(Bloomberg) — Colombia’s finance chief has been hit with fresh accusations in an alleged corruption scandal, adding to complications for President Gustavo Petro just as the government tries to navigate a deepening fiscal crisis.
Finance Minister Ricardo Bonilla, who has just a month to secure approval for higher taxes meant to cover a 12 trillion peso ($2.7 billion) shortfall in next year’s budget, is now facing significant opposition in Congress, with lawmakers calling for his resignation.
A former adviser to Bonilla testified against him, local broadcaster Noticias Caracol reported late Friday, alleging that the finance minister was aware of decisions made by lawmakers approving loans in exchange for government contracts that benefitted them personally.
Bonilla, a close Petro ally, has denied any wrongdoing and the president has publicly defended him. “I respect the work of the prosecutor’s office and I’m confident that in proving that I eventually may make mistakes, but not crimes,” Bonilla said Saturday in a post on X. The finance ministry didn’t respond to a request for comment Monday.
Lawmakers from the independent Green Alliance and opposition Radical Change party have said Bonilla should step aside from his government post to defend himself. The president of Congress, meanwhile, argues Petro’s administration must improve its budget execution before pushing for tax reform.
Petro, Colombia’s first leftist leader, has warned that the Andean nation risks defaulting on its debt if Congress rejects the government’s financing bill.
Concerns over fiscal stability have become paramount for creditors. Last week, the finance ministry announced a spending cut of 28.4 trillion pesos to comply with the fiscal rule, after the government failed to meet its tax revenue targets.
“The scandal raises serious questions about the minister’s legitimacy to promote the financing law,” Andres Pardo, a strategist at XP Investment, said by email. “Time is running out, and this scandal further undermines any support he might still have in Congress.”
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