Press Release: IMF Executive Board Reviews Noncomplying Disbursement to Chad
June 26, 2003
The Executive Board of the International Monetary Fund (IMF) has reviewed matters related to the noncomplying disbursement to Chad in an amount equivalent to SDR 5.4 million (about US$7.6 million) that was made following the completion by the Executive Board of the fourth review under Chad's Poverty Reduction and Growth Facility (PRGF) arrangement in October 2002. It was agreed that Chad could repay the IMF in two equal installments to be paid no later than July 31, 2003 and October 31, 2003, respectively.
Subsequent to the PRGF disbursement to Chad in October 2002, it was found that Chad had provided the IMF with inaccurate information as to its external payments arrears. Specifically, the authorities did not inform the IMF of new external payments arrears accumulated between July and September 2002. The accumulation of these arrears violated a continuous performance criterion under the PRGF arrangement, and, as a result of the inaccuracy in the information communicated to the Fund, the disbursement was deemed to be noncomplying. Arrears, moreover, continued to be accumulated in the last quarter of 2002 and in early 2003. In March 2003, the authorities indicated that a set of corrective actions had been implemented, that all external arrears had been cleared, and that Chad had remained current on its external obligations since February 2003. However, Chad had accumulated new arrears when that communication was received and continued to do so in April 2003; furthermore, the corrective actions had not yet been fully implemented. These arrears were subsequently cleared and the identified corrective actions put in place.
Following the Executive Board's discussion on Chad, Deputy Managing Director and Acting Chairman, Shigemitsu Sugisaki, stated:
"The Executive Board regretted the authorities' misreporting on the accumulation of new external payments arrears in connection with the fourth review under Chad's PRGF arrangement in October 2002. The further accumulation of arrears through April 2003 and the authorities' failure to fully implement a set of corrective actions, despite their assurances to the contrary, are a matter of serious concern.
"While recognizing that all arrears have now been cleared, the Board considered that, under these circumstances, granting a waiver for the noncomplying disbursement made in October 2002 would be inappropriate. Chad has, therefore, been asked to repay early the Fund the amount of SDR 5.4 million plus accrued interest, in two equal installments. The Board urged the authorities to fully and consistently implement the corrective measures they have identified and which are aimed at preventing the reemergence of external payments arrears and misreporting," Mr. Sugisaki stated.