Gabon: IMF Executive Board Completes the Third Review of Gabon's Extended Arrangement and Approves US$99 Million Disbursement

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On December 19, 2018, the Executive Board of the International Monetary Fund (IMF) completed the third review of Gabon's economic program supported by an extended arrangement under the Extended Fund Facility [1]. Completion of the review enables the immediate disbursement of SDR 71.43 million (about US$99 million). This brings total disbursements under the arrangement so far to SDR 285.72 million (about US$395.9 million).

In completing the third review, the Executive Board approved the authorities' requests for waivers of nonobservance of a performance criterion and modification of performance criteria.

Gabon's three-year, SDR 464.4 million extended arrangement (about US$ 642 million at the time of approval), the equivalent of 215 percent of Gabon's quota, was approved by the Executive Board on June 19, 2017 (see Press Release No. 17/233). The government's reform program, supported by the IMF, aims to restore macroeconomic stability and lay the foundation for inclusive growth. It also seeks to attain debt sustainability at the national level and contribute to the external stability of the Central African Economic and Monetary Union (CEMAC).

Following the Executive Board discussion, Mr. Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair, made the following statement:

"Gabon's performance under the EFF arrangement has improved. The authorities have taken important and difficult actions to keep the program on track despite the October 2018 legislative elections. However, the economic recovery remains fragile and further fiscal consolidation and decisive reforms are needed to achieve strong and sustainable growth.

"The authorities are committed to continuing with growth- friendly fiscal consolidation. This requires steadfast implementation of measures to boost non-oil revenues and contain non-priority spending, while protecting social and investment spending. Enhancing budgetary execution and oil revenue management, and further improving cash and debt management are also priorities.

"Safeguarding banking sector stability is essential for growth. The authorities plan to accelerate the liquidation of the three distressed banks and expeditiously tackle the NPL overhang to support financial stability, promote credit to the private sector, and growth.

"Gabon's program continues to be supported by the implementation of supportive policies and reforms by the regional institutions in the areas of foreign exchange regulations and monetary policy framework and to support an increase in regional net foreign assets, which are critical to the program's success."

[1] The Extended Fund Facility (EFF) was established to provide assistance to countries: (i) experiencing serious payments imbalances because of structural impediments; or (ii) characterized by slow growth and an inherently weak balance of payments position. It provides assistance in support of comprehensive programs that include policies of the scope and character required to correct structural imbalances over an extended period.

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