## ppea2021063 ## Source details **Canonical URL:** [ppea2021063](https://www.imf.org/-/media/files/publications/pp/2021/english/ppea2021063.pdf) ## Other formats - [Markdown version](/-/media/files/publications/pp/2021/english/ppea2021063.pdf.md) - [Structured JSON version](/-/media/files/publications/pp/2021/english/ppea2021063.pdf.json) --- ### Executive summary — COVID-19 pandemic and CCRT debt service relief - Executive Board approved changes to the Catastrophe Containment and Relief Trust (CCRT) on March 26, 2020, enabling grants for debt service relief up to a maximum of two years from April 14, 2020. - Three tranches of debt service relief approved to cover eligible Fund debt service falling due from April 14, 2020 through October 15, 2021. - Cumulative COVID-19 cases in CCRT-eligible countries have risen to over 2 million and associated deaths have exceeded 38 thousand; both have almost doubled since April 2021. - According to the July 2021 WEO outlook: - Real GDP growth in CCRT-eligible countries is projected to remain slower than the pre-COVID forecasts in 2021. - CCRT-eligible countries perform weaker than the wider group of low-income developing countries (LIDCs) and contrast with solid recoveries in advanced economies (AEs) and emerging market and developing economies (EMDEs). - Executive Board-approved three tranches total SDR 520 million for eligible debt service falling due from April 14, 2020 through October 15, 2021. - Since onset of the pandemic, the IMF approved SDR 5.2 billion in financial assistance to 29 CCRT-eligible countries via RCF and RFI emergency financing instruments and new ECF arrangements for four countries. - CCRT-eligible countries’ share of the new General SDR Allocation (effective August 23, 2021) amounts to about SDR 5.8 billion. ### Eligibility and qualification — Kyrgyz Republic and Lesotho - Based on July 2021 GNI figures, two PRGT-eligible countries—the Kyrgyz Republic and Lesotho—became newly CCRT-eligible with eligible debt service to the Fund falling due through April 13, 2022. - Both requested CCRT grant assistance under the Catastrophe Containment window to free up resources to cope with exceptional balance of payments needs arising from the COVID-19 pandemic, a Qualifying Public Health Disaster (QPHD) determined effective April 14, 2020. - Staff assessment: - Staff considers that both countries meet the qualification requirements under the alternative qualification test adopted in March 2020, given the continued human and economic toll from COVID-19 and the appropriateness of macroeconomic policy frameworks in place. - Recommendation: - The paper proposes that the Executive Board approve the qualification of the Kyrgyz Republic and Lesotho for CCRT grant assistance. ### Macroeconomic response, staff assessment, and governance safeguards (29 beneficiaries) - Fiscal and spending outcomes: - On average, CCRT beneficiary countries boosted priority spending in 2020 relative to pre-COVID projections by 0.8 percentage points of GDP. - Other COVID-related spending added 1.7 percent of GDP in 2020. - Priority spending anticipated to be around 1.4 percentage points of GDP higher than pre-COVID projections in 2021. - Other COVID-related spending expected to be 1.3 percent of GDP in 2021. - Staff assessment of policy appropriateness: - Staff assesses CCRT-eligible countries are generally pursuing appropriate macroeconomic policies in response to the pandemic and that resources freed by CCRT relief are helping provide emergency health, social and economic support. - Program transition and surveillance: - New ECF arrangements approved for Democratic Republic of Congo and Madagascar. - Four program requests under discussion (Burkina Faso, Mozambique, Malawi, Niger). - Five countries completed reviews under UCT-quality programs including one PCI (Afghanistan, The Gambia, Rwanda, São Tomé and Príncipe, Sierra Leone). - One Article IV consultation (Guinea) conducted during the period of the third tranche; ten missions scheduled during the remaining full CCRT period. - Governance, accountability, transparency: - Many countries report on COVID-19 spending and publish procurement contract information; most committed to ex-post audits and publication online. - Some audits published (e.g., Burkina Faso, Central African Republic, Rwanda); others face delays due to legal revisions, capacity constraints, and novelty of measures. - Nine CCRT countries receiving Fund technical assistance to address these challenges; Fund staff begun assistance to support audits of crisis-related spending. ### Funding status, pledges, and resource adequacy - Donor pledges and cash: - Grant pledges received to date amount to SDR 609 million (including SDR 63.6 million in new pledges since third tranche), mobilized by 17 donor countries and the EU. - Cash balances in the CCRT amounted to SDR 227.9 million as of September 23, 2021. - Specific donor contributions (as presented): - Greece: US$11 million (SDR 7.7 million) - Spain: EUR 25 million (SDR 20.7 million) - Japan: US$50 million (SDR 35.2 million) additional to US$100 million (SDR 73.4 million) disbursed in April 2020 - European Union plans to transfer remaining portion (SDR 10.8 million) of its EUR 183 million grant commitment in support of the fourth tranche. - Resource adequacy and projections: - Total pledges fall short of the SDR 1 billion fundraising goal and below the estimated cost of two full years of COVID-related debt relief (estimated at SDR 692 million including newly eligible members). - In absence of new contributions, delivery of COVID-related debt service relief through April 13, 2022 would reduce the CCRT cash balance to about SDR 69 million (assuming expected EU transfer), significantly depleting the SDR 150 million pre-COVID cash buffer. - Pre-COVID shortfall estimated at SDR 200-275 million; substantially more resources required to reach SDR 1 billion target. ### Proposed two-step operational approach for remaining period - Rationale: resources too low to recommend a full six-month fourth tranche at this time given likely needs of other qualifying members. - Proposal: 1. Immediate approval of disbursement of a fourth tranche of debt service relief to all qualified beneficiary countries covering October 16, 2021 through January 10, 2022, including Kyrgyz Republic and Lesotho. 2. Consideration in January 2022 of a final tranche of CCRT debt service relief through April 13, 2022, possibly on a lapse-of-time (LOT) basis and without country-specific updates, based on assessment of resources at that time. - Operational notes: - Burundi, the Democratic Republic of the Congo, Nepal, Tanzania, Togo, and Yemen do not have eligible debt service falling due during the proposed fourth tranche covering through January 10, 2022. - Afghanistan: lack of clarity on government recognition means Fund engagement with Afghanistan remains on pause; approval of a fourth tranche for Afghanistan is not proposed. Afghanistan’s next payments to the Fund are due on November 23, 2021 and January 10, 2022 for SDR 1.2 million each. ### Issues for discussion and next steps - Potential for additional members to become CCRT eligible after Board declaration of QPHD could raise fundraising and resource allocation issues; staff proposes addressing this at the next CCRT review scheduled for 2022/23. - Staff will reassess resources in January 2022 and consider a final tranche through April 13, 2022 potentially on a lapse-of-time basis. ### Annex highlights — Kyrgyz Republic (Staff Appraisal) - Economic impact: - Output contracted by 8.6 percent in 2020 and by 1.7 percent in H1 2021 compared to pre-crisis projections. - Headline inflation rose to 9.7 percent in 2020 and further to 14 percent in 2021 from 3.1 percent in 2019. - Public debt rose by 16.5 percent of GDP to 68 percent in 2020. - Staff assesses an exceptional balance of payments need of US$150 million. - Policy response: - Total fiscal cost of COVID response amounted to 7.2 percent of GDP. - Central bank raised policy rates three times by cumulative 250 basis points in 2021. - Authorities plan to increase health spending by 5.5 billion soms (0.8 percent of GDP) in 2021. - Debt service and CCRT request: - Kyrgyz Republic requests Catastrophe Containment (CC) grant assistance to cover IMF debt service falling due October 8, 2021 through April 13, 2022. - Upcoming IMF debt service in that period: SDR 9.19 million (US$12.1 million). - Key macro indicators (selected): - Population (2021): 6.6 million - Per capita GNI (2020): 1,160 (U.S. dollars) - Real GDP growth: 2018: 3.5; 2019: 4.6; 2020: -8.6; 2021 Est.: 2.1; 2022 Proj.: 5.6 - Consumer prices (end period): 2019: 0.5; 2020: 3.1; 2021: 9.7; 2022 Proj.: 12.6 - External public debt (percent of GDP): 2020: 58.3; 2021 Est.: 56.0; 2022 Proj.: 51.4 ### Annex highlights — Lesotho (Staff Appraisal) - COVID-19 fiscal and monetary response: - Around LSL1.2 billion (3.8 percent of GDP) spent on mitigation measures. - Monetary policy rate reduced from 6.25 to 3.5 percent (275bp) between March and July 2020 and maintained at 3.5 percent since then. - Central Bank increased target floor for net international reserves by US$150 million to US$780 million on July 27, 2021. - IMF engagement and CCRT request: - Lesotho received RCF/RFI in July 2020 amount SDR 34.9 million (50 percent of quota). - Lesotho meets the income threshold with GNI per capita of US$1,100 (2020). - Lesotho requested CCRT grant assistance to cover IMF debt service falling due from October 8, 2021 to April 13, 2022. - Upcoming IMF debt service falling due in that period: SDR 3.8 million. - Balance of payments and reserves (selected projections): - Current account (percent of GDP): 2018/19: -1.4; 2019/20: -5.8; 2020/21: -14.6; 2021/22: -14.8; 2022/23: -11.2 - Gross international reserves (US$ millions): 2018/19: 735; 2019/20: 642; 2020/21: 809; 2021/22: 885; 2022/23: 951 ### Country annexes — Representative findings and staff assessments (selected) - Benin: - Benin benefited from CCRT tranches totaling SDR 19.11 million covering April 14, 2020 to October 13, 2021. - Priority spending in 2021 expected to be 5.6 percent of GDP (US$1 billion). - Upcoming debt service: SDR 2.122 million falling due Oct 16, 2021 to Jan 10, 2022 (4th tranche period). - Burundi: - Staff estimates real GDP contracted by about 1 percent in 2020; fiscal deficit reached 6.9 percent of GDP in FY2021. - COVID-related spending estimated about 0.8 percent of GDP in 2020/21 and could reach 3.3 percent of GDP in 2021/22. - Burundi does not have debt service falling due during Oct 16, 2021 to Jan 10, 2022. - Chad: - Non-oil GDP expected to remain flat in 2021; oil GDP expected to grow by 4.4 percent in 2021. - Chad has debt service of SDR 4.062 million falling due Oct 16, 2021 to Jan 10, 2022. - Staff notes liquidity squeeze and need for transparency in procurement and beneficial ownership identification. - Democratic Republic of the Congo: - Real GDP estimated to have grown by 1.7 percent in 2020 and expected to expand by 4.9 percent in 2021. - IMF Executive Board approved a 3-year ECF arrangement equivalent to SDR 1,066 million on July 15, 2021. - DRC does not have debt service to the Fund falling due Oct 16, 2021 to Apr 13, 2022. - Ethiopia: - Real GDP growth for 2020/21 projected at 2 percent; weaker recovery than previously expected. - Eligible GRA charges falling due Oct 16, 2021 to Jan 10, 2022 estimated at SDR 239,658. - Guinea: - GDP growth 7.1 percent in 2020; projected 5.2 percent in 2021. - CCRT third tranche contributed 0.2 percent of GDP to 2021 budget financing. - Upcoming CCRT-covered debt service: SDR 1.836 million due Oct 16, 2021–Jan 10, 2022. - Malawi: - Real GDP growth revised to 2.2 percent (2021) and 3.0 percent (2022); gross official reserves projected to decline to US$144 million by end-2021 (0.5 months of imports). - Malawi has debt service of SDR 6.724 million falling due Oct 16, 2021 to Jan 10, 2022. - Nepal: - Real GDP growth FY2020/21 estimated at 1.8 percent; FY2021/22 estimated at 4.4 percent (pre-pandemic baseline 5.7 and 5.5). - Nepal does not have debt service due Oct 16, 2021 to Jan 10, 2022. - Niger: - Real GDP growth 2020: 3.6; 2021 projection: 5.4. - Niger has debt service of SDR 5.029 million falling due Oct 16, 2021 to Jan 10, 2022. - Rwanda: - Real GDP growth for 2021 projected at 5.1 percent; Economic Recovery Plan cost rose to 10.1 percent of GDP and extended until FY23/24. - Rwanda has debt service of SDR 8.01 million falling due Oct 16, 2021 to Jan 10, 2022. - Sierra Leone: - Real GDP contracted by about 2.2 percent in 2020; rebound to 3.2 percent expected in 2021. - Debt service to the Fund of SDR 6.00 million falling due Oct 16, 2021 to Jan 10, 2022. - Solomon Islands: - Fiscal package size: 3.6 percent of GDP plus early withdrawals from National Provident Fund of about 0.7 percent of GDP. - Debt service to the Fund falling due Oct 16, 2021 to Jan 10, 2022: SDR 0.059 million. - Tanzania: - No remaining outstanding debt to the IMF aside from RCF and RFI funds; will no longer benefit from debt service relief during Oct 16, 2021 to Apr 13, 2022. - Togo: - Projected growth in 2021 revised upward to 4.8 percent; public debt-to-GDP ratio 60.3 percent at end-2020. - Togo does not have eligible debt service falling due Oct 16, 2021 to Apr 13, 2022. - Yemen: - Economic activity contracted by 8.5 percent in 2020; projected to contract by a further 2 percent in 2021. - CCRT first three tranches totaled SDR 42.454 million; recent SDR allocation SDR 467 million. - Yemen does not have debt service falling due Oct 16, 2021 to Jan 10, 2022. ### Policy implications and staff recommendations - Continue to target resources freed by CCRT relief toward emergency health, social, and economic support while maintaining governance safeguards (ex-post audits, procurement transparency, beneficial ownership disclosures). - Adopt the proposed two-step approach to tranche further relief: - Immediate tranche through January 10, 2022 to preserve flexibility given current funding (SDR 609 million pledges; SDR 227.9 million cash). - Reassess in January 2022 for a final tranche through April 13, 2022 based on updated resource assessment and country circumstances. - Prioritize mobilizing additional donor contributions to move toward the SDR 1 billion fundraising target and preserve the SDR 150 million pre-COVID buffer for other qualifying shocks. - Address capacity and legal constraints that delay implementation of governance commitments via targeted Fund technical assistance to strengthen procurement transparency, audit capacity, and beneficial ownership frameworks. *Prepared by the Finance Department, the Legal Department, and the Strategy, Policy, and Review Department; ppea2021063 (IMF).* ### EXECUTIVE SUMMARY ### EXECUTIVE SUMMARY ### Recent developments: COVID-19 pandemic and CCRT debt service relief - Executive Board approved changes to the Catastrophe Containment and Relief Trust (CCRT) on March 26, 2020, enabling grants for debt service relief up to a maximum of two years from April 14, 2020 to help tackle the COVID-19 pandemic and its economic repercussions. - To date, the Executive Board has approved three tranches of debt service relief to all CCRT-eligible countries with eligible debt service to the Fund falling due from April 14, 2020 through October 15, 2021. - Cumulative COVID-19 cases in CCRT-eligible countries have risen to over 2 million and associated deaths have exceeded 38 thousand; both have almost doubled since April 2021 (Figure 1). - According to the July 2021 WEO outlook: - Real GDP growth in CCRT-eligible countries is projected to remain slower than the pre-COVID forecasts in 2021. - CCRT-eligible countries’ performance is weaker than the wider group of low-income developing countries (LIDCs) and contrasts with solid recoveries in advanced economies (AEs) and emerging market and developing economies (EMDEs) (Table 1). - The Executive Board-approved three tranches total SDR 520 million for eligible debt service falling due from April 14, 2020 through October 15, 2021 (Table 5). - Since the onset of the pandemic, the IMF has approved SDR 5.2 billion in financial assistance to 29 CCRT-eligible countries via RCF and RFI emergency financing instruments and new arrangements under the Extended Credit Facility (ECF) for four countries. - CCRT-eligible countries’ share of the new General SDR Allocation (effective August 23, 2021) amounts to about SDR 5.8 billion. ### Eligibility and qualification for assistance: Kyrgyz Republic and Lesotho - Based on July 2021 GNI figures, two PRGT-eligible countries—the Kyrgyz Republic and Lesotho—became newly CCRT-eligible and have eligible debt service to the Fund falling due through April 13, 2022. - Both countries have requested CCRT grant assistance under the Catastrophe Containment window to free up resources to cope with exceptional balance of payments needs arising from the COVID-19 pandemic, a qualifying public health disaster (QPHD) as determined by the Executive Board effective April 14, 2020, including their policy responses. - Staff considers that, in light of the continued human and economic toll from COVID-19 and staff’s assessment of the appropriateness of the macroeconomic policy frameworks in place, both countries meet the qualification requirements under the alternative qualification test adopted in March 2020. - The paper proposes that the Executive Board approve the qualification of the Kyrgyz Republic and Lesotho for CCRT grant assistance. ### CCRT-eligible countries: policy response, staff assessment, and governance safeguards - Real GDP growth in 29 CCRT-beneficiary countries is expected to remain below pre-COVID projections in 2021 and reach pre-COVID levels only in 2022, leaving GDP levels substantially lower than pre-COVID trend in coming years (Figure 2). - Current projections for general government overall deficit (excluding grants) remain larger than pre-pandemic projections through 2022. - Elevated gross financing needs (GFNs) are projected to ease only gradually, with external debt stabilizing at higher levels. - Transition from emergency financing to UCT-quality programs is ongoing: - New ECF arrangements approved for two members (Democratic Republic of Congo and Madagascar). - Four program requests (Burkina Faso, Mozambique, Malawi, and Niger) under discussion. - Five countries completed reviews under UCT-quality programs, including one PCI (Afghanistan, The Gambia, Rwanda, São Tomé and Príncipe, and Sierra Leone). - Surveillance activity: One Article IV consultation (Guinea) conducted during the period of the third tranche; ten missions scheduled during the remaining full CCRT period. - Governance, accountability, and transparency: - Many countries report on COVID-19 related spending and publish procurement contract information. - Most countries committed to ex-post audits of crisis-related spending and publication online; some audits published (e.g., Burkina Faso, Central African Republic, Rwanda), while others face delays. - Most countries committed to publish beneficial ownership information for COVID-related awarded companies; several amended procurement legal frameworks to publish information structurally (e.g., Benin, The Gambia, Guinea, Kyrgyz Republic). - Delays in implementation reflect legal framework revisions, capacity constraints, and novelty of measures. - Nine CCRT countries are receiving Fund technical assistance to address these challenges; Fund staff has begun providing assistance to support audits of crisis-related spending. ### Funding status and proposal for further relief - Donor support: 17 donor countries and the EU mobilized SDR 609 million in new pledges since the onset of the pandemic — about 60 percent of the SDR 1 billion fundraising target and well short of the estimated cost of two years of COVID-related relief. - Based on undisbursed pledges and cash balances at hand in the CCRT, staff considers resources too low to recommend a full six-month fourth tranche of CCRT grant relief at this time, given likely needs of other potentially qualifying members. - Staff notes that ongoing reflections related to the expected end of the Debt Service Suspension Initiative (DSSI) at end-2021, and continued uncertainty on the pandemic’s health and economic impact, may affect donor decisions to provide new contributions. - Proposed two-step approach to allow continuation of CCRT debt relief while providing time to raise additional resources: - (i) Immediate approval of disbursement of a fourth tranche of debt service relief to all qualified beneficiary countries covering October 16, 2021 through January 10, 2022. - (ii) Consideration in January 2022 of a further final tranche of CCRT debt service relief through April 13, 2022, possibly on a lapse-of-time basis without country-specific updates, and based on an assessment of resources at that time. - Operational notes: - Burundi, the Democratic Republic of the Congo, Nepal, Tanzania, Togo, and Yemen do not have eligible debt service falling due during the proposed fourth tranche covering through January 10, 2022 (see Table 5). - At time of issuance of this paper, lack of clarity within the international community regarding recognition of the government in Afghanistan means Fund engagement with Afghanistan remains on pause. Approval of a fourth tranche for Afghanistan is not proposed at this stage. Afghanistan’s next payments to the Fund are due on November 23, 2021 and January 10, 2022 for SDR 1.2 million each. ### Issues for discussion and next steps - The possibility that additional members could become CCRT eligible after the Board declaration of a QPHD could raise issues, particularly for fundraising. Staff proposes taking up this issue at the next CCRT review, scheduled for 2022/23. - Staff will assess resources and consider a final tranche through April 13, 2022 in January 2022, potentially on a lapse-of-time basis and without country-specific updates depending on resource availability. *Prepared by the Finance Department, the Legal Department, and the Strategy, Policy, and Review Department; September 23, 2021.* ### 8. The CCRT beneficiary countries have been implementing a set of macroeconomic ### 8. The CCRT beneficiary countries have been implementing a set of macroeconomic policy measures to address the pandemic, supported by financial resources freed up by the debt service relief. ### Macroeconomic response and spending - On average, CCRT beneficiary countries boosted priority spending in 2020 relative to pre-COVID projections by 0.8 percentage points of GDP. - These countries added other COVID-related spending by an additional 1.7 percent of GDP in 2020. - Priority spending is anticipated to be around 1.4 percentage points of GDP higher than pre-COVID projections in 2021. - Other COVID-related spending is expected to be 1.3 percent of GDP in 2021, mainly for prevention and containment (including vaccination programs), and support for households and businesses. - Expected composition of 2021 priority and social spending increases includes expanded spending on education, social protection, and health-related expenditure. ### Staff assessment of policy appropriateness - Staff assesses CCRT-eligible countries are generally pursuing appropriate macroeconomic policies in response to the pandemic, broadly in line with commitments made to the Fund. - Staff assesses that resources freed by earlier tranches of CCRT debt service relief are helping provide emergency health, social and economic support to mitigate the pandemic’s impact. ### Eligibility and qualification under the CCRT Instrument - The COVID-19 pandemic was determined to constitute a Qualifying Public Health Disaster (QPHD) effective April 14, 2020, enabling relief for eligible and qualified members for up to two years from that date. - Eligibility is limited to PRGT-eligible members with annual GNI per capita below the IDA operational cut-off (or twice that cut-off for small states); the cut-off published in July 2021 is US$1,205. - Qualification is determined by the Board’s assessment that (i) a member is facing an exceptional BOP need arising from a global pandemic determined to constitute a QPHD, including the member’s policy response, and (ii) the country’s macroeconomic policy framework to address the BoP need is appropriate. - Debt service relief for pandemics is limited to obligations falling due during a maximum period of two years from the declaration of a QPHD and is provided in tranches to manage resource constraints. ### New countries meeting eligibility and qualification - Based on the latest data, GNIs per capita for Kyrgyz Republic and Lesotho (both PRGT-eligible) have fallen below the IDA operational cut-off (US$1,205), meeting eligibility criteria. - Table 4 entries (as presented): - Kyrgyz Republic1,160177.69,189,508 - Lesotho1,10069.83,835,512 - Total...24713,025,020 - Staff considers the Kyrgyz Republic and Lesotho to meet qualification criteria and recommends inclusion for debt service relief related to the COVID-19 pandemic starting from the date of the Board meeting for the remainder of the two-year period. ### Funding status, pledges, and resource adequacy - Grant pledges received to date amount to SDR 609 million, including a recent second pledge by Japan; this includes SDR 63.6 million in new pledges made since approval of the third tranche. - Specific donor contributions noted in-text include: - Greece: US$11 million (SDR 7.7 million) - Spain: EUR 25 million (SDR 20.7 million) - Japan: US$50 million (SDR 35.2 million) additional to US$100 million (SDR 73.4 million) disbursed in April 2020 - European Union plans to transfer remaining portion (SDR 10.8 million) of its EUR 183 million grant commitment in support of the fourth tranche. - Cash balances in the CCRT amounted to SDR 227.9 million as of September 23, 2021. - In absence of new contributions, delivery of COVID-related debt service relief through April 13, 2022 would reduce the CCRT cash balance to about SDR 69 million (assuming the expected transfer of the remaining portion of the EU grant commitment), implying significant depletion of the SDR 150 million pre-COVID cash buffer available for other qualifying events. - Total pledges remain significantly short of the SDR 1 billion fundraising goal and below the estimated cost of two full years of COVID-related debt relief (estimated at SDR 692 million including newly eligible members). - Staff notes a pre-COVID shortfall estimate of SDR 200-275 million and that substantially more resources will be required to reach the SDR 1 billion target and ensure capacity to address other CCRT-qualifying shocks. ### Proposed operational approach for remaining period - Staff proposes a two-step approach given current limited resources: 1. Immediate approval of a further period of debt service relief through January 10, 2022, including debt service relief to the Kyrgyz Republic and Lesotho, based on resources mobilized so far. 2. Consideration, possibly on a lapse-of-time (LOT) basis in January 2022, for a final tranche of debt relief through April 13, 2022, based on an updated brief on resources and final staff assessment. - Staff considers resources too low to decide at this point on a full six-month fourth CCRT tranche, including debt service relief to the Kyrgyz Republic and Lesotho for the period from the date of the Board meeting up to October 15, 2021, totaling SDR 172.8 million, while maintaining an adequate resource cushion for other potential CCRT-qualifying shocks. - The two-step approach is consistent with the tranching approach approved in April 2020 to reduce the risk of CCRT depletion. ### Issues for discussion (as presented) - Do Directors agree that the Kyrgyz Republic and Lesotho meet the qualification requirements and therefore be included for the remainder of the two-year period? - Given the current financial situation of the CCRT, do Directors agree on the proposed approach to tranche further the remainder of the two-year period, with an immediate approval of a tranche through January 10, 2022, and a second decision to be made in January 2022 for the final portion of the full two-year period? - What are Directors’ views on possible amendments in the context of the expected 2022/2023 review, as regards the evolution of income eligibility and tranching in line with evolving GNI data? *Source: ppea2021063 (IMF).* ### Annex I. Kyrgyz Republic: Staff Appraisal—CCRT Request ### Annex I. Kyrgyz Republic: Staff Appraisal—CCRT Request ### Economic impact - Output contracted by 8.6 percent in 2020 and by 1.7 percent in H1 2021 compared to pre-crisis projections of about 4 percent growth annually. - Decline in activity pronounced in exports, gold mining, industry, tourism, transport, and construction. - Headline inflation rose to 9.7 percent in 2020 and further to 14 percent in 2021 from 3.1 percent in 2019, primarily due to imported food price inflation and the pass-through from the exchange rate depreciation of 19 percent. - Fiscal deficit widened to 3.3 percent of GDP in 2020 from close to a balance, driven by a sharp decline in tax revenue and higher expenditure on health and other anti-crisis measures. - Public debt rose by 16.5 percent of GDP to 68 percent in 2020 reflecting lower output, a higher fiscal deficit, and currency depreciation. - A surge in imports following the reopening of borders in 2021 is expected to weaken the current account to a deficit of 7.7 percent of GDP, resulting in balance of payments financing needs even after counting the SDR allocation of about US$242 million. - Staff assesses an exceptional balance of payments need of US$150 million stemming from the impact of COVID-19. ### Macroeconomic policies and response - Authorities’ 2020 measures included emergency health spending, stepping up the food security program for the vulnerable, temporary tax deferrals, and subsidized loans for small and medium enterprises. - The total fiscal cost of the COVID response amounted to 7.2 percent of GDP. - The central bank provided liquidity to banks and temporarily eased enforcement of prudential norms in 2020. - Since 2021 the central bank raised policy rates three times by cumulative 250 basis points in response to rising inflation. - The authorities plan to increase health spending by 5.5 billion soms (0.8 percent of GDP) in 2021 to procure medical equipment and vaccines, strengthen medical infrastructure, train medical personnel, and increase compensation for infected and deceased medical workers and for working in red zones. - World Bank approved US$20 million and an expected US$25 million from the Asian Development Bank to finance vaccines. - Authorities plan to suspend or sharply curtail non-essential outlays (including non-health capital expenditure) to create budgetary space; still expect an increase in the primary budget deficit by 0.5 percent of GDP. - The authorities raised policy rates by 250 basis points in 2021 and are prepared to tighten monetary policy further if second-round inflation pressures emerge; they will provide selective liquidity support to banks and maintain/enhance exchange rate flexibility. ### Governance safeguards and transparency - A special audit report on all emergency spending is expected to be completed in September/October and will be presented to Parliament and subsequently published. - The revised procurement law requires disclosure of beneficial owners in all public contracts starting from enactment in January 2021. - With USAID support, authorities are developing an online database accessible to the public containing beneficial ownership information of all public procurement contracts. - Implementation status under RCF/RFI (selected items): - Increase procurement transparency by disclosing beneficial owners in all public contracts: Revised procurement law enacted in January 2021. Challenge: Retroactive application to 2020 emergency spending might not be possible. - Ex-post audit of emergency spending in the health sector: In progress. Special audit report by the Chamber of Accounts expected to be finalized in September/October 2021. - Publication of all direct procurement documents: Partially implemented. Extended summaries published on the public procurement portal, including SOEs with more than 50 percent government ownership. - Publication of bidding documents for competitive procurement: Partially implemented. All publicly available information on participating vendors/suppliers is published; technical issues on information exchange remain before beneficial owners’ information is disclosed in the vendors’ database, to be introduced in January 2022. ### IMF program status and staff appraisal - The Kyrgyz Republic currently has no Fund-supported program. - The country received IMF COVID-related emergency financial assistance in two equal disbursements of about US$121 million (50 percent of quota) each under the Rapid Financing Instrument (RFI) and the Rapid Credit Facility (RCF). - Staff supports the Kyrgyz Republic’s request for debt relief under the CCRT. - The Kyrgyz Republic meets the income threshold with GNI per capita of US$1,160 in 2020 which is below the threshold of US$1,205. - Staff considers the country to be pursuing appropriate macroeconomic policies to address the crisis. ### Debt service and CCRT request - The Kyrgyz Republic requests grant assistance under the Catastrophe Containment (CC) window of the CCRT to cover IMF debt service falling due in the period from October 8, 2021 through April 13, 2022, or as much as is available from resources. - Upcoming IMF debt service in that period: SDR 9.19 million (US$12.1 million). - Table of scheduled IMF debt service (selected aggregated figures from staff projections, as of July 21, 2021): - Total debt service due to the IMF, October 8, 2021–April 13, 2022: 9.19 million of SDR (5.17 percent of quota cumulative). - Individual entries include repeated PRGT Repayment (ECF) items of 0.95 million of SDR and GRA Charges of 0.31 million of SDR across specified due dates in 2021–2022. ### Key macroeconomic indicators and projections (selected, as presented) - Population (in millions, 2021): 6.6 - Per capita GNI (2020, U.S. dollars): 1,160 - Poverty rate (in percent, national definition, 2019): 20.1 - Real GDP growth (percent): 2018: 3.5; 2019: 4.6; 2020: -8.6; 2021 Est.: 2.1; 2022 Proj.: 5.6; 2023 Proj.: 4.6 - Nongold real GDP growth (percent): 2018: 3.5; 2019: 4.1; 2020: -9.0; 2021 Est.: 3.7; 2022 Proj.: 5.0 - GDP per capita (in U.S. dollars): 2018: 1,322; 2019: 1,389; 2020: 1,189; 2021 Est.: 1,225; 2022 Proj.: 1,314 - Consumer prices (12-month percent change, eop): 2019: 0.5; 2020: 3.1; 2021: 9.7; 2022 Proj.: 12.6; 2023 Proj.: 5.6 - Current account balance (in percent of GDP): 2018: -12.1; 2019: -12.1; 2020: 4.5; 2021 Est.: -7.7; 2022 Proj.: -7.6; 2023 Proj.: -6.9 - Nominal GDP (in millions of U.S. dollars): 2018: 8,271; 2019: 8,872; 2020: 7,747; 2021 Est.: 8,150; 2022 Proj.: 8,928 - Gross international reserves (in millions of U.S. dollars): 2018: 1,919; 2019: 2,176; 2020: 2,628; 2021 Est.: 2,475; 2022 Proj.: 2,267 - External public debt (in percent of GDP): 2018: 47.0; 2019: 43.3; 2020: 58.3; 2021 Est.: 56.0; 2022 Proj.: 51.4 *Source: IMF staff estimates and projections, Annex I. Kyrgyz Republic: Staff Appraisal—CCRT Request.* ### 6.25 to 3.5 percent; an initial drop in the international reserve target by 20 percent in May 2020; the ### ppea2021063 - 6.25 to 3.5 percent; an initial drop in the international reserve target by 20 percent in May 2020; the ### COVID-19 fiscal and monetary response - Nonpharmaceutical containment measures: social distancing, travel restrictions, border closures, school closures, suspension of business activity; first lockdown lifted on May 19, 2020; second lockdown from January 15 to February 3, 2021; national COVID alert level raised to third highest level on July 22, 2021. - Fiscal mitigation and social support: - Around LSL1.2 billion (3.8 percent of GDP) spent on economic and social mitigation measures. - Measures included expansion of child grants and public assistance, provision of food parcels and stamps, salary subsidies for textile industry workers, and sector-specific grants to SMEs. - Monetary and financial measures: - Monetary policy rate reduced from 6.25 to 3.5 percent (275bp) between March and July 2020 and maintained at 3.5 percent since then. - Suspension of bank loan repayments for 6 months and insurance premium payments for 3 months. - Directive for banks not to pay dividends to shore up capital and liquidity. - Delayed implementation of Basel II.5 to maintain bank lending capacity. - Central Bank encouraged banks to reduce fees on digital platforms. - Central Bank increased the target floor for net international reserves by US$150 million to US$780 million on July 27, 2021. - Cash management: - Switched to the use of cash warrants to contain public spending and preserve room for COVID-related expenditures. - Tax payments deferred. ### Governance safeguards, audits, and transparency - Progress on governance commitments from the 2020 RCF/RFI: mixed implementation. - Publication and audits: - Only partial quarterly budget implementation reports on COVID-related spending were published in 2020. - A partial internal audit was completed; Ministry of Finance close to completing an internal audit of the first tranche of COVID-related spending; an internal audit of the remainder expected end-September 2021. - Auditor General reported that the full audit for FY20/21 can only be finalized by March 2022; a transactions audit is expected to be published by end-September 2021. - COVID-19 related expenditure expected to form part of consolidated financial statements, which are submitted for audit five months after the financial year (by end-August); statutory period for audit is 90 days. - Procurement and legislation: - Government working on online publication of COVID-19 spending-related procurement contracts. - Public Procurement Bill: complete/submitted process underway (read for the first time by Parliament on April 6, 2020). - Anti-Corruption Bill and Public Financial Management and Accountability Bill: still being (re)drafted/reviewed and awaiting submission to Parliament/Cabinet. ### IMF engagement, program status, and staff appraisal - Lesotho requested a medium-term Fund-supported program; discussions ongoing on macroeconomic policies and structural reforms to restore fiscal sustainability and inclusive, resilient growth. - Lesotho previously received IMF support: - RCF/RFI in July 2020 in an amount of SDR34.9 million (50 percent of quota). - Staff assessment for CCRT: - Lesotho meets the income threshold with GNI per capita of US$1,100, below the threshold of US$1,205. - Staff assesses Lesotho faces exceptional BoP needs from COVID-19 impact and is pursuing appropriate macroeconomic policies. - Lesotho requested CCRT grant assistance to cover IMF debt service falling due from October 8, 2021 to April 13, 2022. ### Balance of payments, reserves, and external position (selected figures) - Current account (percent of GDP): - 2018/19: -1.4 - 2019/20: -5.8 - 2020/21: -14.6 - 2021/22: -14.8 - 2022/23: -11.2 - 2023/24: -8.9 - 2024/25: -9.1 - 2025/26: -2.4 - 2026/27: -0.2 - Gross international reserves (US$ millions), actual/projections: - 2018/19: 735 - 2019/20: 642 - 2020/21: 809 - 2021/22: 885 - 2022/23: 951 - 2023/24: 1,002 - 2024/25: 1,038 - 2025/26: 1,074 - 2026/27: 1,103 - Net international reserves (NIR) at program exchange rate (US$ million): - 2018/19: 745 - 2019/20: 748 - 2020/21: 841 - 2021/22: 931 - 2022/23: 1,011 - 2023/24: 1,109 - 2024/25: 1,204 - 2025/26: 1,209 (table shows 1,204 then 1,209—values as presented) - Trade balance (US$ millions), selected: - 2018/19: -701 - 2019/20: -720 - 2020/21: -845 - 2021/22: -814 - 2022/23: -876 - 2023/24: -691 - 2024/25: -706 - 2025/26: -732 - 2026/27: -828 - Current account (US$ millions), selected: - 2018/19: -33 - 2019/20: -129 - 2020/21: -294 - 2021/22: -353 - 2022/23: -271 - 2023/24: -226 - 2024/25: -243 - 2025/26: -67 - 2026/27: -6 ### Fiscal accounts and public debt (selected figures) - GNI per capita (U.S. dollars; 2020 est.): US$1,100 - Population (1,000; 2020 est.): 2,142 - Poverty rate at national poverty line (percent, 2017 est.): 50 - GDP at market prices (billions Maloti), selected: - 2018/19: 31.9 - 2019/20: 33.0 - 2020/21: 32.9 - 2021/22: 35.8 - 2022/23: 38.3 - 2023/24: 41.1 - 2024/25: 44.3 - 2025/26: 46.8 - 2026/27: 50.6 - GDP at market prices (billions US$), selected: - 2018/19: 2.3 - 2019/20: 2.2 - 2020/21: 2.0 - 2021/22: 2.4 - 2022/23: 2.4 - 2023/24: 2.5 - 2024/25: 2.7 - 2025/26: 2.7 - 2026/27: 2.9 - Central government fiscal operations (percent of GDP), selected: - Revenue and grants: 2018/19: 50.5; 2019/20: 49.8; 2020/21: 56.9; 2021/22: 45.6; 2022/23: 46.8; 2023/24: 43.9; 2024/25: 44.2; 2025/26: 44.6; 2026/27: 44.2 - Recurrent expenditure: 2018/19: 41.6; 2019/20: 41.3; 2020/21: 44.6; 2021/22: 39.8; 2022/23: 37.5; 2023/24: 36.3; 2024/25: 35.2; 2025/26: 34.6; 2026/27: 33.7 - Capital expenditure: 2018/19: 13.3; 2019/20: 16.1; 2020/21: 11.9; 2021/22: 12.5; 2022/23: 12.6; 2023/24: 12.4; 2024/25: 12.3; 2025/26: 11.7; 2026/27: 11.6 - Overall balance: 2018/19: -4.4; 2019/20: -7.6; 2020/21: 0.4; 2021/22: -6.7; 2022/23: -3.3; 2023/24: -4.9; 2024/25: -3.3; 2025/26: -1.7; 2026/27: -1.1 - Public debt (percent of GDP), selected: - Total public debt: 2018/19: 51.4; 2019/20: 59.2; 2020/21: 46.6; 2021/22: 52.4; 2022/23: 55.8; 2023/24: 60.2; 2024/25: 62.2; 2025/26: 63.3; 2026/27: 62.3 - External public debt: 2018/19: 40.6; 2019/20: 48.3; 2020/21: 37.8; 2021/22: 38.6; 2022/23: 39.9; 2023/24: 43.0; 2024/25: 44.8; 2025/26: 46.1; 2026/27: 46.7 - Domestic public debt: 2018/19: 10.8; 2019/20: 10.9; 2020/21: 8.7; 2021/22: 13.8; 2022/23: 16.0; 2023/24: 17.2; 2024/25: 17.4; 2025/26: 17.3; 2026/27: 15.6 ### Debt service to the IMF and CCRT eligibility - Upcoming IMF debt service falling due in the CCRT relief period (October 8, 2021 to April 13, 2022): SDR 3.8 million. - Debt relief entries (as of table shown): - Total eligible for CCRT debt relief: 3,835,512 (SDR) - Memo: Quota (in SDR): 69,800,000 - Staff supports Lesotho’s request for debt relief under the CCRT given income and exceptional BoP needs. ### Letter of Intent highlights (Ministry of Finance, September 17, 2021) - Public health and pandemic statistics (as of dates specified in letter): - Confirmed cases as of September 9, 2021: 15,145 - Recorded deaths as of September 9, 2021: 532 - Vaccine doses administered as of August 28, 2021: 216,370 (just over 10 percent of the population) - Estimated macro impact and BoP need: - Anticipated real output to grow by 2.8 percentage points in FY21/22 compared with pre-crisis projections of 3.7 percent growth (text: "real output will grow by 2.8 percentage points in FY21/22, compared with pre-crisis projections of 3.7 percent growth"). - Emerging balance of payments need estimated at US$143 million (6 percent of GDP and 17.6 percent of projected end-2021 official external reserves). - Use of SDR allocation: intend to use SDR allocation to boost international reserves and provide short-term budget support as needed. - Request: grant assistance under the Catastrophe Containment (CC) window of the CCRT to cover IMF debt service falling due from October 8, 2021 to April 13, 2022. - Commitment reaffirmed to governance and transparency commitments under the July 2020 RCF/RFI and work toward a new medium-term Fund-supported program to address protracted BoP problems. *International Monetary Fund — Catastrophe Containment and Relief Trust (Lesotho section, excerpt).* ### 3.3 percent of GDP) will amply ### Benin: COVID-19 Related Fiscal Measures and Macroeconomic Update ### Fiscal outlook and public debt - Total public debt is projected to increase to around 52 percent of GDP at end-2021 (from 46.1 percent of GDP at end-2020). - The current account deficit is projected to widen in the medium term owing to an increase in imports and a decrease in budgetary grants. - Total revenue (percent of GDP): 12.9 (2019 actual); 13.5 (Pre-COVID proj); 12.7 (2020 actual); 13.5 (Pre-COVID proj 2021); 12.6 (Current proj 2021); 13.1 (2022); 13.7 (2023); 13.9 (2024); 14.1 (2025); 14.3 (2026). - Grants (percent of GDP): 1.2 (2019); 1.0 (Pre-COVID proj); 1.7 (2020); 0.8 (Pre-COVID proj 2021); 1.1 (Current proj 2021); 1.0 (2022); 1.0 (2023); 1.0 (2024); 0.8 (2025); 0.8 (2026). - Priority spending (percent of GDP): 4.3 (2019); 4.9 (Pre-COVID proj); 5.3 (2020); 0.5 change (2020 vs Pre-COVID); 4.9 (Pre-COVID proj 2021); 5.4 (Current proj 2021); 0.6 change (2021 vs Pre-COVID); 5.7 (2022). - Public spending on education, health and social protection is expected to increase to 5.6 percent of GDP in 2021 (or US$1 billion) compared to 5.5 percent in 2020 (US$0.8 billion) and 4.3 percent in 2019 (US$0.6 billion). - Total public spending and net lending (percent of GDP): 14.6 (2019); 16.3 (Pre-COVID proj); 19.1 (2020); 2.8 change (2020 vs Pre-COVID); 16.2 (Pre-COVID proj 2021); 18.2 (Current proj 2021); 2.0 change (2021 vs Pre-COVID); 18.0 (2022). - Fiscal overall balance (commitment basis, incl. grants) (percent of GDP): -0.5 (2019); -1.8 (Pre-COVID proj); -4.7 (2020); -2.9 change (2020 vs Pre-COVID); -1.7 (Pre-COVID proj 2021); -4.1 (Current proj 2021); -2.4 change (2021 vs Pre-COVID); -3.6 (2022). ### Public health and macroeconomic policies - A third wave of the pandemic hit Benin in late July 2021, with the number of new daily confirmed cases reaching a weekly record of 2,309 cases by end-August 2021. - Vaccine rollout: less than 1 percent of total population received at least one vaccine dose as of August 31, 2021, indicating deployment challenges and vaccination hesitancy. - Benin received 610,000 vaccine doses as of end-July 2021, including from the COVAX initiative. - Recent policy measures to contain the wave and increase vaccination uptake: - Suspension of large events. - Increased mobile vaccination teams. - Diversified vaccine offerings. - Some public entities have made vaccination mandatory for their employees. - Benin has benefited from the 1st, 2nd, and 3rd tranche of the CCRT covering the period between April 14, 2020 and October 13, 2021 for an amount of SDR 19.11 million (CFAF 15 billion), representing about 4.6 percent of its COVID-19 response plan. ### Governance safeguards and transparency - Authorities reiterated commitments to ensure transparency and accountability in the management of COVID-19-related expenditures in their latest Letter of Intent. - Since December 2020, monthly publication online of procurement documents and key information related to contracts above CFAF 10 million implemented under the COVID-19 response plan; publication includes names of beneficial owners of awarded companies and ex-post validation of delivery. - A new legal framework for the transformation of the Audit Chamber into a supreme audit institution has been enacted to comply with WAEMU directives; this has delayed the publication of the independent audit of the use and effectiveness of the committed Covid-related funds. - Following recommendations of an IMF fiscal transparency mission in July 2021, the authorities committed to further improving the public financial management system and enhancing fiscal transparency. - Note: The publication of the independent audit was initially planned for end-June 2021; a new publication date is yet to be determined by the authorities. ### IMF support and financing relief - Benin’s three-year arrangement under the Extended Credit Facility (ECF) concluded on July 31, 2020. - Completion of the sixth and final review under the arrangement enabled disbursement of SDR 91.931 million (about US$125 million), of which SDR 73.013 million (US$103.3 million) were due to an augmentation of access by 61.4 percent of Benin’s quota. - IMF Board approved emergency financing under the Rapid Credit Facility (RCF) and purchase under the Rapid Financing Instrument (RFI) in December 2020, equivalent to 100 percent of quota (SDR 123.8 million or US$176 million). - Authorities expressed interest in a new Fund-supported program; focus and timeline to be discussed at the forthcoming Article IV mission. - Upcoming debt service: Benin has debt service of SDR 2.122 million falling due during October 16, 2021 to January 10, 2022, the maximum period covered by the 4th tranche of debt service relief under the CCRT. Debt service for January 11, 2022 to April 13, 2022 will be covered subsequently subject to resource availability. - Staff assessment: IMF staff assess that Benin is pursuing appropriate macroeconomic policies to address the global pandemic and that resources freed by Fund debt service relief, augmentation of access under the ECF, and emergency financing under the RCF/RFI are being used to help provide emergency health, social and economic support and to speed up economic recovery. ### Key economic indicators (selected, 2019–26) - Real GDP (annual percent change): 6.9 (2019 actual); 6.7 (Pre-COVID 2020 est.); 3.8 (2020 est.); 6.7 (Pre-COVID 2021 proj.); 5.5 (Current proj. 2021); 6.5 (2022); 6.5 (2023); 6.5 (2024); 6.5 (2025); 6.5 (2026). - Nominal GDP (percent change): 6.5 (2019); 8.0 (Pre-COVID 2020 est.); 6.8 (2020 est.); 9.2 (Pre-COVID 2021 proj.); 9.8 (Current proj. 2021); 8.5 (2022); 8.1 (2023); 8.4 (2024); 8.5 (2025); 8.4 (2026). - Consumer price index (average): -0.9 (2019); 1.0 (Pre-COVID 2020); 3.0 (2020); 2.0 (Pre-COVID 2021); 3.0 (Current proj. 2021); 2.0 (2022–2026). - WAEMU gross official reserves (in months of imports): 5.9 (2019); 4.3 (2020); 5.5 (2020 est.); 4.4 (Pre-COVID 2021); 5.0 (Current proj. 2021); 4.6 (2022); 4.5 (2023); 4.3 (2024); 3.9 (2025). - Total public debt (end period, percent of GDP): 41.2 (2019); 40.1 (Pre-COVID 2020); 46.1 (2020); 37.4 (Pre-COVID 2021); 52.3 (Current proj. 2021); 48.9 (2022); 46.3 (2023); 44.8 (2024); 43.4 (2025); 41.7 (2026). - External public debt (percent of GDP): 24.0 (2019); 23.3 (Pre-COVID 2020); 26.0 (2020); 22.9 (Pre-COVID 2021); 34.9 (Current proj. 2021); 34.3 (2022); 33.8 (2023); 31.6 (2024); 29.6 (2025); 27.6 (2026). - Domestic public debt (percent of GDP): 17.3 (2019); 16.7 (Pre-COVID 2020); 20.2 (2020); 14.6 (Pre-COVID 2021); 17.4 (Current proj. 2021); 14.6 (2022); 12.5 (2023); 13.2 (2024); 13.8 (2025); 14.1 (2026). - Current account balance, including official transfers (percent of GDP): -4.0 (2019); -4.7 (Pre-COVID 2020); -3.9 (2020); -4.5 (Pre-COVID 2021); -4.0 (Current proj. 2021); -4.3 (2022); -4.4 (2023); -4.5 (2024); -4.6 (2025); -4.8 (2026). - Exports of goods and services (percent of GDP): 24.9 (2019); 14.7 (Pre-COVID 2020); 16.9 (2020); 15.5 (Pre-COVID 2021); 20.5 (Current proj. 2021); 20.6 (2022); 20.9 (2023); 21.0 (2024); 21.1 (2025); 21.3 (2026). - Imports of goods and services (percent of GDP): -29.9 (2019); -20.0 (Pre-COVID 2020); -21.7 (2020); -19.9 (Pre-COVID 2021); -25.2 (Current proj. 2021); -25.3 (2022); -25.7 (2023); -25.9 (2024); -26.1 (2025); -26.4 (2026). *Source: IMF staff report excerpts and country data presented in the supplied content.* ### Annex VII. Burundi: Update for CCRT Debt Relief ### Annex VII. Burundi: Update for CCRT Debt Relief ### Recent economic developments - COVID-19 cases: - New cases increased from an average of 20 cases per week in 2020 to an average of 340 cases per week during January-August 2021, with more than a thousand cases per week from mid-July to end-August. - Growth and sectoral impact: - Staff estimates that real GDP contracted by about 1 percent in 2020. - Lockdown measures in trading partner countries and the airport closure during part of 2020 disrupted supply chains and slowed tertiary-sector activities (tourism-related activities and commerce), compensated somewhat by stable agricultural and industrial production. - Pandemic impacted most households via loss of income from border closure, business bankruptcy, or furloughs. - Assuming a partial recovery in services and increase in exports during H2 of 2021, growth in 2021 could reach about 1.6 percent. - External sector and reserves: - Current account deficit is expected to worsen in 2021 despite projected exports recovery, mainly because of a large increase in COVID-related imports and imports of intermediate goods. - Notwithstanding the recent SDR allocation, foreign exchange reserves would remain precarious at 2.5 months of imports without additional external support. - Fiscal: - Fiscal deficit reached 6.9 percent of GDP in 2020/21 (July 2020-June 2021, i.e., FY2021), above the budget target of 2.5 percent of GDP, mainly because of COVID-related spending and the transition to the new administration. - This deficit was mainly financed with higher-than-expected domestic debt issuance. - COVID-related spending is expected to push the fiscal deficit in 2021/22 well above the budget target of 2.3 percent of GDP. - Financial sector: - The banking sector appears generally in good health, though frequent loan restructurings, including in response to the pandemic, could mask potential vulnerabilities. ### Public health and macroeconomic policy response - Health measures and pandemic response plan: - Preventative measures emphasized (frequent handwashing); limited use of social distancing. - Hand sanitizers and water for handwashing installed in public places; prices of soap and water subsidized by up to 50 percent. - On January 11, 2021, authorities launched a large-scale testing campaign for 30 days and closed land and sea borders to passengers. - The international airport reopened on November 8, 2020. - Testing is mandatory for all international travelers, but quarantine requirements have been lifted for them. - Authorities’ pandemic response plan estimated at US$150 million or 4.7 percent of GDP, focusing on strengthening the health care system, social safety net, and parts of the road network; includes tax forgiveness to some private companies. - Authorities are still collecting data on the plan’s implementation, which accelerated from the second half of 2020 (FY2021). - COVID-related spending estimates: - Staff estimates COVID-related spending amounted to about 0.8 percent of GDP in 2020/21 and could reach 3.3 percent of GDP in 2021/22 if expected financing (including from the IMF) materializes. - Financing and donor support: - Implementation impeded by limited financing beyond a World Bank grant (US$5 million) and the first three tranches of CCRT debt relief. - Burundi was granted debt service relief under the DSSI by EXIM Bank China and the Kuwait fund for about $1 million in 2020 and 2021. - Authorities are using domestic resources to boost priority expenditures above pre-COVID projections. ### Burundi: COVID Related Fiscal Measures (Percent of GDP, unless otherwise indicated) - Note: "Pre-Covid proj." is the most recent projection before March 1, 2020. - Table (columns: Pre-Covid proj.; Actual FY2020; Pre-Covid proj. 1/; Current proj. FY2021; Change FY2020; Change FY2021) - Priority expenditures: 11.0 | 10.8 | -0.2 | 10.1 | 12.3 | 2.3 - of which Health: 2.9 | 1.9 | -0.9 | 1.7 | 3.7 | 2.0 - Education: 5.2 | 5.9 | 0.6 | 5.2 | 5.3 | 0.1 - Social: 2.9 | 3.0 | 0.1 | 3.2 | 3.3 | 0.1 - Other Covid-related spending: 0.0 | 5.2 | 5.2 | 0.0 | 7.3 | 7.3 - Covid prevention, containment & mgmt: 0.0 | 0.2 | 0.2 | 0.0 | 0.8 | 0.8 - Transfers to HHs: 0.0 | 0.9 | 0.9 | 0.0 | 0.9 | 0.9 - Transfers to businesses, SOEs, govt entities: 0.0 | 4.2 | 4.2 | 0.0 | 5.6 | 5.6 - Memorandum: - Priority expenditures (percent of public spending): 38.7 | 38.0 | 36.2 | 40.8 - Other Covid-related spending (percent of public spending): 0.0 | 18.5 | 0.0 | 24.0 - Tax relief to HHs/businesses/other revenue measures: 0.0 | n.a. | 0.0 | 35.9 ### Governance safeguards - Oversight and reporting: - A technical committee overseen by the Minister of Interior was created to manage the COVID-19 response. - A fund has been set up to centralize donor financing in a single account at the central bank. - Authorities are preparing reports on COVID-related spending to be audited by the Court of Auditors and published on the government’s website within nine months of the end of FY 2021 (i.e., before end-March 2022). - In July 2021, authorities committed to preparing timely bi-annual reports on COVID spending, audited by the Court of Auditors and published within three months of the end of each semester. - Authorities committed to collecting information on ultimate beneficiary ownership of companies awarded COVID-related contracts moving forward. ### IMF support status - CCRT and RCF engagement: - Fund financial support in March and October 2020 and April 2021 entailed three tranches of debt relief under the CCRT (totaling SDR 14.46 million or 9.4 percent of quota). - In August 2021, Burundi received an SDR allocation amounting to SDR 147.6 million (US$ 211 million or 6.6 percent of GDP). - No current Fund-supported program; international engagement limited. - During a recent virtual mission (June 23-July 26, 2021), authorities and staff agreed on policies that could be supported by a disbursement of SDR 53.9 million (about US$ 78 million) under the Rapid Credit Facility (RCF). This staff level agreement is subject to IMF management approval and Executive Board consideration. - Last Article IV consultation completed by the IMF Executive Board on August 25, 2014; sixth and last review under Burundi’s ECF arrangement completed on March 23, 2015. - In late October 2020, authorities requested the resumption of Article IV consultations. ### Upcoming debt service - CCRT coverage interval: - Burundi does not have debt service falling due to the Fund during the interval from October 16, 2021 to January 10, 2022, the maximum period covered by the 4th tranche of debt service relief under the CCRT. - Debt service falling due during the remaining period from January 11, 2022 to April 13, 2022 will be covered subsequently subject to resource availability. ### Staff assessment - Policy assessment and use of relief: - Staff assesses that Burundi continues to pursue broadly appropriate macroeconomic policies to address the impact of the pandemic. - Authorities committed to use resources freed by the first three tranches of Fund debt service relief under the CCRT to continue providing emergency health, social, and economic support to mitigate the socio-economic impact of the pandemic. *Source: IMF staff report — Annex VII. Burundi: Update for CCRT Debt Relief.* ### Annex IX. Chad: Update for CCRT Debt Relief ### Annex IX. Chad: Update for CCRT Debt Relief ### Recent economic developments - Byproducts of major shocks in 2020—the COVID-19 pandemic, the drop in oil prices, heightened insecurity, and floods—continue to severely strain Chad’s vulnerable economy. - Real activity and inflation projections: - Non-oil GDP is expected to remain flat in 2021. - Oil GDP is expected to grow by 4.4 percent in 2021. - Inflation is expected to weaken to 2.6 percent in 2021. - Liquidity and fiscal space: - Chad is facing a liquidity squeeze, hampering its ability to adequately conduct fiscal policy towards anti-COVID measures and social spending. - The recent SDR allocation (of about US$191m) will help increase regional reserve buffers while providing the needed fiscal space for vaccine rollout, priority spending, and measures to support economic recovery. - Political and social context: - The first half of 2021 witnessed significant political events with the death of President Deby, followed by the formation of a transitional government. - Chad scores 0.398 on the UN Human Development Index and is ranked 187 among 189 countries covered by the index. ### Public health and macroeconomic policy response, including use of resources freed by debt relief - Priority spending and fiscal composition: - In the first half of 2021, priority spending were estimated at 25.5 percent of total spending, an increase compared to FY2020. - Priority spending is expected to remain below the pre-Covid level for the whole year, mainly because some Covid-related expenditures were phased out during 2021, and expenditures (other than priority spending) including capital spending are expected to increase following the approval of the IMF program by the board. - Constraints and tax measures: - Other measures in FY21 to fight Covid-19 were hindered by the liquidity squeeze in government finances. - Tax advantages introduced in 2021 include: - exemptions of employer’s charges for the recruitment of young graduates, - exemption from VAT on many items, particularly on equipment and other agricultural related ingredients, - reduction of charges for enterprises that work in the hotels’ business. - Use and transparency of COVID-19 resources: - Resources dedicated to combatting COVID-19 will be used in full transparency and, in addition to being reflected in the budget law, will be committed in line with CEMAC PFM directives. - All COVID-19-related expenditures, including emergency spending for urgently needed supplies, will be subject to an ex-post compliance audit by a reputable international auditing firm, to be completed with the support of the Inspectorate of Public Finances within six months of the end of the fiscal year. - Auditing reports, including analysis of compliance with procedures with regards to regulated agreements, will be published within a month of completion on the Ministry of Finance and Budget’s website. This was expected to be published in July 2021 but there are delays following the death of the President in April and the formation of a transition government. - The authorities will continue publishing on-line the full text of all COVID-19-related procurement contracts. The procurement system currently doesn’t identify beneficial owners of awarded legal persons; authorities could benefit from strengthening transparency in public procurement, particularly to enhance the framework for identifying the beneficial owners, with the help of IMF technical assistance. - Authorities are expected to publish on-line the ex-post-delivery reports for goods and services, including the lists of suppliers and contractors, for all such contracts starting October 2021. ### Governance Safeguards - Chad faces governance and corruption vulnerabilities. - Steps taken: - Government commitments to ensure transparency in the use of COVID-19 resources consistent with commitments made under the second RCF disbursement. - Ex-post compliance audits and online publication of COVID-19-related procurement contracts, with an anticipated broader publication of delivery reports starting October 2021. - Areas for improvement: - Procurement system does not currently identify beneficial owners; IMF technical assistance suggested to strengthen transparency and beneficial ownership identification. ### IMF engagement - On January 27, IMF staff reached a staff-level agreement with the Chadian Authorities on a new medium-term program that could be supported by IMF resources of about $573 million under the Extended Credit Facility (ECF). - Despite fiscal adjustment and structural reforms in the new program, Chad’s debt is assessed to be unsustainable, and the authorities have requested a debt workout under the Common Framework. - Financing assurances: - Chad has already received financing assurances in mid-June from official bilateral creditors, but it has yet to receive similar assurances from its main private creditor. ### Upcoming debt service - Chad has debt service of SDR 4.062 million falling due during the interval from October 16, 2021 to January 10, 2022, the maximum period covered by the 4th tranche of debt service relief under the CCRT. - There is no debt service falling due during the remaining period from January 11, 2022 to April 13, 2022. ### Staff assessment - Staff assesses that Chad is pursuing appropriate macroeconomic policies to address the global pandemic and urged the authorities to continue undertaking steps to ensure transparency in use of Covid-19 resources. - Staff also assesses that the resources freed by the first, second, and third tranches of Fund debt service relief under the CCRT and other support from the Fund are being used to help provide emergency health, social and economic support to mitigate the impact of the pandemic on lives and livelihoods. ### Key statistics and projections (selected) - Growth and inflation: - GDP at constant prices: 2019: 3.0; 2020: 3.9; 2021 (Est.): -0.8; 2021 (Proj.): 5.8; 2022: 0.9; 2023: 2.4; 2024: 2.5; 2024 (oil GDP growth): 4.4 (note: table includes detailed year-by-year series). - Consumer price index (annual average): 2019: -1.0; 2020: 3.0; 2021: 4.5; 2021 (current proj.): 3.0; 2021 (expected): 2.6; subsequent years: 2.8, 2.8, 2.9 (table format preserved in source). - Oil and external sector: - Brent (US$/barrel): 2020: 64.0; 2021: 60.5; 2022: 42.3; 2023: 58.0; 2024: 61.7; 2025: 58.2; 2026: 56.1; 2027: 55.0 (table series). - Oil production for exportation (millions of barrels): 2019: 47.0; 2020: 51.1; 2021: 48.3; 2022: 58.9; 2023: 50.7; 2024: 50.9; 2025: 50.6; 2026: 54.4. - Government finance (percent of GDP): - Revenue and grants: 2019: 17.3; 2020: 22.5; 2021: 24.2; 2022: 22.5; 2023: 19.6; 2024: 21.6; 2025: 20.8; 2026: 20.7. - Of which: oil revenue: 2019: 6.4; 2020: 9.7; 2021: 10.6; 2022: 9.7; 2023: 7.5; 2024: 9.1; 2025: 7.5; 2026: 6.9. - Expenditure: 2019: 18.0; 2020: 19.5; 2021: 22.3; 2022: 20.0; 2023: 21.6; 2024: 20.7; 2025: 20.6; 2026: 20.2. - Non-oil primary balance (commitment basis, excl. grants): 2019: -4.8; 2020: -4.9; 2021: -8.1; 2022: -5.0; 2023: -6.9; 2024: -5.7; 2025: -5.0; 2026: -3.9. - Overall fiscal balance (incl. grants, commitments basis): 2019: -0.8; 2020: 3.0; 2021: 1.9; 2022: 2.5; 2023: -2.0; 2024: 0.9; 2025: 0.2; 2026: 0.5. - Debt indicators: - External debt (percent of GDP): 2019: 24.6; 2020: 23.2; 2021: 25.3; 2022: 20.5; 2023: 25.0; 2024: 25.0; 2025: 25.7; 2026: 25.2. - Total debt (in percent of GDP): 2019: 52.3; 2020: 39.7; 2021: 47.9; 2022: 35.1; 2023: 44.0; 2024: 44.3; 2025: 42.9; 2026: 41.7. - Memorandum items: - Nominal GDP (billions of CFA francs): 2019: 6,406; 2020: 6,880; 2021: 6,228; 2022: 7,502; 2023: 6,778; 2024: 7,033; 2025: 7,342; 2026: 7,820. - Human Development Index: 0.4 (as shown in table). *Source: Chad authorities; and IMF staff estimates and projections.* ### Annex XI. Democratic Republic of the Congo: Update for CCRT ### Annex XI. Democratic Republic of the Congo: Update for CCRT ### Recent economic developments - COVID-19 impact and containment - Between May and August 2021, 45% of the country’s 54,863 cumulative cases at the end of August were recorded during that period. - Only 0.1% of the population have received are even partially vaccinated. - No major mine was shut down given limited spread to mining regions. - Growth and sectoral outcomes - Real GDP is estimated to have grown by 1.7 percent in 2020 and is expected to expand by 4.9 percent in 2021. - Projected pre-virus growth rates were 3.2 and 3.5 percent in 2020 and 2021, respectively. - Non-extractive GDP is projected to have contracted by 1.3 percent in 2020 (impact of containment measures on services). - Continuous increase in copper prices and recovery of world demand led to higher mineral production than projected at the beginning of the pandemic. - External sector and balance of payments - In 2020, nominal exports grew by 4.6 percent (vs. pre-COVID projection of a 5.4 percent decline). - Nominal imports shrank by 8.3 percent (vs. pre-COVID projection of 0.1 percent growth). - Current account deficit (including transfers) was 2.2 percent of GDP in 2020 (relative to 4.3 percent pre-COVID). - Balance of payments financing gap: US$433 million in 2020 and US$798 million in 2021, equivalent to 0.9 and 1.5 percent of GDP respectively. - Social context - DRC is ranked 175 out of 189 countries in human development (UNHDI). - Authorities’ efforts to reduce poverty and promote development were significantly affected by the pandemic. ### Public health and macroeconomic policy response (including use of resources freed by debt relief) - COVID-related spending and financing - US$52 million have been identified as COVID19-related spending in 2020. - Contributions for GAVI’s vaccination campaigns: US$16 million. - About US$10 million spent by the Ministry of Health. - External donor commitments of more than US$200 million and US$116 million executed by end-April 2021 (Ministry of Health note). - Budgetary health spending is projected to increase by 0.1 percent in 2021. - Government continued implementation of free education initiative despite financing constraints. - IMF financing, other donors’ support, and debt relief have covered government revenue losses associated with the pandemic and helped rebuild external buffers. - Nature of COVID-related spending - Identified spending includes: Inter-ministerial Committee to Fight against COVID-19, GAVI contributions, Ministry of Health spending, wages and emergency payments (some without procurement), and re-directed regular spending (security, sanitation, transport) for which information is limited. ### Governance safeguards - Budgeting, reporting, and procurement transparency - Authorities produced and published a revised 2020 treasury plan reflecting pandemic impact and partner support. - COVID-19 related expenditures started to be included in monthly budget execution reports; authorities report these expenditures monthly. - Under the ECF arrangement, authorities committed to produce quarterly reports detailing the nature and amount of each procedure; publication starting by end-2021. - Commitment to publish all COVID-19 related procurement contracts exceeding US$12,000 and to disclose beneficial ownership for contracts exceeding US$1 million. - By June 23rd, 2021, authorities published 32 contracts totaling US$6.8 million, including one contract above one million with supplier name but not beneficial owners. - The General Finance Inspectorate is undertaking an audit of COVID-19 related expenditures; the Audit court annual report will include a special audit on COVID-19 related expenditures to be published after presentation to Parliament in September 2021. ### IMF support status - On July 15, 2021, the IMF Executive Board approved a 3-year ECF arrangement for DRC equivalent to SDR1,066 million (100 percent of quota or about US$1.52 billion). - Under the August 2021 general SDR allocation, the country received 95.8 percent of the quota (equivalent to US$ 1.46 billion). - The use of the SDR allocation will be discussed with authorities during the first review under the ECF arrangement. ### Upcoming debt service - DRC does not have debt service to the Fund falling due during the interval from October 16, 2021 to April 13, 2022. ### Staff assessment - Monetary policy was tightened substantially to contain inflation and exchange rate depreciation in 2020. - Budget execution has been aligned to available funding and has discontinued recourse to central bank advances. - Preliminary data support that resources freed by the first three tranches of Fund debt service relief under the CCRT are being used to help provide emergency health, social and economic support to mitigate the pandemic’s impact. ### Key statistics and projections (selected figures preserved exactly as reported) - GDP and inflation - Real GDP: 1.7 (2020, Prel.), 4.9 (2021, Prel.). - Extractive GDP: 9.7 (2020, Prel.), 11.0 (2021, Prel.). - Non-Extractive GDP: -1.3 (2020, Prel.), 2.2 (2021, Prel.). - Consumer prices, period average: 11.4 (2020, Prel.), 4.9 (2021, Prel.). - Fiscal and public finance - Revenue and grants: 9.8 (2020, Prel.), 11.2 (2021, Prel.). - Expenditures: 11.9 (2020, Prel.), 12.9 (2021, Prel.). - Overall fiscal balance (commitment basis): -2.1 (2020, Prel.), -1.7 (2021, Prel.). - Non-natural resource overall fiscal balance: -3.9 (2020, Prel.), -3.2 (2021, Prel.). - External sector and reserves - Exports in U.S. dollars, f.o.b. value: 4.6 (2020, Prel.), 46.7 (2021, Prel.). - Imports in U.S. dollars, f.o.b. value: -8.3 (2020, Prel.), 54.1 (2021, Prel.). - Current account balance, incl. transfers: -2.2 (2020, Prel.), -3.7 (2021, Prel.). - Gross official reserves (millions of U.S. dollars): 709 (2020, Prel.), 1,493 (2021, Prel.). - Gross official reserves (weeks of imports): 1.9 (2020, Prel.), 5.4 (2021, Prel.). - External public debt and debt service - Total stock, including IMF: 14.4 (2020, Prel.), 13.4 (2021, Prel.). - Scheduled debt service (millions of U.S. dollars): 403 (2020, Prel.), 769 (2021, Prel.). - Scheduled debt service percent of exports of goods and services: 2.9 (2020, Prel.), 5.8 (2021, Prel.). - Scheduled debt service percent of government revenue: 8.9 (2020, Prel.), 12.3 (2021, Prel.). - Memorandum items - Nominal GDP (millions of U.S. dollars): 48,707 (2020, Prel.), 55,159 (2021, Prel.). - UN Human Development Index: 0.480 (most recent reported). *International Monetary Fund — Annex XI. Democratic Republic of the Congo: Update for CCRT* ### Annex XIII. Federal Democratic Republic of Ethiopia: Update for ### Annex XIII. Federal Democratic Republic of Ethiopia: Update for CCRT Debt Relief ### Recent Economic Developments - COVID-19 continued to affect lives and livelihoods with: - steady decline in cases from August to December 2020 after a proactive 2020 response; - second surge in late January 2021 leading to reinstatement of some containment measures; - a third surge since July 2021. - Vaccination progress: - Ethiopia received 2.2 million vaccine doses through COVAX in March 2021; - supply constraints have delayed subsequent planned shipments and endanger the goal of vaccinating 20 percent of the population by the end of 2021. - Growth and outlook: - Real GDP growth for 2020/21 is projected at 2 percent (unchanged from 3rd CCRT tranche update); - growth is well below past trends due to the pandemic’s effect on non-agricultural activity, locusts infestation’s adverse impact on agricultural production, and domestic conflict; - convergence to trend growth in the medium-term is expected to be slower than forecast previously and from below (as opposed to a sharp v-shaped recovery with an overshooting in 2021/22 envisaged earlier); - reasons for weaker outlook include significantly slower-than-expected vaccine rollout, emergence of more transmissible variant(s), and limited policy space to offset pandemic effects and procure/administer vaccines faster. - Downside risks: - further significant downside risks due to widening conflict, evidenced by recent deterioration in high frequency indicators such as inflation and the parallel market exchange rate; - ongoing pandemic and conflict expected to slow down or possibly reverse the declining trend of poverty over the past two decades. ### Fiscal Policy, Public Health and COVID-19 Spending - Fiscal stance and spending: - Fiscal policy was expected to be moderately expansionary in 2020/21, with the deficit at 3 percent of GDP (compared with 3.3 percent projected during the February staff-level agreement with the IMF); - authorities cut or deferred other current and capital spending to accommodate COVID-related measures amounting to 0.7 percent of GDP in 2020/21 (mainly additional payments to health workers, food assistance, and procurement of health equipment). - Revenue and external flows: - Tax revenues in 2020/21 are expected to be in line with the budget, but much lower than in the pre-COVID projections; - In 2020/21 the current account balance improved significantly compared to 2019/20 due to a turnaround in private transfers while foreign direct investment increased; - net repayment of loans by SOEs and lower donor support resulted in lower reserves. - COVID-related allocations and estimates: - In 2019/20, the authorities allocated 1.6 percent of GDP to combat the COVID-19 pandemic (healthcare, emergency food distribution and sanitation, social welfare support); - For 2020/21, authorities continued to provide fiscal support for pandemic related spending and humanitarian assistance (about 0.8 percent of GDP), although detailed decomposition is not available; - staff projected recurrent priority poverty-reduction expenditures of 4.8 percent of GDP and other COVID-19 related expenditures of 0.3 percent of GDP for FY2020/21, which would be similar to the ¾ percent of GDP as announced by the authorities. - Crowding-out risk: - Given tight budget constraints amid shortfalls in external financing and expected increase in conflict-related outlays, there are significant risks that COVID-related and other social/priority spending would be crowded out. ### Governance Safeguards and Transparency - Procurement and tax relief: - Tenders for public contracts (primarily for healthcare supplies, personal protective equipment, and humanitarian support goods) carried out through competitive bidding in accordance with national procurement law; bidding documents and outcomes are published online. - Limited tax relief to businesses during the crisis enacted transparently through a published regulation by the Council of Ministers and a directive by the Ministry of Finance, with the impact fully reflected in the budget. - Accounting and audits: - All funds secured from donors in 2019/20 were included in the approved supplementary budget; a directive was issued to ensure mobilized resources are accounted for and managed transparently. - Monitoring of COVID-19 spending is led by a steering committee chaired by the deputy Prime Minister; a technical committee chaired by the Ministry of Finance monitors budgetary processes from allocation to audit. - An ex-post audit by the Auditor General over COVID-19 related measures during FY2019/20 is underway and now expected to be published online by December 2021 (previously expected in September 2021) due to capacity constraints. ### IMF Support Status and Upcoming Debt Service - IMF program and access: - Ethiopia’s 3-year program under the Extended Credit Facility (ECF) and Extended Fund Facility (EFF) arrangements with total access of 700 percent of quota (SDR 2.1 billion or about US$2.9 billion) was approved by the Board on December 20, 2019. - Ethiopia’s request for assistance under the RFI of 100 percent of quota (SDR 300.7 million or about US$411 million) and debt relief under the CCRT (about US$12 million) were approved by the Board on April 30, 2020 along with a reduction in EFF access by 50 percent of quota. - The ECF arrangement expired on September 19, 2020 due to non-completion of reviews; the EFF remains operational. - On August 23, 2021 Ethiopia received $410 million as part of the general allocation of SDRs approved by the IMF Board of Governors. - Upcoming IMF debt service covered by CCRT: - Ethiopia has eligible debt service estimated at SDR 239,658 in the form of GRA charges falling due during the interval from October 16, 2021 to January 10, 2022, the maximum period covered by the 4th tranche of debt service relief under the CCRT. - Debt service falling due during the remaining period from January 11, 2022 to April 13, 2022 will be covered subsequently subject to resource availability. ### Staff Assessment - Staff assesses that Ethiopia is pursuing appropriate macroeconomic policies in response to the health and economic impacts of the global pandemic. - Staff assesses that the fiscal space freed by the first three tranches of Fund debt service relief under the CCRT, and other support from the Fund, are being used to help provide emergency health, social and economic support to mitigate the pandemic’s impact on life and livelihood. ### Key Economic and Financial Indicators (selected figures from Table 1) - National and price indicators: - GDP at constant prices (2018/19 Act.): 9.0; (2019/20 Proj.): 6.2; (2020/21 Est.): 6.1; (2020/21 Rev. Proj.): 2.0 - GDP deflator (2018/19 Act.): 12.9; (2019/20 Proj.): 19.4; (2020/21 Est.): 18.2; (2020/21 Rev. Proj.): 12.3; (2020/21 Rev. Proj. value) 19.6 - Consumer prices (period average, base December 2016): 12.6; 19.4; 19.9; 11.1; 20.2 - Consumer prices (end period): 15.3; 18.1; 21.6; 9.4; 24.5 - External sector and reserves: - Exports of goods and services (U.S. dollars, f.o.b.): 7.9; 12.8; 0.8; 12.7; 9.5 - Imports of goods and services (U.S. dollars, c.i.f.): 4.1; 11.3; -9.2; 9.4; 1.6 - Gross official reserves (in millions of U.S. dollars): 3,387; 4,031; 3,110; 5,661; 2,864 - Gross official reserves (months of prospective imports): 2.2; 2.0; 2.0; 2.6; 1.6 - Fiscal and debt indicators (percent of GDP unless otherwise indicated): - Revenue: 11.6; 11.7; 10.5; 13.0; 10.5 - Tax revenue: 10.0; 10.1; 9.2; 11.5; 9.0 - Nontax revenue: 1.6; 1.5; 1.3; 1.5; 1.5 - External grants: 1.2; 0.9; 1.2; 0.8; 0.6 - Expenditure and net lending: 15.4; 15.0; 14.5; 16.0; 14.0 - Recurrent poverty reduction spending: 4.5; 4.5; 4.4; 4.7; 4.8 - Fiscal balance, excluding grants (cash basis): -3.8; -3.4; -4.0; -3.0; -3.5 - Fiscal balance, including grants (cash basis): -2.5; -2.5; -2.8; -2.2; -3.0 - Public debt: 57.3; 53.4; 56.5; 52.7; 55.4 - Domestic debt: 28.9; 25.4; 27.4; 22.6; 24.8 - External debt (including to the IMF): 28.4; 28.0; 29.2; 30.1; 30.6 - Memorandum: - Nominal GDP (2019, billions of U.S. dollars): 96 - Poverty headcount ratio (percent of population, 2015/16 national definition): 23.5 - GNI per capita, Atlas method (2019, current US$): 850 - Population total (2019, million): 112 *Source: IMF staff report — Annex XIII. Federal Democratic Republic of Ethiopia: Update for CCRT Debt Relief.* ### Annex XV. Guinea: Update for CCRT Debt Relief ### Annex XV. Guinea: Update for CCRT Debt Relief ### Recent Economic Developments - COVID-19 continues to negatively impact Guinea’s non-mining sector—which accounts for over ¾ of GDP and employs the vast majority of the population. - Government containment measures and weakened external demand adversely affected retail trade, transport, and tourism in 2020. - A third wave in August 2021, driven by the delta variant, raised the positivity rate from 2 in May to 9 percent in mid-August. - The pandemic exacerbated poverty and inequality: World Bank survey data indicate higher unemployment, reduced access to health and education services, and an increase in poverty levels. - The mining sector, particularly bauxite and artisanal gold, was more resilient than expected; record mining production offset the relative decline in the non-mining sector, resulting in GDP growth of 7.1 percent in 2020. - Increased mining activity did not translate into higher tax revenues due to exonerations, exemptions, and the untaxed nature of artisanal gold activities. - The overall fiscal balance reached -2.9 percent in 2020, reflecting the response plan and revenue shortfalls from COVID-induced constraints to tax collection capacity. - A significant financing gap in 2020, reflecting pandemic-related imports and increased service imports, was met through international support including US $246 million from the Fund (including $25 million from the CCRT) and US $32 million from the DSSI. - Guinea faced a new Ebola outbreak in February 2021, declared over on June 19, 2021; vaccination against COVID-19 and Ebola began in March 2021. - By early September, roughly 6.6 percent of the population received at least one dose of the Covid vaccine. - Growth is expected to reach 5.2 percent in 2021, against a pre-pandemic projection of 6.2 percent, supported by continued ramp-up of bauxite and iron ore production and gradual recovery in non-mining activities. - Inflation increased to over 12 percent year-on-year in recent months, mainly driven by a spike in food prices due to border closures, domestic transport disruptions, and higher international freight costs. - The overall fiscal deficit is projected at 2.3 percent of GDP in 2021, with the budget fully financed as approved. - The CCRT third tranche of debt service relief contributed 0.2 percent of GDP to financing the approved 2021 budget. - The external financing gap in 2021 is estimated at about US $81 million, more modest than 2020, with balance of payments supported by strong mineral exports and expected support from CCRT and DSSI operations. - June 2021 Debt Sustainability Analysis concluded Guinea remains at moderate risk of debt distress; the pandemic has raised the path of public debt and limited space for additional borrowing above the baseline. - Preliminary discussions indicate authorities will use about half of their August 2021 SDR allocation (worth SDR 205.3 bn, about 1.8 percent of GDP) to finance vaccine procurement. ### Public health and macroeconomic policy response - Execution of the Government’s covid-response plan amounted to 1.5 percent of GDP in 2020. - Health component: 0.9 percent of GDP (focus on surveillance infrastructure, medical services and equipment). - Social support measures: 0.3 percent of GDP (provision of food stocks and utility subsidies to households). - Support to private sector: tax exemptions for health equipment, support to hospitality sector, support for farmers, and creation of a special fund for financing and loan guarantees to firms with focus on SMEs. - The originally projected scale-up of cash transfers was delayed until Q1 2021 due to failure to meet World Bank effectiveness conditions. - 2020 execution resulted in over-execution of health component by 0.2 percent of GDP and under-execution of social and economic support components each by 0.3 percent of GDP. - Covid-related fiscal measures in 2021 amount to 0.7 percent of GDP (higher-than-expected compared with last CCRT report). - Projected 2021 spending: 0.5 percent of GDP on vaccine procurement and distribution; remainder on social protection (delayed cash transfers) and support to private sector and SOEs. - Monetary policy: central bank lowered policy rate and reserve requirements to support banking sector liquidity. - Prudential regulatory measures (expected to remain through 2021) included: - Reduction in liquidity coverage ratio. - Suspension of NPL classification and provisioning for loans to most affected sectors. - Moratorium on supervision-related fees and contributions to deposit insurance scheme. - Eased identification requirements for electronic money accounts. - The BCRG is closely monitoring pandemic effects on the banking sector and stands ready to withdraw support measures as the pandemic recedes. ### Governance safeguards - Authorities created a budgetary fund to account for all earmarked external and domestic COVID-related resources. - A dedicated account as part of the Treasury Single Account at the central bank was established to receive and disburse COVID-19 funds. - Monthly reports on execution of COVID-19 related spending were published, covering spending through July 2021. - The inspectorate-general for finance conducted ex-post control of high-risk expenditures for Phase 1 of the Response Plan with civil society involvement; the report on Phase II is not yet available. - Authorities published all awarded procurement contracts for COVID-19-related projects, including names of entities and their beneficial owners; authorities could strengthen transparency by ensuring more frequent publication of awarded contract information. - The Court of Accounts conducted an audit of COVID-19 spending with some delays; the audit expected online publication was delayed pending Ministry of Economy and Finance review. ### IMF support status and upcoming debt service - June 2020: Board approved disbursement of SDR 107.1 (50 percent of quota) under the Rapid Credit Facility. - December 2020: Guinea completed its ECF arrangement combining the fifth and sixth review, providing a disbursement of the equivalent of SDR 34.43 million. - The 2021 Article IV consultation was concluded in June 2021. - Guinea has debt service of SDR 1.836 million falling due during the interval from October 16, 2021 to January 10, 2022, the maximum period covered by the 4th tranche of CCRT debt service relief. - Debt service falling due from January 11, 2022 to April 13, 2022 will be covered subsequently subject to resource availability. ### Staff assessment - Staff assesses that Guinea is pursuing appropriate macroeconomic policies to address the effects of the pandemic. - Authorities swiftly implemented their COVID response plan and contagion mitigation measures. - Based on available information, Staff believes resources freed by the CCRT debt service relief, and other Fund support, are being used to respond to the health and socio-economic crisis by mitigating the impact of the pandemic on lives and livelihoods. ### Key fiscal and macroeconomic figures (selected, as presented) - GDP growth: 7.1 percent in 2020; projected 5.2 percent in 2021 (pre-pandemic projection 6.2 percent). - Overall fiscal balance: -2.9 percent of GDP in 2020; projected -2.3 percent of GDP in 2021. - CCRT third tranche contribution to 2021 budget financing: 0.2 percent of GDP. - External financing gap in 2021: about US $81 million. - IMF support in 2020: US $246 million from the Fund (including $25 million from the CCRT). - DSSI support in 2020: US $32 million. - August 2021 SDR allocation: SDR 205.3 bn (about 1.8 percent of GDP); authorities plan to use about half for vaccine procurement. - Vaccination: roughly 6.6 percent of population received at least one dose by early September. - Inflation: increased to over 12 percent year-on-year in recent months. - Guinea: COVID Related Fiscal Measures table highlights (percent of GDP): - Government covid-response execution in 2020: 1.5 percent of GDP. - Health spending in 2020 (actual): 0.9 percent of GDP. - Social support in 2020 (actual): 0.3 percent of GDP. - Covid-related fiscal measures in 2021: 0.7 percent of GDP. - Upcoming CCRT-covered debt service: SDR 1.836 million due Oct 16, 2021–Jan 10, 2022. *Source: Annex XV. Guinea: Update for CCRT Debt Relief (IMF).* ### 2.6 percent of GDP). The ### ppea2021063 - 2.6 percent of GDP). The ### Guinea-Bissau — COVID-related fiscal measures and execution - Priority expenditures (percent of GDP): Pre-Covid proj. 4.2; Actual FY2020 8.4; Pre-Covid proj. FY2021 4.2; Current proj. FY2021 4.0; Change FY2020 6.7; Change FY2021 2.7. - Of which, Health (percent of GDP): Pre-Covid proj. 1.4; Actual FY2020 4.6; Pre-Covid proj. FY2021 3.2; Current proj. FY2021 1.4; Change FY2020 3.8; Change FY2021 2.4. - Of which, Education (percent of GDP): Pre-Covid proj. 2.6; Actual FY2020 3.2; Pre-Covid proj. FY2021 0.6; Current proj. FY2021 2.4; Change FY2020 2.7; Change FY2021 0.3. - Of which, Social (percent of GDP): Pre-Covid proj. 0.2; Actual FY2020 0.6; Pre-Covid proj. FY2021 0.4; Current proj. FY2021 0.2; Change FY2020 0.3; Change FY2021 0.0. - Onlending to banks (memorandum): Pre-Covid proj. 0.0; Actual FY2020 1.8; Pre-Covid proj. FY2021 1.8; others n.a. - Priority expenditures (percent of public spending): Pre-Covid proj. 18.4; Actual FY2020 32.4; Pre-Covid proj. FY2021 14.0; Current proj. FY2021 17.7; Change FY2020 28.6; Change FY2021 10.9. - Other Covid-related spending (percent of public spending): Actual FY2020 0.7; Pre-Covid proj. FY2021 0.7; others n.a. - As of end-June, execution of total priority expenditures reached about 50 percent of the total projected for the year. - Authorities plan to vaccinate 1.4 million people by the end of the first quarter of 2022. ### Guinea-Bissau — Governance safeguards and transparency - The authorities published the 2019 IMF Report on Governance and Anti-corruption and implemented several recommendations. - COVID-19 related funds are managed using a dedicated account at the BCEAO and will be subject to an ex-post independent audit by a reputable third-party auditor working jointly with the audit court. - The audit process was planned to start in the first semester of 2021 but has not yet started; Terms of Reference have not been finalized; this commitment has not been implemented. - Crisis-related spending is part of the State Budget and reports have been published in the budget execution report presented to the National Assembly. - Key information of all crisis-related contracts in 2020 was published through the High Commissioner for COVID-19, but full texts of contracts and ex-post validation of delivery reports remain to be published. - Authorities have yet to implement RCF commitments to disclose beneficial ownership information of companies awarded COVID-19 related contracts; they expect to implement pending RCF commitments by the end of 2021. - The Ministry of Finance is conducting an audit on the High Commissioner for COVID-19 since end-May 2021; the High Commissioner requested an ex-post independent audit to the Audit Court on September 6. ### Guinea-Bissau — IMF support status and debt relief - A request for a Rapid Credit Facility (RCF) of SDR 14.2 million (50 percent of quota) was approved by the Board on January 25, 2021. - In December 2020, the authorities requested to join the Debt Service Suspension Initiative (DSSI) and a Staff Monitored Program (SMP). - A nine-month SMP was approved by the Managing Director on July 19, 2021. - On August 23, Guinea-Bissau received an allocation of Special Drawing Rights of SDR 27.2 million. - Upcoming debt service: Guinea-Bissau has debt service of SDR 0.596 million falling due during October 16, 2021 to January 10, 2022 (maximum period covered by the 4th tranche of debt service relief under the CCRT). Debt service falling due January 11, 2022 to April 13, 2022 will be covered subsequently subject to resource availability. ### Guinea-Bissau — Staff assessment - Staff assesses that Guinea-Bissau is pursuing appropriate macroeconomic policies to address the global pandemic. - Staff assesses that resources freed by the first three tranches of Fund debt service relief under the CCRT, and other support from the Fund, are being used to help provide emergency health, social and economic support to mitigate the impact of the pandemic. ### Guinea-Bissau — Selected economic indicators (highlights from Table 1, 2019–26) - Real GDP at market prices (annual percent change): 2019 4.5; 2020 4.9; 2021 Est. -1.4; Pre-Covid proj. 5.0; 2022 3.3; 2023 4.0; 2024 5.0; 2025 5.0; 2026 5.0. - Real GDP per capita (annual percent change): 2019 2.3; 2020 2.6; 2021 Est. -3.5; Pre-Covid proj. 2.7; 2022 1.1; 2023 1.7; 2024 2.8; 2025 2.8; 2026 2.9; 2027 2.9. - Consumer price index (annual average): 2019 0.3; 2020 2.0; 2021 Est. 1.5; Pre-Covid proj. 2.0; 2022 1.9; 2023 2.0; 2024 2.0; 2025 2.0; 2026 2.0. - Government finances (percent of GDP): Revenue excluding grants: 2019 9.2; 2020 5.3; 2021 Est. -5.5; Pre-Covid proj. 12.9; Current proj. 15.2; subsequent years reported (11.6, 10.2, 9.1, 9.1, 7.5). - Overall balance (commitment basis) including grants (percent of GDP): 2019 -3.9; 2020 -5.1; 2021 Est. -9.5; Pre-Covid proj. -5.1; Current proj. -5.0; later projections -4.6, -4.2, -3.6, -3.0, -3.0. - External current account (percent of GDP): 2019 -8.8; 2020 -4.5; 2021 Est. -8.3; Pre-Covid proj. -4.6; Current proj. -8.5; later projections -5.5, -4.8, -4.8, -4.5, -4.4. - Stock of public and publicly guaranteed debt (percent of GDP): 2019 65.9; 2020 71.5; 2021 Est. 79.3; Pre-Covid proj. 71.1; Current proj. 78.4; later projections 77.5, 75.7, 73.6, 71.1, 68.8. - Social & health expenditures (percent of GDP): 2019 3.7; 2020 4.2; 2021 Est. 8.4; Pre-Covid proj. 4.0; Current proj. 6.7; later projections 4.1, 4.1, 4.1, 4.1, 4.1. - Nominal GDP at market prices (CFAF billions): 2019 843.5; 2020 892.9; 2021 Est. 824.1; Pre-Covid proj. 971.7; Current proj. 874.2; subsequent years 934.7, 1008.9, 1089.0, 1175.4, 1268.8. *Sources: Guinea-Bissau authorities; and IMF staff estimates and projections.* ### Haiti — Recent COVID and economic developments - Confirmed COVID-19 cases and deaths: about 20,962 confirmed cases and 586 reported COVID-related deaths. - Population: 11.7 million people. - Real GDP: estimated contraction by 3.3 percent in FY2020 (ending September 30); expected decline around 0.7 percent in FY2021. - Poverty rate (US$1.90 per day): estimated to have risen to 25.1 percent in 2020, up from 23.6 percent in 2019 (World Bank). - Partial FY2021 data: exports of goods and services (US dollars) could rise by 31 percent following a decline of over 41 percent in FY2020; imports of goods and services on track to rise by about 10 percent after a decline of 17 percent in FY2020. - Current account: could give rise to a current account deficit of about 0.3 percent of GDP in FY2021 compared to a surplus of 3.4 percent of GDP in FY2020. - Gross international reserves projected to remain stable at about US$2.5 billion, or 4.9 months of projected imports. - External financing needs: estimated at about 2.9 percent of GDP for FY2021, excluding official transfers. - Domestic revenue (percent of GDP): expected to fall from 6.2 percent in FY2020 to 6.0 percent in FY2021. - Non-fuel domestically funded public spending: expected to decline from 7.9 percent in FY2020 to 7.3 percent in FY2021. - Inflation: average inflation estimated at 16.2 percent in FY2021. - Political risks: significant, including ongoing political uncertainty and gang-related security problems; presidential assassination on July 7 and formation of an interim government; calendar for presidential and legislative elections unknown. ### Haiti — COVID spending, governance safeguards, and IMF engagement - Authorities spent less on COVID-related needs than anticipated; no data on COVID-related spending since January 2021 (covering March 2020–January 2021). - FY2021 spending on education, health and social protection estimated roughly one third less than expected and in line with pre-COVID period. - 2021 budget planned a decrease in COVID spending from 0.6 percent of GDP (realized) to 0.1 percent (budget); difficult revenue situation likely pushed COVID spending even lower. - Authorities published four reports on COVID-related expenditures in April, May, and September 2020 and January 2021; no updates since. - Reports tracked spending by ministry, project, and economic nature, but lacked standardized budget categories, did not specify source of funding, and actual spending was not matched with descriptions of effective delivery. - A thorough audit of COVID-related spending remains key for Fund re-engagement; in June 2021, the Minister of Economy and Finance formally requested the Cour Supérieure des Comptes et du Contentieux Administrative to prepare the audit, expected to be concluded during 2021. - A revised central bank law prepared with LEG assistance has not been finalized; needed to strengthen central bank autonomy and governance. - Fund staff providing technical assistance to strengthen governance and transparency of public procurement, including beneficial owner disclosure. ### Haiti — IMF support status and debt relief - Haiti does not currently have an IMF arrangement and has outstanding debt to the IMF of SDR 128.3 million. - On April 17, 2020 the IMF Board approved a disbursement of SDR 81.9 million (US$111.6 million) under the Rapid Credit Facility. - Haiti benefited from CCRT debt relief worth SDR 15.912 million (US$22.679 million) covering debt service falling due from April 14, 2020 to April 13, 2022. - Staff reached understandings on a Staff Monitored Program (SMP) in May 2020 but SMP was not approved because prior actions related to governance were not implemented; staff continue to work on governance and public procurement to enable resumption of SMP discussions. - Upcoming debt service: Haiti has debt service of SDR 0.866 million falling due during October 16, 2021 to January 10, 2022 (maximum period currently covered by the fourth tranche of debt service relief under the CCRT). Debt service falling due January 11, 2022 to April 13, 2022 will be covered subsequently subject to resource availability. - Haiti received SDR 157 million (about US$224 million) from the August 2021 SDR allocation. ### Haiti — COVID-related fiscal measures (selected figures) - Priority expenditures (percent of public spending): FY2019/20 Budget 13.65; Actual FY2019/20 22.10; FY2020/21 Proj. 20.23; FY2020/21 Current proj. 19.53. - Priority expenditures — Health (percent of GDP): FY2019/20 Budget 0.39; Actual 0.80; Change 105%; FY2020/21 Proj. 0.59; FY2020/21 Current proj. 0.35; Change -40%. - Priority expenditures — Education (percent of GDP): FY2019/20 Budget 0.95; Actual 1.03; Change 8%; FY2020/21 Proj. 1.47; FY2020/21 Current proj. 1.08; Change -26%. - Priority expenditures — Social (percent of GDP): FY2019/20 Budget 0.10; Actual 0.15; Change 53%; FY2020/21 Proj. 0.14; FY2020/21 Current proj. 0.08; Change -44%. - Other Covid-related spending: Covid prevention, containment & mgmt reported NA in some categories; Transfers to HHs reported NA in some categories and 0.15/0.02 in others; Transfers to businesses/SOEs/government entities reported NA or 0.03. ### Haiti — Selected economic and financial indicators (FY2018–22 highlights) - Nominal GDP (2020): US$14.5 billion. - GDP per capita (2020): US$1,235. - Population (2020): 11.7 million. - Percent of population below poverty line (2012): 58.5. - GDP at constant prices (change): FY2018 1.7; FY2019 -1.7; FY2020 -0.4; FY2021 Est. -3.3; Pre COVID-19 proj. 0.9; Current proj. -0.7; FY2022 proj. 1.3. - Consumer prices (period average): FY2018 12.9; FY2019 17.3; FY2020 19.0; FY2021 22.9; FY2022 proj. 15.9; Current proj. 16.2; later 15.5. - External public debt (medium and long-term, eop): FY2018 13.8; FY2019 16.1; FY2020 25.4; FY2021 9.8; FY2022 proj. 24.2; later 12.0, 11.4. - Total public sector debt (end-of-period): FY2018 24.8; FY2019 27.5; FY2020 46.1; FY2021 24.3; FY2022 proj. 44.9; later 26.8, 26.6. - Gross international reserves (millions of US$): FY2018 2,086; FY2019 2,100; FY2020 2,145; FY2021 2,501; FY2022 proj. 2,207; Current proj. 2,545; later 2,545. - Gross international reserves in months of imports of the following year: FY2018 4.9; FY2019 6.0; FY2020 4.8; FY2021 4.9; FY2022 proj. 4.8; Current proj. 5.1; later 4.9. - Nominal GDP (millions of U.S. dollars): FY2018 16,454; FY2019 14,787; FY2020 8,533; FY2021 14,508; FY2022 proj. 8,842; Current proj. 20,143; Current proj. 18,825. *Sources: Guinea-Bissau authorities; Haiti authorities; and IMF staff estimates and projections.* ### Annex XVIII. Liberia: Update for CCRT Debt Relief ### Annex XVIII. Liberia: Update for CCRT Debt Relief ### Recent Economic Developments - The COVID-19 pandemic continues to adversely affect the Liberian economy. - The third wave, which started in June, is likely to slow non-mining economic recovery in 2021 to 2.9 percent from 3.4 percent, reflecting protracted COVID-19 restrictions. - Overall GDP growth projection for 2021 remains unchanged at 3.6 percent because mining sector growth compensates for the non-mining slowdown. - The level of real GDP is 4.7 percent below pre-COVID-19 projections. - Vaccination progress: - Additional 96,000 doses of AstraZeneca under COVAX, bringing the total under COVAX to 496,000 doses. - 302,400 doses of Johnson and Johnson from the United States Government. - These doses are enough to vaccinate about 20 percent of the eligible population. - As of September 3, 2021: 113,680 doses have been administered; 27,392 people (representing 1.2 percent of the eligible population) fully vaccinated. - Human development and poverty: - World Bank estimate: share of population below national poverty line likely rose from 56 percent in 2019 to at least 65 percent in 2020. - School closures impaired education for the majority of Liberian students. - Public finances and macro indicators: - COVID-related spending and stronger-than-expected domestic revenue performance and more budget support reduced fiscal pressure. - Reallocation of spending, improved tax compliance, and introduction of a fuel excise tax kept deterioration of overall fiscal balance (excluding project aid) relative to pre-pandemic projections to 0.7 percent of GDP in FY2020; the balance for FY2021 remained unchanged. - Economic fallout resulted in an external financing gap of 5.6 percent of GDP. - Debt dynamics impact limited; debt distress rating: high for total public debt and moderate for external public debt. - Exchange rate appreciation in last quarter of 2020 helped ease inflation to single digits. - Financial sector risks increased due to pandemic-contributed rises in NPLs. ### Public Health and Macroeconomic Policy Response - COVID-19-related spending (FY2020, FY2021, and July–December 2021) is estimated at 6.1 percent of GDP, composed as follows: - FY2020: 2.5 percent of GDP - FY2021: 3.4 percent of GDP - July–December 2021 (bridging period): 0.2 percent of GDP - Composition of COVID-19-related spending (percent of GDP): - Increases in priority spending in health, education and expansion of social programs, including distribution of food aid: 2.7 percent of GDP. - Other COVID-19-related spending, including cash transfers and transfers to State Owned Enterprises: 3.4 percent of GDP. - Notes on fiscal year transition: - Liberia’s fiscal year runs from July to June. - Authorities are changing fiscal year from July–June to January–December; July–December 2021 serves as a bridging period. - Additional COVID-19 related spending amounting to 0.8 percent of GDP has been approved by the Legislature for the Special Budget for July–December 2021 to purchase COVID-19 vaccines, and transfer to households and SOEs affected by the pandemic. ### Governance safeguards - Measures taken to improve accountability and fiscal transparency: - Publishing information on procurement contract awards on Public Procurement and Concessions Commission’s website, including full text of large procurement contracts for FY20 and information on legal ownership of companies winning contracts (FY21 contracts not yet published). - Increasing scope of public expenditure processed through the Integrated Financial Management Information System (including all on-budget COVID-19 emergency spending). - Moving from annual to quarterly expenditure reconciliation. - Posting summary fiscal reports on the Ministry of Finance and Development Planning’s website from June 2020. - Audits and reporting: - Audit of annual financial statements for FY2020 by the General Audit Commission is near completion; preparation of audit for FY2021 facing delays amid implementation challenges. - Special audit for COVID-related spending during February to June 2020 has been finalized; preparation of an update for July–December 2020 is underway. ### IMF support status - On December 11, 2019, Executive Board approved a four-year arrangement under the Extended Credit Facility (ECF) in the amount of SDR 155 million (US$213.6 million, 60 percent of quota). - First and second reviews completed on December 21, 2020, enabling a disbursement of SDR 34 million (US$48.86 million), with US$38 million on-lent to the government. - In June 2020, Liberia benefitted from a disbursement of SDR 36.176 million (US$50 million) under the Rapid Credit Facility (RCF). ### Upcoming debt service - Liberia has debt service to the Fund of SDR 3.103 million falling due during the interval from October 16, 2021 to January 10, 2022, the maximum period covered by the 4th tranche of debt service relief under the CCRT. - Debt service falling due during the remaining period from January 11, 2022 to April 13, 2022 will be covered subsequently subject to resource availability. ### COVID-Related Fiscal Measures (selected figures from the table) - Priority expenditures (percent of GDP): - Pre-Covid proj.: 8.2 - Actual (FY2020): 10.1 - Change (FY2020): 1.9 - Pre-Covid proj. (FY2021): 8.2 - Current Est. (FY2021): 9.6 - Change (FY2021): 1.4 - Pre-COVID proj. (2021 Jul–Dec proj): 9.4 - Current proj (2021 Jul–Dec proj): 8.8 - Change (2021 Jul–Dec proj): -0.6 - Of which (percent of GDP): - Health: Pre-Covid 4.5; Actual FY2020 4.6; Change 0.1; FY2021 Pre-Covid 4.5; Current Est. 4.6; Change 0.1; Jul–Dec Pre-COVID 4.5; Current proj 3.9; Change -0.6 - Education: Pre-Covid 2.1; Actual FY2020 2.0; Change -0.1; FY2021 Pre-Covid 2.1; Current Est. 2.5; Change 0.4; Jul–Dec Pre-COVID 3.3; Current proj 3.1; Change -0.2 - Social: Pre-Covid 1.6; Actual FY2020 3.2; Change 1.5; FY2021 Pre-Covid 1.6; Current Est. 2.6; Change 0.9; Jul–Dec Pre-COVID 1.6; Current proj 1.8; Change 0.2 - Other COVID-related spending (percent of GDP): - FY2020 actual: 0.6 (change 0.6) - FY2021 current est.: 2.0 (change 2.0) - Jul–Dec current proj.: 0.8 (change 0.8) - Memorandum: - Priority expenditures (percent of public spending): FY2020 actual 31.6 (change 8.5); FY2021 current est. 28.4 (change 3.7); Jul–Dec current proj. 32.7 (change 3.0) - Other COVID-related spending (percent of public spending): FY2020 actual 1.8; FY2021 current est. 6.1; Jul–Dec current proj. 2.9 ### Staff assessment - Staff assesses Liberia is pursuing appropriate macroeconomic policies to mitigate the pandemic’s negative impact. - Resources freed by the first, second, and third tranches of Fund debt service relief under the CCRT, and other Fund support, have been used to help provide emergency health, social, and economic support to mitigate the pandemic’s impact on lives and livelihoods. *IMF staff report: Annex XVIII. Liberia: Update for CCRT Debt Relief* ### Annex XX. Malawi: Update for CCRT Debt Relief ### Annex XX. Malawi: Update for CCRT Debt Relief ### Recent economic developments - Malawi experienced a severe second round of COVID infections in February 2021 and a further uptick in mid-June 2021; cumulative positive cases increased from 25,895 to 60,090 between February and August 2021, with daily positive cases declining since mid-July. - Real GDP growth has been revised downward to 2.2 and 3.0 percent for 2021 and 2022, respectively, which implies negative per capita growth. - Inflation increased to 8.7 percent at end-July 2021 from 7.6 percent in 2020, driven by increases in prices for fuel, fertilizer and food. - Increasing health and social spending raised the FY2020/21 primary deficit to 4.5 percent of GDP from 1.6 percent of GDP the year before; projected further social spending will increase the primary deficit to 5 percent of GDP in FY2021/22. - The overall deficit is projected to reach 8.8 percent of GDP due to sizeable domestic interest payments, putting further pressure on already high total public debt. - The current account in 2021 widened to 14.7 percent of GDP and is projected to remain elevated in 2022. - Gross official reserves are projected to decline to US$144 million by end-2021 (equivalent to 0.5 months of imports) from US$565 million (equivalent to 2.9 months of imports) at end-2020, even after accounting for the SDR allocation. - External financing needs are projected to remain elevated in 2021 and the medium term. ### Policy response - COVID-related health care and social spending reached 0.4 percent of GDP in FY20/21 with donor and Fund support; expected to fall to 0.2 percent of GDP in FY21/22 as positive cases declined since July 2021. - Financial support was used to develop testing capabilities and isolation centers, import medical equipment, hire medical staff, and raise public awareness. - The government rolled out in February 2021 a National COVID-19 Vaccine Deployment Plan with a target of reaching 20 percent of the population by end-2021, benefiting from the COVAX facility. - Vaccines expected in the second quarter of 2021 to cover 20 percent of the population (3.8 million people), starting with high risk groups. - An additional 100,000 doses covering 0.5 percent of the population have been secured through the African Union. - As of August 26, 4.6 percent of total population were vaccinated. - To support SMEs, commercial banks and micro-finance institutions have been providing moratoria on their debt service while continuously assessing economic conditions. - The Reserve Bank of Malawi maintained an accommodative monetary policy stance, keeping the policy rate at 12 percent. ### Governance safeguards and transparency measures - Addressing governance weaknesses is a top priority; actions taken against civil servants involved in mismanagement of COVID-19 funds amounting to MK6.2 billion. - Authorities are publishing procurement documentation on an ongoing basis—tenders, bids, names of awarded companies, legal arrangements, products or services procured and their costs—and are working to: - publish beneficial ownership information of awarded companies; - conduct ex-post validation of delivery on a contract-by-contract basis; - publish quarterly statements on commitments and payments of COVID-19 related activities; - specify COVID-19 related costs in published monthly salary report, budget funding, and cash management analysis. - The National Audit Office will submit quarterly audits of COVID-19 related spending to the Minister of Finance and, within 180 days after the end of the pandemic, will publish and submit to Parliament a comprehensive audit of COVID-19-related spending. ### IMF support status - A three-year ECF arrangement was approved in April 2018; the administration that came into office in June 2020 cancelled the 2018 ECF arrangement in September 2020. - On May 1, 2020 the Executive Board approved emergency financing under the Rapid Credit Facility (RCF) equivalent to 47.9 percent of quota or SDR 66.44 million. - On October 2, 2020 the Executive Board approved another disbursement under the RCF of 52.1 percent of quota (SDR 72.31 million), 30 percent of which was provided as budget support. - The authorities requested a successor arrangement in April 2021, aligned with Malawi Vision 2063 launched in January 2021. - The Fund continues to provide technical assistance in domestic revenue mobilization, public financial management, and statistics. - Ongoing efforts to enhance transparency and accountability include launching an improved Integrated Financial Management Information System (IFMIS) to strengthen commitment and cash expenditure controls. ### Upcoming CCRT-eligible debt service - Malawi has debt service of SDR 6.724 million falling due to the Fund during the interval from October 16, 2021 to January 10, 2022, the maximum period covered by the 4th tranche of debt service relief under the CCRT. - Debt service falling due during the remaining period from January 11, 2022 to April 13, 2022 will be covered subsequently subject to resource availability. ### Staff assessment and recommended priorities - Staff assesses Malawi is implementing appropriate measures to provide emergency health, social and economic support to minimize the pandemic’s impact. - In the context of the authorities’ request for a Fund-supported program, discussions are ongoing on a set of well-targeted reforms to: - respond to the global pandemic; - correct elevated and further growing macroeconomic imbalances; - support long-term development. - Staff emphasize prompt action to address: - debt vulnerabilities; - fiscal imbalances and rebuilding gross official reserves; - strengthening fiscal and central bank governance to address significant weaknesses and ensure efficient use of public resources. ### Key statistics (selected, as reported) - Cumulative COVID-19 cases: 25,895 to 60,090 (February–August 2021). - GDP growth revisions: 2.2 percent (2021), 3.0 percent (2022). - Inflation: 8.7 percent (end-July 2021); 7.6 percent (2020). - FY2020/21 primary deficit: 4.5 percent of GDP; FY2019/20 primary deficit: 1.6 percent of GDP. - Projected primary deficit FY2021/22: 5 percent of GDP. - Projected overall deficit: 8.8 percent of GDP. - Current account 2021: 14.7 percent of GDP. - Gross official reserves: US$565 million (end-2020; 2.9 months of imports) → projected US$144 million (end-2021; 0.5 months of imports). - RCF disbursements: SDR 66.44 million (47.9 percent of quota); SDR 72.31 million (52.1 percent of quota; October 2, 2020 disbursement). - Upcoming Fund debt service covered by 4th CCRT tranche: SDR 6.724 million (Oct 16, 2021–Jan 10, 2022). - Vaccination targets and status: target 20 percent of population by end-2021 (3.8 million people); 100,000 doses covering 0.5 percent of the population secured through the African Union; as of August 26, 4.6 percent of total population vaccinated. - Monetary policy: policy rate at 12 percent. - Mismanagement actions: MK6.2 billion related to COVID-19 funds. *International Monetary Fund — Annex XX. Malawi: Update for CCRT Debt Relief* ### Annex XXI. Mali Update for CCRT Debt Relief ### Annex XXI. Mali Update for CCRT Debt Relief ### Recent economic developments - COVID-19 has had a notable economic impact, exacerbating socio-political and security crises. - Health statistics: - Total registered COVID-19 cases: 14,874 as of August 31, 2021. - Deaths: 539. - Mali has undergone three waves of infection; the third and strongest began end-February 2021 and peaked at a record high of over 400 new cases on April 9, 2021. - Output and growth: - Real GDP contracted by 1.6 percent in 2020. - Real GDP is expected to recover in 2021 to some 4 percent of GDP, still below estimated potential growth of around 5 percent (2 percent in per capita terms). - Recovery drivers in 2021 include a recovery in the cotton sector, continued accommodation by monetary and fiscal policies, and stronger external demand; downside risks remain. - Inflation and external sector: - Headline inflation spiked in the first half of 2021 to over 5 percent year-on-year due to higher food and energy prices, but has since subsided to within the central bank’s target band 2±1 percent. - Balance of payments pressures are picking up in 2021 with a higher cost of imported fuel and a lower price of gold; the external current account is expected to widen to over 5 percent of GDP. - Poverty and social impact: - The downturn in 2020-21 is estimated to push 850 thousand people into extreme poverty, raising incidence from 42 percent of the population (8.2 million people) in 2019 to over 45 percent in 2020-21 (World Bank estimates). - Fiscal stance: - Fiscal policies supported the economy through 2 percentage point of GDP wider deficits in both 2020 and 2021. - Persistent higher spending (e.g., public wages, including teachers) and heavy reliance on domestic financing following two coups d’état in 2020-21 increase the interest bill, making a return to the WAEMU ceiling of 3 percent of GDP by 2024 more challenging. ### Public health and macroeconomic policies - Vaccination and public health measures: - Authorities prepared a national vaccination plan prioritizing medical workers, the elderly and those with underlying health conditions. - First wave of vaccinations under COVAX started in April 2021, aiming to reach some 20 percent of the population (40 percent of those above age 15) initially, with subsequent rollout as more vaccines become available. - Vaccination rollout has been slow with only 0.8 percent of the population vaccinated by end-August 2021, largely due to weak demand. - Policy measures and fiscal support: - Monetary and financial measures were taken by the regional central bank (BCEAO) in 2020. - A 2020 package of fiscal measures to support vulnerable households and firms totaled about 2 percent of GDP. - Authorities allocated an additional 0.9 percent of GDP to combat COVID-19 in 2021. - Estimates of stimulus implementation: 95 percent of the 2020 stimulus had been implemented (noting household income support had not yet reached all households due to delays in identifying beneficiaries); around 20 percent of the 2021 stimulus had been executed by end-May 2021. ### Governance safeguards - Under IMF support via the Rapid Credit Facility, authorities committed to transparent use of funds through: - Publication of information on COVID-19 spending. - Commissioning and publication of an independent audit of COVID-19 spending. - Publication of information on large procurement projects, including beneficial ownership, by end-May 2021. - Implementation steps taken: - Monthly COVID-19 expenditure reports started in October 2020. - An independent audit of COVID-19 related expenditure was initiated by the Office of the Auditor General (BVG), expected to be published by end-2021. - Following technical discussions and a Governance Assessment, the government committed to issuing a circular letter requiring companies awarded procurement contracts to submit beneficial owners’ information, after which documentation on large public procurement contracts will be published. - Implementation has been delayed relative to original plans, including by the recent coup d’état and the need to clarify data protection issues; authorities expressed commitment to complete the safeguards. ### IMF support status - IMF support following the pandemic onset: - COVID-19 emergency support under the Rapid Credit Facility: around US$200 million, 1.2 percent of GDP, approved April 30, 2020. - First, second and third tranches of debt service relief under the Catastrophe Containment Relief Trust (each around US$10 million, 0.06 percent of GDP) approved on April 13, October 30, 2020, and April 1, 2021 respectively. - Second and third reviews under the Extended Credit Facility arrangement (around US$57 million, 0.3 percent of GDP) completed by the Executive Board on February 22, 2021. - The three-year arrangement under the IMF’s Extended Credit Facility for Mali was approved on August 28, 2019, in the amount of SDR 139.95 million (about US$191.9 million, 1.1 percent of GDP), of which about US$115.3 million (0.6 percent of GDP) has been disbursed. - Reviews and program discussions: - Discussions under the fourth review started in May 2021 and were interrupted by a coup d’état; they resumed in July after formation of the new government and will continue later in fall 2021 to allow more time for completion of reforms. ### Upcoming CCRT eligible debt service - Mali has debt service of SDR 5.7 million falling due during the interval from October 16, 2021 to January 10, 2022, the maximum period covered by the 4th tranche of debt service relief under the CCRT. - Debt service falling due during the remaining period from January 11, 2022 to April 13, 2022 will be covered subsequently subject to resource availability. ### Staff assessment - The unabating socio-political, health and security crises have delayed reforms and are adding to fiscal pressures. - The government continues to pursue macroeconomic policies to address the pandemic and advance structural reforms. - Staff assesses that resources freed by the first three tranches of Fund debt service relief under the CCRT, and other Fund support, are being used to help provide emergency health, social and economic support to mitigate the pandemic’s impact. - Going forward, increased vigilance and a renewed reform momentum will be needed to preserve the government’s ability to address social and growth imperatives through sustainable and quality fiscal policies. *International Monetary Fund — Annex XXI. Mali Update for CCRT Debt Relief* ### Annex XXIII. Nepal: Update for CCRT Debt Relief ### Annex XXIII. Nepal: Update for CCRT Debt Relief ### Recent Economic Developments - COVID-19 impact: severe through a drop in tourism, stalled construction, and subdued economic activity. - Growth outlook: - Real GDP growth in FY2020/21 is estimated at 1.8 percent. - Real GDP growth in FY2021/22 is estimated at 4.4 percent. - Pre-pandemic baseline: 5.7 percent (FY2020/21) and 5.5 percent (FY2021/22). - Fiscal outcomes: - Overall fiscal deficit narrowed from 5.3 percent of GDP in FY2019/20 to 4.6 percent of GDP in FY2020/21. - Debt of 46.7 percent of GDP in FY2020/21. - Pre-pandemic baseline fiscal deficits: 4.5 and 4.4 percent of GDP respectively. - Revenue and expenditure: - Revenues in FY2020/21 benefited from increases in import related taxes and deferred tax receipts. - Budgeted expenditures underperformed relative to estimates due to implementation capacity constraints from the second wave and associated lockdown measures since April 2021. - FY2021/22 fiscal deficit is estimated at 7.1 percent of GDP as temporary revenue factors dissipate and higher expenditures resume. - External sector and reserves: - Current account deficit widened to 8.3 percent of GDP in FY2020/21; projected to fall slightly to 6.7 percent of GDP in FY2021/22. - Reserve coverage: 8.9 months of imports in FY2020/21. - SDR allocation: approximately US$214 million approved by the IMF Executive Board in August 2021 expected to support reserves. - Remittances and social impact: - Flow of remittances surprised on the upside. - Job losses at home, return migration, and limited social assistance coverage may set back poverty alleviation gains. ### Public health and macroeconomic policy response - Public health measures and budget announcements: - Tailored reimposition of lockdown measures since April 29, 2021. - FY2021/22 budget measures include: - (i) free tests, treatment and vaccinations for all Nepali citizens (11 percent of the population have received a 2nd dose of the vaccine); - (ii) purchase of medical equipment and supplies such as ventilators and oxygen cylinders; - (iii) further tax relief to households and businesses; - (iv) increase in social security allowance by 33 percent including the amount of child protection grant and senior citizens allowance; - (iv) expand the scope of Social Security Fund to informal sector workers. - Financial sector measures: - Nepal Rastra Bank (NRB) maintained the Refinance Facility Fund in FY2021/22 to provide subsidized interest rates to banks willing to lend to priority sectors. - NRB eased macroprudential measures by postponing the implementation of the regulation to require banks to build up a counter cyclical capital buffer. ### Governance safeguards - Transparency and auditing: - Office of the Auditor General (OAG) audits government accounts annually and publishes results on the OAG website. - The latest OAG report for FY2019/20 was published in August 2021. - Covid-19 Fund oversight: - Spending from the Covid-19 Fund is being published monthly. - OAG is expected to audit the Covid-19 Fund in 2022. - Commitments under Rapid Credit Facility: - Authorities committed to publish budget expenditures related to Covid-19 and beneficial ownership information for new, large, Covid-19 related procurement contracts. - Preliminary publication of beneficial ownership information on the Department of Health’s website has been undertaken and is being strengthened in consultation with Fund staff. - Implementation caveat: - Progress on full implementation of these measures continues to be impacted by the pandemic and prolonged lockdown measures. ### Data gaps - Fiscal data coverage: - Available fiscal data cover only the central government. - Total public spending on priority areas (health, education, social assistance) is higher than reported due to additional spending by local and provincial governments not captured in central data. - Authorities do not currently have adequate mechanisms to track COVID-19 related spending in the budget separately from other priority spending. ### IMF support status - Rapid Credit Facility: - On May 6, 2020, the IMF Executive Board approved a 100 percent of quota (US$214 million) disbursement under the Rapid Credit Facility. - Prospective ECF arrangement: - Discussions are ongoing to design a new IMF program supported by the Extended Credit Facility (ECF) for 180 percent of quota (USD 403 million). - The ECF arrangement aims to: - mitigate the COVID-19 impact on health and economic activity and protect vulnerable groups; - preserve macroeconomic and financial stability; - implement reforms to support sustained growth and poverty reduction including governance safeguards. ### Upcoming debt service - Fund debt service schedule relative to CCRT: - Nepal does not have debt service due to the Fund during the interval from October 16, 2021 to January 10, 2022 (maximum period covered by the 4th tranche of debt service relief under the CCRT). - Debt service falling due during January 11, 2022 to April 13, 2022 will be covered subsequently subject to resource availability. ### Staff assessment - IMF staff assessment: - Nepal is assessed as pursuing appropriate macroeconomic policies to address the global pandemic. - Ongoing efforts to enhance transparency and accountability of COVID-19 related spending will help provide assurances that resources freed by the first three tranches of Fund debt service relief under the CCRT, and other support from the Fund and development partners, are being used for emergency health, social and economic support. ### Selected economic indicators and key statistics (highlights from Table 1) - Output and prices: - Real GDP: -2.1 (2020), 1.8 (FY2020/21 current proj.), 4.4 (FY2021/22 current proj.), 6.3 (2022/23 proj.). - Headline CPI (period average): 6.1 (2020), 3.6 (FY2020/21 current proj.), 5.7 (FY2021/22 proj.). - Fiscal indicators (central government, percent of GDP): - Total revenue and grants: 22.1 (2020), 24.2 (FY2020/21 current proj.), 24.4 (FY2021/22 proj.). - Tax revenue: 17.9 (2020), 21.1 (FY2020/21 current proj.), 21.3 (FY2021/22 proj.). - Expenditure: 27.4 (2020), 28.8 (FY2020/21 current proj.), 31.6 (FY2021/22 proj.). - Net lending/borrowing: -5.3 (2020), -4.6 (FY2020/21 current proj.), -7.1 (FY2021/22 proj.). - Balance of payments: - Current account (in millions of U.S. dollars): -339 (2020), -2,844 (FY2020/21 current proj.), -2,429 (FY2021/22 proj.). - Current account (percent of GDP): -1.0 (2020), -8.3 (FY2020/21 current proj.), -6.7 (FY2021/22 proj.). - Workers' remittances (in millions of U.S. dollars): 7,533 (2020), 8,150 (FY2020/21 current proj.), 8,394 (FY2021/22 proj.). - Workers' remittances (percent of GDP): 22.2 (2020), 23.8 (FY2020/21 current proj.), 23.1 (FY2021/22 proj.). - Gross official reserves (in millions of U.S. dollars): 10,559 (2020), 10,884 (FY2020/21 current proj.), 10,099 (FY2021/22 proj.). - Reserves (months of prospective imports): 9.0 (2020), 8.9 (FY2020/21 current proj.), 7.8 (FY2021/22 proj.). - Public debt and GDP: - Public debt (percent of GDP): 42.2 (2020), 46.7 (FY2020/21 current proj.), 52.7 (FY2021/22 proj.). - Nominal GDP (in billions of U.S. dollars): 34.0 (2020), 34.3 (FY2020/21 current proj.), 36.3 (FY2021/22 proj.). - Social and health spending: - Health Expenditure (in percent of GDP): 1.5 (FY2021/22 proj.), 2.0 (FY2022/23 onward in table). - Social Protection/Assistance (in percent of GDP): 1.7 (2020 baseline), 3.4 (FY2021/22 proj.), 3.4 (subsequent years in table). - CCRT debt relief (in millions of SDR): - First tranche: SDR 2.9 million covered the period April 14, 2020 to October 13, 2020. - Second tranche: SDR 3.6 million covered October 14, 2020 to April 13, 2021. - Third tranche: SDR 3.6 million covered April 14, 2021 to October 15, 2021. - CCRT debt relief for January 11, 2022 through April 13, 2022 is included in projections but approval is subject to adequate resources under the CCRT. - Memorandum and notes: - Fiscal year ends mid-July. - Net incurrence of foreign liabilities includes IMF prospective ECF (US$398.8 million for FY2021/22-FY2024/25), World Bank (US$500 million for FY2020/21-FY2022/23), Asian Development Bank (US$200 million for FY2020/21-FY2023/24), and DSSI (US$52.6 million for FY2020/21). *Source: IMF staff summary based on Annex XXIII. Nepal: Update for CCRT Debt Relief (pp. 97–100).* ### Annex XXIV. Niger: Update for CCRT Debt Relief ### Annex XXIV. Niger: Update for CCRT Debt Relief ### Recent economic developments - In April 2021, Niger achieved its first democratic transfer of power. The new government is committed to sustained macroeconomic policy and medium-term reform while the political economy remains challenging. - Real GDP growth revisions and projections: - 2020 revised upwards to 3.6 percent (due to higher agricultural production). - 2021 projected at 5.4 percent (instead of 6.9 percent previously forecasted), largely due to the base effect. - Pre-pandemic projections were 6.0 percent for 2020 and 5.6 percent for 2021. - Drivers of 2021 growth: removal of containment measures, acceleration of implementation of large-scale projects, and reopening of the border with Nigeria. - The Covid-19 crisis compounds other challenges: the security crisis across the Sahel, climate change, and recent massive floods. - Fiscal outlook: - Fiscal deficit set to widen in 2020 and 2021 from pre-pandemic projections of 2.7 and 1.9 percent of GDP, respectively, to 5.3 and 6.6 percent of GDP. - Widening reflects stepped-up security and infrastructure spending, revenue shortfalls related to the economic slowdown, and difficulties in collecting taxes under pandemic conditions. - External sector: - Current account deficit projected to widen from 13.5 percent of GDP in 2020 to 15.5 percent in 2021, as domestic economic activities recover and large-scale projects resume. - External financing needs will remain high in the short-to-medium term. ### Public health and macroeconomic policy response - Containment measures: - Most measures were gradually lifted from mid-May to August 2020. - State of emergency extended for three months from January 2021; entertainment venues closed again. - Government response plan: comprehensive plan covering health, social, and economic aspects of the COVID-19 pandemic. - Priority expenditures and health spending: - Priority expenditures in 2020 amounted to 7.9 percent of GDP, slightly below the pre-COVID-19 projection of 8.2 percent, mainly due to lower than expected health expenditures. - Health expenditure in 2020 reached 1.3 percent of GDP against a pre-COVID projection of 1.7 percent of GDP. - Priority expenditures are currently forecast at 9.1 percent of GDP in 2021. - Other COVID-related spending and support: - Spending on other Covid-related items in 2020 is estimated at 0.5 percent of GDP. - Breakdown of other Covid-related spending in 2020: - Covid prevention, containment & management: 0.2 percent of GDP. - Transfers to households: 0.2 percent of GDP. - Transfers to businesses, SOEs, government entities: 0.0 percent of GDP. - A credit promotion scheme worth 1.9 percent of GDP, backstopped by government guarantees, remains without significant fiscal costs. - Revenue impact: large revenue shortfall for 2020 and projected in 2021 reflecting economic repercussions of the pandemic. - Note: Expenditure figures unchanged since last update because latest available spending data by functional area are from Q3 2020; 2020 outturns expected to be revised upward when Q4 data are available. ### Governance safeguards - COVID-19 related spending is channeled through the budget and subject to usual safeguards, including auditing by the Court of Audit, expected to be completed by the end of this year for the 2020 budget law. - No significant extra-budgetary funds. - The Court of Audit committed to carrying out an audit of COVID-related spending; publication date may be delayed to December rather than September to allow more time for technical work. - Public procurement transparency: - Government is publishing data on public procurement (plans, tenders, and contracts awarded) with larger contracts (over 0.5 billion CFA) subject to review and approval of the Council of Ministers. - The list of Covid-related emergency procurement contracts has been shared with the IMF and other development partners (not yet published). - Beneficial ownership and asset declarations: - Government has not yet begun collecting beneficial ownership information but has committed to begin doing so. - Authorities intend to issue a regulation requiring all Covid-related new public contracts to request beneficial ownership information of bidding companies, with the winning company’s information to be published (proposed program prior action). - Authorities intend to extend the beneficial ownership requirement to all non-competitive bids. - Authorities intend to improve transparency of the asset declaration regime by adopting and publishing a new template for members of government providing more details while redacting sensitive information. - Authorities published on an official website the updated report on asset declarations of all members of government—providing information on the total value of assets and the ministers that are current in their declaration. - Anti-corruption and accountability: progress in strengthening governance, including establishment and strengthening of the anti-corruption agency, Haute Autorité de Lutte contre la Corruption et les Infractions Assimilées (HALCIA). A judicial process is investigating alleged procurement irregularities at the Ministry of Defense; government committed to review and strengthen procurement procedures once process is complete. - Centralized crisis management: government centralized costing and monitoring of crisis measures at the Ministry of Finance and issued a supplementary budget in line with commitments under the RCF. ### IMF support status and upcoming debt service - IMF financial assistance: - An ECF arrangement (SDR118.44 million or 90 percent of quota) was completed in October 2020. - Emergency financial assistance under the RCF (SDR83.66 million, 63.6 percent of quota) was approved on April 14, 2020. - Following an official request from the authorities, discussion on a successor ECF program was initiated in June 2021. - Upcoming debt service under CCRT: - Niger has debt service of SDR 5.029 million falling due during the interval from October 16, 2021 to January 10, 2022, the maximum period covered by the 4th tranche of debt service relief under the CCRT. - The debt service falling due during the remaining period from January 11, 2022 to April 13, 2022 will be covered subsequently subject to resource availability. - Memorandum note: CCRT debt relief for the period from January 11, 2022 through April 13, 2022 is included in projections, but its approval is subject to adequate resources under the CCRT. ### Staff appraisal - Staff assessment: Niger is pursuing appropriate macroeconomic policies to address the global pandemic. - Authorities’ commitments under the new program in discussion: - Issue regulation requiring beneficial ownership information for Covid-related public contracts and publish the winning company’s information (proposed program prior action). - Extend beneficial ownership information requirements to all non-competitive bids. - Improve transparency of the asset declaration regime by adopting and publishing a new template for members of government. - Staff received reasonable assurances from the authorities that these commitments will be met. - Use of resources: staff assess that resources freed by the first three tranches of Fund debt service relief under the CCRT, and other Fund support, are being used to help provide emergency health, social and economic support to mitigate the impact of the pandemic. ### Key statistics (selected figures from Table 1) - Real GDP growth (annual percentage change): - 2020: 3.6 - 2021 projection: 5.4 - Pre-COVID 2020 projection: 6.0 - Pre-COVID 2021 projection: 5.6 - Oil production (thousand barrels per day): 2020: 17 - GDP deflator (annual percentage change): 2020: 0.9 - Consumer price index (annual average): 2020: 2.0 - Total revenue (percent of GDP): - 2020: 10.5 (table shows multiple rows; select entries: 2020 column under "Total revenue": 10.5) - Total expenditure and net lending (percent of GDP): - 2020: 11.0 - Overall balance (commitment basis, incl. grants) (percent of GDP): - 2020: -5.3 - 2021 projection: -6.6 - External current account balance (incl. grants) (percent of GDP): - 2020: -13.5 - 2021 projection: -15.5 - Total public and publicly-guaranteed debt (percent of GDP): - 2020: 45.0 - 2021 projection: 39.0 - Public and publicly-guaranteed external debt (percent of GDP): - 2020: 31.6 - 2021 projection: 27.9 - PV of external debt (percent of GDP): - 2020: 24.2 - 2021 projection: 23.4 - Debt-service ratio as percent of exports of goods and services: - 2020: 5.5 - 2021 projection: 8.8 - Social and health expenditures, percent of GDP: - 2018: 5.1 - 2019: 4.8 - 2020: 5.4 *International Monetary Fund — Annex XXIV. Niger: Update for CCRT Debt Relief* ### Annex XXV. Rwanda: Update for CCRT Debt Relief ### Annex XXV. Rwanda: Update for CCRT Debt Relief ### Recent economic developments - COVID-19 continues to impact Rwanda; Q1 2021 growth registered 3.4 percent driven by agriculture (good harvest) and rebound in manufacturing. - High-frequency indicators point to continued recovery in Q2 2021. - Headline inflation reached -0.4 percent y/y in July 2021. - Real GDP growth for 2021 is projected at 5.1 percent. - Slow vaccination rollout and renewed mobility restrictions in 2021 Q2 risk delaying recovery. - Poverty projected to increase by almost 4 percent between 2019 and 2021, close to 900,000 new poor over two years. - Fiscal and external balances projected to deteriorate relative to pre-pandemic projections due to additional COVID-19 spending, higher oil prices, and decline in net exports with delayed tourism resumption; deterioration expected to gradually reverse as demand recovers. ### COVID-related fiscal measures and public spending - Economic Recovery Plan (ERP) COVID-related spending: - Initially costed at 3.3 percent of GDP spanning FY19/20 and FY20/21. - Increased to 10.1 percent of GDP and extended until FY 23/24. - Estimated spent over last two fiscal years (by end-June 2021): 4.8 percent of GDP. - Projected to be spent by end-FY21/22: 7.9 percent of GDP. - Breakdown of projected FY21/22 COVID-related spending (percent of GDP): - Prevent, contain, and manage pandemic and scars (including vaccination and education investments): 3.3 percent of GDP. - Support vulnerable households (cash transfers, subsidized agricultural inputs, public works): 2.5 percent of GDP. - Assist firms in hardest-hit sectors (subsidized loans, direct support, credit guarantees via Economic Recovery Fund): 2.1 percent of GDP. - Tax deferral and relief measures benefiting households and corporates phased out at end-December 2020. ### Public health and vaccination - As of September 7, 12.8 percent of the population has received at least one dose; 7.1 percent fully vaccinated against a 30 percent target set for end-December 2021. - Rwanda’s vaccination pace faster than sub-Saharan average of about 1 percent but slower than planned due to vaccine supply constraints. ### Governance safeguards and transparency - A financing item “COVID-19 response” created in chart of accounts to track crisis-related spending. - Separate bank account under the treasury single account set up to receive Economic Recovery Fund contributions for businesses. - Information on awarded government contracts publicly available from government’s e-procurement website. - All government expenditures and procurement tenders for FY19/20, including pandemic-linked, audited by the office of the Auditor General; findings made public by end-April. - Audits of COVID-19 related spending for FY20/21 expected to be published by end-May 2022 as part of annual independent audit. ### IMF program status and support - PCI-supported program in place since June 2019; program performance strong with all reviews but the second completed. - Third review completed in December 2020; fourth review on July 1, 2021 with Board approving a one-year extension of the PCI. Fifth review expected by end-December 2021. - Two RCF disbursements under the “exogenous shock window” totaling SDR160.2 million (100 percent of the quota) approved on April 2 and June 11, 2020. - With new SDR allocation, Rwanda received SDR 153.5 million (2.1 percent of GDP) usable for pandemic needs and reserves boost. ### Upcoming debt service under CCRT - Rwanda has debt service of SDR 8.01 million to the Fund falling due during October 16, 2021 to January 10, 2022 (maximum period covered by the 4th tranche of CCRT debt service relief). - Debt service due from January 11, 2022 to April 13, 2022 will be covered subsequently subject to resource availability. ### Staff assessment - Staff assesses Rwanda is pursuing appropriate macroeconomic policies to address the pandemic. - Staff assesses resources freed by first three tranches of Fund debt service relief under the CCRT, and RCF disbursements, are being used appropriately to provide emergency health, social and economic support. ### Selected economic indicators (highlights from Table 1) - Real GDP (annual percentage change): 2020: -3.4; 2021 (Proj.): 5.1; 2022 (Proj.): 5.1; 2023 (Proj.): 7.0. - CPI (end period): 2021 (Proj.): 3.5; 2022 (Proj.): 5.2. - Total revenue and grants (percent of GDP, FY basis): 2020: 23.3; 2021 (4th Rev. proj.): 23.2; 2022 (4th Rev. proj.): 25.0. - Grants (percent of GDP): 2020: 4.2; 2021 (4th Rev. proj.): 4.5. - Expenditure (percent of GDP): 2020: 30.4; 2021 (4th Rev. proj.): 32.4; 2022 (4th Rev. proj.): 28.8. - Overall balance (percent of GDP): 2020: -7.1; 2021 (4th Rev. proj.): -9.1; 2022 (4th Rev. proj.): -5.6. - Total public debt incl. guarantees (percent of GDP): 2020: 58.9; 2021 (4th Rev. proj.): 71.3; 2022 (4th Rev. proj.): 59.8. - PV of total public debt incl. guarantees (percent of GDP): 2020: 43.1; 2021 (4th Rev. proj.): 51.0; 2022 (4th Rev. proj.): 42.9. - Current account balance (incl grants, percent of GDP): 2020: -9.9; 2021 (4th Rev. proj.): -12.2; 2022 (4th Rev. proj.): -9.1. - Gross international reserves (US$ millions): 2020: 1,553; 2021 (4th Rev. proj.): 1,780; 2022 (4th Rev. proj.): 1,654. - M3/GDP (percent): 2020: 29.8; 2021 (4th Rev. proj.): 28.9; 2022 (4th Rev. proj.): 30.9. *Source: Rwandan authorities and IMF staff estimates and projections (Annex XXV, ppea2021063).* ### Annex XXVII. Sierra Leone: Update for CCRT Debt Relief ### Annex XXVII. Sierra Leone: Update for CCRT Debt Relief ### Recent economic developments - COVID-19 third wave started in June 2021 and appeared to be flattening with daily cases reducing from over 100 to a single digit in August 2021, but uncertainty around true caseloads persists amid slow vaccination progress. - Real GDP growth: - Contraction in 2020 of about 2.2 percent. - Now expected to rebound to 3.2 percent in 2021. - Key drivers of the 2021 rebound: - Normalization and ramped up production of iron ore mining (Tonkolili and later Marampa). - Favorable iron ore prices. - Expected increase in iron ore exports, partly offset by weakness in rutile exports. - Balance of payments: - A BoP financing gap of about 0.6 percent of GDP would emerge in 2021 in the absence of the prospective CCRT debt relief. - Fiscal outlook and public debt: - Overall fiscal balance projected at about -3.8 percent of non-iron ore GDP in 2021 (against -3.4 percent projected pre-pandemic). - Public debt expected to increase to 73 percent of GDP in 2021. - SDR allocation and reserves: - Recent SDR allocation of about US$283mn will help increase reserve buffers and provide fiscal space for vaccine rollout and priority spending. - Social and poverty indicators: - Poverty head count of 57.9 percent in 2020. - Share of food insecure population rose to 57 percent in 2020, up 10 percentage points from a decade earlier. - Almost 4 percent of the population face severe acute malnutrition. - Downside risks: - Considerable downside risks including slower recovery if additional containment measures are needed or if vaccine rollout is delayed. ### Fiscal measures, COVID-related spending, and vaccination - 2021 budget reprioritized expenditures and allocated about 6.0 percent of GDP to COVID-related spending on health, education, and social sectors. - Preliminary outturn end-June 2021: - Transfers to NaCOVERC (health supplies, additional health care workers, quarantine expenditures, public awareness) slightly higher-than-budgeted at 0.6 percent of GDP (including uptick in cases in June 2021). - Cash transfers targeted at workers in vulnerable sectors: 0.1 percent of GDP. - Other COVID-related spending (prevention, containment & management; transfers to households; transfers to SOEs; labor-intensive public works) around 1.3 percent of GDP in 2021. - Use of SDR allocation: - Additional resources allocated to vaccination expenditure, arrears clearance payments consistent with arrears clearance strategy, domestically financed development spending (ambulance services, school feeding program, completion of water supply services). - Vaccination progress as of end-July 2021: - Almost 2 percent of the population have received their first shot. - Almost 18 percent of health workers have received their first shot. - Authorities’ actions to boost vaccination: - Restrictions to public building entry without vaccination. - Widening priority group to all those 18 years and older. - Working with development partners to boost vaccine supply and address hesitancy via enhanced risk communication and public sensitization. ### Governance safeguards and public financial management - Transparency measures and reporting: - Published unaudited financial statements of NaCOVERC as of December 2020 and March 2021. - Published certain details of large procurement contracts related to crisis mitigation through end-May 2021, including names of companies awarded contracts and their beneficial ownership on NPPA website. - Reporting on broader social and economic response. - Parliamentary and audit oversight: - Parliament scrutinized real-time external audit by the Audit Service of Sierra Leone (ASSL). - ASSL plans to complete an ex-post audit of NaCOVERC and the COVID-19 response and publish its report within 12 months of end of fiscal year 2020. - Strengthening financial management: - Implementation of standard operating procedures, training all District Covid-19 Emergency Response Centers on principles of financial management, and steps to improve HR processes. - Chart of accounts developed with the Accountant General to facilitate recording and reporting of emergency response transactions. - Appointment of a fiduciary agent to support NaCOVERC’s financial management. - Authorities have started to take actions to address identified irregularities. ### IMF support, debt service, and CCRT coverage - IMF arrangements and disbursements: - 43-month ECF arrangement for SDR 124.44 million (60 percent of quota) approved in November 2018. - Completion of combined 3rd and 4th ECF reviews in July 2021 enabled disbursement of SDR 31.11 million (about US$44.2 million), bringing total disbursements under the arrangement to SDR 77.775 million (about US$111 million). - RCF disbursements: SDR 103.7 million (50 percent of quota) in June 2020; second disbursement of SDR 35.26 million (17 percent of quota) in March 2021. - Upcoming Fund debt service: - Debt service to the Fund of SDR 6.00 million falling due during the interval from October 16, 2021 to January 10, 2022 (maximum period covered by the 4th tranche of CCRT relief). - Debt service falling due during January 11, 2022 to April 13, 2022 will be covered subsequently subject to resource availability. - Note on projections: - CCRT debt relief for the period from January 11, 2022 through April 13, 2022 is included in projections, but its approval is subject to adequate resources under the CCRT. ### Staff assessment and policy implications - Staff view: - Sierra Leone is pursuing appropriate macroeconomic policies to address the pandemic; vaccination campaign is gathering momentum. - First three tranches of Fund debt service relief under the CCRT have provided needed fiscal space to support pandemic responses. - Government’s revised budget plans appropriately support pandemic response while ensuring debt sustainability. - Further debt relief under the CCRT in 2021 will allow continuation of pandemic response, including ramping up vaccination. - Government is taking steps to improve PFM framework and has made notable progress on governance commitments under the RCF. - Fund emergency support under the RCF and the ECF (on-lent to the budget) have been vital in funding Sierra Leone’s emergency response. - August 2021 SDR allocation provides further legroom to respond to the pandemic while supporting inclusive and sustainable recovery. ### Key statistics and selected indicators (highlights) - Real GDP growth: - 2018: 3.5 - 2019: 5.5 - 2020: -2.2 - 2021 (current proj.): 3.2 - 2022 (proj.): 5.9 - GDP excluding iron ore growth: - 2018: 5.5 - 2019: 5.3 - 2020: -2.0 - 2021 (current proj.): 4.5 - Consumer prices (end-of-period): - 2020: 10.4 - 2021 (current proj.): 11.0 - 2022 (proj.): 14.6 - Public debt: - 2018: 69.1 - 2019: 71.8 - 2020: 66.6 - 2021 (current proj.): 73.0 - 2026 (proj.): 59.2 - External sector and reserves: - Gross international reserves (excluding swaps, months of next year's imports) — 2020: 4.6; 2021 (current proj.): 3.6; 2022 (proj.): 6.0 - Gross international reserves (US$ millions) — 2020: 677; 2021 (current proj.): 577; 2022 (proj.): 935 - Fiscal balances (percent of non-iron ore GDP): - Overall balance 2021 (current proj.): -3.8 - Overall balance pre-COVID proj. for 2021: -3.4 - Domestic primary balance 2021 (current proj.): -2.0 - COVID-related fiscal allocations and outturns (percent of GDP): - Priority expenditures: pre-COVID proj. 4.8; FY2020 estimate/actual 5.4; FY2021 current proj. 5.2 - Health: pre-COVID proj. 1.5; FY2020 estimate/actual 2.5; FY2021 current proj. 1.4 - Education: pre-COVID proj. 3.2; FY2020 estimate/actual 2.8; FY2021 current proj. 3.2 - Other COVID-related spending: FY2020 estimate/actual 2.7; FY2021 current proj. 1.3 - Transfers to households (FY2021 current proj.): 1.0 percent of GDP - Transfers to NaCOVERC through end-June 2021: 0.6 percent of GDP (included in health/COVID allocations) - Social indicators: - Poverty head count 2020: 57.9 percent - Food insecure population 2020: 57 percent - Severe acute malnutrition: almost 4 percent of the population - Vaccination as of end-July 2021: - Almost 2 percent of population received first shot. - Almost 18 percent of health workers received first shot. *Source: IMF staff summary of Annex XXVII. Sierra Leone: Update for CCRT Debt Relief.* ### 3.6 percent of GDP with additional support to those who lost their jobs provided through early ### 3.6 percent of GDP with additional support to those who lost their jobs provided through early withdrawals from the National Provident Fund (amounting to about 0.7 percent of GDP) ### Fiscal response and 2021 budget - Fiscal package size: 3.6 percent of GDP, plus early withdrawals from the National Provident Fund amounting to about 0.7 percent of GDP targeted to those who lost their jobs. - 2021 budget focuses on: - (1) protecting economic and social wellbeing through improved service delivery and preventing the spread of COVID-19; - (2) improving the quality of spending and redirecting resources to support the economic recovery; - (3) maintaining prudent macroeconomic and fiscal management. - Execution to date: about 60 percent of budgeted overall expenditure executed in the first seven months of the year; capital spending has been lower, in part owing to the late passage of the 2021 budget. - COVID-19 related spending has been protected despite the overall reduction in budgeted recurrent spending. - Policy options noted: room to provide further support by prioritizing measures to safeguard health security (including vaccinations) and identifying additional financing to provide targeted lifeline support to vulnerable households and business. - Monetary policy: remains accommodative; the central bank has purchased government bonds in the secondary market. ### Governance safeguards - An Oversight Committee established to oversee COVID-19 stimulus spending and guard against abuse or misuse, including an on-going multistage monitoring and evaluation process. - Publication and transparency commitments: - Publishing information on stimulus recipients on the Ministry of Finance website (already practiced). - Fund technical assistance on procurement transparency. - Authorities are working towards completing commitments including publication of: - an audit by the Solomon Islands Office of the Auditor General of COVID-19 related expenditures; - documentation on crisis-related procurement, including the names of the entities awarded the contracts and their beneficial owners. ### IMF support status - Emergency financing received under the RCF/RFI: approved on June 1, 2020, amount SDR 20.8 million (about US$28.5 million, 100 percent of quota). - Purpose: to help cover urgent balance of payments needs stemming from the COVID-19 pandemic. - Recipient of RCF/RFI emergency financing assistance: Central Bank of Solomon Islands; financing used to provide balance of payment support. ### Upcoming debt service - Debt service to the Fund falling due during October 16, 2021 to January 10, 2022: SDR 0.059 million (maximum period covered by the 4th tranche of debt service relief under the CCRT). - Debt service falling due during January 11, 2022 to April 13, 2022 will be covered subsequently subject to resource availability. ### Staff assessment - Staff assesses that Solomon Islands is pursuing appropriate macroeconomic policies to address the domestic impact of the pandemic. - Use of Fund support: - Fund debt service relief under the CCRT and support under the RCF/RFI emergency financing will be used to maintain macroeconomic stability, thus safeguarding public health, supporting livelihoods and the economic recovery. - Fund support is playing a catalytic role for budget financing from development partners for emergency support to mitigate the pandemic’s impact on the population. ### Selected economic indicators (highlights from Table 1) - Per capita GDP (2019): US$2,215 (p) - Population (2019): 721,455 (p) - UNHDI (2019): 0.567 - Social & health expenditures (2019): 5.6 percent of GDP - Poverty rate (2006): 23 percent - Real GDP growth (annual % change): 2019: 1.2; 2020 (Est.): 2.5; 2021 (Proj.): -4.3; 2022 (Proj.): 1.2; 2023 (Proj.): 4.4; 2024 (Proj.): 4.5; 2025 (Proj.): 3.3; 2026 (Proj.): 3.0 - CPI (period average): 2019: 1.6; 2020 (Est.): 2.3; 2021 (Proj.): 3.0; 2022 (Proj.): 2.4; 2023 (Proj.): 3.5; 2024 (Proj.): 2.8; 2025 (Proj.): 2.4; 2026 (Proj.): 2.3 - Nominal GDP (in SI$ millions): 2019: 12,833; 2020 (Est.): 13,475; 2021 (Proj.): 12,697; 2022 (Proj.): 13,404; 2023 (Proj.): 14,620; 2024 (Proj.): 16,032; 2025 (Proj.): 17,240; 2026 (Proj.): 18,338 - Central government operations (percent of GDP): - Total revenue and grants: 2019: 32.8; 2020 (Est.): 32.9; 2021 (Proj.): 33.2; 2022 (Proj.): 31.0; 2023 (Proj.): 32.8; 2024 (Proj.): 31.1; 2025 (Proj.): 30.5; 2026 (Proj.): 29.9 - Revenue: 2019: 26.4; 2020 (Est.): 26.8; 2021 (Proj.): 24.5; 2022 (Proj.): 22.1; 2023 (Proj.): 24.5; 2024 (Proj.): 24.3; 2025 (Proj.): 24.1; 2026 (Proj.): 23.8 - Grants: 2019: 6.3; 2020 (Est.): 6.0; 2021 (Proj.): 8.8; 2022 (Proj.): 8.9; 2023 (Proj.): 8.3; 2024 (Proj.): 6.8; 2025 (Proj.): 6.4; 2026 (Proj.): 6.2 - Total expenditure: 2019: 34.2; 2020 (Est.): 36.2; 2021 (Proj.): 35.7; 2022 (Proj.): 33.8; 2023 (Proj.): 35.0; 2024 (Proj.): 35.4; 2025 (Proj.): 34.6; 2026 (Proj.): 34.0 - Overall balance: 2019: -1.5; 2020 (Est.): -3.4; 2021 (Proj.): -2.4; 2022 (Proj.): -2.8; 2023 (Proj.): -2.2; 2024 (Proj.): -4.3; 2025 (Proj.): -4.1; 2026 (Proj.): -4.1 - Central government debt: 2019: 8.3; 2020 (Est.): 17.0; 2021 (Proj.): 14.0; 2022 (Proj.): 15.9; 2023 (Proj.): 17.4; 2024 (Proj.): 20.2; 2025 (Proj.): 22.7; 2026 (Proj.): 25.4 - Balance of payments highlights: - Trade balance (goods and services, in US$ millions): 2019: -161.6; 2020 (Est.): -73.5; 2021 (Proj.): -127.4; 2022 (Proj.): -176.0; 2023 (Proj.): -313.8 - Trade balance (percent of GDP): 2019: -10.2; 2020 (Est.): -4.4; 2021 (Proj.): -8.2; 2022 (Proj.): -10.7; 2023 (Proj.): -17.5 - Current account balance (in US$ millions): 2019: -154.0; 2020 (Est.): -120.2; 2021 (Proj.): -25.1; 2022 (Proj.): -95.7; 2023 (Proj.): -275.7 - Current account balance (percent of GDP): 2019: -9.8; 2020 (Est.): -7.2; 2021 (Proj.): -1.6; 2022 (Proj.): -5.8; 2023 (Proj.): -14.7 - Gross official reserves (in US$ millions, end of period): 2019: 574.1; 2020 (Est.): 600.8; 2021 (Proj.): 660.6; 2022 (Proj.): 743.9; 2023 (Proj.): 680.0 - Gross official reserves (in months of next year's imports of GNFS): 2019: 12.4; 2020 (Est.): 7.6; 2021 (Proj.): 12.3; 2022 (Proj.): 10.2; 2023 (Proj.): 8.7 - Memorandum items: - Broader cash balance (in SI$ millions): 2019: 346; 2020 (Est.): 269; 2021 (Proj.): 326; 2022 (Proj.): 120; 2023 (Proj.): 120; 2024 (Proj.): 120; 2025 (Proj.): 120; 2026 (Proj.): 120 - Broader cash balance (in months of total spending): 2019: 1.2; 2020 (Est.): 1.0; 2021 (Proj.): 1.1; 2022 (Proj.): 0.4; 2023 (Proj.): 0.4; 2024 (Proj.): 0.3; 2025 (Proj.): 0.3; 2026 (Proj.): 0.3 *Source: IMF staff report (selected excerpts).* ### 397.8 million (100 percent of quota). ### 397.8 million (100 percent of quota). ### Upcoming debt service (Tanzania) - Aside from RCF and RFI funds, Tanzania has no remaining outstanding debt to the IMF, and therefore will no longer benefit from debt service relief during the interval from October 16, 2021 to April 13, 2022. ### Staff assessment (Tanzania) - Staff assesses that Tanzania is pursuing appropriate macroeconomic policies to address the global pandemic. - Staff supports the temporary loosening of macroeconomic and financial policies to accommodate the measures undertaken against the impacts of the pandemic. - Staff assesses that the first two tranches of CCRT debt relief provided much needed space for the authorities to address some of the challenges arising from the pandemic. - Critical conditions and recommendations: - It will be critical to ensure that the health spending in the TCRP is fully financed and executed; otherwise Tanzania would be left vulnerable to the spread of the virus, and the economic recovery would falter. - Staff recommends delaying investments in large infrastructure projects as needed. - If financing fails to materialize as expected, the authorities have committed to reallocating and prioritizing health spending to directly tackle the pandemic and bring it under control. - Regularly and transparently reporting epidemiological data will be critical for the plan’s success. - The governance safeguards put in place, and the authorities’ commitment to use IMF financing for COVID-19 spending ensure that resources are appropriately used to provide emergency support to mitigate the impact of the pandemic on the population and the economy. ### Priority and COVID-related fiscal spending (Tanzania; FY2020/21 and FY2021/22) - Priority expenditures (percent of GDP): - Pre-Covid proj. FY2020/21: 5.3 - Current proj. FY2020/21: 5.1 - Change: -0.2 - Pre-Covid proj. FY2021/22: 5.4 - Current proj. FY2021/22: 5.5 - Change: 0.1 - Of which (percent of GDP): - Health: Pre-Covid FY2020/21: 1.0; Current FY2020/21: 0.9; Change: 0.0. Pre-Covid FY2021/22: 1.0; Current FY2021/22: 1.0; Change: 0.0. - Education: Pre-Covid FY2020/21: 2.7; Current FY2020/21: 2.7; Change: 0.0. Pre-Covid FY2021/22: 2.8; Current FY2021/22: 2.9; Change: 0.1. - Social: Pre-Covid FY2020/21: 1.0; Current FY2020/21: 1.0; Change: -0.1. Pre-Covid FY2021/22: 1.1; Current FY2021/22: 1.1; Change: 0.0. - Other Covid-related spending (percent of GDP): - FY2020/21 Pre-Covid: 0.2; Current: 0.2 - FY2021/22 Pre-Covid: 1.0; Current: 1.0 - Components FY2021/22: Covid prevention, containment & mgmt: 0.5; Transfers to HHs: 0.05; Transfers to businesses, SOEs, govt entities: 0.4 - Memorandum: - Priority expenditures (% of pub. spending): Pre-Covid FY2020/21: 27.9; Current FY2020/21: 31.0; Change: 3.1. Pre-Covid FY2021/22: 27.9; Current FY2021/22: 30.8; Change: 2.9. - Other Covid-related spending (% of pub. spending): FY2020/21: - ; Current FY2020/21: 1.4. FY2021/22 Pre-Covid: - ; Current FY2021/22: 5.5. ### Selected economic indicators (Tanzania, 2016/17–2023/24; key items preserved) - Real GDP (percent change): - 2017/18: 6.8 - 2018/19: 6.9 - 2019/20: 7.0 - 2020/21 Est.: 5.9 (Pre-covid proj. 1/: 5.9) - 2021/22 Pre-covid proj.: 4.4; Current proj.: 6.1 - 2022/23 proj.: 4.6 - 2023/24 proj.: 5.3; later proj.: 5.7 - GDP deflator: - 2017/18: 108.9; 2018/19: 111.2; 2019/20: 112.8; 2020/21: 114.3; 2020/21 Pre-covid proj.: 127.4; 2021/22: 117.2; 2021/22 Pre-covid proj.: 133.4; 2022/23: 121.7; 2023/24: 126.5; later: 131.5 - CPI (period average): - 2017/18: 5.3; 2018/19: 4.3; 2019/20: 3.2; 2020/21 Est.: 3.5; 2020/21 Pre-covid proj.: 4.3; 2021/22 proj.: 3.2; 2021/22 Pre-covid proj.: 4.6; 2022/23 proj.: 3.4; 2023/24 proj.: 3.5; later: 3.5 - Exchange rate (period average, TSh/USD): - 2017/18: 2,199; 2018/19: 2,251; 2019/20: 2,294; 2020/21: 2,302 - Broad money (M3, end of period): - 2017/18: 6.0; 2018/19: 6.0; 2019/20: 7.7; 2020/21: 9.5; 2020/21 Pre-covid proj.: 12.7; 2021/22 proj.: 11.6; 2021/22 Pre-covid proj.: 12.9; 2022/23 proj.: 8.3; 2023/24 proj.: 9.2; later: 9.6 - Credit to the private sector (end of period): - 2017/18: 1.3; 2018/19: 4.0; 2019/20: 7.6; 2020/21: 5.5; 2020/21 Pre-covid proj.: 14.5; 2021/22 proj.: 3.6; 2021/22 Pre-covid proj.: 14.6; 2022/23 proj.: 7.4; 2023/24 proj.: 8.8; later: 9.2 - Central government operations (percent of GDP): - Revenues and grants: 2017/18: 15.6; 2018/19: 15.2; 2019/20: 14.1; 2020/21: 15.3; 2020/21 Pre-covid proj.: 15.7; 2021/22 proj.: 13.8; 2021/22 Pre-covid proj.: 15.9; 2022/23 proj.: 14.0; 2023/24 proj.: 14.7; later: 14.9 - Expenditures: 2017/18: 16.6; 2018/19: 16.5; 2019/20: 16.6; 2020/21: 16.3; 2020/21 Pre-covid proj.: 18.9; 2021/22 proj.: 16.3; 2021/22 Pre-covid proj.: 19.3; 2022/23 proj.: 17.9; 2023/24 proj.: 17.7; later: 17.8 - Overall balance: 2017/18: -1.4; 2018/19: -1.9; 2019/20: -3.1; 2020/21: -1.4; 2020/21 Pre-covid proj.: -3.2; 2021/22 proj.: -2.5; 2021/22 Pre-covid proj.: -3.4; 2022/23 proj.: -3.9; 2023/24 proj.: -2.9; later: -2.9 - Public debt (gross nominal debt, percent of GDP): - 2017/18: 40.0; 2018/19: 41.4; 2019/20: 39.7; 2020/21: 38.7; 2020/21 Pre-covid proj.: 36.3; 2021/22 proj.: 39.1; 2021/22 Pre-covid proj.: 37.0; 2022/23 proj.: 39.9; 2023/24 proj.: 39.2; later: 38.4 - Of which external debt: 2017/18: 28.3; 2018/19: 29.5; 2019/20: 28.6; 2020/21: 28.0; 2020/21 Pre-covid proj.: 26.3; 2021/22 proj.: 28.2; 2021/22 Pre-covid proj.: 26.8; 2022/23 proj.: 28.0; 2023/24 proj.: 27.1; later: 25.5 - External sector: - Exports (goods and services, percent of GDP): 2017/18: 16.8; 2018/19: 15.9; 2019/20: 14.8; 2020/21: 14.9; 2020/21 Pre-covid proj.: 15.4; 2021/22 proj.: 13.3; 2021/22 Pre-covid proj.: 15.7; 2022/23 proj.: 13.4; 2023/24 proj.: 13.6; later: 13.9 - Imports (goods and services, percent of GDP): 2017/18: 18.7; 2018/19: 17.7; 2019/20: 17.6; 2020/21: 15.9; 2020/21 Pre-covid proj.: 18.6; 2021/22 proj.: 14.6; 2021/22 Pre-covid proj.: 18.8; 2022/23 proj.: 17.2; 2023/24 proj.: 16.0; later: 16.1 - Current account balance (percent of GDP): 2017/18: -2.8; 2018/19: -2.5; 2019/20: -3.5; 2020/21: -1.6; 2020/21 Pre-covid proj.: -4.6; 2021/22 proj.: -1.9; 2021/22 Pre-covid proj.: -4.6; 2022/23 proj.: -4.5; 2023/24 proj.: -3.3; later: -3.1 - Gross international reserves: - In billions of U.S. dollars: 2017/18: 5.0; 2018/19: 5.5; 2019/20: 4.4; 2020/21: 5.2; 2020/21 Pre-covid proj.: 5.6; 2021/22 proj.: 5.2; 2021/22 Pre-covid proj.: 6.4; 2022/23 proj.: 5.5; 2023/24 proj.: 6.2; later: 6.7 - In months of next year's imports: 2017/18: 6.2; 2018/19: 6.4; 2019/20: 5.3; 2020/21: 6.4; 2020/21 Pre-covid proj.: 4.8; 2021/22 proj.: 5.1; 2021/22 Pre-covid proj.: 5.0; 2022/23 proj.: 5.4; 2023/24 proj.: 5.5; later: 5.6 - Memorandum items: - GDP at current prices (Trillions of Tanzanian shillings): 2016/17: 114; 2017/18: 124; 2018/19: 134; 2019/20: 144; 2020/21: 168; 2020/21 Pre-covid proj.: 154; 2021/22: 187; 2021/22 Pre-covid proj.: 168; 2022/23: 183; 2023/24: 202 - GDP in Millions of U.S. dollars: 2016/17: 51,500; 2017/18: 54,963; 2018/19: 58,755; 2019/20: 62,607; 2020/21: 69,182; 2020/21 Pre-covid proj.: 66,812; 2021/22: 74,618; 2021/22 Pre-covid proj.: 71,833; 2022/23: 77,210; 2023/24: 83,032 - GDP per capita (U.S. dollars): 2016/17: 985; 2017/18: 1,020; 2018/19: 1,058; 2019/20: 1,095; 2020/21: 1,175; 2020/21 Pre-covid proj.: 1,135; 2021/22: 1,230; 2021/22 Pre-covid proj.: 1,185; 2022/23: 1,236; 2023/24: 1,291 - Population (million): 2016/17: 52.3; 2017/18: 53.9; 2018/19: 55.5; 2019/20: 57.2; 2020/21: 58.9; 2020/21 Pre-covid proj.: 58.9; 2021/22: 60.6; 2021/22 Pre-covid proj.: 60.6; 2022/23: 62.4; 2023/24: 64.3 - Priority social spending (percent of GDP): historical and projections: 5.8; 5.7; 5.8; 5.3; 5.1; 5.4; 5.5; 5.3; 5.3 ### Annex XXXI — Togo: Update for CCRT Debt Relief — Recent economic developments - COVID-19 impact: - Expected output loss of about 5 percent of GDP (relative to the pre-pandemic projection) over 2020-21. - World Bank estimates: extreme poverty increased to just over 46 percent in 2020 from about 45 percent in 2019. - Activity and outlook: - High-frequency indicators up to June 2021 show stronger activity (higher household consumption, increasing port and airport activities, growing export-oriented production). - Projected growth in 2021 revised upward to 4.8 percent (from 3.5 percent predicted earlier). - Near-term growth prospects uncertain due to delta variant; new cases rose in late June and surpassed April peak of second wave in mid-August. - As of August 30, total confirmed cases since start of pandemic: 21,261; deaths: 185; active cases: 4,353. - Fiscal and balance of payments: - Overall fiscal deficit budgeted at 6.0 percent of GDP in 2021, compared with pre-COVID-19 projections of 1.5 percent of GDP. - Additional balance of payments needs from COVID-19 crisis tentatively estimated in the range of 2-3 percent of GDP in 2021. - Public debt-to-GDP ratio: 60.3 percent at end-2020; projected to increase to 63.0 percent at end-2021. ### Public health and macroeconomic policy response (Togo) - Response plan focuses on: - (i) containment and mitigation measures; - (ii) upgrading of the health system; - (iii) support to vulnerable households; - (iv) support to the private sector. - Priority expenditures: - Projected at 6.1 percent of GDP in 2021 with higher spending on education and reduced health spending compared to 2020. - 2021 Budget provision for COVID-19 related spending: 0.4 percent of GDP. - Staff projects current COVID-19 related spending at 0.7 percent of GDP (pending supplementary budget). - Vaccination plan and costs: - Goal: administer 10.6 million vaccine doses (covering about 60 percent of the population) by 2022. - Of which 6.1 million (covering about 35 percent of the population) in 2021; only about 0.5 million administered by August 20 due to supply constraints. - About one-third of vaccinations paid by COVAX; estimated fiscal cost for remaining two-thirds: at least 0.5 percent of GDP. - Debt service to the Fund: - Togo’s debt service to the Fund falling due during 2021 amounts to SDR 1.76 million (0.03 percent of GDP). ### Governance safeguards (Togo) - Donor financial contributions deposited in a special account at the central bank (BCEAO). - Authorities committed to: - Publish a special audit report by the Auditor General (Cour des Comptes) on 2020 COVID-19 related spending and use of donor support dedicated to it. - Publish a list of essential elements of COVID-19 related public procurement issued in 2020 and the first half of 2021 (nature of goods/services procured, price per unit, overall contract amount, names of entities awarded contracts). ### IMF support status (Togo) - Togo had an ECF-supported program during 2017–20; final review completed in April 2020, which included an augmentation of access from 17.1 percent of quota to 65.8 percent of quota to address COVID-19 impacts. - Discussions on a new ECF-supported program started in June 2021 and are expected to resume in the fourth quarter of 2021. ### Upcoming CCRT-eligible debt service (Togo) - Togo does not have any eligible debt service to the Fund falling due during the interval from October 16, 2021 to April 13, 2022. ### Staff assessment (Togo) - Staff assesses that Togo is pursuing appropriate macroeconomic policies to address the impact of the global pandemic. - Staff assesses that resources freed by the three tranches of Fund debt service relief under the CCRT, and other Fund support, are being used to provide emergency health, social, and economic support to mitigate the pandemic's impact. ### Priority and COVID-related fiscal spending (Togo; FY2020 and FY2021) - Priority expenditures (percent of GDP): - Pre-Covid FY2020: 5.6; Actual FY2020: 6.4; Change: 0.8 - Pre-Covid FY2021: 5.3; Current FY2021: 6.1; Change: 0.9 - Of which (percent of GDP): - Health: FY2020 Pre-Covid: 1.8; Actual: 2.4; Change: 0.6. FY2021 Pre-Covid: 1.6; Current: 1.7; Change: 0.1. - Education: FY2020 Pre-Covid: 2.7; Actual: 2.9; Change: 0.2. FY2021 Pre-Covid: 2.7; Current: 3.3; Change: 0.7. - Social: FY2020 Pre-Covid: 1.1; Actual: 1.1; Change: 0.0. FY2021 Pre-Covid: 1.0; Current: 1.1; Change: 0.1. - Other Covid-related spending: - FY2020 Actual: 1.7 percent of GDP; FY2021 Current proj.: 0.7 percent of GDP. - Components FY2020: Covid prevention, containment & mgmt: 0.9; Transfers to HHs: 0.7; Transfers to businesses, SOEs, govt entities: 0.1 - Memorandum: - Priority expenditures (percent of public spending): FY2020 Pre-Covid: 28.5; Actual: 27.5; Change: -1.0. FY2021 Pre-Covid: 27.1; Current: 26.4; Change: -0.7. - Other Covid-related spending (percent of public spending): FY2020 Actual: 7.5; Change from pre-Covid: 7.5. FY2021 Current: 3.1. - Tax relief to HHs/businesses/other revenue measures: FY2020 Actual: 1.0; FY2021 Current: 1.0. *Sources: Tanzanian and Togolese authorities; IMF staff estimates and projections.* ### Annex XXXII. Republic of Yemen: Update for CCRT Debt Relief ### Annex XXXII. Republic of Yemen: Update for CCRT Debt Relief ### Recent Economic Developments - Six-year conflict has crippled the economy and pushed the country into an acute humanitarian crisis; UN estimates more than 24 million people—some 80 percent of the population—are in need of humanitarian assistance. - COVID has aggravated the situation; limited testing capacity likely causes reported cases to underestimate spread. - Desperately needed foreign assistance collapsed during the pandemic, adding to an already large financing need of over 7 percent of GDP in 2021. - An in-kind fuel subsidy announced by Saudi Arabia in March and additional humanitarian assistance from the U.S. announced in August have alleviated some financing pressures, but much more is needed. - Foreign exchange reserves are now nearly exhausted at less than a month of already-compressed imports. - Economic activity is estimated to have contracted by 8.5 percent in 2020. - Growth is projected to contract by a further 2 percent in 2021. - With limited alternative resources, the central bank has resorted to monetary financing of the fiscal deficit. - The exchange rate has depreciated by 66 percent since the start of 2020, further eroding purchasing power for critical food and medical imports. - Food prices have increased by around 58 percent over the same period. ### Public health and macroeconomic policy response (including use of resources freed by debt relief) - Emergency health policies implemented despite limited resources and fragmented institutional capacity: - Containment measures: school and business closures, bans on public and religious gatherings, shutdown of border points. - Health system actions: established emergency facilities, procured test kits and additional ventilators, increased ICU capacity, deployed a public campaign on personal hygiene, enlisted healthcare workers. - Emergency funds allocated to support local quarantine centers with medical equipment, including by reallocating non-priority outlays. - Fiscal measures and spending: - Additional COVID expenditures of 0.4 percent of GDP and priority expenditures of 0.5 percent of GDP were implemented. - Priority expenditures, including on health and education, and modest COVID-related support are expected to be maintained going forward. - Vaccination and delivery support: - COVAX expected to cover about 23 percent of the population. - As of end-July 2021, about 13,000 people have been fully vaccinated and about 300,000 people partially vaccinated (less than 1 percent of the population). - Support under the CCRT has helped defray the costs of vaccine delivery. ### Governance safeguards and technical assistance - Authorities established a high-level interministerial committee to oversee COVID-related spending, prioritize expenditures and monitor implementation. - Limited institutional capacity constrains effective oversight of COVID-related spending. - Authorities are receiving IMF technical assistance on budget execution and cash management to enhance transparency and improve accountability in fiscal operations. ### IMF support status and debt relief details - Yemen is not currently under a Fund-supported program and has not received emergency support under the RCF. - Yemen has benefitted from the first three tranches of the CCRT totaling SDR 42.454 million and the recent SDR allocation of SDR 467 million. - Yemen is also a beneficiary of the Debt Service Suspension Initiative. - Upcoming debt service: - Yemen does not have debt service falling due during the interval from October 16, 2021 to January 10, 2022, the maximum period covered by the 4th tranche of debt service relief under the CCRT. - Debt service falling due during the remaining period from January 11, 2022 to April 13, 2022 will be covered subsequently subject to resource availability. ### Staff assessment - Staff assesses that Yemen is pursuing broadly appropriate macroeconomic policies to address the pandemic amidst conflict and very limited resources. - Data challenges due to ongoing conflict and weak institutional capacity complicate assessment of the macroeconomic outlook. - Authorities, in coordination with WHO and UN, have made progress in addressing the health shock and are working with development partners on vaccination strategy. - Staff assesses that resources freed up due to Fund debt service relief under the CCRT are being used to help provide emergency health, social and economic support to mitigate the impact of the pandemic on lives and livelihoods. ### Key indicators and fiscal numbers (selected, as reported) - Financing need: over 7 percent of GDP in 2021. - Real GDP at market prices: economic activity contracted by 8.5 percent in 2020; growth projected to contract by a further 2 percent in 2021. - Additional COVID spending: 0.4 percent of GDP. - Priority expenditures increase noted: 0.5 percent of GDP. - CCRT support received: SDR 42.454 million (first three tranches) and SDR 467 million (recent allocation). - Vaccination: about 13,000 fully vaccinated; about 300,000 partially vaccinated; COVAX expected to cover about 23 percent of population. - Exchange rate depreciation: 66 percent since start of 2020. - Food price increase: around 58 percent. - Foreign exchange reserves: now nearly exhausted at less than a month of imports. - Debt service scheduling: no debt service due Oct 16, 2021–Jan 10, 2022; remainder Jan 11, 2022–Apr 13, 2022 subject to CCRT resources. *Annex XXXII. Republic of Yemen: Update for CCRT Debt Relief* --- _Source: https://www.imf.org/-/media/files/publications/pp/2021/english/ppea2021063.pdf_