To provide financing support for essential health-related expenditures and income support to ease the impact of the novel coronavirus (COVID-19) on the population, the executive board of the International Monetary Fund (IMF) approved a US $111.6-million disbursement to Haiti under the Rapid Credit Facility.

To address the pandemic, Haiti’s Government announced measures to support workers and households, including paying salaries and providing food and cash transfers to the public, however the pandemic has worsened an already weak economic outlook for the country.

According to the IMF, an expected sharp drop in remittance flows, reduction in textile exports, and drop in foreign direct investment will put significant strain on the balance of payments. Additional direct health and social expenditures, together with a further drop in fiscal revenues, will add to the fiscal deficit and financing needs.

“COVID-19 poses a major challenge for Haiti, a country in a fragile situation with very limited health care services [which is] just emerging from two years of socio-political instability and worsening economic hardship. Measures are being taken by the Government to stop the spread of the virus and to cushion the economic impact of the shock,” stated Tao Zhang, IMF deputy managing director and acting chair.

IMF support will help cover financial needs and allow the Government to ease the impact on the population, such as paying salaries of some teachers and workers, providing cash transfers and food rations to households, and providing subsidies to the transport and sanitation sectors.

According to Zhang, to ensure the appropriate use of emergency financing, Haitian authorities should prepare monthly budget execution reports on COVID-19 expenditures and undertake an ex post financial and operational audit of COVID-related operations.

He added that while providing adequate liquidity support to the financial sector, the central bank should contain monetary financing of the deficit and limit foreign exchange interventions to smooth volatility.

“Expeditious donor support is needed to close the remaining balance of payments gap and ease the adjustment burden. The IMF intends to further support Haiti through a Staff Monitored Program to help start the process of restoring macroeconomic stability and sustainability, building a better social safety net, and tackling governance weaknesses and corruption,” Zhang continued.

The Haitian population, 60 per cent of which exists below the poverty line, also suffers from high levels of diabetes and other health conditions.

To date Haiti has reported 57 cases of the coronavirus, with three deaths.