Haiti will receive US$105 million from the IMF under the Food Shock Window of the Rapid Credit Facility to address urgent balance of payment demands connected to the global food crisis.
The Washington-based financial organization says Haiti was heavily hurt by the global food price shock. Given the substantial pass-through from global to domestic food prices and food shortages, record price inflation has weakened Haiti.
With more than half the population below the poverty line, Haiti faces a dire humanitarian crisis with an expected financing gap in this financial year of at least US$105 million or 0.5 percent of its GDP, assuming import compression and pending additional external financing from development partners.
The IMF stated this shock worsens an already vulnerable country with cholera and security threats.
Haiti’s humanitarian catastrophe and economic fallout from Russia’s invasion of Ukraine are catastrophic. “These spillovers included record price inflation that aggravated Haiti’s fragility and compounded the hardship of Haitians already suffering from chronic malnutrition,” said IMF Deputy Managing Director Antoinette Sayeh.
She claimed the administration is expanding social safety nets and cushioning food price shocks.
She added IMF emergency support under the food shock window of the Rapid Credit Facility will address the balance of payment gap and support those most affected by food price spikes through feeding programs, cash and in-kind transfers to vulnerable households, and school fee waivers.
Budgetary resources must be prioritized for food programs and vulnerable social assistance to meet the situation. The authorities should closely regulate, track, document, and disclose emergency response spending to maximize donor support and reduce debt sustainability problems.
With close Fund engagement, they shall conduct internal expenditure audits by all line ministries using emergency resources supplied under the food shock window through the General Inspectorate of Finance and transmit these internal audits to the Supreme Audit Court in a timely manner.”
Sayeh stated the Staff-Monitored Program (SMPmacroeconomic )’s and structural policies protect the Fund’s obligations. While supporting banking sector liquidity, the central bank should restrict monetary financing of the deficit and limit foreign exchange interventions to smoothing volatility.
“The SMP catalyzes donor support. She said that Haiti’s SMP’s successful implementation would help restore macroeconomic stability and sustainability, boost the social safety net, and address governance deficiencies and corruption.
