IMF Executive Board completes fourth review

The Executive Board of the International Monetary Fund (IMF) today completed its fourth review of Togo’s economic performance under its Extended Credit Facility (ECF) arrangement and approved an augmentation of access of US$16.2 million. With this augmentation, completion of the review allows Togo to access US$21.1 million immediately, bringing total disbursements under the arrangement to US$106.7 million.
The Executive Board granted waivers for nonobservance of two performance criteria related to fiscal performance for end- December 2009 and a third regarding nonconcessional external debt.
After the Executive Board’s discussion of Togo, Mr. Naoyuki Shinohara, Deputy Managing Director and Acting Chair, made the following statement:
“The Togolese authorities have satisfactorily implemented their economic reform program supported by the ECF arrangement, notwithstanding the adverse impact of global recession.
“The countercyclical fiscal stance for 2010 remains appropriate, in light of the lingering effects of the global recession on Togo’s economy. In particular, the increased levels of domestically-financed public investment and clearance of domestic arrears in cash will help offset the impact of the difficult external conditions on exports, remittances and financial flows. Over the medium term, gradual fiscal consolidation will be necessary, with disciplined growth in current spending, including the wage bill.
“The authorities are implementing prompt corrective actions in reaction to some recent slippages to program targets. In particular, they adjusted the 2010 fiscal framework to offset the impact of fiscal slippages in 2009; canceled the nonconcessional external borrowing they had contracted; and strengthened monitoring of budget execution and debt management.
“The substantial structural reforms underway need to be completed to realize their full benefits in terms of growth potential. Structural measures have advanced significantly, particularly in domestic arrears clearance, public financial management, and adoption of a reform strategy for the phosphate sector. The authorities also have new plans to improve petroleum products pricing and establish a “one-stop-window” for trade and customs procedures. Progress continues in bank restructuring, although the ambitious preparation schedule for privatization of state-owned banks will require intensified efforts.
“A continuation of the disciplined program implementation seen in 2008 will be important, especially in light of the difficulty of financing any fiscal slippages. In this connection, the authorities are determined to fulfill the conditions necessary to reaching the HIPC completion point by the end of the year.”