The economy continues to recover, and the outlook remains broadly positive, though subject to some challenges; Fiscal performance is on-track but spending pressures are starting to emerge.

An International Monetary Fund (IMF) mission led by Edward Gemayel visited N’Djamena during February 6-12 to take stock of the latest economic and financial developments and follow-up on the implementation of the authorities’ structural reform agenda.

At the conclusion of the visit, Mr. Gemayel issued the following statement:

“Economic activity is expected to continue to recover and the macroeconomic outlook remains broadly positive. The non-oil economy is projected to grow at 3 percent this year backed by higher public investment and domestic arrears repayment as well as the pick-up in cotton and livestock. Oil GDP is expected to grow by 7.5 percent as a result of new extraction technologies as well as additional production from new fields. Inflation last year was in negative territory (-1 percent annual average), reflecting subdued food and transport prices and is projected to remain below 3 percent this year.

“Preliminary data suggest that performance under the IMF-supported program was broadly satisfactory in 2019, with fiscal performance on track. Both non-oil and oil revenues exceeded projections. The wage bill slightly exceeded its target, but this was offset by underspending on goods and services, mainly reflecting procurement problems. Domestic investments exceeded the end-year target due to security spending. Banking sector liquidity has improved, reflecting higher deposit collection, but vulnerabilities remain in some banks.

“Spending pressures are emerging, which could undermine the hard-won fiscal adjustment efforts implemented since the 2014-15 economic crisis. Maintaining fiscal discipline in the run up to the parliamentary and presidential elections is critical for macroeconomic stability and maintaining a sustainable debt position. To this end, the authorities’ efforts should continue to focus on strengthening domestic revenue mobilization, streamlining exemptions, improving VAT collection, controlling the wage bill, increasing social spending, and clearing domestic arrears. Staying the course with the reform agenda is equally important, including in the banking sector.

“The IMF team would like to thank the Chadian authorities and other counterparts for their hospitality, excellent cooperation, and candid and constructive discussions during the visit, and reaffirms the IMF’s support to the government’s efforts to implement their economic reform program. Discussions for the 6^th and last review under the current ECF arrangement will be initiated in Washington during the Spring Meetings and pursued in N’Djamena at the end of April.

“During its visit, the mission met Mr. Tahir Hamid Nguilin, Minister of Finance and Budget, Mr. Issa Doubragne, Minister of Economy and Development Planning, Mr. Annour Mahamat Hassan, the National Director of BEAC, and other senior officials, as well as representatives of international development partners.”