US lawmakers want to block IMF assistance to Central Africa

(MENAFN) US lawmakers have introduced a bill to prevent International Monetary Fund (IMF) support for certain Central African countries in response to a controversial regulation imposed by local fiscal authorities on foreign oil companies. The regulation, implemented by the Bank of Central African States (BEAC), requires international oil companies (IOCs) to deposit environmental restoration funds, estimated to range from $5 billion to $10 billion, into accounts controlled by the regional bank. These funds, which are intended for environmental cleanup after oil production, are currently held in foreign banks.

The BEAC’s directive is designed to strengthen the foreign reserves of the six countries in the Central African Economic and Monetary Community (CEMAC)—Cameroon, Gabon, Chad, Equatorial Guinea, the Central African Republic, and the Republic of Congo. These countries’ economies have struggled to recover from the impact of the Covid-19 pandemic. The IMF-backed policy, approved during an emergency summit in December, will be enforced starting May 1, with penalties up to 150% of the funds for non-compliance.

Critics, including Republican Representatives Bill Huizenga and Dan Meuser, argue that this policy threatens billions of dollars in American oil and gas investments in the region. Their proposed bill, the Central African Exploitation and Manipulation of American Companies Act (CEMAC Act), aims to prevent the US Treasury from supporting IMF proposals involving CEMAC states until the IMF clarifies that any funds provided to BEAC for site rehabilitation will not count towards foreign exchange reserves.

The lawmakers claim that by not making this clarification, the IMF has misled CEMAC member states and jeopardized American investments in the region. The IMF has acknowledged awareness of the proposed legislation and indicated readiness to assess the situation once final agreements are reached between the authorities and extractive companies. French oil company Perenco, which is privately owned, is in discussions with regional authorities to reach an agreement before the April 30 deadline.

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