The Executive Board of the International Monetary Fund (IMF) today completed the fifth review of Côte d'Ivoire's performance under an economic program supported by a three-year Extended Credit Facility (ECF) arrangement.
The Board's decision, which was taken without a formal meeting,1 enables the immediate disbursement of SDR 48.78 million (about US$ 75.2 million), bringing total disbursements under the arrangement to SDR 357.72 million (about US$ 551.4 million).
The Executive Board approved the ECF arrangement for Côte d'Ivoire on November 4, 2011 for SDR 390.24 million (120 percent of the country's quota in the IMF, see Press Release No. 11/399).
Côte d'Ivoire's macroeconomic performance was impressive in 2013. Real GDP growth is estimated to have reached 8.7 percent, driven by strong domestic demand and exports.
Average annual inflation remained moderate at 2.6 percent, while the fiscal position improved. Higher Foreign Direct Investment inflows and project loans financed the moderate widening of the external current account deficit.
Performance under the ECF-supported program remains good. All performance criteria and all but one indicative targets for end-December 2013 were met.
Progress on the structural reform agenda was satisfactory, notably with the adoption of a medium-term wage bill strategy and a time-bound action plan for restructuring public banks. Some steps have also been taken to improve the business climate, and strengthen public financial management and tax administration.
Côte d'Ivoire's macroeconomic prospects for 2014 remain positive. A broad stabilization of growth at a high level (8½ percent) is projected, supported by sustained strong domestic demand.
Average annual inflation is expected to decline to 1.2 percent. The overall fiscal deficit would remain moderate at 2.3 percent, while higher FDI inflows and project loans are projected to finance a widening of the external current account deficit.
The main challenges for Côte d'Ivoire are to sustain the growth momentum and improve its inclusiveness through forceful implementation of the structural reform agenda.
Priority areas include further improving the business climate to foster private sector development, implementing the action plan for restructuring public banks and, more generally, developing the financial sector.
In addition, there is a need for increasing the transparency and efficiency of public spending, improving cash planning and cash management, further reinforcing the financial situation of the electricity sector while investing to increase energy supply, and strengthening debt management through a prompt reorganization of the debt unit.
In the medium term, bringing down the wage bill as a share of tax revenue will help implement the envisaged universal health insurance system in a sustainable manner and, more broadly, create fiscal space for needed development and social spending.
1 The Executive Board takes decisions without a formal meeting when it is agreed by the Board that a proposal can be considered without convening formal discussions.