Project Summary

Project General Description

The proposed operation is a technical assistance and capacity building project to be financed by a grant under Pillar III of the Transition Support Facility. It complements the Bank’s previous intervention to reform the West African Monetary Zone (WAMZ) Payment Systems used by the Central Banks of Guinea, Sierra Leone and Liberia. This project seeks to help diversify the investor base by supporting the development of a framework for mutual funds, insurance, pension funds etc. and establishment of a primary dealership systemin order to contribute in freeing up banks’ resources for the financing of the real sector. It proposes to review the status of the debt markets in the four countries to identify characteristics and varying levels of development to establish a robust roadmap and action plan for debt market development. The project has been designed to encompass three components(i) improvement of debt market infrastructure; (ii) Strengthening of domestic debt markets; and (iii) project management. It is focused on three key areas: (i) creation of an enabling environment for domestic resource mobilisation; (ii) technical assistance for the upgrading and/or modernisation of debt markets infrastructure; and (iii) sensitisation and financial education for investors in debt markets. The estimated project implementation period is 3 years from June 2020 to June 2023. The total cost is UA 1.5 million.

Project Objectives

The project’s overall objective is to strengthen the capacity of the four West African Monetary Zone (WAMZ) Member countries, to manage domestic debt through the development of their debt securities (bond) markets. The project is expected to enhance the development of the financial markets in the four Member States in order to improve financing development. The project’s specific objectives are to: (i) deepen primary markets and short-tenured instruments; (ii) enhance debt securities market infrastructure; (iii) support development of longer-tenured instruments; (iv) improve the debt market operational system; (v) facilitate deepening of secondary debt markets; and(iv) broaden the investor base.

Beneficiaries

The Project aims to benefit all participants particularly in the debt and financial markets of the beneficiary WAMZ Member States (Republic of The Gambia, Liberia, Sierra Leone, and Guinea), including national regulators and institutions and the general public in the region. The direct beneficiaries will be the Central Banks, Ministries of Finance and the financial system in general. The capacity of personnel of the different ministries and central banks will also be developed through training on the various elements of debt management. Indirectly, the project will benefit the private sector, especially financial institutions and institutional investors that participate the primary debt markets; households and any economic agent that interact with credit and debt markets. This will, in part, be as a result of improvement in intermediation and transformation of savings for investment in support of economic development in the four countries; and enhancing the countries readiness to meet the macroeconomic convergence criteria for regional financial integration.

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