Press Release No. 09/416

Press Release: IMF Executive Board Completes First Review Under Côte d'Ivoire’s PRGF Arrangement, Approves US$57.3 Million Disbursement

November 18, 2009

The Executive Board of the International Monetary Fund (IMF) completed today the first review of Cote d’Ivoire’s economic performance under a three-year Poverty Reduction and Growth Facility (PRGF) arrangement. With the completion of the review, Cote d’Ivoire may request an SDR 35.772 million disbursement (about US$57.3 million) This will bring total disbursements under the program to SDR 195.12 million (about US$312.5 million).

Côte d'Ivoire’s PRGF arrangement was approved in March 2009 (see Press Release No. 09/96) in the total amount of SDR 373.98 million.

In completing the review, the Executive Board also granted two waivers of non-observance of the performance criteria on the overall fiscal balance and on the non-accumulation of new external payment arrears. The Executive Board also completed the financing assurances review.

Following the Executive Board’s discussion of Cote d’Ivoire’s performance, Mr. John Lipsky, First Deputy Managing Director and Acting Chair, stated:

“The Ivoirien authorities are to be commended for their satisfactory performance under the PRGF-supported program and progress toward political normalization. They achieved a primary budget surplus and made significant progress in normalizing relations with external creditors despite the global economic crisis and the difficult post-conflict environment. Helped by favorable terms of trade, Côte d’Ivoire’s economy is recovering, and, although significant challenges remain, near-term economic prospects are favorable.

“Continued fiscal consolidation is critical to expand the fiscal space gained from the reforms and political normalization. The authorities aim to improve public resource management and to continue reorienting spending to areas critical to reducing poverty and improving infrastructure. To address the large accumulated wage commitments, the authorities are committed to implement a major civil service reform in 2010 and adopt a strategy for a sustainable medium-term wage bill. They will also address the rising deficits of both the pension funds and the electricity sector.

“Determined structural reforms coupled with further regional integration are needed to address the weak external competitiveness. The authorities will further reduce the taxation of cocoa income, reform the institutional and regulatory framework in the cocoa sector, advance restructuring in the electricity sector, and enhance the efficiency and fairness of the judicial system.

“Reforms in the financial sector aim to strengthen the prudential and supervisory framework and clarify the government’s role in the financial system.

The international community’s assistance remains crucial for Côte d’Ivoire’s full political normalization and economic success,” Mr. Lipsky said.

Cote d’Ivoire, which became of member of the IMF in March 1963, has a quota in the Fund amounting to SDR 325.20 million (about US$520.8 million).