Chad Sees $1.1 Billion of Debt Relief After Meeting IMF Targets

Chad expects to receive $1.1 billion of debt relief after it met targets set by the International Monetary Fund, helping to shore up an economy hampered by lower oil prices, Finance Minister Kordje Bedoumra said.

The IMF on Monday announced Chad had achieved goals under its so-called Heavily Indebted Poor Countries Initiative to stabilize the economy. The completion of the program allowed the immediate disbursement of about $37.1 million, the Washington-based lender said in a statement.

“This opens the door for more support from different financial institutions like the World Bank, the African Development Bank and the European Union,” Bedoumra said in an interview on Tuesday at his office in the capital, N’Djamena.

The government of Chad, sub-Saharan Africa’s seventh-biggest crude producer, is being forced to cut spending after oil prices fell by more than half. The country has also joined a multinational war against the Islamist militant Boko Haram group in neighboring Nigeria, which has drained state finances, Bedoumra said.

The government has taken a number of steps to rein in expenditure this year, including canceling an African Union summit it had planned to host in July, Bedoumra said. The IMF forecasts growth in Chad will slow to 4.9 percent next year from 7.6 percent this year.

Oil accounts for almost half of output in the economy, according to the African Development Bank. The collapse in oil prices has “significantly affected” economic outlook for this year and the medium-term, the IMF said.

“The drop of oil prices is a big shock for us,” Bedoumra said. “We have to be very careful with our expenses and try to monitor the impact, but at the same time we are diversifying our efforts. We are going to push for mining and also agriculture.”

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