SUDANESE GOVERNMENT'S COLLABORATION WITH DMFAS Presented by: Mrs.Kaltoum Satti Ali Manager General Directorate of Public Debt Management Republic of

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1 1 SUDANESE GOVERNMENT'S COLLABORATION WITH DMFAS Presented by: Mrs.Kaltoum Satti Ali Manager General Directorate of Public Debt Management Republic of Sudan

2 Outlines 2 Overview of Sudan's debt Responsibilities of the DMO DMFAS 6.2 Training Achievements Challenges Lessons learned Plans for the future Recommendations Conclusion

3 Overview of Sudan's debt Sudan has accumulated sizeable external arrears since 1970s its debt burden grew substantially with obligations reaching over USD 45 billion by EOY % of this debt were arrears Sudan remains a highly indebted country 3

4 Sudan External Debt As of 31st of Dec Commercial Banks 13% Foreign Suppliers 5% Multilateral Creditors 12% Paris Club 31% NonParis Club 39% 4

5 Domestic Causes of Debt Accumulation: Poor exchange rate policies in the 1970s and 1980s fed directly into the debt problems High inflation rates contributed to economic instability and low economic growth, while foreign direct investment remained scarce in the volatile economic environment. the second civil war in Southern Sudan(1983 to 2005)absorbed precious financial resources Also during this time, numerous droughts hurt the economy s relatively large agricultural sector. 5

6 External Causes of Debt Accumulation: Two oil price shocks occurred in the late 1970s and early 1980s Global ant-iinflation efforts in creditor countries resulted in higher interest rates and faster accruing interest levels for indebted countries. he drying up of concessional credits forced Sudan to resort to harder lending terms A set of political and economic embargoes deprived the country from approaching the international capital markets 6

7 Current Organizational Structure of Debt Management in Sudan Prime Minister Governor of Central Bank of Sudan Minister of Finance GD of Stock Exchange and Foreign Currencies External Debt Unit Sudan Financial Service Company State Minister OF Economic Plan State Minister of Budget Undersecretary of Economic Planning Undersecretary of Budget GD of Public Debt GD of Foreign Finance External Debt Directorate Domestic Debt Directorate Guarantees SUKUK Subsidiary Agreements 7

8 Current Organizational Structure of DMGD DMGD External Debt Domestic Debt Monitoring & Registration Repayments Loans Monitoring & Registration SUKUK Guarantees Subsidiary Agreements 8

9 Future Organizational Structure of DMGD DMGD External Debt Domestic Debt Front Office Middle Office Back Office Front Office Middle Office Back Office 9

10 History of the acquisition of the DMFAS 1999: AfDB technical assistance : installation and use of DMFAS 5.2 at CBOS by UNCTAD 2015: AfDB Financial support: installation of DMFAS 6.2 at MoFEP By UNCTAD 2005: Norwegian grant : installation of DMFAS 5.3 at Centarl bank of Sudan (CBOS) by UNCTAD 10

11 Technical Assistance &Training received Technical Assistance received from different donors 1999: AfDB technical assistance under Institutional Strengthening Program in three categories, installation and use of DMFAS 5.2, internal training of staff in the debt Unit in form of recording, reporting besides the computer utilities program, and external training in Egypt. 2004: Norwegian government grant : installation & use of DMFAS 5.3, debt data validation, the production of the debt statistical bulletin, the drafting of a Procedures Manual, DPA and various study tours and seminars. 2005: DFID project in the field of loan negotiation & evaluation, Paris Club & Commercial Banks rescheduling, Financial Transactions and study tours 11

12 Training received: 2007 Mission on work programming, project management and other issues Debt Data Validation Workshop, DPA Workshop 2009 Debt statistics, DPA Workshop 2010 training on new version of DMFAS 6 and its new features. 12

13 Current Project with UNCTAD Training & Technical support received: Evaluation of institutional, legal and organizational arrangements of Debt management in Sudan 28 September -8 October Evaluation of training needs for MoFEP during 24 May -1 st of June DMFAS Advance Training :26 March-6 April 2017 and 26 March-13 April 2017 Basic functional training for DMFAS new users at MoFEP during August 2016 and during 21 August - 8 September Technical support and training in installation of DMFAS 6.2 during August 2016 Workshop on production of Debt Statistical Bulletin during the period 6-16 August 2017 Workshop on Debt Portfolio Analysis ( DPA) during the period October

14 Current Project with UNCTAD Training & technical support received (cont ): Conversion of data base of DMFAS 5.3 to DMFAS 6.2. Technical support for Debt data migration and validation based on DMFAS standards 1 st of July-12 August 2016 Drafting of a debt Procedures Manual, Continuous IT backup by technical support. Debt management team Participation in the 11 th UNCTAD conference. 14

15 Recording of loans External Loans Domestic Loans SUKUK Guarantees Subsidiary Agreements Reporting Analysis What DMFAS is used for? 15

16 Main achievements Unification of public debt (domestic and external debt) at MoFEP. DMFAS users at MoFEP are capable to use the basic functionalities of DMFAS 6. (i.e. external and domestic debt modules and production of standard reports.) Upgrading of the capacities of debt mangers and operation staff in debt portfolio Analysis.. Production of the Draft Statistical Bulletin. Recoding and analysis of domestic debt instruments under guidance of DMFAS Experts.. Enhancing capacities in analysis and repotting for both external and domestic debt.. Provide required data and statistics for policy/decision makers.. 16

17 Challenges encountered Strengthening the legal and institutional framework for Public Debt Management Coordination and collaborating between institutions responsible for public debt management within the country. Secure funds for continues human and institutional capacity building in public debt management. Staff turnover and periodic movement. 17 Technical problems regarding integration with PFM systems.

18 Lessons learned DMFAS 6 enabled MoFEP in public debt recording, analysis and reconciliation. DMFAS 6 enabled More to record and create all needed types of demotic debt instruments mainly Islamic types (i.e Sukuk) DMFAS 6 in more advanced compared to the old versions in terms of the technical and functional features. It enables countries to understand their debt structure and position. It Provides timely information to debt managers and policy/decision makers 18

19 Plans for the future Designing and formulating of Medium Term Debt Strategy. Establishment of of Analysis and Reporting Office at DMGD(MoFEP) (within 3 months) Continuation of capacity building programs for the new comers to DMGD 19

20 Plans for the future (cont ) Execution of Payments using DMFAS and Government Resource Planning System (GRP) (DMFAS Integration with GRP System). Establishment of special Unit for production and dissemination of Sudan Public Debt and Sudan s Debt Statistics Bulletin. 20

21 Recommendations for other countries 21 Using DMFAS 6 is very important for it was designed to help countries manage their external and domestic public debt. Using DMFAS 6 is very essential for it depends on reliable database and keeps debt managers and decision makers up-to-date It enables continues improving their Debt recording, analysis and reporting. DMFAS 6 as a web-based solution enables integration with PFM systems.

22 Conclusion: Installation of DMFAS 6 represents a big achievements for our country in terms of public Debt Management. I will take this opportunity on behalf of Sudanese delegation to extends our appreciation and thankful to the UNCTAD and the African Development Bank for their continues technical and financial support. 22

23 THANKS FOR ATTENTION. 23