The relationship between inflation and public debt is a delicate and critical one for any economy. While a sudden burst of unanticipated inflation can temporarily reduce the real value of a government's debt, it can also lead to higher interest rates that increase the long-term cost of borrowing, making debt management more difficult. This complex dynamic can put immense pressure on public finances, threatening a nation's fiscal solvency and long-term macroeconomic stability. Understanding how to manage this interplay is crucial for policymakers aiming to secure a sustainable financial future.

This program provides a comprehensive and practical guide to public debt sustainability analysis in the context of varying inflation regimes. Participants will gain a deep understanding of the key channels through which inflation affects a government's balance sheet, from tax revenue and spending to borrowing costs and the debt-to-GDP ratio. The course will address the tools and frameworks used by international institutions like the IMF and the World Bank to assess debt sustainability, as well as the strategic choices available to debt managers, such as the use of inflation-linked bonds and prudent maturity management. By focusing on real-world case studies and robust analytical frameworks, attendees will be equipped to identify risks and formulate effective policy responses.

Duration: 10 days

Target Audience:

• Central Bank Officials
• Fiscal Policy and Treasury Officials
• Public Debt Managers
• Macroeconomic Analysts
• International Financial Institution Staff
• Financial Market Strategists
• Sovereign Risk Analysts
• Researchers and Academics
• Economists and Advisors
• Rating Agency Analysts

Objectives:

• Master the core concepts of public debt sustainability and its determinants.
• Learn to analyze the channels through which inflation affects public finances.
• Understand the fiscal and monetary policy trade-offs in high-inflation environments.
• Grasp the complexities of the debt-to-GDP ratio and its components.
• Develop proficiency in applying standard debt sustainability frameworks.
• Explore best practices for managing government debt maturity and currency risk.
• Learn about robust methods for stress-testing a country's debt profile.
• Identify the critical legal and governance frameworks for public debt management.
• Develop skills in assessing sovereign risk and its drivers.
• Formulate strategies for building a more resilient fiscal policy.

Course Modules:

Module 1: Foundations of Public Debt

• The definition of public debt and its different types
• The concept of a debt-to-GDP ratio
• The role of a "clear and focused research question"
• The difference between deficits and debt
• The importance of a "risk and mitigation" plan

Module 2: Inflation and Fiscal Accounts

• The impact of inflation on nominal tax revenues
• The effect on government spending and social transfers
• The role of a simple scorecard and a dashboard
• The concept of a primary balance
• The importance of a "data story map"

Module 3: The Debt-to-GDP Ratio

• The key components of the debt-to-GDP equation
• The role of real interest rates and economic growth
• The use of a "clear and consistent reporting style"
• The impact of inflation on the denominator
• The role of a program's theory of change

Module 4: Debt Sustainability Analysis (DSA)

• The purpose and methodology of DSA
• The importance of a "stakeholder analysis"
• The use of baseline and stress-test scenarios
• The role of a clear and compelling KPI
• The challenges of projecting future debt paths

Module 5: The Role of Central Banks

• The impact of monetary policy on government borrowing costs
• The importance of a "risk and mitigation" plan
• The interaction between monetary and fiscal policy
• The use of a simple scorecard and a dashboard
• The role of a "data story map"

Module 6: Debt Management Strategy

• The objectives of prudent debt management
• The use of a "clear and consistent reporting style"
• The role of an independent debt management office
• The importance of a program's theory of change
• The challenges of issuing debt in volatile markets

Module 7: Inflation-Linked Bonds

• The mechanics of inflation-indexed debt
• The importance of a "stakeholder analysis"
• The benefits for governments and investors
• The role of a clear and compelling KPI
• The impact on the government's interest burden

Module 8: Fiscal Rules and Frameworks

• The purpose of fiscal rules and their design
• The importance of a "clear and focused research question"
• The role of debt brakes and expenditure ceilings
• The use of a "risk and mitigation" plan
• The challenges of enforcement

Module 9: The Role of External Shocks

• The impact of global interest rates and capital flows
• The use of a simple scorecard and a dashboard
• The effects of commodity price changes
• The importance of a "data story map"
• The role of a "clear and consistent reporting style"

Module 10: Fiscal and Monetary Coordination

• The debate over fiscal dominance
• The importance of a program's theory of change
• The impact of central bank independence
• The use of a "stakeholder analysis"
• The role of a clear and compelling KPI

Module 11: Case Studies in Sustainability

• Case study: The impact of high inflation on a country's debt
• The importance of a "clear and focused research question"
• Case study: A sovereign debt crisis and its resolution
• The role of a "risk and mitigation" plan
• The use of a simple scorecard and a dashboard

Module 12: Advanced Analytical Tools

• The use of probabilistic DSA models
• The importance of a "data story map"
• The role of econometric forecasting
• The use of a "clear and consistent reporting style"
• The role of a program's theory of change

Module 13: Political Economy of Debt

• The political pressures to spend and borrow
• The importance of a "stakeholder analysis"
• The role of public opinion and media
• The use of a clear and compelling KPI
• The influence of political cycles

Module 14: Sovereign Ratings and Risk

• The role of credit rating agencies
• The importance of a "clear and focused research question"
• The factors that influence a country's rating
• The use of a "risk and mitigation" plan
• The impact of a rating downgrade

Module 15: The Future of Public Debt

• The impact of aging populations and healthcare costs
• The use of a simple scorecard and a dashboard
• The role of climate-related spending
• The importance of a "data story map"
• The future of global debt architecture

Training Approach

This course will be delivered by our skilled trainers who have vast knowledge and experience as expert professionals in the fields. The course is taught in English and through a mix of theory, practical activities, group discussion and case studies. Course manuals and additional training materials will be provided to the participants upon completion of the training.

Tailor-Made Course

This course can also be tailor-made to meet organization requirement. For further inquiries, please contact us on: Email: info@skillsforafrica.org, training@skillsforafrica.org  Tel: +254 702 249 449

Training Venue

The training will be held at our Skills for Africa Training Institute Training Centre. We also offer training for a group at requested location all over the world. The course fee covers the course tuition, training materials, two break refreshments, and buffet lunch.

Visa application, travel expenses, airport transfers, dinners, accommodation, insurance, and other personal expenses are catered by the participant

Certification

Participants will be issued with Skills for Africa Training Institute certificate upon completion of this course.

Airport Pickup and Accommodation

Airport pickup and accommodation is arranged upon request. For booking contact our Training Coordinator through Email: info@skillsforafrica.org, training@skillsforafrica.org  Tel: +254 702 249 449

Terms of Payment: Unless otherwise agreed between the two parties’ payment of the course fee should be done 10 working days before commencement of the training.