The new public debt management legislation passed by The Bahamas will help the country navigate the challenges of the COVID-19 pandemic, said Minister of State for Finance, James Thompson.
Drafted by Commonwealth Secretariat in consultation with The Bahamas Ministry of Finance, the Public Debt Management Act, 2021, was passed by Parliament and received the Governor General's assent in March. It is due to be enforced on 1 July 2021.
The new Act consolidates and rationalises existing debt legislations and modernises debt laws to ensure accountability, transparency and improve response to emerging issues such as the global pandemic.
Minister Thompson said this is an important step in The Bahamas’ concerted efforts to strengthen arrangements for public debt management as part of a larger strategy to protect fiscal health and economic stability.
He added: “The Ministry of Finance was pleased to receive strategic assistance from the Commonwealth Secretariat in preparing a modern and comprehensive legislative framework. Our collaborative efforts culminated, in March 2021, with the enactment of the Public Debt Management Act, 2021.
“This affords us a modern and comprehensive framework for debt management, one that promotes greater accountability, transparency and efficiency in these operations, and which is necessary to help us navigate the more challenging operating environment for fiscal policy determination amid the ongoing COVID-19 pandemic.”
Senior Director for the Economic, Youth and Sustainable Development at the Secretariat, Dr Ruth Kattumuri said: “The Commonwealth’s technical support to The Bahamas is part of our knowledge sharing and capacity building for debt management, which comprises a key priority for economic development in our member countries.
"This programme has been delivered through policy advisory services and software solutions which includes the state-of-the-art Commonwealth Meridian debt management system - currently being utilized by central banks and government agencies across the Commonwealth to monitor transactions and conduct in-depth analysis to enable informed decisions for debt management.
“According to the Institute of International Finance, Covid-19 has added $24 trillion to the already worrying mountain of global debt. Countries are facing extra costs at a time when trade and other economic activities are being impeded by the pandemic, and there is recognition across our governments that prioritising strategies and tools to ensure debt sustainability is crucial,” said Dr Kattumuri.
She added: “Therefore, the passing of the Bahamas’ Public Debt Management Act 2021, is timely and an extremely important outcome of our collaborative efforts. This Act introduces many new features that will enhance the current framework for debt management, strengthen governance systems, and support transparency, discipline, and prudence in the management of government debt.
“Our support with this initiative is part of a package of Commonwealth measures designed to strengthen Bahamas’ legal framework for public debt management. This includes collaboration on complementary regulations for the current Act and a Fiscal Agency Agreement between the Ministry of Finance and the Central Bank of the Bahamas, which will delineate their respective roles.”
The Secretariat is implementing a multi-year debt management project in The Bahamas to strengthen capacity for prudent public debt management. The programme is a tripartite collaboration involving the Secretariat, the India UN Partnership Development Fund and the Government of The Bahamas.