Ortega sends more than 12.8 billion córdobas to the BCN in three months, leaving financial austerity behind

TODAY NICARAGUA – The deposits that the Government has in the Central Bank continue to grow, in such a way that in February an additional 555 million córdobas (US$16 million dollars) were added, raising the balance to a level not seen since before.

In this way, the Daniel Ortega regime has managed to put in three months – that is, between December, January and February – more than 12.8 billion cordobas (US$367 million dollars), ending the negative streak that it experienced between 2018 and the end of 2020.

In the opinion of the economists consulted by LA PRENSA, deposits have not decreased because the regime has been slowing down the funds that are arriving from abroad for projects to rebuild the damage caused by hurricanes Iota and Eta.

Until February of this year, the Government had deposited in the Central Bank 27,155.3 million córdobas, higher than the 26,599.6 million in January, which is equivalent to a growth in the reference period of 2 percent.

But also, if compared to February of last year, it is above the 17,396.7 million córdobas accumulated in the same period last year. That is equivalent to an increase of 56 percent, that is, 9,759 million córdobas more in the hands of the Government, alleviated by funds from multilateral organizations.

At the discretion of the economist Róger Arteaga, former manager of the Central American Bank for Economic Integration (CABEI), these resources will begin to decrease when the projects for which they were for begin to be executed.

“These resources are going to decrease when the resources are executed, however, the speed with which the Government executes is slower than the speed with which they are disbursing the loans, imagine that we are still receiving donated vaccines,” said Arteaga.

Similarly, economist Mario Arana, former president of the Central Bank, agrees with Arteaga when pointing out that the government’s execution is slow.

“I understand that the execution is slow, it gives me the impression that it will be far below what they would have wanted in practice, however in the coming months they will pressurize to accelerate the pace because it is an electoral year, although everything boot is like that. For example, the purchase of food, of medical supplies, is more expeditious than everything that has to do with infrastructure, which takes more time to execute,” said Arana.

Collection could also be oxygenating the regime

Arteaga stated the possibility that the regime is also increasing its deposits in the Central Bank due to the fact that in the first months of the year the annual IR and the closing of other taxes are paid, which should be impacting the balances of fiscal income and therefore the Government generally transfers surplus resources to the BCN vaults.

“Let us remember that the bulk of the collection is captured in the first months of the year, when the annual IR is rendered, which is in February, before it was in March, so it is possible that we are also seeing part of those resources there, in addition to loan disbursements,” said Arteaga.

He also expressed that there is a possibility that the resources obtained from drug trafficking pass to that account because the Central Bank is the government bank.

“The money they take from drug trafficking is nowhere else to keep it, it is not that the Police or the Army keep it, that the Government has to keep and the regime’s bank is the Central Bank, so I believe that in addition to the loan disbursements and the collection is what is captured from drug trafficking,” said Arteaga.

The last seizure of money that the Government announced was on March 8 of this year. The Ortega regime reported that at kilometer 252 of the Ocotal-Jalapa highway, they found almost US$2 million dollars in a truck. No arrests were made.

Committed resources

Both Arteaga and Arana maintain that most of these resources are committed to attending the Covid-19 emergency and rebuilding the damage caused by the hurricanes last November.

“These external resources were linked to the Covid issue, especially, and hurricanes Eta and Iota, I estimate that revenues may grow a little because the economy is expected to grow one percent this year, so taxes are going to grow, that it is going to help the deposits, but here most of the resources come from the emergency,” said Arana.

This article was translated from the original (in Spanish) in La Prensa