Chad will receive $1.1bn in debt relief after completion of the Highly Indebted Poor Countries (HIPC) initiative of the World Bank and International Monetary Fund (IMF), its finance minister said on Tuesday.
Kordje Bedoumra said in an interview that the oil-producing central African nation – one of the poorest countries on earth – had cut its growth forecast for this year to 5%, from 7% in 2014, following a slump in international petroleum prices.
Chad was producing roughly 130 000 barrels of oil per day by the end of last year and aimed to double that in 2015 as new fields come on stream.
However, government spending has been stretched by an influx of refugees from conflicts in neighbouring countries and by military commitments as part of a regional alliance fighting the Boko Haram Islamist group in northern Nigeria.
The IMF said on Monday that Chad had qualified for debt relief under the HIPC initiative, but added that a formal announcement required the approval of the World Bank Executive Board. It did not provide further details.
“The debt relief will be worth around $1.1bn,” Bedoumra told Reuters. “Achieving completion point is not just about debt relief, it is also recognition of the reforms undertaken by Chad and its management of public finances.”
The IMF welcomed improvements to the transparency of Chad’s oil revenues and its efforts to comply with budget deficit targets, including spending cuts in a revised 2015 budget before parliament.
The IMF also announced that it had increased Chad’s existing $111m, three-year Extended Credit Facility (ECF) programme by roughly $37m.
“Taking into account all the financial help that we are receiving, our objective is to reach 5 percent economic growth for this year,” the minister said.
Bedoumra said the World Bank had agreed to increase funding by around $50m. The minister said these additional donor funds would help cover the slump in oil revenues and the cost of operations against Boko Haram.
“The international community understands Chad’s position and supports it, because Chad is like a dike for risks in the Sahel and if that dike fails the situation will be worse still,” said the minister.
After 29 years at the African Development Bank before joining the government, Bedoumra is running for the presidency of the pan-African lender next month.
“African integration would be my priority,” Bedoumra said, adding that the AfDB should promote infrastructure projects aimed at creating a single market from Africa’s 54 nations.