DEBT MANAGEMENT BUREAU (ESTABLISHMENT ETC.) ACT, 2011

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CENTER FOR LAWS OF THE FEDERATION OF NIGERIA

LAWS OF THE FEDERATION OF NIGERIA 

DEBT MANAGEMENT BUREAU (ESTABLISHMENT ETC.) ACT, 2011

EXPLANATORY MEMORANDUM

This Act repeals the Debt Management Office (Establishment) Act No. 18 of 2003 and enacts the Debt Management Bureau Act, 2011 charged with the responsibility, among other things, to maintain a reliable database of all loans taken or guaranteed by the Federal, State Governments, Local Governments or any of their agencies.

ARRANGEMENT OF SECTIONS

PART I- ESTABLISHMENT OF THE DEBT MANAGEMENT BUREAU, ETC.

1. Establishment of the Debt Management Bureau, etc.
2. Establishment and composition of the supervisory Board.

PART II – FUNCTIONS OF THE BUREAU,ETC.

3. Functions of the Bureau.
4. Powers of the Bureau.
5. Functions of the Board.

PART III – STAFF

6. Appointment of the Director-General.
7. Appointment of other staff of the Bureau.
8. Staff regulations.
9. Service in the Bureau to be pensionable
10. Establishment of the management team.

PART IV – FINANCIAL PROVISIONS

11. Establishment of a Fund for the Bureau.
12. Fund of the Bureau.
13. Gifts to the Bureau.
14. Annual estimate and expenditures.
15. Expenditure of the Bureau.

PART V – EXTERNAL BORROWING, ETC.

16. External borrowing.
17. Execution of external loan agreements.
18. Minster to guarantee all loans.
19. Any loan in contravention of this Act not binding.

PART VI – FEDERAL GOVERNMENT GUARANTEE, ETC.

20. Government guarantee, etc.
21. Terms and conditions for loans and guarantees.
22. Bureau to determine issuance of securities.
23. Internal borrowing
24. Approval for grants or loans to a foreign State, etc.
25. Loan receipts to form part of the Consolidated Revenue Fund of the Federation.

PART VII – MISCELLANEOUS

26. Limitations of suit against the office, etc
27. Service of the documents.
28. Judgment debt to be paid from the Fund of the Bureau.
29. Regulations.
30. Transitional provisions etc.
31. Validation or appointment.
32. Savings
33. Short title.
34. Interpretation.

DEBT MANAGEMENT BUREAU (ESTABLISHMENTETC.) ACT, 2011

AN ACT to repeal the Debt Management Office (Establishment) Act No.18 of 2003 and enact the Debt management Bureau; and for related matters.

[Commencement            ]

ENACTED by the National Assembly of the Federal Republic of Nigeria –

PART I – ESTABLISHMENT OF THE DEBT MANAGEMENT BUREAU, ETC.

Establishment of the Debt Management Bureau.

1. (1) There is established the Debt Management Bureau (in this Act referred to as “the Bureau”) which shall be a body corporate with perpetual succession and a common seal:

(b)     may sue andbe suedin its corporate name; and

(c)     may acquire, hold and dispose of property whether moveable or immovable.

Establishment and composition of the supervisory Board

(2) – (1) There is established for the Bureau a supervisory Board (in this Act referred to as the Board) which shall consist of-

(a)     the Vice-President of the Federal Republic of Nigeria who shall be the Chairman:

(b)     the Minister of Finance who shall be the Vice-Chairman:

(c)     the Attorney-General of the Federation;

(d)     the Minister responsible for national planning;

(e)     the Chief Economic Adviser to the President;

(f)      the Governor of the CentralBank of Nigeria;

(g)     the Accountant-General of the Federation;and

(h)     the Director-General of the Bureau, who shall be the Secretary to the Board.

Schedule

(2)    The Supplementary provisions set out in the Schedule to this Act shall have effect with the proceedings of the Board and the other matters therein.

PART II – FUNCTIONS OF THE BUREAU, ETC.

Functions of the Bureau

(1)     The Bureau shall –

(a)     maintain a reliable database of all loans takenor guaranteedby the Federal or State Governments or any of their agencies;

(b)     prepare and submit to Federal Government a forecast of loan service obligations for eachfinancialyear;

(c)     prepare and implement a plan for the efficient management of Nigeria’s external, domestic and sub-national debt obligations at sustainable levels compatible with desired economic activities for growth and development, and participate in negotiations aimedat realizing those objectives;

(d)     verify and service all debts guaranteed or directly taken by the Federal Government;

(e)     on agencybasis, verifyandservice externalandother debts taken byState Governments or Local Governments and any of their agencies, where such debts are guaranteedby theFederalGovernment;

(f)      set guidelines for managing Federal Government financial risks and- currency exposure with respectto all loans;

(g)     advise theFederalGovernment onthere-structuring andre-financingof all debt Obligations;

(h)     advise the Ministeron the terms and conditionson whichmonies, whether in the currency of Nigeriaor in any other currency, are to be borrowed;

(i)      submit to the Federal Government, for consideration intheannual budget, a forecast of borrowing capacity in local and foreign currencies;

(j)      prepare a schedule of any other Federal Government obligations such as trade debts and other contingent liabilities, both explicit and implicit, and provide advice on policies and procedures for their management;

(k)     establish and maintain relationships with international and local financial institutions, creditors and institutionalinvestors in Government debts;

(l)      collect, collate, disseminate information, data and forecasts on debt management with the approval of the Board; and

(m)    perform such other functions which in the opinion of the Bureau are required for the effective implementation of its function under this Act.

(2)     Notwithstanding the provisions of subsection (1) of this section, the Bureau         shall-

1. a) administer the debt conversion programme of the Federal Government; and
2. b) perform the functions of the Minister with regard to the development fund rules.

Powers of the Bureau.

4. The bureau shall have power to –
5. a) issue and manage FederalGovernment debt arising fromtheissuance of various instruments upon such terms and conditions as may be agreed between the Federal government and the Bureau.
6. b) developa debtmarket for the State Governments,thatwillallow them have directaccesstoborrowing throughissuanceofstatebonds,but within the guidelines that will ensuresustain ability;
7. c) issue, from time to time, guidelines for theprudent management and smooth operation of the public debt of the FederalGovernment;
8. d) issue, from time to time, guidelines on external borrowing, domestic borrowing, federal government guarantees and on-lending to sub-nationals, subjectto the approval of the National Assembly;
9. e) require persons and institutions having access to, at all reasonable times, tosupply, such forms as the Bureau may from time to time direct, information relating to matters affecting borrowing or public debts in the nationaleconomy;and,
10. f) do such other things which in the opinion of the Board relate to debt management ofFederation.

Functions of the Board.

5. The Board shall-

(a)     approve policies, strategies andprocedures to be adoptedby the Bureau for the achievementof its objectives;

(b)     review, from time to time, the economic and politicalimpact of domestic and external debt management strategies;

(c)     appoint,as and whennecessary, technicalcommittees comprisingpersons with requisitetechnicalcompetence from the private or public sector to advise theBureau on such matters as maybe determined from time to time;

(d)     recommend for the approval of the President members of the Debt Conversion Committee; and

(e)     perform suchotherfunctions as may,fromtimetotime, benecessary to achievethe objectivesof the Bureau.

Appointment of the Director-General

PART III – STAFF

6. (1) There shall be for the Bureau, a Director-General, who shall be appointed by the President on the recommendation of the Minister of Finance.

(2)     The Director-General shall –

(a)     be aperson possessing a minimum of FirstDegreeinFinancerelated discipline, with not lessthan 10 years post qualification experience;

(b)     holdofficefor a periodof 5 years inthefirstinstanceandmaybere-appointed for another term of 5 years and no more;

(c)     be responsible to the Board for policy direction and day-to-clay administration of the Bureau; and

(d)     subject to the provisions of paragraph (c), hold office on terms and conditions as may be determinedby the Boardor as may be containedinhis letter of appointment.

Appointment of other staff of the Bureau

7. (1) TheBoard shall appoint for the Bureausuch other number of employeesas may in theopinionof theBoard beexpedient andnecessaryfortheproperandefficient performanceof the functions of Bureau.

(2)     The terms and conditions of service(including remuneration,allowances,benefits andpensions)of the employeesof theBureaushallbe as determinedby theBoard after consultation with nationalSalaries and Wages Commission.

(3)     The Board shall have power to –

(a)     appoint either on transfer or on secondmentfrom any public service in the Federation, such numberof employeesas may,in the opinion of theBoard be required to assist the Bureau in the discharge of any of its functions under this Act; and

(b)     pay to persons so employed such remuneration as the Board may, after consultation with the National Salaries and Wages Commission, determine.

Staff regulations.

8. (1) The Bureau may make staff regulations relating generally to the conditionsof service of the employees of the Bureau and without prejudice to the generality of the foregoing, such regulations may providefor –

(a)     the appointment, promotionand disciplinarycontrol (includingdismissal) of employeesof the Bureau; and

(b)     appeals by such employees against dismissal or other disciplinary measures, and, until such regulations are made, any instrument relating to the conditions of service of officers in the civil service of the Federation shall be applicable, with such modifications as may be necessary, to the employeesof the Bureau.

(2)     Staffregulations made under subsection (1)of thissection shallnothave effect untilapproved by theBoardandwhen soapproved, they shall bepublishedin the Federal Gazette.

Service in the Bureau to be pensionable [Act No. 2, 2004]

9. Service in the Bureau shall be approved service for the purposes of the Pension Reform Act.

Establishment of the Management team

10. (1) There shall be for theBureau a management team which shall comprisethe Director-General and the heads of departments of the Bureau and it shall be responsible for the implementation of the policies of theBoard.

(2)     The organizational structure of the Bureau shall be determined from time to time by the Board.

PART IV – FINANCIAL PROVISIONS

Establishment of a Fund for the Bureau

11. (1) There is established for the Bureau a Fund from which shall be defrayedall expenditure incurred by the Bureau.

(2)     There shall be paid and credited to the Fund

(a)     any allocation to theBureau from the ConsolidatedRevenue Fund of the Federation; and

(b)     all other assets that may, from time to time, accrue to the Bureau;

(3)     The Fund shall be managed in accordance with extant regulations.

Fund of the Bureau

12. The Bureau shall apply the proceeds of the Fund to –

(a)     the cost of administration of theBureau:

(b)     the payment of salaries, fees, remunerations, allowances, pension and other benefit payable to the members of the Board and the employees of the Bureau;

(c)     the payment for all consultancies, contracts, including mobilization, fluctuations, variations, legal fees and cost on contract administration;

(d)     the payment for all purchases: and

(e)     undertaking such other activitiesas are connectedwithall oranyof the functions of the Bureau under this Act.

Gifts to the Bureau

13. (1) The Bureau may accept gifts of land, money or other property on such terms and conditions, if not in contravention of any law.

(2)     The Bureau shall not accept any gift if the conditions attached by the person or organisation making the gift are inconsistent with the functions of the Bureau under this Act.

Annual Estimates and Expenditure

14. (1) The Bureau shall, not later than 30th September in each year, submit tothe Minister an estimate of the expenditure andincomeof theBureauduringthenext succeeding year.

(2)     The Board shall cause to be kept proper accountsof the Bureau inrespect of each year and recordsin relation thereto and shall cause the accounts to be audited not later than 6 after the end of each year by auditors appointed fi.-0111 the list and in accordance with guidelines supplied by the Auditor-Generalof the Federation.

Expenditure of the Bureau

15. The Bureaushallprepare and submitto the Boardnotlaterthan30thJuneineach year,a reportin such a formas theBoardmaydirect on its activitiesduringthe immediatelypreceding year,andshallincludeinthereportacopyof itsaudited accounts for that year and the auditors report thereon.

PART V – EXTERNAL BORROWING, ETC.

External Borrowing

16. (1)The Bureaushall annually advise the Federal Government on thefinancing gap for the succeeding financial year and the amounts to be borrowed for bridging the gap both internallyand externally .

(2)     Any advice issued by the Bureau under subsection (1) of this section shall, among other things form the basis of the national borrowing programme for the succeeding financial year as may be approved by the National Assembly.

(3)     The Ministry and the Bureau shall be responsible for leading the negotiation and acquisition of such loans and credit referred to in subsection (1) of this section.

(4)     All external borrowing proposals of the Federal Government, its agencies, State Governments and Local Governments and their agencies for the next succeeding year shall be submitted not later than 30th August of each year to the Minister for vetting andincorporation into the public sectorexternal borrowing programme for the following year.

Execution of external loan agreements.

17. An agreement entered into for the purpose of subsection 18(1) of this Act shall subject to the provisions of this section, be executedfor and onbehalf of the Federal Government by the Minister or by such other persons andthe Minister may, from time to time and in writing, designate for that purpose.

Minister to guarantee all loans

18. The Federal, State and Local Governments or any of their agencies shall not obtain any external loan except with a guarantee issued by the Minister.

Any loan in contravention of this Act not binding

19. Any loan obtained in contravention of the provisions of this Act shall not bind the Federal Government of Nigeria.

PART VI – FEDERAL GOVERNMENT GUARANTEE, ETC.

20. (1) The Federal Government may, subject to the provisions of this section, guarantee external loans.

(2)     A guarantee agreement for external loans shall be executed on behalf of the Federal Government by the Minister or any other person designatedbyhim in writing.

(3)     The Minister shall not guarantee an external loan unless the terms and conditions of the loan are in accordance with the standard terms and conditions approved by the National Assembly pursuant to section 24 of this Act.

(4)     Where any money is due to be paid by the Federal or a State Government in satisfaction of any obligation arising from a borrowing or a guarantee by the Minister, that money shall be deemed to be a charge on the Consolidated Revenue Fund of the Federation or the Consolidated Revenue Fund of the State, as the case may be.

Terms and conditions for loans and guarantees

21. (1) The standard terms and conditions approved by the National Assembly shall form the basis for the negotiation and acceptance of external loans andissuance of guarantees.

(2)     Where the National Assembly has approved the standard terms andconditions under subsection (1) of this section, any agreemententeredinto by the Federal Government shall [be in] operation without further referenceto the National Assembly where the terms and[conditions] are in conformity with the terms and conditions.

(3)     Notwithstanding the provisions, of subsection (2) of this section, the National Assembly may by a resolution request that a particular agreement be brought before it for approval.

(4)     No agreement in respect of which the approval of the National Assembly is required shall come operation without such approval.

Bureau to determine issuance of securities

22. (1) Subject to the provisions of section 7 of this Act the Bureau shall in collaboration with Central Bank of Nigeria and the Accountant-General of the Federation determine –

(a)     the amounts and timings for the issuance of Federal Governmentshort-termand medium-term securities in the Nigerian money market;

(b)     the repayment or roll-over of existing or maturingissues;

(c)     the appointment of underwriters lo the issues specified in paragraph(a) of this subsection to ensure their success;

(d)     the floatation of Federal Government long-term securities to raise appropriate funds in the capital market;

(e)     the payment of interest, maintenance of a register of holders and redemption of securities at maturity;

(f)      the creation and management of sinking funds to provide for the redemption of securities at maturity;

(g)     any other form of securities that may be created, issued or floated to achieve the domestic debt management objectives of theFederal Government;

(2)     The Bureau shall review and advise Government on the maintenance of statutory limits for all categories of loans or debt instruments at levels compatible with economic activities for sustainable growth and development.

(3)     The Bureau for the purpose of achieving the objectives specified in this section, may –

(a)     liaise or cooperatewithState Governmentsor other relevantinstitutions within or outside Nigeria; and

(b)     maintain accounts with the Central Bank of Nigeria.

Internal Borrowing

(1)     The Bureau, with the approval of the Minister, shall, at the beginning of each financial year, issue guidelines identifying the level, nature and procedure by the Federal, States or Local Governments or any agencies on borrowing.

(2)     Banks and other financial institutions shall ensure that their lending to those bodies referred to in subsection (1) of this section is in compliance with guidelines issued pursuant to this provision.

(3)     Any loan transaction by the Federal, State or Local Government or any of their agencies in contravention of this section shall be unlawful.

Approval for grants or loans to a foreign State, etc.

24. (1) Approvals for grants or loans to a foreign state or any international body or any of its agencies may be granted in accordance with the procedure specified in this section.

(2)     Applications for grants to a foreign state may be submitted by the President to the National Assembly and may be approved subject to such terms and conditions as may be prescribed by a resolution of the National Assembly.

(3)     An application specified in subsection (2) of this section shall indicate the –

(a)     foreign policy objectives underlining therequest or proposal;

(b)     terms and conditions of the grant;

(c)     benefits which Nigeria stands to derive from the grant; and

(d)     state of the relations existing between the foreign state or international body and Nigeria at the time of the request or proposal.

(4)     The National Assembly shall, by resolution, decide whether or not the grant may be made.

(5)     The President shall forward a request to the National Assembly for approval of loans to a foreign country or any other intending body or any of its agencies for ratification

(6)     The Bureau shall negotiate the terms and condition of the loan referred in subsection (5) and the resident shall thereafter submit it to the National Assembly for ratification

Loan receipts to form part of the Consolidated Revenue Fund of the Federation.

25. (1) Monies received in respect of any loan contracted by the Federal Government shall be –

(a)     paid into and form part of the Consolidated Revenue Fund of the Federal Government;

(b)     paid into any other public fund of the Federal Government either existing at the time or created for the purpose of the loan; and

(c)     applied solely for the purpose for which it was obtained and in accordance with the terms and conditions of the agreement under which it wasobtained.

(2)     Monies received in respect of any guaranteed loan on behalf of a State Government shall be –

(a)     paid into and form part of the Consolidated Revenue Fundof the State;

(b)     paid into any other public fund of the State either existing at the time or created for the purpose of the loan; and

(c)     applied solely for the purpose for which it was obtained and in accordance with the terms and conditions of the agreement under which it was obtained.

(3)    Where any amount has been paid out of the monies credited to the Consolidated Revenue Fund of the Federation or of a State or other public funds under subsection (1) or (2) of this section, the amount shall be a charge on the Consolidated Revenue Fund of the Federation or, of a State as the case may be, or such other public funds into which the monies have been paid.

PART VII -MISCELLANEOUS

Limitation of suit against the office, etc

26. Subject to the provisions of this Act, the provisions of the Public Officers Protection Act shall apply in relation to any suit instituted against the Bureau or any officer of employee of the Bureau.

Service of documents

27. A notice, summons or other documents required or authorized to be served upon the Bureau under this Act or any other law or enactment shall be in accordance with the provisions of this Act.

Judgment debt to be paid from the Fund of the Bureau

28. Any sum of money which may be the judgment of any court be awarded against the Bureau under this Act or any other law or enactment shall be in accordance with provisions of the Act.

29. Without prejudice to the provisions of section 24, the Bureau may with the approval of the Federal Executive Council make regulations for the operation of this Act including the issuance of guidelines for –

(a)     obtaining external loans by the Federal government or any of its agencies;

(b)     guarantees with regard to, externalloansby a State Government or any of its agencies; and

(c)     the approval by the Ministerin respect of on-lendingto public bodies.

30. As from the commencement of this Act, the powers of any Ministry or Extra-Ministerial Department over the management of any debt, referred to in section 6 of this Act shall, by virtue of this Act and without further assurance,be vested in the Bureau established by this Act and in accordancewith the provisions of this Act.

(2)     Accordingly, any proceeding or cause of action pending or existing immediately before the commencement of this Act by or against any such Ministry or Extra-Ministerial Department over the management of any debt in respect of any right, interest, obligation or liability in relation to the Management of a debt referred to in section 6 of this Act may be continued or commenced, as the case may be, by or against the Bureau, as if the Bureau had been a party thereto.

(3)     The determination of a court of law, tribunal or other authority or person made in anyproceeding or cause of action referred to in subsection (2),maybe enforcedby or againstthe Bureautothesame extentthat the proceeding, cause of action or determination couldhavebeen continued, commenced or enforced by or against that Ministry or extra-MinisterialDepartment as if this Acthadnot beenmade.

(4)     Thenoticereferred to in subsection (2) of this section shall clearly andexplicitly statethecause of action, the particulars of the claim, thename andplace of abode of the existingimmediately beforethe commencement of thisActby or against any such Ministry or Extra-MinisterialDepartment over the management of any debt in respect of any right,interest, obligation or liability in relation tothemanagement of a debt referred toinsection6 of thisActmaybecontinuedor commenced,as thecasemay be,by or against theBureau, as if theyhad beena party thereto.

31. Theappointment, of officers and employees made by the Bureau prior to the commencement of thisAct shall be deemed to havebeen validly madeunder this Act and theexisting rights of suchofficers shall,by virtue of thissection be preserved.

Savings

32. (1) Withoutprejudice to section 6 of the Interpretation Act, the repeal of the enactmentsreferred toin section 34 of the repealed Act shall notaffectanything doneunder or pursuant to thoseenactments.

(2)     Therights, interest, obligations andliabilitiesof theBureau existingbefore the commencement of thisAct under anycontract or instruments,or inlaworinequity shallby virtue ofthisAct be assigned to andvested in theBureau.

Short Title

33. This Act may be cited as the Debt Management Bureau Act, 2010.

Interpretation

In this Act –

“Board” means the supervisory Board of the Bureau established under section 3 of thisAct;

“Debt” includes domestic and external debts;

“Loans “includes both internal and external borrowing;

“Minister” means the Minister charged with responsibility for finance;

“Ministry” means the Federal Ministry of Finance;

“Bureau” means the Debt Management Bureau established under section 2 of this Act;

“Public Bodies'” includes the Federal, State and Local Governments or their agencies and parastatals.

SCHEDULE – Section 2 (2)

SUPPLEMENTARY PROVISIONS RELATING TO THE BOARD, ETC.

Proceedings of the Board

1. (1) Subjectto thisAct andsection 27 ofthe Interpretation Act the Board maymake standing orders regulating its proceedings or those of any of its committees.

(2)     The quorum of the Board shall be 4 members.

(3)     At everymeetingof theBoard,thedecisionof theBoardshallbebysimple majority,but where isa tie, the Chairman ora person actingas Chairmanshallhave a casting vote.

2. (1) The Board shallmeet not lessthan4 times ineach year andsubjectthereto,the Boardshall meet wheneverit is summoned by the Chairmanand if the Chairman is required to do so by notice given to him in writing by not less than 4 other members, he shallsummona meeting of the Board to be held within 28 days from the dateon which the notice isgiven.

(2)     At any meeting of the Board the Chairman shall preside but if he is absent,the Vice-Chairmanshallpresideatthemeetingandif heisabsent,themembers present at the meeting shall appoint one of them to preside at the meeting.

(3)     Where the Boarddesires to obtain the advice of any person on a particularmatter, theBoard may co-opthim to the Board for such periodas itdeemsfitbut a person who is in attendanceby virtueof this sub-paragraphshall not be entitled to voteat any meeting of theBoard and shall not count towards a quorum.

Committees

3. (1) The Board may appoint one or more committees to carry out, on behalf of the Board, such functions as the Board may determine.

(2)     A committee appointed under this paragraph shall consist of such number of persons as may be determined by the Board and a person shall hold office on the committee in accordance with terms of his appointment.

(3)     The decision of a committee shall be of no effect until it is confirmed by the Board.

Miscellaneous

4. (1) The fixing of the seal of the Bureau shall be authenticated by the signatures of the Chairman or any person generally or specifically authorized by the Board to act for that purpose and that of the Director-General.

(2)     Any contract or instrument which, if made or executed on behalf of the Bureau by the Director-General or any person generally or specifically authorized by the Board to act for that purpose.

(3)     Any document purporting to be a document duly executed under these all of the Bureau shall be received in evidence and shall, unless and until the contrary is proved,be presumed to be executed.

(4)     The validity of any proceeding of the Board or of a committee shall not be adversely affected by –

(a)     a vacancy in the membership of the Board or committee;

(b)     a defect in the appointment of a member of the Board or committee;or

(c)     reason that a person no ten titled to do so,took part in the proceedings of the Board or committee.

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