## tnmea2025012 - Executive Summary

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### Scope and Structure
- Documents covered: Executive Summary; I. Introduction; II. Annual Borrowing Plan (ABP) and benefits; III. ABP within the macroeconomic framework; IV. Steps in formulating an ABP (Steps 1–8); V. Institutional Arrangements; Annex 1 (Gross Financing Need and Granular ABP); References.
- Key illustrative materials: Table 1–7, Annex Table 1.1, Figures 1–7, Boxes 1–3.

### Purpose, tools, and high-level guidance
- Purpose:
  - Primary purpose: meet the government’s GFN for the year ahead, supporting timely financing at the lowest possible cost, subject to prudent risk.
  - ABP implements a 3–5 year DMS on an annual operational basis.
- Tools:
  - ABP technical note supported by an Excel-based Annual Borrowing Plan Tool (ABPT).
  - ABPT links directly with the MTDS AT for data consistency and is designed around monthly cash flows.
- Key operational requirement:
  - ABP requires higher-frequency data and a clear action plan reflecting the time profile of the gross financing need (GFN).

### Key functions and benefits of an ABP
- Benefits:
  - Manage refinancing risk (cash buffers, liability management operations such as buybacks or exchanges).
  - Provide feedback on feasibility of financing assumptions from the budget.
  - Detect and address potential in-year financing gaps.
  - Facilitate engagement with investors via publication and issuance calendars.
  - Support market development and benchmark yield-curve building.
  - Monitor progress against the DMS using cost-risk indicators.
  - Increase transparency and discipline; publication of ABP and issuance calendars is strongly recommended.

### ABP’s role within the macroeconomic framework
- Necessary linkages:
  - Debt management (DMS consistency and monitoring).
  - Fiscal policy (budget formulation and execution; gross/net borrowing limits).
  - Cash management (cash flow forecasts, TSA projections, cash buffers, prefunding).
  - Monetary policy (government securities operations affect market liquidity; coordinate with central bank).
  - Market development and financial regulation (regulatory changes and investor dialogue).
- Cash buffers:
  - Typically sized by the Cash Management Unit (CMU), informed by the Debt Management Unit (DMU); buffers drawn down should be replenished in the following year.
- Data requirements:
  - Accurate, up-to-date projections of revenues, primary expenditures, and debt service; debt service projections should ideally be extracted from the debt recording system.

### Illustrative DMS and ABP targets and compositions (preserve figures exactly)
- Illustrative DMS gross financing (local currency, millions) — Year 1 / Year 2 / Year 3:
  - Multilateral: 5,750 [40] / 5,500 [40] / 5,000 [37]
  - Bilateral: 750 [5] / 650 [5] / 500 [4]
  - FX commercial loan: 750 [5] / 650 [5] / 500 [4]
  - Treasury bills (T-bills): 4,000 [28] / 3,000 [22] / 2,500 [19]
  - Bonds: 3,250 [22] / 4,000 [29] / 5,000 [37]
- Illustrative DMS portfolio risk targets — At the Start / At the End of Strategy Period:
  - FX debt as a percentage of total: 50 / 45
  - Debt refixing in 1 year (%): 30 / 25
  - ATR in years: 7 / 9
  - Debt maturing in 1 year (%): 20 / 15
  - ATM in years: 8 / 10
- Illustrative ABP gross financing composition (Table 2, local currency, in millions; percentages):
  - Gross financing need: 14,500
  - Multilateral: 5,750 (40%)
  - Bilateral: 750 (5%)
  - Commercial loans: 750 (5%)
  - T-bills: 3,750 (26%)
  - T-bonds: 3,250 (22%)
  - Net change in cash balances: (250) (−2%)
  - Total: 14,500 (100%)
  - Note: domestic sources projected to contribute 50 percent of total financing, with 2 percent sourced from cash drawdown.

### Steps in formulating an ABP (Steps 1–8, condensed)
- Step 1: Identify the DMS and its debt coverage
  - ABP derived from the DMS; use same debt coverage (typically central government); keep deviations within predefined thresholds unless intentional.
- Step 2: Obtain the most recent annual GFN and in-year time profile
  - Update ABP if GFN changes; liaise with CMU; example change: Gross financing need: (14,500) → (15,000).
  - Example line items preserved exactly:
    - Revenues and grants: 12,000 → 11,900
    - Primary expenditure: (18,000) → (18,235)
    - Interest payments: (1,850) → (1,925)
    - Principal payments: (6,500) → (6,600)
    - Gross financing need: (14,500) → (15,000)
- Step 3: Identify borrowing instruments for the ABP
  - Typical instruments (Table 4): Nonmarketable (multilateral, bilateral, commercial loans, special government securities, central bank loans, retail instruments) and marketable (international bonds, T-bonds, T-bills).
  - Specify instruments at granular level (e.g., 3-, 6-, 12‑month T-bills; coupon frequency).
  - Illustrative DMS→ABP movement (selected):
    - Foreign currency financing: 50% → 7,250 (ABP)
      - Multilateral: 40% → Multilateral 5,750
      - Bilateral: 5% → Bilateral 750
      - Commercial loans and bonds: 5% → Commercial loans and bonds 750
    - Local-currency financing: 50% → 7,250 (ABP)
      - T-bills: 26% → T-bills 3,750 (3-month T-bills 2,500; 6-month T-bills 1,500)
      - Short- and medium-term bonds: 15% → 2,200 (2-year bond 1,250; 5-year bond 1,000)
      - Long-term bonds: 7% → 1,050 (7-year bond 750; 10-year bond 250)
      - Net change in cash balances: (2%) → (250)
- Step 4: Formulate a granular ABP
  - Break annual GFN by quarter or month; ABPT designed around monthly cash flows; prefer starting with external financing in granular plan.
  - Link financing tied to specific expenditures or conditional disbursements to GFN and funding schedule.
- Step 5: Produce issuance calendars
  - Publish issuance calendar as stand-alone or as part of ABP; include all government securities operations and liability management operations; specify methods of issuance.
  - Recommended auction practices: publish auction calendars; maintain consistent ranges for auction sizes by tenor; hold T-bill tenders more frequently than T-bonds; build benchmark bonds with target minimum outstanding.
- Step 6: Validate the ABP against DMS targets
  - Define acceptable thresholds (example: ±5 percent) before formulating ABP; exceeding thresholds should trigger ABP/DMS review and communication to policymakers.
  - Stylized DMS target comparison (Table 6 exact figures preserved):
    - FX ATM (years): 9.3 11.8 13.8 [10.0 –15.0]
    - DX ATM (years): 3.7 3 .1 2.9 [3.0–5.0]
    - FX debt refixing in 1 year (in %): 29 25.9 27.1 [25.0–30.0]
    - DX debt refixing in 1 year (in %): 39. 3 30.2 25 .1 [25.0–40.0]
    - Ratio of FX debt maturing in 1 year to FX reserves (in %): 6.6 4.3 3 .1 [4.5–6.5]
- Step 7: Publish the ABP and issuance calendars
  - Publish high-level ABP with the budget; refined/detailed ABP to follow (detailed ABP should be published before the beginning of the year).
  - Types of ABP: ABP based on DMS; High-level ABP; Detailed ABP; Granular ABP (monthly/quarterly for internal use).
  - Practical: if time-constrained, publish high-level nominal amounts/percentages and update with detailed ABP later.
- Step 8: Monitor and review the ABP regularly
  - Update ABP as budgets/borrowing needs are revised; use buffers for exogenous shocks; material revisions should be communicated publicly; ABP outcomes should feed rolling DMS updates.

### Publication, timing, and credibility
- Recommended practice:
  - High-level ABP published alongside budget or at budget approval; detailed ABP published before the start of the year where possible.
  - Issuance calendars: annual calendar, supplemented by quarterly and monthly auction calendars; publish further details closer to issuance.
- Credibility risks:
  - Large deviations from ABP amounts/instruments or frequent auction cancellations undermine credibility.
  - Under elevated uncertainty, shorten calendar horizon to publish a more reliable document.

### Institutional arrangements and DMU roles (selected responsibilities)
- General: Front Office (FO) leads ABP preparation with input from Middle Office (MO); Back Office (BO) provides accurate debt service projections; coordination with CMU and central bank is essential.
- Front Office selected responsibilities:
  - New loan negotiations; ABP preparation; domestic securities issuance; designing auction calendar; auction management; liquidity management; market monitoring.
- Middle Office selected responsibilities:
  - Designing DMS; support ABP development; DMS- and ABP-related policies; dissemination to investors and stakeholders.
- Back Office selected responsibilities:
  - Recording and reconciliation of debt data; management of disbursements; debt statistics and reports.
- Recommended governance:
  - Formal procedures, MoUs where needed; end-of-year assessment of ABP implementation led by MO.

### Illustrative granular ABP and Annex 1 selected figures (Annex Table 1.1 preserved exactly where shown)
- Gross financing need (In millions of local currency) — selected months:
  - Jan 2,495.90
  - Feb 1,651.93
  - Mar 1,669.59
  - Apr 632.60
  - May 2,409.49 (14 4. 28)
  - Jun 2,533.05
  - Jul 1,935. 26
  - Aug 888.44
  - Sep 1,396.89
  - Oct 1,218 .16
  - Nov 538.48
- Primary deficit (selected months):
  - Jan 192.96
  - Feb 772.89
  - Mar 618 . 32
  - Apr (453.66)
  - May 1, 813.70
- Interest payment (selected months and split):
  - Jan 245.08 (Foreign currency 53.60; Local currency 191.4 8)
  - Feb 181.33 (Foreign currency 25.53; Local currency 155.81)
  - Mar 288.36 (Foreign currency 149.75; Local currency 138 . 61)
- Overall deficit (selected months):
  - Jan 438.04
  - Feb 954.23
  - Mar 906.67
  - Apr (331.25)
  - May 1, 894 .19
- Principal payment (selected months and split):
  - Jan 2 , 0 5 7. 8 6 (Foreign currency 1,725. 26; Local currency 332.60)
  - Feb 69 7. 70 (Foreign currency 2 9.14; Local currency 668.56)
  - Mar 762.92 (Foreign currency 243.98; Local currency 518 .95)
- Gross financing sources (selected months):
  - Jan 2,571.45 (Foreign currency 1,000.00; Domestic currency 1,571.45)
  - Feb 1, 59 7. 7 7 (Foreign currency 750.00; Domestic currency 8 47. 7 7)
  - Jul 3,938.68 (Foreign currency 3,750.00; Domestic currency 188.68)
- Domestic instrument schedule (selected commitments, In millions of local currency):
  - T-bills* Jan 1,171. 4 5; Feb 2 9 7. 7 7; Mar 684.96
  - 2-year bond Feb 300.00; Apr 300.00; Aug 300.00; Oct 300.00; Dec 300.00
  - 3-year bond Jan 300.00; Mar 300.00; May 300.00; Sep 300.00; Nov 300.00
  - 7-year bond Jan 100.00; May 100.00; Oct 100.00; Dec 100.00
  - 10-year bond Feb 50.00; Aug 50.00; Nov 50.00
- (+Overfinancing/-Shortfall) Monthly financing gap (selected months):
  - Jan 75.55
  - Feb (5 4 .16)
  - Mar 65.36
  - Apr 106.08
  - May (178 . 6 6)
  - Jun 332.96
  - Jul 1,405.63
  - Aug (446.58)
  - Sep (99.76)
  - Oct (3 0 8 . 21)
  - Nov (679.4 8)
  - Dec 50.20
- Cumulative financing gap (end-Dec) 268.94
- Memo (T-bill financing disbursements — selected):
  - 3 months Jan 496.28; Feb 2 9 7. 7 7; Mar 496.28
  - 6 months Jan 39 2.16; May 39 2.16
  - 12 months Jan 283.02; Mar 188.68; Apr 188.68; ... Dec 188.68
- Net financing (selected months):
  - Jan 1,171. 4 5
  - Feb 2 9 7. 7 7
  - Mar 684.96
  - Apr (311. 3 2)
  - May 280.84
  - Jul (211. 3 2)
  - Dec 188.68

### Publication and preparatory timing note
- 2024. Preparation for the 2025 ABP should start in earnest in 2024.

*Source: tnmea2025012 - Executive Summary (tnmea2025012 - Executive Summary, PDF).*

### Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

### tnmea2025012 - Executive Summary

### Scope and Structure
- Executive Summary (page 2)
- I. Introduction (page 3)
- II. Annual Borrowing Plan (page 4)
  - A. What Is an ABP? (page 4)
  - B. Benefits of an ABP (page 6)
- III. The ABP within the Macroeconomic Framework (page 8)
- IV. Steps in Formulating an ABP (page 10)
  - Step 1: Identify the DMS and Its Debt Coverage (page 10)
  - Step 2: Obtain the Most Recent Annual Gross Financing Need and Its In-Year Time Profile (page 11)
  - Step 3: Identify the Borrowing Instruments for the ABP (page 12)
  - Step 4: Formulate a Granular ABP (page 14)
  - Step 5: Produce Issuance Calendars (page 17)
  - Step 6: Validate the ABP against the DMS Targets (page 21)
  - Step 7: Publish the ABP and Issuance Calendars (page 22)
  - Step 8: Monitor and Review the ABP Regularly (page 24)
- V. Institutional Arrangements (page 25)
- Annex 1. Gross Financing Need and Granular ABP (page 27)
- References (page 29)

### Key Tools, Outputs, and Illustrative Materials
- Tables listed in the Executive Summary:
  - Table 1. DMS: Illustrative Key Outputs and Targets
  - Table 2. ABP: Illustrative Gross Financing Based on DMS for Year 1
  - Table 3. Illustrative GFN: At DMS and ABP Stages
  - Table 4. Typical Borrowing Instruments
  - Table 5. Illustrative DMS and ABP: Moving from the DMS to an ABP
  - Table 6. Stylized DMS Targets
  - Table 7. Stylized High-Level and Detailed ABP
  - Annex Table 1.1. Illustrative Monthly GFN and Granular ABP
- Figures listed in the Executive Summary:
  - Figure 1. Meeting Debt Management Objectives through DMS and ABP
  - Figure 2. ABP and Key Macroeconomic Interlinkage
  - Figure 3. Debt Coverage for the ABP
  - Figure 4. Main Components of Gross Financing Need
  - Figure 5. Illustrative: Monthly Domestic GFN, Cash Buffer, and Auction Calendar
  - Figure 6. ABP: Indicative Timeline for Preparation and Publication
  - Figure 7. ABP Responsibilities within the DMU
- Boxes listed:
  - Box 1. The Annual Borrowing Plan Tool
  - Box 2. Steps Required to Produce an Issuance Calendar
  - Box 3. Issuance Calendars of Côte d’Ivoire and Fiji

### Steps in Formulating an ABP (as enumerated)
- Step 1: Identify the DMS and Its Debt Coverage
- Step 2: Obtain the Most Recent Annual Gross Financing Need and Its In-Year Time Profile
- Step 3: Identify the Borrowing Instruments for the ABP
- Step 4: Formulate a Granular ABP
- Step 5: Produce Issuance Calendars
- Step 6: Validate the ABP against the DMS Targets
- Step 7: Publish the ABP and Issuance Calendars
- Step 8: Monitor and Review the ABP Regularly

### Illustrative Analytical and Operational Elements
- Gross Financing Need (GFN) and its monthly/in-year profile are central to moving from DMS to ABP (Annex 1 and Annex Table 1.1.)
- The document provides illustrative tables linking DMS outputs and targets to ABP-level gross financing and issuance.
- Issuance calendars and auction scheduling are treated as operational outputs derived from the granular ABP.
- Institutional roles and responsibilities for ABP preparation and publication are addressed in the Institutional Arrangements section and Figure 7.

### Abbreviations (as listed)
- ABP annual borrowing plan
- ABPT Annual Borrowing Plan Tool
- ATM average time to maturity
- ATR average time to refixing
- BO back office
- CMU Cash Management Unit
- DMS debt management strategy
- DMU Debt Management Unit
- DX domestic currency
- FJD Fijian dollar
- FO front office
- FX foreign currency
- GFN gross financing need
- IMF International Monetary Fund
- MO middle office
- MTDS medium-term debt management strategy
- MTDS AT Medium-Term Debt Management Strategy Analytical Tool
- T-bills Treasury bills
- T-bonds Treasury bonds
- TSA Treasury Single Account
- WAEMU West African Economic Monetary Union
- WB World Bank
- XOF WAEMU franc

*Source: tnmea2025012 - Executive Summary (tnmea2025012 - Executive Summary, PDF).*

### Executive Summary

### Executive Summary — Preparing an Annual Borrowing Plan

### Progress, purpose, and tools
- Emerging market and low-income countries have made good progress in formulating debt management strategies, but implementation challenges remain.
- The IMF and World Bank published MTDS guidance in 2009 and updated guidance in 2019; the MTDS framework is supported by the MTDS analytical tool (MTDS AT).
- A DMS typically has a horizon of 3–5 years and is implemented through an annual borrowing plan (ABP).
- The ABP technical note is supported by an Excel-based tool (ABPT) that:
  - Links directly with the MTDS AT for data consistency.
  - Helps organize domestic debt issuance operations, emphasizing the role of Treasury bills (T-bills) and Treasury bonds (T-bonds).
  - Allows users to plan external borrowing.
- An ABP requires higher-frequency data and a clear action plan through an annual borrowing plan (ABP) reflecting the time profile of the gross financing need (GFN).

### Key functions and benefits of an ABP
- Primary purpose: meet the government’s GFN for the year ahead, supporting the debt manager’s objective to meet financing requirements on time and at the lowest possible cost, subject to prudent risk.
- Benefits:
  - Manage refinancing risk (including buildup/use of cash buffers and liability management operations such as buybacks or exchanges).
  - Provide feedback on feasibility of financing assumptions from the budget.
  - Detect and address potential in-year financing gaps.
  - Facilitate engagement with investors and stakeholders through publication and issuance calendars.
  - Support market development and the building of benchmark yield curves.
  - Monitor progress against the DMS by tracking cost-risk indicators.
  - Increase transparency and discipline in borrowing activities; publication of ABP and issuance calendars is strongly recommended.

### ABP’s role within the macroeconomic framework
- The ABP must be linked with:
  1. Debt management (DMS consistency and monitoring).
  2. Fiscal policy (budget formulation and execution; inputs for gross or net borrowing limits).
  3. Cash management (cash flow forecasts, TSA projections, cash buffers, prefunding).
  4. Monetary policy (government securities operations affect market liquidity; coordination with central bank is necessary).
  5. Market development and financial regulation (dialogue with financial regulators; regulatory changes can affect investor demand).
- Accurate and up-to-date projections of revenues, primary expenditures, and debt service are essential; debt service projections should ideally be extracted from the debt recording system.
- Cash buffers: size and design usually determined by the Cash Management Unit (CMU) but informed by the Debt Management Unit (DMU); buffers drawn down should be replenished in the following year.

### Key outputs and illustrative targets (as presented)
- Illustrative DMS outputs and targets (Table 1 excerpts):
  - Gross Financing (in local currency, millions) — Year 1 / Year 2 / Year 3
    - Multilateral: 5,750 [40] / 5,500 [40] / 5,000 [37]
    - Bilateral: 750 [5] / 650 [5] / 500 [4]
    - FX commercial loan: 750 [5] / 650 [5] / 500 [4]
    - Treasury bills (T-bills): 4,000 [28] / 3,000 [22] / 2,500 [19]
    - Bonds: 3,250 [22] / 4,000 [29] / 5,000 [37]
  - Debt Portfolio Risk Targets — At the Start / At the End of Strategy Period
    - FX debt as a percentage of total: 50 / 45
    - Debt refixing in 1 year (%): 30 / 25
    - ATR in years: 7 / 9
    - Debt maturing in 1 year (%): 20 / 15
    - ATM in years: 8 / 10
- Illustrative ABP gross financing composition (Table 2 excerpts):
  - Gross financing need (local currency, in millions) = (14,500)
  - Sources/Instruments (local currency, in millions; percentage of total)
    - Multilateral: 5,750 (40%)
    - Bilateral: 750 (5%)
    - Commercial loans: 750 (5%)
    - T-bills: 3,750 (26%)
    - T-bonds: 3,250 (22%)
    - Net change in cash balances: (250) (−2%)
    - Total: 14,500 (100%)
  - Note: A negative change signifies cash drawdown; domestic sources projected to contribute 50 percent of total financing, with 2 percent sourced from cash drawdown.

### Steps and operational guidance for preparing an ABP
- Step 1: Identify the DMS and its debt coverage
  - ABP should be derived from the DMS and use the same debt coverage (typically central government debt).
  - Keep material deviations within predefined thresholds unless intentional.
- Step 2: Obtain the most recent annual GFN and its in-year time profile
  - Update ABP if GFN changes between DMS and ABP preparation.
  - Liaise with the CMU for the most up-to-date GFN and other flows.
  - Illustrative change from DMS to ABP stage (Table 3):
    - Revenues and grants: 12,000 → 11,900
    - Primary expenditure: (18,000) → (18,235)
    - Interest payments: (1,850) → (1,925)
    - Other flows: (150) → (140)
    - Asset sales: 50 → 10
    - On-lending: (200) → (150)
    - Principal payments: (6,500) → (6,600)
    - Gross financing need: (14,500) → (15,000)
  - Cash buffer considerations: differentiate buffers for precautionary needs versus funds set aside from prior-period issuance.
- Step 3: Identify borrowing instruments for the ABP
  - Typical borrowing instruments (Table 4):
    - Nonmarketable: official creditors (multilateral, bilateral), commercial loans, special government securities, central bank loans, retail instruments.
    - Marketable: international bonds, T-bonds, T-bills.
  - Reassess feasibility of DMS-assumed instruments given current market conditions; specify instruments at the most granular level possible (e.g., 3-, 6-, 12-month T-bills; coupon payment frequency).
  - Illustrative movement from DMS to ABP (Table 5 highlights):
    - Total financing: 100% (GFN 14,500 at DMS stage → 15,000 at ABP stage)
    - Foreign currency financing: 50% → 7,250 (ABP)
      - Multilateral: 40% → Multilateral 5,750 (with examples of World Bank (IDA) Loans 2,250; Caribbean Development Bank loan 1,875; Inter-American Development Bank loan 1,875)
      - Bilateral: 5% → Bilateral 750
      - Commercial loans and bonds: 5% → Commercial loans and bonds 750 (International bond 10-year 750)
    - Local-currency financing: 50% → 7,250 (ABP)
      - T-bills: 26% → T-bills 3,750 (3-month T-bills 2,500; 6-month T-bills 1,500)
      - Short- and medium-term bonds: 15% → 2,200 (2-year bond 1,250; 5-year bond 1,000)
      - Long-term bonds: 7% → 1,050 (7-year bond 750; 10-year bond 250)
      - Net change in cash balances: (2%) → (250)
- Step 4: Formulate a granular ABP
  - Break down annual GFN by quarter or month to match borrowing frequency with cash flow needs.
  - ABPT is designed around monthly cash flows and assists in developing a granular ABP.
  - Prefer starting with external financing sources when building the granular plan because timing of loan disbursements is often arranged in advance.
  - Identify financing tied to specific expenditures or conditional disbursements (e.g., multilateral creditor conditions) and link them to both GFN and funding schedule.

### Institutional roles and publication
- Front office of the DMU should be in charge of preparing the ABP in close collaboration with the middle office; the middle office should be involved for DMS development, risk management, and intergovernmental collaboration.
- Publication of the ABP is strongly recommended:
  - A high-level borrowing composition version should accompany the budget, with a more refined version to follow.
  - For government securities, publish an issuance calendar to improve predictability and investor engagement.

*Source: IMF and World Bank staff (Executive Summary, Preparing an Annual Borrowing Plan).*

### BOX 1. The Annual Borrowing Plan Tool

### BOX 1. The Annual Borrowing Plan Tool

### Purpose and Key Features
- The Annual Borrowing Plan Tool is a Microsoft Excel–based tool that complements the guidance provided in this technical note.
- Purpose: support the quantitative development of an annual borrowing plan (ABP) using monthly or quarterly cash flows and the government securities issuance calendar.
- Best used with the jointly developed IMF-WB Medium-Term Debt Management Strategy Analytical Tool, but can be used independently.
- Helps debt managers:
  - evaluate feasibility of covering the financing need;
  - monitor progress of ABP execution during the year;
  - compare implied debt portfolio risk indicators at the end of the ABP year against risk targets.
- Instructions in the tool describe required data and key features; detailed concepts are in the Annual Borrowing Plan Tool manual.

### Data and Currency Treatment
- External borrowing projections should normally be converted to local currency using the most recent exchange rate.
- Footnote guidance: assumptions may be needed about lags between receipt of external flows and conversion to domestic currency; FX projections for the intra-year period may also have to be made (for example, using constant real exchange rates based on projected inflation for countries with high inflation).
- Produce estimates first for any nonmarketable financing (examples: prearranged on-lending, special drawing right allocation, planned commercial loans, receipts from a retail savings program).
  - Footnote: Commercial loans can also be used as a short-term safety net in response to unanticipated cash outflows.

### Uses in Design Stage
- The marketable-government-securities portion of the ABP forms the basis of the issuance plan.
- Issuance plan elements: direct placements, syndications, auctions, exchanges, buyback operations.
- Transparency practices: announce operations beforehand, post results afterward, let prices adjust to clear the market.
- For auctions, recommended practices:
  - publish auction calendars;
  - maintain consistent ranges for auction sizes (which may differ by tenor);
  - organize frequency and sequencing of auctions (hold T-bill tenders more frequently than T-bonds);
  - build benchmark bonds (define a target minimum outstanding to enhance liquidity and price discovery);
  - use short-term instruments to smooth issuance and address minor variations in the GFN.
- Importance of investor base understanding: investor characteristics, behavior, instrument preferences, and demand patterns (for example, demand may be subdued at quarter-ends when liquidity is relatively scarce).
- Regular consultation with investors and intermediaries is recommended.

### Market Conditions and Risk Monitoring
- Domestic securities are most flexible when local markets are relatively developed and liquid; T-bills are generally most suitable to meet unforeseen in-year financing gaps.
- DMU should monitor market rates closely because they affect new borrowing terms and interest payments on existing debt.
- Risks identified:
  - securities that need refinancing within the year = refinancing and interest rate risk;
  - floating-rate instruments = interest rate risk;
  - foreign-currency-denominated securities = exchange rate risk.
- Debt managers should be ready to adjust financing program to accommodate changes in market rates.
- Coordination with cash managers, Treasury (CMU), and central bank is important (settlement dates, coupon and redemption timing, avoid auction timing that competes with central bank operations).

### Step 5: Produce Issuance Calendars
- The issuance calendar should be published as a stand-alone document or as part of the ABP.
- Include all government securities operations, including liability management operations (buybacks and exchanges), and specify methods of issuance (auctions, syndications, private placements).
- Calendar should include as much information as possible about domestic issuances.
- Publish annual calendar if possible; disclose further details closer to issuance with quarterly and monthly auction calendars (tenors, currency, indicative offering amounts).
- Publication advantages: gives investors and intermediaries time to prepare and market bonds.
- Design issuance calendar in close coordination with CMU and central bank; inform instrument choice, amounts, timing by debt service projections, above-the-line cash flow forecasts, and minimum cash balance.
- Operational arrangements must ensure timely debt service payments.
- Footnote guidance: issuance should take place at the prevailing market rate; debt and cash managers should use tools to mitigate risks including building or reducing cash buffers.
- Domestic debt securities should ideally be issued primarily by auction to ensure transparent price discovery and market development.

### BOX 2 — Steps Required to Produce an Issuance Calendar
1. Identify financing instruments and their relative contributions to the financing need based on the debt management strategy.
2. Determine the financing need to be met by issuance of domestic marketable government securities (obtain weekly or monthly breakdown of the gross financing need).
3. Decide the instruments to be issued (specifying their tenor, for example, 3-month and 6-month T-bills, 3-year, 5-year, and 10-year bonds). For bonds, specify the number of issuances and target size.
4. Organize auctions, by setting out the offering size range for each bond, the frequency and sequencing of issuance (for example, 3-year bond, in local currency 100–200 million at each auction to be offered every other week).
5. Organize maturities by security (for example, 3-year bonds to mature on May 15 and November 15).
6. Determine any liability management operations (setting out the type of operation, timing, and target size).
7. Produce the issuance calendar.
8. Determine the frequency, format, and detail of communication (for example, an indicative annual calendar and a more detailed quarterly calendar).
9. Review and adjust periodically based on market conditions, demand, and updates on the budget forecast.

### BOX 3 — Examples: Côte d’Ivoire and Fiji (highlights)
- Many countries prepare quarterly issuance calendars; some provide a full-year program.
- WAEMU publishes quarterly issuance calendars for members (example: Côte d’Ivoire’s calendar for Q2 2023 shows auction dates, instruments, and amounts in XOF billions).
  - Example month totals (XOF billions): April 41; May 91; June 132; totals and detailed instrument splits listed in source tables.
  - Instruments listed include T-bills (3 months, 6 months, 12 months) and bonds (3 year, 5 year, 7 year) with specific amounts.
- Fiji publishes a yearly issuance calendar as part of its ABP indicating dates, types of operations, targeted issuance amounts, and tenors.
  - Example FJD millions by tenor and month are presented in the source tables (10 year, 15 year, 20 year bond lines; T-bill 3-month, 6-month, 12-month lines).
  - Publication notes: prior to issuance, Ministry of Finance provides type of issuance, International Security Identification Number, tenor, amount, maturity, interest payment date, coupon rate, noncompetitive tender details, and tender form.
- Sources referenced: West African Economic Monetary Union and Fiji Ministry of Finance.

### Illustrative Coordination and Cash Management
- Figure example: Illustrative monthly domestic GFN, cash buffer, and auction calendar showing cash flow projection, bonds, T-bills, domestic financing requirement, closing cash balance, and minimum cash balance (presented in local currency millions in source).

### Step 6: Validate the ABP against the DMS Targets
- Define acceptable thresholds for deviations from the DMS, ideally before formulating the ABP.
  - Example simple threshold: ±5 percent.
  - Or thresholds informed by cost-risk indicators when deviations hinder compliance with strategy-period risk targets.
- Exceeding thresholds should trigger review of the ABP or the DMS and be communicated to policymakers.
- Any significant divergence from the DMS should be explainable and based on sound arguments (example: breaching exchange rate risk target because of securing highly concessional loans).
- Monitor in-year changes to the ABP against DMS targets.

- Stylized example of DMS target comparison (Table 6 figures preserved exactly):
  - Risk Indicators: Before the Design of ABP (Year 0); Projections Based on ABP Implementation (at the end of Year 1) (Year 1); Projections at the End of the Strategy Period (for example, in 3 years) (Year 3 — DMS Targets).
  - Refinancing:
    - FX average time to maturity (years): 9.3 11.8 13.8 [10.0 –15.0]
    - DX average time to maturity (years): 3.7 3 .1 2.9 [3.0–5.0]
  - Interest rate:
    - FX debt refixing in 1 year (in %): 29 25.9 27.1 [25.0–30.0]
    - DX debt refixing in 1 year (in %): 39. 3 30.2 25 .1 [25.0–40.0]
  - Exchange rate:
    - Ratio of FX debt maturing in 1 year to FX reserves (in %): 6.6 4.3 3 .1 [4.5–6.5]

### Step 7: Publish the ABP and Issuance Calendars
- Publish a high-level ABP alongside the budget or at time of budget approval, ideally before the start of the budget year.
- High-level ABP: general breakdown of financing sources based on the DMU-prepared ABP.
- Internal ABP work should start as soon as an estimate of the GFN is available and be revised through budget iterations to identify financing gaps or unrealistic issuance plans before budget finalization.
- Indicative timeline: ABP preparation starts the previous year; activities mapped across 3rd Quarter / 4th Quarter leading to DMS approval, ABP preparation, and publication of a high-level ABP with or as part of the budget.

*Source: IMF and WB staff.*

### 2024. Preparation for the 2025 ABP should start in earnest in 2024.

### 2024. Preparation for the 2025 ABP should start in earnest in 2024.

### Types of ABP and publication timing
- Four ABP types discussed:
  - ABP based on DMS.
  - High-level ABP: the ABP commonly published alongside the budget.
  - Detailed ABP: the high-level ABP with more specific instruments, accompanied by amount and/or percentage ranges. Published as a stand-alone document.
  - Granular ABP: High-frequency cash flow—monthly or quarterly—prepared for internal purposes with as much specificity as possible on instruments (Annex A). Preparation should start as early as possible and be updated throughout the year for the remaining months.
- Practical guidance:
  - If time constraints prevent a detailed ABP at budget publication, the DMU should publish a high-level overview showing nominal amounts (or percentages of the total) from different sources (for example, multilateral, bilateral official, concessional, T-bills, T-bonds).
  - The high-level ABP should be part of the budget document and supplemented later by a stand-alone detailed ABP specifying amounts as ranges (for flexibility).
  - The detailed ABP should be published before the beginning of the year for which it is prepared.
  - Publication of a stand-alone detailed ABP enhances transparency, accountability, and the connection with the DMS, including target cost and risk indicators.

### Stylized high-level and detailed ABP (key figures from Table 7)
- High-Level ABP (In millions of local currency) / Percentage of Total:
  - External:
    - Multilateral 5,750 40
    - Bilateral 750 5
    - Commercial loans 750 5
  - Domestic:
    - T-bills 3,750 27
    - Bonds 3,250 22
  - Net change in cash balance (250) (2)
  - Total 15,000 100
- Detailed ABP (In millions of local currency) / Percentage of Total (ranges shown as in source):
  - External — Official creditors:
    - Multilateral [5,500–6,500][30 –50]
    - World Bank [2,500–3,500][15 –25]
    - Caribbean Development Bank [1,500–2,500][10 –15]
    - Inter-American Development Bank [750–1,500][5–10]
    - Bilateral [700–800][3–7]
    - Paris Club [700–800][3–7]
    - Commercial loans [700–800][3–7]
    - International loan [700–800][3–7]
  - Domestic — Government securities:
    - T-bills (3 months) [2,000–3,000][15−20]
    - T-bills (6 months) [1,000–2,000][5 −15]
    - 2-year bond [1,000–1,500][5 −10]
    - 5-year bond [1,000–1,500][5 –10]
    - 7-year bond [500–1,000][2–7]
    - 10-year bond [150–350][1−3]
  - Net change in cash balance (250) (2)
  - Total 15,000 100

### Domestic issuance calendar and market credibility
- A domestic issuance calendar should be published, particularly with a shorter horizon for transparency.
- Large deviations from the ABP amounts and instruments or frequent auction cancellations undermine ABP credibility.
- Under elevated uncertainty, weigh shortening the calendar’s horizon against publishing a more reliable document.
- Explicitly indicate that T-bill issuance or auction size may be more variable than Treasury bond equivalents to facilitate TSA cash-flow smoothing.

### Monitoring, review, and updates (Step 8)
- Key monitoring tasks:
  - Policy units responsible for budget formulation and Treasury cash flow forecasting must monitor and communicate changes to budget cash flows to the DMU.
  - Transactions or events that could lead to unexpected gaps in the GFN require special attention.
- ABP updates:
  - ABP will be updated as budgets and borrowing needs are revised.
  - Use of buffers is preferred to deal with exogenous shocks; if shocks require ABP updates, communicate changes promptly.
  - Variation in budget cash flows that materially changes the GFN should be communicated to debt managers to adjust the ABP.
- Trade-offs and market considerations:
  - Predictability vs. flexibility is crucial, especially where domestic bond markets are less liquid.
  - Capacity to issue T-bills or short-term T-bonds is beneficial to respond quickly to changes in GFN.
  - Market conditions and investor risk sentiment, global financial conditions, or domestic shocks (for example, problems in a big domestic bank) will affect borrowing capacity.
  - Keep continuous monitoring of global and domestic financial conditions and be prepared to amend domestic issuance plans or provide feedback to fiscal authorities.
- Link to DMS:
  - ABP outcomes should feed into rolling annual updates of the DMS.
  - Material revisions to the ABP should be communicated publicly, with explanations of main changes and causes.
  - If ABP revisions imply divergence from the DMS, consider an early review of the DMS.
  - Annual debt management reports should assess ABP execution, divergences from quantitative targets, and reasons for deviations.
- Special notes:
  - Within-year timing variation should be handled via cash management.
  - In some low-income country contexts, funding projections should inform fiscal authorities so expenditure can be adjusted to avoid arrears.

### Institutional arrangements and roles within the DMU (Figure 7)
- General arrangement:
  - The Front Office (FO) should lead ABP preparation with input from the Middle Office (MO); the Back Office (BO) provides accurate debt service projections.
  - Regular interaction with cash management, fiscal/budget, monetary, and financial regulation units is necessary.
  - Formal definition of responsibilities and internal procedures (and MoUs where external actors are involved) is recommended to ensure timely inputs and quality assurance.
  - An end-of-year assessment of ABP implementation, led by the MO, is recommended.
- Front Office responsibilities (selected):
  - New loan negotiations
  - ABP preparation
  - Domestic securities debt issuance
  - Designing auction calendar
  - Auction process and management
  - Monitoring lending/on-lending and guarantees including their impact on GFN
  - Liquidity management to address deviation from ABP
  - Market monitoring to ensure ABP feasibility
- Middle Office responsibilities (selected):
  - Designing DMS
  - Support ABP development
  - DMS- and ABP-related policies
  - Supporting macro-fiscal unit on DSA monitoring consistency with ABP
  - ABP dissemination among investors, rating agencies, the public and policymakers
- Back Office responsibilities (selected):
  - Recording and reconciliation of debt data (key input for ABP)
  - Management of disbursements and related administration (given implications for ABP)
  - Debt statistics and reports, including internal ones on ABP implementation
- Coordination:
  - Cash management function is integral to ABP development and implementation; the FO should be the sole agent in the market to avoid conflicting signals.
  - Forecasting and management of conditionality-linked disbursements require coordination between FO and relevant ministries and BO.
  - Central bank consultation at planning and implementation stages (preferably within a coordination committee) is recommended for liquidity management, FX flows, and banking regulatory inputs.

### Annex 1 — Illustrative Monthly GFN and Granular ABP (selected figures from Annex Table 1.1)
- Gross financing need (In millions of local currency):
  - Jan 2,495.90
  - Feb 1,651.93
  - Mar 1,669.59
  - Apr 632.60
  - May 2,409.49 (14 4. 28)
  - Jun 2,533.05
  - Jul 1,935. 26
  - Aug 888.44
  - Sep 1,396.89
  - Oct 1,218 .16
  - Nov 538.48
- Primary deficit (selected months):
  - Jan 192.96
  - Feb 772.89
  - Mar 618 . 32
  - Apr (453.66)
  - May 1, 813.70
- Interest payment (selected months and split):
  - Jan 245.08 (Foreign currency 53.60; Local currency 191.4 8)
  - Feb 181.33 (Foreign currency 25.53; Local currency 155.81)
  - Mar 288.36 (Foreign currency 149.75; Local currency 138 . 61)
- Overall deficit (selected months):
  - Jan 438.04
  - Feb 954.23
  - Mar 906.67
  - Apr (331.25)
  - May 1, 894 .19
- Principal payment (selected months and split):
  - Jan 2 , 0 5 7. 8 6 (Foreign currency 1,725. 26; Local currency 332.60)
  - Feb 69 7. 70 (Foreign currency 2 9.14; Local currency 668.56)
  - Mar 762.92 (Foreign currency 243.98; Local currency 518 .95)
- Gross financing sources (selected months):
  - Jan 2,571.45 (Foreign currency 1,000.00; Domestic currency 1,571.45)
  - Feb 1, 59 7. 7 7 (Foreign currency 750.00; Domestic currency 8 47. 7 7)
  - Jul 3,938.68 (Foreign currency 3,750.00; Domestic currency 188.68)
- Domestic instrument schedule (selected commitments, In millions of local currency):
  - T-bills* Jan 1,171. 4 5; Feb 2 9 7. 7 7; Mar 684.96
  - 2-year bond Feb 300.00; Apr 300.00; Aug 300.00; Oct 300.00; Dec 300.00
  - 3-year bond Jan 300.00; Mar 300.00; May 300.00; Sep 300.00; Nov 300.00
  - 7-year bond Jan 100.00; May 100.00; Oct 100.00; Dec 100.00
  - 10-year bond Feb 50.00; Aug 50.00; Nov 50.00
- (+Overfinancing/-Shortfall) Monthly financing gap:
  - Jan 75.55
  - Feb (5 4 .16)
  - Mar 65.36
  - Apr 106.08
  - May (178 . 6 6)
  - Jun 332.96
  - Jul 1,405.63
  - Aug (446.58)
  - Sep (99.76)
  - Oct (3 0 8 . 21)
  - Nov (679.4 8)
  - Dec 50.20
- Cumulative financing gap (end-Dec) 268.94
- Memo (T-bill financing disbursements — selected):
  - 3 months Jan 496.28; Feb 2 9 7. 7 7; Mar 496.28
  - 6 months Jan 39 2.16; May 39 2.16
  - 12 months Jan 283.02; Mar 188.68; Apr 188.68; ... Dec 188.68
- Net financing (selected months):
  - Jan 1,171. 4 5
  - Feb 2 9 7. 7 7
  - Mar 684.96
  - Apr (311. 3 2)
  - May 280.84
  - Jul (211. 3 2)
  - Dec 188.68

*Notes from Annex (as in source):*
- 1 Estimate of debt service payments for new debt (expected to be incurred in the ABP planning year) should be included as part of the GFN to ensure that sufficient funds are raised to meet such requirements.
- 2 Domestic currency financing should follow sound debt management practices: relying primarily on medium- and long-term instruments, maintaining a regular amount of bond issuance, using T-bills to manage cash flow variation, and maintaining a positive cash balance. In the absence of active cash management, the implications of adhering to such practice could mean keeping idle cash at the central bank (Treasury Single Account).
- 3 In this stylized table, principal payments of T-bills include imputed interest payments.

*Source: IMF and WB staff.*

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_Source: https://www.imf.org/-/media/files/publications/tnm/2025/english/tnmea2025012.pdf_