In the area of public debt management, progress has been made to consolidate various pieces of legislation that govern debt, into a draft Public Debt Management Bill.
According to the coalition administration, it is anticipated that under this consolidated umbrella, institutional and legal frameworks will be solidified to allow for more effective public debt management.
The Government has articulated that the intent is to promote transparency, accountability and debt sustainability while striving to meet the nation’s financing needs at minimal borrowing costs and an acceptable level of risk. The Bill is expected to be laid in the National Assembly, in 2018.
According to the 2015 Public Debt Annual Report, the existing legal framework for debt management in Guyana is not consistent with many of the elements of international best practices and would need to be improved.
The report says that the Fiscal Management and Accountability Act (FMAA) attempted to fill some of the gaps in the legislation and identifies the Ministry of Finance as being principally responsible for managing the public debt and cash-flow as they pertain to the Treasury functions.
The report notes, however, that this Act still needs further elaboration regarding the management of borrowing, lending, investments and guarantees. In addition, the existing legislation does not require an approved medium term debt strategy being linked to a high-level debt management objective, expressed in terms of the cost-risk borrowing preferences of the Government.
The report articulates that currently, debt levels and ceilings in the law are not linked to fiscal and macroeconomic conditions. There is also no requirement for the involvement of the Parliament or the Cabinet in the drafting or approval of the National Debt Strategy and; no guidance regarding the organizational structure for debt management, the roles of debt management officials and their relations with fiscal, monetary and other agencies.
Additionally, current legislation does not address the public dissemination of information or the flow of information among agencies regarding the public debt Transparency in debt management operations is an integral component of sound debt management practice.
While the existing legal framework provides for the auditing of loans, there is no requirement for the specific auditing of the Debt Management Division and its debt operations. There is no provision for the evaluation of debt management activities and outcomes against goals and objectives in what is called performance auditing.
The report outlines that sound practice in public debt management requires the auditing of public debt management operations, especially activities related to the formulation of the debt strategy, recording and accounting for debt, debt system administration, and management of loan records.
With the help of an Inter-American Development Bank funded Consultant, a single Public Debt and Aid Management Act and Regulations were drafted in 2006. This important draft legislation was never enacted. It has since been updated.
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