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Lebanon to sign deal for central bank audit

September 14, 2021 at 3:25 pm

Lebanons Finance Minister Ghazi Wazni speaks to Agence France-Presse (AFP) at his office at the ministry in the Lebanese capital Beirut on May 15, 2020 [ANWAR AMRO/AFP via Getty Images]

Lebanon will sign a new contract for a forensic audit of the central bank with Alvarez & Marsal (A&M) within days, the outgoing Finance Minister Ghazi Wazni said today, signalling a renewed push to deliver on a key donor demand, Reuters reports.

Wazni spoke at a ceremony handing control of the ministry to incoming Finance Minister Youssef Khalil, part of the government agreed on Friday that must tackle one of the worst financial meltdowns in history.

Wazni, who took part in IMF talks last year, said opposition in Lebanon to IMF negotiations had disappeared since then, and everybody now viewed IMF negotiations as inevitable.

Last year’s IMF talks were derailed when politicians and the banking sector disputed the scale of financial losses mapped out in a financial recovery plan drawn up by the government.

Since then, Lebanon’s financial collapse has deepened: more than three-quarters of the population are now in poverty, the currency has lost 90 per cent of its value, and the country is paralysed by fuel shortages.

Wazni said an IMF programme was the only way out of the crisis. “When we started negotiating with the Fund in March 2020, the majority were against this, and today everyone views negotiations with it as inevitable,” Wazni said.

READ: Lebanon working with World Bank to fund power supply

The new government led by Prime Minister Najib Mikati was agreed on Friday after a year of political fighting over cabinet seats. Mikati has said he will seek talks with the IMF.

Khalil, the new finance minister, served as a senior central bank official and is close to its veteran governor Riad Salameh. He also took part in Lebanon’s meetings with the IMF last year.

The plan for an audit, a key requirement for Lebanon to secure vital foreign aid, hit a roadblock in November when restructuring consultancy A&M withdrew, saying it had not received information it needed from the central bank.

The finance ministry said in April the central bank had agreed to hand over documents required by A&M.

Khalil, speaking alongside Wazni, said failure in his new role was not an option, saying it would only exacerbate Lebanon’s problems.

Lebanon is heading towards complete collapse - Cartoon [Sabaaneh/Middle East Monitor]

Lebanon is heading towards complete collapse – Cartoon [Sabaaneh/Middle East Monitor]