ZIPAR prods State on debt control
By BUUMBA CHIMBULU
GOVERNMENT should introduce a legal provision for the Ministry of Finance to periodically set fiscal rules that will strengthen debt management, Zambia Institute for Policy Research (ZIPAR) has suggested.
ZIPAR senior research fellow, Caesar Cheelo, explained that such legally binding rules would significantly strengthen fiscal and debt management.
“One essential element that ZIPAR has been advocating for to be incorporated into one or all the three pieces of legislation is a legal provision for the Minister of Finance to periodically set fiscal rules,
“These are legally binding, long-standing quantitative restrictions on some budgetary or fiscal aggregates, particularly on expenditure, deficit financing and overall debt contraction,” he said.
Mr. Cheelo said in an interview that the Debt Management Strategy was therefore a good thing and a step in the right direction which should be commended.
He, however, said the authorities should carefully consider moving to the next step of debt management, which was to create a robust and reliable legal framework for fiscal governance.
“The Ministry of Finance's formulation and publishing of the Debt Management Strategy 2017-2019 is commendable,
“Given the rapid accumulation of public debt since 2011, a deliberate strategy for managing the speed of debt contraction, the composition of foreign and domestic debt, the rational use of debt proceeds, and the repayment of interest and principle amounts when they fall due was long overdue,” Mr Cheelo said.
Mr. Cheelo said some pieces of legislation such as the Planning and Budgeting Bill needed to be revised or formulated.
He also said the Loans and Guarantees needed to be made more publically available so citizens could comment about the adequacy of the revisions for improving the effectiveness of Parliamentary oversight.