Despite a record deficit of more than 10 billion Gourdes in the first quarter of the current fiscal year (2018-2019) and taking into account the cash flow difficulties of the Government https://www.haitilibre.com/en/news-26814-haiti-economy-the-economist-eddy-labossiere-sounds-the-alarm.html , on Friday, Ronald Gray Décembre the Minister of Finance and Jean Baden Dubois, Governor of the Bank of the Republic of Haiti (BRH) signed an Economic and Financial Governance Compact Memorandum of Understanding on cash advances and the settlement mechanism of the Haitian State's oil bill, which we reproduce in full for your information:

Economic and Financial Governance Pact :

"BETWEEN :

The Ministry of Economy and Finance (MEF) represented by its owner, Mr Ronald Gray DECEMBRE, Minister, owner, residing and domiciled in Port-au-Prince, identified by his TIN: xxxxxxxxxxxxxxxxxxxxx hereinafter referred to as the MEF, of one hand ;

AND

The Bank of the Republic of Haiti (BRH), a public body, with legal personality and financial autonomy, created by the law of August 17, 1979, with headquarters in Port-au-Prince, represented by its Governor Mr Jean Baden DUBOIS, owner, residing and domiciled in Port-au-Prince, identified by his TIN: xxxxxxxxxxxxxxxxxxxxx hereinafter referred to as the BRH, on the other hand;

Considering the need to contain State spending within the limits of available resources;

Considering the need to avoid the accumulation of arrears likely to affect the sound management of Public Finance;

Considering the opportunity for the Haitian State to facilitate the supply of petroleum products to the country;

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 ARRESTED 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 and means of payment of the oil bill.

Article 2. - In the framework of the present protocol, the MEF undertakes to ensure the maintenance of a good adequacy 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 particular 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 advances must be compatible with the level of monetary financing as at 31 January 2019. However, when circumstances so 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 program of expenditures drawn up jointly 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. - In view of the strategic nature of petroleum products, BRH, together with the MEF, undertakes to work with local financial system actors to set up a currency acquisition mechanism exclusively used to pay the CIF-PAP oil bill (excluding any other fees), after examining the invoices previously submitted to the MEF one working day following the award by the Bureau for Monetization of Development Assistance Programs (BMPAD).

Article 7. - 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 8. - In order to facilitate the operations mentioned in this Memorandum of Understanding, the MEF will transmit on a weekly basis to the BRH a summary schedule of the expenditure to be executed.

Article 9. - This Memorandum of Understanding is binding upon the parties immediately after the signing of their signature. It is concluded for a period of eight (8) months beginning on February 1, 2019 and ending on September 30, 2019.

Article 10. - 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 to the Finance Act, to the evolution of the economic situation, and to the commitments made towards international donors.

Article 11. - The parties declare to amicably resolve any dispute that may arise from the interpretation or execution of this Memorandum of Understanding.

Article 12. - 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 Pavée Streets and du Quai, Port-au-Prince, Haiti.

Done in Port-au-Prince, in duplicate and in good faith, on January 31, 2019.

Ronald Gray December

Minister

Ministry of Economy and Finance

Jean Baden Dubois

Governor

Bank of the Republic of Haiti"

See also :

https://www.haitilibre.com/en/news-26814-haiti-economy-the-economist-eddy-labossiere-sounds-the-alarm.html

https://www.icihaiti.com/en/news-26743-haiti-politic-the-2018-2019-budget-returned-to-jovenel-moise.html

https://www.haitilibre.com/en/news-26501-haiti-economy-poor-performance-of-the-haitian-economy-in-2018.html

https://www.haitilibre.com/en/news-26376-haiti-flash-tabling-of-the-draft-budget-law-2018-2019-of-1728-billion.html

https://www.haitilibre.com/en/news-26308-haiti-flash-the-next-budget-up-26-billion.html

HL/ HaitiLibre