CAR: IMF approves US$31.8m for CAR's macroeconomic stability

Bangui, Central African Republic (PANA) - Along with ongoing efforts to promote dialogue and national reconciliation in Central African Republic (CAR), sustained implementation of the country's programme on entrenching macroeconomic stability is critical to create fiscal space for development spending, improve the business environment, and foster higher and more inclusive growth, according to the International Monetary Fund (IMF).

“The success of the programme will also depend on the implementation of supportive policies and reforms by the regional institutions,” said IMF Deputy Managing Director and Acting Chair Mitsuhiro Furusawa as the Fund's Executive Board completed the second review under the Extended Credit Facility (ECF) arrangement for CAR.

Completion of the review has enabled a disbursement of about US$16.3 million to CAR, while the Board also approved a request for augmentation of the ECF arrangement by about US$15.5 million, to be disbursed upon the completion of the third review, the IMF said in a statement released on Tuesday.

"The augmentation is for additional balance of payments needs associated with the accelerated clearance of arrears to small and medium sized government suppliers which would support social cohesion and economic growth," it explained.

Mr. Furusawa noted that the CAR authorities have adopted measures to streamline quasi-fiscal taxes, enhance budget transparency, and address revenue shortfalls.

"Sustaining and accelerating efforts to mobilise domestic revenues—particularly at customs—and enhance budget transparency will create fiscal space for increasing social and capital spending," he said, observing that performance under the ECF-supported programme has been satisfactory despite the challenging security environment.

“The authorities should build on recent progress to improve public financial management, including by ensuring regular publication of budget execution reports, consolidating the treasury single account, and limiting the use of exceptional spending procedures. The reduction of domestic payment arrears to small and medium-sized enterprises will support growth and help restore the state’s credibility, thus contributing to social cohesion," Mr. Furusawa added.

In the Board's view, swift implementation of the National Plan for Recovery and Peace’s investment programme would boost economic prospects.

Given CAR's high risk of debt distress, the Board said that continued reliance on grant financing, while limiting borrowing, even in highly concessional terms, is essential. "Available assistance needs to be channeled effectively into priority projects to lift economic growth, create jobs, and reduce poverty," it suggested.
-0- PANA AR/MA 18July2017

18 july 2017 07:05:17

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