CUTS opposes Bill 10 proposal to scrap parliamentary oversight in debt contraction

Consumer Unit Trust Society (CUTS) says deleting constitutional clauses that seek parliamentary oversight in the contraction of public debt will weaken the system of checks and balances.

Making a submission before the parliamentary Select Committee on the Constitution of Zambia (Amendment) Bill No. 10 of 2019 at parliament buildings, Tuesday, CUTS stated that making the President responsible for negotiating, ratifying, acceding or withdrawing from international agreements meant that National Assembly would have no say or oversight over deals that would potentially bind the Zambian people to debt.

“Section 13 of the Constitution of Zambia (Amendment) Bill seeks to delete paragraphs (d) and (e) of Article 63 (2) the Constitution of Zambia Act No. 2 of 2016 [to] remove National Assembly’s ability to approve public debt before it is contracted and approved; and international agreements and treaties before these are acceded to or ratified is removed. This proposed provision weakens the system of checks and balances and restricts transparency in the contraction of debt. At present, in addition to providing oversight, the process of submitting agreements to National Assembly allows public scrutiny through National Assembly’s consultative meetings with stakeholders. The proposed amendments would therefore mean agreements are secret and confidential and therefore not available for public scrutiny,” CUTS submitted.

“Section 26 of the Constitution (Amendment) Bill proposes to amend Article 92 (b) by making the President responsible for negotiating, ratifying, acceding or withdrawing from international agreements. This means that National Assembly will have no say or oversight over agreements that would potentially bind the Zambian people to debt. This provision, by removing the requirement of National Assembly approval, implies that National Assembly will have no oversight over debt contraction particularly foreign debt.”

CUTS further submitted that Bill 10 seeks to provide for the revision of the system of debt contraction by giving Cabinet the authority to approve loans acquired by the State as well as guarantee those contracted by state institutions.

“The proposed amendments to make the approval of public debt a function of Cabinet not only breach the principle of separation of powers but also remove any transparency and public accountability over the contraction of public loans and debt…The quorum for a Cabinet decision is the President plus one minister or Vice-President. This means that in effect, the proposed amendments allow the President with one other member of Cabinet to approve loans or guarantees contracted by the state or state institutions,” CUTS submitted.

“…When considered with the other proposed amendments relating to public finance management, the amendments mean that the Executive will be free to borrow and use public finance in a manner that is not transparent and will not be held accountable because of the weakened systems and public accountability institutions.”

It stated that proceeding with these proposed amendments removed public accountability and transparency and could have negative implications on the country’s already growing debt burden.

“The need for strong systems to monitor debt contraction and the need for parliamentary oversight in Zambia is reflected in reports from both the Government as well as international organizations such as the World Bank and the International Monetary Fund. In the 2017 National Debt Strategy, the Ministry of Finance recommended that Parliament’s oversight over debt contraction be strengthened by enhancing the legal and institutional framework,” submitted CUTS.

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