Context and risks. The pandemic may have a long-lasting impact on CEMAC’s growth potential, which is already curtailed by structural, governance, and transparency issues. The policy response from national and regional authorities in 2020 helped mitigate the economic fallout. CEMAC, however, experienced a severe recession in 2020, fiscal and external deficits increased, and public debt rose with some countries having debt sustainability issues. The region is facing an increasing dilemma between internal and external stability, as external reserves fell sharply between mid-2020 and March 2021. A moderate recovery in economic growth is expected from 2021. Supported by lower than previously projected total external financing of €4.8 billion over 2021–23, international reserves build-up would be slower than pre-pandemic. This outlook is highly uncertain and contingent on the evolution of the pandemic and the vaccination program. Other significant risks include delayed implementation of the ongoing or possible new Fund-supported programs, uncertainties in filling large external financing needs, oil prices, and a possible deterioration in the security situation.
This paper discusses Chad’s 2019 Article IV Consultation, Fourth Review Under the Extended Credit Facility (ECF) Arrangement, Request for Modification of Performance Criteria, and Financing Assurances Review. Article IV discussions focused on policy priorities to deal with legacies from the crisis and the longstanding structural weaknesses. Reducing government domestic debt and domestic arrears would address key impediments to growth that persist from the crisis. Sustained efforts are needed to increase non-oil revenues, improve the efficiency and quality of public spending, and reduce the vulnerability of the fiscal position to oil price fluctuations. Performance under the ECF-supported program 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; however, further reform efforts are needed to support the recovery in the non-oil sector and improve social conditions. Chad’s program is supported by the implementation of policies and reforms by the regional institutions which are critical to its success.
This paper presents Chad’s Requests for Disbursement Under the Rapid Credit Facility, Extension of the Extended Credit Facility Arrangement, and Rephasing of Access. In response to the coronavirus disease 2019 outbreak, the authorities have taken strong measures to halt the community spread of the virus. They are also scaling up health-related spending and are considering a set of economic measures to support households and businesses. Given the sudden nature of the shocks and their widespread impact, the authorities will be temporarily relaxing the fiscal deficit to allow for the scaling up of health care spending and to accommodate the impact of the sharp drop in oil prices. In order to safeguard debt sustainability, they remain committed to the medium-term fiscal path and will implement the needed adjustment measures as soon as the current crisis abates.
The Democratic Republic of the Congo is suffering directly from the COVID-19 pandemic with 215 confirmed cases and 20 deaths as of April 9. The economic impact, chiefly through lower commodity prices, was being felt even before the first confirmed case was reported on March 10. The authorities’ policy response to the pandemic has been firm, scaling up health care spending and putting in place measures to help contain and mitigate the spread of the disease. The pandemic is also dampening domestic revenue mobilization and putting significant pressures on foreign exchange reserves.
A technical assistance mission in national accounting from the International
Monetary Fund (IMF) Regional Technical Assistance Center for Central Africa (AFRITAC
Central) visited Brazzaville during December 5–14, 2018 to support the National Statistics
Institute (INS) in its work on the national accounts estimates. The mission focused on an
analysis of the 2016 and 2017 annual national accounts finalized in accordance with the System
of National Accounts 1993 (1993 SNA). The analysis included a review of the information sources
used, the methods of calculation and extrapolation, and compliance with the 1993 SNA. The 2016
accounts are completed and finalized, including the summary tables – supply and use tables
(SUT), branch accounts, and integrated economic accounts table (IEAT); and the 2017 accounts
are still being finalized. The mission recommends that the national accounting officers improve
estimates based on the recommendations provided by the mission.1
While macroeconomic policies in recent years have succeeded in restoring
elements of macroeconomic stability under difficult circumstances, macroeconomic
conditions are nonetheless precarious. The recent fall in commodity prices, new spending
initiatives, and looser spending oversight during the political transition period have led to a
weaker fiscal position mostly financed by the central bank. In that context, international
reserves have fallen to critically low levels (one week of import coverage). Balance of
payments needs remain both urgent and protracted.
The Republic of Congo was hit hard by the oil price shock and delayed fiscal adjustment, amidst governance challenges and unsustainable debt. While program negotiations were long and complex, the authorities made decisive progress in 2018 and early 2019 with decisive fiscal consolidation, and the implementation of a large package of structural reforms, including two rounds of prior actions to improve governance and transparency. In addition, financing assurances have been secured.
Mr. Mario de Zamaroczy, Mr. Vincent Fleuriet, and Mr. Jose G Gijon
This paper discusses possible reserve management approaches in the Central African Economic and Monetary Community (CEMAC). The paper looks beyond the region’s current oil crisis and proposes a new approach to international reserve management in the medium term.