ACTS OF GHANA

LOANS ACT, 1970 (ACT 335)

ARRANGEMENT OF SECTIONS

Section

PART I—LOCAL LOANS

1. Raising of loans in Ghana.

2. Authenticating of agreements, securities, etc.

PART II—EXTERNAL LOANS

3. Authority to raise external loans.

4. External loan agreements.

5. Power to issue bonds, etc.

PART III—GENERAL PROVISIONS

6. Statutory Corporations to require approval of Minister before raising a loan.

7. Terms and conditions of loans to be approved by National Assembly.

8. Moneys received to be paid into Consolidated Fund or other prescribed public fund.

9. Repayment of Government loans charged on Consolidated Fund.

10. Guarantees of loans by Government.

11. National Assembly may approve standard terms of agreements.

12. Requests for National Assembly approval to be responsibility of Minister.

13. Guarantee by Government of loan to prescribed bodies to be effected by Bank of Ghana.

14. Restriction on prescribed body borrowing while a guarantee is in force.

15. Minister's powers in event of default by prescribed body.

16. Prescribed body to repay Government sums paid under guarantee.

17. Issue and management of loans, etc.

18. Statement of loan transactions, etc. to be included in public accounts of Ghana.

19. Regulations, etc.

20. Paragraphs 14 and 15 of N.L.C.D. 165 not to apply to transactions under this Act.

21. Exchange Control Act to apply to agreements, etc. under this Act.

22. Interpretation.

23. Repeals.

THE THREE HUNDRED AND THIRTY-FIFTH

ACT OF THE PARLIAMENT OF THE REPUBLIC OF GHANA

ENTITLED

THE LOANS ACT, 1970.

AN ACT to make provision for the raising of loans by the Government and for other purposes connected therewith.

DATE OF ASSENT: 3rd July, 1970.

WHEREAS clauses (3) and (4) of article 133 of the Constitution provide that no loan shall be raised by the Government on behalf of itself or any other public institution or authority otherwise than by or under the authority of an Act of Parliament and prescribe certain provisions which shall be incorporated in such Act of Parliament:

NOW THEREFORE BE IT ENACTED by the Presidential Commission and the National Assembly in this present Parliament assembled as follows:

PART I—LOCAL LOANS

Section 1—Raising of Loans in Ghana.

(1) The Government may, subject to the provisions of this Act raise within Ghana whether on behalf of itself or any other public institution or authority, loans of such sums of money as may be agreed between the Government and the lender:

Provided that no such agreement for the raising of any such loan shall be submitted to the Cabinet for its approval except after consultation with the Minister.

(2) The Minister may, for the purposes of subsection (1) of this section—

(a) borrow the money by the issue and sale of securities in such form, for such separate sums, at such rates of interest and upon such other terms and conditions as the Minister may approve; and

(b) enter into such contracts or agreements relating to the borrowing of the money or the issue or sale of securities relating thereto on such terms and conditions as the Minister may approve,

(3) The Government may borrow under subsections (1) and (2) of this section such sums of money as are required for the payment of any securities issued under subsection (2) of this section and are maturing or have been called for redemption.

Section 2—Authenticating of Agreements, Securities, Etc.

(1) Contracts and agreements entered into and securities issued under section 1 of this Act shall be signed by the Minister or such other person as the Minister may designate in writing and in the case of securities, shall be countersigned by such other person as the Minister may so designate.

(2) The Minister may direct that there shall be substituted for the signatures in the proper handwriting of one or both of the persons authorised under this section to sign or countersign securities, facsimiles thereof printed from engraving and such substitution shall be effected accordingly.

(3) If both the signature and counter-signature on a security issued under this section are to be printed, they shall only be printed on the securities (together with any distinguishing mark) from engraving after the  securities have been delivered to the Minister or the Bank.

PART II—EXTERNAL LOANS

Section 3—Authority to raise External Loans.

Subject to the provisions of this Act, the Government may, whether on behalf of itself or any other public institution or authority and in such manner and on such terms and conditions as may be agreed between the Government and the party by whom the external loan is to be granted, enter into any agreement providing for the raising by the Republic of an external loan:

Provided that no such agreement for the raising of an external loan shall be submitted to the Cabinet for its approval except after consultation with the Minister.

Section 4—External Loan Agreements.

An agreement to be entered into for the purposes of section 3 of this Act shall, subject to section 7 of this Act, be executed for and on behalf of the Government by the Minister or by such other person as the Minister may by writing designate for that purpose.

Section 5—Power to Issue Bonds, Etc.

(1) The Minister may issue such bonds, promissory notes or other instruments and on such terms and conditions as may be necessary for the purpose of giving effect to the terms of any loan agreement entered into in accordance with this Part of this Act.

(2) Any bond, promissory note or other instrument issued under subsection (1) of this section may be signed by the Minister or by any other person designated in writing for that purpose by the Minister.

PART III—GENERAL PROVISIONS

Section 6—Statutory Corporations to require Approval of Minister before Raising a Loan.

Except where the Minister otherwise directs by legislative instrument either generally or in the case of any particular corporation or class of corporations, no statutory corporation shall raise any loan without the prior approval in writing of the Minister.

Section 7—Terms and Conditions of Loans to be Approved by National Assembly.

The terms and conditions of any loans obtained by the Government under Part I or II of this Act or under any other enactment shall not come into operation unless they have been laid before the National Assembly and approved by the National Assembly by resolution.

Section 8—Moneys received to be paid into Consolidated Fund or other Prescribed  Public Fund.

(1) Any moneys received in respect of any loan referred to in section 7 of this Act shall be paid into the Consolidated Fund and form part thereof, or into some other public fund of Ghana either existing at the time of the loan or created for the purposes of the loan and shall be applied for purposes for which they were obtained and in accordance with the agreement under which they were obtained.

(2) Where any sum has become payable out of any moneys paid into the Consolidated Fund or other public fund under subsection (1) of this section under an agreement by which a loan is granted for any purpose prescribed under the agreement, the money shall be deemed to be charged on the Consolidated Fund or such other public fund into which the money has been paid under subsection (1) of this section.

Section 9—Repayment of Government Loans Charged on Consolidated Fund.

All moneys required for the discharge of all loans obtained under Part I or Part II of this Act, and also for the payment of all interest and other charges in relation thereto and the principal and interest on all securities are hereby charged on the Consolidated Fund and shall be paid in accordance with the terms and conditions of the relevant agreement applicable thereto.

Section 10—Guarantees of Loans by Government.

(1) Subject to the provisions of this section, the Government may, subject to the provisions of this Act guarantee loans on such terms and conditions as may be agreed by the parties to the agreement providing for the guarantee including (if any) the requirement of the payment of a commission for affording the guarantee.

(2) Any such agreement may be signed on behalf of the Government by the Minister or by any other person designated in writing by the Minister.

(3) No agreement providing for a guarantee by the Government of any loan shall come into operation unless the terms and conditions of the agreement have been laid before the National Assembly and approved by the Assembly by resolution.

(4) Where any money falls to be paid by the Government in satisfaction of any obligation guaranteed by the Government that money shall be deemed to be charged on the Consolidated Fund.

Section 11—National Assembly may Approve Standard Terms of Agreements.

(1) The National Assembly may if it thinks fit, by resolution approve from time to time standard terms and conditions of agreements for the purposes of sections 7 and 10 of this Act and up to such limits as the National Assembly may by resolution prescribe.

(2) Where the National Assembly has approved any terms and conditions under subsection (1) of this section any agreement entered into by the Government in the terms and conditions so approved and within the limits prescribed by the National Assembly shall come into operation in accordance with its terms and without the need for further approval of the National Assembly.

(3) The National Assembly may, notwithstanding anything in this section, by resolution request that any particular agreements or classes of agreements shall be brought before it for further approval before they shall come into operation and no agreement in respect of which such a request has been made shall come into operation without such approval, and the National Assembly may in any case by resolution, revoke or vary any approval granted under subsection (1) of this section so far as concerns agreements to be entered into after such revocation or variation.

(4) The Minister shall cause agreements entered into by virtue of an approval granted under subsection (1) of this section to be laid before the National Assembly as soon as practicable after they have been entered into.

Section 12—Requests for National Assembly Approval to be Responsibility of  Minister.

The Minister shall be responsible for laying before the National Assembly for its approval the terms and conditions of any loan or guarantee the terms and conditions of which are required by this Act to be laid before the National Assembly and approved by a resolution of the Assembly.

Section 13—Guarantee by Government of Loan to Prescribed Bodies to be Effected by Bank of Ghana.

Subject to section 10 of this Act, where any prescribed body is desirous of raising any loan and the terms of the agreement under which the loan is to be raised require a guarantee of the loan by Government, the Government may, if the Minister has, with the concurrence of the Bank and before the raising of the loan, given his approval in writing to the terms and conditions subject to which the loan is to be raised, by writing request the Bank—

(a) to guarantee the discharge by the prescribed body of its obligations in respect of the loan, and

(b) to undertake such other obligations as may be provided for in the agreement relating to the loan and the Bank shall comply with such request.

Section 14—Restriction on Prescribed Body Borrowing while a Guarantee is in Force.

Without prejudice to the general effect of section 6 of this Act, during any period in which any guarantee or other undertaking given by the Bank in respect of a prescribed body remains in force under section 13 of this Act, that body shall not, except with the consent in writing of the Minister, raise any further loan requiring a guarantee by Government.

Section 15—Minister's Powers in Event of Default by Prescribed Body.

(1) Where the Minister is satisfied that there is reasonable cause to believe—

(a) that a prescribed body is likely to fail or be unable to discharge any of its obligations under any agreement concluded under section 13 of this Act; and

(b) that the Bank is or may become liable under any guarantee or other undertaking given by it under section 13 of this Act in respect of that obligation,

the Minister may by writing give or authorise any other person to give such directions to the prescribed body as the Minister may think necessary or desirable to ensure that satisfactory arrangements are made by the prescribed body to enable that body duly to discharge its obligations under such agreement or under this Act:

Provided that where the prescribed body is a statutory corporation or other body for which responsibility has been assigned by the Prime Minister or by any enactment to any Minister, that Minister shall not exercise his powers under this subsection except after consultation with such Minister.

(2) A prescribed body shall comply with any directions given to it under subsection (1) of this section notwithstanding anything to the contrary and where that body is a statutory corporation the provisions of this section shall, for the purpose of giving effect to such directions, override the provisions of any enactment under which that body exists.

(3) Where any sum becomes payable by the Bank under a guarantee or undertaking given by that Bank under section 13 of this Act, that sum shall be deemed to be charged on the Consolidated Fund.

Section 16—Prescribed Body to repay Government sums paid under Guarantee.

(1) If any sum is paid out of the Consolidated Fund in respect of any liability incurred by the Bank under a guarantee or other undertaking given under section 13 of this Act in respect of any loan raised by a prescribed body, that body shall repay such sum together with interest and other charges thereon at the same rate if any, as are payable on the loan under the agreement relating to the loan into the Consolidated Fund in such manner and at such time or by such instalments as the Minister may direct.

(2) If any sum is so paid out of the Consolidated Fund the Minister shall as soon as possible after the end of each financial year beginning with the financial year in which the sum was paid and ending with that in which all liabilities in respect of that sum and any interest payable thereon is finally discharged by the prescribed body concerned, lay before the National Assembly a statement relating to that sum.

Section 17—Issue and Management of Loans, Etc.

(1) The Minister shall cause to be maintained a system of books and records—

(a) showing all moneys authorised to be borrowed and all loans authorised to be guaranteed under this Act;

(b) containing a description and record of all moneys so borrowed and securities (if any) issued and all loans so guaranteed; and

(c) showing all amounts paid in respect of the principal of, or interest on, all moneys so borrowed.

(2) The Bank shall annually and as often as required by the Minister in writing, give to the Minister a statement giving an account in such form and terms and containing such information as the Minister may direct of all its transactions in connection with the discharge of its functions under section 38 of the Bank of Ghana Act, 1963 (Act 182).

(3) The Minister may provide for the creation and management of a sinking fund with respect to any issue of securities, or with respect to all securities issued under this Act.

Section 18—Statement of Loan Transactions, etc. to be included in Public Accounts of Ghana.

An annual statement of all transactions effected under sections 1, 3 and 10 of this Act shall be included in the public accounts of Ghana.

Section 19—Regulations, Etc.

The Minister may by legislative instrument make such regulations or make such orders as he deems necessary or expedient to provide for the management of the public debt and the payment of interest thereon and without prejudice to the generality of the preceding provisions of this section may make regulations or orders in respect of all or any of the following matters:—

(a) for the inscription or registration of securities and prescribing the effect of such inscriptions or registration;

(b) for the transfer, transmission, exchange, redemption, cancellation and destruction of any securities and without limiting the generality of the preceding provisions of this paragraph—

(i) for the transmission, transfer or redemption of securities as a result of a judgment of a court or of death, dissolution or bankruptcy of the registered owner thereof; and

(ii) for prescribing the conditions upon which the transfer, transmission, exchange and redemption of securities registered in the names of infants or other persons not of full capacity to enter into ordinary contracts may be made;

(c) for the issue of securities or the making of payments in respect of damaged, lost, stolen or destroyed securities or interest coupons and the register pertaining thereto and prescribing conditions for such issue or payments;

(d) requiring guarantees to be given to the Bank in such manner and by such persons as may be specified in the regulations or orders before the Bank is authorised to make entry in a register maintained by the Bank for the purposes of this section;

(e) authorising the correction by the Bank, in such circumstances as may be specified in the regulations or orders of errors in such register and otherwise authorising the rectification of such register; and

(f) generally for the better carrying into effect of the provisions of this Act.

Section 20—Paragraphs 14 and 15 of N.L.C.D. 165 not to Apply to Transactions under this Act.

Paragraphs 14 and 15 of the Financial Administration Decree, 1967 (N.L.C.D. 165) (which relate to government contracts) shall not apply to any transaction under this Act unless the Minister otherwise directs.

Section 21—Exchange Control Act to apply to Agreements, etc. under this Act.

This Act shall have effect subject to the provisions of the Exchange Control Act, 1961 (Act 71) and to the provisions of any statutory instrument made thereunder but subject thereto, any transaction or thing duly affected in accordance with the provisions of this Act shall be valid and have full force and effect notwithstanding anything to the contrary.

Section 22—Interpretation.

In this Act unless the context otherwise requires—

"Bank" means the Bank of Ghana;

"external loan" means a loan raised from all or     any of the following:—

(a) the Government of any country other than Ghana,

(b) any person, body or institution whether resident in Ghana or outside Ghana;

being a loan raised in currency other than Ghana currency or a loan the repayment of which is to be made in currency other than Ghana currency;

"guarantee" includes an undertaking to repay a    loan whether conditioned upon a default or not;

"loan" includes an overdraft and any moneys lent or given to the Government on condition of return or repayment and any other form of borrowing or lending in respect of which—

(a) moneys from the Consolidated Fund or any other public fund, or

(b) moneys from any fund by whatever name called established for the purposes of repayment whether in whole or in part and whether directly or indirectly, may be used for repayment;

"Minister" means the Minister responsible for Finance;

"prescribed body" means—

(a) a body corporate established by an Act or by a statutory instrument made under an Act,

(b) any company or partnership in which the Government has a controlling interest being a company or partnership which is registered under the Companies Code, 1963 (Act 179) or as the case may be, under the Incorporated Private Partnerships Act, 1962 (Act 152),

(c) any other company or partnership (whether the Government has any interest in it or not) which is registered under the Companies Code, 1963 (Act 179) or as the case may be under the Incorporated Private Partnerships Act, 1962 (Act 152);

"securities" include securities of the Government or of any other country approved by the Minister and bonds, notes, deposits, certificates, debentures and treasury bills.

Section 23—Repeals.

(1) The following enactments are hereby repealed:—

(a) Paragraphs 25, 26, 27, 28, 29 and 30, the word "loan" appearing in paragraph 13 and the proviso to paragraph 46 (1) of the Financial Administration Decree, 1967 (N.L.C.D. 165),

(b) the External Loans Decree, 1968 (N.L.C.D. 246), and

(c) the provisions relating to the External Loans Decree, 1968 in the Second Schedule to the Constitution (Consequential and Transitional Provisions) Decree, 1969 (N.L.C.D. 406).

(2) Notwithstanding the repeal of the enactments referred to in subsection (1) of this section any loans or other transactions or statutory instruments existing thereunder immediately before the commencement of this Act shall continue in effect under the corresponding provisions of this Act.