Southern Africa Officials Participate in IMF-World Bank Debt Sustainability Regional Seminar for Low-Income Countries
The seminar brought together government officials from Lesotho, Madagascar, Mozambique, Swaziland, Zambia and Zimbabwe. It focused on the main principles of debt sustainability and the link to the IMF’s Debt Limit Policy and the Bank’s Non-Concessional Borrowing Policy. IMF and Bank experts presented and discussed with seminar participants the IMF-World Bank Debt Sustainability Framework (DSF) for Low-Income Countries (LICs). The DSF is a standardized framework for conducting public and external debt sustainability analysis in LICs. It aims to help guide the borrowing decisions of LICs, provide guidance for creditors’ lending and grant allocation decisions, and improve IMF and World Bank assessments and policy advice.
The hands-on approach focused on how to develop baseline stress-test scenarios by using the DSF and how to interpret the results from the debt sustainability analysis. Specific attention was given to practical application of the framework by engaging participants to use the analytical tool and interpret results. Participants discussed the importance of the individual country context and macroeconomic and technical challenges they face in using the DSF as a tool for guiding their countries’ borrowing decisions.
Based on the IMF’s World Economic Outlook (WEO) projections of April 2016, the general government’s gross debt, for most of these countries, is projected to increase over the medium term. In this context, the regional seminar was very timely in addressing the upgrade and sharing of technical skills to analyze African countries’ debt dynamics.
AFRITAC South will continue to provide technical assistance and hands on training, facilitating specialized peer-learning for macro-fiscal medium-term frameworks and debt sustainability analysis.