The Bauchi State Debt Management Agency was established on the 30th of December, 2009 via a Debt Management Agency Law ‘’2009’’ enacted by the Bauchi State House of Assembly. The Agency is responsible for the efficient management of the state government’s debt portfolio and provides advice on a sustainable debt management practice. Among the mandate of the Agency as articulated in the Debt Management (Establishment) Law 2009 specifies that the Agency shall:
- maintain a reliable database of all loans taken or guaranteed by the State, its agencies and Local Governments;
- prepare and submit to the Governor, a forecast of debt service obligations for each financial year;
- prepare a schedule of any other State Government obligations such as contractor and supplier debts, pension liabilities, loans from the Federal Government and other contingent liabilities, both explicit and implicit, and provide advice on policies and procedures for their management;
- prepare and implement a strategy for the efficient management of the external and domestic debt obligations at sustainable levels compatible with desired economic activities for growth and development and participate in negotiations aimed at realizing those objectives;
- set guidelines for managing State Government financial risks and currency exposure with respect to all loans;
- advise the State Government on the restructuring and re-financing of all debt obligations;
- establish and maintain relationships with international and local financial institutions and institutional investors, donor agencies and the DMO.
Based on part II, 5(1) of the DMA law 2009 there shall be established a Debt Management Committee (DMC) which is the supervisory arm of the Agency. Its members comprised of:
- Deputy Governor as Chairman
- Commissioner of Finance as Vice-Chairman
- Commissioner of Budget and Economic Planning- Member
- Commissioner for Local Government Affairs – Member
- Special Adviser to the Governor on Economy and Budget- Member
- State Accountant General- Member
- State Attorney General- Member
- Head of the Agency who shall be the Secretary to the Committee.
Accordingly based on section 8 of the DMA law, the DMC shall:
- approve policies, strategies, guidelines and procedures to be implemented by the Agency for the achievement of its objectives.
- review from time to time the economic and political impact of borrowing and debt management strategies.
- Consider and approve loan/credit facilities proposals as may be recommended by the Agency
- Perform any other function as may from time to time be necessary to achieve the objectives of the Agency. The DMA Law 2009 is attached as appendix ‘A’ for your kind information, please.
STRUCTURE OF THE DEBT MANAGEMENT AGENCY
In the core operations of the Agency, the Director General is assisted by departmental heads, who in turn supervise the work of team leaders. In line with global best practice, these operations are strategically carried out in a front, middle and back office configuration which separates accounting from transaction. The front office is responsible for resource mobilization, loan negotiation e.t.c. and houses the portfolio management department. The back office is responsible for debt recording and settlement, while the middle office executes policy, strategy and risk management. Below is a brief on the functions of the departments:
Portfolio Management Department (PMD)
The front office department negotiates external and domestic loans of the State as well as applying the strategies and guidelines developed in the middle office to its core activities of negotiating new loans. As such, the department can be seen as the arm of the debt agency.
Policy and Strategy Department (PSD)
This is a middle office department whose responsibilities include the formulation of policies and strategies as well as performing sustainability analysis and risk evaluations on the portfolio. This department is seen as the think tank arm of the Agency which provides the analytical and risk management bases for undertaking government borrowing. The analytical and Risk management team is responsible for the overall management of the government debt portfolio. Other functions of the department include research and analyzing policy alternatives and deriving their implications for debt sustainability, conduct portfolio reviews and debt strategy analysis to feed into the debt management framework etc.
Debt recording and settlements
This is a back office Department that is responsible for Recording Public Debt Data as well as Servicing of the Debt. It functions extends further to the Administration of the full cycle of a contract from the signature and registration to documentation as well as monitoring, recording of disbursements, Projecting of debt, Managing of Debt Service Payments, Producing Statistical Information and Monitoring Projects funded by Loans.
Organizational Resource Department (ORD) This department provides the corporate services supportive of the activities of the DMA. It is a medium through which the Committee executes its resourcing functions. The main functions of the Department include human resources and administrative functions and issues as well as IT, accounts, and corporate affairs.