Press Release No. 19/394

IMF Staff Completes Review Mission to Chad

November 5, 2019

• The economy is slowly recovering, and the macroeconomic outlook remains broadly positive, though subject to some challenges.
• Fiscal performance is on-track, and efforts should continue to ensure that social expenditures are stepped up, particularly in health and education, in order to meet the end year target.
• The authorities and the IMF team have reached a staff-level agreement on the fifth review under the ECF arrangement.

An International Monetary Fund (IMF) mission led by Mr. Edward Gemayel visited N’Djamena from October 24 to November 5 to hold discussions on the fifth review of the authorities’ three-year economic and financial program supported by an IMF arrangement under the Extended Credit Facility (ECF).

At the conclusion of the visit, Mr. Gemayel issued the following statement:

“The discussions on the fifth review under the ECF arrangement have allowed the authorities and the IMF team to reach a staff-level agreement, subject to approval by IMF Management and the Executive Board. Consideration by the IMF’s Executive Board is expected in December 2019.

“Economic activity is expected to continue to recover and the outlook remains broadly positive. Aided by an increase in public investment, domestic arrears clearance, and the recovery of the cotton sector, non-oil growth is expected to reach 2 percent and 3 percent in 2019 and 2020, respectively. Inflation is expected to remain low for the remainder of the year, reflecting subdued food and transport prices.

“Performance under the IMF-supported program was broadly satisfactory during the first half of 2019. All end-June quantitative performance criteria and the indicative target on social spending have been met. Out of the five structural benchmarks that were due by end-September three were completed. Progress has been made on the audit of domestic arrears and the restructuring and funding plans of the two public banks, which are expected to be completed by end-November.

“Fiscal consolidation is helping maintain debt in a sustainable position. Fiscal performance in 2019 is expected to be in line with program projections. Meeting the end-year targets will require continued efforts to strengthen domestic revenue mobilization, contain non-priority spending, and accelerate social spending, particularly in health and education. For 2020, consolidation efforts should be sustained by containing spending, especially the wage bill, and refraining from fiscal slippages, particularly in the run up to the elections. Similarly, payment of existing arrears should continue apace to provide breathing space to the economy.

“The banking sector is showing signs of stabilization; however, vulnerabilities remain. Deposits and credits have picked-up this year and the liquidity situation is improving. Non-performing loans remain high but are on a downward trend. Addressing bank vulnerabilities, in coordination with regional bodies, is critical for the stability of the sector and for containing fiscal risks.

“The IMF team wishes to express its gratitude to the Chadian authorities and other counterparts for their warm hospitality, excellent cooperation, and candid and constructive discussions during the visit. The IMF reaffirms its support to the government’s efforts to implement their economic reform program.

“During its visit, the mission met with Mr. Kabadi, President of the National Assembly and had discussions with Mr. Nguilin, Minister of Finance and Budget, Mr. Doubragne, Minister of Economy and Development Planning, Mr. Koua, Minister of Oil, Energy and Mines, Mr. Mahamat Hassan, the National Director of BEAC, and other senior officials, as well as representatives of the private sector, civil society, and international development partners. A press conference was held at the end of the mission.”