Improving Public Debt Management
In the OIC Member Countries
172
4.2 Comparison of Public Debt Management Practices While all case study countries have established legal and organizational debt management
frameworks, actual debt management practices differ among the countries. All case study
countries have created debt management units, in most cases located at the Ministry of
Finance, or are in the process of doing so. The central bank often acts as a financial advisor to
the government. In some countries, however, the breakdown of competencies still remains
vague. In these countries, responsibilities are not clearly distributed, as additional institutions,
such as the central bank, departments in other ministries and committees, pursue debt
management functions besides the debt management unit. Several institutions involved in
public debt management make it difficult to evaluate the degree of accountability of the
individual institutions. As long as all debt management responsibilities are not centralized at a
debt management unit, adequate and systematic communication between the various
embedded institutions is very important.
The World Bank has conducted Debt Management Performance Assessments in the African
countries Gambia, Mozambique, Togo, Uganda, Nigeria and Sudan,37 and also in Albania and
Kazakhstan. Several of these countries subsequently have established centralized Debt
Management Offices (DMOs) and developed debt management strategies. In oilproducing
countries, such as Saudi Arabia, Iran and Oman, public debt management has been of lower
importance in the past, because public debt levels have historically been relatively low.
Following the decline in oil revenues since 2014 and the consequent financing pressure on
public revenues, governments in these countries, however, have begun to create centralized
debt management units.
In almost all case study countries public disclosure of legal and organizational structures of
public debt management, operations and strategies might be improved. For example,
contingent liabilities such as debts of state owned enterprises (SOEs), government loan
guarantees, and arrears might be included in debt reports. In some reports, data is not uptodate. Improving public debt disclosure requires setting up comprehensive debt databases. In
some case study countries, debt management responsibilities and operations lack
transparency. Case study countries that have not yet published their debt management
strategies in English are encouraged to do so to establish or facilitate communication with
international investors.
Table 412 shows the differences in debt levels and structures among the case study countries.
While the uppermiddle and high income countries have shares of external debt in total debt
below 50%, the African low and lowermiddle income countries Gambia, Mozambique, Togo,
Uganda and Sudan have shares of external debt of about 50% or even higher. High shares of
external debt indicate an underdeveloped domestic debt market. The high share of debt
denominated in foreign currencies exposes these countries to exchange rate risk. Nigeria is an
exception among the African countries with external public debt amounting to only 18% of
total public debt.
External public debt of the low and lowermiddle income countries with high shares of
external public debt is largely held by official creditors such as international organizations38
37 In the OIC classification Sudan belongs to the Arab region.
38 E.g. the Islamic Development Bank, the International Development Association (IDA), the Arab Bank for EconomicDevelopment in Africa (BADEA),, the European Investment Bank (EIB), the International Fund for Agricultural
Development (IFAD), the African Development Fund (ADF) and the OPEC Fund for International Development (OFID).