ROSEAU, Dominica, Thursday October 29, 2015 – The International Monetary Fund (IMF) has given the go-ahead for US$8.7 million in immediate financial assistance to aid Dominica’s post-Tropical Storm Erika recovery efforts.
The funds, to be drawn from the Rapid Credit Facility (RCF), are expected to address balance of payments difficulties and support areas such as macroeconomic stability and poverty reduction.
In a statement issued following the Executive Board decision, Deputy Managing Director and Acting Chair, Mitsuhiro Furusawa said Dominica has shown commitment to strengthening financial policies to tackle regional and domestic vulnerabilities.
“Structural reforms remain critical to support the fiscal effort as well as to improve competitiveness and private-sector growth prospects. Reforms to build resilience to potential future natural disasters should also be stepped up,” he said.
The August disaster left many people dead and caused an estimated US$483 million in damage.
The IMF said recovery and rehabilitation costs would put tremendous pressure on the country’s challenging fiscal and balance of payments positions.
“The authorities have committed to generating robust primary surpluses over the medium term to ensure downward debt dynamics. They will tackle pressures on current spending, broaden the revenue base, strengthen tax collection, further re-prioritize capital expenditures, and step up efforts to strengthen the fiscal policy framework to ensure the sustainability of the fiscal adjustment effort,” the deputy managing director added.
Financing under the RCF carries a zero interest rate, has a grace period of 5.5 years, and a final maturity of 10 years.