The executive board of the International Monetary Fund (IMF) on Monday approved an additional release of $123.5 million to the Central African country of Gabon, part of a $642 million loan secured in 2017 under an extended fund facility.
An extended fund facility (EFF) is a medium-term arrangement which allows countries to borrow a certain amount of money, typically over a three- to four-year period. The EFF aims to address structural problems within the macroeconomy that are causing chronic balance of payment inequities.
Monday’s approval of an additional release of funds brought total disbursements under the arrangement so far to $518.5 million to Gabon. It came after the IMF board completed the fourth and fifth reviews of Gabon’s economic program under EFF.
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According to the IMF, prudent macroeconomic policies have contributed to Gabon’s economic recovery. It said the government’s reform program supported by the IMF aims to restore macroeconomic stability and lay the foundation for inclusive growth.
“Gabon’s performance under the program supported by the IMF’s Extended Fund Facility Arrangement has been broadly satisfactory. Macroeconomic conditions have continued to improve, with growth slowly picking-up, fiscal and external positions improving, and public debt declining. Going forward, bold and ambitious reforms are needed to generate higher, more inclusive, and resilient growth,” said Mr. Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair.
Furusawa added: “Efforts should continue to further boost domestic revenue and contain non-priority spending, while protecting investment and enhancing social protection. Improving public finance management and the efficiency of public investment is also important for growth prospects.
“Sustained implementation of structural reforms is critical. Efforts to close infrastructure gaps, improve human capital, deepen financial intermediation, clear domestic arrears, and enhance governance and anti-corruption measures are necessary to improve the business climate and achieve higher and inclusive growth.
“Gabon’s program is supported by the implementation of supportive policies and reforms by the CEMAC regional institutions in the areas of foreign exchange regulations, the monetary policy framework, and increasing regional net foreign assets, which are critical to the program’s success.”