During April 24-28, 2017 AFRITAC South, in collaboration with the Strategy, Policy and Review Department of the IMF and the Macroeconomic and Fiscal Management Global Practice of the World Bank, held a regional seminar on debt sustainability analysis for low income countries. The event was hosted by the AFRITAC South at the facilities of Africa Training Institute in Mauritius.
The seminar brought together government officials from Comoros, Lesotho, Madagascar, Mozambique, Zambia and Zimbabwe. It focused on the main principles of debt sustainability and the link to the IMF’s Debt Limit Policy and the Bank’s Non-Concessional Borrowing Policy. IMF and Bank experts presented and discussed with seminar participants the IMF-World Bank Debt Sustainability Framework (DSF) for Low-Income Countries (LICs). The DSF is a standardized framework for conducting public and external debt sustainability analysis in LICs. It aims to help guide the borrowing decisions of LICs, provide guidance for creditors’ lending and grant allocation decisions, and improve IMF and World Bank assessments and policy advice.
The hands-on approach focused on how to develop baseline stress-test scenarios by using the DSF and how to interpret the results from the debt sustainability analysis. Specific attention was given to practical application of the framework by engaging participants to use the analytical tool and interpret results. Participants discussed the importance of the individual country context and macroeconomic and technical challenges they face in using the DSF as a tool for guiding their countries’ borrowing decisions.