Debt Relief for Chad

On April 29, the International Monetary Fund (IMF) and the World Bank announced $1.1 billion in debt relief for Chad under the Highly Indebted Poor Countries (HIPC) Initiative. The Initiative works by means of a two-step process that involves first, meeting certain eligibility criteria including the development of a Poverty Reduction Strategy Paper (PRSP); and second, showing progress on reforms (as determined by the IMF and the Bank) and on implementation of the PRSP. Chad has now reached the second stage, called the “completion point,” which allows a country to “receive full and irrevocable reduction in debt.” The Initiative aims to allow governments to spend more money on reducing poverty.

You can read Chad’s first (2003) PRSP here, and its second (2008) here. The second paper placed greater emphasis on alleviating rural poverty, and it responded to a context in which oil sector growth was a less dominant aspect of the economy.

You can read more about Chad and IMF here, and about the IMF’s Extended Credit Facility arrangement for Chad here. The three-year arrangement, which began in 2014, aims to “ensure fiscal sustainability, strengthen fiscal institutions and governance, promote sustained and inclusive growth over the medium term, and facilitate the move to the Highly Indebted Poor Country Completion Point.”

For the perspective of the Chadian government, you can look to this interview (French) that RFI conducted with Chadian Finance Minister Bédoumra Kordjé. RFI asks some tough questions, including whether Chad’s military participation in different conflicts in Africa (Mali, Nigeria, CAR) was part of the equation – i.e., whether the French pleaded Chad’s case to the IMF as a reward for Chad’s military assistance. Kordjé thanks the French without responding specifically to the question. Kordjé also discusses, in response to a question about late payments of salaries for Chadian bureaucrats, how the Boko Haram crisis in Nigeria and the Lake Chad region is straining Chad’s budget. You can find the 2014 budget, in French, here.

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