Front Matter

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© 2007 International Monetary Fund

September 2007

IMF Country Report No. 07/312

Côte d’lvoire: 2007 Article IV Consultation and Request for Emergency Post-Conflict Assistance—Staff Report; Staff Statement; Staff Supplement; Public Information Notice and Press Release on the Executive Board Discussion; and Statement by the Executive Director for Côte d’lvoire

Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. In the context of a combined discussion of the 2007 Article IV consultation with Côte d’Ivoire and request for emergency post-conflict assistance, the following documents have been released and are included in this package:

  • The staff report for the combined 2007 consultation and Request for Emergency Post Conflict Assistance, prepared by a staff team of the IMF, following discussions that ended on May 15, 2007, with the officials of Côte d’Ivoire on economic developments and policies. Based on information available at the time of these discussions, the staff report was completed on July 19, 2007. The views expressed in the staff report are those of the staff team and do not necessarily reflect the views of the Executive Board of the IMF.

  • A supplement on the joint IMF/World Bank debt sustainability analysis.

  • A staff statement of August 3, 2007 updating information on recent economic developments.

  • A Public Information Notice (PIN) and Press Release, summarizing the views of the Executive Board as expressed during its August 3, 2007, discussion of the staff report on issues related to the Article IV consultation and the IMF arrangement, respectively.

  • Statement by the Executive Director for Côte d’Ivoire.

The documents listed below have been or will be separately released.

  • Letter of Intent sent to the IMF by the authorities of Côte d’Ivoire*

  • Memorandum of Economic and Financial Policies by the authorities of Côte d’Ivoire*

  • Technical Memorandum of Understanding*

  • *Also be included in Staff Report

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Staff Report for the 2007 Article IV Consultation and Request for Emergency Post-Conflict Assistance

Prepared by the African Department

(In consultation with other departments)

Approved by Thomas Krueger and Michael Hadjimichael

July 19, 2007

  • Discussions for the 2007 Article IV Consultation and Emergency Post-Conflict Assistance (EPCA) were held in Abidjan April 30–May 15, 2007. The team consisted of Messrs. Kouwenaar (head), Egoume (resident representative), Fabig, Le Hen, and Bornhorst (all AFR), Dicks-Mireaux (PDR), and Ms. Nkhata (MCM). Mr. Alle, senior advisor to the Executive Director for Côte d’Ivoire, participated in the policy discussions. The mission met with the Minister of Economy and Finance and other senior officials, and was received by President Gbagbo and Prime Minister Soro. It met with representatives of the private sector, civil society, and the donor community.

  • At the 2003 Article IV Consultation, completed on March 31, 2004, Directors stressed that (i) actions to improve the political and security situation should be accompanied by a coherent economic policy framework to promote private sector confidence; and (ii) public finances, transparency and governance in public enterprise operations and the cocoa sector needed to be strengthened. The subsequent Article IV consultation was postponed several times because of the security situation and division of the country.

  • Côte d’Ivoire is a member of the West African Economic and Monetary Union (WAEMU) whose currency, the CFA franc, is pegged to the euro. It has accepted the obligations under Article VIII, Sections 2, 3, and 4 of the IMF’s Articles of Agreement. Data provision is broadly adequate for surveillance, but data quality and timeliness have declined since the conflict started.

  • Côte d’Ivoire’s outstanding use of Fund resources at end-May 2007 was SDR 91.41million (28.11 percent of quota). Côte d’Ivoire is current in its payments to the Fund. A PRGF-supported program was interrupted in late 2002 and expired in March 2005. Côte d’Ivoire is in nonaccrual status vis-à-vis the World Bank and African Development Bank (AfDB). Relations with the Fund, World Bank Group, and AfDB, and statistical issues are presented in an informational annex to this report.


  • Acronyms

  • Executive Summary

  • I. Introduction

  • II. Legacy of the Conflict, Challenges Ahead

    • A. Impact of the Conflict

    • B. Recent Economic Developments

  • III. Policy Discussions

    • A. Challenges: Economic Recovery and Sustained Growth

    • B. Medium-Term Outlook and Debt Sustainability Analysis

    • C. Foreign Exchange System, Competitiveness, and Trade

    • D. Macroeconomic Outlook and Policies for 2007

  • IV. Staff Appraisal

  • Text Tables

  • 1. Côte d’Ivoire, WAEMU, and SSA Economic Performance Indicators, 1994-2006

  • 2. Summary of Key Economic Indicators, 2004-07

  • 3. Summary of Central Government Financial Operations, 2005-07

  • 4. Coverage of Financing Gap, 2007

  • Figures

  • 1. Governance Indicators, 1996-2005

  • 2. Progress Toward Millennium Development Goals, 1993–2002

  • Boxes

  • 1. WAEMU Convergence Criteria

  • 2: Sources of Growth

  • 3. Trade and Competitiveness

  • Statistical Tables

  • 1. Key Political Developments, 1999–April 2007

  • 2. Selected Economic and Financial Indicators, 2004–07

  • 3. National Accounts and Savings Investment Balance, 2005–09

  • 4a. Central Government Financial Operations, 2004–07 (Billions of CFA francs)

  • 4b. Central Government Financial Operations, 2004–07 (Percent of GDP)

  • 5. Balance of Payments, 2002–07

  • 6a. Monetary Survey, 2002–07

  • 6b. Summary Accounts of the Central Bank and Commercial Banks, 2002–07

  • 7. External Financing Requirements, 2004-07

  • 8. External Debt Outstanding, 2002-07

  • 9. External Debt Service, 2002-07

  • 10. Medium-Term Scenario, 2007-12

  • 11. Indicators of Fund Credit, 2003-10

  • 12. Financial Soundness Indicators for the Banking Sector, 2001-06

  • 13. Governance Indicators in Côte d’Ivoire vs. WAEMU and Sub-Saharan Countries, 2004-06

  • 14. Selected Demographic and Social Indicators, 2004

  • Appendixes

  • I. Letter of Intent

  • Attachment I. Memorandum of Economic and Financial Policies for 2007

  • Attachment II. Technical Memorandum of Understanding (TMU)



African Development Bank


Africa Technical Assistance Center–West (Bamako)


African Growth and Opportunity Act


African Union


Central Bank of West African States


National Investment Bank


Common External Tariff


Civil Service Pension Fund


Postal Savings Fund


Center-North-West (of Côte d’Ivoire)


Disarmament, Demobilization, and Reintegration


Debt Sustainability Analysis


Economic Community of West African States


Extractive Industries Transparency Initiative


Economic Partnership Agreement


Emergency Post-Conflict Assistance


Equilibrium Real Exchange Rate


European Union


Forces Nouvelles


Financial Sector Assessment Program


Heavily Indebted Poor Country


Low Income Country


Letter of Intent


Millennium Development Goals


Multilateral Debt Relief Initiative


Memorandum of Economic and Financial Policies


Nominal Effective Exchange Rate


Net Present Value


Post-Conflict Assistance Project


Poverty Reduction and Growth Facility


Poverty Reduction Strategy Paper


Real Effective Exchange Rate


Integrated Public Finance Management System


Small and Medium-sized Enterprises


Sub-Saharan Africa


Technical Memorandum of Understanding


United Nations Security Council


Value-Added Tax


West African Economic and Monetary Union

Executive Summary

In emerging from political instability, conflict, and economic stagnation since 1999, Côte d’Ivoire will need strong domestic consensus and the continued support of the international community to reunify the country and start its recovery, which are also crucial for stronger growth in the subregion. The authorities see an IMF-supported program as key for returning to growth of at least 5 percent, reducing poverty, and progressing toward the MDGs. EPCA would be a step toward a PRGF arrangement and HIPC/MDRI relief.

The Article IV discussions with the authorities showed a broad consensus on key challenges and policy requirements. Discussions centered on removing constraints to post-conflict recovery, enhancing transparency in public resource management, strengthening the financial sector, and addressing longer-term obstacles to growth.

The EPCA-supported program for 2007 focuses on short-term measures to address these challenges:

  • Restoring security, social services, and basic infrastructure in the whole country. Tight financing constraints require reinforcing revenue administration and reorienting spending away from nonessential spending toward social/reunification spending. The program for 2007 targets a primary basic fiscal surplus of 1 percent of GDP.

  • Promoting efficient use of public resources. Early efforts would focus on enhancing transparency in public resource mobilization (energy and cocoa/coffee sectors), strictly enforcing budget procedures, and ensuring transparency in budget execution.

In the medium and longer term

  • Modest fiscal primary basic surpluses would help progress toward compliance with WAEMU convergence criteria and debt sustainability. The LIC-DSA shows debt distress, and to reduce debt vulnerabilities sizable debt relief (within the framework of HIPC/MDRI) and prudent debt management would be needed.

  • Revitalizing structural reforms, notably in the energy and export agricultural sectors, would be crucial for attracting investment, diversifying the economy, and raising productivity. Steps to enhance soundness, banking supervision, and the judiciary environment are needed to enhance the financial sector’s role in supporting growth. Impediments to the business climate need to be addressed to improve competitiveness.

Implementation of macroeconomic policies along these lines should contribute to domestic stability and the external stability of the WAEMU. Central in this regard are the policies in 2007 that aim to achieve sustainable fiscal and external positions.

A resurgence of political tensions, delays in disarmament, demobilization, and reintegration (DDR), and weakening security represent risks to program implementation. The authorities’ firm commitment to the program, as demonstrated by strong prior actions, and continued international support for the peace process should help keep these risks in check.

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Joint IMF/World Bank Debt Sustainability Analysis 2007

Prepared by the staffs of the International Monetary Fund and the International Development Association

Approved by Thomas Krueger and Michael Hadjimichael (IMF) and Vikram Nehru and Sudhir Shetty (IDA)

July 19, 2007

The external Low-Income Country Debt Sustainability Analysis (DSA) shows that Côte d’Ivoire is in debt distress with large external arrears. The public sector DSA suggests that Côte d’lvoire’s public debt is currently unsustainable. Key debt indicators are projected to fall below the country-specific indicative thresholds only after 2013.1

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Staff Report for the 2007 Article Consultation and Request for Emergency Post-Conflict Assistance—Informational Annex

Prepared by the African Department,

(In collaboration with other departments)

Approved by Thomas Krueger and Michael Hadjimichael

July 19, 2007


  • I. Côte d’Ivoire: Relations with the Fund

  • II. Côte d’Ivoire: Relations with the World Bank Group

  • III. African Development Bank Group Operations Strategy

  • IV. Statistical Issues

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August 3, 2007

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Public Information Notice (PIN) No. 07/101


August 13, 2007

International Monetary Fund

700 19th Street, NW

Washington, D. C. 20431 USA

On August 3, 2007, the Executive Board of the International Monetary Fund (IMF) concluded the 2007 Article IV consultation with Côte d’Ivoire.1

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Press Release No. 07/176


August 3, 2007

International Monetary Fund

Washington, D.C. 20431 USA

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August 3, 2007