Coronavirus: IMF approves US$38 million to help CAR address pandemic
Bangui, Central African Republic (PANA) – The International Monetary Fund (IMF) on Monday approved US$38 million emergency assistance for Central African Republic (CAR) under the Rapid Credit Facility to meet urgent balance of payments needs stemming from the COVID-19 pandemic.
If not contained, the pandemic could have a considerable economic and social impact on the Central African Republic, a fragile state with a volatile security environment, limited administrative capacity, weak governance and limited capacity to contain it, said an IMF press statement made available to PANA on Tuesday.
Approving the aid disbursement, the IMF Executive Board said that the sharp global economic downturn and border closures with CAR’s neighbouring countries have already led to a significant reduction in economic activity, with sectors such as commodity exports, trade, and construction particularly hard-hit.
Following the Executive Board’s discussion on CAR, IMF Deputy Managing Director Mitsuhiro Furusawa issued a statement noting that the global COVID-19 crisis is expected to have a considerable economic and social impact on the country.
“A temporary widening of the budget deficit is warranted in the short term to allow for the implementation of the response plan while continuing to meet CAR.’s considerable social, infrastructure, and security needs.
“The IMF’s emergency financial support under the Rapid Credit Facility, along with the additional donor grant financing it will help to catalyse, will address CAR.’s urgent balance of payments needs while supporting this temporary fiscal loosening. The recent approval of debt service relief for CAR under the Catastrophe Containment and Relief Trust (CCRT) will also play an important role in freeing up resources to cope with the pandemic,” Mr Furusawa said.
“The implementation of the policies and structural reforms to which the authorities committed under the ECF arrangement adopted in December remains key to ensuring macroeconomic stability and debt sustainability and restoring sustained inclusive growth,” he added.
According to the IMF official, additional external support, preferably in the form of grants, is also urgently required to meet CAR.’s elevated financing needs and ease the financial burden of the pandemic. These are also essential to the country’s authorities’ efforts to restore national peace and prosperity.
To limit the pandemic’s human and economic impact, the CAR authorities have adopted measures— including border closures, school closings, and prolonged curfews—to contain its spread and prepared, in collaboration with the World Health Organization, a response plan to strengthen the health system’s capacity.
In addition, the regional central bank and banking commission are taking steps to support growth and preserve financial sector stability.
-0- PANA AR/MA 21April2020
