IMF Executive Board Completes Fifth Review of the Arrangement under Extended Credit Facility for Chad and Approves US$38.8 Million Disbursement

Fifth Review under the Extended Credit Facility Arrangement and Financing Assurances Review-Press Release; Staff Report; Staff Supplement; and Statement by the

Abstract

Fifth Review under the Extended Credit Facility Arrangement and Financing Assurances Review-Press Release; Staff Report; Staff Supplement; and Statement by the

  • Performance under the ECF arrangement has been broadly satisfactory as the program is supported by CEMAC-wide efforts to maintain an appropriate monetary policy stance.

  • Improving governance remains a key element of the country’s strategy to revive the private sector.

  • Efforts to raise non-oil revenue, especially through improvements in the tax and customs administration will need to be continued.

On December 13, 2019, the Executive Board of the International Monetary Fund (IMF) completed the fifth review of Chad’s economic program supported by an Extended Credit Facility (ECF) arrangement. The completion of the review enables the disbursement of SDR28.04 million (about US$38.8 million), bringing total disbursements under the arrangement to SDR196.28 million (about US$271.7 million).

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$310.5 million or 160 percent of Chad’s quota). The ECF-arrangement aims at stabilizing the economy and supporting the resumption of growth, especially in the non-oil sector, lay the foundation for robust and inclusive growth, and contribute to the regional effort to restore and preserve external stability for the Central African Economic and Monetary Union (CEMAC).

Following the Executive Board discussion, Mr. Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair, made the following statement:

“Chad’s performance under the Fund’s ECF-supported program has been broadly satisfactory, reflecting strong commitment by the authorities despite a challenging environment, including security concerns and a tense social situation. Good progress on the structural reform agenda has been made, despite some delays. Looking ahead, it is essential that the authorities continue to pursue prudent fiscal policy, particularly in the run up to the upcoming elections, create sufficient fiscal space for increased social and development spending, and pay down domestic debt and arrears.

“Fiscal consolidation efforts should give emphasis to strengthening domestic revenue mobilization, particularly by reducing exemptions and improving VAT collection, controlling the wage bill, and strengthening public financial management. Effort to contain public debt vulnerabilities should be sustained by reducing domestic debt and strictly adhering to the zero limit on non-concessional borrowing.

“Accelerating the implementation of structural reforms to enhance the business climate and improve governance is necessary to boost economic recovery. In addition, developing and implementing a clearance strategy for domestic arrears and addressing public banks vulnerabilities is also essential.

“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.”