By Amie Sanneh
A regional training on Debt Management Performance Assessment Tool (DeMPA) opens yesterday at a local hotel in Kololi.
Jointly organised by the West African Institute for Financial and Economic Management (WAIFEM) and the World Bank, the training brought together participants from WAIFEM member states such as Nigeria, Sierra Leone, Ghana, Liberia and the Gambia.
Delivering the keynote address on behalf of the Central Bank of the Gambia (CBG), Ousman Sowe, Senior Adviser to the Governor, said the Gambia’s domestic debt to GDP is estimated at 67.9 percent of GDP in 2016 up from 53.9 percent in 2015 reflecting high domestic debt accumulation.
He said preliminary figures show that external debt to GDP ratios in 2016 stood at 50.9 percent compared with the established threshold 30 percent for countries with weak CPIA.
He explains that the macroeconomic management cluster of the latest Country Policy and Institutional Assessment (CPIA) 2015 known as the International Development Association Resource Allocation Index, in the fiscal policy and debt policy rating, no West African country posted more than 4.5 out of 6. “WAIFEM member countries as at 2015, The Gambia scored 2.0 and 2.5 for fiscal policy and debt policy respectively. The corresponding figures were 3.0 and 3.0, while the indices for Liberia were 3.5 and 3.5 respectively. In the case of Nigeria, the ratings were 3.5 for fiscal policy and 4.5 for debt policy while the corresponding figures for Sierra Leone were 3.0 and 3.5 out of 6,” he said. In the Gambia, Sowe said they are still faced with impact of exogenous shocks. Economic growth in 2016 is estimated at 2.2 percent, down from 4.3 percent in 2015, he said. He also recalled last year, they have had weak agricultural output, foreign exchange challenges and the effect of the political impasse on tourism.
He recalled that in the past two decades, while progress has been made in addressing debt to sustainability levels in many low and lower middle income countries, improvements have also been made in strengthening their debt management competences. “As a result, debt management practices in most sub-Saharan African countries today are a far cry from what they were before 1996,” he said. Sowe noted that despite this progress, challenges remain to be dealt with to ensure sustained effective debt management practices especially in West Africa.
He assured that the new government has already put in place adequate measures to enable the country to be on top of the challenges.
The Director General of WAIFEM, Baba Y Musa, Director, Debt Management Department, WAIFEM, said the training course aims to provide in-depth training in the methodology and operational modalities of the tool, rationale, scope, coverage and application of the DeMPA tool and preparation of reform plans. He recalled that since 2007, the World Bank introduced The Government Debt Management Performance Assessment (DeMPA) Tool as part of the armory for effective debt management performance. The tool, he said, provides mechanism for assessing debt management performance in developing countries at national and sub-national level of government. “The DeMPA is useful in conducting country dialogue, guiding the design of debt management reform programmes, enhancing donor harmonization and monitoring performance over time,” he said.
The course which is expected to end on May 12th 2017, will help participants acquire a strong understanding of how to apply the DeMPA tool in assessing their country’s debt management performance and will also apply the theory to specific country case studies.