• The request may give the current Bill an opportunity to CSOs and other concerned stakeholders.
• Government must as well consider contraction of public debt through loans, guarantees and other forms of agreements.
• This policy reform is key to strengthening the debt management policy framework.

Consumer Unity and Trust Society (CUTS) has called upon Government to urgently circulate the proposed Public Debt Grants and Guarantees Authorization (PDGGA) Bill (2022 to Civil Society Organizations and other stakeholders for deliberation and validation.

CUTS Programs Officer Sylvia Kagulurah notes the request for the government to release the draft Bill for circulation to the public and potential oversight may give the current Bill an opportunity to CSOs and other concerned stakeholders to scrutinize and provide insight before it is finally adopted in parliament.

Ms. Kagulurah further implores government to consider including the object of the new law on public debt to provide for repealing of the Loans Grants and Guarantees Authorization Act Cap 366 of the Laws of Zambia and replacing it with a new Act.

She also implored for Establishment of the Public Debt Management Authority to oversee the contraction of public debt through loans, guarantees and other forms of agreements.

The Cuts program officer added that government must as well consider contraction of public debt through loans, guarantees and other forms of agreements to seek the approval of The National Assembly in the contraction of public debt, approval of the National Assembly in contracts involving Private Public Partnerships.

She added among the recommendations to government, the disclosure, auditing and publication of all debt and all material facts related thereto, the setting of upper limits on how much public debt and guarantees can be contracted in a financial year, and setting up of a framework for consultation of CSOs in the debt management process from the onset.

“It goes without noting that including these recommendations will align parliamentary oversight in debt contraction, increase transparency and accountability and develop borrowing plans before contracting debt,” said Ms. Kagulurah.

According to her, “This policy reform is key to strengthening the debt management policy framework which includes Debt Management Strategies and Debt Sustainability Analyses and will hugely affect the pursued pathways to sustainable growth.”

She expressed hope that the Government will consider the adoption of all the recommendations proposed as they reflect the global best practices as well as Governments desire to manage public debt prudently and sustainably indicating that “this has the potential to reduce the fiscal gap that continues to affect governments spending in critical social sectors and Governments efforts to improve the welfare of the Zambian citizens.”

Ms. Kagulurah had however stated that CUTS commended government for proactively taking the courageous and decisive step to commit to bring to the floor of the house, the Public Debt Grants and Guarantees Authorization (PDGGA) Bill (2022) which would repeal and replace the Loans Grants and Guarantees (Authorization) Act Cap 366 of the Laws of Zambia.

She noted this was long overdue, considering the amount of public debt that had been accumulated over time due to weak institutional mechanisms to ensure parliamentary oversight over debt contraction, transparency, accountability and ultimately, prudent debt management best practices.

“The government’s resolve to redress these ills is a necessary way forward in its attempt to recover the ailing economy and get it back into a sustainable growth trajectory.” she stated.

“CUTS is of the considered view that now, more than ever, the willingness of the government and its efforts to reform the loan contraction irregularities presents an ideal opportunity for concerned stakeholders to participate in this reform process,” She added.

According to her, “this would enable us to redress issues of unsustainable debt management and potentially create a path that will lead to a reduced debt burden and diversify opportunities for economic growth once the fiscal space is enhanced by the removal of loan repayments.”