Global lender, International Monetary Fund approved more than USD 2 million for the development of Djibouti’s economy, one of Africa’s tiniest countries under Extended Credit Facility arrangement bring the total funds approved by the Bretton Woods institution to USD 15 million this year.

According to reports, the Executive Board of the International Monetary Fund recently completed the fourth review of Djibouti’s economic performance under the Extended Credit Facility arrangement. The Board’s decision which was taken on a lapse of time basis, enables the immediate disbursement of Special Drawing Rights amounting to 1.476 million bringing total disbursements under the program to Special Drawing Rights to 9.768 million.

The IMF’s board of directors further granted the authorities’ request for two waivers of nonobservance of the continuous performance criteria on the non-accumulation of domestic arrears and the non-accumulation of external arrears on the grounds of the minor deviation from the program objectives and the corrective measures undertaken by the authorities.

These focus mainly on improvements in liquidity management and a more rigorous execution of external debt service payments. The Djibouti authorities remain committed to the program, especially fiscal discipline and structural reforms in tax revenue, public financial management, bank supervision and central bank governance.

According to data, the ECF arrangement for Djibouti was approved on September 17th 2008 for mount to about USD 20.22. Additionally, on 7 January 7th 2011, the ECF arrangement was extended by nine months through June 16th 2012.

The Extended Credit Facility has replaced the Poverty Reduction and Growth Facility as the Fund’s main tool for medium-term financial support to low income countries by providing a higher level of access to financing, more concessional terms, enhanced flexibility in program design features and more focused streamlined conditionality. Financing under the ECF currently carries a zero interest rate, with a grace period of five and half years and a final maturity of 10 years.

The Fund reviews the level of interest rates for all concessional facilities every two years. The Executive Board takes decisions under its lapse of time procedure when it is agreed by the Board that a proposal can be considered without convening formal discussions.

(Filed by Mr Kapembwa Sinkamba SteelGuru Correspondent Zambia)