Development Finance International

The legal and institutional framework is an important element of debt management. In particular an efficient institutional structure should have:

• Clear institutional and departmental responsibilities that are defined in law covering all executive, management and technical functions,
• Comprehensive provisions (including regulations) for the supply and flow of information and data,
• Comprehensive provisions (including regulations) requiring the evaluation and audit of debt management units,
• Clear co-ordinating mechanisms at political and technical levels
• Legislation and implementation circulars defining the parameters for debt contraction, guarantees and servicing

While experience across many countries indicates there is no superior framework, DFI has compiled information on best practices for legal framework, institutional arrangements and co-ordination structures.

To assist countries evaluate the quality of their legal and institutional arrangements, DFI in collaboration with its regional partners has developed an assessment methodology. Under the HIPC Capacity Building Programme, DFI has had extensive experience of assisting countries strengthen their legal and institutional capacities, as discussed in CBP Shows Improved HIPC Debt Management Capacity Since 2002 and Assessing HIPC Capacity: CBP and IDA Compared.

The World Bank has recently developed a Debt Management Performance Assessment Tool (DEMPA) .

Latest work DFI carried out in this area:

July-September – Final Aid & Auditing Mission in Guinea

Two DFI experts have conducted their final two missions in Guinea in keeping with the national capacity building programme in aid management, and audit and control. After launching a training programme for Ministry of Finance executives and public investment experts, the consultants are now finalising a national manual of procedures for the management and control of public investment projects.

25 July - 5 August – Southern Sudan Debt Policy and Capacity Building Mission

DFI was funded by the Joint Donor Capacity Building Trust Fund for Southern Sudan to help the Government of the newly-independent Republic of Southern Sudan to examine policy options for post-independence development financing – especially borrowing on concessional terms – and the institutional and capacity-building measures required to establish a debt management unit well coordinated with wider economic policymaking. To read more on Southern Sudan’s debt, click here.

June-August – Institutional Missions in the Franc Zone

In the context of the BCEAO/BEAC/BCC Capacity Building Programme under the HIPC CBP, five institutional missions were held in Senegal (30 May – 3 June), in Togo (6-10 June), in Burkina Faso (13-17 June), in Central African Republic (27 July – 1 August) and in Comoros (15-19 August). These missions focus on helping countries to introduce debt management procedures manuals adapting international best practices to national needs. Two other similar missions will be held soon in Chad and Congo.

11-22 July Tajikistan Debt Management Reform Plan

A joint Development Finance International and World Bank mission visited Dushanbe to conduct a Reform Plan mission in July. The mission met the various officials involved in debt management and with their input prepared a reform plan that contains short and medium-term recommendations, capacity building needs and their costings. The draft report was finalized and has been sent for peer review.

1-10 June – DeMPA Mission to Afghanistan

A joint Development Finance International and World Bank mission visited Kabul to conduct a Debt Management Performance Assessment (DeMPA) during June. The mission met with officials from the various agencies responsible for debt management and reviewed the way the various functions are performed to see whether they are in line with international standards. As required by the methodology, each dimension of the indicators was scored between A and D. A draft report was prepared during the mission and is being peer reviewed.

16-26 May – DeMPA Mission to São Tomé and Príncipe

DFI participated in a joint mission with the World Bank to Sao Tome and Principe. The mission met with officials from the Central Bank, Ministry of Foreign Affairs and the Ministry of Finance as well as commercial banks operating in the country. The main objective of the mission was to evaluate the existing debt management capacity in the country within the framework of the Debt Management Performance Assessment (DeMPA). At the end of the stay, the mission presented the national authorities with a preliminary assessment.

14-24 April - DFI mission to Tajikistan

DFI participated in a joint mission to Tajikistan. Other partners that took part in the mission included the World Bank and UNCTAD. The mission met with officials from the Central Bank and the Ministry of Finance as well as commercial banks operating in the country. The main objective of the mission was to evaluate the existing debt management capacity in the country within the framework of the Debt Management Performance Assessment (DeMPA). At the end of the stay, the mission presented the national authorities with a preliminary assessment.

28 February – 4 March – Latin America Regional DeMPA Workshop

DFI participated as a resource person in the World Bank Debt Management Facility regional workshop on the Debt Management Performance Assessment tool, held jointly with the Centro de Estudios Monetarios Latino-Americanos in Mexico City. 31 participants from 14 countries participated in the workshop and DFI assisted Haiti to complete their own self-assessment and comment on the DeMPA tools. DFI has been asked to write an article about the workshop for the next DMF newsletter.

30 Jan – 3 February – DFI Assists Sudan Government to Plan Debt Relief and Capacity Building

DFI was funded by the Swiss Ministry for Economic Affairs to conduct this mission to Khartoum to assist the government with technical inputs for planning potential debt relief under the HIPC process, depending on various decisions relating to the treatment of debt in the discussions on secession by Southern Sudan. It also assisted the government to plan a 4-year programme for capacity-building to maximize its debt relief and ensure its debt remains sustainable after relief.

24 May-1 June - Haiti Institutional Mission

This second CIDA-financed mission organised by CEMLA reviewed the institutional framework for public debt management and produced a first draft law for Public Debt Management.