Minister of Finance signs Policy-Based Loan Agreement to
Support Medium-Term Fiscal Consolidation
The Honourable Colm Imbert, Minister of Finance on Monday, April 23rd 2018 signed the first tranche of a Policy-Based Loan Agreement in the sum of US$180 million with the Corporación Andina De Fomento (CAF) Development Bank. The total loan of US$300 million will be used for the implementation of the Programme to support Government’s “Medium-term Fiscal Consolidation Strategy – Phase II”, to boost potential growth and reduce the economy’s vulnerability to external fluctuations and volatility of external terms of trade.
This programme aims to increase fiscal revenues; improve public expenditure efficiency and accountability; strengthen public debt management and promote fiscal policy sustainability. Policy actions which will be supported under the loan agreement include:
· Tax policy reform for the energy sector
· Corporation tax reform
· Implementation of an environmental tax
· Improve public procurement mechanisms
· Strengthening of the Central Audit Committee of the Ministry of Finance
· Review of the Public Debt Legislation
· Improvement of the Bond Market
· Establishment and operationalization of the National Investment Fund
· Monitoring fiscal consolidation progress
The loan is being pursued under the International Financial Organizations (Corporación Andina De Fomento) Act No. 5 of 2017.
‘CAF is a development bank created in 1970, owned by 19 countries – 17 of which are Latin American and Caribbean countries, Spain and Portugal- in addition to 13 private banks in the region.
CAF promotes a sustainable development model through credit operations, non-reimbursable resources, and support in the technical and financial structuring of projects in the public and private sectors of Latin America’.