In Signal of Progress to Donors, IMF to Lend Togo $108 million
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The IMF's Executive Board approved on April 21 a low-interest loan for Togo of about $108 million to help rebuild its economy, becoming the first major international financial institution to resume lending to the west African state after most donors withdrew financial support more than a decade ago.
Parliamentary elections last year paved the way for the resumption of financial support by major donors to the West African country of 6 million people that lies sandwiched between Ghana and Benin.
"Togo has made significant progress since 2006 in advancing economic and political reforms," said Takatoshi Kato, IMF Deputy Managing Director and Acting Chair, following the Board discussion.
"With the support of a successful IMF Staff-Monitored Program, the authorities have implemented important fiscal governance reforms that have boosted tax revenues and strengthened expenditure control. This has resulted in a much-improved fiscal position and reversed the accumulation of domestic arrears. Structural reforms in the banking, cotton, phosphate, and energy sectors have begun," Kato added.
The Board approved a three-year arrangement under the IMF's Poverty Reduction and Growth Facility (PRGF) amounting to SDR 66.06 million (about $108 million) to support the government's economic program for 2008-10. An initial disbursement of SDR 13.26 million (about $22 million) will become available immediately.
Improving prospects
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"The authorities' medium-term economic program, supported by the new PRGF arrangement, will help sustain the reform momentum. The program, anchored in Togo's Interim Poverty Reduction Strategy Paper, aims to revive economic growth and reduce poverty within a stable macroeconomic environment, Kato said.
A central objective is to reduce Togo's excessive public debt to a sustainable level through gradual fiscal adjustment and debt relief. The PRGF-supported program will help Togo move toward comprehensive debt relief under two IMF-backed initiatives.
"The program also envisages a significant boost in spending on infrastructure, health, and education to promote economic growth and improve basic living...
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