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Chad: Staff Report for the 2016 Article IV Consultation–Informational Annex

Author(s):
International Monetary Fund. African Dept.
Published Date:
August 2016
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Relations with the IMF

(As of May 31, 2016)

Membership Status:July 10, 1963
General Resources Account:SDR Million% Quota
Quota140.20100.00
Fund holdings of currency (Exchange Rate)137.1797.84
Reserve Tranche Position3.052.17
SDR Department:SDR Million% Allocation
Net cumulative allocation53.62100.00
Holdings0.070.14
Outstanding Purchases and Loans:SDR Million% Quota
ECF Arrangements45.4432.41
Latest Financial Arrangements:
TypeDate of ArrangementExpiration DateAmount Approved (SDR Million)Amount Drawn (SDR Million)
ECFAug 01, 2014Jul 31, 2017106.5653.93
ECF1Feb 16, 2005May 31, 200825.204.20
ECF1Jan 07, 2000Dec 06, 200347.6042.40
Overdue Obligations and Projected Payments to Fund2/
(SDR Million; based on existing use of resources and present holdings of SDRs):
Forthcoming
20162017201820192020
Principal Charges2.00
Interest0.020.030.030.140.14
Total0.020.030.030.142.14

Formerly PRGF

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

Formerly PRGF

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

Implementation of HIPC
Initiative:
Enhanced Framework
Commitment of HIPC assistance
Decision point dateMay 2001
Assistance committed by all creditors (US$ Millions) 1/170.12
Of which: IMF assistance (US$ million)18.02
(SDR equivalent in millions)14.26
Completion point dateApr 2015
Disbursement of IMF assistance (SDR million)
Assistance disbursed to the member14.26
Interim assistance8.55
Completion point balance5.71
Additional disbursement of interest income 2/2.77
Total Disbursement17.03
Implementation of Multilateral Debt Relief Initiative (MDRI)Not Applicable
Implementation of Catastrophe Containment and Relief (CCR)Not Applicable
As of February 4, 2015, the Post-Catastrophe Debt Relief Trust has been transformed to the Catastrophe Containment and Relief (CCR) Trust.
Decision point - point at which the IMF and the World Bank determine whether a country qualifies for assistance under the HIPC Initiative and decide on the amount of assistance to be committed.Interim assistance - amount disbursed to a country during the period between decision and completion points, up to 20 percent annually and 60 percent in total of the assistance committed at the decision point (or 25 percent and 75 percent, respectively, in exceptional circumstances).1/ 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 cannot be added.2/ 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.
Decision point - point at which the IMF and the World Bank determine whether a country qualifies for assistance under the HIPC Initiative and decide on the amount of assistance to be committed.Interim assistance - amount disbursed to a country during the period between decision and completion points, up to 20 percent annually and 60 percent in total of the assistance committed at the decision point (or 25 percent and 75 percent, respectively, in exceptional circumstances).1/ 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 cannot be added.2/ 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.

Safeguards Assessments

The Bank of the Central African States (BEAC) is the regional central bank of the Central African Economic and Monetary Community (CEMAC). Regional central banks are normally subject to a safeguards assessment every four years. For the BEAC, governance challenges and control failures that emerged in 2009 led to close engagement subsequently through annual IMF monitoring of safeguards “rolling measures.” A safeguards staff visit to the BEAC conducted in April 2016 found that although the BEAC’s own Reform and Modernization Plan was nearing completion, the Fund’s two priority recommendations on governance-focused law reform and the transition to an internationally recognized financial reporting framework (IFRS) were outstanding. However, following the April visit, the BEAC Board mandated that the institution take steps to initiate work on the priority recommendations. Staff has now revised the road map for implementation with an envisaged conclusion of the law reform in early 2017 and adoption of IFRS beginning with the financial statements for 2018. Staff will maintain close engagement with the BEAC to monitor the implementation of the remaining safeguards measures going forward, and progress on the latter will remain a condition for new program requests and reviews for CEMAC member countries.

Exchange Rate Arrangement

Chad maintains an exchange system that is free from restrictions and multiple currency practices on payments and transfers for current international transactions. The BEAC common currency is the CFA franc which, since January 1, 1999, has been pegged to the euro at the rate of EUR 1 = CFAF 655.957.

Article IV Consultations

Chad is on a 24-month consultation cycle.

Technical Assistance

The Fund technical assistance strategy for Chad is focused on revenue administration, public financial management (PFM), debt management, and the quality of macroeconomic data. As the turnover of senior officials (responsible for economic management) is very high, posting long-term experts in the field and providing training would enhance absorption capacity, notably in revenue administration, PFM, and debt management.

DepartmentPurposeTime of Delivery
FAD (AFRITAC)Public financial managementApril 2016
STA (AFRITAC)National accountsMarch 2016
FAD (AFRITAC)Customs administrationFebruary – March 2016
FAD (AFRITAC)Tax administrationJanuary-February 2016
STA (AFRITAC)National accountsJanuary 2016
FADPublic financial managementNovember – December 2015
STA (AFRITAC)National accountsAugust - September 2015
STA (AFRITAC)National accountsMarch 2015
FAD (AFRITAC)Revenue administrationJanuary 2015
STA (AFRITAC)Balance of paymentDecember 2014
STA (AFRITAC)National accountsDecember 2014
FAD (AFRITAC)Public financial managementSeptember 2014
STA (AFRITAC)National accountAugust 2014
STA (AFRITAC)National accountMarch 2014
STA (AFRITAC)National accountsDecember 2013
FADImplementation of CEMAC directivesSeptember 2013
STA (AFRITAC)National accountsJuly 2013
FAD (AFRITAC)Public financial managementApril - May 2013
FAD (AFRITAC)Tax administrationApril 2013
FAD (AFRITAC)Customs administrationMarch 2013
MCM (AFRITAC)Debt managementMarch 2013
FAD (AFRITAC)Public financial managementFebruary 2013
STA (AFRITAC)National accountsFebruary 2013
STA (AFRITAC)National accountsNovember 2012
FAD (AFRITAC)Public financial managementOctober 2012
FADCustoms administrationOctober 2012
FAD (AFRITAC)Tax administrationSeptember 2012
FAD (AFRITAC)Public financial managementSeptember 2012
FADCustoms follow-up missionJuly 2012
FAD (AFRITAC)Public financial managementJune 2012
STA (AFRITAC)National accountsJune 2012
FAD (AFRITAC)Tax administrationMay-June 2012
STA (AFRITAC)National accountsMay 2012
FADResource revenue managementApril-May 2012
FAD (AFRITAC)Public financial managementMarch-April 2012
FAD (AFRITAC)Tax administrationFebruary 2012
STA (AFRITAC)National accountsNovember-December 2011
FAD (AFRITAC)Public financial managementNovember 2011
FAD (AFRITAC)Public financial managementSeptember 2011
FAD (AFRITAC)CustomsSeptember 2011
STA (AFRITAC)National accountsAugust 2011
MCMBanking system vulnerabilitiesJanuary 2011
FAD (AFRITAC)Tax administrationFebruary 2011
FAD (AFRITAC)Tax administrationSeptember-October 2010
FAD (AFRITAC)Tax administrationJune-July 2010
FAD (AFRITAC)Public financial managementSeptember 2010
STABalance of paymentsSeptember 2010
MCM (AFRITAC)Public debtMay 2010
FADTax policy reviewApril-May 2010
FAD (AFRITAC)Tax and custom administrationMarch-April 2010
FAD(AFRITAC)Customs administrationMarch 2010
STA (AFRITAC)National accountsMarch 2010
FAD (AFRITAC)Public financial managementJanuary 2010

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

A joint IMF-World Bank mission conducted an FSAP for Chad during May 25舑June 10, 2011. An FSAP mission for CEMAC was concluded in July 2015. A ROSC Data Module mission visited Chad May 26–June 8, 2005.

Resident Representative

Mr. Jean-Claude Nachega is the IMF’s Resident Representative in N’Djamena since January 2015.

Joint World Bank and IMF Work Program

The IMF and World Bank staff communicates and collaborates closely in their work on Chad. Bank staff participates in IMF missions, while the Bank’s analysis and advice to the government in key structural reform areas informs Fund surveillance. Bank and IMF staffs collaborated on assistance related to FSAP update and financial sector deepening, and public financial management reform. In 2015, staffs of the IMF and World Bank jointly determined that Chad had made satisfactory progress in meeting the requirements to reach the completion point under the Heavily Indebted Poor Countries (HIPC) Initiative. The Boards of Directors of both institutions then decided to support a US$1.1 billion in total debt relief for Chad.

The IMF and the World Bank Group are active members of the Financial and Technical Partners Committee (Comité des Partenaires Techniques et Financiers CPTF), which includes all United Nations’ agencies represented in Chad as well as the African Development Bank (AfDB), the European Union, the Swiss Agency for Development and Cooperation, and the ambassadors of France, Germany, and the United States. This committee holds monthly meetings and has established thematic groups that conduct studies on specific development issues relevant for Chad. Members of the committee share information about upcoming missions and convene in order to hold briefing sessions with visiting heads of the institutions it represents.

Exchange of information and collaboration:

  • World Bank requests to the Fund include periodic updates on the macroeconomic framework, on the status of the current Fund supported economic program under the ECF, and on planned technical assistance missions.

  • Fund requests include periodic updates on World Bank program in Chad.

  • Joint products include joint Bank-Fund Debt Sustainability Assessments (DSA).

  • Other exchange of information is related to the authorities’ structural reform agenda, and to the upcoming 2016-2020 National Development Plan. Under the new Poverty Reduction Strategy (PRS) policy, the new National Development Plan should be issued to the Board along with an assessment letter from the World Bank. A PRS implementation review (PIR) should be prepared by Fund staff within the 4th review of the ECF.

AML/CFT Framework

As a member of CEMAC, Chad is subject to the regional legal framework on AML/CFT and the implementing regulations issued for banks by the Commission bancaire de l’Afrique centrale (COBAC). The supervision of banks’ action to combat money laundering and the financing of terrorism falls within the competence of the COBAC, assisted by the BEAC. As indicated in the April 2016 FSSA on the CEMAC, the AML/CFT framework needs to be rapidly strengthened both at the national and regional levels. In that respect, the FSSA called for the allocation of appropriate financial, technical and human resources to regional and national supervisors of the financial and nonfinancial sectors, for gradual and effective implementation of AML/CFT risk-based supervision. The FSSA identified as a key recommended action the need to better implement and enforce the existing AML/CFT regulations. In 2014, the Groupe d’Action Contre le Blanchiment d’Argent en Afrique Centrale (GABAC) has assessed Chad’s AML/CFT framework against the 2003 Standard set by the Financial Action Task Force. A number of strategic deficiencies were identified and an action plan to address the gaps was laid out.

Statistical Issues

I. Assessment of Data Adequacy for Surveillance
General: Data provision has capacity-related shortcomings, but is broadly adequate for surveillance. There is scope for improvement in quality, coverage, and timeliness in most macroeconomic datasets. The authorities continued to dedicate resource to improve the macroeconomic database, particularly the national accounts. The 2007 Report on the Observance of Standards and Codes (ROSC) found that the statistical system was weak and suffers from a shortage of both financial and human resources.
National accounts: The authorities are reviing national accounts estimates, moving from the 1968 System of National Accounts (SNA) to the 1993 SNA and rebasing the data to 2005 as the base year. Final Annual National Accounts are available until 2013. The new series should be disseminated by mid-2017. However, compilation remains weak owing to inadequate funding for the Institut National de la Statistique, des Etudes Economiques et Démographiques (INSEED) and high staff turnover. In addition, dissemination of data and metadata to the public could be improved by more timely releases, provision of more detailed information, and enhanced dissemination through the internet.
Price statistics: The Harmonized Consumer Price Index (HCPI) is of rather good quality. However, it covers only the capital city and is sometimes released with some delays. The regional authorities are working underway to improve the quality of the HCPI in each of the Central African Economic and Monetary Community (CEMAC) countries.
Government finance statistics: Data weaknesses create uncertainty about the central government’s actual fiscal position and hamper debt sustainability analysis. Staff is compelled to prepare estimates of central government financial operations from disparate administrative sources that may or may not fully reconcile with domestic bank financing or changes in net indebtedness.
Monetary statistics: The Banque des Etats de L’Afrique Centrale (BEAC) reports monetary and financial statistics for the central bank and other depository corporations on a monthly basis using the standardized report forms (SRFs). A key shortcoming of monetary and financial statistics is the lack of clear reconciliation between the domestic banking sector’s net credit to the government and the implicit financing in the weak government financial accounts. Meanwhile, the data for interest rates offered by financial institutions to non-financial entities on deposits and loans is not available. In addition, the depository corporations’ survey omits the large number of microfinance operations in the country.
Balance of payments: Weaknesses in Chad’s balance of payments data create uncertainty about its actual external position, creating challenges for the debt sustainability analysis. Customs-based data are unreliable and suffer from coverage problems, to the extent that they are not relied upon for balance of payments or national income estimation. BEAC prepares balance of payments data and submit to BEAC headquarters for validation with the long time lag. Staff must estimate current and capital flows from disparate administrative sources, to supplement the official balance of payments. Using recently updated figures from BEAC, staff revised some BOP historical data but there was neither a change in methodology nor a significant revision of previous values. The IMF Statistics Department has recommended tighter coordination among the CEMAC, INSEED, and other agencies in order to improve data coverage. BEAC headquarters is coordinating technical reforms to improve data quality and timeliness.
II. Data Standards and Quality
Chad participates in the IMF’s Enhanced General Data Dissemination Standard (e-GDDS). Metadata and plans for improvement are posted on the IMF’s Dissemination Standards Bulletin Board (DSBB) and were last updated in July 2002A Data ROSC was published in August 2007.
III. Reporting to STA (Optional)
Only international liquidity, monetary statistics, GDP, and prices are currently reported to STA for publication in the International Financial Statistics (IFS). Chad has not yet been able to resume reporting of detailed data for publication in the Government Finance Statistics Yearbook. Annual fiscal data through 2001 have been reported and are included in the IFS database. The BEAC has yet to submit test monetary and financial statistics using the standardized report forms. Chad has yet to submit BOP and IIP data to STA.
Chad: Table of Common Indicators Required for Surveillance
Date of Latest ObservationDate ReceivedFrequency of Data7Frequency of Reporting7Frequency of Publication7Memo Items:
Data Quality: Methodological Soundness8Data Quality – Accuracy and Reliability9
Exchange ratesDailyDailyDDD
International reserve assets and reserve liabilities of the monetary authorities101/201606/2016MMM
Reserve/base money01/201606/2016MMMLO, LNO, LNO, LOLO, O, O, LO, NA
Broad money01/201606/2016MQMM
Central bank balance sheet01/201606/2016MMM
Consolidated balance sheet of the banking system01/201606/2016MMM
Interest rates202/201606/2016MIQMM
Consumer price index02/201606/2016MMM
Revenue, expenditure, balance and composition of financing3 – general government411/201312/2013QQQLO, LNO, LO, LOO, LO, LO, LO, NO
Revenue, expenditure, balance and composition of financing3–central government08/201312/2013QQQ
Stocks of central government and central government-guaranteed debt508/201312/2013QQQ
Exports and imports of goods and services201109/2012AAA
GDP/GNP201209/2013AAALNO, LO, LNO, LOLNO, LNO, LNO, LNO, LNO
Gross external debt12/201109/ 2012Bi-MBi-MBi-M
International investment position6, 10NANANANANA

Any reserve assets pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.

Both market-based and officially determined, including discount rates; money market rates; and 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, 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 of 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.

Data on the international investment position (IIP) is not reported due to the lack of capacity. The authorities should request technical assistance to overcome it.

Any reserve assets pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.

Both market-based and officially determined, including discount rates; money market rates; and 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, 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 of 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.

Data on the international investment position (IIP) is not reported due to the lack of capacity. The authorities should request technical assistance to overcome it.

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