In direct response to the COVID-19 crisis the
International Monetary Fund (IMF) Executive Board has adopted some immediate enhancements to its Catastrophe Containment and Relief Trust (CCRT) to enable the Fund to
provide debt service relief for its poorest and most vulnerable members. The CCRT enables the IMF to deliver grants for debt relief benefiting eligible low-income countries in the wake of catastrophic natural disasters and major, fast-spreading public health emergencies.
International Monetary Fund. Strategy, Policy, &, Review Department, and International Monetary Fund. Finance Dept.
The Fund is facing strong demand for financing from low-income countries (LICs). Commodity price shocks and loose fiscal policies have contributed to rising debt levels and financing needs in many countries. Several developing states, especially smaller ones, are also increasingly vulnerable to large natural disasters. At the same time, many LICs less dependent on commodity exports have enjoyed robust growth in recent years, with more contained vulnerabilities.
This paper discusses Côte d’Ivoire’s Second Reviews Under An Arrangement Under the Extended Credit Facility (ECF) and the Extended Arrangement Under the Extended Fund Facility (EFF). Performance under the EFC/EFF-supported program was strong in the first half of 2017. All performance criteria and indicative targets for end-June 2017 were observed and all structural benchmarks were met. Sound policies implemented by the authorities in the context of the IMF-supported program have helped secure confidence of the international financial markets, which enabled a successful Eurobond issuance in June. The IMF staff supports the authorities’ requests for completion of the second reviews of the program supported by the ECF and EFF arrangements.
This paper discusses Liberia’s Seventh and Eighth Reviews under the Extended Credit Facility Arrangement, and Request for Waiver of Nonobservance of Performance Criteria (PCs). Three of six structural benchmarks (SBs) for the seventh review and two of four SBs for the eighth review were met. The rest, except one, were met with a delay. Risks are concentrated in the near term. Based on the strength of the authorities’ policy commitments and corrective measures, the IMF staff supports the authorities’ request for waivers for nonobservance of PCs and supports completion of the seventh and eighth program reviews.
This paper discusses Liberia’s Fifth and Sixth Reviews Under the Extended Credit Facility (ECF) Arrangement, Request for Waivers of Nonobservance of Performance Criteria, Augmentation of Access, and Extension of the Arrangement. Two end-December 2015 and three end-June performance criteria were missed. Two out of nine structural benchmarks for the fifth review were met, while three were completed late. Three out of five structural benchmarks for the sixth review were met. The IMF staff supports the completion of the fifth and sixth reviews and the authorities’ requests for waivers of nonobservance of performance criteria, augmentation of ECF access, and extension of the ECF arrangement.
This paper discusses Côte D’Ivoire’s Requests for an Extended Arrangement Under the Extended Fund Facility (EFF) and an Arrangement Under the Extended Credit Facility (ECF). Extending the gains of 2015, solid economic and fiscal performance continued in 2016. Strong investment and private consumption contributed to real GDP growth estimated at about 9 percent in 2015. In 2016, booming extractive industries and rising domestic demand supported activity in the commercial sector, which should sustain GDP growth at about 8 percent. The macroeconomic outlook remains favorable, but structural bottlenecks pose challenges to sustained strong growth. The IMF staff supports the authorities’ request for the ECF and EFF arrangements.
This 2016 Article IV Consultation highlights that the Ebola epidemic and the fall in commodity prices have revealed the vulnerabilities of Liberia’s economy. After barely positive growth in 2014, GDP was flat in 2015 mainly owing to the decline in activity in the iron ore and rubber sectors. Although international gross reserves increased in 2015, the Central Bank of Liberia’s net foreign exchange position declined owing to operational deficits and exceptional support to the banking sector. In 2016, growth is expected to rise to 2.5 percent, thanks to a rebound in services and the start of gold production, while inflation should stay in the single digits.
Ms. Corinne C Delechat, Mr. John W Clark JR, Pranav Gupta, Ms. Malangu Kabedi-Mbuyi, Mr. Mesmin Koulet-Vickot, Ms. Carla Macario, Mr. Toomas Orav, Mr. Manuel Rosales Torres, Rene Tapsoba, Dmitry Zhdankin, and Ms. Susan S. Yang
Like other fragile sub-Saharan African countries, Côte d’Ivoire, Guinea, Liberia, and Sierra Leone are seeking to harness their natural resource potential in the context of ambitious development strategies. This study investigates options for scaling up public investment and expanding social safety nets in a general equilibrium setting. First, it assesses the macro-fiscal implications of alternative fiscal rules for public investment, and, second, it explicitly accounts for redistribution through direct cash transfers. Results show that a sustainable non-resource deficit target is robust to the high uncertainty of resources output and prices, while delivering growth benefits through higher public investment. The scaling-up magnitudes, however, depend on the size of projected resource revenue and absorptive capacity. Adding a social transfer raises private consumption, suggesting that a fraction of the resource revenue could be used to expand safety nets.
The Fund’s existing facilities for low-income countries (LICs) provide a vehicle for the speedy provision of financial assistance to member countries hit by natural disasters, either through the Rapid Credit Facility (RCF) or through augmentation of the funding already being provided through other facilities such as the Standby or Extended Credit Facilities. The quick disbursement of funds strengthens national financial capacity, including external payments capacity, to tackle relief and recovery challenges.
To address catastrophic disasters, the Fund created a mechanism in 2010 to provide additional relief to its poorest and most vulnerable member countries to help meet their exceptional balance of payments needs. Under this mechanism, the Fund can provide grants from a trust fund—the Post Catastrophe Debt Relief (PCDR) trust—that are used to pay off debt service falling due to the Fund. These grants ease pressures on the member’s balance of payments and create financial space by reducing its debt service burden.
This paper proposes reforms to this mechanism to cover situations where the member is experiencing an epidemic of an infectious disease that constitutes a significant threat to lives, economic activity, and international commerce across countries.
EXECUTIVE SUMMARY Guinea is suffering from an outbreak of Ebola, which has become a humanitarian crisis with a significant economic impact. Preliminary estimates suggest a negative impact on 2014 growth, which will be markedly lower. Government revenue is showing a substantial shortfall and the response to the Ebola outbreak entails additional critical spending needs. The exchange rate has started to depreciate. The authorities intend to adopt a tighter monetary policy to address the transitory balance of payments shock. Performance under the ECF-supported program has remained satisfactory. Preliminary data indicate that all performance criteria (PCs) under the program for end-June 2014 were met. There has also been further progress with structural reform. The authorities have requested additional IMF financial assistance to meet urgent fiscal and balance of payments needs not anticipated at the time of the recent program review. Such assistance cannot be provided in the form of an augmentation of access under the ECF arrangement at this time since a review associated with the most recent availability date has not yet been completed because of delays in program implementation associated with the 2013 parliamentary elections. The authorities have requested a disbursement under the Rapid Credit Facility (RCF) because the urgent balance of payments need is characterized by a financing gap that, if not addressed, would result in an immediate and severe economic disruption. Moreover, Guinea’s balance of payments difficulties are caused primarily by a sudden exogenous shock and not by a withdrawal of financial support by donors, and its balance of payments need is expected to be resolved within one year with no major policy adjustments being necessary. As such polices remain guided by the objectives of the ECF-supported program. Staff supports the authorities’ request for a disbursement under the RCF of 25 percent of quota (SDR 26.775 million). It also supports the authorities’ request for a modification of the end-September indicative targets and end-December 2014 PCs under the ECF arrangement, including program adjustors.