Debt Management Performance Assessment

2019-03-01, World Bank

The first Debt Management Performance Assessment (DeMPA) for Maldives was conducted in 2009, and a second DeMPA was completed in March 2019. The authorities have taken important steps to improve debt management since the first assessment, but many challenges remain. The government has implemented a series of reforms to public financial and debt management, including changes to the legal and institutional framework. Key measures include a complete overhaul of Treasury operations, the implementation of the Integrated Financial Management Information System (IFMIS) across all government entities in the capital, Malé, the establishment of a Treasury Single Account, and the development of cash-flow forecasting procedures. The coverage of the Commonwealth Secretariat Debt Recording and Management System (CSDRMS) has also been expanded, and the CS-DRMS is now used as a central database for almost all debt obligations, except Islamic finance instruments. The results of the 2019 DeMPA shed light on these improvements and indicate areas for further action.

2019-03, World Bank

A World Bank (WB) mission undertook an assessment of the government's debt management(DeM) capacity and institutions in Maldives during March 20-29, 2019, at the request of theMinistry of Finance (MoF). The objective of the mission was to assess the DeM strengths andareas in need of reform through the application of the Debt Management Performance Assessment (DeMPA) methodology. This is the second evaluation for Maldives; the first DeMPA was conducted by the WB in 2009. The MoF has implemented a series of public finance management reforms in legal and institutional arrangements since the last DeMPA. Treasury operations have experienced a complete overhaul, including the rolling out an Integrated Financial Management Information System (SAP) to government entities on Male', establishment of a Treasury Single Account (TSA) and the development of cash flow forecasting procedures. The coverage of the debt management system, the CS-DRMS, has also been expanded and is now used as a central database for almost all debt obligations (excluding Islamic instruments). The DeMPA methodology, revised in 2015, provides a comprehensive set of indicators spanning the full range of DeM functions and is used for in-depth analysis of government debt management functions and institutions. The results of the assessment help the central government authority to take stock of the current DeM situation and design medium term priority reforms. The results of 2019's assessment for Maldives demonstrate many broad-based improvements implemented in Maldives and provide highlights of pending reforms.

2009-10, World Bank

From October 19 to 27, 2009, a World Bank team in collaboration with the Commonwealth Secretariat undertook a debt management performance assessment of the Government of the Republic of Maldives (GRM). The objective was to undertake a comprehensive assessment of debt management functions using the Debt Management Performance Assessment tool (DeMPA), version of November 2008. As part of the assessment, the team met relevant officials dealing with public debt management in Maldives from the Ministry of Finance and Treasury (MOFT), the Maldives Monetary Authority (MMA), the Attorney General, the Auditor General's office, the National Disaster Management Centre, Capital Markets Development Authority, the State Bank of India and the Bank of Maldives. The assessment for Maldives was timely. The current situation shows moderately high government debt levels (around 55 percent of GDP) with sustainability indicators reflecting vulnerabilities (at current trajectory of primary deficit, the International Monetary Fund (IMF) article four report estimated debt levels would reach 75 percent of GDP by 2013). The recently concluded Public Expenditure and Financial Accountability (PEFA) findings highlighted areas for improvement relating to budget execution and credibility, audit and legislative oversight, cash management and the Treasury Single Account (TSA), and monitoring and managing fiscal risks.