Washington, DC - December 4th, 2023: The Executive Board of the International Monetary Fund (IMF) completed the first reviews under the Extended Credit Facility (ECF) [1] Arrangement and the Extended Arrangement under the Extended Fund Facility (EFF) [2] for Côte d'Ivoire.
The 40-month ECF/EFF arrangements with a total access of SDR 2,601.6 million (about US$3.5 billion or 400 percent of Côte d'Ivoire's IMF quota) were approved by the IMF Executive Board on May 24, 2023. The completion of the first reviews of the ECF/EFF arrangements provides Côte d'Ivoire immediate access to the second disbursement for a total of SDR 371.657 million or US$495.288 million.
Program performance has been strong. The Ivorian economy has faced adverse spillovers from the war in Ukraine and global monetary tightening. Indirect and direct subsidies to curb price pressures, higher security spending, and worsening terms-of-trade amid robust domestic demand had led to a widening of macroeconomic imbalances in 2022. Under the ECF/EFF arrangements, the authorities have started decisive fiscal consolidation in 2023, including through increased domestic revenue mobilization. They also pursued the implementation of their national development plan through important structural reforms to improve business climate and private sector's involvement in the country's development. Growth has remained resilient, estimated at about 6 1/2 percent in 2023, while both the current account and budget deficits are projected to shrink compared to 2022 by 1.6 and 1.1 percent of GDP respectively.
Following the Executive Board discussion, Mr. Okamura, Acting Chair and Deputy Managing Director, made the following statement:
"Côte d'Ivoire's performance under the Fund supported program has been strong, reflecting the authorities' commitment to entrenching macroeconomic stability. Growth has been among the highest in Africa for more than a decade and the country has delivered the largest fiscal consolidation in the WAEMU region in the last six months. Sustained reform efforts will help maintain a moderate risk of debt distress amid a still difficult external backdrop.
"Continued fiscal consolidation envisaged in the 2024 budget will be underpinned by high-quality and permanent tax policy measures, as well as tax and customs administration reforms. These will support reaching the WAEMU deficit target of 3 percent of GDP by 2025 and reduce the country's debt sustainability risks.
"Sustaining domestic revenue mobilization over the medium-term remains a clear priority, to generate the fiscal space needed to finance deeper economic transformation towards upper middle-income status. To this end, development, publication, and implementation of the MTRS will require significant engagement with stakeholders to ensure buy-in for the requisite overhaul of the tax system, and in particular streamlining or eliminating VAT tax exemptions and tax expenditures.
"Safeguarding fiscal space will be aided by the authorities' commitments to enhance the coverage, transparency, and management of public finances, especially to cover state owned enterprises. The authorities' continued focus on improving the institutional and legislative framework for debt management remains critical in safeguarding debt sustainability.
"Sustaining structural reform momentum and continuous improvements in safeguarding financial integrity and governance are important for unlocking the private sector's potential. Completing the review of the financial inclusion strategy and advancing related reforms will enhance financial access to vulnerable groups and women. Moreover, addressing the recommendations made by the Financial Action Task Force to improve the effectiveness of Côte d'Ivoire's AML/CFT system, and strengthening both public procurement and the asset declaration framework for public officials will strengthen governance. Further investments in human capital development, especially amongst youth and women, will make growth more inclusive. Strengthening resilience to climate change, including through a possible future Resilience and Sustainability Facility (RSF) arrangement, will also be important for a sustainable transformation of Côte d'Ivoire's economy."
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[1] The ECF is a lending arrangement that provides sustained program engagement over the medium to long term in case of protracted balance of payments problems.
[2] The EFF was established to provide assistance to countries: (i) experiencing serious payments imbalances because of structural impediments; or (ii) characterized by slow growth and an inherently weak balance of payments position.
