The Executive Board of the International Monetary Fund (IMF) today completed the third and fourth reviews of Chad’s economic performance under the program supported by an Extended Credit Facility (ECF)1 arrangement. Completion of these reviews enables the immediate disbursement of SDR 44.41 million (about US$61 million). This brings total disbursements under the arrangement to SDR 98.34million (about US $135 million).
The Board also approved the authorities’ request to waive the non-observance of the continuous performance criterion on the non-accumulation of new external payments arrears and the end-December 2015 and end-June 2016 performance criteria on the non-accumulation of domestic payment arrears. It also approved requests to augment access under the program for SDR 33.64 million or 24 percent of quota (about US$46.2 million) and to extend the arrangement until end-November 2017, as well as a rephrasing of the planned disbursements.
Chad’s ECF arrangement was originally approved by the Executive Board on August 1, 2014 (see Press Release No. 14/381) for SDR 79.92 million (about US$109.7 million). Additional access of 40 percent of Chad’s quota at the time was approved by the Executive Board in April 2015, bringing Chad’s access under the ECF arrangement to SDR 106.56 million (about US$146.3 million) at that time.
Following the Executive Board’s discussion on Chad, Mr. Mitsuhiro Furusawa, Acting Chair and Deputy Managing Director, made the following statement:
“Performance under the ECF-supported program has been broadly satisfactory in spite of intensifying pressures from the oil shock and the tense regional security situation. The authorities have taken determined steps to address the fiscal imbalances that emerged earlier this year, by moving to cash-based execution of the budget and implementing large spending cuts. Progress has also been made in implementing the structural reform agenda.
“Moving forward, the second revised 2016 budget that was approved by the National Assembly and the draft 2017 budget that has been submitted to the National Assembly aim to preserve the significant adjustments made. While the budgets are based on conservative revenue assumptions, the authorities are committed to protect social spending, and will continue to seek additional donor support to ease the fiscal constraints. The augmentation of access under the ECF arrangement will help in this regard. For the medium term, the spending envelope should remain in line with available revenues and financing.
“The structural reform agenda remains focused on improving public financial management, including further enhancing oil sector transparency and budget implementation. The authorities are determined to implement a comprehensive strategy for the settlement of domestic expenditure arrears and will soon launch an audit of existing arrears to support this effort. The medium-term fiscal strategy is complemented by measures aimed at increasing non-oil revenue collections.
“A new National Development Plan is at an advanced stage of preparation. A key objective should be to identify measures to diversify the economy and improve the climate for private sector activity. Bold structural reforms are necessary for Chad’s development efforts, especially given oil revenue volatility.”