June 20, 2024

Chad reaches debt treatment agreement with creditors, IMF chief Kristalina Georgieva celebrates deal: ‘We have been waiting for this day’

Managing Director Kristalina Georgieva participates in a one-on-one conversation with World Bank President David Malpass during the 2022 Annual Meetings at the International Monetary Fund. IMF Photo/Cory Hancock 10 October 2022 Washington, DC, United States Photo ref: CH221010001.jpg

Chad has reached a debt treatment agreement with its creditors under the Group of 20 Common Framework, the government announced in a statement on Friday, November 11.

The agreement, the first Common Framework accord, which will allow Chad to access more funds to tackle the country’s economic challenges, was reached after more than two years of negotiations.

It comes as oil prices remain high amid Russia’s war in Ukraine, and expectations that Chad, an oil producing country in central Africa, will be able to pay back its debts if given some breathing room.

In Washington, the Managing Director of the International Monetary Fund (IMF), Ms. Kristalina Georgieva, welcomed the deal, writing in a brief statement that,”We have been waiting for this day.”

“I welcome the announcement by Minister of Finance Tahir Hamid Nguilin that the authorities have agreed with their external creditors on the treatment of Chad’s debt,” Georgieva wrote. “We recognize the work by the official creditor committee comprising China, France, India, and Saudi Arabia, as well as private creditors, to reach this agreement and secure the first Common Framework accord.”

She said that the agreed debt treatment “is consistent with the objectives of the IMF-supported program that was approved in December 2021,” and that the debt treatment “reduces the risk of debt distress at a time when the global outlook is highly uncertain, and provides protection against downside risks, including lower oil prices.”

“Once formalized, the debt treatment should pave the way for the completion of the first and second reviews of Chad’s three-year Extended Credit Facility Arrangement , which will help put Chad’s economy on a path toward sustainable economic growth and poverty reduction,” added the IMF chief.

The Chadian authorities and the staff of the International Monetary Fund started discussions for the first review under the ECF-supported program approved on December 10, 2021.

From March 16–30, 2022, an IMF mission led by Edouard Martin visited N’Djamena to conduct discussions for the first review under the program supported by the ECF arrangement approved by the IMF Executive Board on December 10, 2021.

The new 36-month ECF arrangement, in an amount of about US$570.75 million or 280 percent of quota, will help meet Chad’s large balance-of-payments and budgetary needs, including by catalyzing financial support from official donors, IMF wrote back then.

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