New Bill to restrain free borrowing hand in Zanzibar

ISSA YUSSUF in Zanzibar

IN a move to check indiscriminate borrowing, the government has tabled a bill to bar the Zanzibar government from independently seeking concessional or non-concessional loans.

The bill, The Government Loans, Guarantees and Grants Act, Cap. 134 which was yesterday tabled for the second reading alongside the Written Laws, Miscellaneous Amendments, No.4 Act, 2016, imposes fresh conditions on Zanzibar to get loans from the union government.

However, Members of Parliament (MPs) and the Parliamentary Standing Constitution and Legal Affairs Committee challenged the move, pressing for full autonomy of the semiautonomous Isles to get loans from the domestic and foreign sources.

Presenting the committee’s recommendations, the Chairman, Mr Mohamed Mchengerwa, said the interests of both parties, the Mainland and Isles, must be observed in borrowing, arguing that Zanzibar should be given an upper hand and autonomy to borrow as per her capacity to repay.

“Zanzibar should be free to borrow subject to her ability to repay and as per the law and guidelines adopted,” he stressed.Section 12 of the proposed bill introduces special procedures for the union government to lend the revolution government and public institutions after acquiring the loans on their behalf. “Ministries and other accredited public institutions will have to seek approval from the Finance Minister to apply for any loan from within or foreign sources.”

However, the bill provides for establishment of the National Debt Management Committee under Section 17 (a) to advise the Finance Minister regarding domestic and foreign loans. It puts provision that the loan applied must be directed to profitable investments to repay the debt.

The Constitution and Legal Affairs Shadow Minister, Mr Tundu Lissu, said the new bill seeks to extend the union government’s dominance over the Isles, charging that even when the government resolved to adopt a consolidated fund, it has not worked out.

“While the law requires at least four per cent of the loan to be allocated to the Isles, since the 2013/14 fiscal year, only three percent was paid. Now Zanzibar is being barred from begging and borrowing,” he charged.

Wingwi MP Juma Kombo Hamadi (CUF) told the House that the envisaged legislation is unfair and unacceptable, arguing that after 50 years of the Union, Zanzibar should be allowed to seek funds on her own instead of being subjected under tight supervision. Attorney General (AG), Mr George Masaju, defended the bill saying it has followed the International Monetary Fund and World Bank Public Debt Management guidelines