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Togo set on path to achieve stronger, more inclusive growth

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Lome, Togo, June 16 (Infosplusgabon) - Togo is set to receive US$35.5 million under the Extended Credit Facility (ECF) arrangement with the International Monetary Fund (IMF) after the Fund’s Executive Board on Friday completed the second review of the country’s economic performance.

 

In a statement released Saturday, IMF Deputy Managing Director Mitsuhiro Furusawa said “Togo’s performance under the ECF-supported programme has been broadly satisfactory despite a difficult political and economic environment.”

 

The programme aims to reinforce fiscal and financial stability and to promote inclusive growth. Togo’s three-year arrangement with the IMF was approved on 5 May 2017 for a credit of about US$241.5 million. Completion of the review brings total disbursements under the arrangement to about US$106.5 million.

 

With this support, Togo should reduce the overall fiscal deficit substantially upfront to ensure long-term debt and external sustainability; refocus policies on sustainable and inclusive growth through targeted social spending and sustainably-financed infrastructure spending; and resolve the financial weaknesses in two public banks.

 

According to Mr. Furusawa, the country’s fiscal position has improved significantly, driven mainly by expenditure reduction and public debt has declined.

 

“However,” he pointed out, “the medium-term outlook faces risks due to socio-political uncertainty and unfavourable global financial conditions. Strong commitment to the programme and maintaining the reform momentum remains critical to preserving macroeconomic stability, improving social protection, safeguarding long-term debt sustainability, and boosting the country’s growth potential.”

 

Following the Executive Board’s discussion on Togo, Mr. Furusawa said it is important that fiscal policy continues to focus on reducing public debt and preserving fiscal sustainability.

 

“The authorities should pursue reforms to address the weak revenue collection, prevent new arrears, improve the cost-effectiveness of public investment projects, and contain public expenditure,” he emphasized.

 

He also noted that the Togolese authorities were undertaking a review of expenditure to improve its efficiency and they have started implementing measures to improve public debt management, “ensuring debt reduction remains key for macroeconomic stability.”

 

“It is important that the authorities continue to make progress toward adherence to the WAEMU convergence criteria so as to help maintain strong regional reserves. Restructuring of the two public banks, including adequate recapitalization, addressing non-performing loans, and strengthening governance, is an important step towards restoring financial stability,” Mr. Furusawa added.

 

 

FIN/INFOSPLUSGABON/IJK/ GABON 2018

 

 

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