Press Release No. 18/120

IMF Staff Team Completes Visit to Côte d’Ivoire

April 5, 2018

• The authorities and the IMF team reached a staff-level agreement on the third review of the ECF and EFF arrangements, subject to approval by IMF management and the Executive Board.
• GDP grew by 7.8 percent last year despite the fall in cocoa prices and social demands and inflation remained subdued at about 1 percent, below the 3 percent regional threshold of the Western Africa Economic and Monetary Union.
• IMF staff and the authorities concurred on the need to accelerate reforms critical to maintaining growth at a sustainable pace and continue making it more inclusive.

An International Monetary Fund (IMF) staff team led by Dhaneshwar Ghura visited Abidjan from March 22 to April 5, 2018, to hold discussions on the 2018 Article IV Consultation and the third review of the three-year economic and financial program supported by the IMF through arrangements under the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF).

At the conclusion of the visit, Mr. Ghura issued the following statement:

“The authorities and the IMF team reached a staff-level agreement on the third review of the ECF and EFF arrangements, subject to approval by IMF management and the Executive Board. Consideration by the IMF’s Executive Board is expected in June 2018.

“Based on preliminary estimations, GDP grew by 7.8 percent last year despite the fall in cocoa prices and social demands. Inflation remained subdued at about 1 percent, well below the 3 percent regional threshold of the Western Africa Economic and Monetary Union (WAEMU). Credit to the economy grew at a healthy pace of 13.3 percent in 2017. Reflecting the decline in cocoa prices in 2017, the deficit in the external current account reached 2.1 percent of GDP.

“The medium-term outlook is favorable and risks to the forecast are broadly balanced. Economic activity is projected to remain strong and the medium-term outlook is for robust growth to continue. Inflation is expected to remain contained. The fiscal deficit should be maintained at 3.75 percent of GDP in 2018, in line with the program objectives. Staff welcomes the authorities’ commitment to converge to the WAEMU fiscal regional deficit norm of 3 percent of GDP by 2019.

“Performance under the IMF-supported program was satisfactory in 2017. The budget deficit was 4.2 percent of GDP in 2017, somewhat lower than programmed. All performance criteria, and all but one indicative quantitative targets for end-December 2017 were met. All but one structural benchmarks were also implemented. Sound policies implemented by the authorities in the context of the IMF-supported program and the country’s good economic performance have helped the Eurobond issuance in March 2018.

“IMF staff and the authorities concurred on the need to accelerate reforms critical to maintaining growth at a sustainable pace and continue making it more inclusive. Staff welcomed the progress made by the authorities in prioritizing the new investment projects which should help maintaining space to finance the National Development Program (2016-2020). IMF staff and the authorities also agreed on the importance of increasing domestic revenues to create fiscal space to undertake priority spending and enhance debt payment capacity.

“The team noted the efforts to mitigate fiscal risks by advancing on restructuring the national oil refinery and public banks. The implementation of the new prudential regulations consistent with the Basel II/III principles should reinforce banking sector stability. While Côte d’Ivoire’s economic performance has been strong, there are also risks to the outlook from slower than expected progress in revenue mobilization, unfavorable terms-of-trade shock and tighter global financial conditions.

“The team and the authorities concurred that Côte d’Ivoire’s economic transformation program is progressing well. Continued fiscal consolidation, prudent debt management policy and supply-side reforms will support high growth rates. Continuing actions to spread growth benefits and reducing youth unemployment will also be important factors for ensuring the long-term success of government policies.

“The IMF team thanks the authorities for their hospitality and productive discussions.”

The IMF team met with His Excellency President Alassane Ouattara; Prime Minister Amadou Gon Coulibaly; Minister of Economy and Finance Adama Koné; Minister of Transports Amadou Koné; Minister of Oil, Energy and Development of Renewable Energies Thierry Tanoh; Minister of Employment and Social Protection Jean Claude Kouassi; Minister of Planning Niale Kaba; Secretary of State to the Prime Minister in charge of the Ministry of Budget and State Holdings Moussa Sanogo; National Director of the BCEAO Chalouho Coulibaly; and other senior officials.