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Abstract:
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In post-HIPIC countries improved debt management capacity is one ingredient of a policy framework to ensure that in future debt remains sustainable. This case study has been developed to provide policy makers and officials with a tool to assist them improve their understanding of the issues involved in sovereign debt and cash management and domestic debt market development. The case study format permits a focus on practical issues in a real- life context. Studying the situation of other countries may cast light on issues relevant to policy makers and officials in their own countries. The case study covers debt management, cash management and developing the domestic debt market in order to allow policy makers and officials to better understand the inter-relationships between these areas and the need for coordination of the Government’s activity. Due to the short maturities issued by Malawi, a situation common to many countries in the region, the discussion of debt market development is more accurately termed money market development. While the case study tries to be comprehensive in its approach, the discussion is broken into separate modules to allow readers to more easily identify particular issues that are of most interest to them. The discussion of debt management is built around the structure of a debt management operation – the Front, Middle and Back Offices. The responsibilities of each of these units are discussed and, for each responsibility, the discussion follows the format: what is sound practice?; what is the current situation?; how relevant is sound practice to Malawi?; what are the gaps between sound practice and the current situation?; action plan. This same format is followed in the discussions of developing cash management and developing the domestic debt market. |