An Investigation Into The Implementation Of The Sovereign Debt Management Strategy In Namibia

Abstract

Sovereign Debt Management has become an important practice in many developing countries and emerging market economies. The debt crisis in 1982 and the recent European debt crisis has triggered the interest of many governments in developing countries to develop capacity in Sovereign Debt Management. Many developing countries had failed to honour their debt obligations and had applied for debt relief from the World Bank and International Monetary Fund. Namibia had no exception that it has to develop its debt management, this was implanted in 2005. This study attempts to explore the challenges experienced in implementing the Sovereign Debt Management Strategy in the Ministry of Finance since its inception in 2005. A quantitative research method was used in this study. The primary data was gathered through structured questionnaires. Secondary data from related literature and official documents reviews such us Debt Management Strategy and guideline for effective debt management from the Ministry of Finance, Bank of Namibia, MEFMI, IMF and World Bank were used in gathering the necessary information for this study. The quantitative analysis of the data collected by structured questionnaires showed that the government Debt Management practices have demonstrated weaknesses that need urgent attention. The noted concerns are the legal framework and institutional arrangement that need to meet the international best practices. Debt management objectives and coordination, though well defined, require serious attention. Risk management framework need to be setup as well the periodic debt sustainability review need to be undertaken at all time. The development and maintenance of an efficient domestic market for government securities also need to be enhanced. The use of structured questionnaires for data collection is a significant departure from the methods used in other studies in this area. The rich and contextual data gathered from the structured questionnaires justified this choice and contributed to the identification of issues not mentioned in the literature.