Creating new perspectives since 2009

Forensic audit firm’s withdrawal casts its shadow over Lebanon’s future

December 3, 2020 at 11:00 am

The Central Bank of Lebanon [Karan Jain/Flickr]

The decision of international restructuring firm Alvarez & Marsal (A&M) to quit its contract to carry out a forensic audit of Lebanon’s central bank has cast a shadow on the country’s future and exacerbated its crushing financial crisis.

Last month, Alvarez & Marsal said its teams did not receive the documents they needed from the Banque du Liban (BDL) some two and a half months after signing a contract to begin the forensic audit; a key demand of international donors. It added the lack of action meant it was forced to cancel its contract.

Donor countries and the International Monetary Fund (IMF) said Lebanon would only receive aid it needs if a forensic audit of the central bank is conducted.

Data from the Lebanese Institute for Market Studies indicates that the central bank has lost $40 billion including $20 billion between 2018 and 2020 alone.

Moreover, the IMF expects the country’s GDP to decline in an unprecedented way to $18 billion by the end of 2020, down from $53 billion in 2019.

By the end of September 2020, Lebanon’s public debt reached about $95 billion.

Lebanon’s Aoun: ‘Forensic audit of central bank is a national issue’