President Robert Mugabe has signed into law the Public Debt Management Act that seeks to provide management of public debt in the country. The announcement was made by Chief Secretary in the Office of the President and Cabinet Dr Misheck Sibanda in an Extraordinary Government Gazette: “The following law, which has been assented to by His Excellency the President, is published in terms of section 13(6) of the Constitution of Zimbabwe,” read the notice.
The Act seeks to establish the Public Debt Management Office on a statutory basis and provide for its functions and administration.
One of the functions was to provide for the raising, administration and repayment of loans by the State and for the repayment of loans by the State and giving of guarantees in respect of certain loans.
In terms of clause (3), the objective of the Public Debt management was to ensure that Government’s financing needs and its payment obligations were met at the lowest possible cost over the medium-to-long term, with a prudent level of risk and to promote development of the domestic debt market.
The clause seeks to create the Public Debt Management office to reside in the Ministry of Finance.
Some of its functions were to prepare and publish a medium term debt management strategy and prepare an annual borrowing plan, that included a borrowing limit.
It would also advise the Minister on all Government borrowings and participate in all negotiations with creditors on borrowings and guaranteed loans.
The office would make annual debt sustainability analysis and assess risks in issuing guarantees.
Clause (6) provides for the creation of the post of Principal Director to operate the office, while clause (7) gives room for the setting up of the External and Domestic Debt management committee that would report to the Minister.
It would be the responsibility of the committee to make recommendations to the Minister on public debt management policy and strategy.
Clause (11) stipulates that the President might authorise the Minister to borrow a sum of money but the money should not exceed the limit fixed by the National Assembly, which limit might be proposed by the responsible Minister to the legislature for approval by resolution.