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afrol News, 21 October - According to the latest IMF assessment of Chad's economy, economic growth currently is very strong, "aided by the implementation of the oil pipeline project." The country was further to draw a credit of about US $7 million for it poverty reduction programme. Anne Krueger, Acting Chair of the IMF, today commented on the economic trends in Chad after the Fund had made its periodic "Review of Performance". Ms Krueger mostly has positive news about the Chadian economic performance, which had "been good so far in 2002." Economic growth had been "very strong" and inflation had "declined as food production has normalised." Further, foreign reserves had "risen despite low cotton prices." The large fiscal and current account deficits did not represent a risk "as they reflect the acceleration of antipoverty spending and the construction of the pipeline. Moreover, these deficits are expected to narrow sharply in 2004 with the commencement of oil revenues." Nevertheless, the fiscal stance would need to be "significantly tightened in 2003 given the anticipated decline in external financing." Therefore, there was strong emphasis on domestic revenue mobilisation. Total expenditure would "need to decrease." - Further efforts are needed to improve governance, Ms Krueger said. "To this end, there needs to be a consistent political commitment," she added, naming various examples. In particular, there was a need to "enhance transparency and accountability by systematically publishing all audits, and to implement the measures identified to improve budget preparation, monitoring, and control." With oil production expected to come on stream in early 2004, the challenge facing Chad was to put "all necessary arrangements in place on time to ensure an efficient and transparent use of oil revenue for poverty reduction," Ms Krueger said. It would be important that the authorities "take action early in 2003 to define the modalities that will ensure the transparent use of oil revenue in accordance with the absorptive capacity of priority sectors." With a view to avoiding a real appreciation arising from large foreign exchange inflows, the government was to review the role of fiscal policy. All in all, the Fund had observed much progress in the Chadian efforts to create a sound macroeconomic climate and to fight poverty "despite delays in improving some health indicators." Nevertheless, the real test to the autocratic N'djamena government comes with oil revenues and in this context, most observers doubt whether the Fund's effort to introduce transparent governance in Chad will be fruitful. Several test cases had already indicated the opposite. Sources: Based on IMF and afrol archives
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