IMF says Chad debt plan needed by end-March as conditions worsen

The IMF logo is seen outside the headquarters building in Washington
The International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, U.S., September 4, 2018. REUTERS/Yuri Gripas/File Photo

WASHINGTON, Jan 18 (Reuters) - The International Monetary Fund said on Tuesday that public and private creditors need to finalize a debt restructuring plan with Chad by the end of March to restore durable growth amid worsening conditions in the African country.

In a statement following a mission to the country's capital N'Djamena last week, the IMF said Chad's economic and financial situation and medium-term prospects have worsened due to continuing shocks since the onset of the COVID-19 pandemic.

"Debt treatment under the G20 Common Framework and significant donor support are key for restoring debt sustainability and (to) promote durable inclusive growth," the IMF said. "In this respect, finalization of a debt treatment with both public and private creditors by end-March will be critical."

IMF mission chief Edward Gemayel said in a statement that Chad's real GDP in 2021 is estimated to have contracted by 1.1%, driven by a reduction in oil production, while average annual inflation was contained after soaring in 2020 to 4.5%.

"The pandemic will likely leave long-lasting scars, and the Chadian economy is projected to remain weak over the near term, before gradually rebounding in 2024, to 3.6% provided adequate reforms are implemented," Gemayel said.

He added that public spending pressures were rising due to social and security tensions.

"Maintaining fiscal discipline in the runup to the parliamentary and presidential elections is critical for macroeconomic stability," Gemayel added.

Reporting by David Lawder; Editing by Mark Porter

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