Press Release No. 08/73

Press Release: IMF Approves US$66.2 Million in Emergency Post-Conflict Assistance for Côte d'Ivoire

April 7, 2008

The Executive Board of the International Monetary Fund (IMF) approved a credit of SDR 40.6 million (about US$66.2 million) in Emergency Post-Conflict Assistance (EPCA) for Côte d'Ivoire to continue the efforts begun under an initial EPCA-supported program (see Press Release No 07/176 of August 3, 2007) to strengthen the country's foundation for sustained recovery.

Emergency Post-Conflict Assistance (EPCA) is designed to promote the strengthening of administrative and institutional capacity, which will be necessary to sustain economic recovery and a higher level of financial assistance. The IMF's support through EPCA is a key part of a concerted international effort to provide financial assistance to Côte d'Ivoire.

Following the Executive Board's discussion of the request by Côte d'Ivoire, Mr. John Lipsky, First Deputy Managing Director and Acting Chair, said:

"Côte d'Ivoire is progressing on its way to effective reunification and sustained peace. Although there have been delays in implementing the Ouagadougou Accord, a climate of political dialogue is evident, and the improved security situation is beginning to pay off in better economic outcomes. Projected growth in real per capita income in 2008 is expected to benefit growth throughout the subregion.

"Fiscal developments in 2007 were close to overall program targets, although the overruns on non-productive spending were made at the expense of infrastructure and crisis-exit programs. The authorities took significant steps to make payments to the World Bank and the African Development Bank and to reduce domestic arrears.

"There was progress on the structural front. Reporting on quasi-fiscal cocoa levies improved, and a large part of the levies was allocated to rural projects. Energy sector audits are being finalized and reporting on financial flows improved. But some key fiscal measures were implemented with delay or postponed to 2008, notably energy pricing. Progress in strengthening the banking system was slow.

"Continuing fiscal consolidation in 2008 will create fiscal space for social, basic infrastructure, and other post-conflict needs. Achieving this will depend on steps to improve tax administration in the whole country, to stabilize the wage bill while confining recruitment to the social sectors, and to decisively reduce nonwage current spending. Steps are envisaged to improve public expenditure management, notably by adhering to budget procedures and issuing quarterly budget execution statements to the council of ministers and making them public. Further improvements in transparency and efficiency in the coffee/cocoa sector, and in the energy sector-including through electricity sector reform and the adequate pricing of petroleum products-will be essential for strengthening the economy's growth prospects.

"The continued support of the international community remains essential for Côte d'Ivoire to achieve sustainable peace and economic recovery. This support will be facilitated by the early completion of the Poverty Reduction Strategy Paper (PRSP), using broad-based consultations with the population. Directors agreed that a track record of solid policy implementation under EPCA could help pave the way for a PRGF arrangement and a HIPC Decision Point," Mr. Lipsky said.