The Gambia: Finance Ministry forms debt management advisory committee

The Ministry of Finance and Economic Affairs in The Gambia recently launched a Debt Management Advisory Committee (DMAC) tasked with regulating the government’s financing and payment needs at the lowest cost.

The committee’s functions include advising the Finance Ministry on an annual borrowing plan. It is also billed to monitor the implementation of the debt strategy and annual borrowing, while discussing progress on the development of the domestic debt market, risk arising from contingent liabilities and guarantees, as well as any new instruments of debt.

Abdoulie Jallow, permanent secretary at the Ministry of Finance, while launching the committee, acknowledged that the government recognises the challenges posed by the global financial environment and its related risks to the performance of the Gambian economy.

The country’s recent domestic debt challenges, he said, are characterised by high interest cost and high rollover risks, whilst external debt has lower cost and risk largely due to its concessionality.

“Allow me to appraise you on the mandate of the debt management directorate. Amongst others, the directorate is responsible for advice and analysis on matters relating to debt management policy, the status of the debt portfolio, recording and reporting of debt data, debt service forecast and payment, development of MTDS and annual borrowing plan,” Mr Jallow stated.

Given the nature of its operations, Mr Jallow added, it will continue to work closely with the ministry’s Treasury directorate, Central Bank of The Gambia, the Gambia Revenue Authority and other related institutions in order to improve the overall management.

Mr Jallow pointed out that significant progress has been made in the area of debt management, among which included the regular publication of the debt bulletin, the development of debt sustainability analysis and medium-term debt strategy and the integration of the domestic debt and external data into a single database.

Mod Ceesay, another permanent secretary at Finance Ministry hailed the launching, announcing that the advisory committee comprises individuals who are worthy and capable of rendering such a huge responsibility. “The Ministry, therefore, is counting on your expertise to deliver on this task,” he added.

In order to have greater economic management, growth and stability, he opined, the committee needed coordinate first the fiscal and monetary policy, while reminding them of their responsibility to provide independent advisory guidance to the management on policy, strategy and policy matters.

“It’s a performance benchmark required under the debt management performance assessment tool of the World Bank, where countries are assessed and ranked on how best practice and policy instruments are put in place to ensure that debts are effectively managed,” he further pointed out.

Ebrima Darboe, director of Loans and Debt Management, indicated that the goal of setting up such a committee is to give management technical advice that will help steer the economy on a continuous basis in a stable manner, and therein derive stability in debt profile.

“As you may all know; we contract loans and debt from international, and domestic sources. These loans and debt are indispensible instruments for economic growth, and development in our country.”

“Therefore, the creation of Debt Management Advisory Committee is an exceptional creativity in addressing public sector financial management issues,” he stated.

Mr Darboe hinted on issues the committee will be deliberating on such as debt capacity, and also spoke of standard measurements for debt ratios that are used in comparing debt ratios to debt sustainability thresholds, and statement of economic conditions.

He said: “Accordingly, the aim of managing collective public sector indebtness will enable us to structure a more ambitious and dynamic investment program such as the Programme for Accelerated Growth and Employment (PAGE), and its successor programmes.”

Lamin Camara, deputy permanent secretary for International Cooperation at the Ministry of Finance, said the public debt objectives of The Gambia are to ensure that government’s financing needs and its obligations are met at the lowest possible cost over the medium to long terms, with a prudent degree of risk, while promoting the development of the domestic debt market.

Public debt management, he stated, seeks to ensure that the public sector can service its debt, while minimising cost in the long run. He maintained that this, on the other hand, minimises the cost to the economy of crises resulting from imprudent debt management.

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