The International Monetary Fund (IMF) will withhold future payments under its program with Guinea-Bissau unless the government backtracks on loan bailouts for two private banks, the institution's country representative said.
Donors have also suspended budget support equal to 2.1 percent of GDP for this year, Oscar Melhado told Reuters by email. Total donor contributions, including direct budget support and financing for targeted sectors and projects, typically make up around 80 percent of the budget.
The tiny West African nation, which has been mired in a months-long political crisis, must submit a new 2016 budget factoring in this lost budget support before IMF payments resume.
"The IMF will not disburse any outstanding credit tranches as previously envisaged," Melhado said.
The IMF agreed a program with Guinea-Bissau last July to help the frequently unstable state get back onto its feet after 2014 polls drew a line under a military coup two years earlier.
The former Portuguese colony has seen nine coups or attempts since 1980. Political turmoil has helped make it a major transit point for South American cocaine heading to Europe.
Last year the government rejected IMF advice and paid 34 billion CFA francs ($57.81 million), 5.5 percent of GDP, for bad loans off Banco da Africa Ocidental and Banco da União.
A former prime minister who oversaw the deal told Reuters it was necessary to avoid bankrupting the private sector.
"The costly bank bailouts benefit the wealthiest people in the country and wealthy foreign shareholders, and come at the expense of urgently needed projects to improve the infrastructure and to reduce poverty," Melhado said.
"OUR REASONING WAS LOGICAL"
The public prosecutor's office launched an investigation into the bailouts last month.
"The State has asked the courts to cancel the contracts," Bakari Biaii, the magistrate handled the investigation, told Reuters. "We are awaiting the response."
The bailouts occurred under former prime ministers Domingos Simoes Pereira and Carlos Correia. Pereira told Reuters they had been proposed by a previous transitional government and had been approved with a view to helping Guinea-Bissau's fragile recovery.
"We cannot allow the private sector as a whole to go into bankruptcy," he said. "Our reasoning was logical, but, yes, it goes against the agreement that was set out by the IMF."
Correia could not immediately be reached for comment.
The move by the IMF comes amid a deeping crisis caused by a power struggle within the ruling PAIGC party between a faction led by Pereira and one led by President Jose Mario Vaz.
Vaz's dismissal of Pereira as prime minister last August led to weeks of political instability until Correia was named to head the government as part of a compromise in October.
Vaz also sacked Correia last month and replaced him with political ally Baciro Dja. Dja named a new cabinet on Thursday but Correia's ministers have refused to leave their offices.
Without the IMF payments, this year's budgetary shortfall will climb to 3.1 percent of GDP, the IMF's Melhado said.
(Additional reporting by Alberto Dabo in Bissau; Editing by Tim Cocks and Richard Balmforth)
REUTERS
Sem comentários:
Enviar um comentário