Loans Act, 1970 Act 335 (Revised Edition)

ACT 335
Loans Act, 1970
ACT 335
LOANS ACT, 1970
ARRANGEMENT OF SECTIONS
Local Loans
SECTION
1. Raising of loans.
2. Authentication of agreements.
External Loans
3. Authority to raise external loans.
4. External loan agreements.
5. Power to issue bonds.
Approvals
6. Approval of Minister for statutory corporation’s loans.
7. Approval of terms and conditions of loans.
8. Payment of moneys into the Consolidated Fund.
9. Repayment of loans charged on the Consolidated Fund.
Guarantees
10. Guarantees by Government.
11. Approval of Parliament of terms of agreement.
12. Minister to seek approval of Parliament.
13. Guarantee by Government of loans effected by Bank of Ghana.
14. Restriction on prescribed body borrowing.
15. Minister’s powers in event of default by prescribed body.
16. Repayment of sums of money paid under guarantee.
Miscellaneous
17. Issue and management of loans.
18. Inclusion of statement of loan transactions in public accounts.
19. Regulations.
20. Application of Financial Administration Act, 2003.
21. Application of Exchange Control Act, 1961.
22. interpretation.
23. Repeals.
V-3351 [Issue 1]

0. Application of Financial Administration Act, 2003.
21. Application of Exchange Control Act, 1961.
22. interpretation.
23. Repeals.
V-3351 [Issue 1]

ACT 335
Loans Act, 1970
ACT 335
LOANS ACT, 19701
AN ACT to provide for the raising of loans by the Government and for related
purposes. Local Loans
1. Raising of loans
(1) The Government may, subject to article 181 of the Constitution and this Act, raise
within the Republic whether on behalf of itself or any other public institution or author
ity, an amount of money which is agreed between the Government and the lender. (2) An agreement for a loan shall not be submitted to the Cabinet for its approval ex
cept after consultation with the Minister. (3) The Minister may, for the purposes of subsection (1),
(a) borrow money by the issue and sale of securities in the form, for the sepa
rate sums, at the rates of interest and on the terms and conditions approved
by the Minister, and
(b) enter into a contract or an agreement relating to the borrowing of the
money or the issue or sale of securities relating to the contract or agreement
on the terms and conditions approved by the Minister.

borrowing of the
money or the issue or sale of securities relating to the contract or agreement
on the terms and conditions approved by the Minister.

(4) The Government may borrow under subsections (1) and (2) the sums of money
that are required for the payment of the securities issued under subsection (2) and are
maturing or have been called for redemption. 2. Authentication of agreements
(1) A contract and an agreement entered into and securities issued under section 1
shall be signed by the Minister or a person designated by the Minister in writing and in the
case of securities shall be countersigned by any other person designated by the Minister. (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 of the signatories printed from engraving and the substi
tution shall be effected accordingly. (3) Where 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 the
distinguishing marks, from engraving after the securities have been delivered to the Min
ister or the Bank of Ghana. 1. The Act was assented to on 3rd July, 1970. [Issue 1] V-3352

graving after the securities have been delivered to the Min
ister or the Bank of Ghana. 1. The Act was assented to on 3rd July, 1970. [Issue 1] V-3352

ACT 335
Loans Act, 1970
External Loans
3. Authority to raise external loans
(1) Subject to article 181 of the Constitution and to this Act, the Government may,
whether on behalf of itself or any other public institution or authority and in the manner
and on the terms and conditions agreed between the Government and the party by whom
the external loan is to be granted, enter into an agreement providing for the raising by the
Republic of an external loan. (2) An agreement for the raising of an external loan shall not be submitted to the
Cabinet for its approval except after consultation with the Minister. 4. External loan agreements
An agreement to be entered into for the purposes of section 3 shall, subject to section 7,
be executed for and on behalf of the Government by the Minister or by any other person
designated in writing by the Minister for that purpose. 5. Power to issue bonds
(1) The Minister may issue the necessary bonds, promissory notes or any other in
struments and on the terms and conditions that are necessary for the purpose of giving
effect to the terms of a loan agreement entered into in accordance with this Act.

he terms and conditions that are necessary for the purpose of giving
effect to the terms of a loan agreement entered into in accordance with this Act.

(2) A bond, promissory note or any other instrument issued under subsection (1) may
be signed by the Minister or by any other person designated in writing for that purpose by
the Minister. Approvals
6. Approval of Minister for statutory corporation’s loans
Except where the Minister otherwise directs by legislative instrument generally or in
the case of a particular corporation or class of corporations, a statutory corporation shall
not raise a loan without the prior approval in writing of the Minister.2
7. Approval of terms and conditions of loans
The terms and conditions of a loan obtained by the Government under this Act or un
der any other enactment shall not come into operation unless it has been laid before Par
liament and approved by a resolution of Parliament in accordance with article 181 of the
Constitution. 8.

operation unless it has been laid before Par
liament and approved by a resolution of Parliament in accordance with article 181 of the
Constitution. 8.

Payment of moneys into the Consolidated Fund
(1) The moneys received in respect of a loan referred to in section 7 shall be paid into
the Consolidated Fund and form part of that Fund, or into any other public fund either
existing at the time of the loan or created for the purposes of the loan and shall be applied
for purposes for which it was obtained and in accordance with the agreement under which
it was obtained. (2) Where a sum of money has become payable out of the moneys paid into the Con
solidated Fund or any other public fund under subsection (1) under an agreement by
2. Statutory corporation for the purposes of this Act would include a public corporation as defined in arti
cle 295 of the Constitution. V-3353 [Issue 1]

Statutory corporation for the purposes of this Act would include a public corporation as defined in arti
cle 295 of the Constitution. V-3353 [Issue 1]

ACT 335
Loans Act, 1970
which a loan is granted for a purpose prescribed under the agreement, the money is a
charge on the Consolidated Fund or that other public fund into which the money has been
paid under subsection (1). 9. Repayment of loans charged on the Consolidated Fund
The moneys required for the discharge of the loans obtained under this Act, and also
for the payment of the interest and any other charges in relation to the loans and the prin
cipal and interest on the securities are hereby charged on the Consolidated Fund and shall
be paid in accordance with the terms and conditions of the relevant applicable agreement. Guarantees
10. Guarantees by Government
(1) Subject to article 181 of the Constitution and to this Act, the Government may
guarantee a loan on the terms and conditions that are agreed by the parties to the agree
ment providing for the guarantee including the requirement of the payment of a commis
sion for affording the guarantee. (2) An agreement under subsection (1) may be signed on behalf of the Government
by the Minister or by any other person designated in writing by the Minister.

agreement under subsection (1) may be signed on behalf of the Government
by the Minister or by any other person designated in writing by the Minister.

(3) An agreement providing for a guarantee by the Government of a loan shall not
come into operation unless the terms and conditions of the agreement have been laid be
fore Parliament and approved by a resolution of Parliament. (4) Where money fails to be paid by the Government, in satisfaction of an obligation
guaranteed by the Government that money shall be charged on the Consolidated Fund. 11. Approval of Parliament of terms of agreement
(1) Parliament may by resolution approve standard terms and conditions of agree
ments for the purposes of sections 7 and 10 and up to the limits that Parliament may by
resolution prescribe. (2) Where Parliament approves the terms and conditions under subsection (1), an
agreement entered into by the Government on the terms and conditions so approved and
within the limits prescribed by Parliament shall come into operation in accordance with
its terms and without the need for further approval of Parliament. (3) Parliament may, despite anything in this section, by resolution request that a par
ticular agreement or class of agreement shall be brought before it for further approval
before it comes into operation.

resolution request that a par
ticular agreement or class of agreement shall be brought before it for further approval
before it comes into operation.

(4) An agreement in respect of which a request has been made pursuant to sub
section (3) shall not come into operation without the approval of Parliament. (5) Parliament may by resolution, revoke or vary an approval granted under sub
section (1) so far as concerns an agreement to be entered into after the revocation or varia
tion. (6) The Minister shall lay before Parliament an agreement entered into by virtue of an
approval granted under subsection (1) as soon as practicable after it has been entered into. [Issue 1] V-3354

n agreement entered into by virtue of an
approval granted under subsection (1) as soon as practicable after it has been entered into. [Issue 1] V-3354

ACT 335
Loans Act, 1970
12. Minister to seek approval of Parliament
The Minister is responsible for laying before Parliament for its approval the terms and
conditions of a loan or guarantee, the terms and conditions of which are required by the
Constitution and by this Act to be laid before, and approved by, a resolution of Parliament. 13. Guarantee by Government of loans effected by Bank of Ghana
Subject to section 10, where a prescribed body is desirous of raising a 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 of Ghana and before the raising of the loan, given 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 re
spect of the loan, and
(b) to undertake any other obligations as may be provided for in the agreement
relating to the loan and the Bank shall comply with that request. 14.

d
(b) to undertake any other obligations as may be provided for in the agreement
relating to the loan and the Bank shall comply with that request. 14.

Restriction on prescribed body borrowing
Without prejudice to the general effect of section 6, during a period in which a guar
antee or any other undertaking given by the Bank of Ghana in respect of a prescribed
body remains in force under section 13, that body shall not, except with the consent in
writing of the Minister, raise a further loan requiring a guarantee by the Government. 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 an obliga
tion under an agreement concluded under section 13, and
(b) that the Bank of Ghana is or may become liable under a guarantee or any
other undertaking given by it under section 13 in respect of that obligation,
the Minister may by writing give or authorise any other person to give the directions to
the prescribed body that the Minister thinks necessary or desirable, to ensure that satisfac
tory arrangements are made by the prescribed body to enable that body duly to discharge
its obligations under the agreement or under this Act.

atisfac
tory arrangements are made by the prescribed body to enable that body duly to discharge
its obligations under the agreement or under this Act.

(2) For the purposes of section (1), where the prescribed body is a statutory corpora
tion or any other body for which responsibility has been assigned by the President or by
an enactment to a Minister, that Minister shall not exercise powers under this subsection
except after consultation with that other Minister. (3) A prescribed body shall comply with the directions given to it under subsection (1)
despite anything to the contrary, and where that body is a statutory corporation this sec
tion shall, for the purpose of giving effect to the directions, override an enactment under
which that body exists. (4) Where a sum of money becomes payable by the Bank of Ghana under a guarantee
or an undertaking given by that Bank under section 13 that sum of money shall be
charged on the Consolidated Fund. V-3355 [Issue 1]

under a guarantee
or an undertaking given by that Bank under section 13 that sum of money shall be
charged on the Consolidated Fund. V-3355 [Issue 1]

ACT 335
Loans Act, 1970
16. Repayment of sums of money paid under guarantee
(1) Where a sum of money is paid out of the Consolidated Fund in respect of a liabil
ity incurred by the Bank of Ghana under a guarantee or any other undertaking given un
der section 13 in respect of a loan raised by a prescribed body, that body shall repay that
sum together with interest and any other charges on that sum of money at the same rate as
is payable on the loan under the agreement relating to the loan into the Consolidated
Fund in the manner and at the time or by the instalments directed by the Minister. (2) Where a sum of money is paid out of the Consolidated Fund under subsection (1)
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 the liabilities
in respect of that sum and the interest payable on that sum is finally discharged by the
prescribed body concerned, lay before Parliament a statement relating to that sum of
money. Miscellaneous
17.

on that sum is finally discharged by the
prescribed body concerned, lay before Parliament a statement relating to that sum of
money. Miscellaneous
17.

Issue and management of loans
(1) The Minister shall maintain a system of books and records
(a) showing the moneys authorised to be borrowed and the loans authorised to
be guaranteed under this Act,
(b) containing a description and record of the moneys so borrowed and securi
ties issued and the loans so guaranteed, and
(c) showing the amounts paid in respect of the principal of, or interest on, the
moneys so borrowed. (2) The Bank of Ghana shall annually and as often as required by the Minister in
writing, give to the Minister a statement giving an account in the form and terms and con
taining the information that the Minister may direct of the transactions in connection with
the performance of its functions under the relevant provisions of the Bank of Ghana Act,
2002 (Act 612). (3) The Minister may provide for the creation and management of a sinking fund
with respect to an issue of securities, or with respect to the securities issued under this
Act. 18. Inclusion of statement of loan transactions in public accounts
An annual statement of the transactions effected under sections 1, 3 and 10 shall be
included in the public accounts. 19.

nsactions in public accounts
An annual statement of the transactions effected under sections 1, 3 and 10 shall be
included in the public accounts. 19.

Regulations
The Minister may, by legislative instrument, make Regulations or make other orders
that are necessary or expedient to provide for the management of the public debt and the
payment of interest on the public debt including Regulations or orders
(a) for the inscription or registration of securities and prescribing the effect of
the inscriptions or registration;
[Issue 1] V-3356

tions or orders
(a) for the inscription or registration of securities and prescribing the effect of
the inscriptions or registration;
[Issue 1] V-3356

ACT 335
Loans Act, 1970
(b) for the transfer, transmission, exchange, redemption, cancellation and de
struction of any securities including provisions
(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 of the securities;
(ii) for prescribing the conditions on which the transfer, transmission,
exchange and redemption of securities registered in the names of in
fants or any 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 pertain
ing to those securities and prescribing conditions for the issue or payments;
(d) requiring guarantees to be given to the Bank of Ghana in the manner and
by the persons as are 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 of Ghana in the circumstances as are
specified in the Regulations or orders of errors in the register and otherwise
authorising the rectification of the register; and
(f) generally for the better carrying into effect of the provisions of this Act.

ster and otherwise
authorising the rectification of the register; and
(f) generally for the better carrying into effect of the provisions of this Act.

20. Application of Financial Administration Act, 2003
The provisions of the Financial Administration Act, 2003 (Act 654) which relate to
Government contracts shall not apply to a transaction under this Act unless the Minister
otherwise directs. 21. Application of Exchange Control Act, 1961
This Act shall have effect subject to the Exchange Control Act, 1961 (Act 71) and to a
statutory instrument made under that Act, but subject to that a transaction or thing duly
affected in accordance with this Act is valid and of full force and effect despite anything
to the contrary. 22. Interpretation
In this Act, unless the context otherwise requires,
“external loan” means a loan raised from
(a) the government of a country other than Ghana, or
(b) a person, body or an institution whether resident in the Republic or outside,
being a loan raised in currency other than Ghana currency or a loan the re
payment of which is to be made in currency other than Ghana currency;
“guarantee” includes an undertaking to repay a loan whether conditioned on a de
fault or not;
V - 3357 [Issue 1]

n currency other than Ghana currency;
“guarantee” includes an undertaking to repay a loan whether conditioned on a de
fault or not;
V - 3357 [Issue 1]

ACT 335
Loans Act, 1970
“ loan” includes an overdraft and the moneys lent or given to the Government on
condition of return or repayment and any other form of borrowing or lending in re
spect of which
(a) moneys from the Consolidated Fund or any other public fund may be used
for repayment, or
(b) moneys from a 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) a company or partnership in which the Government has a controlling inter
est being a company or partnership which is registered under the Compa
nies Act, 1963 (Act 179) or under the Incorporated Private Partnerships
Act, 1962 (Act 152),
(c) any other company or partnership, whether the Government has an interest
in it or not, which is registered under the Companies Act, 1963 (Act 179)
or under the Incorporated Private Partnerships Act, 1962 (Act 152);
“ securities” include securities of the Government or of any other country ap
proved by the Minister and bonds, notes, deposits, certificates, debentures and treas
ury bills.

curities of the Government or of any other country ap
proved by the Minister and bonds, notes, deposits, certificates, debentures and treas
ury bills.

23. Repeals
Spent.3
3. The section provided:
“(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 commence
ment of this Act shall continue in effect under the corresponding provisions of this Act.”
[Issue 1] V-3358