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Jovenel Moïse Promises to Stop Mismanaging Public Funds in BRH Agreement

Money

Maxime

Having the Bank of the Republic of Haiti (BRH) headed by a governor in interim has its benefits. On Wednesday, the Jovenel Moïse administration managed an agreement with the BRH to continue operating by remedies not made public as long as, in good faith, it would sin no more.

On Wednesday, Joseph Jouthe, the resigning-Minister of the Economy and Finance (MEF) and Jean Baden Dubois, the interim Governor of the Bank of the Republic of Haiti (BRH) signed an Economic and Financial Governance Pact for the fiscal year 2019-2020.

This pact focused on the management of public expenditures and the maintenance of a good match between available resources and those expenditures. This is the 2nd pact of its kind that the Jovenel Moïse administration has signed with the BRH. In February 2019 one was signed with a duration of 8 months to address the overspending of the fiscal year 2018-19.

The document reads:

Economic and Financial Governance Pact Fiscal year 2019-2020

Considering the need to contain state spending within the limits of available resources;
Considering that the rate of mobilization of public resources does not always coincide with that of public expenditure;
Considering the need to contain the accumulation of arrears likely to affect the sound management of Public Finance;
Considering the need to ensure the continuity of Treasury operations;
Considering that it is necessary to establish, between the Ministry of Economy and Finance and the Bank of the Republic of Haiti, a mechanism for better management of the financing of public expenditure;

IT HAS BEEN ADOPTED AND AGREED AS FOLLOWS

Article 1.- The purpose of this Memorandum of Understanding is to determine the conditions under which the MEF and the BRH undertake to ensure the efficient management of the execution of public expenditure.

Article 2.- In the framework of this protocol, the MEF undertakes to ensure the maintenance of a good match between the available resources and the expenses of the Central Administration of the State.

Article 3.- When the available resources are declared insufficient, the MEF may request from BRH an advance, on a monthly basis, strictly limited to the amount of funds needed to cover essential expenses, in priority those relating to staff costs. Thus, the parties agree that the BRH will not have to honor the other expenses ordered in the form of check or transfer.

Article 4.- At the end of each quarter, the total of these advances must be compatible with the level of monetary financing agreed between the MEF and the BRH, ie an amount of Ten (10) billion Gourdes. When circumstances require, additional advances may be granted, on a temporary basis, by BRH at the market rate, which must be repaid before the end of the current fiscal year.

Article 5.- The Ministry of Economy and Finance undertakes to draw up a cash flow plan on the basis of a quarterly expenditure program drawn up in collaboration with the other ministries in accordance with the provisions of article 59 of the law. of May 4, 2016 on the development and execution of the finance laws.

Article 6.- The BRH will provide each week to the MEF the estimated amount of funding from the Central Administration of the State, according to the methodology decided by the parties.

Article 7.- In order to facilitate the operations mentioned in this Memorandum of Understanding, the MEF will send a weekly summary to BRH of the expenses to be executed.

Article 8.- This Memorandum of Understanding is binding upon the parties immediately after the signing of their signature. It is concluded for a period of twelve (12) months from 1 October 2019 to 30 September 2020.

Article 9.- The parties undertake to meet each other on a monthly basis in order to adapt the terms of this Memorandum of Understanding to the possible amendments of the Finance Act, to the evolution of the economic situation, and to the commitments made towards international donors.

Article 10.- The parties declare to amicably resolve any dispute that may arise from the interpretation or execution of this Memorandum of Understanding.

Article 11.- For the execution of this Memorandum of Understanding, the MEF shall elect domicile at its headquarters at 5 Avenue Charles Summer, Port-au-Prince and the BRH at its seat at the corner of Streets Pavée and Quai, Port-au-Prince, Haiti.

Done in Port-au-Prince, in duplicate and in good faith, on November 27, 2019.

Ministry of Economy and Finance

Jean Baden Dubois
Governor
Bank of the Republic of Haiti

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Jovenel Moïse Promises to Stop Mismanaging Public Funds in BRH Agreement