Press Release: IMF Executive Board Reviews Noncomplying Disbursement to Chad

IMF News, June 26, 2003

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Canonical URL: Press Release: IMF Executive Board Reviews Noncomplying Disbursement to Chad

The Executive Board reviewed a noncomplying disbursement to Chad in an amount equivalent to SDR 5.4 million (about US$7.6 million) made following completion of the fourth review under Chad's Poverty Reduction and Growth Facility (PRGF) arrangement in October 2002.
The Board agreed that Chad could repay the IMF in two equal installments to be paid no later than July 31, 2003 and October 31, 2003, respectively.
The Board considered a waiver for the noncomplying disbursement to be inappropriate given misreporting and continued accumulation of arrears; repayment plus accrued interest was requested.

Chad provided the IMF with inaccurate information about its external payments arrears subsequent to the PRGF disbursement in October 2002.
The authorities did not inform the IMF of new external payments arrears accumulated between July and September 2002.
The accumulation of these arrears violated a continuous performance criterion under the PRGF arrangement; as a result of the inaccuracy in information communicated to the Fund, the disbursement was deemed to be noncomplying.
Arrears continued to be accumulated in the last quarter of 2002 and in early 2003.
In March 2003, the authorities indicated that: a set of corrective actions had been implemented; all external arrears had been cleared; and Chad had remained current on its external obligations since February 2003.
At the time of that March 2003 communication, Chad had accumulated new arrears and continued to do so in April 2003; the corrective actions had not yet been fully implemented.
These arrears were subsequently cleared and the identified corrective actions put in place.

The Board regretted the authorities' misreporting on the accumulation of new external payments arrears in connection with the fourth review under Chad's PRGF arrangement in October 2002.
Given the further accumulation of arrears through April 2003 and the authorities' failure to fully implement corrective actions despite assurances to the contrary, the Board found a waiver for the noncomplying disbursement inappropriate.
Chad was asked to repay early the Fund the amount of SDR 5.4 million plus accrued interest, in two equal installments.
The Board urged the authorities to fully and consistently implement the corrective measures they have identified, aimed at preventing the reemergence of external payments arrears and misreporting.

Press Release No. 03/98 — June 26, 2003 (IMF).