IMF Executive Board Approves US$658.9 Million Under the ECF and EFF Arrangements for Côte d’Ivoire
December 12, 2016
- Real GDP grew by 9 percent per year on average during 2012–15, driven by investment and consumption and is expected to remain strong over the medium term, averaging 7.7 percent per year during 2017-19.
- The authorities’ new economic program under the ECF and EFF appropriately focuses on inclusive, sustainable growth; structural transformation of the economy; and poverty reduction
- The goal is to maintain fiscal discipline and strengthen buffers for future shocks, while creating fiscal space for infrastructure and social spending
On December 12, 2016 the Executive Board of the International Monetary Fund (IMF) approved two three-year arrangements under the Extended Credit Facility (ECF)[1] and the Extended Fund Facility (EFF)[2] for Côte d’Ivoire for a combined total of SDR 487.8 million (about US$658.9 million, or 75 percent of Côte d’Ivoire’s quota) to support the country’s economic and financial reform program.
The program will aim to achieve a sustainable balance of payments position, inclusive growth, and poverty reduction by investing in infrastructure and priority social projects. It will also focus on containing current spending, catalyzing official and private financing, and building resilience to future economic shocks.
The Executive Board’s decision will enable an immediate disbursement of total amount of SDR 69.686 million (about US$94.1 million). The remaining amount will be phased over the duration of the program, subject to semi-annual reviews.
Following the Executive Board discussion on Côte d’Ivoire, Deputy Managing Director Mr. Furusawa, and Acting Chair, said:
“Côte d'Ivoire’s economy has made an impressive turnaround since 2012 and its outlook remains favorable. Nevertheless, reducing poverty and closing human capital and infrastructure gaps will take time, and structural bottlenecks pose challenges. Against this backdrop, the authorities’ new economic program under the Extended Credit Facility and Extended Fund Facility appropriately focuses on inclusive, sustainable growth; structural transformation of the economy; and poverty reduction. The program builds on the solid performance under the previous Fund-supported program in 2011–15 and is expected to catalyze official and private financing.
“The authorities’ goal is to maintain fiscal discipline and strengthen buffers for future shocks, while creating fiscal space for infrastructure and social spending. To this end, improving tax administration and adopting new tax policy measures will help increase revenue mobilization. Containing current spending will be also critical, while prudent public financial and debt management will help ensure debt sustainability. Enhancing surveillance of public enterprises and extending budget coverage to extra-budgetary entities would strengthen control over all government’s activities and improve transparency. Reinforcing the framework for public-private partnerships and pressing ahead with the reform of public enterprises will mitigate fiscal risks.
“The authorities’ measures to recapitalize and strengthen public banks and their efforts to promote financial inclusion will help sustain healthy credit expansion and contribute to private sector-led economic growth.
“Further improvements to the business environment are crucial, particularly in the areas of paying taxes, obtaining permits, and facilitating trade. The authorities’ continued efforts to improve the quality and dissemination of economic statistics would support policy making and private investment.”
Annex
Recent Economic Developments
Côte d’Ivoire’s economy has achieved an impressive turnaround since 2012. Political normalization, supportive fiscal policy facilitated by extensive debt relief, reforms to improve the business climate, and rising world cocoa prices have enabled a strong rebound in economic activity. Real GDP grew by 9 percent per year on average during 2012–15, driven by investment and consumption, partly reversing a decade-long fall in per capita income.
The robust economic performance since 2012 has not fully shed the socio-economic legacies of decades of sluggish growth compounded by conflict. Significant disparities remain across the country, and in the areas of education attainment, employment and income. As such, the authorities’ 2016-20 National Development Plan (NDP) appropriately prioritizes inclusive and sustainable growth, focusing on structural transformation and improving living standards.
Solid macroeconomic performance continued in the first half of 2016 notwithstanding the impact of a drought on agriculture, and real GDP growth is projected at around 8 percent for the entire year. The budget deficit is projected at 4 percent of GDP in 2016, reflecting higher spending, including for security, health and education. Economic growth is forecast to remain strong over the medium term, averaging 7.7 percent per year during 2017-19, reflecting buoyant domestic demand. Inflation is projected to remain below 3 percent. Reflecting investment-driven imports, the external current account deficit would widen to about 2.5 percent of GDP.
Program Summary
Building on progress made under the 2012-15 program (see Press Release No. 11/399), the new three-year program will support the broad objectives of the NDP and help implement a sustainable balance of payments position, inclusive growth, and poverty reduction.
The authorities’ program aims to create fiscal space for infrastructure investment and social spending, and strengthen policy buffers; maintain public debt on a sustainable path; facilitate debt restructuring of the national oil refinery and enhance monitoring of the debts of state-owned enterprises; address vulnerabilities in the public banks; improve the business climate;
enhance the quality of economic data; and increase Côte d’Ivoire’s contribution to the regional foreign exchange reserves pool.
Under the program’s planned policies, the government’s budget deficit would converge to the West African Economic and Monetary Union norm of 3 percent of GDP by 2019 in order to preserve public debt sustainability and support the regional international reserves pool. Prudent public financial and debt management practices along with public enterprise reform would ensure fiscal sustainability and mitigate fiscal risks. Financial sector polices would focus on reducing vulnerabilities, including in the public banks, and fostering financial inclusion. Structural reforms will improve the business environment. Measures to improve the quality and dissemination of economic statistics will support policy making and investment.
Background
Côte d’Ivoire, which became a member of the IMF on March 11, 1963, has an IMF quota of SDR 650.40 million.
For additional information on the IMF and Côte d’Ivoire, see:
http://www.imf.org/external/country/civ/index.htm
|
2015 |
2016 |
2017 |
2018 |
2019 |
2020 |
||||||||||
|
Est. |
Proj. |
Proj. |
Projections |
||||||||||||
|
(Annual percentage changes, unless otherwise indicated) |
|||||||||||||||
|
National income |
|||||||||||||||
|
GDP at constant prices |
8.9 |
7.9 |
7.9 |
7.8 |
7.3 |
7.2 |
|||||||||
|
GDP deflator |
1.8 |
1.0 |
1.4 |
1.9 |
1.9 |
2.0 |
|||||||||
|
Consumer price index (annual average) |
1.2 |
1.0 |
1.5 |
2.0 |
2.0 |
2.0 |
|||||||||
|
External sector (on the basis of CFA francs) |
|||||||||||||||
|
Exports of goods, f.o.b., at current prices |
8.0 |
3.3 |
12.2 |
10.8 |
10.0 |
9.9 |
|||||||||
|
Imports of goods, f.o.b., at current prices |
11.4 |
7.3 |
14.9 |
12.3 |
11.3 |
10.7 |
|||||||||
|
Export volume |
10.6 |
3.1 |
6.2 |
5.9 |
5.4 |
5.1 |
|||||||||
|
Import volume |
13.8 |
10.2 |
8.8 |
10.7 |
10.2 |
9.3 |
|||||||||
|
Terms of trade (deterioration –) |
3.8 |
2.8 |
0.1 |
3.1 |
3.3 |
3.3 |
|||||||||
|
Nominal effective exchange rate |
-3.9 |
... |
... |
... |
... |
... |
|||||||||
|
Real effective exchange rate (depreciation –) |
-4.4 |
... |
... |
... |
... |
... |
|||||||||
|
Central government operations |
|||||||||||||||
|
Total revenue and grants |
18.9 |
11.7 |
11.3 |
11.3 |
9.9 |
10.4 |
|||||||||
|
Total expenditure |
21.8 |
16.7 |
9.5 |
9.8 |
8.2 |
9.6 |
|||||||||
|
(Changes in percent of beginning-of-period broad money unless otherwise indicated) |
|||||||||||||||
|
Money and credit |
|||||||||||||||
|
Money and quasi-money (M2) |
18.8 |
10.7 |
14.3 |
13.1 |
12.3 |
9.3 |
|||||||||
|
Net foreign assets |
3.2 |
0.3 |
4.7 |
4.7 |
3.3 |
1.0 |
|||||||||
|
Net domestic assets |
15.6 |
10.4 |
9.6 |
8.5 |
9.0 |
8.3 |
|||||||||
|
Of which : government |
-0.7 |
1.7 |
1.4 |
2.4 |
2.0 |
1.8 |
|||||||||
|
private sector |
16.0 |
8.6 |
8.2 |
6.1 |
7.0 |
6.4 |
|||||||||
|
Credit to the economy (percent) |
29.6 |
14.7 |
13.4 |
10.1 |
11.9 |
11.0 |
|||||||||
|
(Percent of GDP unless otherwise indicated) |
|||||||||||||||
|
Central government operations |
|||||||||||||||
|
Total revenue and grants |
20.2 |
20.7 |
21.1 |
21.4 |
21.5 |
21.7 |
|||||||||
|
Total revenue |
18.8 |
19.1 |
19.6 |
19.8 |
19.8 |
20.1 |
|||||||||
|
Total expenditure |
23.1 |
24.7 |
24.8 |
24.8 |
24.5 |
24.5 |
|||||||||
|
Overall balance, incl. grants, payment order basis |
-2.9 |
-4.0 |
-3.7 |
-3.4 |
-3.0 |
-2.8 |
|||||||||
|
Primary basic balance 1/ |
-0.4 |
-1.6 |
0.1 |
0.6 |
1.0 |
1.3 |
|||||||||
|
Gross investment |
17.8 |
19.3 |
20.2 |
21.2 |
21.2 |
21.4 |
|||||||||
|
Central government |
6.4 |
7.5 |
7.8 |
8.3 |
8.2 |
8.4 |
|||||||||
|
Nongovernment sector |
11.4 |
11.9 |
12.4 |
12.9 |
13.0 |
13.0 |
|||||||||
|
Gross domestic saving |
19.8 |
20.1 |
20.7 |
21.6 |
21.4 |
21.7 |
|||||||||
|
Central government |
2.9 |
2.6 |
3.6 |
4.2 |
4.5 |
4.9 |
|||||||||
|
Nongovernment sector |
16.9 |
17.5 |
17.1 |
17.4 |
16.9 |
16.8 |
|||||||||
|
Gross national saving |
16.8 |
17.3 |
17.7 |
18.7 |
18.5 |
18.8 |
|||||||||
|
Central government |
3.6 |
3.0 |
4.2 |
4.9 |
5.2 |
5.6 |
|||||||||
|
Nongovernment sector |
13.2 |
14.3 |
13.5 |
13.7 |
13.3 |
13.2 |
|||||||||
|
External sector balance |
|||||||||||||||
|
Current account balance (including official transfers) |
-1.0 |
-2.0 |
-2.5 |
-2.5 |
-2.7 |
-2.6 |
|||||||||
|
Current account balance (excluding official transfers) |
-2.4 |
-3.7 |
-4.0 |
-4.1 |
-4.3 |
-4.2 |
|||||||||
|
Overall balance |
0.3 |
-0.3 |
1.0 |
1.1 |
0.7 |
0.2 |
|||||||||
|
Public sector debt |
|||||||||||||||
|
Central government debt, gross |
47.8 |
48.3 |
47.9 |
46.4 |
44.9 |
43.4 |
|||||||||
|
Central government debt (excluding C2D) |
40.5 |
42.4 |
43.2 |
42.8 |
42.2 |
41.5 |
|||||||||
|
External debt |
29.8 |
28.9 |
28.2 |
27.4 |
26.6 |
25.7 |
|||||||||
|
External debt (excluding C2D) |
22.5 |
23.0 |
23.5 |
23.8 |
23.9 |
23.8 |
|||||||||
|
External debt-service due (CFAF billions) |
412 |
477 |
523 |
616 |
702 |
764 |
|||||||||
|
Percent of exports of goods and services |
5.6 |
6.3 |
6.1 |
6.5 |
6.8 |
6.7 |
|||||||||
|
Percent of government revenue |
11.3 |
11.9 |
11.6 |
12.3 |
12.8 |
12.5 |
|||||||||
|
Memorandum items: |
|||||||||||||||
|
Nominal GDP (CFAF billions) |
19,368 |
21,102 |
23,069 |
25,344 |
27,736 |
30,324 |
|||||||||
|
Nominal exchange rate (CFAF/US$, period average) |
591 |
… |
… |
… |
… |
… |
|||||||||
|
Nominal GDP at market prices (US$ billions) |
32.8 |
35.9 |
39.7 |
43.8 |
48.2 |
53.1 |
|||||||||
|
Population (million) |
23.7 |
24.3 |
25.0 |
25.6 |
26.3 |
27.0 |
|||||||||
|
Nominal GDP per capita (CFAF thousands) |
817 |
867 |
924 |
990 |
1,056 |
1,125 |
|||||||||
|
Nominal GDP per capita (US$) |
1,382 |
1,477 |
1,589 |
1,709 |
1,835 |
1,970 |
|||||||||
|
Real GDP per capita growth (percent) |
6.3 |
5.3 |
5.3 |
5.2 |
4.7 |
4.6 |
|||||||||
|
Poverty rate (in percent) |
46.3 |
… |
… |
… |
… |
… |
|||||||||
|
Sources: Ivoirien authorities; and IMF staff estimates and projections. |
|||||||||||||||
|
1/ Defined as total revenue minus total expenditure, excluding all interest and foreign-financed investment expenditure. |
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IMF Communications Department
MEDIA RELATIONS
PRESS OFFICER: Lucie Mboto Fouda
Phone: +1 202 623-7100Email: MEDIA@IMF.org