The IMF has approved an SDR 292.68 million ($365 million) loan under the Poverty Reduction and Growth Facility (PRGF), resuming lending to this West African country after a three-year hiatus. The loan became effective on March 28 after a World Bank review of Côte d’Ivoire’s interim poverty reduction strategy paper (PRSP). Côte d’Ivoire can immediately draw up to SDR 58.54 million (about $73 million) under the PRGF arrangement.
IMF First Deputy Managing Director Anne Krueger said that “Côte d’Ivoire has been broadly successful in the implementation of a six-month staff-monitored program under difficult sociopolitical conditions, and the IMF is encouraged by the government’s demonstrated discipline in macroeconomic management and its commitment to implement structural reforms in a determined manner.”
She went on to say that the policies to be pursued in the first year of the program “are expected to begin to lay the foundation for sustained growth by focusing on macroeconomic stabilization measures and key structural reforms. Particular attention will be paid to better-focused and stronger action in the priority sectors of health, education, security, and basic infrastructure, and on legal and regulatory reforms to create a business environment in which private enterprise can flourish.
During 1994-97 and 1998-2001, the IMF supported reform programs instituted by the Ivoirien government to boost growth and achieve financial viability. In 1998, Côte d’Ivoire was declared eligible for external debt relief under the IMF-World Bank Heavily Indebted Poor Countries (HIPC) Initiative. The second program, however, was suspended in 1999 because of a political crisis and significant problems with governance and fiscal management that derailed the country’s reform efforts.
Programs supported by the PRGF are intended, over time, to be based on poverty reduction strategies designed by the government with the participation of civil society and development partners and set out in a PRSP. This process is meant to ensure that the programs are founded on macro-economic, structural, and social policies that will foster growth and reduce poverty. With the preparation of a realistic interim PRSP, the Ivoirien authorities have made a good start toward producing a national poverty reduction strategy and should complete a full PRSP by the end of July 2002.
Krueger said that “the authorities should adhere to their timetable for the completion of a PRSP… which is expected to guide the allocation of public resources in future years. The government will build the political support for the reforms and seek technical and financial assistance from multilateral and bilateral donors. Provided the authorities maintain a good track record of policy implementation, Côte d’Ivoire could reach the decision point under the enhanced HIPC Initiative in September 2002.”