The International Monetary Fund (IMF) has approved the disbursement of $69.49 million to Chad to respond to COVID-19.
The loan money, approved under the Rapid Credit Facility (RCF) to address the external financing needs arising from the COVID-19 pandemic, brings Chad’s total IMF emergency support since the outbreak of the pandemic to $183.60 million.
The IMF Executive Board also cancelled Chad’s ECF arrangement, which was to expire at end-September 2020.
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Mr. Mitsuhiro Furusawa, IMF Deputy Managing Director and Acting Chair, said the twin Covid-19 pandemic and terms of trade shocks continue to severely impact the Chadian economy.
“The macroeconomic outlook has further deteriorated, with greater economic contraction and higher balance of payments and budgetary financing needs. The risk to the outlook is tilted to the downside,” he wrote in a statement.
Furusawa added: “In response to the shocks, the authorities continue to implement strong measures to halt the community spread of the virus and mitigate the impact of the crisis. Key measures focus on scaling up health-related spending, protecting the most vulnerable and supporting households and businesses. The authorities will also strengthen transparency and monitoring of emergency resources.
“To help save lives and support those most affected by the pandemic, the authorities will temporarily relax the fiscal deficit to allow for the scaling up of health care spending and to accommodate the impact of the sharp drop in oil prices. The IMF emergency assistance will support the authorities’ policy response and catalyze donor support.
“Once the crisis abates, the authorities should stand ready to gradually unwind the temporary emergency measures. Fiscal adjustment will be needed in the medium term, especially since oil prices are expected to remain low, including by allowing temporary expenditure measures to expire.
“Public debt vulnerabilities remain high and the authorities should continue to refrain from non-concessional borrowing consistent with their commitments under the DSSI and the terms of the World Bank’s Sustainable Development Financing Policy.”