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

September 2010

NEWSLETTER
CS-DRMS: 25 Years of Helping Countries
Manage Debt
Over 25 years since it was first developed, the Secretariat‟s debt recording system
continues to aid countries

I
n 1985, Sri Lanka became the first
country to install and use the
Commonwealth Secretariat‟s 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.
global prices for mineral commodity exports  Our key objective
has underpinned the country's recent is to promote
macroeconomic stability. The country has
prudent debt
been using the CS-DRMS software since
1987 to record and manage its debt. management
practices in member
Gibson Gotaha of Papua New Guinea‟s
Department of Treasury said that the countries. We do so
implementation of CS-DRMS enabled the by providing
country “to keep an up to date and concise
database on its borrowing.”
advisory support in
developing sound
He added that the introduction of the
software has made it easier to monitor the debt management
debt service payments of the multi-island policies, strategies
state and avoid penalty fees. It is also being
and operations in
used to assist in the formulation of a medium
-term debt strategy and in formulating its line with best
borrowing policy. practice, backed up
Kenya also started using the software in by state-of-the-art
1987 and is now able to accurately record all
its debt. According to Felister Kivisi of the
software

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
The nature of this crisis is different and the analytical reports being produced. The Inside:

debt problems are mostly in the more system was cumbersome and not all
advanced countries. Many of the agreements were recorded, but we now EMERGING MARKET DEBT 3
NEWS
Commonwealth‟s poorest countries have know the extent of our indebtedness,” she
fared reasonably well, benefitting not only said.
SUPPORTING MTDS IN 4
from strong growth but also improved debt GHANA
and macroeconomic management that the Assisting Francophone Countries
Secretariat has supported through its Special In 1990, the Commonwealth Fund for CS-SAS INSTALLED IN THE 6-7
SOUTH PACIFIC
Advisory Services Division, which provides Technical Cooperation partnered with the
substantial technical assistance and capacity Canadian International Development
MEETING REPORTING 8
building in debt management in addition to Research Centre to extend CS-DRMS to STANDARDS
providing CS-DRMS. French speaking countries. As a result, the
software was translated into French and HOT TOPICS 10
Working Where it is Needed Most deployed in Benin, Mali and Cameroon and is
In Papua New Guinea - a Commonwealth now used in eight countries.
small state - a combination of prudent fiscal (Continued on page 2)
PLANNED ACTIVITIES 12
and monetary policies supported by high

The Debt Management Section (DMS) is an arm of the Special Advisory Services Division
 D e b t M a n a g e m e n t
Newsletter
(Continued from page 1)
Bruno Iboklene, the Director
of Cameroon‟s Debt
Operation Department,
commented that, “the
permanent and fruitful
cooperation between the
Commonwealth Secretariat
and the Autonomous Sinking
Fund of Cameroon [the
administrative 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
Cameroon‟s financing needs
and its future payment
obligations, while at the
same time contributing to
the emergence of the
country‟s national and sub-
regional capital markets.
Reaching Beyond the
Commonwealth
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 management
in emerging countries such
Page 2
S e c t i o n
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, the
country 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 country‟s
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.
Continuous
Development
A recent independent
evaluation of the
Secretariat‟s 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 current
generation of CS-DRMS was
released in 2001, the
In 2009, Liberia became
Secretariat is planning to re- the 60th country to use CS-
DRMS, and subsequently
engineer it to incorporate
received debt relief
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 Secretariat‟s
commitment to continually
Gibson Gotaha from Papua
improving the software.
New Guinea, which has
used CS-DRMS since 1987
“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 CS-DRMS, the brainchild
help countries to formulate of the Debt Management
and implement medium- Section at the
term debt management Secretariat, is available in
both English and French
strategies and reposition the
and has been used in 60
Secretariat‟s software at the countries to date,
centre of borrowing including 15 countries
decisions.” and territories outside
the Commonwealth.
The process for Coincidentally, Liberia
re-engineering the system became the 60th country
has commenced and will to adopt the software in
continue with substantial 2009, the year in which
user engagement throughout the Commonwealth
celebrated its 60th
2010 and 2011.
anniversary.
 D e b t M a n a g e m e n t S e c t i o n

Newsletter

Debt Management News

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.

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

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.

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,

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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

Supporting the MTDS Process in Ghana

At the request of the
Minister for Finance of
Ghana, the Commonwealth
Secretariat and the West
African Institute for Financial
and Economic Management
(WAIFEM) accompanied a
joint IMF-World Bank team
to provide technical
assistance on the IMF-World
Bank‟s Medium-Term Debt
Strategy (MTDS) toolkit in
August. There were 24
participants from the
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
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 The Ministry of Finance

Ministry and the Central sensitivity analysis of the amount of time on in Ghana

Bank. preferred strategy was interpreting the results.

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
carried out based on a more
pessimistic 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
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.

Using CS-DRMS for On-Lending in Kenya

Whilst the Kenyan finance
ministry has
responsibility for
managing the
Government’s debts using
CS-DRMS, DGIPE is now
using CS-DRMS to record
and manage its own loans
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
view to it using the on-
lending module in CS-DRMS.
Following the assessment, it
was agreed that the on-
lending module would meet
DGIPE‟s needs and a mission
from the Secretariat visited
DGIPE again in September.
The objective of this mission
was to work with DGIPE to
transfer 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 allow
DGIPE to associate on-
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 commitment
and 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.

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Review of the Institutional Arrangements for Debt Management in Botswana
The DMS team also
provided refresher
training to staff on debt
and cash management
IT Training Workshop for ECCU Countries
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
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
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
D e b t M a n a g e m e n t
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 Miriam
Tamene (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
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‟.
S e c t i o n
Newsletter
ministry and central bank
could be brought together to
enhance information flows
and provide the context for
developing 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 recommendations
on 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.
The IT workshop was
hosted at the ECCB
headquarters in St
Kitts
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 D e b t M a n a g e m e n t
Newsletter
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.
O
ver 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 exposure
and 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
Page 6
S e c t i o n
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 are the first
countries to fully use
CS-SAS
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)

(Continued from page 6)
He also noted that CS-SAS
has improved the efficiency
of the Central Bank‟s
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
The Central Bank of Samoa has found that CS-SAS has made its
operations much more efficient
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 securities
and 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 single
system 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 debt
information to the Ministry of
Finance,” Ms Collins said.
Accurate, Transparent
and Informed
Management 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 for
the 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 of
IT in the Debt Management
D e b t M a n a g e m e n t S e c t i o n
Newsletter
Section, said that CS-SAS CS-SAS is designed to be
user-friendly and
significantly improves
training can take as little
operational efficiency for as one week
countries involved in issuing
securities. He noted that the
system is specifically
beneficial to small states,
many of which have not yet
invested in software to
computerise their auctioning
process.
Streamlined
Implementation
Like CS-DRMS, CS-SAS has
been designed for ease of
use. One week‟s 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 CS-SAS and other
management applications. services offered by the
Commonwealth
Online Bidding Secretariat are provided
free of charge by the
The Secretariat is currently
Secretariat to
developing a supplementary
Commonwealth
product that would allow countries. Other
central banks to post countries can procure the
notifications of securities‟ software through the
issuance online and for Crown Agents (UK) which
dealers to submit bids is the official distributor
of the Commonwealth
electronically. This facility,
Secretariat debt
the Online Securities Bidding
management software
System (OSBS), is the first outside the
web-based software from Commonwealth.
the Secretariat and can be
used as an alternative to
paper-based bidding. It will
be available in 2011.
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 D e b t M a n a g e m e n t
Newsletter
Debt Reporting Workshop for East and Southern Africa
The Kenya School of
Monetary Studies in Nairobi
was the venue for a
workshop in September on
debt 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 and
focused 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
Officials from the MEFMI
region were shown how to
make the most effective use
of CS-DRMS to meet
reporting standards
Page 8
S e c t i o n
frameworks for debt
analysis, such as the
Medium-Term Debt Strategy
(MTDS) tool and the debt
sustainability 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 Debt
Management 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
Meeting New Statistical Reporting Standards
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 for
compilers of debt statistics.
To ensure that compilers of
workshop to fully understand
how they can make best use
of CS-DRMS to improve debt
recording in their respective
countries.
Raphael Otieno, MEFMI‟s
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.
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 highlighted
the 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.
Participants from five
MEFMI countries
participated in the
regional workshop in
Nairobi
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
Secretariat‟s public debt
bulletin 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.

The DMS review team
presented their findings to
senior management from
the CAA in Cameroon
Review of Public Debt Management in Mauritius
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 with
various other multilateral
Review and Needs Assessment in Cameroon
In August, the Debt
Management Section fielded
a mission to Cameroon to
review the status of the debt
management 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
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
D e b t M a n a g e m e n t
 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
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 and
management.
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
S e c t i o n
Newsletter
maintenance of the database
and be able to carry out
some middle office functions,
such as developing a debt
strategy 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 and
prioritisation. Thereafter, an
implementation plan will be
agreed upon between CAA
and the Commonwealth
Secretariat.
The review of debt
management
operations in Mauritius
identified a number of
areas 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
Newsletter
HOT TOPICS
Calculating Average Time to Maturity Using CS-DRMS Data
CS-DRMS enables users to
analyse 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
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:
Pt is principal repayments in
period t, and t is the length
of time until the next
principal payment. Nom is
simply the nominal value of
outstanding principal.
Exporting Data for the
Calculations
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
Page 10
S e c t i o n
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
Bank‟s 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‟. You
can 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 headed
by 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
for and add them together to
get 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
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
Pt×t. 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 your
spreadsheet before making the
final calculations.
*
If there are loans that
mature in more than 50
years, you will need to create
reports from the 51st year
until maturity using a NODI
scenario in Management
Tools
1. Derive (Pt t)/Nom
2. Calculate ATM by summing
the answers to (Pt t)/Nom
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.
Did you know?
Macaulay
Duration
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 debt
module.
 D e b t M a n a g e m e n t S e c t i o n

Newsletter

CS-DRMS HOT SUPPORT TOPICS

Exporting Data to Quarterly External Debt Statistics
The new Quarterly External When you click the „Create
Debt Statistics (QEDS) data Output Files‟ button, you will
export facility in CS-DRMS be asked for the name and
has raised a number of location of the template.
questions from our users Normally, this file will be in
recently. Here, we address the „Templates‟ sub-folder
two of those most frequently beneath the application
asked. installation folder*. The file
is called:
The first question that has
arisen regards the first page „QEDS_Templates.xls‟
that is displayed when you
select the QEDS option from Having selected this
the „Data Export‟ menu template the application will
option (see image). then fill the spreadsheet with
the extracted data from your
On this form the user is CS-DRMS database. Once
required to select from the completed, the spreadsheet
list of bilateral creditors is left open for you to
those that are members of review.
the Paris Club. This is
necessary because the To save it, you must select
export categorises some of „File‟ from the menu and
its data in relation to the then click on „Save As‟.
Using the QEDS data export facility, users are able to
Paris Club. automatically generate data in the format for reporting to
You should not use the
QEDS.
Note that this does NOT „Save‟ option because this
select the creditors that will will try and save the
be included in the exported spreadsheet as a new
data. All data will be template. Since the
exported. template is protected (read-
only), it cannot be
The second question relates overridden and the file will What is QEDS?
the selection of the template not be saved.
The Quarterly External Debt Statistics
and saving the resulting
(QEDS) database is a collaborative
spreadsheet.
undertaking of the World Bank and the
IMF, and it is part of an ongoing effort to
*
The default location is: improve the transparency, timeliness,
C:\Program Files\ComSec\English\CS-DRMS 2000+\Templates
and availability of external debt
statistics. It brings together comparable
external debt data from countries that
subscribe to the IMF‟s Special Data
Dissemination Standard (SDDS) and a
selected number of countries that
Did you know? Data Export participate in the IMF‟s General Data
In addition to the QEDS bridge, there are a number of other Dissemination System (GDDS).
in-built data export facilities for: The database is updated quarterly and
The World Bank/IMF Medium Term Debt Strategy (MTDS) includes country and cross-country
tool (the output is also useful for carrying out other analysis) tables, and enables users to query and
extract data, by country, group of
World Bank‟s Debtor Reporting System (DRS)
countries, and specific external debt
DebtPro components.
DSM+
Why not check your country‟s data at:
In October, Service Pack 2 will be released which also includes
a facility to export data to the DSA/DSF for LICs and MICs. www.worldbank.org/qeds

Page 11
 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
Debt Management Section
Special Advisory Services
Division
Commonwealth Secretariat
Marlborough House
Pall Mall
London
SW1Y 5HX
: +44 (0)20 7747 6430
: +44 (0)20 7747 6450
: www.csdrms.org
: csdrms@commonwealth.int
In November, Sanjay Kumar (India) will be
joining the DMS team as an economist.
The DMS team is:
Arindam Roy (Head)
John-Paul Fanning (Economist)
Walton Gilpin (Economist)
Carilus Odumbe (Economist)
Miriam Tamene (Economist)
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)
Planned Activities
October
Publication of, ‘Government
Debt Management: A
Guidance Note on the Legal
Framework’ by Arindam Roy
and Mike Williams
Release of CS-DRMS Service
Pack 2
WAIFEM regional workshop
on debt bulletins, Sierra
Leone
World 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 Guyana
Training on debt
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.
sustainability analysis using January
the DSA-DSF framework,
OECD global forum on public
The Gambia
debt management, France
CS-DRMS interface review,
Interfacing domestic debt
The Gambia
data in CS-DRMS, Tanzania
CS-DRMS training, review of
Review of policies and
database and interfacing in
institutional framework,
Barbados
Mauritius
CS-DRMS training and Book
Interfacing domestic debt
Entry System interface,
data in CS-DRMS and project
Mauritius
review, Sri Lanka
Discussion of use of CS-
Interfacing domestic debt
DRMS for recording public
data with CS-DRMS and use
sector debt, South Africa
of CS-SAS, Maldives
December
February
Debt expert group meeting
Meeting of IMF Government
on CS-DRMS re-
Finance Statistics Advisory
development, UK
Committee, USA
Advisory mission on
March
reorganising the Debt Unit,
Jamaica Debt management
programme: stakeholder‟s
Developing a debt bulletin, and user group meeting, UK
Dominica