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Finance Ministry Launches Debt Management Advisory Committee

June 3, 2014

Bekai Njie

In a bid to tackle debt challenges in the country, the Ministry of Finance and Economic Affairs, last Thursday launched a Debt Management Advisory Committee (DMAC), aimed at regulating government's financing and payment obligation needs at the lowest cost.

The committee among its functions include advising the Finance Ministry on annual borrowing plan, monitoring the implementation of the debt strategy and annual borrowing, while discussing progress on the development of domestic debt market, risk arising from contingent liabilities, as well as any new instruments of debt.

Launching the committee, Abdoulie Jallow, permanent secretary at the Ministry of Finance, acknowledged that the government has recognised the challenges posed by the global financial environment and its related risks to the performance of the country's economy.

The Gambia's recent domestic debt challenges, he said, is characterised by high interest rates 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," he stated.

Given the nature of its operations, PS Jallow said, his office would continue to work closely with the Treasury, Central Bank of The Gambia, the Gambia Revenue Authority and other related institutions, in order to improve the overall management.

He pointed further that significant progress has been made in the area of debt management, including 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, PS No2 at the Finance Ministry hailed the committee, saying it 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 that the committee needs to first coordinate the fiscal and monetary policy. He then reminded 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 as how best practice and policy instruments are put in place to ensure that debts are effectively managed," he further pointed out.

For his part, Ebrima Darboe, director of Loans and Debt Management indicated that the goal for setting up such a committee is to inform management with technical advice that it 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 indispensable 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.

He hinted on issues the committee will be deliberating on. These, he said, include debt capacity, which he said, are standard measurement for debt ratios that are used in comparing debt ratios to debt sustainability thresholds, and statement of economic conditions.

Darboe added that "accordingly, the aim of managing collective public sector indebtness will enable us to structure a more ambitious and dynamic investment programmes, such as the likes of Programme for Accelerated Growth and Employment (PAGE), and its successor programmes."

Lamin Camara, the 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 financial 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 domestic debt market.

Public debt management, he stated, seeks to ensure that 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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Source: AllAfrica

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