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Chad: Staff Report for the 2008 Article IV Consultation: Informational Annex

Author(s):
International Monetary Fund
Published Date:
February 2009
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I—Relations with the Fund

(As of November 30, 2008)

I. Membership Status: Joined: July 10, 1963;Article VIII
II. General Resources Account:SDR Million%Quota
Quota56.00100.00
Fund holdings of currency55.7299.50
Reserve position0.280.50
Holdings exchange rate
III. SDR Department:SDR Million%Allocation
Net cumulative allocation9.41100.00
Holdings0.131.39
IV. Outstanding Purchases and Loans:SDR Million%Quota
PRGF arrangements26.4347.19
V. Latest Financial Arrangements:
Date ofExpirationAmount ApprovedAmount Drawn
TypeArrangementDate(SDR Million)(SDR Million)
PRGFFeb. 16, 2005May 31, 200825.204.20
PRGFJan. 07, 2000Jan. 06, 200447.6042.40
PRGFSep. 01, 1995Apr. 30, 199949.5649.56
VI. Projected Payments to Fund1
(SDR Million; based on existing use of resources and present holdings of SDRs):
Forthcoming
20082009201020112012
Principal8.237.305.082.68
Charges/Interest0.070.210.170.140.12
Total0.078.437.475.222.80

When a member has overdue financial obligations outstanding for more than three months, the amount of such arrears will be shown in this section.

When a member has overdue financial obligations outstanding for more than three months, the amount of such arrears will be shown in this section.

VII. Implementation of HIPC Initiative:
Enhanced
I. Commitment of HIPC assistanceFramework
Decision point dateMay 2001
Assistance committed by all creditors (US$ million)1170.00
Of which: IMF assistance (US$ million)18.00
(SDR equivalent in millions)14.25
Completion point dateFloating
II. Disbursement of IMF assistance (SDR million)
Assistance disbursed to the member8.55
Interim assistance8.55
Completion point balance
Additional disbursement of interest income2
Total disbursements8.55

Assistance committed under the original framework is expressed in net present value (NPV) terms at the completion point, and assistance committed under the enhanced framework is expressed in NPV terms at the decision point. Hence these two amounts can not be added.

Under the enhanced framework, an additional disbursement is made at the completion point corresponding to interest income earned on the amount committed at the decision point but not disbursed during the interim period.

Assistance committed under the original framework is expressed in net present value (NPV) terms at the completion point, and assistance committed under the enhanced framework is expressed in NPV terms at the decision point. Hence these two amounts can not be added.

Under the enhanced framework, an additional disbursement is made at the completion point corresponding to interest income earned on the amount committed at the decision point but not disbursed during the interim period.

VIII. Implementation of Multilateral Debt Relief Initiative (MDRI): Not Applicable

IX. Safeguards Assessments

The Bank of the Central African States (BEAC) is the regional central bank of the Central African States. The most recent safeguards assessment of the BEAC was completed on August 30, 2004. The assessment found that the Bank has implemented a number of measures to strengthen its safeguards framework since the 2001 safeguards assessment, and recommended further enhancements in the areas of external and internal audits, and financial reporting. Latest monitoring results indicate the existence of certain vulnerabilities including in the system of internal controls. These and other aspects of the BEAC safeguards framework will be reviewed in the context of the 2008 update safeguards assessment of BEAC that is underway.

X. Exchange Rate Arrangement

The exchange system common to all members of the BEAC has been free of restrictions on payments and transfers for current international transactions. The BEAC common currency is the CFA franc, which was formerly pegged to the French franc. Repurchase of CFA franc banknotes exported outside the BEAC was suspended on August 2, 1993. Effective January 12, 1994, the CFA franc was devalued by 50 percent in foreign currency terms, and the exchange rate was adjusted from F 1=CFAF 50 to F 1=CFAF 100. Since January 1, 1999, the CFA franc has been pegged to the Euro at the rate of EUR 1=CFAF 655.957.

XI. Article IV Consultations

Chad is on the 12-month cycle. The next Article IV consultation is expected to take place by December 2009.

XII. Technical Assistance

DepartmentPurposeTime of Delivery
FAD (AFRITAC)Tax and Customs AdministrationNovember, 2008
STA (AFRITAC)National AccountsOctober 28-November 7, 2008
STA (AFRITAC)Price StatisticsAugust 18-29, 2008
STANational AccountsJanuary-February 2008
FADBudgetSeptember-October 2007
FAD (AFRITAC)Treasury managementAugust 2007
STA (AFRITAC)National accountsAugust 2007
STAPrice statisticsMay 2007
AFRITACAssessment missionMarch 2007
STAData ROSCMay 2006
FADStrengthen budget and accounting transparencyMay-June 2005
FADConsolidate budget managementOctober 2004
FADImplement customs action planApril 2003
STANational account statisticsJuly 2002
FADAssess fiscal reformsMay 2002
FADStrengthen tax collections and VATJune–December 2001
STAMultisector statistics missionMay 2000

XIII. Finance Sector Assessment Program (FSAP) Participation, Report on the Observances of Standards and Codes (ROSCs), and Offshore Finance Center (OFC) Assessments

A ROSC Data Module mission visited Chad May 26–June 8, 2005. A joint IMF-World Bank mission conducted an FSAP for CEMAC countries January 30–February 9, 2006.

XIV. Resident Representative

Mr. Karangwa has been the Fund resident representative in N’Djamena since November 2007.

II—The JMAP Bank-Fund Matrix

(October 2008-October 2009)1

TitleProductsProvisional Timing of MissionsExpected Delivery Date
A. Mutual Information on Relevant Work Programs
The World Bank work program inthe next12 months1. Prepayment of Pipeline-related loans completed September 5, 2008.Sept 5, 2008
2. Joint WB-Government of Chad Evaluation/mission(impact of WB portfolio, progress in priority sectors, and progress on PFM).Oct 27-Nov. 72008
3. World Bank partially reopens office in N’Djamena.January 2009
4. Prime Minister to visit Washington when relations between the Chad and the Bank will be discussed.Early 2009
The Fund Work program in the next12 months1. 2008 Article IV consultation, discussions of the 2009budget, and first review of the SMP.Oct./Nov 2008Board meetingin December 2008
2. Second review of the SMP and PRGF negotiations.Q1 2009Board meetingin Q2 2009
Technical Assistance
National account statisticsOctober 2008October 2008
Customs administrationQ1/Q2 2009Q1/Q2 2009
Debt managementQ1/Q2 2009Q1/Q2 2009
Public financial managementQ1/Q2 2009Q1/Q2 2009
B. Requests for Work Program Inputs
Fund request to Bank1. Inputs for review of the 2009 Budget.
2. Assessing consistency of PRSP, PAPs, and MTEF.
Bankrequest to Fund1. Fund to keep Bank abreast of developments in Chad, including those related to the macroeconomic framework, implementation of the 2008 and 2009 budgets, preparationsfor the 2009 and 2010 Budgets, PFM and PRML issues.
C. Agreement on Joint Products and Missions
Joint products1. Debt sustainability analysis.
2. Assessment of HIPC completion point triggers.
3. JSAN of PRSP.

III—Statistical Issues

(As of December 23, 2008)

I. Assessment of Data Adequacy for Surveillance

General: Data provision have serious shortcomings that significantly hamper surveillance.

1. National accounts: The accuracy and reliability of key national aggregates are seriously affected by weak source data due to inadequate funding for the National Institute of Statistics, Economic and Demographic Studies (INSEED). Consequently, there is a high degree of uncertainty regarding estimates of the level and growth rate of GDP and expenditure components that impact on ratios scaled by GDP. Timeliness of the national accounts also impacts on surveillance: since early 2007, with assistance from AFRISTAT and Central AFRITAC, the authorities made a number of improvements and are currently in process of finalizing the national accounts estimates for 2005. Sustained improvement in the utility of the national accounts for surveillance will require a durable and substantial increase in resources, as well as ensuring absorption and retention of know-how transferred through technical assistance.

2. Price statistics: In January 2008, the Harmonized Consumer Price Index (IHPC) covering the capital replaced the dated CPI. However, significant work is still needed to improve the reliability and visibility of the IHPC. An August 2008 Central-AFRITAC mission agreed with INSEED a short-term program to improve timely production of the IHPC using new software.

3. Government finance statistics: reported for surveillance purposes include a quarterly Tableau des opérations financières de l’État (TOFE) and monthly debt statistics. The TOFE generally follows the presentational recommendations of the GFSM 1986, but is compiled by a working group drawing source data from disparate administrative sources, resulting in discrepancies between the central government operations and financing data.

4. Monetary and financial statistics: Monetary statistics, interest rates, and exchange rates are provided for surveillance purposes. The 2005 data ROSC mission found that the coverage of monetary statistics is limited to the central bank and commercial banks, whereas microfinance corporations, a growing source of finance in the country, are not covered by the depository corporations survey. The monetary data on net credit to government frequently can not be reconciled with the fiscal data, owing to differences in the institutional coverage and grouping of units in general government and the public sector.

5. In addition, the accuracy of monetary statistics may be affected by large cross-border movements of banknotes among Central African Economic and Monetary Union (CEMAC) member countries. About 40 percent of banknotes issued in Chad by the BEAC national directorate circulate in Cameroon, while currency in circulation in Chad includes some 10 percent of banknotes from Cameroon and 5 percent of banknotes from the Central African Republic.

6. The BEAC started in mid-2007 a project to migrate monetary statistics of member countries of the CEMAC to the methodology in the Monetary and Financial Statistics Manual (MFSM). As part of this project, a regional workshop was organized by the BEAC in December 2007 to finalize the mapping of source data from commercial banks to the MFSM concepts and framework. STA participated in this workshop to provide guidance and advice. The BEAC has yet to submit test data using the standardized report forms.

7. External sector statistics: The poor quality of external sector statistics appears to be related to inadequacies in staffing and in provision of material resources dedicated to compilation. The foreign trade data, compiled by the INSEED on the basis of customs declarations are known to be unreliable, and to suffer from coverage problems; in addition, they are believed to be inconsistent with those used in the compilation of national accounts. Consequently, they are not fully used by the BEAC national directorate in the compilation of balance of payments statistics. Data on exports are estimated based on data provided by line ministries. Even considering the difficulty of collecting data on informal border trade between Chad and its neighboring countries, many improvements could be made to items such as imports, cotton and cattle exports, freight, and public transfers. Tighter coordination among the CEMAC, INSEED, and other agencies is required in order to improve the data coverage.

II. Data Standards and Quality

8. Chad participates in the General Data Dissemination System. A data ROSC was published in August 2007.

III. Reporting to STA (Optional)

9. Chad does not report government finance statistics for publication in the Government Finance Statistics Yearbook or in International Financial Statistics (IFS). Balance of payments statistics are not reported for publication in the Balance of Payments Statistics Yearbook or IFS. Monetary and financial statistics, as well as international liquidity and exchange rates are reported for publication in IFS.

III—Appendix I. Chad: Table of Common Indicators Required for Surveillance

(As of December 22, 2008)

Date of Latest ObservationData ReceivedFrequency of Data 7Frequency of Reporting 7Frequency of Publication 7Memo Items
Data Quality—Methodological Soundness 8Data Quality—Accuracy and Reliability 9
Exchange RatesDailyDailyMMM
International Reserve Assets andJune 2008July 2008MMM
Reserve Liabilities of the Monetary
Authorities 1
Reserve/Base MoneyOct. 2008Oct 2008MMMLO, LNO, LNO, LOLO, O, O, LO, NA
Broad MoneyOct. 2008Oct 2008MQMM
Central Bank Balance SheetOct. 2008Oct 2008MMM
Consolidated Balance Sheet of the Banking SystemOct. 2008Oct 2008MMM
Interest Rates 2August 2008Sept 2008MIQMM
Consumer Price IndexOct. 2008Oct 2008MMM
Revenue, Expenditure, Balance and Composition of Financing 3—General Government 4May 2008July 2008QQQLO, LNO, LO, LOO, LO, LO, LO, NO
Revenue, Expenditure, Balance and Composition of Financing 3—Central GovernmentMay 2008July 2008QQQ
Stocks of Central Government and Central Government-Guaranteed Debt 5Dec. 2007July 2008QQQ
External Current Account Balance2006July 2008AAAO, O, O, LOLO, LO, O, O, O
Exports and Imports of Goods and2006July 2008AAA
Services
GDP/GNP2007July 2008AAALNO, LO, LNO, LOLNO, LNO, LNO, LNO
Gross External DebtDec. 2007July 2008Bi-MBi-MBi-M
International Investment Position 6NANANANANA

Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.

Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.

Including currency and maturity composition.

Includes external gross financial asset and liability positions vis-à-vis nonresidents.

Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).

Reflects the assessment provided in the data ROSC (published on August 31, 2007), and based on the findings of the mission that took place during May 28 to June 8, 2005) for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning concepts and definitions, scope, classification/sectorization, and basis for recording are fully observed (O); largely observed (LO); largely not observed (LNO); not observed (NO); and not available (NA).

Same as footnote 8, except referring to international standards concerning (respectively) source data, assessment of source data, statistical techniques, assessment and validation of intermediate data and statistical outputs, and revision studies.

Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.

Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.

Including currency and maturity composition.

Includes external gross financial asset and liability positions vis-à-vis nonresidents.

Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).

Reflects the assessment provided in the data ROSC (published on August 31, 2007), and based on the findings of the mission that took place during May 28 to June 8, 2005) for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning concepts and definitions, scope, classification/sectorization, and basis for recording are fully observed (O); largely observed (LO); largely not observed (LNO); not observed (NO); and not available (NA).

Same as footnote 8, except referring to international standards concerning (respectively) source data, assessment of source data, statistical techniques, assessment and validation of intermediate data and statistical outputs, and revision studies.

This JMAP is subject to revision as the Bank work program may change following further dialogue with the Chadian authorities.

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