IMF Executive Board Completes the Third Review under the Extended Credit Facility Arrangement and Approves the Fourth US$34.9 Million Disbursement to Togo
IMF News, December 10, 2018
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- IMF Executive Board Completes the Third Review under the Extended Credit Facility Arrangement and Approves the Fourth US$34.9 Million Disbursement to Togo
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- Published: December 10, 2018
Program performance and disbursement
- The Executive Board completed the third review of Togo’s program under the Extended Credit Facility (ECF) on December 10, 2018.
- Program implementation under the ECF arrangement has been satisfactory.
- All quantitative performance criteria and three out of five structural benchmarks were met.
- The completion of the review enables the disbursement of SDR25.17 million (about US$34.9 million).
- Total disbursements since the beginning of the arrangement amount to SDR100.68 million (about US$139.5 million).
Program scope and financing terms
- Togo’s three-year arrangement was approved on May 5, 2017 for SDR176.16 million (120 percent of quota or about US$241.5 million at the time of approval of the arrangement).
- The program aims to:
- reduce the overall fiscal deficit substantially to ensure long-term debt and external sustainability;
- refocus policies on inclusive growth through targeted social spending and sustainably-financed infrastructure spending;
- resolve the financial weaknesses in the two public banks.
Key findings, projections, and near-term targets
- “Togo’s performance under the ECF-supported program has been satisfactory despite a challenging environment. The economy shows signs of incipient stabilization, growth is projected to accelerate, and inflation remains within the WAEMU criteria. Meanwhile, the structural reform agenda is advancing. With risks abating but still on the downside, it is important that the authorities remain committed to their macroeconomic adjustment and reform agenda.” — Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair
- Fiscal and debt objectives:
- The authorities are determined to reduce public debt to sustainable levels and advance fiscal reforms.
- The fiscal framework is expected to achieve the debt reduction envisaged initially under the program.
- Togo is projected to comply with the WAEMU convergence criteria by end-2019.
- The authorities are planning to pursue a debt reprofiling operation with appropriate safeguards, aimed at reducing the present value of total public debt.
Fiscal reforms and public investment management
- Ongoing fiscal reforms aim to create space for social and infrastructure spending.
- The authorities are making efforts to:
- improve revenue mobilization in a permanent way;
- shift the composition of spending in favor of growth-supporting public investment;
- enhance the efficiency of overall spending.
- Further progress is needed to finalize the cost-benefit analysis of public investment projects and strengthen arrears management.
Financial sector reforms and privatization
- The authorities have revisited their financial sector strategy and re-launched the privatization of the two remaining public banks.
- Implementation of the agreed safeguard measures will be important to ensure that the privatization is in line with international best practices.
National Development Plan, Compact with Africa, and governance priorities
- Efforts are underway to implement measures under the National Development Plan and the Compact with Africa to:
- promote Togo as a major logistical hub;
- develop a dynamic financial center;
- build a strong manufacturing base.
- Priorities highlighted include fighting corruption, strengthening governance, and improving the business climate more broadly.
Press Release No. 18/469, December 10, 2018 — International Monetary Fund
