baba y. musa - world bank musa_0_0.pdfbaba y. musa director, debt management department, (waifem)...

DeMPA in Anglophone West Africa

A Retrospective

Baba Y. MusaDirector, Debt Management Department,

(WAIFEM)

Presentation at World Bank DMF Stakeholder's Forum 2015Asian Development bank Headquarters, Manila, Philippines

Introduction – Overview of DeMPAMissions in Anglophone West Africa

Country Specific cases

Nigeria’s Performance Indicator Grid

Some Noticeable Impact of DeMPA

OUTLINE

Overall Results in WAIFEM Countries

7 National DeMPA

4 Sub-NationalDeMPA

4Reform Plans

15 DeMPA Missions (Between 2007 – April 2015)

Implementation of DEMPA in WAIFEM Member Countries – Lessons Learned

Pilot DeMPA in 2007

Revised DeMPA Jan. 11-20, 2010

Reform Plan Nov. 20 – Dec.9, 2010

Reform Plan February 11 – 15, 2013

2nd DeMPA – June 9 –18, 2014

Pilot DeMPA

March 6 – 14, 2008

Reform Plan November 17-21, 2008

2nd DeMPA

June 4 – 8, 2012

Reform Plan June 24 –July 2, 2013Ghana

DeMPA mission, September 7-

16, 2009

Reform Plan January 11-20,

2012

DeMPA Mission

July 20 – 31, 2009

Reform Plan June 27 – July 4, 2010

Liberia

Sierra Leone

National DeMPASeptember 15-25, 2008

2nd National DeMPA

March 26 - 30, 2012

Sub- National DeMPA

Lagos, Jan. 31-Feb. 8, 2011

Sub- National DeMPACross Rivers, Jan. 27– Feb

6, 2014

Sub- National DeMPAOndo, Feb.27-Mar.7, 2011

Sub- National DeMPAEdo, April 1-8, 2013

7

0

10

20

30

40

50

60

70

80

90

100

1.LegalFramework 2.ManagerialStructure:BorrowingandDebt-RelatedTransac ons

3.ManagerialStructure:LoanGuarantee

4.DebtManagementStrategy:QualityofContent

5.DebtManagementStrategy:Decision-MakingProcess

6.Evalua onofDebtManagementOpera ons

7.Audit:Frequency

8Audit:AppropriateResponse

Coordina onwithMacroeconomicPolicies

9.FiscalPolicy:ProvisionandQualityofDebt-ServiceForecasts

10.FiscalPolicy:AvailabilityandQualityofInforma ononKeyMacroVariablesandDSA

11.MonetaryPolicy:ClarityofSepara onbetweenDeMandMonetaryPolicyOpera ons

12.MonetaryPolicy:RegularityofInforma onSharing

33.MonetaryPolicy:LimitedAccesstoCentralBankFinancing

2.BorrowingandRelatedFinancingAc vi es

14.Domes cBorrowing:Market-BasedMechanismsandPrepara onofaBorrowingPlan

15.Domes cBorrowing:AvailabilityandQualityofDocumentedProcedures

16.ExternalBorrowing:BorrowingPlanandAssessmentofCostsandTerms

17.ExternalBorrowing:AvailabilityofDocumentedProcedures

18.ExternalBorrowing:InvolvementofLegalAdvisers19.LoanGuarantees:AvailabilityandQualityofDocumented

PoliciesandProcedures

20.On-lending:AvailabilityandQualityofDocumentedPoliciesandProcedures

21.Deriva ves:AvailabilityandQualityofDocumentedPoliciesandProcedures

CashFlowForecas ngandCashBalanceManagement

22.Effec veCashFlowForecas ng

23.Effec veCashBalanceManagement

Opera onalRiskManagement

24.DebtAdministra on:AvailabilityandQualityofDocumentedProceduresforDebtService

25.DebtAdministra on:AvailabilityandQualityofDocumentedProceduresforDataRecordingandStorage

26.DataSecurity:AvailabilityandQualityofDocumentedProceduresforDataRecordingandSystemandAccessControl

27.DataSecurity:FrequencyofBack-UpsandSecurityofStorage

28.Segrega onofDu es

29.StaffCapacityandHumanResourceManagement

30.Opera onalRiskManagement,BusinessCon nuity,andDisasterRecoveryPlans

DebtRecordsandRepor ng

31.DebtRecords:CompletenessandTimeliness

32.DebtRecords:RegistrySystem

33.CentralGovernmentDebtData:StatutoryandMandatoryRepor ngRequirements

34.PublicSectorDebtData:StatutoryandMandatoryRepor ngRequirements

35.DebtSta s calBulle n:QualityandTimeliness

WAIFEMmembercountriesaverageDeMPAresults

Overall Results in WAIFEM Countries

80 10 20 30 40 50 60 70 80 90 100

1.LegalFramework

2.ManagerialStructure:BorrowingandDebt-RelatedTransac ons





7.Audit:Frequency













18.ExternalBorrowing:InvolvementofLegalAdvisers

19.LoanGuarantees:AvailabilityandQualityofDocumentedPoliciesandProcedures




















WAIFEMmembercountriesaverageDeMPAresults

Common Issues across the member countries

• The accountability framework for debt management in terms of auditwould need to be strengthen. Most of the audit exercises concentratedonly on audits of the government’s financial statements and activities.There were no reviews of debt management operations, performance ofsystems and control procedures.

• Business continuity planning was found to be weak across most of thecountries. Disaster recovery process especially capacity to resume criticalbusiness operations after natural disaster was absent.

• There was lack of cost-effective cash management policies that wouldenable authorities to invest surplus balances (excess liquidity) or to be usedto buy back domestic debt through transactions such as entering intoreverse repurchase agreements or buyback of T-bills. In additioneffectiveness of cash flow forecasting of level of aggregate cash balances ingovernment bank accounts is generally weak.

Common Issues across the member countries

• None of the countries ever had a derivative transaction and there are nolaws guiding such transaction.

• There was lack of cost-effective cash management policies that wouldenable authorities to invest surplus balances (excess liquidity) or to be usedto buy back domestic debt through transactions such as entering intoreverse repurchase agreements or buyback of T-bills.

The Gambia as at 2014

12

0

10

20

30

40

50

60

70

80

90

100

1.Leg

alFram

ework

2.Ma

nager

ialStr

ucture

:Borr

owing

andD

ebt-R

elated

Transac

ons

3.Ma

nager

ialStr

ucture

:LoanGu

arante

e4.De

btMa

nagem

entS

trateg

y:Quality

ofCo

ntent

5.De

btMa

nagem

entS

trateg

y:Deci

sion-M

akingPr

ocess

6.Eva

luaon

ofDe

btMa

nagem

entO

pera

ons

7.Au

dit:Fr

eque

ncy

8Aud

it:Ap

propri

ateRe

sponse

Coord

inaon

with

Macro

econo

micP

olicie

s

9.Fis

calPo

licy:P

rovisio

nand

Qualit

yofD

ebt-S

ervice

Forec

asts

10.Fi

scalPo

licy:A

vailab

ilitya

ndQu

alityo

fInfor

maon

onKe

yMacr

oVari

ables

andD

SA

11.M

oneta

ryPo

licy:C

larity

ofSe

para

onbe

tweenD

eMan

dMon

etary

Policy

Opera

ons

12.M

oneta

ryPo

licy:R

egular

ityof

Infor

maon

Shari

ng

33.M

oneta

ryPo

licy:Li

mited

Acces

stoCe

ntralB

ankF

inanci

ng

2.Bo

rrowin

gand

Relat

edFin

ancin

gAcv

ies

14.D

omes

cBorr

owing

:Mark

et-Ba

sedM

echanism

sand

Prep

araon

ofaB

orrow

ingPlan

15.D

omes

cBorr

owing

:Avai

labilit

yand

Qualit

yofD

ocume

ntedP

roced

ures

16.Ex

ternalBorr

owing

:Borr

owing

Plana

ndAs

sessm

ento

fCost

sand

Term

s

17.Ex

ternalBorr

owing

:Avai

labilit

yofD

ocume

ntedP

roced

ures

18.Ex

ternalBorr

owing

:Involve

ment

ofLeg

alAdvi

sers

19.Lo

anGu

arante

es:Av

ailability

andQ

uality

ofDo

cumen

tedPo

licies

andP

roced

ures

20.O

n-len

ding:A

vailab

ilitya

ndQu

alityo

fDocu

mente

dPolicie

sand

Proce

dures

21.D

eriva

ves:A

vailab

ilitya

ndQu

alityo

fDocu

mente

dPolicie

sand

Proce

dures

Cash

FlowF

orecas

ngan

dCash

Balan

ceMa

nagem

ent

22.Ef

fecve

Cash

FlowF

orecas

ng

23.Ef

fecve

Cash

Balan

ceMa

nagem

ent

Opera

onalR

iskM

anage

ment

24.D

ebtA

dministr

aon

:Avai

labilit

yand

Qualit

yofD

ocume

ntedP

roced

uresfo

rDeb

tServ

ice

25.D

ebtA

dministr

aon

:Avai

labilit

yand

Qualit

yofD

ocume

ntedP

roced

uresfo

rData

Recor

dinga

ndSt

orage

27.D

ataSe

curity

:Freq

uency

ofBa

ck-Up

sand

Secur

ityof

Stora

ge

28.Se

grega

onof

Dues

29.St

affCa

pacitya

ndHu

manR

esourc

eManage

ment

30.O

pera

onalR

iskM

anage

ment,

Busin

essCo

nnu

ity,an

dDisa

sterR

ecover

yPlan

s

Debt

Recor

dsandR

epor

ng

31.D

ebtR

ecords

:Com

pleten

essan

dTim

eliness

32.D

ebtR

ecords

:Regi

stryS

ystem

33.C

entra

lGovern

ment

Debt

Data:

Statu

torya

ndM

andator

yRep

orngRe

quire

ments

34.P

ublic

Sector

Debt

Data:

Statu

torya

ndM

andator

yRep

orngRe

quire

ments

35.D

ebtS

tasc

alBulle

n:Qu

alitya

ndTim

eliness

TheGambia

Series1

Ghanaas at June 2012

13

0 20 40 60 80 100 120

1.LegalFramework

2.ManagerialStructure:BorrowingandDebt-RelatedTransac ons





7.Audit:Frequency













18.ExternalBorrowing:InvolvementofLegalAdvisers

19.LoanGuarantees:AvailabilityandQualityofDocumentedPoliciesandProcedures




















Ghana2013

Liberiaas at Sept 2009

14

0

10

20

30

40

50

60

70

80

90

100

1.Le

galFramew

ork

2.M

anagerialStru

cture:BorrowingandDe

bt-Related

Transac

ons

3.M

anagerialStru

cture:Lo

anGuarantee

4.Deb

tManagem

entS

trategy:Q

ualityo

fCon

tent

5.Deb

tManagem

entS

trategy:D

ecision

-MakingProcess

6.Evalua

onofD

ebtM

anagem

entO

pera

ons

7.Aud

it:Frequ

ency

8Aud

it:App

ropriateRespo

nse

Coordina

onwith

Macroecon

omicPo

licies

9.FiscalPolicy

:Provis

ionandQu

ality

ofD

ebt-S

ervic

eForecasts

10.Fisc

alPolicy

:Availabilitya

ndQualityo

fInforma

ononKe

yMacroVariablesand

DSA

11.M

onetaryP

olicy

:Clarityo

fSep

ara

onbetweenDe

Mand

Mon

etaryP

olicy

Ope

raon

s

12.M

onetaryP

olicy

:Regularity

ofInforma

onSh

aring

33.M

onetaryP

olicy

:Lim

itedAccessto

Cen

tralBankF

inancin

g

2.BorrowingandRe

latedFinancingAc

vies

14.D

omes

cBorrowing:M

arket-B

ased

Mechanism

sand

Prepara

onofa

BorrowingPlan

15.D

omes

cBorrowing:Availabilitya

ndQualityo

fDocum

entedProced

ures

16.ExternalBorrowing:BorrowingPlanand

Assessm

ento

fCostsand

Terms

17.ExternalBorrowing:Availabilityo

fDocum

entedProced

ures

18.ExternalBorrowing:Involve

men

tofLegalAdvise

rs

19.LoanGu

arantees:A

vailabilitya

ndQualityo

fDocum

entedPo

liciesa

ndProcedu

res

20.O

n-lend

ing:Availabilitya

ndQualityo

fDocum

entedPo

liciesa

ndProcedu

res

21.D

eriva

ves:Av

ailabilitya

ndQualityo

fDocum

entedPo

liciesa

ndProcedu

res

CashFlowForecas

ngand

CashBa

lanceManagem

ent

22.Effe

cveCashFlow

Forecasng

23.Effe

cveCashBa

lanceManagem

ent

Opera

onalRisk

Managem

ent

24.D

ebtA

dministra

on:A

vailabilitya

ndQualityo

fDocum

entedProced

uresfo

rDeb

tServic

e

25.D

ebtA

dministra

on:A

vailabilitya

ndQualityo

fDocum

entedProced

uresfo

rDataRe

cordingandStorage

27.D

ataSecurity:Frequ

encyofB

ack-Up

sand

Securityo

fStorage

28.Segrega

onofD

ues

29.StaffCa

pacitya

ndHum

anResou

rceManagem

ent

30.O

pera

onalRisk

Managem

ent,Bu

sinessC

onnu

ity,and

Disa

sterRecoveryP

lans

DebtRecordsand

Rep

orng

31.D

ebtR

ecords:C

ompleten

essa

ndTim

eliness

32.D

ebtR

ecords:R

egistrySy

stem

33.C

entra

lGovernm

entD

ebtD

ata:St

atutorya

ndM

andatoryRep

orngReq

uiremen

ts

34.Pu

blicSectorDeb

tData:St

atutorya

ndM

andatoryRep

orngReq

uiremen

ts

35.D

ebtS

tascalBulle

n:Qualitya

ndTim

eliness

Liberia2009

15

Sierra Leoneas at July 2009

0

20

40

60

80

100

120

1.Le

galFramew

ork

2.M

anagerialSt

ructure:Borrowinga

ndDeb

t-Related

Transac

ons

3.M

anagerialStru

cture:Lo

anGuarantee

4.Deb

tManagem

entS

trategy:Q

ualityo

fCon

tent

5.Deb

tManagem

entS

trategy:D

ecision

-MakingP

rocess

6.Evalua

onofD

ebtM

anagem

entO

pera

ons

7.Aud

it:Fr

eque

ncy

8Aud

it:App

ropriat

eRe

spon

se

Coordina

onwith

Macroecon

omicPo

licies

9.FiscalPolicy

:Provis

ionandQu

ality

ofD

ebt-S

ervic

eForecasts

10.Fisc

alPo

licy:Availabilitya

ndQualityo

fInforma

ononKe

yMacroVariab

lesa

ndDSA

11.M

onetaryP

olicy

:Clarityo

fSep

ara

onbetweenDe

Mand

Mon

etaryP

olicy

Ope

raon

s

12.M

onetaryP

olicy

:Regularity

ofInforma

onSh

aring

33.M

onetaryP

olicy

:Lim

itedAccessto

Cen

tralBankF

inancin

g

2.Borrowinga

ndRelated

FinancingA

cvi

es

14.D

omes

cBorrowing:M

arket-B

ased

Mechanism

sand

Prepara

onofaBorrowingP

lan

15.D

omes

cBorrowing:Availabilitya

ndQualityo

fDocum

entedProced

ures

16.ExternalBorrowing:BorrowingP

lanandAssessmen

tofC

ostsan

dTerm

s

17.ExternalBorrowing:Availabilityo

fDocum

entedProced

ures

18.ExternalBorrowing:Involve

men

tofLegalAdvise

rs

19.LoanGu

arantees:A

vailabilitya

ndQualityo

fDocum

entedPo

liciesa

ndProcedu

res

20.O

n-lend

ing:Availabilitya

ndQualityo

fDocum

entedPo

liciesa

ndProcedu

res

21.D

eriva

ves:Av

ailab

ilitya

ndQualityo

fDocum

entedPo

liciesa

ndProcedu

res

CashFlow

Forecasngan

dCashBalanceM

anagem

ent

22.Effe

cveCashFlo

wFo

recasng

23.Effe

cveCashBa

lanceManagem

ent

Opera

onalRisk

Managem

ent

24.D

ebtA

dministra

on:A

vailabilitya

ndQualityo

fDocum

entedProced

uresfo

rDeb

tServic

e

25.D

ebtA

dministra

on:A

vailabilitya

ndQualityo

fDocum

entedProced

uresfo

rDataR

ecordingan

dStorage

27.D

ataS

ecurity

:Frequ

encyofB

ack-Up

sand

Securityo

fStorage

28.Segrega

onofD

ues

29.StaffCa

pacitya

ndHum

anResou

rceManagem

ent

30.O

pera

onalRiskM

anagem

ent,Bu

sinessC

onnu

ity,and

Disa

sterRecoveryP

lans

DebtRecordsan

dRe

porng

31.D

ebtR

ecords:C

ompleten

essa

ndTim

eliness

32.D

ebtR

ecords:R

egistrySy

stem

33.C

entra

lGovernm

entD

ebtD

ata:St

atutorya

ndM

andatoryRep

orngReq

uiremen

ts

34.P

ublicSe

ctorDeb

tData:St

atutorya

ndM

andatoryRep

orngReq

uiremen

ts

35.D

ebtS

tascalBulle

n:Qualitya

ndTim

eliness

SierraLeeone2009

Nigeria

16

0

10

20

30

40

50

60

70

80

90

100

1.LegalFramew

ork

2.ManagerialSt

ructu

re:B

orrowingan

dDeb

t-Rela

tedT

ransac

ons

3.ManagerialSt

ructu

re:LoanG

uarantee

4.De

btM

anagem

entS

trategy:Q

ualityo

fCon

tent

5.De

btM

anagem

entS

trategy:D

ecision

-Making

Process

6.Evalu

aon

ofDeb

tManagem

entO

pera

ons

7.Au

dit:Frequ

ency

8Aud

it:App

ropriat

eRespo

nse

Coordin

aon

with

Macroecon

omicPo

licies

9.Fis

calPolicy:P

rovis

ionan

dQualityo

fDeb

t-Servic

eForecasts

10.Fisc

alPo

licy:Av

ailabilit

yand

Qualityo

fInforma

onon

KeyM

acroVariab

lesan

dDSA

11.M

onetaryP

olicy:C

larity

ofSe

para

onbe

tweenD

eMan

dMon

etaryP

olicyOpe

raon

s

12.M

onetaryP

olicy:R

egula

rityo

fInforma

onSh

aring

33.M

onetaryP

olicy:Lim

itedA

ccesstoC

entra

lBankF

inancing

2.Bo

rrowingan

dRela

tedF

inancing

Acvi

es

14.D

omes

cBorrowing:M

arket-B

ased

Mechanis

msa

ndPr

epara

onof

aBo

rrowingPlan

15.D

omes

cBorrowing:A

vailability

andQ

ualityo

fDocum

entedP

rocedu

res

16.Exte

rnalBo

rrowing:B

orrowingPlanan

dAssessm

ento

fCostsandT

erms

17.Exte

rnalBo

rrowing:A

vailability

ofDocum

entedP

rocedu

res

18.ExternalBorrowing:In

volve

men

tofLegalAd

visers

19.LoanG

uarantees:Av

ailabilit

yand

Qualityo

fDocum

entedP

olicie

sand

Proced

ures

20.O

n-len

ding:Av

ailabilit

yand

Qualityo

fDocum

entedP

olicie

sand

Proced

ures

21.D

eriva

ves:Av

ailabilit

yand

Qualityo

fDocum

entedP

olicie

sand

Proced

ures

CashFlow

Forecasngan

dCashB

alanceM

anagem

ent

22.Effe

cveCa

shFlow

Forecasng

23.Effe

cveCa

shBala

nceM

anagem

ent

Opera

onalRiskM

anagem

ent

24.D

ebtA

dministr

aon

:Availability

andQ

ualityo

fDocum

entedP

rocedu

resforDeb

tServic

e

25.D

ebtA

dministr

aon

:Availability

andQ

ualityo

fDocum

entedP

rocedu

resforDataR

ecordin

gand

Storage

27.D

ataS

ecurity

:Frequ

encyof

Back-U

psan

dSecurity

ofSt

orage

28.Segrega

onof

Du

es

29.StaffCa

pacitya

ndHum

anResou

rceM

anagem

ent

30.O

pera

onalRiskM

anagem

ent,Bu

sinessC

onnu

ity,and

Disa

sterR

ecoveryP

lans

DebtRecordsan

dRep

orng

31.D

ebtR

ecords:C

omple

tene

ssan

dTim

eline

ss

32.D

ebtR

ecords:R

egistrySy

stem

33.C

entra

lGovernm

entD

ebtD

ata:Statutorya

ndM

andatoryRe

porngRe

quire

men

ts

34.P

ublicSe

ctorD

ebtD

ata:Statutorya

ndM

andatoryRep

orngReq

uirem

ents

35.D

ebtS

tascalBulle

n:Qualitya

ndTimeline

ss

Nigeria2013

Sub-national DeMPA in Nigeria

36 States and Federal CapitalTerritory, and 774 localgovernments.

Central government controlsthe sub-national externalborrowings (not allowed toborrow directly

States can borrow fromdomestic Capital Market,commercial banks

centre controls the bulk ofthe states autonomy inspending.

18

Generally weak legal framework on authorization to undertake other debt management activities especially issue loan guarantees, and on external audit .

Fragile managerial structure for SNG borrowings and debt-related transactions .

No debt management strategy.

No annual borrowing plan for the aggregate borrowing requirement, No, detail assessment cost/risk of borrowings and options before borrowing is undertaken.

No documented procedures for the processing of debt-related and other payments and receivables

Very weak debt data administration and data security

Absence of capacity and business continuity

Low quality cash flow forecasting and absence of cash balance management

Sub-national DeMPA in Nigeria

19

Noticeable impact of DeMPA in the region

20


Review of legal framework for debt management particularly lawsespecially in Sierra Leone and Gambia – Ghana and Liberia is currently inprogress;

Development of DeMPA tracking grid in some countries;

Regular reporting (statistical bulletin and websites);

Review of managerial structure in most countries;

Regular conduct of debt sustainability analysis (DSA) in all the countries

Production of debt strategy document although implementation of thestrategy is weak

21


Debt data administration and data security –all the member states acquired andUse state of the art debt recoding and management system for recoding and managing both domestic and external debt data and other debt related transactions

Multidisciplinary loan negotiation teams are visible in all our countries especially inclusion of qualified lawyers at the very beginning.

22

End of Presentation

Thank You

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