The Executive Board of the International Monetary Fund (IMF) is considering an urgent request made by Chad for a disbursement of $115 million to the central African country to respond to COVID-19 economic sabotage under a Rapid Credit Facility arrangement.
The IMF defines the Rapid Credit Facility (RCF) as rapid concessional financial assistance or loan with limited conditionality to low-income countries (LICs) facing an urgent balance of payments need.
The government of Chad has taken strong actions to mitigate the impact of the pandemic by closing schools, suspending flights, and banning public gatherings, and is currently putting together a comprehensive economic plan to upgrade the health system and contain the economic impact of the pandemic.
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In a statement received by TODAY NEWS AFRICA in Washington D.C., the IMF said the Board’s consideration of the request is expected by mid-April.
The $115 million would “meet the urgent budgetary and balance of payments needs stemming from the COVID-19 pandemic,” IMF said.
IMF said the government of Chad has taken strong measures to halt the community spread of the virus and is preparing an economic plan to mitigate the impact of the pandemic.
“IMF staff completed discussions with the authorities for a disbursement by mid-April of US$115 million. This will allow the authorities to meet the urgent budgetary and balance of payment needs stemming from the deterioration of the global economic conditions and the spread of COVID-19 in Chad. The authorities hope that the IMF financial support will help catalyze much needed financial support from other development partners,” said Mr. Edward Gemayel, IMF Mission Chief for Chad.
Gemayel said the outbreak of COVID-19 is having a severe economic and social impact on Chad and could jeopardize the gains achieved in recent years under the current Extended Credit Facility (ECF) arrangement.
“Economic activity is projected to slow sharply, and large fiscal and external financing needs have emerged. Containing a spread of the pandemic will put pressure on a weak health system and entail additional spending in the health sector, under the National Contingency Plan for the preparedness and response to the COVID-19 pandemic. Measures to prevent the spread of the virus have created hardship for households and businesses,” Gemayel added.
The RCF was created under the Poverty Reduction and Growth Trust (PRGT) as part of a broader reform to make the Fund’s financial support more flexible and better tailored to the diverse needs of LICs, including in times of crisis. The RCF places emphasis on the country’s poverty reduction and growth objectives.