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United States : IMF Executive Board Approves New US$122.4 Million ECF Arrangement for Chad

August 2, 2014

The Executive Board of the International Monetary Fund (IMF) today approved a new three-year arrangement under the Extended Credit Facility (ECF) for a total amount equivalent to SDR 79.92 million (about US$122.4 million), 120 percent of quota for Chad. The approval will enable the first disbursement of an amount equivalent to SDR 13.31 million (about US$20.4 million).

The new ECF arrangement is expected to address the country s protracted balance of payments problems which resulted from a reduction in oil revenues, maintain adequate international reserves coverage, and play a catalytic role for bilateral and multilateral assistance.

At the conclusion of the Executive Board s discussion, Mr. Naoyuki Shinohara, Deputy Managing Director and Acting Chair, issued the following statement: Chad s macroeconomic performance has been relatively strong, despite major regional security issues requiring the strengthening of security measures along its borders and increased humanitarian assistance to refugees and returning nationals. Medium term prospects are generally favorable. The commencement of activities in new fields is expected to significantly boost oil production and exports over the next few years, while, non-oil GDP should continue to increase at a sustained rate.

The new ECF-supported program is anchored on accelerating reforms to strengthen fiscal institutions and support growth, while maintaining fiscal discipline. A smooth decline in the non-oil primary deficit over the medium-term is warranted to ensure fiscal sustainability in light of a projected exhaustion of oil reserves. Structural fiscal reforms are critical to increase fiscal space, enhance fiscal control, and improve the efficiency of public spending. Key objectives include a further reduction in the use of emergency spending procedures, improving fiscal accounting and reporting, and strengthening cash management and forecasting.

Achieving the country s medium-term growth and development objectives will require improving the business environment, including addressing bottlenecks in infrastructure, labor quality, and access to finance. In addition to ambitious public investment plans in infrastructure, promoting a more favorable environment for the private sector and the implementation of the authorities strategy to enhance financial inclusion which appropriately focuses on rural areas are critical to foster new sources of non-oil growth.

Sustained implementation of the ECF-supported program should help catalyze additional financial resources from international donors and foreign direct investment flows to more effectively tackle development needs and foster economic growth, in addition to being a key step for reaching the HIPC Completion Point.

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Source: TendersInfo (India)

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