PUBLIC DEBT MANAGEMENT ACT

Arrangement of Sections

    Section

PART I
PRELIMINARY DIVISION

    1.    Short title

    2.    Interpretation

    3.    Government debt management objectives

    4.    Medium Term Debt Strategy

PART II
DEBT MANAGEMENT OFFICE

    5.    Establishment of Debt Management Office

    6.    Functions of Debt Management Office

    7.    Director and other staff

PART III
ANNUAL BORROWING PLAN

    8.    Annual borrowing plan

    9.    Review of annual borrowing plan

    10.    Update on implementation of annual borrowing plan

PART IV
GENERAL BORROWING POWERS

    11.    Power to raise loans

    12.    Purpose of loans

    13.    Methods of raising loans

    14.    Suspension of approval by National Assembly in state of emergency

    15.    Establishment of Special Deposit Account

    16.    Application and deposit of loan proceeds

    17.    Supplier’s credit, export credit and finance lease agreement

    18.    Repayment, conversion and consolidation of loans

    19.    Debt charge

    20.    Agents to issue or raise bonds, stock or treasury bills

    21.    Power to grant loans out of Consolidated Fund

PART V
BORROWING BY PUBLIC BODIES

    22.    Borrowing by public body

    23.    Loans by public body requiring National Assembly approval

    24.    Reporting requirements for public body

PART VI
SINKING FUNDS

    25.    Establishment of sinking funds for redemption of bonds or stock

    26.    Establishment of sinking funds in other cases

    27.    Contribution to sinking fund

    28.    Withdrawal of money from sinking fund

    29.    Deficiency in sinking fund to be charged on Consolidated Fund

    30.    Regulations for sinking funds

PART VII
GUARANTEES AND INDEMNITIES

    31.    Power to give guarantees

    32.    Approval of guarantee by National Assembly

    33.    Payment of guarantee fee

    34.    Maximum amount of guarantees

    35.    Beneficiary to reimburse all costs

    36.    Indemnities

    37.    Guarantees and indemnities to be paid out of Consolidated Fund

PART VIII
POWER TO RAISE GRANTS

    38.    Power to raise grants

    39.    Purpose of grants

PART IX
REPORTS

    40.    Debt sustainability analysis

    41.    Debt statistical bulletin

    42.    Annual public debt, guarantees and grants execution report

PART X
GENERAL PROVISIONS

    43.    General restriction on raising of loans

    44.    Minister and other person not responsible for fulfilment of trusts attaching to bonds, stocks or treasury bills

    45.    Minister may delegate functions to public officer

    46.    Financial misconduct by public officer or controlling body

    47.    Disciplinary proceedings

    48.    Offence by principal officer, shareholder or partner of body corporate or unincorporate body

    49.    Regulations

    50.    Repeal of Cap. 366 and Cap. 350 and savings and transitional arrangements

        FIRST SCHEDULE

        SECOND SCHEDULE

AN ACT

to provide for the raising of loans and grants; the issuing of guarantees; the approval of loans by the National Assembly; the issuing of loans by or on behalf of the Government; the establishment of sinking funds; the establishment of the Debt Management Office and provide for its functions; the repeal of the Loans and Guarantees (Authorisation) Act, 1969, and the General Loan and Stock Act, 1931; and matters connected with, or incidental to, the foregoing.

[11th August, 2022]

Act 15 of 2022.

PART I
PRELIMINARY DIVISION

1.    Short title

This Act may be cited as the Public Debt Management Act.

2.    Interpretation

In this Act, unless the context otherwise requires—

"annual borrowing plan" means a schedule of anticipated borrowings for the Government and public bodies for a financial year;

"Bank of Zambia" means the Bank of Zambia established under the Constitution;

"beneficiary" means a body specified, or belonging to a class specified, in the First Schedule, in whose favour a guarantee is issued by the Minister;

"bond" means an interest-bearing debt instrument issued with a maturity period of more than one year;

"central Government" has the meaning assigned to the words in the Public Finance Management Act;

"Consolidated Fund" means the Consolidated Fund established under the Constitution;

"controlling body" has the meaning assigned to the words in the Public Finance Management Act;

"debt charge" includes interest, sinking fund charges, the repayment or amortisation of debt and expenses necessarily incurred in connection with the raising or the repayment of a loan in accordance with this Act;

"debt sustainability analysis" means an assessment of the manner in which the Republic’s current level of public debt and prospective borrowing affects the Republic’s present and future ability to meet debt service obligations;

"Director" means the person appointed as Director of the Debt Management Office under section 7;

"financial misconduct" has the meaning assigned to the words in the Public Finance Management Act;

"Government debt" means financial liabilities created as a result of borrowing by central Government;

"grant" means resource flow to a beneficiary for the advancement of economic development, technical co-operation or otherwise for the purpose of financing a project or specified action, or an operational expenditure for which no repayment is required;

"guarantee" means the potential liability assumed by the Republic that is contingent on the financial obligation of a beneficiary and becomes Government debt when the beneficiary responsible for the payment of the financial obligation fails to make payment when due;

"legally disqualified" means the absence of legal capacity as provided in section 4 of the Mental Health Act;

"Medium Term" means a period of three to five years;

"Medium Term Debt Strategy" means a strategic plan designed to operationalise high level objectives for debt management, taking into account the cost and risk associated with the public debt portfolio and the financing of the Government’s borrowing requirements over the Medium Term;

"public account" has the meaning assigned to the words in the Public Finance Management Act;

"public body" means a local authority, parastatal, State-owned enterprise, Commission or other body appointed by the Government or established by or under any written law, but excludes a professional association or body, and "public bodies" shall be construed accordingly;

"public debt" means a financial liability created as a result of borrowing by Government, a local authority, parastatal, State-owned enterprise, or other body appointed by the Government or established by or under, any written law, but excludes a professional association or body;

"public funds" has the meaning assigned to the words in the Public Finance Management Act;

"public officer" has the meaning assigned to the words in the Constitution;

"repealed Acts" means the Loans and Guarantees (Authorisation) Act and the General Loan and Stock Act;

"sinking fund" means a fund established under sections 25 and 26;

"Special Deposit Account" means an account established under section 15 which consists of a Government bonds proceeds account, treasury bills proceeds account and any other account for purposes of depositing loan proceeds raised in accordance with this Act; and

"Treasury" has the meaning assigned to the word in the Public Finance Management Act.

3.    Government debt management objectives

The Government shall, in the management of debt over the medium to long term—

    (a)    meet Government’s financing needs in a timely manner;

    (b)    minimise the borrowing costs in accordance with a prudent degree of risk; and

    (c)    promote the development of the domestic financial market.

4.    Medium Term Debt Strategy

    (1) The Minister shall cause the preparation of a Medium Term Debt Strategy for the management of Government debt, in accordance with section 3, for Cabinet consideration and approval.

    (2) The Medium Term Debt Strategy shall take into account the determined fiscal strategy and macroeconomic framework, and include—