IMF Executive Board Completes Second Review under the ECF arrangement for Chad and Approves US$ 49.09 Million Disbursement

Second Review of the Program Under the Extended Credit Facility, Request for Waivers of Nonobservance of Performance Criteria, And Financing Assurances Review-Press Release; Staff Report; and Statement by the Executive Director for Chad

Abstract

Second Review of the Program Under the Extended Credit Facility, Request for Waivers of Nonobservance of Performance Criteria, And Financing Assurances Review-Press Release; Staff Report; and Statement by the Executive Director for Chad

The Executive Board of the International Monetary Fund (IMF) today completed the second review of Chad’s economic performance under the program supported by an Extended Credit Facility (ECF) arrangement. Completion of this review enables the immediate disbursement of the equivalent of SDRSDR 35.05 million (about US$ 49.09 million). This brings total disbursements under the arrangement to SDR 105.15 million (about US $147.27 million). The Board granted a further waiver of nonobservance of the continuous performance criterion on the accumulation of external arrears, for arrears incurred before completion of the first review under the ECF arrangement.

Chad’s ECF arrangement was originally approved by the Executive Board on June 30, 2017 (see Press Release No. 17/257) for SDR 224.32 million (about US$ 312.1 million or 160 percent of Chad’s quota). The ECF-supported program aims to help Chad restore macroeconomic stability and lay the foundation for robust and inclusive growth. It will also contribute to the regional effort to restore and preserve external stability for the Central African Economic and Monetary Union (CEMAC).

Following the Executive Board’s discussion on Chad, Mr. David Lipton, Acting Chair and First Deputy Managing Director, made the following statement:

“Performance under the ECF-supported program has been satisfactory, reflecting strong commitment by the authorities to the objectives of the program. All, but one, end-December 2017 performance criteria, notably the non-oil primary balance, and most endMarch indicative targets were met. The criterion on non-accumulation of arrears was missed by a small margin. All structural benchmarks have been implemented. In June 2018, the authorities reached a final agreement to restructure debt to a private external creditor.

“The authorities are determined to continue implementing their strategy to further stabilize the fiscal position, foster inclusive non-oil growth, and reduce banking sector vulnerabilities. A key element of the strategy is to create sufficient space for increased spending in social sectors and public investment, reduce debt, and to clear outstanding arrears. This will entail maintaining control over the wage bill, increasing non-oil revenue mobilization, strengthening governance, and improving public financial management.

“Chad’s program is supported by the implementation of supportive policies and reforms by the regional institutions in the areas of foreign exchange regulations and monetary policy framework and to support an increase in regional net foreign assets, which are critical to the program’s success.”