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© 2008 International Monetary Fund

April 2008

IMF Country Report No. 08/142

Côte d’Ivoire: Request for Emergency Post-Conflict Assistance—Staff Report; Staff Statement; Press Release on the Executive Board Discussion; and Statement by the Executive Director for Côte d’Ivoire

In the context of a request for emergency post-conflict assistance, the following documents have been released and are included in this package:

• The staff report for the Request for Emergency Post-Conflict Assistance, prepared by a staff team of the IMF, following discussions that ended on February 28, 2008, 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 March 21, 2008. 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 staff statement of April 4, 2008, updating information on recent developments.

• A Press Release summarizing the views of the Executive Board as expressed during its April 4, 2008 discussion of the staff report that completed the review.

• A statement by the Executive Director for Côte d’Ivoire.

The documents listed below 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 included in Staff Report

The policy of publication of staff reports and other documents allows for the deletion of market-sensitive information.

Copies of this report are available to the public from

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International Monetary Fund

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INTERNATIONAL MONETARY FUND

CÔTE D’IVOIRE

Use of Fund Resources—Request for Emergency Post-Conflict Assistance

Prepared by the African Department

(In consultation with other departments)

Approved by Thomas Krueger and Michael Hadjimichael

March 21, 2008

Contents

• Acronyms

• Executive Summary

• I. Introduction

• II. Performance on the 2007 EPCA

• III. Policy Discussions

  • A. Overview

  • B. Growth Outlook

  • C. Fiscal Program for 2008

  • D. External Arrears, Debt, and Program Financing

  • E. Financial Sector

  • F. External Sector

  • G. Structural Reforms

  • H. PRSP Process

  • I. Program Issues

• IV. Staff Appraisal

• Text Tables

• 1. Summary of Key Economic Indicators

• 2. WAEMU convergence criteria

• 3. Summary of Central Government Financial Operations, 2006-08

• 4. Coverage of Financing Gap, 2007–08

• Box

• 1. Public Expenditure Management: Issues and Reforms

• Statistical Tables

• 1. Selected Economic and Financial Indicators, 2004–2008

• 2. National Accounts and Savings-Investment Balance, 2005–10

• 3. Central Government Operations (FCFA), 2004–08

• 4. Balance of Payments, 2004–08

• 5. Monetary Survey, 2004–08

• 6. External Financing Requirements, 2004–08

• 7. External Debt Outstanding, 2004–08

• 8. External Debt Service, 2004–08

• 9. Indicators of Fund Credit, 2006–2013

• 10. Medium-Term Scenario, 2007-12

• 11. Financial Soundness Indicators for the Banking Sector, 2001–07

• Appendices

• I. Letter of Intent

  • Attachment I: Memorandum of Economic an Financial Policies

  • Attachment II: Technical Memorandum of Understanding

Acronyms

Executive Summary

Côte d’Ivoire is progressing on the road to reunification, sustained peace, and elections. Although there have been delays in implementing the Ouagadougou Accord, a climate of political dialogue is evident, and elections are expected later in 2008. The continued support of the international community remains essential. The authorities see EPCA as a step toward a PRGF arrangement and HIPC/MDRI relief.

Having been resilient to the crisis since 2002, GDP growth is estimated at 1.6 percent in 2007 and should reach 3 percent in 2008. The economic recovery in Côte d’Ivoire is crucial to growth throughout the subregion.

Fiscal developments in 2007 were close to program targets, but the composition of spending deviated. Overruns on discretionary spending by the highest state institutions were at the expense of infrastructure and crisis-exit programs. The fiscal results and mobilized domestic financing enabled the authorities to make payments to the World Bank and AfDB and reduce domestic arrears.

There was progress on the structural front. Reporting on quasi-fiscal cocoa levies improved, and a large part of the accumulated levies was allocated to rural projects. Energy sector audits are being finalized and reporting on financial flows improved. But some key fiscal measures were implemented with delay or postponed to 2008. Progress in strengthening the banking system was slow.

Key elements of the 2008 program are:

• ▪ Continuing fiscal consolidation and creating fiscal space for urgent needs by improving tax administration, especially in the CNW zones; stabilizing the wage bill while confining recruitment to the social sectors; and decisively reducing nonwage current spending.

• ▪ Improving public expenditure management, notably by adhering to budget procedures and issuing quarterly budget execution statements to the Council of Ministers and the public.

• ▪ Strengthening the financial sector by recapitalizing underfunded banks, enhancing bank compliance with prudential norms, and restructuring microfinance.

• ▪ Further improving transparency and efficiency in the energy sector by reporting in line with EITI procedures, electricity reform, and adequate pricing of petroleum products; and in the cocoa/coffee sector by publishing quarterly reports on quasi-fiscal levies and their use for investment, and the budgets and certified accounts of sector agencies. For both sectors, reform strategies will be formulated with support from the World Bank and other donors.

A resurgence of political tensions, delays in elections, and renewed overruns in discretionary spending represent risks to the program. Satisfactory performance so far, commitment to program objectives shared by all political parties, and increasing international support are helping contain the risks.

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INTERNATIONAL MONETARY FUND

CÔTE D’IVOIRE

Use of Fund Resources—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

March 21, 2008

Contents

• I. Relations with the Fund

• II. Relations with the World Bank Group

• III. African Development Bank Group Operations Strategy

• IV. Statistical Issues

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Press Release No. 08/73

FOR IMMEDIATE RELEASE

April 7, 2008

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