The Government of Daniel Ortega used 50% of a $185.32 million dollar loan that it acquired from the International Monetary Fund (IMF), destined to attend the Covid-19 pandemic, to pay debts of the Nicaraguan Water and Sewage Co. (ENACAL) and also the Nicaraguan Social Security Institute (INSS), confirms the 2020 budget execution report, published by the Ministry of Finance and Public Credit.
The total amount that was executed in December of 2020, 20 days after the loan was approved, was around $91 million USD. Of this sum, approximately $11 million was allocated to pay an electric energy debt that ENACAL had with the energy distributor Disnorte y Dissur, nationalized in the same month. The data comes from the investigation “Nicaragua diverts funds from the IMF destined to combat the Covid-19 pandemic,” published by the Expediente Público (Public File) platform.
In addition, an amount equal to approximately $59 million USD was destined to cover six annual installments of the historical debt of the INSS. Likewise, approximately $21.5 million were used for the depreciation of external debt payments with other banks, among them: the Inter-American Development Bank (IDB), the World Bank (WB) and the Central American Bank for Economic Integration (CABEI).
The large loan was signed on November 20, 2020. As established, these funds would be destined “to help Nicaragua meet its urgent balance of payments needs derived from the covid-19 pandemic”, to strengthen the health system, and to assist the population most affected by the pandemic, detailed the IMF.
The 2020 Budget Execution Report notes that to use this financing, Ortega amended the Annual Budget Law, on December 10, 2020, as a matter of urgency. In the reform, it was established that the remaining approximately $93 million dollars, destined to the care of the pandemic, would be executed in 2021.
However, according to Minsa’s budget execution report, published by the same Ministry of Finance and Public Credit, un until September 2021 the State had barely used 20.5% of the budget allocated to care for the pandemic, according to an analysis of CONFIDENCIAL, published at the end of November. The “Covid-19 budget” amounts to approximately $141.3 million USD, equivalent to 1.0% of the Gross Domestic Product (GDP) and as of September they had only used around $29 million USD.
UNOPS and WFP implement funds to address covid-19
The amount destined exclusively to the pandemic is being executed by the United Nations Office of Project Services (UNOPS) and the World Food Program (WFP), as established in the contractual agreement, in which Ortega also promised to disclose the "covid contracts" and the financial reports of five state institutions.
The funds, as described by the Electronic Administrative Procurement System (SISCAE), have already been divided between WFP, which received $18.6 million dollars on January 15, and UNOPS, which received $74.7 million on February 4.
During 2021, the Ortega government has under-executed the funds earmarked for the pandemic, as confirmed by CONFIDENCIAL in several reports on the under-execution and lack of transparency of these funds. Until September, the authorities had barely used 20.5% of the "covid budget", despite the country being hit by a wave of infections greater than that of 2020 and that during the first eight months of the year vaccinations were slow in administering.
Covid-19 funds also went to the Army and Sinapred
The 2020 Budget Execution Report indicates that in that year the expenditure on attention to the pandemic was around $112 million USD. Of this amount, around $80 million USD was executed as internal and external public debt (including the payment of the INSS debt and loans); approximately $28 million were expenses in the SIGAF and around $3.6 million USD were expenses that were executed during the first months of the pandemic.
Of the SIGAF spending, the Ministry of Health received approximately $13.4 million USD and according to the report, 97.3% was allocated to the purchase of pharmaceutical and medicinal products, oxygen, medical, sanitary and laboratory equipment.
The MHCP allocated, in addition to the approximately $11.3 million USD of Enacal's debt, around $490,000 USD to the National System for the Prevention, Mitigation and Attention of Disasters (Sinapred), $1.4 million USD to the Property Management project and $1.3 million to the Nicaraguan Army. However, there are no details of how these funds were used.
According to the report, 50.9% of SIGAF spending corresponds to current expenditures and 49% to capital expenses. "At the origin of the resources, approximately $14.7 million USD was financed by Treasury Revenues, $14.7 million USD from external loans and $608 thousand USD from external donations," they explain.
Meanwhile, the $3.6 million USD executed in the first months of the pandemic were allocated $2.4 million USD to Minsa, $963 thousand USD to Sinapred and about $237 thousand USD to the Ministry of Family, Community, Cooperative and Associative Economy.
World Bank funds were audited
The Execution Report also indicates that in June 2020, the country received a fund of $1.4 million USD through the reallocation of funds from the World Bank Credit No. 6087-NI, to mitigate the Epidemiological Alert of the Pandemic covid-19 in Nicaragua.
This money was used to buy medicines and replacement material for the MINSA health units nationwide, for which a selective tender was carried out for ten minor contracts and one simplified contract. These operations were verified and validated by an external audit of Grant Thornton Hernandez y Associates, the report details.
Likewise, it is specified that during the first year of the pandemic, Minsa received around $2 million USD as donations, of which approximately $1.9 million came from Taiwan, $14.1 thousand from the Nicaraguan Health Fund (Fonsalud) and $124 thousand from the World Bank. This last amount was allocated to the National Center for Diagnosis and Reference (CNDR).
There was also a total donation of $95 thousand USD for attention to the pandemic, which was destined to the Ministry of the Family, Adolescents and Children.
This article was originally published in Spanish in Confidencial and translated by Havana Times