Government Debt Management Performance Assessment

(DeMPA)

An Introduction to DeMPA

Lars Jessen, World Bank Treasury

Asian Regional Public Debt Management

Summit,
Kuala Lumpur, 3-5 November 2009
Structure of Presentation
1. DeMPA: The big Picture
2. Objectives and features
3. Coverage and process of
implementation
4. Preliminary results

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DeMPA and the big picture
 What is DeMPA?

• DeMPA = Debt Management Performance

Assessement
• DeMPA is a methodology for assessing public
debt management performance through a
comprehensive set of performance indicators
spanning the full range of government debt
management (DeM) functions

– It is firmly grounded in the Public Expenditure and

Financial Accountability (PEFA) methodology and offers a
“drill down” on debt management

• It may be applied in all developing countries

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 What is DeMPA ?
Performance Assessment tool with following attributes:
 Governance and Strategy Development
DPI-1 Legal Framework
DPI-2 Managerial Structure
DPI-3 Debt Management Strategy
DPI-4 Evaluation of Debt Management Operations
DPI-5 Audit
Coordination with Macroeconomic Policies
DPI-6 Coordination with Fiscal Policy
DPI-7 Coordination with Monetary Policy
Borrowing and Related Financing Activities
DPI-8 Domestic Borrowing
DPI-9 External Borrowing
DPI-10 Loan Guarantees, On-lending and Derivatives
Cash Flow Forecasting and Cash Balance Management
DPI-11 Cash Flow Forecasting and Cash Balance Management
Operational Risk Management
DPI-12 Debt Administration and Data Security
DPI-13 Segregation of Duties, Staff Capacity and Business Continuity
Debt Records and Reporting
DPI-14 Debt Records
DPI-15 Debt Reporting
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What is DeMPA – example of
dimensions within PI
 Coverage of Indicators

Coverage: Central Government DeM and

connected activities
¾ Borrowing and use of derivatives
¾ Issue of loan guarantees
¾ On-lending
¾ Cash flow forecasting and cash balance management

Flexible: applicable in sub-national context

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 DeMPA: Scoring Method

Scoring method - quantifiable scores (A to D)

• Meet minimum requirement = Score C
• Important for effective debt management
• Absence of minimum requirement = Score D
• Signals an area of priority attention
• Sound practice = Score A (B intermediate for
more granularity)
• Not rated – if process/system does not exist
(e.g., derivatives)

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 To date DeMPAs done in 38
developing countries
FY09 (14)
FY08 (13) FY10 (7
Burundi (RO) completed)
Burkina Faso (RO)
Uganda (RO) Tonga (pipeline)
CAR (RO) St Kitts & Nevis (ECCB) Cambodia (pipeline)
Ghana Solomon Islands (RO) Samoa (postponed)
FY07 Mali (RO) Cape Verde
Pakistan (postponed)
(5) Mozambique Cameroon (RO)
Maldives (pipeline)
Togo Congo, Brazzaville (RO)
The Gambia (Pilot) Malawi (follow up-pipeline
Sao Tome Principe Guinea (RO)
Malawi (Pilot) Swaziland (RO) Liberia (RO)
Nigeria (RO)
Albania (Pilot) Zambia Guinea –Bissau (RO)
Rwanda (RO)
Guyana (Pilot) Bangladesh Senegal (RO)
Congo, DRC (RO)
Nicaragua (Pilot) Honduras (RO) Cote d’Ivoire (RO) Congo, DRC (RO)

Moldova Grenada Cote d’Ivoire (RO)

Mongolia Antigua Sierra Leone (RO)

RO = Regional Organizations. Missions undertaken in collaboration with regional TA providers – Pole Dette,
MEFMI, WAIFEM, and CEMLA
First-round Results

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 Results (1)
Picks up priority areas of reform and monitors progress

5 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27
DPI‐1 D D C D C C C+ B C B D B D C C D C D D D C D
DPI‐2 D D D D D+ C C B C A D B+ D B+ B D D+ D C C+ C C+
DPI‐3 D D D D D D D C D D+ D C D D+ D D D+ D D D D D+

DPI‐4 C D C C D D D C D C D C D C C C D D D C D D
DPI‐5 D D C D D D D C C D+ D C D B D D D D D+ D D D+
DPI‐6 C D C D C D+ B B B C D B+ D+ B+ A C D+ C D C D+ C
DPI‐7 A A D+ C D D+ B C+ C A C C D+ B C+ B C C D+ D+ C D+
DPI‐8 B D C+ N/R C+ D B+ B C A D C B B N/R D D+ C NR D+ D C
DPI‐9 D+ D+ D+ D D D D+ C D+ C D A C B D D+ N/R D+ D+ D+ D+ B
DPI‐10 D N/R D N/R D+ D B B D C D C D C C D D D D D D D

DPI‐11 D+ D D D+ C D D+ D D C+ D D+ D D D+ D D+ D D C D D+
DPI‐12 D D D D D D D D D D+ D B+ D C D D D D D D D D

DPI‐13 D D D D D D D+ D D D D B D C D D D+ D D D D+ D+
DPI‐14 D+ D C+ D D+ D+ D+ A D+ A D A D+ B D+ D D D D D D+ D+
DPI‐15 C D D+ D+ D+ D D C C B D B D D+ C+ D C D D D D D
 Results (2)

• Across the six core functions

Percentage of countries meeting Score C and higher on the DeMPA indicators

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 Results (3)

• Governance and Strategy Development

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 Results (4)

• Coordination with Fiscal and Monetary Policies

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 Results (5)

• Borrowing and Related Activities

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 Results (6)

• Operational Risk Management

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 Results (7)

• Debt Records and Reporting

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Frequency of DeMPA scores

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 Relationship between Indicators
A
14
12
10
8
6
4
2
D 0 B

D e b t M a n a g e m e n t S t ra t e g y D e b t R e c o rd s D e b t R e p o r t in g

• Most countries that lacked an effective debt management strategy also scored poorly on the indicators for
debt data and reporting (Chart above). Thus, scores on debt data and reporting could be useful signals to
assess the quality and process of debt management strategy formulation in countries. Such inter-links when
explored help to draw preliminary lessons, if any, for sequencing reform programs.

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Follow-up Activities from Assessments
Technical Assistance
provided by
the World Bank, International TA
providers and other donors

Workshops, Seminars,
and Training Programs DeM staff capacity building

Sequenced reform plans, Linked with TA providers for

Institutional development, improvements in debt management
DeMPA Included in PFM reform
Identified Constraints in Debt system
Management Performance

Analytical input
in World Bank
programs and operations

Ongoing and new DPL, AAA activities, Public

lending Expenditure Review
operations
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 Technical Assistance Road Map

Possible
follow-
ups

Training /
TA
examples
 Conclusion

• Results from DeMPA missions clearly highlight large gaps in

PDM frameworks and capacity in developing countries.
• Moreover, the current crisis underscores the urgency for
improving PDM in many countries.
• Thanks to the DMF, the scaling up of World Bank’s technical
assistance for strengthening PDM has come at the right time.
• Going forward, the World Bank will not only further leverage
the dissemination of existing tools, but it will also continue to
develop new tools and facilitate knowledge sharing with a
view to foster coordination among debt management TA
providers.
 Thank You

Contact Information:

Abha Prasad (aprasad@worldbank.org)

http://go.worldbank.org/W7V1F1A6S0

Lars Jessen (ljessen@worldbank.org)

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