An Analysis of Loan Contraction and Debt Management: The Case of the Republic of Mauritius
Developing countries, especially in Africa must establish appropriate and dynamic legal frameworks and structures that are responsible for coordinating and managing public debt. All public loan contraction and debt management rules and regulations must be anchored on constitutional provisions and other precise pieces of legislation defining how public loans should be obtained, used and serviced. Contracted debt should be used to promote economic growth, development and poverty reduction. Government borrowing from either domestic or external sources requires that there is a well-established legal basis for contracting debt. A clear legal framework governing the mobilization, management and monitoring of resources that have been raised through borrowing should be in place. The report analyzes the loan contraction process and debt management of the Republic of Mauritius. It reviews the legal framework, the procurement, utilization and management of public loans and debts to assess if they are done in a transparent, accountable, participatory and inclusive manner. Based on the findings, proposals for more rational, coherent, and inclusive policies to be adopted on public loan contraction and management were made. This report notes that Mauritius total public debt stock has been on a rising trend in recent years and is relatively high for an emerging economy. Nonetheless, according to the most recent debt sustainability analysis conducted by the IMF, the public debt outlook remains broadly positive.