Chaotic Bosnian Federation misses out on IMF funds after failing to provide bank details

By bne IntelliNews November 21, 2016

The government of Bosnia & Herzegovina’s Muslim-Croat Federation adopted an urgent budget revision for this year on November 18, as it will need to borrow additional BAM100mn (€51.1mn) to replace the income from the first tranche of the new International Monetary Fund (IMF) loan which it has not yet received.

On September 7, the IMF’s executive board approved a three-year extended arrangement with Bosnia for an amount equivalent to SDR443.042mn (€553.3mn), and immediately disbursed around €79.2mn. The remainder will be available in 11 installments subject to quarterly reviews. A week later, Bosnia’s central bank wired one third of the first tranche to the country’s other entity, Republika Srpska.

However, the Federation did not receive its share as it has failed to provide instructions for the transfer. The entity has yet to give clear details about bank account to which the sum – around BAM102mn – should be transferred.

The entity will also not receive BAM312mn from the World Bank as it has failed to meet the requirements for the loan.

The budget revenue in the revised plan was cut by BAM81.6mn, or 3%, as the entity plans to replace part of the missing income from international institutions with BAM100mn T-bills issues to be auctioned on the Sarajevo Stock Exchange.

At the same time, the entity has succeeded in increasing its other revenues above plan and will cut spending, which will help to patch the budget gap this year. The revised revenue was set at BAM2.517bn.

The budget revision was tabled to parliament for adoption under emergency procedures.

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