Course Overview

This program equips policymakers, debt managers, and macro‑fiscal analysts with the tools to apply the World Bank–IMF Debt Sustainability Framework for Low‑Income Countries (LIC‑DSF). The course covers the full cycle of debt sustainability analysis—from data preparation and macro‑framework development to risk rating, scenario analysis, and policy recommendations.

Participants learn how to assess debt vulnerabilities, evaluate borrowing strategies, and support sustainable financing decisions in line with World Bank and IMF program requirements.

2. Learning Objectives

Participants will be able to:

• Understand the conceptual foundations of the LIC‑DSF.

• Compile and validate debt and macroeconomic data for DSA.

• Build a macro‑fiscal framework consistent with LIC‑DSF requirements.

• Conduct baseline and stress‑test scenarios.

• Interpret debt sustainability indicators and risk ratings.

• Assess the impact of new borrowing on debt sustainability.

• Prepare DSA reports aligned with World Bank–IMF standards.

• Integrate DSA results into fiscal, monetary, and borrowing strategies.

3. Target Audience

• Ministry of Finance and Treasury officials

• Debt management offices (DMOs)

• Central bank economists and macro‑financial analysts

• Public investment and fiscal risk units

• World Bank–funded project teams

• Researchers and academics in macroeconomics and public finance

• Development practitioners and consultants

4. Detailed Course Outline

Module 1: Introduction to Debt Sustainability & LIC‑DSF

• Why debt sustainability matters for low‑income countries

• Evolution of the World Bank–IMF LIC‑DSF

• Key concepts: solvency, liquidity, debt distress

• Role of DSA in concessional financing and policy operations

• Case studies of debt distress episodes

Module 2: Data Requirements & Preparation

• Debt data: external, domestic, guaranteed, SOE debt

• Debt instruments and terms (grants, concessional loans, commercial loans)

• Macroeconomic data: GDP, inflation, fiscal balances, exports, reserves

• Data validation and reconciliation

• Using debt recording systems (DMFAS, CS‑DRMS)

Module 3: Building the Macroeconomic Framework

• Real sector projections (growth, inflation, productivity)

• Fiscal projections (revenue, expenditure, financing needs)

• External sector projections (exports, imports, remittances, FDI)

• Monetary and financial sector assumptions

• Ensuring internal consistency across sectors

Module 4: Baseline Scenario Construction

• Setting baseline assumptions

• Projecting debt dynamics under current policies

• Debt accumulation equation and drivers

• Interpreting baseline debt trajectories

• Identifying underlying vulnerabilities

Module 5: Stress Testing & Scenario Analysis

• Standardized stress tests (growth, exports, exchange rate, interest rates)

• Tailored stress tests for country‑specific risks

• Combined shocks and extreme scenarios

• Interpreting stress‑test results

• Assessing resilience to macro‑financial shocks

Module 6: Debt Indicators & Thresholds

• Present value (PV) of debt indicators

• Debt‑to‑GDP, debt‑to‑exports, debt‑to‑revenue ratios

• Debt service indicators

• Policy‑dependent thresholds and risk ratings

• Understanding the Country Policy and Institutional Assessment (CPIA)

Module 7: Risk Rating & Debt Distress Classification

• Methodology for assigning risk ratings

• Low, moderate, high risk, and in debt distress categories

• Role of judgment vs. mechanical results

• Implications for borrowing and concessional financing

• Communicating risk ratings to policymakers

Module 8: Integrating DSA into Policy & Borrowing Strategies

• Medium‑Term Debt Management Strategy (MTDS)

• Fiscal policy implications of DSA results

• Public investment planning and debt sustainability

• Managing contingent liabilities and SOE risks

• Aligning borrowing with development priorities

Module 9: LIC‑DSF in World Bank & IMF Programs

• DSA in IDA financing decisions

• DSA in IMF programs (ECF, EFF, SBA)

• DSA in Development Policy Operations (DPOs)

• Transparency and reporting requirements

• Case studies from Africa, Asia, and Latin America

Module 10: Practical Exercises & Capstone Project

• Compiling debt data and building a macro‑framework

• Constructing a baseline scenario

• Running stress tests and interpreting results

• Preparing a full DSA report and risk rating

• Capstone: Develop a Debt Sustainability Assessment for a simulated low‑income country

5. Training Methodology

• Expert‑led lectures and guided discussions

• Hands‑on modelling using LIC‑DSF templates

• Case studies from World Bank and IMF programs

• Group work and scenario‑based simulations

• Practical sessions on data preparation, projections, and stress testing

• Capstone project with peer and instructor feedback

6. Deliverables & Outputs

Participants will receive:

• A LIC‑DSF Toolkit (frameworks, templates, datasets)

• Debt sustainability modelling tools

• Sample DSA reports and risk rating templates

• Capstone project report and presentation

• Certificate of Completion from Regewall Training Institute