Lebanon central bank audit demanded by IMF, France to resume

Lebanon central bank audit demanded by IMF, France to resume
3 min read
The audit is part of urgent reforms to unlock financial support to deal with the devastating economic crisis gripping Lebanon.
Lebanon's Central Bank will now be audited by a the Alvarez & Marsal firm [Getty]

A New York-based firm contracted by the Lebanese government is to resume its audit of the central bank on Thursday in line with creditors' demands, the Lebanese presidency and a top official said.

The International Monetary Fund (IMF) and France are among creditors demanding an audit of Banque du Liban.

The move is part of urgent reforms to unlock financial support to deal with an economic crisis branded by the World Bank as one of the planet's worst since the mid-19th century.

Some observers have warned the audit is unlikely to yield the kind of revelations that could hold Lebanon's ruling elite accountable for the alleged corruption and mismanagement that caused the collapse.

The Alvarez & Marsal (A&M) auditing firm had launched an audit in September last year but was forced to pull out some two months later because the central bank failed to hand over necessary data.

On Wednesday, President Michel Aoun met with A&M managing director James Daniell, who informed him that "the company will begin tomorrow its forensic financial audit of Lebanon's central bank after all arrangements were completed," the presidency said.

Finance ministry official Georges Maarawi told AFP that the firm "will have 12 weeks to collect information and draft a report," under the terms of its contract with the Lebanese government.

Finance Minister Youssef Khalil signed the contract with A&M last month, only days after he took up his post.

Experts have expressed doubts that the terms of the contract and the limited time given to auditors will allow for a credible investigation.

"As long as the auditors don't have direct access to servers, IT and accounting systems and the work isn't overseen by the competent authorities... then I don't expect anything out of it," financial analyst Mike Azar said.

"The way the work is structured now will most likely not result in an honest and thorough forensic audit," he told AFP.

In December, parliament approved a bill that suspends banking secrecy laws for one year to allow for the forensic audit - which is widely seen as a necessary prelude to any agreement with the IMF over financial assistance.

Finance ministry official Maarawi said Lebanese authorities were holding "technical meetings" with the IMF, without elaborating.

Following a meeting with IMF executive director Mahmoud Mohieldin on Tuesday, Prime Minister Najib Mikati said that Lebanon was betting on an IMF plan to help it survive its unprecedented financial crunch.

"We hope to clinch a cooperation agreement before the end of the year," he said.