The Executive Board of the International Monetary Fund (IMF) approved a disbursement under the Rapid Credit Facility (RCF) of about $69.49 million to Chad to address urgent balance of payment needs stemming from the COVID-19 pandemic.
This is the second funding in three months under RCF to address financing needs arising from the pandemic, which brings the country’s total IMF support since COVID -19 pandemic outbreak to $183.60 million. The board also confirmed the cancellation of the Extended Credit Facility (ECF) arrangement which was to expire end of September this year.
The IMF’s second RCF will provide timely support for the implementation of additional measures to address the COVID-19 crisis and lessen its severe impact. Chad’s authorities are also taking steps to ensure transparency and accountability in the use of COVID-related resources, including an ex-post audit of crisis-related spending and the publication of crisis-related procurement contracts.
The Chadian economy continues to be severely affected by the twin Covid-19 pandemic and terms of trade shocks, which has led to a weaker than previously predicted economic outlook. Due to this, Chad’s government has adopted containment measures such as the closure of markets and non-essential stores and curfew, which has been successful in containing the pandemic spread.
However, these containment measures further contributed to depressing the economy. In addition to the higher than expected spending to contain the COVID-19 crisis, fiscal and external positions have also worsened due to reduced export proceeds and lower oil and non-oil revenues.
The government of Chat continues to contain the economic impact of the pandemic as well as taking strong actions to upgrade health systems.
“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 a higher balance of payments and budgetary financing needs. The risk to the outlook is tilted to the downside.” Said Mr Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair.
“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.” He added.