Raphael Owino Otieno, Kenya

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Director, Debt Management Programme
Macroeconomic and Financial Management Institute of Eastern and Southern Africa (MEFMI)
Public Policy Program (’02)

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Raphael O. Otieno is currently the Director of Debt Management Programme at Macroeconomic and Financial Management Institute of Eastern and Southern Africa (MEFMI), a 13 member country capacity building organisation based in Harare, Zimbabwe. He received his M.A. in Public Policy from GRIPS in 2002 and a B.A. Economics (Hons) from the University of Nairobi, Kenya. Otieno has vast experience in public finance and macroeconomic analysis. He has held various senior positions in Kenya’s public service including working as an Economist in Kenya’s Ministries of Finance and Planning, Policy Analyst at the Kenya Institute for Public Policy Research and Analysis (KIPPRA), and Senior Research Officer/Economist at the Central Bank of Kenya. His experience on Public Debt management issues spans more than 16 years. He is married and has three children.

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While working at the Ministries of Finance and Planning he rose through the ranks served as Personal Assistant to the Economic Secretary and later as Personal Assistant to the Minister for Planning.

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In 2006 and 2007 he was a member of the Core Technical Team that developed Kenya’s Vision 2030, a long term development blue print that seeks to transform Kenya into a middle income country by the year 2030.

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In June 2011 he was elected, and is currently, the Chairman of the Technical Advisory Group (TAG) of the World Bank’s Debt Management Facility (DMF). DMF is a donor funded trust fund managed by the World Bank for implementing debt management reforms and capacity building in low income countries. Members of the TAG comprise officials from World Bank, IMF, UNCTAD, Commonwealth Secretariat, OECD and regional organisations such as MEFMI, WAIFEM and CEMLA.

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What is your area of specialization and how did you come to work in this area?

My field of specialization is macroeconomic and fiscal policy, with a bias currently on public debt management. I have previously worked extensively on macroeconomic modelling and policy simulation, Fiscal and Monetary policy analysis and monitoring and analysis of key macroeconomic indicators such as interest rates, inflation and exchange rate.
I started working on public debt issues when I joined the Kenya Government in 1995 as an Economist. My first set of responsibilities in Government entailed monitoring and analysis of public debt service and balance of payments developments. From that time I developed a keen in interest in public debt management and that is why I chose the topic “Kenya’s Public Debt Sustainability: A macroeconomic model based analysis” for my Masters Research Paper in GRIPS.

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You are currently working at the Macroeconomic and Financial Management Institute of Eastern and Southern Africa (MEFMI). Please tell us about MEFMI, its mission and activities.

MEFMI is a regional capacity building organization of 13 member countries straddling Eastern and Southern Africa. The current members of MEFMI are Angola, Botswana, Kenya, Malawi, Lesotho, Mozambique, Namibia, Rwanda, Swaziland, Tanzania, Uganda, Zambia, and Zimbabwe. Its Headquarters is located in Harare, Zimbabwe.

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MEFMI’s mission is “To build sustainable human and institutional capacity and foster best practices for prudent macroeconomic and financial management in central banks, ministries of finance and of planning and other relevant institutions”.

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Specifically, the Institute aims at:
– Building sustainable human and institutional capacity for macroeconomic, financial sector and public debt management in member states;
– Facilitating the development and implementation of sound and stable macroeconomic and financial management policies, systems and databases; and
– Creating awareness among senior officials of member states and other stakeholders on latest developments in macroeconomic and financial management.

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As can be noted from our mission statement, MEFMI’s target institutions are Central Banks and Ministries of Finance and Development Planning. The Institute was created as a centre of excellence by member countries and not only offers training to officials of these targeted institutions but also helps them create structures and systems that enhance effective implementation of macroeconomic and financial policies.

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We fulfill these objectives by conducting short courses and seminars, carrying out country policy advisory missions, conducting special studies and preparing manuals and guidelines.

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As Director of the Debt Management Program, what are your main tasks and responsibilities?

My key responsibilities include (i) formulation and implementation of capacity building programmes on Sovereign Debt Management; (ii) advising MEFMI member countries on debt management issues including debt strategy formulation and implementation, institutional reforms, and debt database management systems; (iii) Leading policy advisory missions to member countries; (iv) Conducting regional or country specific training programmes for public sector officials on macroeconomic and financial management issues; and (v) Identification of relevant research areas and coordinating research on such issues.

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In this capacity, what do you see as the main opportunities and challenges for Eastern and Southern Africa over the course of the next five to ten years?

Despite the fact that a number of countries recovered from the debt crises of the late 1990s to early 2000s through the debt relief efforts, there are signs of public debt accumulation reaching levels of concern. This has been exacerbated by the financial crisis of 2008, which led countries to implement fiscal stimulus interventions resulting in increased borrowing. Furthermore, many developing countries still need development financing to implement anti-poverty interventions so that they can reach the MDGs by 2015. Countries in Eastern and Southern Africa have made tremendous progress in addressing the problem of poverty but high levels of poverty still exist with some of these countries still having more than 50 percent of their population living on less than US$ 2 a day. Consequently, as countries borrow to meet their development financing needs, the challenge they face is to ensure that their public debt levels remain sustainable.

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While many countries in Eastern and Southern Africa have made commendable progress in implementing debt management reforms, weaknesses still remain in several areas including the legal frameworks; internal and external audits of public debt; management of loan guarantees; on-lending and derivatives; and debt administration and data security. Recent debt management performance assessments reveal that most countries in Eastern and Southern Africa have fairly well crafted laws governing borrowing especially from the external sources. However, the laws have serious gaps on domestic debt management. More work is therefore required to create awareness of these gaps and assist the countries in improving the debt management laws. There is also need to improve documentation of policies and procedures for giving loan guarantees and on lending as well as development of guidelines for derivative transactions which are completely lacking at the moment.

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Another serious challenge that countries are facing and which they are expected to face in the next five to ten years is the human resource constraint in government institutions. This is worsened by the high staff turnover in Government Ministries.

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Moreover, in the quest to diversify sources of development financing, the role of private-public partnerships (PPPs) as vehicles for accessing private sector financing is becoming prominent in the region. While this provides an excellent opportunity for countries to use in development financing, it can generate large contingent liabilities. Countries will therefore need to structure the PPP transactions in a way that limits the potential contingent liabilities that may be generated.

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Nevertheless, the region has great opportunity to develop its domestic debt markets and use the same for issuance of bonds for development financing. In some countries this is already on course. Tremendous opportunities also exist for countries to attract foreign investment into sectors such as energy, tourism, manufacturing and even investment in physical infrastructure through options such as build operate and transfer. Countries that are able to attract such investment will surely increase their GDP growth and development levels and hence reduce the chances of having public debt distress.

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What are some of the biggest challenges you face in your work and what have been the most interesting or rewarding aspects of your career thus far?

The biggest challenge in my work is perhaps creating a balance between sparing enough time to deal with managerial duties in the office and the need to be in the field implementing the ongoing programmes. My work involves a lot of travel but I also have managerial responsibilities that I have to fulfill in the office.

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I enjoy seeing MEFMI transform young professionals from novices in the public policy arena into globally competitive experts especially through our Fellowship programme. It gives me comfort that perhaps one day Eastern and Southern Africa will be self-reliant on human resource capacity needed for the formulation and implementation of macroeconomic and financial sector policies.

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What led you to GRIPS?

I got to GRIPS by chance but I will always cherish that chance. I was looking for a University where I could pursue a Masters degree either in Economics or in Public Policy and when I talked to a World Bank official he gave me a list of Universities. Most of these were in Europe, USA and Canada. In that list was the GSPS, in Saitama, Japan. When I checked it on the Internet I liked the programmes and applied.

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I made three applications mainly targeting Universities where I could get scholarships. Apart from the application to GRIPS (GSPS at that time), I also applied to Makerere University in Kampala, Uganda, where I targeted African Capacity Building Foundation (ACBF) scholarship and to Dar es Salaam University in Tanzania, where I targeted the African Economic Research Consortium (AERC) scholarship. Fortunately for me I got admission into all the three Universities with scholarships and I opted to go for the Monbukagakusho (then Monbusho) scholarship at GRIPS.

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What has been the most important thing you got out of your studies at GRIPS, and how has your experience at GRIPS prepared you for future endeavours?

The cultural diversity among the students and staff of GRIPS was an experience that greatly helped to shape how I interact with people in international circles where I work at the moment. I also believe that my experience in dealing with students and staff, when I was the President of International Student Council, helped in shaping my approach in leadership wherever I am.

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For me, GRIPS was truly a “Gateway to Global Leadership”.

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What is your fondest memory of your time spent in Japan? And what do you miss about Japan?

Japan is a very unique country and the Japanese people are marvelous. I have lived in many parts of the world but the organization, cleanliness and the sense of security that you find in Japanese cities is only available in Japan. Japan is the only country where I could get out of a train station at midnight and walk to my apartment located nearly a kilometer away without bothering to take a taxi because it is safe

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What is your favorite thing to do when you are not working?

Mainly reading magazines on geopolitical and economic issues. But I also do enjoy bicycle rides, when possible, just as a way of exercising.

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How do you maintain a balance between your work and your family life?

This is one of the most difficult things for me given the frequent travels and the fact that I live in a country that is different from where my family lives. However, I manage to talk to my wife and children through telephone almost every day, I try to visit them as frequently as I can and I have to make time for a family holiday every year.

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What advice would you give to current GRIPS students?

You have an unrivalled opportunity at GRIPS. Make the best use of that opportunity. GRIPS is a great graduate school and effective use of your time at GRIPS will open new doors for your career whether in the field of public policy or research, both at national and global levels.

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The choice is in your hands.

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Do you have any suggestions on how to further strengthen and utilize the GRIPS alumni network?

The GRIPS Alumni network could be used for dissemination of information about GRIPS including distribution of brochures for recruitment of new students.
The network could also be used to generate ideas on areas of graduate training with the greatest demand in different regions of the world and which GRIPS could prioritize.