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Managing debt in Sierra Leone

16 January 2008

The Commonwealth Debt Management Programme is established in 55 countries

A domestic debt support programme for Sierra Leone has been set up by the Commonwealth Secretariat and is expected to last for two years.

The programme, requested by Sierra Leone’s government, is part of the Secretariat’s effort to support member countries in managing their sovereign debt portfolios. This process is aided by use of the Commonwealth Secretariat Debt Recording and Management System (CS-DRMS) which acts as a repository for capturing all categories of debt instruments. There are currently 55 countries, of which 45 are members of the Commonwealth, that use the system.

Since 1985, the CS-DRMS has helped countries record and manage their debt. Beneficiary countries continue to receive regular training and support from the Secretariat’s Special Advisory Services Division, which oversees the debt management programme.

Once the domestic debt programme – part of CS-DRMS – is implemented, it will allow the Government of Sierra Leone to track the impact of its domestic debt and externally funded programmes, and devise means of efficiently managing the debt. As part of this programme, the Commonwealth will install the newly developed Securities Auctioning System at the Bank of Sierra Leone to help improve the securities auctioning process. It is expected that the use of the system will increase the efficiency of the auctioning process as well as generate data that would enable investors to make informed policy decisions to improve the securities market.

“The project will aid in reorganising the domestic debt management structure in Sierra Leone, rationalising debt management policies and developing the ability of local personnel to effectively manage various categories of sovereign debt. Such improvements will not only yield more accurate forecasting and budgeting for policy formulation, but will also increase the financial management profile of Sierra Leone in the eyes of potential investors,” said Carilus Odumbe, the programme manager at the Secretariat who is overseeing this project.

Although Sierra Leone has been receiving debt management support since the early 1990s, Commonwealth Secretariat assistance has been limited to external debt management only. This will be the first time that the West African country has requested assistance in domestic debt management from the Secretariat.