IMF Executive Board Completes Second Review Under the ECF Arrangement for the Central African Republic, Approves US$16.3 Million Disbursement, and an Augmentation of US$15.5 Million

IMF News, July 17, 2017

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Canonical URL: IMF Executive Board Completes Second Review Under the ECF Arrangement for the Central African Republic, Approves US$16.3 Million Disbursement, and an Augmentation of US$15.5 Million

On July 17, 2017, the IMF Executive Board completed the second review under the Extended Credit Facility (ECF) arrangement for the Central African Republic.
The completion of the review enables a disbursement of SDR 11.70 million (about US$16.3 million).
The Executive Board approved an augmentation of the ECF arrangement of SDR 11.14 million (about US$15.5 million), to be disbursed upon completion of the third review.
The augmentation is intended to meet additional balance of payments needs associated with the accelerated clearance of arrears to small and medium sized government suppliers.

Original ECF approval (July 20, 2016): SDR 83.55 million (about US$116.5 million), representing 75 percent of Central African Republic’s quota at the IMF.
Total disbursements after this review: SDR 36.75 million (about US$51.2 million).
Augmentation approved: SDR 11.14 million (about US$15.5 million).
Total financing approved after augmentation: SDR 94.69 million (about US$132 million), representing 85 percent of the country’s IMF quota.

Performance under the ECF-supported program has been described as satisfactory despite the challenging security environment.
The program aims to create fiscal space for development spending, improve the business environment, and foster higher and more inclusive growth.
Given the country’s high risk of debt distress, continued reliance on grant financing, while limiting borrowing, even in highly concessional terms, is emphasized.

Fiscal strategy:
- Remain anchored in the domestic primary balance objective.
- Sustain and accelerate efforts to mobilize domestic revenues—particularly at customs.
- Enhance budget transparency to create fiscal space for increasing social and capital spending.
Public financial management:
- Ensure regular publication of budget execution reports.
- Consolidate the treasury single account.
- Limit the use of exceptional spending procedures.
Arrears and credibility:
- Reduce domestic payment arrears to small and medium-sized enterprises to support growth, restore the state’s credibility, and contribute to social cohesion.
Investment and growth:
- Swift implementation of the National Plan for Recovery and Peace’s investment program to boost economic prospects.
- Channel available assistance effectively into priority projects to lift economic growth, create jobs, and reduce poverty.
Debt and financing strategy:
- Given high risk of debt distress, prioritize grant financing and limit borrowing, including in highly concessional terms.
Regional coordination:
- Program success depends on supportive policies and reforms by regional institutions.

The augmentation aims to support accelerated clearance of arrears to small and medium sized government suppliers, thereby supporting social cohesion and economic growth.

Press Release No. 17/287 — July 17, 2017 — IMF Communications Department