By Modupe Gbadeyanka
The International Monetary Fund (IMF) team and the Togolese authorities have agreed on a programme supported by the bank’s Extended Credit Facility (ECF) arrangement.
The agreed economic program supported by the ECF arrangement aims to improve the living conditions for the population and to maintain a stable macroeconomic environment that is compatible with public debt sustainability
The team, led by Cemile Sancak, visited Lomé, the country’s capital, from January 5-18, 2017 to carry out discussions with the Togolese authorities on a program supported by the IMF’s ECF arrangement.
After the visit, Ms Sancak noted that, “The IMF team reached staff-level agreement with the government, subject to approval by IMF Management and the Executive Board, on a three-year program that could be supported by an arrangement under the ECF for about $238 million.
She explained that the main objectives of the program are to reduce the overall fiscal deficit to ensure long-term debt sustainability; refocus policies on sustainable and inclusive growth through targeted social spending and judiciously-financed infrastructure spending; and resolve the existing financial sector weaknesses.
According to her, the program includes a comprehensive set of reforms aimed at accelerating implementation of key reforms in revenue administration and public financial management, strengthening debt management, addressing the weaknesses in the public banks, and supporting private sector development.
“The government will strengthen the primary balance to progressively restore public debt sustainability,” she said.
Ms Sancak said further that the program targets a primary surplus (cash basis, including grants) of 2 percent of GDP by 2019.
However, government will control capital spending in the budget while improving public investment management and partnering with the private sector and technical and financial partners to continue to improve infrastructure.
It will also mobilize additional revenues through further improving revenue administration and broadening the tax base, with an emphasis on overhauling the exemption and tax expenditure system.
The IMF team leader noted that government plans to continue its policies on sustainable and inclusive growth through targeted social spending and judiciously-financed investment through programs such as the Emergency Program for Community Development (PUDC) and Support Program for Vulnerable Populations (PAPV).
She said the authorities are in the process of identifying development priorities in the National Development Plan for 2018-2022 and aim to fully integrate these priorities into the budget.
“The program is expected to catalyze significant support from development partners. In this context, official support in the form of grants and concessional lending will bolster debt sustainability. With steady and determined efforts, the authorities’ program will reinforce macroeconomic stability and promote sustained and inclusive growth,” she said, adding that, “The staff-level agreement is expected to be submitted to the IMF Executive Board for its consideration in April 2017.”
Adedapo Adesanya