CBP REGIONAL PARTNER INSTITUTIONS: MEFMI

The Macroeconomic and Financial Management Institute of Eastern and Southern Africa (MEFMI) is owned by its 11 regional member countries: Angola, Botswana, Kenya, Lesotho, Malawi, Namibia, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe. It began life as the Eastern and Southern Africa Initiative in Debt and Reserves Management (ESAIDARM) in 1994 and became MEFMI in 1997.

MEFMI was founded to:

• Build sustainable human and institutional capacity in critical areas of macroeconomic and financial management, assisting central banks, and ministries of finance and planning or their equivalent;
• Foster the use and development of best practices;
• Bring emerging risks and opportunities to the attention of executive level officials.

The ultimate expected outcomes are sound and efficient financial sectors, stable macroeconomies and strong, sustained growth.

MEFMI delivers its capacity building through programmes in Macroeconomic Management, Financial Sector Management and Debt Management. These provide regional and in-country courses, seminars and workshops, with a hands-on practical bias; and country missions fulfilling specific capacity building needs with on-site problem solving, needs assessment, data gathering, impact assessment and/or awareness raising.

MEFMI also has a Fellows Development Programme to provide opportunities for promising young professionals to develop into credible experts in macroeconomic and financial management. Candidates go through a comprehensive and rigorous programme before being accredited as fully-fledged MEFMI Fellows. This includes training courses and attachments in specialized areas, submission of a technical paper and participation as resource persons in MEFMI workshops and missions. Qualified Fellows are available to the whole region as experts in their areas of specialization. The success of this programme has eliminated dependence on external support in areas where fellows have mastered the skills, minimizing costs and providing incentive for these experts to remain in the region where they are in high demand.

Other activities include the annual Executive Forum Series for Finance Ministers, Finance/Treasury Secretaries, Secretaries of Planning and Governors of Central Banks to discuss new challenges and strategies for effective responses. MEFMI also conducts studies, develops instruments and provides Institutional Review Services for its clients.

MEFMI's capacity building in debt management aims mainly to strengthen the ability of member states to manage and monitor public debt. To date, countries have been empowered by the programme to cope with the following:

• Loan interpretation and recording
• Data validation and portfolio reviews
• Debt sustainability analysis and formulation of national debt strategies
• Installation and support of debt management software
• Awareness of the need for team work including an appreciation of the role of the lawyer in debt negotiations

MEFMI / DRI Collaboration in the HIPC CBP

MEFMI and DRI (and their predecessors) have been working together on debt strategy formulation since 1994, before the HIPC Initiative or debt sustainability analysis were invented. Our cooperation is guided by a memorandum of understanding between the two institutions which provides a framework for assisting MEFMI HIPCs in debt sustainability analysis and strategy formulation through the HIPC Capacity Building Programme. The two institutions deliver coordinated and complimentary debt strategy formulation and implementation activities to avoid duplication of effort. The cooperation has provided an avenue for exchange and sharing of experience, knowledge and skills between the two organizations thus strengthening DSA and Debt Strategy formulation expertise in the MEFMI region.

The areas of cooperation include the following:

• Joint country workshops and missions on debt sustainability analysis, strategy formulation and implementation planning, as well as follow-up activities to review and facilitate implementation progress;
• Joint development of HIPC DSA training materials;
• MEFMI Fellows and Staff Attachment and training for acquisition of skills in debt strategy formulation, debt sustainability analysis and DSA analytical software.

Since 1997, the two institutions have conducted many joint activities in the MEFMI HIPCs. The achievements can be summarized as follows:

• creation of government teams of officials to conduct national DSAs with little or no external assistance;
• development of promising and potentially sustainable capacity to conduct DSAs among MEFMI HIPCs through a pool of regional experts and trainers;
• enhanced capacity in macroeconomic forecasting through training and information;
• production and implementation of national debt strategies in four of MEFMI's five HIPC member states (Angola will produce such a strategy later this year);
• enhanced negotiation skills and better understanding of the HIPC debt relief process, allowing some countries to access faster or deeper debt relief;
• improved coordination of debt management activities as HIPCs establish national teams to improve databases, debt analysis, macro forecasting and poverty reduction programming in preparation for negotiations;
• enhanced political commitment to sound debt management through sensitization seminars for senior government officials.

Future Support for HIPCs

Most HIPCs should have acquired sufficient skills for debt sustainability analysis, and strategy formulation and implementation by the time they get to completion point, as they will have received a lot of training and retraining. However, given the dynamic nature of financial management and the effects of globalization, they will have to continue strengthening their capacity to face new challenges. These include:

• Building capacity for proactive development financing strategies, by deeper understanding of the policies and procedures of donors and other financiers;
• Strengthening debt strategies to avoid relapses into unsustainable debt positions;
• Revamping outdated legal structures to attain best practices in debt management;
• Building capacity to prepare and analyse poverty reduction strategies with participation by the poor. Current strategies are on a steep learning curve, and will need major reinforcement in analysing the impact of macroeconomic policies and monitoring of targets if they are to move towards poverty eradication;
• Debt sustainability analysis and debt negotiation strategies are only part of the solution to the debt problems facing HIPCs. Authorities need to acquire hardware and software for improved data base management and for analytical purposes;
• Developing capacity to manage domestic public debt as some HIPCs have large domestic debts whose service consumes a high proportion of government revenue;
• Training to create a larger pool of regional experts - Fellows and others - to ensure sustainability of this expertise and fulfil great demand by member states.

For more details on joint HIPC CBP events, see the Calendar of Events page on this site.

For more details on MEFMI, please contact the Executive Director, Mr. Anthony Maruping, at capacity@mefmi.org or visit their website at http://www.mefmi.org.