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September 2010
Inside:
EMERGING MARKET DEBTNEWS
3
SUPPORTING MTDS INGHANA
4
CS-SAS INSTALLEDINTHESOUTH PACIFIC
6-7
MEETING REPORTINGSTANDARDS
8
HOT TOPICS 10
PLANNED ACTIVITIES 12
The Debt Management Section (DMS) is an arm of the Special Advisory Services Division
Our key objective
is to promote
prudent debt
management
practices in member
countries. We do so
by providing
advisory support in
developing sound
debt management
policies, strategies
and operations in
line with best
practice, backed up
by state-of-the-art
software
C o m m o n w e a l t h S e c r e t a r i a t
Debt Management Section
NEWSLETTER
I
n 1985, Sri Lanka became the first
country to install and use the
Commonwealth Secretariats Debt
Recording and Management System(CS-DRMS). The software was developed
after a bout of economic instability resulted
in numerous countries in Latin America and
Africa defaulting on their debt repayments.
CS-DRMS has now been installed in 60
countries but, at its 25th anniversary, the
world finds itself in the midst of a similar
period of economic uncertainty.
The nature of this crisis is different and the
debt problems are mostly in the more
advanced countries. Many of the
Commonwealths poorest countries have
fared reasonably well, benefitting not only
from strong growth but also improved debt
and macroeconomic management that the
Secretariat has supported through its Special
Advisory Services Division, which provides
substantial technical assistance and capacity
building in debt management in addition to
providing CS-DRMS.
Working Where it is Needed Most
In Papua New Guinea - a Commonwealth
small state - a combination of prudent fiscal
and monetary policies supported by high
global prices for mineral commodity exports
has underpinned the country's recent
macroeconomic stability. The country has
been using the CS-DRMS software since1987 to record and manage its debt.
Gibson Gotaha of Papua New Guineas
Department of Treasury said that the
implementation of CS-DRMS enabled the
country to keep an up to date and concise
database on its borrowing.
He added that the introduction of the
software has made it easier to monitor the
debt service payments of the multi-island
state and avoid penalty fees. It is also being
used to assist in the formulation of a medium
-term debt strategy and in formulating its
borrowing policy.
Kenya also started using the software in
1987 and is now able to accurately record all
its debt. According to Felister Kivisi of the
Debt Management Department, the 1980s
crisis was a wakeup call for her government
to manage its debts more efficiently.
It was difficult, given that before CS-DRMS
only basic recording was done without any
analytical reports being produced. The
system was cumbersome and not all
agreements were recorded, but we now
know the extent of our indebtedness, she
said.
Assisting Francophone Countries
In 1990, the Commonwealth Fund for
Technical Cooperation partnered with the
Canadian International Development
Research Centre to extend CS-DRMS to
French speaking countries. As a result, the
software was translated into French and
deployed in Benin, Mali and Cameroon and isnow used in eight countries.
(Continued on page 2)
CS-DRMS: 25 Years of Helping CountriesManage Debt
Over 25 years since it was first developed, the Secretariats debt recording system
continues to aid countries
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Bruno Iboklene, the Director
of Cameroons Debt
Operation Department,
commented that, the
permanent and fruitful
cooperation between the
Commonwealth Secretariat
and the Autonomous Sinking
Fund of Cameroon [theadministrative body in
charge of public debt
management] has made CS-
DRMS the reference software
in the Central African sub-
region. Today, with the use
of CS-DRMS, Cameroon is
carrying out its debt policy
more efficiently.
He added that CS-DRMS has
assisted in determining
Cameroons financing needsand its future payment
obligations, while at the
same time contributing to
the emergence of the
countrys national and sub-
regional capital markets.
Reaching Beyond theCommonwealth
Non-Commonwealth
countries can acquire CS-
DRMS for a modest price
through the official
distributor to non-
Commonwealth countries,
Crown Agents (UK). They
have extended the use of CS
-DRMS across Europe, Asia,
Africa and Latin America. It
has been cited as a key
component in helping
countries such as
Afghanistan and Liberia
receive debt relief and in
improving debt managementin emerging countries such
(Continued from page 1)
as Suriname and Bhutan.
Kosovo is one of the most
recent countries to have
acquired the software. As
the dust settled in its war-
torn capital in 1999, thecountry was left in a fragile
state and near economic
ruin. Struggling to finance
its debt repayments, Kosovo
was required by the World
Bank and the IMF to create a
professional debt
management unit to record
and manage the countrys
mounting debt. CS-DRMS
was introduced to allow the
debt unit to be more
effective in its duties.
Arbnor Hasani of the Debt
Management Division said,
We can clearly see the
benefits of generating future
transactions and calculating
total debt service.
He added that the software
has enabled the Government
to analyse its debt portfolio
and support its domestic
debt market.
ContinuousDevelopment
A recent independent
evaluation of the
Secretariats debt
management programme
showed that it is highly
regarded by member
countries, where it has
improved debt management.
According to the findings, CS-DRMS is an invaluable tool
and it has greatly increased
efficiency where it is in
operation.
However, the evaluation also
stressed the need for
continuous development to
ensure that it remains a
relevant tool for user
countries in the future.
Given that the currentgeneration of CS-DRMS was
released in 2001, the
Secretariat is planning to re-
engineer it to incorporate
functional improvements and
capitalise on the advantages
offered by the latest
technologies. This will help
enhance the effectiveness of
the software, maintain its
competitive edge and extend
its useful life, said Sanjay
Lollbeharree, Head of IT
within the Debt Management
Section.
Arindam Roy, who heads the
Debt Management Section,
reaffirmed the Secretariats
commitment to continually
improving the software.
Next year, the software
suite will be expanded to
include a new product, the
Commonwealth Secretariat
Public Debt Analytical Tool
(CS-PDAT). This tool will
help countries to formulateand implement medium-
term debt management
strategies and reposition the
Secretariats software at the
centre of borrowing
decisions.
The process for
re-engineering the system
has commenced and will
continue with substantial
user engagement throughout
2010 and 2011.
In 2009, Liberia becamethe 60th country to use CS-
DRMS, and subsequently
received debt relief
CS-DRMS, the brainchild
of the Debt ManagementSection at the
Secretariat, is available in
both English and French
and has been used in 60
countries to date,
including 15 countries
and territories outside
the Commonwealth.
Coincidentally, Liberia
became the 60th country
to adopt the software in
2009, the year in which
the Commonwealth
celebrated its 60th
anniversary.
Gibson Gotaha from PapuaNew Guinea, which has
used CS-DRMS since 1987
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July saw close to
record debt issuance
by emerging
countries. According
to ING Bank,
issuance in July
reached $35bn,
marginally less than
the record high in
April ($40bn)
Uncertainty in the
euro zone is likely to
continue investors
interest in emerging
Following large concerns about the fiscal sustainability of a number of European countries earlier this year, market sentiment
improved in the quarter that ended in September 2010. However, sovereign bond yields in major markets fell as weaker than
expected USA macroeconomic data casted doubt on the sustainability of global economic recovery.
The publication of stress test results for European banks boosted market confidence, which was reflected in strong
performance of stock markets across the globe (see chart 1). In general, the market sentiment towards the credit risk of
emerging countries remained relatively stable (see chart 2). By contrast, the fall in credit default swaps for European
sovereigns following the publication of banks results was offset by fresh concerns about the fiscal status of some European
countries and their banking sectors.
Debt Management News
News from the Commonwealth
Cyprus Responsibilities for public debt management were transferred from the Central Bank of Cyprus to the
Ministry of Finance on 1 August 2010.
India The government is to establish a debt management office to manage its domestic debt in 2 years time. At
the moment this function is carried out by the Reserve Bank of India (RBI).
The government focused on deepening the debt market and lengthening the maturity of its portfolio in line
with its policy of issuing up to 30 years to develop and create liquidity at the long-end of the yield curve.
Nigeria Approved bond issuance of 88bn Naira ($585m) to finance current budge, while the Central Bank of Nigeria
is to float US$1.4bn to assist the automobile industry.
The debt market in Nigeria continues to deepen, with the government accounting for 95% share of the
market. The government issues bonds on a monthly basis to lengthen the maturity of its debt profile.
Pakistan The government is seeking some kind of debt relief on its foreign debt repayments to give it respite over
the financial challenges it faces following the worst flood in its history.
Sri-Lanka Bond issuance of US$1bn with 10 year maturity saw strong demand ($6.33bn), which was priced at 6.25%
(only 100bps above Australia's 10 year bond).
Other Emerging Countries
Brazil Public debt falls as repayments exceed new issuances.
China Yields on bonds fell for much of July but began to rise on news of new stress test on banks,
Other News
Part 2 of the Handbook on Securities Statistics was published in September by the Bank for International Settlements, IMF
and European Central Bank. This covers the holdings of debt securities and follows on from part 1, published in 2009.
The World Bank reported a surge in demand for its expertise in mitigating currency and interest rate risk in fiscal year
2010. Its Treasury arranged US$11.8 billion in hedging transactions on behalf of clients, including interest rate and cur-
rency hedges.
In September, debt managers agreed the Stockholm Principles for effective debt management at an IMF consultation co -
hosted by the Swedish National Debt Office. These encompass the framework and operations for debt management, the
importance of sound market communication strategies and the need for cautious portfolio risk management.
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line with the structural
benchmark under the IMF
Extended Credit Facility.
The team worked with the
authorities to analyse the
cost and risk implications of
a range of debt strategies.
These strategies were
assessed under a set of
agreed assumptions on the
macroeconomic environment
and a set of market risk
scenarios. Further
sensitivity analysis of the
preferred strategy was
carried out based on a morepessimistic macroeconomic
outlook to assess its
robustness.
In addition to the core set of
cost and risk indicators, the
size of borrowing by
instrument under each
strategy was also reviewed
to assess the feasibility of
At the request of the
Minister for Finance of
Ghana, the Commonwealth
Secretariat and the WestAfrican Institute for Financial
and Economic Management
(WAIFEM) accompanied a
joint IMF-World Bank team
to provide technical
assistance on the IMF-World
Banks Medium-Term Debt
Strategy (MTDS) toolkit in
August. There were 24
participants from the
Ministry and the Central
Bank.
As one of the MTDS pilot
countries, Ghana has been
using the tool since 2008
and this mission provided
further assistance. Miriam
Tamene, an economist with
DMS, participated in the
mission, with the objective
of helping the authorities to
develop a formal MTDS in
implementation and the
potential consequences for
the development of the
domestic debt market.
Towards the end of the
mission the team spent a
day training participants,
taking smaller groups
through the tool in detail.
The model was run from the
very beginning and each
step was explained before
spending a considerable
amount of time on
interpreting the results.
By the end of the mission,
the authorities had gained a
deeper understanding of the
tool. The baseline
macroeconomic
assumptions, proposed
budget figures and GDP data
will be revised before the
MTDS is presented to the
Ministers and published.
Supporting the MTDS Process in Ghana
Using CS-DRMS for On-Lending in Kenya
view to it using the on-
lending module in CS-DRMS.
Following the assessment, it
was agreed that the on-
lending module would meet
DGIPEs needs and a mission
from the Secretariat visited
DGIPE again in September.
The objective of this mission
was to work with DGIPE totransfer its existing database
into the on-lending module
and upgrade its system with
the latest service pack.
A number of changes were
made to the database to
ensure that DGIPE was able
to start using the module as
soon as possible. In
addition, a link was
established to the external
debt database to allowDGIPE to associate on-
In April 2010, the
Commonwealth Secretariat
carried out a needs
assessment of the
Department of Government
Investment and Public
Enterprises (DGIPE) of the
Ministry of Finance in Kenya.
At the time, DGIPE was
considering procuring a
system to manage its
lending and on-lending
operations so the
assessment focused on
understanding the lending
operations of DGIPE with a
lending agreements with
their parent loans. Finally, a
number of user-defined
fields were added to allow
DGIPE to customise the
loans for reporting purposes.
By the end of the mission,
the Investment Secretary
(DGIPE), Ms Esther Koimett,
reiterated their commitmentand support to CS-DRMS.
The findings from this work
have since been integrated
into the development of
Service Pack 2, which will
include a number of specific
on-lending reports. The
findings from the analysis of
lending operations and
business processes have
been recorded to inform the
further enhancement of the
CS-DRMS on-lending
module.
The Ministry of Financein Ghana
Whilst the Kenyan finance
ministry hasresponsibility for
managing the
Governments debts usingCS-DRMS, DGIPE is now
using CS-DRMS to recordand manage its own loans
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Page 5
increased from over 6% of
GDP to more than 14% and,
with deficits expected to
persist in the medium-term,the government has
recognised the need for
better informed borrowing
decisions and clearer
responsibilities and lines of
accountability.
To support this process, the
government requested
assistance from the
Commonwealth Secretariat.
In September 2010, John-
Paul Fanning and MiriamTamene (economists in
DMS) were accompanied by
Mike Williams (consultant) to
advise on how the existing
governance and operational
structures for debt
management could be better
aligned to internationally
agreed good practice. In
particular, the team focused
on how the dispersed
functions across the finance
Prudent macroeconomic
management has enabled
Botswana to reap the
benefits of its rich resource
base and minimise its need
to borrow. Driven by well-
managed diamond revenue,
the economy has grown at
8.7% per year on average
since independence and
budget surpluses have been
routinely saved.
The global economic crisis
hit the economy hard, with
diamond revenue falling by
20% and GDP contracting by
3.7% in 2009. Borrowing
ministry and central bank
could be brought together to
enhance information flows
and provide the context fordeveloping a strategy to
guide future borrowing.
The team also advised on
how the finance ministry
could take a greater role in
determining the size and
composition of domestic
issuance to meet future
shortfalls whilst supporting
market development
objectives. Finally, the team
provided recommendationson how the debt
management function could
coordinate with other parts
of the ministry and support
better cash management.
The Commonwealth
Secretariat will continue to
work with the Government
to identify further areas for
support, once it has
considered and agreed the
team's recommendations.
Review of the Institutional Arrangements for Debt Management in Botswana
Statistics from the ECCB,
Mrs Juletta Jeffers.
The course was presented by
Nick Cusk, a Systems
Development Officer from
the Commonwealth
Secretariat, accompanied by
Elliot Williams from St Kitts
and Craig David from the
Ministry of Finance, Nevis.
It built on similar courses
delivered in the UK and
provided a practical
understanding of a number
of administrative and
support tasks including
installing and upgrading the
system and customising
reports using the in-built
Report Writer.
The Deputy Governor of the
In collaboration with the
Commonwealth Secretariat,
the Eastern Caribbean
Central Bank (ECCB) ran an
eight-day training course on
IT Administration for CS-
DRMS in Basseterre, St Kitts
and Nevis, in August.
The course was attended
primarily by officials from
government IT departments
from the members of the
Eastern Caribbean Currency
Union (ECCU) including
Anguilla, Antigua and
Barbuda, Dominica,
Grenada, Saint Lucia, St
Vincent and The Grenadines
and St Kitts and Nevis. The
strong representation from
the region was commended
by the Deputy Director of
IT Training Workshop for ECCU Countries
ECCB, Mr Trevor O B
Brathwaite, opened the
course and re-iterated the
importance of having an
efficient and well-maintained
debt management system:
Because of the high level of
debt in the region, it has
become a hot topic...Hence,
the debt system has become
an important system in the
government financials.
The DMS team alsoprovided refresher
training to staff on debt
and cash management
The IT workshop was
hosted at the ECCB
headquarters in StKitts
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Over the last
decade, many
Commonwealth
countries have
been meeting their
budgetary financing needs
by borrowing an increasing
amount from their domestic
financial markets. This has
been compounded more
recently by a fall in the
availability of international
credit, since the onset of the
global economic crisis. In
many cases, borrowing more
domestically is also being
done with a view to optimise
foreign currency exposureand also to develop the
domestic debt markets.
CS-SAS was developed by
the Commonwealth
Secretariat to assist
countries in the process of
issuing and managing the
auction of Treasury bills and
bonds. It allows debt offices
including central banks, or
other entities with
responsibility for auctioning
government securities, to
manage the end-to-end
auctioning process for the
issuance of securities in the
primary market.
It assists in allocating
securities to various bidders
at a market clearing price
based on the auction
procedures of the issuing
country. The system also
allows debt offices to record
securities issued through the
auctioning route and
comprehensively analyse all
types of bids, whether
competitive or non-
competitive.
End-to-End Auctioning
Samoa and the Solomon
Islands are the first
countries to use CS-SAS,
which is based on a workflow
system to help countries
handle end-to-end auction
processing: from
notification, through bid
processing to electronic
generation of allotment
letters for successful
bidders. Its rich analytical
Samoa and Solomon Islands Using CS-SAS
In September, two countries in the South Pacific started using the Commonwealth Secretariat-
Securities Auction System (CS-SAS) to help them manage the auction of Treasury bills and bonds.
Samoa and Solomon
Islands are the first
countries to fully use
CS-SAS
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capabilities, along with a
user-friendly graphical
interface, allow users to
carry out quick and easy
analysis.
Mr Daniel Haridi, Chief
Manager at the Currency and
Banking Operations
Department in the Central
Bank of Solomon Islands,
said the new system has
proven to be of much benefit
to the country.
Prior to the installation of
CS-SAS, we used a local
system simply for capturing
the data and most of this
was done manually and
there was no analysis. Now
that we are using CS-SAS,
we are able to perform a lot
more functions because of
the amount of information
we are able to capture and
maintain. We now have a
comprehensive database and
it allows us to do more
analytical work, Mr Haridi
said.(Continued on page 7)
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He also noted that CS-SAS
has improved the efficiency
of the Central Banks
operations in terms of
managing the auctioning of
securities.
It certainly helps us to
reduce cost and it is very
effective. After a few weeks
of implementing we found
that we were able to
effectively analyse the
auctions. It really assists us
in making decision faster.
Ms Lea Collins, Assistant
(Continued from page 6)
Section, said that CS-SAS
significantly improves
operational efficiency for
countries involved in issuing
securities. He noted that thesystem is specifically
beneficial to small states,
many of which have not yet
invested in software to
computerise their auctioning
process.
StreamlinedImplementation
Like CS-DRMS, CS-SAS has
been designed for ease of
use. One weeks training is
typically sufficient to allow
debt managers to start using
the system. Although the
system is principally
designed to be compatible
with CS-DRMS, it can also be
used with other debt
management applications.
Online Bidding
The Secretariat is currently
developing a supplementary
product that would allowcentral banks to post
notifications of securities
issuance online and for
dealers to submit bids
electronically. This facility,
the Online Securities Bidding
System (OSBS), is the first
web-based software from
the Secretariat and can be
used as an alternative to
paper-based bidding. It will
be available in 2011.
CS-SAS and other
services offered by the
Commonwealth
Secretariat are provided
free of charge by the
Secretariat to
Commonwealth
countries. Other
countries can procure the
software through the
Crown Agents (UK) which
is the official distributor
of the Commonwealth
Secretariat debt
management software
outside the
Commonwealth.
Manager for Banking and
Corporate Services at the
Central Bank of Samoa
(CBS), said: The system, by
offering a range of reports
and analytic features, helps
the Central Bank to operate
more efficiently in the
auctioning of CBS securitiesand government bonds.
Ms Collins believes that
CS-SAS will help the Central
Bank to significantly reduce
the time spent on processing
these auctions. CS-SAS has
been especially useful in
performing its function as
the repository for
information on CBS
securities and government
bonds, by providing a singlesystem to record the
different auctions.
To a wider extent, the
capability of exporting data
from CS-SAS to CS-DRMS
will also enable the [CBS] to
provide domestic debtinformation to the Ministry of
Finance, Ms Collins said.
Accurate, Transparentand InformedManagement Decisions
Arindam Roy, Head of the
Debt Management Section at
the Commonwealth
Secretariat, commented that
the software is a useful
decision support tool to
countries. It has been
designed to help debt
managers make more
accurate, transparent and
informed management
decisions in processing bids
for issuance of government
securities. It not only
ensures the best price forthe government based on
the auctioning rules adopted,
but also ensures that such
securities are allocated in a
fair and transparent manner
which is crucial to instil
confidence among investors
and broaden the domestic
debt market as a source of
sustainable finance for
governments.
Sanjay Lollbeharree, Head ofIT in the Debt Management
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CS-SAS is designed to beuser-friendly and
training can take as little
as one week
The Central Bank of Samoa has found that CS-SAS has made itsoperations much more efficient
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As the global financial
system has evolved, the
scope of debt management
and reporting needs have
also changed. This has
prompted the
Commonwealth Secretariat,
along with other members of
the international Task Force
on Finance Statistics (TFFS),
to revise the guide forcompilers of debt statistics.
To ensure that compilers of
debt statistics are able to
use their debt management
system to comply with new
international statistical
reporting standards, MEFMI
organised a workshop in
Tanzania in July in
collaboration with the
Commonwealth Secretariat.
The workshop highlightedthe latest developments in
statistical reporting
standards in anticipation of
the forthcoming Public
Sector Debt Statistics
Guide for Compilers and
Users and was attended by
32 participants from 12
countries in east and
southern Africa.
Representatives from the
IMF and UNCTAD joined the
presenters.
Sanjay Lollbeharree, Head of
IT in DMS, showed how data
can be validated in
CS-DRMS. He also
demonstrated the new and
improved data export tools
for the MTDS, DSA/DSF,
QEDS, a new version of the
World Bank Debtor
Reporting System and the
Secretariats public debtbulletin template.
It was emphasised that
officials need to keep up-to-
date with the latest
developments and ensure
they possess the skills
needed to carry out their
jobs effectively. To this end,
the Secretariat informed
participants about its
eLearning programme that
has been developed, whilst
MEFMI is also planning
e-learning programmes.
Officials from the MEFMIregion were shown how to
make the most effective useof CS-DRMS to meet
reporting standards
Debt Reporting Workshop for East and Southern Africa
frameworks for debt
analysis, such as the
Medium-Term Debt Strategy
(MTDS) tool and the debtsustainability framework
(DSF).
As many countries are
carrying out more analysis
and developing periodic debt
bulletins, the workshop also
showed how CS-DRMS can
be used to generate relevant
reports and analysis.
In his opening remarks, the
Director of the DebtManagement Department in
the Kenyan finance ministry,
Mr John Murugu, reminded
participants that good
database management is
critical for enabling informed
decisions in economic and
financial management. He
urged the participants to
take advantage of the
The Kenya School of
Monetary Studies in Nairobi
was the venue for a
workshop in September ondebt reporting using CS-
DRMS. The workshop was
arranged by the
Macroeconomic and Financial
Management Institute for
East and Southern Africa
(MEFMI) and the
Commonwealth Secretariat
The workshop was attended
by 17 participants from
Malawi, Swaziland, Lesotho,
Kenya and Tanzania andfocused on the new features
in the latest version of CS-
DRMS. Refresher training on
important concepts in debt
management was given and,
based on this, hands-on
training was provided in
using the new data links in
CS-DRMS to meet reporting
standards as well as
workshop to fully understand
how they can make best use
of CS-DRMS to improve debt
recording in their respective
countries.
Raphael Otieno, MEFMIs
Director of Debt
Management, and Carilus
Odumbe, an economist in
DMS commended the
continued collaboration
between the Commonwealth
Secretariat and MEFMI,
especially in the area of
capacity building.
Meeting New Statistical Reporting Standards
Participants from fiveMEFMI countries
participated in the
regional workshop inNairobi
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Review of Public Debt Management in Mauritius
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The interaction between
CAA and other
stakeholders in debt
management CS-DRMS database
operations, management
and system maintenance
Capacity building,
particularly in analysis and
strategy formulation
Implementing new
modules for recording
other types of debt
One particular observation
was that the institutional
arrangements for
maintaining the database in
the CAA were sub-optimal.
The mission proposed that
CAA identifies a CS-DRMS
supervisor to oversee the
In August, the Debt
Management Section fielded
a mission to Cameroon to
review the status of the debtmanagement and CS-DRMS
project. The mission worked
closely with personnel of the
Autonomous Sinking Fund of
Cameroon (CAA) and met
with senior officials and
several key players involved
in the debt management
process.
The review discussed a
number of areas of potential
support, including:
The institutional and legal
arrangements for debt
management
maintenance of the database
and be able to carry out
some middle office functions,
such as developing a debtstrategy based on cost and
risk analysis. In essence,
the CS-DRMS supervisor
would support the decision
making process of CAA in
debt management issues.
A report has been submitted
to CAA that includes a
comprehensive list of
findings and
recommendations for
consideration andprioritisation. Thereafter, an
implementation plan will be
agreed upon between CAA
and the Commonwealth
Secretariat.
Review and Needs Assessment in Cameroon
The DMS review teampresented their findings to
senior management from
the CAA in Cameroon
The authorities in Mauritius
are facing two major
challenges related to public
debt management. Firstly,
due to the impact of global
economic crisis on its fisc, it
is struggling to contain the
stock of public sector debt
within the limits as
stipulated in its debt
management act. As per
legal obligation, its level of
borrowing must be within
60% of GDP in 2010 and
reduced to 50% by 2013.Secondly, the finance
ministry has been unable to
put in place a debt
management strategy for
2009-10 after initiating one
the previous year.
Against this background, the
Government invited the
Commonwealth Secretariat
to attend its annual business
plan (ABP) meeting in
September, along withvarious other multilateral
and bilateral organisations,
to discuss assistance on debt
management and other
economic areas.
The Secretariat mission also
consulted with the agencies
responsible for public debt
management to develop a
detailed plan of assistance in
coordination with other
institutions such as the
World Bank and African
Development Bank. As part
of this, the mission provided
comments on the terms of
reference for a public debt
expert to be provided by the
African Development Bank.
The focus of the mission was
on understanding the
existing arrangements for
public debt management,
the nature of assistance
required, and carrying out a
high-level gap analysis of
the policies and institutional
framework across the
finance ministry and central
bank. The mission also
stressed the need for a core
unit to be established within
the finance ministry to focus
on public debt analysis andmanagement.
At the end of the mission, it
was mutually agreed that
the Secretariat should
prioritise assistance in
interfacing the Auctioning
system (Book Entry System)
held at the Bank of Mauritius
with CS-DRMS to reduce
duplication and free up
resources for strategic issues
in debt management. In
addition, training will be
The review of debtmanagement
operations in Mauritius
identified a number ofareas of potential
collaboration with the
Commonwealth
provided in generating
reports for domestic
reporting and reporting to
the Quarterly External Debt
Statistics and Debtor
Reporting System. A more
detailed institutional and
policy review is planned for
early 2011 that would spell
out the key areas of
reforms required for
moving to strategic debt
management.
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D e b t M a n a g e m e n t S e c t i o n
Newsletter
Calculating Average Time to Maturity Using CS-DRMS Data
recording modules.
You could run the reports in
Management Tools through a
scenario with no
disbursements (NODI), but
the reports only cover 12
years so you would need to
run them several times,
shifting the start date
forwards until there are no
more principal payments.
A simpler way is to use the
MTDS export facility, which
was developed for the World
Banks Medium-Term Debt
Strategy tool and included in
Service Pack 1. This
provides a longer stream of
principal payments (50
years*) without future
disbursements.
To run the MTDS bridge, go
to Data Export and select
MTDS Data Export. Youcan choose data by calendar
or financial year for different
categories of borrowing
(government external loans,
guaranteed etc.).
The facility generates an
Excel file for each category
of borrowing. The output
contains a number of
columns, with principal
payments starting under the
first column that is headedby a year. You will see that
after 50 years, the years
start again - this data is
interest payments.
Note that all data are in
tranche currency. You will
need to convert the data into
local (or other) currency,
using the exchange rate data
in the spreadsheet.
Once you have done this,calculate the total principal
payments in each year. Do
this for all categories of debt
you wish to calculate ATM
CS-DRMS enables users toanalyse the cost and risk
characteristics within debt
portfolios, including through
analysing the portfolio under
different scenarios. But
there are some indicators
like average time to maturity
which CS-DRMS does not
generate automatically.
These risk indicators will be
made available shortly in the
next release of CS-DRMS in
mid-2011.
Here, we highlight how you
can calculate average time
to maturity (ATM) using
CS-DRMS.
What is ATM?
ATM is a measure of
refinancing risk since it
indicates how long, on
average, until loans mature.
The lower the ATM, the
for and add them together toget total principal payments.
Calculating ATM
Create a new Excel
spreadsheet with one row for
the year and a row below
that for the number of years
until maturity (t). Then
create another row for
principal payments (Pt) and
paste in your principal
payments data from the
MTDS output. Create
HOT TOPICS
Did you know?MacaulayDuration
CS-DRMS reports the
Macaulay Duration on
an instrument and
portfolio basis. It is
based on yield at issue
and can be found in
reports 750 and 751 in
the domestic debtmodule.
sooner debt will need to be
rolled-over or refinanced and
therefore the more the
portfolio is exposed to risk.
It is calculated using the
following formula:
Ptis principal repayments in
period t, and tis the lengthof time until the next
principal payment. Nom is
simply the nominal value of
outstanding principal.
Exporting Data for theCalculations
The formula indicates that
from CS-DRMS, you only
need aggregated annual
principal payments until all
principal has been repaid.
For ATM we also assume no
further disbursements, which
means that you cannot use
the reports in the main
We will show how to
calculate average time
to interest rate
re-fixing in the next
issue.
Contact us if you would
like support in carrying
out cost and risk
analysis.
another row and calculate the
total of all principal payments
(Nom).
To complete the calculation (see
also the Excel screenshots):
1.Multiply the principal payment
in each year by its associated
time until maturity to give you
Ptt. Then divide this by
Nom. Do this for each year.
2. Sum the calculations you
made in step 1 for each year
to calculate ATM.
Limitations
The MTDS export facility cannot
be used to calculate mid-year
ATM. You will have to use the
reports in Management Tools for
this.
Finally, CS-DRMS will only
report what is in the system. If
you have data outside of CS-
DRMS, be sure to add the
principal payments to yourspreadsheet before making the
final calculations.
1. Derive (Ptt)/Nom
2. Calculate ATM by summing
the answers to (Ptt)/Nom
* If there are loans that
mature in more than 50years, you will need to create
reports from the 51st yearuntil maturity using a NODI
scenario in Management
Tools
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sustainability analysis using
the DSA-DSF framework,
The Gambia
CS-DRMS interface review,
The Gambia
CS-DRMS training, review of
database and interfacing in
Barbados
CS-DRMS training and Book
Entry System interface,
Mauritius
Discussion of use of CS-DRMS for recording public
sector debt, South Africa
December
Debt expert group meeting
on CS-DRMS re-
development, UK
Advisory mission on
reorganising the Debt Unit,
Jamaica
Developing a debt bulletin,
Dominica
October
Publication of, GovernmentDebt Management: A
Guidance Note on the Legal
Frameworkby Arindam Roy
and Mike Williams
Release of CS-DRMS Service
Pack 2
WAIFEM regional workshop
on debt bulletins, Sierra
LeoneWorld Bank sovereign debt
management forum, USA
Sub-national debt
management review, India
Review of the use of CS-
DRMS and CS-SAS, Nigeria
November
Strengthening middle office
capacity, Kenya
Installation of CS-SAS in
Central Bank of GuyanaTraining on debt
Planned Activities
Debt Management SectionSpecial Advisory ServicesDivisionCommonwealth SecretariatMarlborough HousePall Mall
LondonSW1Y 5HX
: +44 (0)20 7747 6430
: +44 (0)20 7747 6450
: www.csdrms.org
C o m m o n w e a l t h S e c r e t a r i a t
Debt Management Section
CS-DRMS User Countries
In 2009, Liberia became the 60th country to acquire CS-DRMS to record, monitor and ana-
lyse its debt position since it was first deployed in Sri Lanka in 1985.
The DMS team is:
Arindam Roy (Head)
Systems Development
Sanjay Lollbeharree (Team Leader)
Mac Banda (Business Analyst)
Nick Cusk (Systems Development Officer)
Alain Fofeh (Systems Development Officer)
Vikas Pandey (Systems Development Officer)
Andrew Hargreaves (Programmer)
Dipti Mathur (Technical Writer)
Kieran Smart (Programmer)
Brian Taylor (Programmer)
Damodar Thejaswee (Tester)
Mohammed Zamir (Programmer)
ohn-Paul Fanning (Economist)
Walton Gilpin (Economist)
Carilus Odumbe (Economist)
Miriam Tamene (Economist)
n November, Sanjay Kumar (India) will be
oining the DMS team as an economist.
January
OECD global forum on publicdebt management, France
Interfacing domestic debt
data in CS-DRMS, Tanzania
Review of policies and
institutional framework,
Mauritius
Interfacing domestic debt
data in CS-DRMS and project
review, Sri Lanka
Interfacing domestic debt
data with CS-DRMS and use
of CS-SAS, MaldivesFebruary
Meeting of IMF Government
Finance Statistics Advisory
Committee, USA
March
Debt management
programme: stakeholders
and user group meeting, UK