Extended Credit Facility: IMF approves $31.7m for Central African Republic

 The Executive Board of the International Monetary Fund (IMF) has completed the 6th and final review under the Extended Credit Facility, ECF, arrangement for the Central African Republic.

ECF is  a lending arrangement that provides sustained program engagement over the medium to long term in case of protracted balance of payments problems.

The completion of the review enables a disbursement of SDR 22.84 million (about US$ 31.70 million), which will bring total disbursements under the arrangement to SDR 133.68 million (about US$ 185.56 million).

In a release made available to OpenLife by IMF Media office, the three-year ECF arrangement for the Central African Republic was approved by the IMF’s Executive Board on July 20, 2016 for SDR 83.55 million, about US$ 115.97.million and subsequently augmented twice to a total of SDR 133.68 million (about US$185.56million, 120 percent of the Central African Republic’s quota at the IMF).

At the conclusion of the Board’s discussion, Mr. Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair, stated:

“The Central African Republic’s performance under the ECF arrangement remains satisfactory despite a challenging security environment and difficult humanitarian conditions. Since its adoption in July 2016, substantial progress has been achieved under the ECF arrangement, including in stabilizing the economy, reducing fiscal vulnerabilities, and improving public financial management.

“The recent peace agreement between the government and 14 armed groups could constitute a pivotal step toward ending the ongoing crisis. Emphasizing power-sharing, its implementation should contribute to improving security and creating the conditions for sustained and inclusive growth.

“The authorities remain committed to pursuing fiscal policy consistent with macroeconomic stability. The 2019 revised budget provides for the gradual allocation of additional grant financing to key government initiatives, including the implementation of the peace agreement, the strengthening of national security forces, and the preparation of the 2020-21 elections.

Further efforts to strengthen domestic revenue mobilization, which remains weak, will be critical to sustainably financing these initiatives.

“Structural reforms have progressed, including with regard to the strengthening of the treasury single account, streamlining of parafiscal taxes, and improved budget transparency.

 Looking ahead, structural fiscal reforms should continue—including to further reduce the use of exceptional payment procedures and comprehensively audit all potential domestic arrears—while being complemented by reforms to improve the business climate and governance, including strengthening the AML/CFT framework.

“The Central African Republic’s program has been supported by the implementation of supportive policies and reforms by the regional institutions in the areas of foreign exchange regulations and monetary policy framework and to support an increase in regional net foreign assets, which are critical to the program’s success.”