Virus-Funds Scandal Prompts Calls for IMF to Halt Cameroon Loan
Virus-Funds Scandal Prompts Calls for IMF to Halt Cameroon Loan
(Bloomberg) -- A group of prominent women leaders in Cameroon urged the International Monetary Fund to halt talks on a proposed new loan because of the government’s alleged misuse of funds intended to fight the coronavirus pandemic.
The call, echoed by advocacy group Human Rights Watch, risks stalling a new three-year funding program at a time when the central African nation faces a high risk of debt distress. The country is currently planning a Eurobond sale that will be partly used to repay debt raised in 2015.
READ: JPMorgan, Citi, SocGen Hired by Cameroon for Eurobond Sale
An audit by a Supreme Court body found there was corruption and mismanagement involving 180 billion CFA francs ($326 million) spent on the pandemic response in the period up to Dec. 30, the Yaounde-based Journal du Cameroun reported last month. The IMF last year provided the country with $382 million of emergency funding to deal with the virus.
In a letter to IMF Managing Director Kristalina Georgieva, 21 Cameroonian women leaders demanded the lender withhold any further funding until there’s clarity on how the money was spent.
‘Clarity First’
“They’re about to give a new loan to those who possibly mismanaged the previous one, while they’re being investigated by the authorities,” Kah Walla, the leader of the opposition Cameroon People’s Party who spearheaded the call, said by phone from Yaounde, the capital. “At least let us have some clarity on those funds first.”
Felix Zogo, the permanent secretary at Cameroon’s Communications Ministry, didn’t answer four calls to his phone or respond to a text message seeking comment. The ministry didn’t respond to an emailed request for comment.
The IMF reached a staff-level agreement with Cameroon in May for a new program, and its board is set to decide on the new program in the coming months. To proceed with the funding, Cameroon should disclose Covid-19-related contracts and render the results of an independent audit public, it said in an emailed response to questions.
“Member countries should spend as much as they can, but keep the receipts,” the fund said. “We don’t want accountability and transparency to take a back seat in this crisis.”
That transparency should extend to future loans, Human Rights Watch said in a statement.
“When badly-needed aid is being squandered or stolen, it would be irresponsible for the IMF to approve another loan without safeguards to ensure that the money goes where it is intended,” Sarah Saadoun, a senior business and human rights researcher, was quoted as saying in the statement.
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