Senate Passes Bill to Strengthen Public Debt Management

The Government is well on its way to strengthening its public debt management framework with the passage of relevant legislation in the Senate on Friday (July 21).

Provisions to improve the operational efficiency and effectiveness of debt management are contained in the Public Debt Management (Amendment) Act, 2017, which was approved with one amendment.

The Bill seeks to amend the principal legislation, the Public Debt Management Act, 2012, in order to make certain provisions more detailed, specific, flexible and consistent with local and international standards.

The principal Act, while creating a framework for the overall management of the public debt, does not make provision for the operational bodies with responsibility for particular aspects of the administration of such debt.

Therefore, the Bill establishes the Debt Management Branch, which is charged with the management of the public debt portfolio including Government loan guarantees and public debt transactions.

The Branch is also responsible for the development, implementation, monitoring and review of the Medium-Term Public Debt Management Strategy, which is the Government’s policy document detailing a three-year plan of action to ensure financing needs are met at the lowest possible cost and a prudent degree of risk.

The amendments will also provide guidelines regarding the main roles, functions, and responsibilities of the operational bodies governed under the Act, including the units of the Debt Management Branch.

Other sections of the legislation are being amended to establish a body called the Public Debt Management Committee and to detail its functions with respect to the Medium-Term Public Debt Management Strategy.

The Bill also empowers the Minister to appoint the Bank of Jamaica to act as the fiscal agent for the Government in accordance with a signed fiscal agent agreement.