There was very good debate in the National Assembly last week on the Public Debt Management Bill that is currently before Parliament.
Most of the members who contributed to the debate recommended further improvements to the Bill in order to enact a policy and legal framework that can effectively manage the country’s burgeoning public debt.
Debate kicked off on Tuesday with a report by the Portfolio Committee on Budget, Finance and Economic Development that conducted public hearings on the Bill in Kariba, Chinhoyi, Bindura, Harare, Marondera, Mutare, Gweru, Masvingo, Beitbridge, Gwanda, Bulawayo, Lupane and Victoria Falls. The portfolio committee’s report included several views and recommendations from participants that made submissions at the hearings. This gives meaning to section 141 of the Constitution that compels Parliament to ensure that interested parties are consulted about draft legislation being considered. The spirit behind this provision is that committees must seriously consider and take on board the views of the public, and not treat consultation as a cosmetic exercise. The committee must be applauded for doing exactly that.
The committee presented a report in plenary with concrete recommendations that include subjecting all borrowings to parliamentary approval, requiring all government and quasi-government institutions to publish their liabilities in the local newspapers for purposes of promoting transparency and accountability and ensuring that the Executive reports to Parliament on debt contraction as stipulated in the Constitution.
The robust debate by MPs on an issue of crucial public importance is most welcome. The country is choking under the weight of a huge a public debt burden of over $9 billion, if one takes into account the recent take-over by government of the Reserve Bank of Zimbabwe debt of $1,35 billion. The country obviously needs a sound policy and legal framework that is implemented in letter and spirit if this debt burden is to be addressed.
The Public Debt Management Bill is one of the key components of this policy and legal framework. The Bill seeks to provide for the management of public debt in Zimbabwe. It also seeks to provide for the functions and administration of the Public Debt Management Office which is a department that currently exists within the Ministry of Finance and Economic Development.
Yes, the Bill empowers Parliament to approve the limits on borrowings and public debt set by the Public Debt Management Office as required under the Constitution. However, there are other provisions that give the Minister of Finance too much power in the issuance of guarantees.
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One example is the provision that says the minister may, “in such manner and upon such conditions as he or she thinks fit with the consent of the President, guarantee the repayment of the capital of, and the payment of expenses or charges incurred on or in connection with any indebtedness or other financial obligation raised, incurred or established, as the case may be, inside or outside Zimbabwe by a person approved by the minister for purposes which will, in the opinion of the minister, promote employment or the development of natural resources or the tourist industry or are otherwise in the public interest or in the interest of the economy of Zimbabwe”.
The issue of public interest is highly subjective. Furthermore, it is not good law for someone to come up with conditions on public interest issues “as he/she thinks fit”. These public interest issues must be approved by Parliament. Giving a minister wide discretionary powers to decide what public interest issues are can be open to abuse.
The informed debate on the Public Debt Management Bill saw the Minister of Finance and Economic Development agreeing to take on board some of the recommendations from the law-makers. He assured the House that he would bring amendments that seek the approval of Parliament to exceed the borrowing limits. He also assured the MPs that the reporting provisions in the Bill would be aligned with the constitutional provisions that require the Minister to report to Parliament at least twice a year.
This is a very good example of a parliamentary committee, after having consulted the public, influencing substantive changes to policy and legislation. Other committees must learn from the Budget, Finance and Economic Development and organise their work better and make non-partisan recommendations to the House that are informed by submissions coming from interested parties.
Regrettably, the minister threw away the recommendation from the portfolio committee requiring quasi-government institutions to publish their borrowings in the press in order to promote transparency and account better to the public. I do not agree with the reasons advanced by the minister that advertising was an expensive exercise, given some of the profligacy that we see daily in these institutions. While the minister is right that Clause 23 of the Bill clearly spells out the procedure which must be followed before a local authority or public entity can incur a debt, this whole process of loan contraction by the institution is never made public.
The requirement in the Bill is that there should be a resolution by the governing body or council of the quasi-government institution. There is a further requirement that they cannot borrow beyond a prescribed limit which the Minister of Finance and Economic Development is mandated to prescribe. Beyond the limit, the Bill provides that there should be the board resolution followed by approval from the line minister as well as approval from the Minister of Finance. I do not see how this procedure can substitute for advertisements and create the much needed public awareness.
l John Makamure is the Executive Director of the Southern African Parliamentary Support Trust. Feedback: firstname.lastname@example.org