## IMF Executive Board Approves an Additional US$68.49 Million Disbursement for Chad and Notes Cancellation of its Extended Credit Facility (ECF) Arrangement

_IMF News, July 22, 2020_

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## Bibliographic details
- Published: July 22, 2020

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### Key facts and figures
- Disbursement approved: SDR 49.07 million (about US$ 68.49 million or 35 percent of quota).
- This is the second RCF disbursement in three months.
- Total IMF emergency support to Chad since the outbreak of the pandemic: SDR 133.19 million (US$183.60 million).
- ECF arrangement: noted cancellation; it was to expire at end-September 2020.
- Relevant dates: July 22, 2020; first RCF dated April 14, 2020.

### Economic context and rationale for RCF support
- Purpose: to address urgent balance of payment needs stemming from the COVID-19 pandemic and provide essential COVID-19-related health expenditure.
- Situation driving the request:
  - The twin Covid-19 pandemic and terms of trade shocks have worsened Chad’s economic outlook since the first RCF in April 14, 2020.
  - Fiscal and external positions have worsened, reflecting reduced export proceeds and lower oil and non-oil revenues, and higher than expected spending to contain the COVID-19 crisis.
  - Containment measures adopted by authorities included a curfew and closure of markets and non-essential stores; these proved successful in containing the pandemic spread but further depressed the economy.

### Authorities’ actions and use of IMF support
- Health and mitigation measures taken or planned by the authorities:
  - Upgrading the health system.
  - Scaling up health-related spending.
  - Measures to help businesses and households absorb the adverse impact of the pandemic.
  - Steps to ensure transparency and accountability in the use of COVID-related resources, including an ex-post audit of crisis-related spending and the publication of crisis-related procurement contracts.
- Role of the RCF disbursement:
  - Provide timely support to fill an urgent financing need.
  - Support implementation of the authorities’ additional measures to address the COVID-19 crisis and mitigate its severe impact.
  - Catalyze donor support.

### Risks, outlook, and policy guidance from IMF management
- Assessment of outlook and risks:
  - “The macroeconomic outlook has further deteriorated, with greater economic contraction and higher balance of payments and budgetary financing needs. The risk to the outlook is tilted to the downside.”
- Short-term policy guidance:
  - Temporarily relax the fiscal deficit to allow scaling up of health care spending and to accommodate the impact of the sharp drop in oil prices.
  - Strengthen transparency and monitoring of emergency resources.
- Medium-term policy guidance:
  - Once the crisis abates, gradually unwind the temporary emergency measures.
  - Fiscal adjustment will be needed in the medium term, especially since oil prices are expected to remain low, including by allowing temporary expenditure measures to expire.
  - Continue to refrain from non-concessional borrowing consistent with commitments under the DSSI and the terms of the World Bank’s Sustainable Development Financing Policy.

### IMF procedural notes
- This is the second disbursement under the Rapid Credit Facility (RCF) to address the external financing needs arising from the COVID-19 pandemic, bringing total emergency support to SDR 133.19 million (US$183.60 million).
- The Executive Board also notes the cancellation of the ECF arrangement that was to expire at end-September 2020.

*Press Release No. 20/268 — July 22, 2020, International Monetary Fund*

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## References

- [https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)
- [The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)
- [Chad and the IMF](http://www.imf.org/external/country/TCD/index.htm)
- [Press Releases](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [This is the second disbursement in three months](https://www.imf.org/en/News/Articles/2020/04/15/pr20159-chad-imf-executive-board-approves-disbursement-to-address-covid-19)
- [https://www.imf.org/en/Topics/imf-and-covid19/COVID-Lending-Tracker](https://www.imf.org/en/Topics/imf-and-covid19/COVID-Lending-Tracker)
- [https://www.imf.org/external/NP/SEC/bc/eng/index.aspx](https://www.imf.org/external/NP/SEC/bc/eng/index.aspx)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2020/07/22/pr20268-chad-imf-execboard-approves-additional-us-69-49m-disburse-and-notes-cancellation-ecf_