## IMF Staff Concludes Visit to Chad

_IMF News, March 30, 2022_

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## Bibliographic details
- Published: March 30, 2022

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### Mission context and program framework
- IMF mission led by Edouard Martin visited N’Djamena from March 16–30, 2022 for discussions on the first review under the ECF-supported program approved on December 10, 2021.
- New 36-month ECF arrangement in an amount of SDR 392.56 million (about US$570.75 million or 280 percent of quota) to help meet Chad’s large balance-of-payments and budgetary needs and to catalyze financial support from official donors.
- The mission’s statement reflects IMF staff views and the mission will not result in a Board discussion; discussions will continue to reach understandings that could be submitted for approval to the Executive Board.

### Macroeconomic developments in 2021
- Overall real GDP contracted by 0.3 percent in 2021.
- Oil production fell by 3 percent in 2021, driven by production difficulties experienced by a major oil company.
- Average annual inflation in 2021 was -0.8 percent.
- Poor 2021-22 crop and inadequate rainfall led to pressures on cereal prices; food prices increased by 6 percent y-o-y in January.
- Non-oil activity constrained by scarring effects of the COVID-19 pandemic and adverse weather conditions due to climate change.
- Pressures on food security are expected to be aggravated by the war in Ukraine.

### Program performance and structural reforms
- Performance under the program was uneven: two of the three end-December 2021 quantitative performance criteria were met.
- The quantitative criterion on the non-oil primary balance was missed owing to expenditure overruns on military equipment and on the wage bill, reflecting security and social tensions.
- Progress on structural reforms: two structural benchmarks met; reforms covered by three other benchmarks expected to be finalized in the coming weeks.
- Structural reform priorities discussed for 2022–23 include:
  - Strengthening public financial management and domestic revenue mobilization.
  - Enhancing governance and transparency.
  - Improving the business environment.

### Outlook for 2022 and key risks
- 2022 growth projection: 2.3 percent (after contraction the last two years), driven by recovery in both oil and non-oil production.
- Inflation outlook: expected to rise to about 4 percent on average in 2022, driven by food prices.
- Key risks to the outlook:
  - Possible resurgence of the pandemic and further delays in vaccination.
  - Security concerns.
  - Domestic debt rollover risk.
  - Possible delays in implementing reforms.
  - Continued volatility in oil prices.

### Fiscal policy and revenue recommendations
- Discussions focused on measures to strengthen public finances.
- Recommendations and policy guidance:
  - Intensify efforts to increase domestic revenue mobilization.
  - Contain overall spending needs, including the wage bill, while protecting social spending.
  - Use additional oil revenue, given high oil price volatility, to rebuild liquidity buffers and reduce government reliance on domestic borrowing from the constrained banking system.

### Food insecurity and humanitarian response
- In the context of the 2022 humanitarian response plan, authorities prepared a framework to provide assistance to the most vulnerable until the lean season.
- Assistance by the World Food Program and the Food and Agriculture Organization noted.
- Use of the SDR allocation will contribute to implementing the humanitarian plan by allowing authorities to rebuild a sufficient stock of cereals.

### Debt treatment and donor support
- Authorities are continuing discussions on a debt treatment with external creditors in the context of the G20 Common Framework.
- Rapid finalization of a debt treatment under the G20 Common Framework and significant donor support are key for restoring debt sustainability.
- Debt treatment discussions will need to be finalized prior to the upcoming program review.

### Engagement and meetings
- The mission met senior Chadian authorities and counterparts including:
  - Mr. Haroun Kabadi, President of the National Transition Council.
  - Mr. Tahir Hamid Nguilin, Minister of Finance and Budget.
  - Mr. Mahamat Hamid Koua, Minister of Economy, Development Planning and International Cooperation.
  - Mr. Haliki Choua, Minister Secretary General of the Government.
  - Mr. Mahamat Ahmat Alhabo, Minister of Justice.
  - Mr. Ali Djadda Kampard, Minister of Trade and Industry.
  - Mr. Idriss Ahmat Idriss, National Director of BEAC.
  - Other senior officials, representatives of the private sector, civil society, and international development partners.

*IMF press release, March 30, 2022.*

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## References

- [Chad and the IMF](http://www.imf.org/external/country/TCD/index.htm)
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_Source: https://www.imf.org/en/news/articles/2022/03/30/pr2299-imf-staff-concludes-visit-to-chad_