Legal Framework
The legal framework should go beyond just providing the authority to borrow and include areas of statutory controls consistent with a country’s debt and aid management objectives, policies and strategies (for example borrowing ceilings or limits), and define clearly the institutional set-up to undertake debt and aid management functions.
In terms of best practices, the legal framework for debt and aid management needs to include sections which cover:
- Purpose, scope of application and definitions used with the legal instrument
- Authority to borrow, to negotiate and to contract new public debt and aid obligations, and the circumstances for undertaking all types of borrowing and the issuance of guarantees,
- Role of the national debt and aid strategy and public debt and aid policy
- Establishment and role of an appropriate co-ordination structure such as an Aid and Debt Co-ordination Committee or working group
- Institutional responsibilities with respect to debt and aid recording, utilisation and implementation, renegotiation and reporting
- Transparency and accountability in the implementation of the law
- Prohibitions under the law.
Examples of legal best practices include those of Nicaragua and Tanzania.
UNITAR produces publications and training materials and on the legal aspects of debt management.
