CHAD– The government of Chad has secured a US$69.49 million loan from the IMF to sustain the ongoing fight against the raging COVID-19 pandemic.
A statement from the IMF noted that the loan disbursement will provide timely support to fill “an urgent financing need to contain the economic impact of the pandemic and provide essential COVID-19-related health expenditure”.
This is the second disbursement in three months, under the RCF, to address the external financing needs arising from the COVID-19 pandemic.
The disbursement brings Chad’s total IMF emergency support since the outbreak of the pandemic to SDR 133.19 million (US$183.60 million).
IMF’s Executive Board while confirming its decision to approve the latest loan disbursement also noted it had approved the cancellation of the ECF arrangement, which was to expire at end-September 2020.
IMF noted that the twin Covid-19 pandemic and terms of trade shocks have worsened Chad’s economic outlook since the first RCF in April 14, 2020.
Since then, Chad’s authorities have adopted containment measures (including a curfew and closure of markets and non-essential stores), which proved successful in containing the pandemic spread.
IMF noted that these measures have resulted in unavoidable consequence of further depressing the economy.
Fiscal and external positions, according to IMF, have also worsened, reflecting reduced export proceeds and lower oil and non-oil revenues, in addition to the higher than expected spending to contain the COVID-19 crisis.
The Chadian government has since reviewed its policies and has announced plans to save the economy by temporarily relaxing the fiscal deficit to allow for the scaling up of health care spending and to accommodate the impact of the sharp drop in oil prices.
The IMF noted that its emergency assistance will support the authorities’ policy response and catalyze donor support.
“Once the crisis abates, the authorities should stand ready to gradually unwind the temporary emergency measures,” The IMF advised.
As of July, 2019 Chad, had reported a total of 889 cases of Covid-19 with 805 of the confirmed cases recovering while 75 others losing their lives to the pandemic.
IMF notes that Chad will be required to make fiscal adjustment in the medium term, to catalyse economic recovery, especially since oil prices are expected to remain low.
Liked this article? Subscribe to DealStreet Africa News, our regular email newsletter with the latest news, deals and insights from Africa’s business, economy and more. SUBSCRIBE HERE
