The Republic of the Congo has recently published its first debt statistical bulletin, which is one of the concrete outcomes of the technical assistance provided by UNCTAD on the implementation of the DMFAS debt recording system. But, what does the publication of a debt statistical bulletin mean for the Congolese people?
Five ways the Republic of the Congo is benefiting from an improved management of its external debt statistics
Statistical bulletins are a periodic set of statistical reports on public sector debt. Their publication demonstrates that the country is in a position to maintain a reliable, comprehensive debt database and produce accurate data. This improves the country's reputation which is critical for attracting domestic and foreign investment. But, to be able to publish statistical bulletins, the public administration needs to have a well-functioning database.
An improved recording and validation of debt data enables the country to respond to international commitments and acquired obligations. The Republic of the Congo can now easily report to the World Bank Debtor Reporting System in compliance with international guidelines, as do 91 per cent of DMFAS-user countries.
The Republic of the Congo has improved the quality of its debt database through enhanced recording and validation. The 2014 Public Expenditure and Financial Accountability assessment gave to the Republic of the Congo its highest grade on the performance indicator related to debt data recording and reporting. The Congolese government is now in a better position to create accurate debt statistics.
The availability of high quality debt data not only contributes to better debt analysis but it is also vital for the effective management of debt. It is widely recognized that the availability of reliable and timely debt data is essential for prudent risk analysis and the elaboration of government strategies aimed at ensuring sustainable debt levels and, in the last analysis, contributing to the well-being of the Congolese people. The DMFAS Programme therefore also contributes to improving debt sustainability.
Thanks to a sound debt database, the Congolese government now has the opportunity to integrate dependable debt data in their policy-making, enabling evidence-based policies. Hence, the Congolese people benefit from improved transparency and better governance.
The Republic of the Congo has become the 36th DMFAS-user country to produce a debt statistics bulletin.
But UNCTAD assistance does not stop here: the next major step for the country is to integrate the DMFAS debt database into the national public financial management system. And UNCTAD will also work side by side with Congolese authorities to assist them in this endeavour. Once this is achieved, the DMFAS system will become the only source of data on government debt, thereby further enhancing the country's ability to manage its finances.
What is DMFAS about and how it is financed?
UNCTAD's Programme on Debt Management and Financial Analysis System focuses on building capacity for effective operational, statistical and analytical debt management at country, subnational and regional levels. This includes the maintenance of debt databases, debt operations, debt reporting and statistics, and basic debt analysis.
The Programme also assists countries to integrate debt management with the broader public finance management system. In addition to offering countries its specialized debt management and financial analysis software, the Programme provides capacity-building and advisory services which focus on the delivery of concrete outputs such as data validation calendars, debt statistics bulletins and debt portfolio analysis reports.
The latest version of the DMFAS software, version 6, used by the Republic of the Congo is a state-of-the-art specialized debt management software that handles a broad range of debt instruments (external and domestic), and provides powerful reporting and analytical tools which can be linked with other financial software.
DMFAS' focus on debt management complements work on diagnosis, debt strategy and debt sustainability analysis undertaken by other major international and regional technical assistance providers such the World Bank, the International Monetary Fund and the Macroeconomic and Financial Management Institute of Eastern and Southern Africa (MEFMI) among others. Indeed, the work of these organizations is often dependent upon the availability of high quality debt data that results from DMFAS' support to countries.
This is why in recent years DMFAS has strengthened its partnerships with other organizations in the debt management community, for example through a formal collaboration with the multi-stakeholder Debt Management Framework (DMF).
The Programme is currently supported by a group of core donors such as Germany, Ireland, the Netherlands and Switzerland (past donors included Finland, France, Italy, Norway, Sweden, and the European Union).
DMFAS is also supported by an innovative cost-sharing mechanism through which beneficiary countries contribute to the Programme's finances, and the Republic of the Congo is one of the many countries which participate.
By supporting countries to improve their day-to-day management of public liabilities, DMFAS' technical assistance is an excellent example of how the United Nations can help countries to strengthen national capacities.