World Bank Trains on Public Debt Management Best Practices

The World Bank and the International Monetary Fund have armed stakeholders in public debt management in Cameroon with management strategies that are consistent with the budget and ensure that the quality of the debt report in terms of risk descriptions is much higher and credible.

A 10-day capacity building workshop on the Medium-term Debt Management Strategy, MTDMS ended in Yaounde last Thursday September 20. The IMF/World Bank tool was developed in partnership with the World Bank's Treasury Department and is driven by country demand and generally implemented through a baseline and follow-up missions. It also entails a wide range of training activities and provides a framework for formulating and implementing a debt management strategy for the medium term. It focuses on determining the appropriate composition of the debt portfolio, taking into account macroeconomic indicators and market environment.

According to Tihomir Stucka, economist, Economic Policy and Debt Department at the World Bank who was one of the facilitators of the Yaounde confab, MTDS is useful for illustrating government's cost and risk tradeoffs associated with different debt management strategies. The tool is also helpful in managing the risk exposure embedded in a debt portfolio, notably the potential variation in debt servicing costs and its budgetary impact. "The main objective was to empower the local technical staff to do an appropriate analysis and develop their own management strategy. We had intensive sessions on conceptual issues and also on hand-on-exercises. Taking these issues and the training together, the capacities of the staff in Autonomous Sinking Fund of Cameroon, CAA, the treasury and the Ministry of the Economy, Planning and Regional Development, have been raised and they are armed to develop a good debt management strategy," he told Cameroon Tribune.

To the Director General of CAA, Dieudonné Evou Mekou, the workshop helped them to subsequently improve debt management. "You know we are coming out of a heavily-indebted period; reason why Cameroon was admitted into the Heavily-indebted Poor Countries Initiative. Now that we have already cleared a good part of our debts, it is necessary to be cautious how we indebt ourselves. The 10-day workshop graciously served us by the World Bank and the International Monetary Fund would help us to escape some of the traps that could get us into heavy indebtedness," he said. Information from CAA indicates that Cameroon's entire debt as at December 31, 2011 stood at FCFA 2,015 billion.