Banking Supervision (January 14-16, February 16-27, March 13-20; 23-27)
METAC participated in an IMF HQ mission, which took place during January 6–20, 2020, and conducted Financial Sector Stability Review (FSSR). The review included an assessment of the following areas: (i) governance of the Central Bank of Djibouti (CBD) regarding financial stability oversight, (ii) banking regulation and supervision, (iii) banks’ liquidity management, (iv) the financial safety net and crisis management, and (v) macroprudential policymaking. The mission’s report included a roadmap for multi-year technical assistance (TA) delivery to help the CBD prioritize future reforms and build organizational capacity to enable these reforms and absorb future TA. METAC will lead the work on future TA in banking regulation and supervision. A first follow up mission, addressing some of the FSSR recommendations, is planned for February 2020.
In line with a comprehensive action plan developed in November 2016, METAC assisted the Central Bank of Djibouti to implement the Basel II and III international regulatory framework for banks. The mission focused on developing a new capital adequacy regulation, including: (i) provision of hands-on training to the supervisors, (ii) definition of the various exposure types and risk weights, (iii) drafting the updated regulation, and (iv) preparing the templates to be used by the banks for the quantitative impact study and prudential reporting.
Following-up on this, METAC assisted Central Bank of Djibouti in finalizing draft capital adequacy regulation by integrating the specific provisions related to Islamic banking products—in line with standards of the Islamic Financial Services Board. It also developed the related prudential reporting and quantitative impact study template, and drafted a guidance note illustrating how Islamic banking products should be reported in the quantitative impact study template.
METAC assisted the Central Bank of Djibouti to develop its capacity related to the Liquidity Coverage Ratio (LCR) standard, prepare to communicate with the banking sector and perform a quantitative impact study. The LCR is an essential component of the Basel III reforms; it promotes the short-term resilience of a bank's liquidity risk profile by ensuring that a bank has an adequate stock of unencumbered high-quality liquid assets that can be converted into cash to meet its liquidity needs for a 30-calendar day liquidity stress scenario. Once implemented, the LCR will enhance CBD’s capacity to detect weak banks by considering early warning indicators in order to intervene at an earlier stage of the supervisory process—thus improving the banking sector's ability to absorb shocks arising from financial and economic stress, and reducing the risk of spillover from the financial sector to the real economy.
Public Financial Management (January 7-16, March 3-13, April 23)
METAC advised the authorities on building a medium-term fiscal framework (MTFF) to underpin budget making and delivered a high-level workshop to discuss the experience of some West African countries that have implemented MTFFs.
As a follow-up to the IMF 2017 recommendations, and using the experience from Cameroon, METAC advised the authorities on: (1) drafting a monthly cash forecast plan as an appendix to the annual Budget Law; and (2) improving exchange of information for better cash forecasts. This activity also produced a roadmap to set up a Treasury Single Account.
METAC facilitated a peer-to-peer exchange between Côte d’Ivoire and Djibouti on how to handle PFM aspects of the covid19 crisis. Djibouti benefit from this exchange in the following areas: (i) sanitary response; (ii) various PFM arrangements to ensure a robust governance and transparent framework in implementing fiscal policies to respond to the economic consequences of covid19; and (iii) practical issues in organizing cash transfers to vulnerable populations.
Statistics (September 8-19; February 14-25)
METAC assisted the National Institute of Statistics of Djibouti in developing the national accounts compilation system and preparing the 2018 GDP estimates, incorporating the additional data provided on the activities of the ports and free zones of the country.
METAC assisted the National Institute of Statistics of Djibouti to develop the national accounts compilation system, finalize the 2014-2018 GDP estimates, and compile the preliminary 2019-2020 GDP estimates. It also assisted with the incorporation of data on the activities of ports and free zones, and compiled the preliminary 2019-2020 GDP estimates.