- The Executive Board of the International Monetary Fund (IMF) has approved an immediated disbursement of US$ 18.46 million to the Central African Republic for poverty reduction.
This follows the completion of the country’s economic performance under a programme supported by the arrangement under the Poverty Reduction and Growth Facility (PRGF) for an amount equivalent to about $112.21 million. The completion of the review enables the disbursement of an amount equivalent to $18.46 million.
The IMF Deputy Managing Director and Acting Chair, Murilo Portugal, commended CAR for the satisfactory implementation of the programme.
“The CAR authorities have made significant progress in improving economic management. The credibility in public finances has been improved through domestic revenue mobilisation and prudent budget execution. The petroleum product price adjustment mechanism has been implemented consistently, and taxes on petroleum products have become a significant and stable source for government revenues. The authorities now have credible plans to reduce domestic arrears and commercial bank debt. As a result of these reform measures, the economy is on a sounder basis for sustaining higher growth”.
He however said CAR need to continue the reform efforts to accelerate growth and to mobilise resources required for poverty reduction, while maintaining debt sustainability.
He pointed out that the main areas of focus are efficient mobilisation of government revenues, prudent expenditure and debt management, improvement in business and investment climate, promotion of private sector activities through facilitating access to credit, and strengthening external sector performance through diversification of the export base.
“The assistance that has been delivered under the Heavily Indebted Poor Countries Initiative and the Multilateral Debt Relief Initiative should provide significant help to the authorities’ efforts to achieve the Millennium Development Goals. In addition, the authorities intend to partly draw on their SDR allocation, which will allow them to replace more expensive commercial bank financing without increasing spending,” Portugal said.
He also said the CAR authorities recognise the importance of improving the security situation and maintaining political stability in the period ahead of next year’s elections, adding that funding is being provided by donors for the peace building process and elections. Enhanced donor financial and technical support is also needed to help the authorities strengthen economic management capacity and address critical infrastructure bottlenecks.
“The ongoing measures to strengthen financial performance of public utility enterprises are expected to help catalyse donor funding in these areas,” he also said.
The IMF approved a three-year, SDR 36.2 million PRGF arrangement for the CAR in December 2006, augmentations of SDR 8.355 million were approved in June 2008 and SDR 25.065 million in June 2009, when it also approved a six-month extension of the arrangement. The augmented arrangement totaling SDR 69.62 million (about $112.21 million) represents 125 percent of the country’s quota in the Fund.
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