IMF Executive Board Approves US$7.63 Million Disbursement Under the Rapid Credit Facility for the Central African Republic

BANGUI, Central African Republic, March 23, 2015/African Press Organization (APO)/ -- On March 18, 2015, the Executive Board of the International Monetary Fund (IMF) approved financial assistance under the Rapid Credit Facility (RCF)1 in the amount equivalent to SDR 5.57 million (about US$7.63 million) for the Central African Republic (C.A.R.) in support of the Transitional Authorities' emergency economic recovery program.

The C.A.R. authorities' overall fiscal response in 2014 to a very difficult situation was broadly adequate. With revenue below target, due to several factors, including a stagnant economy, the authorities rightly tightened non-priority spending to avoid further disruptions to macroeconomic stability and the creation of additional financing needs. Even though the recovery was held back by a difficult security environment, the prospects for 2015 remain favorable on condition that there is a successful and timely completion of the political transition, improved security and increased support from the international community in revitalizing the country's economy.

Building upon the success of the policies implemented with the support of the previous RCF disbursement approved by the IMF Executive Board in May 2014 (See Press Release No. 14/226), the new financial assistance will help the C.A.R. to continue with the implementation of a set of economic and structural policies and measures aimed at restoring macroeconomic stability, achieving fiscal consolidation and strengthening the capacity of the C.A.R. government. The disbursement should act as a catalyst for further financial support and technical assistance from C.A.R.'s development partners.

The Executive Board's approval enables the immediate disbursement of the full amount, which is equivalent to 10 percent of C.A.R.'s quota in the IMF.

At the conclusion of the Executive Board's discussion, Mr. Mitsuhiro Furusawa, Acting Chair and Deputy Managing Director issued the following statement:

“The Central African Republic remains in the midst of a crisis that is hindering an economic recovery and basic government functions. Against this background, the transitional government in place since August 2014 is stepping up efforts to boost social reconciliation, improve security, and implement the authorities' emergency program. In addition to financial support and targeted technical assistance, international stakeholders are actively working to facilitate the domestic political dialogue.

“The transitional government is making progress in implementing its economic program supported by the Fund under the Rapid Credit Facility. The program objectives include rebuilding government functions, restoring macroeconomic stability, improving governance and institutions, and clearing domestic payments arrears.

“With the anticipated normalization of the security and political situation, the economic outlook is favorable. Economic activity is expected to recover and inflation should be brought under control. The fiscal position will improve as the authorities continue their efforts to strengthen treasury management, boost revenue collection, implement normal budget procedures, and enhance coordination with the donor community. A steadfast implementation of the economic program will help minimize risks to the outlook.

“The Fund will continue to play a key role in coordinating international efforts in the provision of policy advice, emergency financial support, and technical assistance to accelerate the shift to policies in support of sustainable and inclusive growth.”

1 The RCF provides rapid financial support in a single, up-front payout for low-income countries facing urgent financing needs. Financial assistance under the RCF is provided as an outright disbursement to Poverty Reduction and Growth Trust (PRGT)-eligible members that face an urgent balance of payments need, and where a full-fledged economic program is either not necessary or not feasible.