PROGRAMS AND TOOLS FOR DEBT PRACTIONERS

DEBT MANAGEMENT RESOURCES

The Debt Management Performance Assessment (DeMPA) is a tool that helps identify strengths and weaknesses in an individual country's public debt management policies, practices, and capacity.

The Medium-Term Debt Management Strategy (MTDS) provides a framework for formulating and implementing a debt management strategy for the medium term (approximately 3 to 5 years). It is primarily focused on determining the appropriate composition of the debt portfolio, taking into account macroeconomic indicators and the market environment.

A Debt Management Reform Plan lays out a detailed, country-owned, capacity-building plan for policy and institutional reform, based on a comprehensive analysis of public debt management operations.


Debt Management Performance Assessments

The World Bank has developed a program, in collaboration with other partners, to assist developing countries in improving debt management. The objective of the program is to help strengthen capacity and institutions in developing countries so that they can manage government debt in an effective and sustainable manner in the medium to long term. 

A cornerstone of the program is the debt management performance assessment (DeMPA) tool, a methodology for assessing performance through a comprehensive set of performance indicators spanning the full range of government DeM functions. The DeMPA highlights strengths and weaknesses in government DeM practices in each country. Performance assessment facilitates the design of plans to build and augment capacity and institutions in ways tailored to country-specific needs. The DeMPA also facilitates the monitoring of progress over time in achieving government debt management objectives in a manner consistent with international sound practice.  Learn more about the DeMPA tool (2015)

Subnational DeMPA Tool and Guide

The Subnational DeMPA Tool have been developed given the increased trend towards decentralization and access to markets among subnational governments to meet infrastructure needs.
The objective of the sub‐national DeMPA tool is to strengthen subnational debt management through the application of aperformance assessment framework, as is done for the sovereign DeMPA.


Debt Management Practitioners Program

Under the Debt Management Practitioners Program (DMPP), government officials from debt management offices in DMF-eligible countries are invited to join the Macroeconomics and Fiscal Management (MFM GP) of the World Bank for a three-month period. Selected candidates participate directly in program work, including missions and training.

The objective of the program is to facilitate the sharing of knowledge and experience while exposing the debt managers to cross-countries practices.


Medium-Term Debt Management Strategies

The Medium-Term Debt Management Strategy (MTDS) provides a framework for formulating and implementing a debt management strategy for the medium term (approximately 3 to 5 years). It is primarily focused on determining the appropriate composition of the debt portfolio, taking into account macroeconomic indicators and the market environment.

MTDS Resources

The MTDS toolkit includes: A Guidance Note which describes the process of designing and implementing a debt management strategy in a low-income country context; An Analytical Tool which can be used for the cost-risk analysis; and, a draft User Guide which complements the Analytical Tool. Download the (Draft) Analytical Tool.

Guidance Note


Debt Management Reform Plans

A Debt Management Reform Plan lays out a detailed, sequenced, country-owned, capacity-building project plan that is based on a comprehensive analysis of public debt management institutions and operations. The goal of this process is to address the weaknesses identified and analyzed by debt management performance assessments. The plan details expected outputs and outcomes, actions, sequencing and milestones. It also provides an estimate of budget and resources required to implement the plan.

Technical assistance in formulating Debt Management Reform Plans is driven by country demand. If financed under the Debt Managment Facility (DMF), World Bank experts work with the DMF's implementing partners. Training on Debt Management Reform Plan missions is generally provided in the context of workshops on Debt Management Performance Assessments (DeMPAs).

Although Debt Management Reform Plans are country-specific and vary considerably depending on the prevailing circumstances of the country, guidelines have been developed that aim to foster a consistent approach and set of process steps for working with client countries.

As laid out in a World Bank guidance note, a Debt Management Reform Plan should:

• Identify a specific timeframe for achieving steps toward effective debt management. While improvement of debt management capacity may be gradual, the period of the plan should ideally not exceed the medium term of 3-5 years, in order to maintain momentum and focus. Reform actions should be recommended sequentially, from 3 months to the date of the end-point chosen in consultation with the authorities.

• Identify key constraints in government debt management institutions, functions and operations, informed by a recent and comprehensive assessment. The scope of the Reform Plan can cover all government debt management activities, loan guarantees, lending, and cash balance management, or can be limited to focus on country specific priorities as discussed and agreed to with the authorities.

• Include a prioritized and sequenced action plan to address areas requiring improvement. The plan should be project-related and contain details on the expected outputs and outcomes, actions, sequencing and milestones. It also provides an estimate of the resources, budget and time required to implement the plan.

• Propose a country-specific approach that reflects the willingness of the authorities to undertake institutional and structural reforms, and realistically set the pace at which they can be implemented. Government officials will be accountable for implementing the plan, so it is imperative that it is practical and tailored to their circumstances. It is thus essential that they participate fully and actively in the drafting of the plan.


Debt Sustainability Analysis

The Debt Sustainability Analysis is a tool that is used as part of a framework developed by the World Bank and the International Monetary Fund to help guide countries and donors in mobilizing critical financing for low-income countries, while reducing the chances of an excessive build-up of debt.

The Debt Sustainability Framework (DSF), developed in 2005, is designed to guide the borrowing decisions of low-income countries in a way that matches their financing needs with their current and prospective ability to repay debt. It also allows creditors to tailor their financing terms in anticipation of future risks.

A key part of the framework is Debt Sustainability Analysis (DSA), a structured examination of a country's debt that debt experts from the IMF and World Bank conduct regularly in low-income and middle-income countries. Some of the focal points of these analyses are:

  • an analysis of a country’s projected debt burden over the next 20 years and its vulnerability to external and policy shocks;
  • an assessment of the risk of external debt distress in that time, based on indicative debt burden thresholds that depend on the quality of the country’s policies and institutions; and
  • recommendations for a borrowing (and lending) strategy that limits the risk of debt distress.