Bosnia, Sarajevo.The International Monetary Fund (IMF) announced on April 6 that the completion of the first review of its agreement with Bosnia & Herzegovina will be delayed significantly after state lawmakers failed to adopt key legislative amendments the previous day. This means disbursement of a €79.3 million euro loan tranche will be delayed.

 

Recently in March, the IMF told the country it risked losing its loan agreement if it failed to complete a set of reforms including changes to the tax laws. It gave Sarajevo until the middle of April to achieve this. In January, the fund put the arrangement on hold for the same reasons. Sparking concerns Administration leaders are too distracted to focus on the requirements to participate in IMF welfare programs.

 

On April 5th, Bosnian MPs did not agree to vote on the changes in an urgent session and left them for a future regular session. This inaction seems to be the straw that “broke the camels back.”

 

“The IMF took note that the Bosnian parliament did not adopt the amendments to the law on excise tax and the new law on deposit insurance during a session held on April 5, 2017. This will have implications for mobilizing external financing for much needed infrastructure projects and for the authorities’ efforts to modernise banking sector legislation. Both are key requirements of the authorities’ program, supported by the IMF under the Extended Fund Facility (EFF). We now expect a significant delay in completion of the first review of the program,” the IMF said in an emailed statement.

 

The IMF added future support will only take place if Bosnian authorities decide to implement the pledged reforms.

 

“The authorities need more time to make further progress in a number of key areas of their program, such as securing financing for key infrastructure projecst, banking sector legislations, and improving corporate governance of state owned enterprises. In the period ahead, we will maintain close dialogue with the authorities and remain committed to assist them in their efforts,” the IMF statement announced.

 

 

 

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