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Improving public debt management

Many Governments seek to further strengthen their capacity to appropriately manage public debt and ensure borrowing in the interest of maintaining sustainable debt levels. The Monterrey Consensus recognized that technical assistance for external debt management and debt tracking can play an important role and should be strengthened, and the Addis Agenda encouraged continuation of such efforts. Effective debt management remains an intrinsic part of sound public financial management and overall good governance.

In the Addis Agenda, Governments :

  • Welcome efforts to strengthen analytical tools for … prudent public debt management
  • Encourage international institutions to continue to provide assistance to debtor countries to enhance debt management capacity, manage risks, and analyse trade-offs between different sources of financing, as well as to help to cushion against external shocks and ensure steady and stable access to public financing 
Latest developments

Developing countries have, in most cases, been making progress with strengthening public debt management. The results from 39 countries that have more than one debt management performance assessment (DeMPA) evaluation over the period 2008-2018 reveal improvements for 11 out of 14 dimensions, however, gaps in debt management remain. However, gaps in debt management remain. Of particular concern is the fact that debt management capacity may not be keeping up with the increasing complexity of debt instruments where it is most needed (i.e., frontier markets). A related concern is that debt management might not always be sufficiently long-term focused. Other areas of concern include suboptimal borrowing frameworks; insufficient audits; lack of operational risk management; poor cash flow forecasting and management; insufficient staff capacity in debt management offices; partial debt coverage; and limited reports. Indeed, developments in 2019 underlined the continued need to enhance downstream debt management capacity (debt data recording and validation, debt operations, and debt reporting and statistics) as part of international efforts to address ongoing problems with debt data transparency. 

Change in DeMPA results
(Percentage of the number of countries meeting minimum requirement)
Source: World Bank’s DeMPA results as of end-December 2018. The sample includes 39 DMF-eligible countries.
 Policy Briefs/Notes