STUDY ON MANAGING SOVEREIGN DEBT IN TIMES OF CRISIS

The document assesses how the COVID-19 pandemic strained sovereign debt management offices (DMOs) in the MEFMI region, highlighting a general lack of comprehensive business continuity plans and procedure manuals. While most countries maintained legal debt limits and audit frequencies, the crisis forced a shift toward remote work and virtual coordination, which increased operational risks and compromised the segregation of duties. The report recommends strengthening operational risk frameworks, investing in digital infrastructure, and introducing 'escape clauses' in regional debt convergence criteria to better handle future crises.

• The pandemic increased debt levels across sub-Saharan Africa, with the average general government gross debt-to-GDP ratio rising from 51.5 per cent in 2019 to 57.8 per cent by the end of 2020.
• Most MEFMI member countries did not breach their legal debt limits during the pandemic, partly because they are bound by SADC and EAC convergence criteria of 50 per cent and 60 per cent respectively, which lack the flexibility of the European Union's 'General Escape Clause'.
• The adoption of remote work and work shifts to contain the virus created operational risks by disrupting the segregation of duties between the front, middle, and back offices of Debt Management Offices (DMOs).
• Coordination of debt management shifted toward virtual tools; 75 per cent of surveyed countries used virtual meetings, and 50 per cent used email and circular resolutions.
• Debt management strategies were adjusted to handle increased deficits; 50 per cent of countries revised fiscal balance projections and 41.7 per cent increased domestic borrowing.
• Nine MEFMI member countries accessed IMF funding through the Rapid Credit Facility (RCF) and Rapid Financial Instrument (RFI), totaling approximately SDR 2.1 billion.
• There is a significant deficiency in operational risk documentation; only two countries have procedure manuals for debt management processes, and only three (Zimbabwe, Namibia, and Rwanda) have operational risk management frameworks.
• Business Continuity Plans (BCPs) are largely absent or outdated; only Namibia and Mozambique reported having BCPs for public debt management, with Namibia being the only one to review its plan during the pandemic.
• Debt reporting and auditing remained largely stable; all countries continued annual financial audits, and most maintained their reporting regularity to the World Bank and IMF, despite some time lags.

APA

FSD Africa (n.d.). STUDY ON MANAGING SOVEREIGN DEBT IN TIMES OF CRISIS. https://fsdafrica.org/wp-content/uploads/2025/05/MEFMI-Report-Chapter-4.pdf

Chicago

FSD Africa. STUDY ON MANAGING SOVEREIGN DEBT IN TIMES OF CRISIS. n.d. https://fsdafrica.org/wp-content/uploads/2025/05/MEFMI-Report-Chapter-4.pdf.

Wikipedia

{{cite report |author=FSD Africa |title=STUDY ON MANAGING SOVEREIGN DEBT IN TIMES OF CRISIS |url=https://fsdafrica.org/wp-content/uploads/2025/05/MEFMI-Report-Chapter-4.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{fsdafricandstudy, author = {{FSD Africa}}, title = {{STUDY ON MANAGING SOVEREIGN DEBT IN TIMES OF CRISIS}}, institution = {FSD Africa}, url = {https://fsdafrica.org/wp-content/uploads/2025/05/MEFMI-Report-Chapter-4.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }