The Inter-American Development Bank today approved a $5.1 million loan to Ecuador to strengthen the Ministry of Economic Affairs and Finance in the critical areas of macroeconomic policy, public debt management, public investment and monitoring finances of provinces and municipalities.
The resources will enable the ministry* to invest in consulting services, information systems, and training that will enhance its capacity to design, implement and monitor macroeconomic and fiscal policy.
The loan will enable the Undersecretariat of Economic Policy to monitor economic variables and formulate policy alternatives. The capacity of the Undersecretariat for Public Credit to manage public debt will be strengthened, and the new Sectional Finance Support Coordination Unit will be enhanced to enable it to monitor the finances of provinces and municipalities and to interact with subnational governments on fiscal issues.
The recently created Undersecretariat of Public Investment will also be strengthened to enable it to carry out its regulatory and operational functions.
The strengthened Ministry of Economic Affairs and Finance will be expected to play a leading role in economic policymaking and contribute to the design of an administrative and fiscal decentralization strategy, among other benefits.
The IDB loan is for a 25-year term, with a 42-month grace period, at the variable annual interest rate, now 6.97 percent. Local counterpart funds total $1.28 million.
Part of the interest will be defrayed by the Intermediate Financing Facility.