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afrol News, 18 January - The IMF has agreed to an augmentation of its monetary aid to Chad to address the consequences of the decline in global prices for cotton, Chad's main export commodity. Chad may draw US$ 6.8 million immediately from the IMF. Chad was approved to a three-year Poverty Reduction and Growth Facility (PRGF) programme in January 2000, and is to receive US$ 53 million, a total that was increased by US$ 6.8 million this week. In a statement issued Wednesday, the IMF commended the Chadian authorities on their "broadly satisfactory performance under the PRGF arrangement in 2001, notwithstanding adverse external developments." According to the IMF, Chadian fiscal policy remained prudent in 2001, although "the continued weakness in fiscal revenue performance is an area of concern." - Governance and transparency improved, and good progress was made in structural reforms, notably in expenditure management and the reforms of the civil service, the procurement system, and the cotton sector, according to the IMF assessment. "Social indicators also improved in health, education and basic infrastructure." IMF director Shigemitsu Sugisaki believed Chad's prospects for 2002 and beyond to be "very good". He expected economic growth to "remain strong, spearheaded by investment in the oil sector." - For this prospect to materialize, however, the authorities will need to take steps to avoid the pitfalls of a dual economy, in which the oil sector would be segregated from the rest of the economy, Sugisaki said. According to Sugisaki, a sharp decline in the price of cotton, Chad's main export product, will dampen Chad's short-term outlook. Even after a significant fiscal adjustment, an important financial gap would remain uncovered, for which the authorities have sought financial support from the international community, including from the IMF. The additional US$ 6.8 million given by the IMF programme came on his background. "This will allow the reform of the cotton sector to continue as planned, notwithstanding unfavorable external developments," Sugisaki says. Also according to Sugisaki's statement, the 2002 Chadian budget was "appropriately tailored toward poverty reduction while maintaining a prudent fiscal stance."
Sources: Based on IMF and afrol archives
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