Global lender IMF may not release the last two tranches – worth $280m – of its Extended Credit Facility, unless Bangladesh executes two pledged reforms, sources have said.
Seeking anonymity, Finance Division officials said that the International Monetary Fund (IMF) is particularly unhappy with the performance of the Bangladesh Petroleum Corporation (BPC) and the government’s failure to enact VAT law.
They also said the lender might cancel the release of the last two tranches if Bangladesh fails to carry out the reforms by the end of June – the last month of the outgoing 2014-15 fiscal year.
A high official of the Finance Division said: “It is frustrating that the country’s lone fuel oil importer BPC has never prepared a balance sheet in the last 45 years. Allegations also have it that there has been a misappropriation of public fund when BPC bought fuel oil from abroad.”
As international oil prices decline to a five-year low, the BPC has managed to earn a profit for the first time in 14 years. The corporation is also expected to earn a healthy profit in the outgoing fiscal year.
However, Finance Division Senior Secretary Mahbub Ahmed is confident that they will able to get the last two tranches of the IMF loan released.
He told the Dhaka Tribune last week that they had taken all measures necessary for fulfilling the conditions of the Extended Credit Facility (ECF) by the end of this month.
An official said that the BPC and VAT law issues will be placed in parliament during the ongoing budget session to fulfill the pledges made to the IMF. He however could not confirm exactly when the issues would be raised in the house.
