Section 7: Public sector debt ceiling

7. Public sector debt ceiling (1) For the purpose of calculating the ceiling of public sector debt under this section— (a) any debt incurred by— (i) the Bank; (ii) Government-owned or controlled commercial banks; (iii) Government-owned or controlled insurance companies; and P47A – 5 [Issue 9] Public Debt Management Act (iv) social security and savings schemes, and which is not guaranteed by Government; (aa) any amount of Special Drawings Rights allocations made by the International Monetary Fund to Government; and (b) any outstanding Government securities transferred to the Bank pursuant to section 10 (5) of the Bank of Mauritius Act, shall not be regarded as public sector debt. (1A) Any debt incurred by a public enterprise which satisfies the criteria set out in the Schedule shall, for the purpose of this section, not be regarded as a public sector debt. (1AA) There shall be deducted from the public sector debt— (a) any cash balance remaining in any account held by Government with the Bank for the purpose of receiving proceeds from the issuance of any Government securities in excess of Government borrowing requirements for the reduction or mopping up of excess liquidity in the banking system; (b) any cash balance held by the Accountant-General with the Bank, other than that in respect of Special Funds under the Finance and Audit Act, in excess of an amount of 200 million rupees; and (c) any cash equivalent held by Government in any financial institution. (1B) Where a public enterprise does not fully satisfy the criteria specified in the Schedule, any debt incurred by that enterprise shall be discounted in accordance with the extent to which the enterprise satisfies the criteria and the level of risks which they represent to public finance. (1C) (a) There shall be for the purpose of subsection (1B) a committee which shall consist of— (i) not more than 5 senior public officers of the Ministry, to be appointed by the Minister; (ii) the Solicitor-General or his representative; (iii) the Accountant-General or his representative; and (iv) the supervising officer of the Ministry responsible for the subject of institutional reforms or his representative. (b) The committee referred to in paragraph (a) shall, every year— (i) prepare a list of public enterprises pursuant to subsection (1B); (ii) determine the level of discount to be accorded to the debt of each of the enterprises; and (iii) identify those public enterprises, the debt in respect of which is required to be excluded from the public sector debt. [Issue 9] P47A – 6 Revised Laws of Mauritius (c) The annual exercise under paragraph (b) shall— (i) be carried out in consultation with an international institution recognised for its expertise in the subject matter; and (ii) be subject to the approval of the Minister. (2) Subject to this section, the total outstanding amount of public sector debt shall, at the end of each fiscal year, not exceed 60 per cent of the Gross Domestic Product (GDP) at current market prices for that fiscal year. (3) Subject to subsection (4), the percentage referred to in subsection (2) shall, at the end of each fiscal year, be reduced so that at the end of the fiscal year ending 31 December 2018, the percentage shall not exceed 50 per cent and that percentage shall remain the ceiling for every subsequent fiscal year. (4) (a) Subject to paragraph (b), the requirements of subsection (2) or (3) shall not apply in case— (i) of natural disasters or other emergencies re nt market prices for that fiscal year. (3) Subject to subsection (4), the percentage referred to in subsection (2) shall, at the end of each fiscal year, be reduced so that at the end of the fiscal year ending 31 December 2018, the percentage shall not exceed 50 per cent and that percentage shall remain the ceiling for every subsequent fiscal year. (4) (a) Subject to paragraph (b), the requirements of subsection (2) or (3) shall not apply in case— (i) of natural disasters or other emergencies requiring exceptional expenditure; (ii) where a large investment project in the public sector is deemed by Cabinet to be timely and prudent; or (iii) of general economic slow-down requiring fiscal stimulus. (b) Any rise in the percentage at the end of a fiscal year shall not exceed 2 per cent by reference to the percentage in respect of the previous fiscal year. (5) Where, in a fiscal year, there is a rise in percentage pursuant to subsection (4), the Ministry shall prepare a plan describing how, within the 3 fiscal years immediately following that fiscal year, the percentage of public sector debt to the Gross Domestic Product (GDP) shall be restored to the percentage referred to in subsection (3), and take steps to ensure that it is made public. [S. 7 amended by s. 13 (a) of Act 10 of 2010 w.e.f. 31 March 2011; s. 23 (a) of Act 38 of 2011 w.e.f. 15 December 2011; s. 42 (c) of Act 9 of 2015 w.e.f. 1 July 2014 and 14 May 2015; s. 40 (c) of Act 18 of 2016 w.e.f. 7 September 2016.]