Washington, DC: An International Monetary Fund (IMF)
mission led by Édouard Martin visited N'Djamena from April 27 to May 10,
2023, to conduct discussions on the third review under the Extended Credit
Facility (ECF) arrangement approved by the IMF Executive Board on December
10, 2021 (see
Press Release
No. 21/375), and for the 2023 Article IV consultation. This 36-month ECF
arrangement in the amount of SDR 392.56 million (about US$570.75 million or
280 percent of quota) helps address Chad's substantial fiscal and balance
of payments needs, including through catalyzing financial support from
official donors. The first and second reviews of this arrangement were
concluded by the IMF Executive Board on December 22, 2022, allowing for the
disbursement of 112.16 million SDRs (about $149.3 million).
At the end of the mission, Mr. Martin made the following statement:
The Chadian authorities and IMF staff started discussions for the third
review of the ECF-supported program approved on December 10, 2021, and for
the 2023 Article IV consultation. These discussions will continue in the
coming weeks to reach understandings that could be submitted for approval
by the IMF Executive Board.
“Growth was higher than expected in 2022 owing mainly to higher oil
production. This increase reflects: a recovery of production of the wells
formerly owned by ESSO following the 2021 disruptions; the restart of
production of the formerly Glencore fields following their acquisition by
Perenco; and higher-than-expected production by China National Petroleum Corporation
. Non-oil growth was affected by the floods, which had negative effects on
agricultural production. The floods also exacerbated pressure on food
prices, which rose 16 percent year-on-year, pushing headline inflation to
8.3 percent year-on-year in December 2022. The current account balance
improved more than expected, essentially reflecting higher oil exports.
“Performance under the program has been mixed. Only two of the five
end-December 2022 quantitative performance criteria were met. Despite
better-than-expected revenues, the non-oil fiscal deficit and net domestic
financing performance criteria were notably missed due to significant civil
and military spending overruns, partly reflecting security tensions and
floods. Progress has been made in implementing structural reforms, with
four structural benchmarks met, while the authorities are working to
implement the reforms covered by the other two benchmarks.
“The outlook for 2023 is favorable but subject to significant risks. Growth
is expected to increase further to reach 4 percent in 2023, while inflation
would remain elevated. After the 2022 rebound, oil production is expected
to increase significantly (to 6.3 percent). Growth in the non-oil sector
would also increase, to 3.5 percent in 2023, owing mainly to the recovery
of agricultural production following the 2022 floods. Risks to the outlook
include: security challenges, particularly those related to the conflict in
Sudan; climate-related risks; and the risk of a higher-than projected
decline in oil prices.
“Economic policy discussions focused on measures to strengthen public
finances. Staff noted the progress achieved in domestic revenue
mobilization, which will need to continue. It also called for a better
control and increased efficiency of budget spending, in particular of the
wage bill, and for a prioritization of social expenditures. It is also
important that budgetary procedures are followed more rigorously and that
the use of emergency expenditure procedures (DAOs) is limited to
emergencies. Given the high volatility of oil prices, it is also necessary
that part of the oil revenues is used to rebuild liquidity reserves and
reduce the stock of expensive treasury securities.
“Staff also discussed with the authorities additional structural reforms to
be implemented in 2023-24. These reforms should notably aim at
strengthening the management of public finances and SOEs, mobilizing
domestic revenue, improving governance and transparency in the energy
sector, and improving the business environment.
“As part of the Article IV consultation, staff discussed with the
authorities policies and reforms aimed at ensuring medium- and long-term
growth sustainability, including how to build resilience to climate change
and reduce gender disparities.
“Staff would like to thank the Chadian Authorities and other counterparts
for their hospitality, excellent cooperation, and frank and constructive
discussions.”
The mission met Mr. Saleh Kebzabo, Prime Minister, Mr. Tahir Hamid Nguilin,
Minister of Finance, Budget, and Public Accounts, Mr. Moussa Batraki,
Minister of Economic Prospects and International Partners, Mr. Haliki
Choua, Minister Secretary General of the Government, Mr. Djerassem Le
Bemadjiel, Minister of Hydrocarbons and Energy, Mr. Ms. Wanledom Robertine,
Minister of Commerce and Industry, and other senior officials, as well as
representatives of the private sector, civil society and international
development partners.
[1]
Under Article IV of the IMF's Articles of Agreement, the IMF holds
bilateral discussions with members, usually every year. A staff team
visits the country, collects economic and financial information,
and discusses with officials the country's economic developments
and policies. On return to headquarters, the staff prepares a
report, which forms the basis for discussion by the Executive
Board.
