On July 17, 2017, the Executive Board of the International Monetary Fund (IMF) completed the second review under the Extended Credit Facility (ECF) arrangement for the Central African Republic. The completion of the review enables a disbursement of SDR 11.70 million (about US$16.3 million), which will bring total disbursements under the arrangement to SDR 36.75 million (about US$51.2 million).
The Executive Board also approved a request for augmentation of the ECF arrangement in the amount of SDR 11.14 million (about US$15.5 million), to be disbursed upon the completion of the third review. The augmentation is for additional balance of payments needs associated with the accelerated clearance of arrears to small and medium sized government suppliers which would support social cohesion and economic growth.
Performance under the ECF-supported program has been satisfactory despite the challenging security environment
The ECF arrangement for the Central African Republic was approved by the Executive Board on July 20, 2016 for SDR 83.55 million (about US$116.5 million, 75 percent of Central African Republic’s quota at the IMF). The augmentation brings the total financing approved to SDR 94.69 million (about US$132 million, 85 percent of the country’s IMF quota).
At the conclusion of the Board’s discussion, Mr. Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair, stated:
“Performance under the ECF-supported program has been satisfactory despite the challenging security environment. Along with ongoing efforts to promote dialogue and national reconciliation, sustained program implementation is critical to create fiscal space for development spending, improve the business environment, and foster higher and more inclusive growth.
“The authorities have adopted measures to streamline quasi-fiscal taxes, enhance budget transparency, and address revenue shortfalls. Moving forward, the fiscal strategy will remain anchored in the domestic primary balance objective. Sustaining and accelerating efforts to mobilize domestic revenues—particularly at customs—and enhance budget transparency will create fiscal space for increasing social and capital spending.
“The authorities should build on recent progress to improve public financial management, including by ensuring regular publication of budget execution reports, consolidating the treasury single account, and limiting the use of exceptional spending procedures. The reduction of domestic payment arrears to small and medium-sized enterprises will support growth and help restore the state’s credibility, thus contributing to social cohesion.
“Swift implementation of the National Plan for Recovery and Peace’s investment program will boost economic prospects. Given the country’s high risk of debt distress, continued reliance on grant financing, while limiting borrowing, even in highly concessional terms, is essential. Available assistance needs to be channeled effectively into priority projects to lift economic growth, create jobs, and reduce poverty.
“The success of the Central African Republic’s program will also depend on the implementation of supportive policies and reforms by the regional institutions.”