Washington, DC -December 22, 2022: The Executive Board of the International Monetary Fund (IMF) licensed nowadays the of completion of the 1st and 2d evaluations below the Extended Credit Facility (ECF) for Chad.
The of completion of the 2 evaluations allows the disbursement of SDR 112.16 million (about US$149.3 million), bringing general disbursements below the association to SDR 168.24 million (about US$224 million). Chad’s three-year ECF association was once licensed on December 10, 2021, for SDR 392.56 million (about US$570.75 million on the time of program approval or 280 % of quota) to assist meet Chad’s massive balance-of-payments and budgetary wishes, together with by way of catalyzing monetary toughen from legit donors (see Press Release No. 21/377 ). Based at the insurance policies and reforms to which the government dedicated, the deliberate corrective movements, and the regional coverage assurances, the Board additionally licensed waivers of non-observance of efficiency standards at the non-oil number one stability and the inventory of home arrears.
Over the long run, insurance policies below the ECF-supported program will assist put the financial system on a balanced and sustainable trail in opposition to inclusive inexperienced expansion and poverty relief. It can even give a contribution to the regional effort to revive and maintain exterior steadiness for the Central African Economic and Monetary Union (CEMAC).
After contracting in 2020 and 2021, financial task is anticipated to step by step get well over the medium time period. Growth is anticipated build up to 2½ % in 2022 and 3½ % in 2023, pushed by way of a restoration in each oil and non-oil manufacturing. Average inflation is anticipated to upward push to five.3 % in 2022–reflecting expanding meals worth pressures from the deficient 2021 crop, the have an effect on of the conflict in Ukraine, and contemporary floods–before step by step moderating over the medium time period. Reflecting upper oil costs, the present account stability is anticipated to make stronger markedly in 2022, when it could sign in a surplus of 2.8 % of GDP, earlier than declining over the medium time period as oil costs are anticipated to step by step recede. Public debt is anticipated to step by step decline over the following few years from 56 % of GDP at end-2021 to about 40 % of GDP in 2024.
Following the Executive Board dialogue, Mr. Kenji Okamura, Deputy Managing Director and Acting Chair, made the next remark:
“Chad continues to stand substantial demanding situations. Higher oil revenues advanced the federal government’s cashflow place. However, the pandemic stays a priority whilst final yr’s deficient crop, Russia’s conflict in Ukraine, and the new floods have exacerbated meals lack of confidence. The prolongation of the political transition has heightened social tensions whilst the protection state of affairs stays unstable. Reflecting partially those demanding situations, quantitative efficiency below this system has been combined, even if there was vital growth on structural reforms.
“The medium-term outlook is projected to step by step make stronger, as reforms boost up. Both oil and non-oil GDP expansion is projected to pick out up. After expanding abruptly in 2022 on account of upper meals costs, inflation is anticipated to step by step reasonable over the medium time period.
“The debt remedy settlement reached with legit and personal collectors below the G20 Common Framework–the first in its kind– supplies Chad with good enough coverage in opposition to drawback dangers whilst bringing the danger of debt misery to reasonable by way of the top of this system, as required below the IMF’s outstanding get entry to insurance policies.
“Continued reform efforts are needed to enhance growth, poverty reduction, and resilience. Fiscal consolidation efforts remain key to Chad’s efforts to ensure debt sustainability while creating the fiscal space necessary to meet its considerable social and investment spending needs. The authorities will continue to implement measures aimed at enhancing domestic revenue mobilization, containing the wage bill, and streamlining non-priority expenditures, such as fuel and electricity subsidies. Additional oil revenue will help rebuild buffers and repay domestic arrears and reduce domestic debt. Structural reforms will also aim at enhancing public financial management and fiscal transparency, improving governance, and strengthening the banking sector. Chad’s program will continue to be supported by implementation of policies and reforms by the CEMAC regional institutions, which notably aim at supporting an increase in regional net foreign assets.”