July 13, 2010 / 2:22 PM / 9 years ago

IMF halts funds to C.African bank in fraud concern

WASHINGTON/DAKAR (Reuters) - The International Monetary Fund has halted disbursements to the regional bank used by oil-producing nations in Central Africa because of persistent concern about fraud, Fund and other officials said.

Bicycle-mounted police officers patrol outside the World Bank building during International Monetary Fund/World Bank Spring Meetings at IMF headquarters in Washington, April 24, 2010. REUTERS/Jonathan Ernst

The step was taken after the Washington-based global lender judged the Bank of Central African States (BEAC) had failed to clear up concerns over its accounts that surfaced during an investigation into irregularities at its Paris office last year.

Congo Republic and Central African Republic will feel the first impact from the move. Reviews of their eligibility for IMF loan programmes disbursed through the BEAC will be suspended until the bank addresses the concerns, meaning the countries may not be able to receive the cash.

“Since the fraudulent transactions at the BEAC’s Paris office came to light last year, IMF staff have been closely engaged ... to assist them in addressing the underlying issues that allowed the fraud to take place,” an IMF spokesman said in response to inquiries.

“The reviews under the Extended Credit Facility for CAR and Republic of Congo can proceed once BEAC has implemented a set of measures proposed by Fund staff,” the spokesman added of a lending facility for poor countries.

A BEAC official at bank headquarters in Yaounde, Cameroon, confirmed that it had received written notification from the IMF of the decision to halt payments.

French weekly Jeune Afrique published extracts of the May 28 letter from IMF Africa director Antoinette Sayeh, an ex-finance minister under Liberian President Ellen Johnson Sirleaf, known for her tough anti-graft stance. The letter questioned “the lack of receipts for transactions worth nearly 5 billion euros”.

ALLEGED EMBEZZLEMENT

The stand-off holds up $12.9 million that Central African Republic could have drawn to fund elections due on October 24. The landlocked country holds deposits of gold, uranium and diamonds but persistent insecurity has discouraged large-scale investors.

Congo Republic is not in line for any major IMF loans for now but the spotlight is on its finances after it announced it would double spending in its 2010 budget to 2.8 trillion CFA francs to fund infrastructure projects.

The BEAC acts as the central bank for Gabon, Equatorial Guinea, Cameroon, Central African Republic, Chad and Congo Republic, known as the Economic Community of Central African States (CEMAC).

Already under investigation for alleged embezzlement during 2004-2008, the bank suffered a new blow last year when the unexplained loss of 40 million euros at its Paris branch cost the job of its chief, Gabon’s Philibert Andzemmbe.

Calling the BEAC the “lung and life force” of the region, leaders of the six states agreed in a joint declaration issued last month to take steps to salvage its credibility.

The BEAC official in Yaounde said a CEMAC delegation had since travelled to Washington for meetings at the IMF but had no details of the outcome of their talks.

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below