Washington, DC: The Executive Board of the International Monetary Fund (IMF) completed the Third Reviews of the Extended Fund Facility (EFF) and Extended Credit Facility (ECF) Arrangements and the Second Review of the Resilience and Sustainability Facility Arrangement (RSF), and concluded the 2024 Article IV consultation [1] with Cote d'Ivoire.
Côte d'Ivoire's performance has been strong under both the 40-month EFF/ECF arrangements with a combined access of SDR 2,601.6 million (or 400 percent of quota) and under the RSF with an access of SDR 975.6 million (or 150 percent of quota). Program implementation has been satisfactory thus far, with all performance criteria, structural benchmarks and reform measures scheduled for the reviews met or implemented. The completion of the reviews allows for an immediate disbursement of about US$ 808.5 million under the EFF/ECF and RSF arrangements.
The authorities' ongoing commitment to reforms under both programs should support Côte d'Ivoire's transformation towards upper middle-income status over the medium-term and enhance its resilience to climate change. At the same time, longstanding structural impediments, including high and persistent informality, the focus of the 2024 Article IV consultation discussions, along with gaps in gender equality, present challenges to higher and more inclusive growth.
Côte d'Ivoire's economy continues to display resilience. Strong consumption and investment demand underpin robust economic activity in 2024 despite weaker than expected agricultural production, and construction activity. Nevertheless, further buoyant growth is expected over the near to medium term with a recovery of agricultural production, stronger extractive industries activity which will benefit from the Baleine oil field fully coming onstream, and growth in energy production supported by the ongoing investment upgrades. Inflation continues to moderate. Headline annual average CPI inflation is projected to fall from 4.4 percent (yoy) in 2023 to 3.8 percent (yoy) by end-2024 as key food and commodity prices continue to ease. The financial sector remains sound. The commitments announced during the November COP 29 will help catalyze climate financing in Côte d'Ivoire. [2]
Fiscal and external imbalances have been steadily receding since 2023. Decisive revenue-based fiscal consolidation is on track and debt sustainability has improved. The fiscal deficit fell from 6.8 percent of GDP in 2022 to 5.2 percent of GDP in 2023, on the back of strong upfront revenue measures. Further revenue measures in 2024 and 2025 are expected to support an additional fiscal consolidation to reach a fiscal deficit of 4 percent of GDP in 2024 and 3 percent of GDP in 2025. The risk of debt distress is confirmed as moderate, and the debt outlook improved mainly due to improved liquidity ratios and proactive debt management operations. After a widening of the current account deficit to 7.9 percent of GDP in 2023, a sharp improvement is expected in 2024, on the back of significant terms-of-trade gains. Record-high cocoa prices, along with increased production prospects, are expected to support export revenue and narrow the current account deficit to about 5.1 percent of GDP in 2024.
Following the Executive Board discussion, Mr. Okamura, Acting Chair and Deputy Managing Director, made the following statement:
"Côte d'Ivoire's performance under the Fund-supported programs has been strong, reflecting the authorities' commitment to sustaining macroeconomic stability. Continued and resolute reform efforts will maintain a moderate risk of debt distress amid a still difficult external backdrop, while also cementing the country's role as an anchor of regional stability.
"The fiscal consolidation envisaged in the 2025 budget will be underpinned by high-quality and permanent tax policy measures, as well as tax and customs administration reforms. These will help in reaching the WAEMU deficit target of 3 percent of GDP in 2025 and further reduce the country's debt sustainability risks, also supported by active debt management.
"Sustaining domestic revenue mobilization over the medium term remains a clear priority, to generate the fiscal space needed to finance deeper economic transformation toward upper middle-income status. To this end, implementation of the MTRS will continue to require significant engagement with stakeholders to ensure successful overhaul of the tax system, and in particular streamlining or eliminating VAT tax exemptions and other tax expenditures.
"Safeguarding fiscal space will be aided by the authorities' commitments to enhance the coverage, transparency, and management of public finances, especially to cover state owned enterprises.
"Sustaining structural reform momentum and continuous improvements in safeguarding financial integrity and governance are important for unlocking the private sector's potential. Addressing identified AML/CFT framework deficiencies and showcasing an implementation track-record on AML/CFT reforms is critical. Tackling and reducing informality will further support ongoing investments in human capital development, especially amongst youth and women, to make growth more inclusive. Pursuing efforts to strengthen resilience to climate risks will also be important for a sustainable transformation of Côte d'Ivoire's economy."
Executive Board Assessment [3]
Table 1. Côte d'Ivoire: Selected Economic and Financial Indicators, 2021–29 |
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[1] Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country's economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.
[2] Government of Côte d'Ivoire Collaborates with International Financial Institutions, Development Partners, and the Private Sector to Catalyze Climate Finance
[3] At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country's authorities. An explanation of any qualifiers used in summings up can be found here: http://www.IMF.org/external/np/sec/misc/qualifiers.htm .
