Country Reports
2020
June 18, 2020
Union of the Comoros: 2019 Article IV Consultation-Staff Report; Press Release
Description: Economic developments over the past two years have been challenging due mainly to adverse impacts of political uncertainty (constitutional referendum in mid-2018 and elections in early 2019) and Cyclone Kenneth (April 2019), notwithstanding the provision of Fund emergency financial support following the cyclone.
June 18, 2020
Lao People’s Democratic Republic: Technical Assistance Report-Risk-Based Banking Supervision
Description: The Banking Supervision Department (BSD) of the BoL is implementing risk-based supervision (RBS) methods. BoL staff are showing favorable results in understanding and applying RBS, recognizing that they are still in the early stages of capacity development. A new commercial banking law became effective in June 2019. The law incorporates expectations that financial institutions establish appropriate risk management systems and maintain adequate capital and liquidity. The law also gives the BoL purview over the adequacy of risk management in banks.
June 16, 2020
Mongolia: Request for Purchase Under the Rapid Financing Instrument-Press Release; Staff Report; and Statement by the Executive Director for Mongolia
Description: This paper discusses Mongolia’s Request for Purchase Under the Rapid Financing Instrument (RFI). The coronavirus disease 2019 pandemic has taken a large toll on economic activity in Mongolia, giving rise to urgent budget and balance of payments needs. The authorities have already taken several measures to limit the economic contraction and help the most vulnerable. Recent revisions to the budget allow for higher health and social spending as well as tax relief to affected households and businesses. In addition, the Bank of Mongolia has eased monetary and financial policies to help prevent a disorderly contraction in bank lending to the private sector. Emergency financing under the IMF’s RFI will provide much needed support to respond to the urgent balance of payments and budgetary needs. Additional assistance from development partners will be required to support the authorities’ efforts and close the financing gap. The authorities’ commitment to high standards of transparency and governance in the management of financial assistance is welcome.
June 15, 2020
Ukraine: Ex-Post Evaluation of Exceptional Access Under the 2015 Extended Arrangement-Press Release and Staff Report
Description: This paper focuses on Ukraine’s Ex-Post Evaluation of Exceptional Access Under the 2015 Extended Arrangement. Sound fiscal and monetary policies since the 2014–2015 crisis have resulted in a sharp reduction in Ukraine’s external and internal imbalances. Public debt was put on a downward path, inflation has declined, and international reserves have recovered. The new Stand-By Arrangement will provide an anchor for the authorities’ efforts to address the impact of the crisis, while ensuring macroeconomic stability and safeguarding achievements to date. Together with support from the World Bank and the European Union, it will help address large financing needs. The program will focus on safeguarding medium-term fiscal sustainability, preserving central bank independence and the flexible exchange rate, and enhancing financial stability while recovering the costs from bank resolutions. The National Bank of Ukraine has skillfully managed monetary policy during a very challenging period. Central Bank independence should be preserved, and monetary and exchange rate policies should continue to provide a stable anchor in the context of the inflation-targeting regime, while allowing orderly exchange rate adjustment and preventing liquidity stress.
June 15, 2020
Nigeria: Technical Assistance Report-Additional Spending Toward Sustainable Development Goals
Description: The contents of this report constitute technical advice provided by the staff of the IMF to the authorities of Nigeria in response to their request for technical assistance. Unlocking the potential of a rapidly growing population requires substantial improvements in human and physical capital. Nigeria is Africa’s most populous country and its largest economy. Recognizing challenges, Nigeria has embraced the Sustainable Development Goals (SDGs) Agenda. The Economic Recovery and Growth Plan 2017–2020 gives prominence to economic, social and environmental issues. This report assesses additional spending associated with making substantial progress along the SDGs. The report focuses on critical areas of human and physical capital. For each sector, the report documents progress to date, assesses Nigeria relative to peers, highlights challenges, and estimates the spending to make substantial SDG progress. Nigeria has shown gradual improvements in education. A gradual and strategic approach should be considered given the relatively large additional spending.
June 12, 2020
Liberia: Request for Disbursement under the Rapid Credit Facility-Press Release; Staff Report; and Statement by the Executive Director for Liberia
Description: This paper presents Liberia’s Request for Disbursement Under the Rapid Credit Facility. The economic impact of the pandemic is hitting the poorest with little social safety net, and food security of those relying on uncertain daily income is a pressing concern. The authorities have responded by taking revenue and expenditure measures to support emergency food aid for the poor; improving monitoring and control of spending; and safeguarding scarce foreign exchange reserves. Preliminary data suggest that performance under the Extended Credit Facility-supported program has been weak, though the authorities are fully committed to address the weaknesses. In order to address the shortage of Liberian dollars and the growing need for more US dollar liquidity, the authorities have contracted the printing of additional Liberian dollar bank notes and are formulating measures for inclusion in the FY2021 budget to augment US dollar liquidity.
June 12, 2020
United Republic of Tanzania: Request for Debt Relief under the Catastrophe Containment and Relief Trust-Press Release; Staff Report; and Statement by the Executive Director for the United Republic of Tanzania
Description: This paper discusses the United Republic of Tanzania’s Request for Debt Relief Under the Catastrophe Containment and Relief Trust. IMF debt service relief will help free up resources for public sector health needs and other emergency spending, as well as mitigate the balance of payments shock resulting from the pandemic. Given the risks ahead, it would be important to ensure close cooperation with multilateral organizations and donors and ensure enough budget allocations on health and other priority spending. The authorities are committed to using the additional resources for their intended purposes and in a transparent manner, including through ex-post audits of corona virus-related spending. To deal with the remaining risks, it will be important to safeguard appropriate funding for health and other priority social spending in the FY2020/21 budget, as well as ensure close cooperation with the World Health Organization, multilateral agencies, and donors. The focus includes addressing arrears on value-added tax refunds and government expenditures, enhancing human capital and the business environment, and improving the affordability of bank credit.
June 11, 2020
Ukraine: Request for Stand-by Arrangement-Press Release; Staff Report; and Statement by the Executive Director for Ukraine
Description: This paper presents Ukraine’s Request for Stand-By Arrangement. The 2020 budget is expected to be hit hard, with a sharp decline in revenues and large emergency spending needs to address the crisis. This has created large balance of payments and fiscal financing needs. Sound fiscal and monetary policies since the 2014–2015 crisis have resulted in a sharp reduction in Ukraine’s external and internal imbalances. Public debt was put on a downward path, inflation has declined, and international reserves have recovered. The new Stand-By Arrangement will provide an anchor for the authorities’ efforts to address the impact of the crisis, while ensuring macroeconomic stability and safeguarding achievements to date. Together with support from the World Bank and the European Union, it will help address large financing needs. The program will focus on safeguarding medium-term fiscal sustainability, preserving central bank independence and the flexible exchange rate, and enhancing financial stability while recovering the costs from bank resolutions. Concerted reform efforts aimed at tackling corruption and strengthening governance will be critical to ensure macroeconomic stability and achieve sustainable and inclusive growth.
June 11, 2020
Guatemala: Request for Purchase Under the Rapid Financing Instrument-Press Release; Staff Report; and Statement by the Executive Director for Guatemala
Description: This paper focuses on Guatemala’s Request for Purchase Under the Rapid Financing Instrument. The coronavirus disease 2019 pandemic is severely impacting Guatemala. Faltering external demand, declining remittances, and the necessary lockdown and social distancing to contain the virus, have disrupted economic activity and severely worsened external and fiscal positions. IMF support under the Rapid Financing Instrument will help address the urgent balance of payments and fiscal needs, improve confidence, and catalyze support from other external partners. In order to support the recovery and counter future shocks, the authorities intend to maintain an accommodative monetary policy stance and exchange rate flexibility. While credit risk regulations have temporarily been eased to facilitate loan restructuring, the authorities are closely monitoring banks’ exposures and the levels of provisioning to ensure the stability of the financial system. The Guatemalan authorities have reaffirmed their commitment to ensure that emergency financing is used effectively, transparently, and through reinforced governance mechanisms.
June 10, 2020
Sierra Leone: Request for Disbursement under the Rapid Credit Facility-Press Release; Staff Report; and Statement by the Executive Director for Sierra Leone
Description: This paper discusses Sierra Leone’s Request for Disbursement Under the Rapid Credit Facility (RCF). The coronavirus disease 2019 (COVID-19) pandemic puts Sierra Leone’s population at risk and is a serious blow to the economy, which has just started to recover. The number of COVID-19 cases is increasing rapidly, threatening the fragile health system. The drop in external demand and essential measures to contain the spread of the virus are sharply curtailing economic activity. The authorities are taking decisive actions to mitigate the health and socio-economic impact of the pandemic. In collaboration with development partners, they are scaling up urgent health spending and introducing measures, including boosting social safety nets and ensuring access to credit for affected businesses. The shock has generated a large balance of payments need. Emergency financing under the RCF will help meet this financing gap and create room for pandemic-related spending. With significant downside risks and a tight financing situation threatening to reverse Sierra Leone’s progress toward the Sustainable Development Goals, additional grant support from the international community is urgently needed.