Sri Lanka: Technical Assistance Report-Debt Management Reform Plan
Technical Assistance Reports, December 6, 2024
Source details
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- Sri Lanka: Technical Assistance Report-Debt Management Reform Plan
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Bibliographic details
- Published: December 6, 2024
- Series: Technical Assistance Reports
- DOI: https://doi.org/10.5089/9798400294532.019
Context and mission
- A joint IMF-World Bank Technical Assistance mission visited Colombo on February 20 – March 3, 2023 to assist the Ministry of Finance, Economic Stabilization, and National Policies (MoF) in developing a public debt management reform plan.
- Publication date: December 6, 2024.
- The authorities have embarked on an ambitious reform of public debt management (PDM) functions in Sri Lanka to address fragmentation across departments within the MoF and the CBSL that has undermined coherent public debt management and debt transparency.
Main assessments
- Fragmented PDM legal framework and dispersed PDM functions across departments within the MoF and the CBSL contributed to:
- Lack of coherent management of the public debt in Sri Lanka.
- Lack of comprehensive public debt reporting.
- Weak management of public guarantees, reducing debt transparency.
Key recommendations from the technical assistance mission
- Introduce a new legal framework for public debt management:
- Consolidate existing laws.
- Establish a new public debt management office.
- Define governance and accountability for public debt management.
- Embed transparency requirements in the PDM law, including annual reporting to Parliament on progress in implementing the medium-term debt management strategy.
- Establish the new public debt management office inside the MoF:
- Appoint a Director General to oversee an office comprising front-, middle-, and back-offices in line with international best practices.
- Develop a medium-term debt management strategy approved by the Cabinet of Ministers to strengthen operational independence of the public debt management office.
- Rationalize and strengthen debt database management:
- Unify functions and create a streamlined system of debt recording, monitoring, and reporting to enhance debt transparency.
- Establish a policy framework and control system for issuance and management of guarantees and on-lending, consistent with the government’s overall risk management framework.
Developments since the mission
- The authorities drafted and submitted a new Public Debt Management Act to Parliament, which was enacted on June 18, 2024.
- Authorities are in advanced stages of finalizing the Public Debt Management Regulations, which will be submitted to Parliament.
- Drafting of the Public Debt Management Guidelines, which define the roles and responsibilities of the new Public Debt Management Office, is in train.
- A new Director General has been appointed to head the Public Debt Management Office.
- With these actions, the stage is set for the establishment and operationalization of the Public Debt Management Office at the Ministry of Finance in Sri Lanka.
Subject coverage and keywords
- Subject: Asset and liability management, Debt management, Debt strategy, External debt, Government debt management, Public debt, Public financial management (PFM)
- Keywords: Debt management, Debt Management reform plan, Debt strategy, Government debt management, IMF counsel, IMF resident representative, Public Debt Management., Sri Lanka, WB country manager, WB Senior Debt Specialist
Content in this bundle
- tarea2024102-print-pdf