IMF Executive Board Approves New US$455 Million Extended Credit Facility Arrangement for the Republic of Congo
January 22, 2022
- The IMF Executive Board approved a new 36-month arrangement under the Extended Credit Facility for the Republic of Congo, in an amount equivalent to about US$455 million. The Executive Board’s decision will enable an immediate disbursement equivalent to about US$90 million.
- New waves of the COVID-19 pandemic are creating headwinds for the nascent economic recovery from the deep recession spurred by the pandemic’s onset and related oil price shocks.
- Reducing debt vulnerabilities while implementing fiscal policy that supports a strong and equitable economic recovery will be key.
- Advancing wide-ranging structural reforms, including anti-corruption measures, transparency in the use of public resources, and energy sector reforms, will be important for improving governance and the business environment.
Washington, DC : The Executive Board of the International Monetary Fund (IMF) approved a 36-month arrangement under the Extended Credit Facility (ECF) in an amount equivalent to SDR 324.0 million (about US$455 million or 200 percent of the Republic of Congo’s quota in the Fund), to help the country maintain macroeconomic stability and support economic recovery in the context of the pandemic, including by catalyzing financial support from official donors. The Executive Board’s decision will enable an immediate disbursement equivalent to SDR 64.80 million (about US$90 million).
Over the long term, policies under this ECF-supported program will help reduce fragilities and place the Republic of Congo onto a path of higher, more resilient, and inclusive growth. It will also contribute to the regional effort to restore and preserve external stability for the Central African Economic and Monetary Union (CEMAC).
At the conclusion of the Executive Board’s discussion, Mr. Kenji Okamura, Deputy Managing Director and Acting Chair, made the following statement:
“The Republic of Congo’s economy is expected to strengthen in the second half of the year, supported by vaccine rollout, social spending, and domestic arrears payments. However, the nascent recovery is facing significant risks, including a possible worsening of the pandemic, continued volatility in oil prices and production, climate change shocks, and weaker-than-expected reform implementation.
“The authorities’ program, supported by a new three-year Extended Credit Facility arrangement, aims to maintain macroeconomic stability during the recovery, reduce fragilities, and put the country on a medium-term path to higher, more resilient, and inclusive growth. The arrangement is also expected to catalyze development partner support.
“Reducing debt vulnerabilities while supporting a strong and equitable recovery will be key. To this end, ensuring adequate fiscal space for critical social spending and infrastructure investment is essential. The authorities are focused on strengthening domestic revenue mobilization and public spending efficiency, including through enhanced public investment management. Improved debt management will also be instrumental, including to ensure steady repayment of debt and arrears. The authorities are taking steps to finalize external debt restructuring.
“Wide-ranging structural reforms are central to improving governance and the business environment, and addressing challenges from climate change and the global transition to low-carbon economies. Operationalizing the new anti-corruption architecture, implementing energy sector reforms, strengthening public financial management, and enhancing financial stability and inclusion would help address long-standing structural bottlenecks and raise confidence.”
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