WASHINGTON DC, United States (CMC) — The International Monetary Fund (IMF) has approved a three-year US$69.7 million Extended Credit Facility (ECF) for Haiti, enabling the French-speaking Caribbean Community (Caricom) country to have access to US$10 million immediately.

The IMF said that the rest of the funds will be phased over the duration of the arrangement, subject to semi-annual programme reviews.

The ECF programme aims to raise Haiti’s growth potential and reduce vulnerabilities to shocks, while entrenching macroeconomic stability.

“Haiti’s pursuit of macroeconomic stability in the aftermath of the 2010 earthquake is commendable — growth has been positive, inflation has remained moderate, and international reserve levels adequate. Going forward, continued efforts are needed to support sustained and inclusive growth, strengthen institutions and the policy framework, and maintain adequate buffers to absorb shocks,” said Min Zhu, IMF deputy managing director.

He said the new three-year programme seeks to entrench macroeconomic stability, improve competitiveness to spur inclusive growth, and preserve buffers through streamlined policies that have full country ownership. Donor support ensures the full financing of the programme.

“The programme targets a reduction of the non-financial public sector deficit from 7.5 per cent in the financial year 2014 to 3.25 per cent of gross domestic product in the financial year 2015, and 2.5 per cent in the medium term to preserve sustainability.

The IMF official said that lower oil prices will facilitate fiscal consolidation, allowing the Government to raise fuel taxes and lower electricity subsidies, while preserving pro-poor spending. The adoption of an automatic fuel pricing mechanism will safeguard fuel taxes if oil prices rebound.

“The programme aims to preserve price stability. Accordingly, the monetary policy stance will remain tight as needed until fiscal consolidation proceeds to anchor exchange rate expectations. The policy mix seeks to keep international reserves at an appropriate level to ensure adequate buffers.

“The programme’s structural reform agenda focuses on strengthening competitiveness to foster growth. It tackles deep-seated problems in the electricity sector; supports the authorities’ efforts to strengthen property rights; and includes actions to increase policy effectiveness through reforms in tax administration, tax policy and public financial management, as well as improvements in the monetary framework and economic statistics,” he added.

In December 2014, Haiti completed an arrangement under the ECF, which helped support positive economic growth and maintain macroeconomic stability after the 2010 earthquake.

But the IMF said that while per capita growth has been positive, it has been insufficient to significantly reduce poverty. Fiscal and external deficits rose to high levels, increasing Haiti’s vulnerabilities.

Due partly to a difficult socio-political environment, progress on structural reform was limited, the IMF added.