IMF Executive Board completes Fourth Review under the Extended Credit Facility, ECF, for Chad

Thu, Jul 4, 2019 | By publisher


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THE performance under the ECF-supported programme has been broadly satisfactory with continued improvement in the fiscal position and progress in implementing structural reforms in spite recent delays.

  • Overall economic activity strengthened in 2018 but further reform efforts are needed to support the recovery in the non-oil sector and improve social conditions.

Chad’s programme is supported by the implementation of policies and reforms by the regional institutions which are critical to its success.

On July 3, 2019, the Executive Board of the International Monetary Fund, IMF, completed the fourth review of Chad’s economic and financial programme supported by an Extended Credit Facility, ECF, and arrangement. Completion of the review enables the disbursement of SDR 28.04 million (about US$38.9 million), bringing total disbursements under the arrangement to SDR 168.24 million (about US$233.1 million).

Chad’s ECF arrangement was originally approved by the Executive Board on June 30, 2017 (see Press Release No. 17/257) for SDR 224.32 million (about US$310.8 million or 160 percent of Chad’s quota).

The ECF-supported program aims to help Chad restore macroeconomic stability, lay the foundation for robust and inclusive growth, and contribute to the regional effort to restore and preserve external stability for the Central African Economic and Monetary Union (CEMAC).

Following the Executive Board discussion on Chad, Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair, made the following statement:

“Performance under the ECF-supported program has been broadly satisfactory, reflecting strong commitment by the authorities despite a challenging environment including security concerns and a difficult social situation. All end-December 2018 performance criteria and most end-March indicative targets were met. Progress is underway on the structural reform agenda, despite some delays.

“Moving forward, it is essential that efforts continue to create fiscal space for increased social spending and public investment, and to reduce domestic debt and clear arrears.

“Key actions in this regard include continued fiscal prudence, increasing domestic revenue mobilization, particularly by reducing exemptions, and strengthening public financial management. Pursuing these policies, accompanied by continued structural reform implementation, will help further stabilize the fiscal position, energize non-oil growth, and reduce banking sector vulnerabilities.

“Chad’s program is supported by the implementation of supportive policies and reforms by the regional institutions in the areas of foreign exchange regulations and monetary policy framework and to support an increase in regional net foreign assets, which are critical to the program’s success.”

The Executive Board also concluded the 2019 Article IV Consultation with Chad.

Chad is a low-income fragile country that depends heavily on oil revenues. In recent years, it has been heavily impacted by an oil price shock and security tensions which intensified recently.

Significant progress has been made under the 2017 ECF arrangement to help restore debt sustainability and fiscal stability.

However, the economic, financial, and social situation is still very difficult, and the recovery in the non-oil economy has not taken strong hold as the economy continues to deal with legacies from the crisis and long-standing structural weaknesses.

Executive Directors commended the authorities’ continued commitment to the reform programme supported by the IMF despite a challenging environment marked by fragility and significant development challenges.

BE

– July 4, 2019 @ 18:10 GMT |

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