 1) governance with no assessment of the costs and risks of the portfolio has to be an integral part of the strategy for debt management and audits of activities of debt management; 2) external borrowing with no formal assessment of the costs and risks of new external loans and weaknesses in procedures for information transfer of recently negotiated debt; 3) managing operational risk with gaps that remain in terms of archiving, securing the access to the database, validation of input data and some operational risk management; and 4) disclosure of information about the debt to statutory obligations.
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This report states that an Inter-agency mission traveled to Nouakchott (Mauritania) to evaluate management operations of public debt through the Assessment Tool performance management of debt (DeMPA).
... See More + Overall, the strengths of the management of public debt held in Mauritania included: 1) the quality of the legal framework; 2) certain aspects of the management structure of public debt; 3) the functioning mechanisms of cash flow forecasting, and 4) the mobilization of domestic borrowing. The report first presents the contextual framework of debt management in Mauritania (macroeconomic performance and institutional characteristics); secondly, it shows aspects of methodological assessment tool and the details of each performance indicator, and finally, it presents conclusions.
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General Economy, Macroeconomics and Growth Study 70841 MAR 01, 2011
The Djibouti government has given priority to the reform of the management of the debt, particularly in the context of the current program supported by the IMF.
... See More + Progress has been made in this area in the recent past. In the future, at a time when the government goes ahead with its ambitious public investment plans, and explore new funding mechanisms (e.g. PPP) for the large port and other infrastructure projects, policies of debt management will become an important pillar of the sound management of public finances and macroeconomic stability. The experience of countries shows that a structured reform approach greatly increases the probability of a positive result. In this context, the report highlights weaknesses in debt management but does not issue recommendations or proposals for improving current practices of debt management. The transition to a dynamic debt management requires institutional capacity building (harmonization of the legal framework of debt management, formulation of a national debt strategy, coordination between the institutions involved in the process of debt management, debt audit, conducted analytical reports Debt Edition a statistical bulletin of the periodic debt), material (renewal and fleet maintenance IT, acquisition of debt analysis, electronic data backup modules) human (staff training on all aspects of debt management and maintenance of system of debt management). This report can be used to prioritize future reforms, and plan projects for capacity building of the debt management to streamline and increase the efficiency of resource management.
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Working Paper 80561 JAN 01, 2011
Jonasson, M. Thordur; Maria-Sube, Mme Elodie; Mooney, M. HenryDisclosed
At the request of the Government of Papua New Guinea (PNG), a mission comprised of Jeff Chelsky (PRMVP, mission lead), Tomas Magnusson (BDM, consultant), Greg Horman (BDM, consultant) and Tim Bulman (EAP, country economist), visited Port Moresby between November 22nd and December 3rd to undertake a DeMPA exercise.
... See More + The team met with officials from the Department of Treasury, Bank of Papua New Guinea, Department of Finance, Department of National Planning and Monitoring, State Solicitor's Office, Auditor General's Office, Independent Public Business Corporation (IPBC), AUSAid, Asian Development Bank, ANZ Bank, Nambawan Super, and Bank South Pacific (BSP). This report reflects comments received from the PNG authorities in February 2011. The mission found that, in a number of areas, PNG meets or exceeds minimum DeMPA requirements. Strengths include the quality of the debt management strategy, the framework for domestic debt issuance, coordination with monetary policy, and the legal framework (except for the issuance of T-bills for which the law contains no explicit borrowing purposes). Looking ahead, the Government has expressed its intention, as part of the 2011 budget and its updated 2011 Medium-term Debt Management Strategy, to remove the nominal cap on external debt, replacing it with a cap of 30 percent of Gross Domestic Product, or GDP. The commitment to allocate a portion of excess government revenue to debt reduction will only apply when the debt-to-GDP ratio exceeds 30 percent of GDP. At the same time, the Government has reiterated its commitment to reducing the exchange rate risks to its debt portfolio by targeting 40 percent of total debt over the medium term for the external portion of the portfolio. Interest rate risk will be reduced through continued efforts to extend the maturity of domestic debt.
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At the request of the authorities, the World Bank has prepared an assessment of strengths and areas for improvement in the management of debt in Togo.
... See More + The assessment uses the instrument rating of the performance in terms of debt management (DeMPA). DeMPA is a methodology developed by the World Bank, in collaboration with international institutions and other technical assistance providers, to evaluate the performance of debt management through a complete set of objective performance indicators based on norms. This report presents the conclusions of evaluation. It will be possible to establish a baseline for monitoring progress over time, especially as the country reaches and exceeds the completion point under the Initiative for Heavily Indebted Poor Countries (HIPC). The evaluation found that except for indicators on the West African Economic and Monetary Union (UEMOA) and triggers passing the completion point of the initiative PPTE5 in almost all respects the minimum elements of effective debt management are currently absent in Togo. The assessment covers all state entities involved in management activities of debt, and the complete portfolio of sovereign debt and publicly guaranteed debt. This set consists of several departments within the Ministry of Economy and Finance (MEF), other government agencies and the national branch of the Central Bank of the States of West Africa. The paper concludes that the debt reduction is an indispensable condition for achieving a level of viable debt in Togo, but it cannot be enough. To this end it is necessary, among other actions to increase the capacity of the analysis by the authorities and better manage new loans. The authorities must continue to implement reforms to improve debt management and manage operational risks, as efforts made to date targeted conditions to pass the completion point and are not enough to solve other challenges of management of debt.
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This report is to evaluate management operations in government debt using the tool for evaluating the performance management of debt (DeMPA). In particular, the report emphasizes that the current strength of management operations of debt in Senegal take legal framework and management structure of the public debt, the coordination with monetary and fiscal policies, forecasting and managing cash flow, and domestic borrowing.
... See More + At the same time, this assessment identifies areas as priorities for efforts of building performance that include: The strategy of debt management, assessment management operations debt auditing, and standardized management of debt; Evaluation and procedures with respect to external borrowing; Operational risk; Records and reports on public debt. The report first presents the contextual framework covering all aspects of performance of macroeconomic and institutional context and management of public debt in Senegal to refer to when evaluating specific performance indicators. Then the report presents methodological aspects (explanation of the evaluation methodology, comparison with the PEFA report, and technical assistance), and finally presents the details of evaluation by performance indicators.
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General Economy, Macroeconomics and Growth Study 70615 MAY 01, 2010
During January 11 to 20, 2010, a World Bank team undertook a Debt Management Performance Assessment (DeMPA) mission to Gambia. This tool provides a methodology for assessing government debt management performance through a comprehensive set of dimensions spanning the full range of DeM functions.
... See More + The first time the tool was applied in Gambia was in 2007, when a pilot study was carried out, and this was a follow-up mission. The DeMPA methodology has evolved since the report made in 2007 and therefore it is not possible to carry out a strict comparison of the two DeMPA reports in terms of individual indicators as the detailed dimensions that make up an indicator are no longer aggregated; instead, each dimension is given a specific score. It is clear however that Gambia's debt management has progressed substantially in some dimensions during recent years although there are still remaining issues that would benefit from reform and institutional capacity-building. The mission notes that given that several reforms are currently being implemented, it is to be expected that future DeMPA evaluations will show stronger scores. At this moment there is institutional capacity-building in the area of the Integrated Financial Management Information System (IFMIS) and cash management; the design of procedures manuals for Directorate of Debt Management (DDM), and the design of a draft bill on public debt management which would provide a more strategic, objectives-based legal orientation to debt management.
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Operational risk is defined as the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events.
... See More + In debt management operations, the categories of risks, such as market risk, credit risk, refinancing risk and liquidity risk, are relatively well known; however operational risk is not. The area has not been given due attention to by government debt managers in developing a risk management framework. A similar conclusion on aspects pertaining to operational risk management is borne out from the early results of the World Bank's assessments using its government Debt Management Performance Assessment (DeMPA) tool. This paper thus, introduces the concepts of operational risk as applied to government debt management (DeM) and attempts to present a framework for debt managers to manage operational risks while undertaking public debt management operations. It draws on existing literature for operational risk management principles and practices that have been formulated by the Bank for International Settlements (BIS) Basel Committee on Banking Supervision, the Committee of Sponsoring Organizations (COSO) and the findings of the DeMPAs.
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