IMF Government Board Completes Fifth Assessment Underneath the Prolonged Credit score Facility for São Tomé and Príncipe
IMF Government Board Completes Fifth Assessment Underneath the Prolonged Credit score Facility for São Tomé and Príncipe
August 31, 2022
- The IMF Government Board resolution permits for an instantaneous disbursement of about US$2.48 million to São Tomé and Príncipe to assist meet the nation’s financing wants, help social spending and the post-pandemic restoration.
- São Tomé and Príncipe has confronted many challenges together with the impression of the COVID-19 pandemic, the struggle in Ukraine, and the floods at end-2021. Regardless of these challenges, program efficiency beneath the Prolonged Credit score Facility (ECF) has been broadly passable, though some structural reforms have been delayed.
- The authorities’ swift actions and well timed worldwide monetary help have been serving to deal with the socio-economic challenges of the nation.
Washington, DC: The Government Board of the Worldwide Financial Fund (IMF) accomplished at this time the fifth overview of the ECF association with São Tomé and Príncipe. The Board’s resolution permits the rapid disbursement of SDR 1.90 million (about US$2.48 million [1] ). This brings São Tomé and Príncipe’s complete disbursements beneath the association to SDR 12.90 million (about US$16.79 million).
In finishing the fifth overview, the Government Board additionally authorized the authorities’ request for a waiver for nonobservance of steady efficiency criterion on non-accumulation of exterior arrears, based mostly on corrective measures taken by the authorities.
São Tomé and Príncipe’s 40-month ECF association was authorized on October 2, 2019 for SDR 13.32 million (about US$18.15 million or round 90 p.c of the nation’s quota) (see Press Release No. 19/363 ). This system goals to help the federal government’s financial reform program to restore macroeconomic stability, scale back debt vulnerability, alleviate steadiness of funds pressures, and create the foundations for stronger and extra inclusive progress.
On the conclusion of the Government Board’s dialogue, Mr. Bo Li, Deputy Managing Director and Appearing Chair, made the next assertion [2] :
“São Tomé and Príncipe’s efficiency beneath this system supported by the IMF’s Prolonged Credit score Facility Association has been broadly passable. Macroeconomic stability has been maintained regardless of a number of challenges. Nonetheless, the short-term macroeconomic outlook is clouded by vital uncertainty and draw back dangers as a consequence of spillovers from growing worldwide meals and gas costs which may dampen financial exercise, worsen energy outages and inflation, and adversely impression revenues and implicit subsidies. Stepping up implementation of key infrastructure tasks and structural reforms and continued sturdy and versatile engagement from the Fund might be crucial to spice up medium-term progress.
“Implementing progress pleasant fiscal consolidation and strengthening expenditure controls are key to attaining the authorities’ fiscal goals. Efforts to spice up home income, together with the implementation of the VAT in 2022, and rationalize expenditures would help growth-enhancing social and infrastructure improvement packages and put public debt on a downward trajectory.
“Sustaining tighter financial coverage would deal with rising inflation, strengthen reserve buffers, and help the trade fee peg. Within the quick time period, this must be complemented by continued mobilization of exterior grant inflows and implementation of different mission financing commitments. In the medium time period, continued fiscal consolidation would assist ease demand pressures, enhance fiscal house, and construct the next reserve buffer.
“Efforts to additional strengthen the implementation of financial coverage and monetary legislative framework ought to stay a precedence and give attention to approvals of the brand new Central Financial institution Regulation and the Monetary Establishments Regulation, and implementation of the remaining safeguards suggestions. Extra efforts are additionally wanted to strengthen supervisory capability.
“A extra complete strategy to implementing structural reforms is crucial. These ought to purpose at increasing tourism companies, together with a complete strategy centered on growing human capital via education schemes, constructing climate-resilient infrastructure, increasing transportation hyperlinks, and bettering the enterprise setting. Efforts also needs to give attention to bettering power sector effectivity, enhancing governance of public enterprises, and supporting focused social switch packages.”
[1] US greenback quantities have been calculated utilizing at this time’s trade fee: (1 USD = SDR 0.768436).
[2] On the conclusion of the dialogue, the Managing Director, as Chairman of the Board, summarizes the views of Government Administrators, and this abstract is transmitted to the nation’s authorities. An clarification of any qualifiers utilized in summings up might be discovered right here: http://www.IMF.org/external/np/sec/misc/qualifiers.htm .
IMF Communications Division
MEDIA RELATIONS
PRESS OFFICER: Nico Mombrial
Cellphone: +1 202 623-7100Electronic mail: MEDIA@IMF.org
@IMFSpokesperson
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