The Executive Board of the International Monetary Fund (IMF) has approved US$ 312.1 million to support the Chas’s stabilization and recovery strategy.
- Board’s decision enables immediate disbursement of US$48.8 million for Chad.
- The arrangement will support the authorities’ stabilization and recovery strategy and help foster long term robust and inclusive growth.
- The arrangement will help stabilize the fiscal position, support a sustainable balance of payments position, and help rebuild the regional international reserve pool.
The three-year arrangement under the Extended Credit Facility (ECF) was approved on On June 30, 2017, and policies under the new arrangement are expected to catalyze further support from Chad’s external partners.
Following the Executive Board discussion on Chad, David Lipton, First Deputy Managing Director and Acting Chair, said Chad’s macroeconomic and financial performances have deteriorated significantly over the past two years, against the backdrop of low oil prices, tense regional security situation, and a heavy external commercial debt burden. In 2016, real non-oil GDP contracted by 6 percent, following a 2.9 percent reduction in 2015.
“The new three-year arrangement under the ECF will support the authorities’ strategy towards macroeconomic stabilization in the short term and a robust, equitable, and sustainable recovery.
“The program, supported by the new ECF arrangement, aims at stabilizing the fiscal and external position as well as reestablishing debt sustainability, through the restructuring of external commercial debt, prudent fiscal policies, and the resumption of growth,” he said.
The ECF-supported program aims to help Chad restore macroeconomic stability and lay the foundation for robust and inclusive growth. It will also contribute to the regional effort to restore and preserve external stability for the Central African Economic and Monetary Union (CEMAC).
An amount equivalent to US$ 48.8 million will be immediately disbursed to Chad. The remaining amount will be phased over the duration of the program, subject to semi-annual reviews.
Lipton said the authorities are committed to preserving the fiscal adjustment achieved so far and to improving the mobilization of non-oil revenue, which requires measures to broaden the tax base, and strengthen tax and customs administrations.
He also said that achieving debt sustainability and stabilizing the fiscal position hinge on reducing the burden of external debt service. To this end, the authorities are committed to
He, however, noted that structural reforms to improve public financial management and diversify the economy are key elements of the program.
“Continued strong implementation of the ECF-supported program will be critical to catalyze financial support from international partners to more effectively tackle development needs and support economic growth,” he said.