A Debt Management Reform Plan lays out a detailed, sequenced, country-owned, capacity-building project plan that is based on a comprehensive analysis of public debt management institutions and operations. The goal of this process is to address the weaknesses identified and analyzed by debt management performance assessments. The plan details expected outputs and outcomes, actions, sequencing and milestones. It also provides an estimate of budget and resources required to implement the plan.
Technical assistance in formulating Debt Management Reform Plans is driven by country demand. If financed under the Debt Managment Facility (DMF), World Bank experts work with the DMF's implementing partners. Training on Debt Management Reform Plan missions is generally provided in the context of workshops on Debt Management Performance Assessments (DeMPAs).
Although Debt Management Reform Plans are country-specific and vary considerably depending on the prevailing circumstances of the country, guidelines have been developed that aim to foster a consistent approach and set of process steps for working with client countries.
As laid out in a World Bank guidance note, a Debt Management Reform Plan should:
- Identify a specific timeframe for achieving steps toward effective debt management. While improvement of debt management capacity may be gradual, the period of the plan should ideally not exceed the medium term of 3-5 years, in order to maintain momentum and focus. Reform actions should be recommended sequentially, from 3 months to the date of the end-point chosen in consultation with the authorities.
- Identify key constraints in government debt management institutions, functions and operations, informed by a recent and comprehensive assessment. The scope of the Reform Plan can cover all government debt management activities, loan guarantees, lending, and cash balance management, or can be limited to focus on country specific priorities as discussed and agreed to with the authorities.
- Include a prioritized and sequenced action plan to address areas requiring improvement. The plan should be project-related and contain details on the expected outputs and outcomes, actions, sequencing and milestones. It also provides an estimate of the resources, budget and time required to implement the plan.
- Propose a country-specific approach that reflects the willingness of the authorities to undertake institutional and structural reforms, and realistically set the pace at which they can be implemented. Government officials will be accountable for implementing the plan, so it is imperative that it is practical and tailored to their circumstances. It is thus essential that they participate fully and actively in the drafting of the plan.