IMF Sanctions $1.3B Resilience Fund for Cote D'Ivoire

• The IMF Executive Board approved a 30-month RSF arrangement for Côte d'Ivoire for a total amount of SDR975.6 million (approximately US$1.3 billion).
• Côte d'Ivoire is exposed and vulnerable to climate change. Rising temperatures, rainfall disruptions, flooding, rising sea levels and coastal erosion are major challenges and represent recurring risks for resilient, sustainable, and inclusive economic growth.
• The RSF arrangement will support the reforms of the Ivorian authorities to strengthen adaptation and mitigation, particularly in the areas of agriculture, transport, infrastructure, and public financial management.

Washington, DC: The Executive Board of the International Monetary Fund (IMF) approved a Resilience and Sustainability Facility (RSF) Arrangement for Côte d'Ivoire.

Reviews under the 30-month RSF arrangement with a total access of SDR975.6 million (about US$1.3 billion or 150 percent of Côte d'Ivoire's IMF quota) will coincide with reviews of the Extended Credit Facility (ECF) and Extended Fund Facility (EFF) arrangements approved in May 2023 (for an amount of about SDR2,601.6 million, or 400 percent of quota). The ECF/EFF arrangements support the government's economic program over 2023-2026 for macroeconomic stability and the structural economic transformation to transition Côte d'Ivoire towards an upper middle-income country.

Côte d'Ivoire is highly exposed to climate change through rising temperatures and sea levels as well as rain pattern changes. Economic vulnerabilities to climate change are mostly due to the country's heavy reliance on agriculture, and the concentration of industrial and services activity in coastal areas. Agriculture employs about half of the workforce and contributes about 17 percent of GDP and 10 percent of tax revenues. At the same time, greenhouse gas emission and pollution in urban areas are growing, albeit from a low level.

The authorities have made strong commitments to reducing the adverse effects of climate change and have developed several government initiatives with development partners' involvement. The RSF arrangement will support the authorities' ambitious homegrown package of reform measures which comprises a balanced mix of adaptation and mitigation efforts and centered around six key pillars: integrating climate into key aspects of PFM, strengthening governance of climate policies, reinforcing safeguards for the agricultural sector, creating a framework for green and sustainable financing, building resilience to climate hazards, and controlling and reducing greenhouse gas emissions. The strategy is based on strong diagnostics including the World Bank Country Climate and Development Report, Climate-Public Investment Management Assessment and green public financial management technical assistance and complemented by various national plans and strategies. Strong synergies with the EFF/ECF arrangements, notably in domestic revenue mobilization, public finance management and financial market deepening, should further enhance the impact of expected outcomes. Technical assistance from the IMF and development partners, including the World Bank Group, the African Development Bank, the UNDP, and bilateral partners should continue to play an important role in meeting challenges from climate change.

Following the Executive Board's discussion, Mr. Kenji Okamura, Deputy Managing Director and Acting Chair, made the following statement:

"Côte d'Ivoire is highly exposed to climate change mainly through rising temperatures and sea levels, and rain pattern changes. Economic vulnerabilities to climate change are exacerbated due to the country's heavy reliance on agriculture and the concentration of industrial and services activity in coastal areas, while greenhouse gas emissions are rising, albeit from low levels.

"Addressing the impact of climate change is a key priority for the country as reflected in its National Development Plan and multiple national strategies and plans, including the country's leadership in organizing the UNCCD COP15 in 2022 to combat desertification. The country has identified priority mitigation and adaptation policies to increase climate resilience in its Nationally Determined Contributions (NDC).

"Built on strong diagnostics, the reforms under the Resilience and Sustainability Facility (RSF) arrangement are centered around six pillars to address the key challenges related to climate change. They include integrating climate into key aspects of PFM, strengthening governance of climate policies, reinforcing safeguards for the agricultural sector, creating a framework for green sustainable financing, building resilience to climate hazards, and controlling and reducing greenhouse gas emissions. On the latter one, the authorities committed to develop a carbon taxation strategy which, along with other commitments, should also create synergies with key policies under the EFF/ECF arrangements such as enhancing domestic revenue mobilization.

"The implementation of reforms under the RSF arrangement should improve Côte d'Ivoire's resilience to climate change over the medium term, replace more expensive financing, build buffers against climate shocks and related prospective balance of payment needs. The strong collaboration with development partners should ensure complementarity of all actors' programs to support the country's reform agenda. It should also encourage the catalytical effect of the RSF to finance the large financing needs identified in the authorities' NDC."

Cote d'Ivoire: Select Economic Indicators 2020-24