Press Release No. 15/260

Press Release: IMF Executive Board Completes Seventh ECF Review for Côte d'Ivoire

June 5, 2015

The Executive Board of the International Monetary Fund (IMF) today completed the seventh review under the Extended Credit Facility Arrangement (ECF) for Côte d’Ivoire. The completion of the review enables the immediate release of the equivalent of SDR 48.78 million (about US$68.36 million), bringing total disbursements under the arrangement to the equivalent of SDR471.54 million (about US$660.84 million). The decision was taken without a formal Board meeting¹.

In completing the review, the Executive Board also approved the authorities’ request for the modification of the performance criteria on the primary basic balance and net domestic financing as of end-June 2015 as well as indicative targets consistent with the framework of the economic and financial program.

The Executive Board approved the ECF arrangement for Côte d’Ivoire on November 4, 2011 (see Press Release No. 11/399).

Performance under the Fund-supported program continued to be strong. Over 2012–14, the growth in real GDP per capita has reached 20 percent. All performance criteria and all but one indicative targets for end-2014 were met. Significant progress has been made toward improving the business climate and the tax administration, and some inroads have been made towards public bank restructuring.

The fiscal stance for 2015 remains appropriate despite emerging budgetary pressures. The planned adjustments to the 2015 budget, which include additional revenues and spending cuts should allow to contain the overall deficit to 3.7 percent of GDP. Despite these adjustments, the budget remains broadly growth-friendly and pro-poor, with significant increases in public investment and poverty-reduction expenditures. The recent discovery of extra-budgetary spending is worrisome. However, the April 23, 2015 Communication by the Council of Ministers reaffirming that extra-budgetary spending should be avoided is welcomed, as is the government’s commitment to forcefully apply the provisions of the 1998 decree aimed at avoiding extra-budgetary spending, including through sanctions.

Looking ahead, the challenge will be to maintain high growth rates while preserving macroeconomic stability. This will require further reforms to improve the business climate, including the creation of additional commercial courts, the reduction of domestic payments delays, and the improvement of relations between tax payers and tax collection agencies through enhanced transparency in tax control procedures. This also calls for implementing the financial sector development strategy to foster access to credit by SMEs. On the fiscal front, there is a need to control increases in current spending over the medium term and to take forceful actions to put the energy sector on a more solid financial footing to limit corresponding fiscal risks. Further steps are also needed to continue strengthening public financial management and the government should pay close attention to the accumulation of debt by public sector entities. Debt management should also be further strengthened. Furthermore, the authorities’ commitment to address weaknesses in the national accounts statistics is welcomed.

¹ The Executive Board takes decisions under its lapse of time procedure when it is agreed by the Board that a proposal can be considered without convening formal discussions.