Côte D’ivoire: Use of Fund Resources—Request for Emergency Post-Conflict Assistance—Informational Annex

The economic recovery in Côte d’Ivoire is crucial to growth throughout the subregion. The fiscal results and mobilized domestic financing enabled the authorities to make payments to the World Bank and AfDB and reduce domestic arrears. Reporting on quasi-fiscal cocoa levies has improved. Energy sector audits are being finalized, and reporting on financial flows has improved. In view of the efforts made at both political and economic management fronts, authorities appreciated the Executive Board’s support for an additional assistance under the IMF’s Emergency Post-Conflict Assistance (EPCA) program.


The economic recovery in Côte d’Ivoire is crucial to growth throughout the subregion. The fiscal results and mobilized domestic financing enabled the authorities to make payments to the World Bank and AfDB and reduce domestic arrears. Reporting on quasi-fiscal cocoa levies has improved. Energy sector audits are being finalized, and reporting on financial flows has improved. In view of the efforts made at both political and economic management fronts, authorities appreciated the Executive Board’s support for an additional assistance under the IMF’s Emergency Post-Conflict Assistance (EPCA) program.

I. Côte d’Ivoire: Relations with the Fund

(As of March 7, 2008)

I. Membership Status: Joined March 11, 1963; Article VIII

II. General Resources Account:

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III. SDR Department:

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IV. Outstanding Purchases and Loans:

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V. Latest Financial Arrangements:

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VI. Projected Payments to Fund: (SDR million; based on existing use of resources and present holdings of SDRs):

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VII. Implementation of HIPC Initiative:

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VIII. Implementation of Multilateral Debt Relief Initiative (MDRI): Not Applicable

IX. Safeguards Assessments:

The Central Bank of West African States (BCEAO) is the common central bank of the countries of the West African Economic and Monetary Union, which includes Cote d’Ivoire.

The most recent safeguards assessment of the BCEAO was completed on November 4, 2005. The assessment indicated progress has been made in strengthening the bank’s safeguards framework since the 2002 assessment and identified some areas where further steps would help solidify it.

The BCEAO now publishes a full set of audited financial statements and improvements have been made to move financial reporting closer to International Financial Reporting Standards (IFRS). Furthermore, an internal audit charter has been put in place, mechanisms for improving risk management have been established, and follow-up on internal and external audit recommendations has been strengthened.

The results of continuous safeguards monitoring indicate that while certain vulnerabilities remain in internal control systems and legal structure, there has been some progress in other areas, including through: (i) improving the external audit process by adopting a multi-year audit program; (ii) establishing an audit committee; (iii) expanding disclosures on financial positions of WAEMU countries with the Fund in the notes to the annual financial statements; and (iv) further strengthening of the effectiveness of the internal audit function.

X. Exchange Arrangements:

Côte d’Ivoire is a member of the WAEMU; the exchange system, common to all members of the union, is free of restrictions on payments and transfers for current international transactions. The common currency, the CFA franc, is pegged to the euro at the rate of €1 = CFAF 655.957.

XI. Article IV Consultation:

Côte d’Ivoire is on the standard 12-month Article IV consultation cycle. The Executive Board completed the 2007 consultation on August 3, 2007.

XII. Technical Assistance:


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B. Headquarters

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XIII. Resident Representative:

A Fund resident representative was posted in Abidjan in January 2007 after an interruption of one and a half years.

II. Côte d’Ivoire: Relations with the World Bank Group3

(As of February 29, 2008)

1. Before the September 2002 crisis, the Bank Group’s Country Assistance Strategy sought to help Côte d’Ivoire reduce poverty through (i) sound macroeconomic management, including prudent debt management; (ii) increased private sector development and investment supported by efficient and transparent regulation; (iii) more efficient expenditure targeting health, education, and basic infrastructure through innovative delivery approaches; (iv) efforts to strengthen institutional and human capacity; (v) emphasis on environmental sustainability; and (vi) improved governance, notably in the area of public expenditure management (PEM).

2. After an interruption because the country was in nonaccrual status, the Bank resumed lending operations in Côte d’Ivoire after arrears were cleared in January 2002. An Economic Recovery Credit (ERC) equivalent to US$200 million (over an 18-month period) was approved on June 11, 2002, and the first tranche of US$100 million was disbursed. The credit aimed to (i) create the conditions for renewed broad-based growth, driven by rural recovery and resumed confidence in the private sector; (ii) improve public services delivery with participation of local communities; and (iii) improve efficiency and accountability in public resource management. Implementation of structural reforms underpinning the ERC, however, was delayed by conflict. Moreover, because of the lack of an adequate macroeconomic framework (the related IMF PRGF credit was also stopped) and stalling progress on structural reforms, the ERC was closed on December 31, 2003 (as originally envisaged), and the two remaining tranches were canceled. Côte d’Ivoire fell again into nonaccrual status on November 2, 2004, with arrears to the Bank estimated at the end of June 2007 to total about US$504 million. World Bank arrears must be cleared before the Bank can make any disbursements from existing projects or provide new financing, other than an exceptional pre-arrears clearance grant in support of the post-conflict transition.

3. Meanwhile, notwithstanding suspension of disbursements and delays in presenting new projects to the Bank’s Board due to the arrears, the Bank has been providing limited financial support and addressing pressing needs via six Post-Conflict Fund grants totaling about US$2 million for (i) support for establishing a National Program for Disarmament, Demobilization, and Reintegration (DDR) amounting to $100,000 (only half of which was spent because the second tranche was not requested); (ii) “Communication to Strengthen Social Cohesion” (US$270,000) executed by the NGO Search for Common Ground; (iii) “Community Reintegration Pilot Project 1” (US$ 538,690), implemented by CARE International; (iv) “Community Reintegration Pilot Project 2” (US$737,500) in partnership with CARE International; (v) “Reintegration of Children Associated with the Armed Groups and Forces” (US$298,000), implemented by UNICEF; and (vi) a “Rapid Social Assessment” (US$160,000). Two additional Low Income Country Under Stress (LICUS) grants were recently approved as part of a US$6 million LICUS package. The first, which the Bank executed, was for $1.9 million to provide assistance in post-conflict planning and improving governance, including audits in the energy sector. The second, for US$2.25 million, to be executed by the Prime Minister’s Office, is for support of the national identification process. The third and last part of the package will be to finance pilot initiatives in creating employment for youth at risk (US$2.25 million).

4. During the discussions at the World Bank–IMF Spring Meetings in April 2007, the World Bank and Ivoirien authorities discussed issues concerning the implementation of the Ouagadougou Accord, the DDR process, and the Bank’s re-engagement in Côte d’Ivoire. An agreement was reached for the government of Côte d’Ivoire to begin paying current debt service to the Bank in July 2007 for the Bank to aim to approve a pre-arrears clearance grant in support of post-conflict transition (Post-Conflict Assistance Project (PCAP)) pending full clearance of Bank arrears over the next 8–9 months. The Bank Board approved the PCAP grant of US$120 million in support of the Ouagadougou Accord, on July 17, 2007, effective August 8, 2007, to support job creation, the identification process, and community recovery. The Bank and Côte d’Ivoire also signed a Memorandum of Understanding (MOU)on July 16, 2007, outlining steps to clear arrears to the Bank, including (i) the Ivoirien government paying 50 percent of its IBRD and IDA arrears in one or several transfers to the World Bank (the last to be made no later than February 29, 2008); (ii) the Bank preparing an exceptional IDA operation to clear the remaining IBRD and IDA arrears; and (iii) the Bank resuming its country assistance program once arrears are cleared.

5. Based on the July MOU Côte d’Ivoire and the Bank are proceeding toward arrears clearance. The Ivoirien government has remained current on its scheduled debt service to the Bank through December 2007 in part through prepayments. The Bank is preparing a US$287 million Economic Governance and Economic Recovery Grant (EGRG), comprising (i) US$252 million for direct reimbursement of a bridge loan extended to clear arrears; and (ii) US$35 million for direct budget support. To encourage resumption of sustainable economic growth and poverty reduction, the EGRG will support Government efforts to improve governance, transparency, and efficiency in PEM, particularly in the key energy, coffee/cocoa, and financial sectors. The proposed EGRG is an integral part of the Bank Interim Strategy Note (ISN) for Côte d’Ivoire that is being prepared for 2008–09. The Bank’s support during the ISN Emergency and Recovery timeframe will include a blend of trust funding and IDA lending and nonlending activities. The ISN proposes to focus Bank assistance on (i) stabilization and peace-building; (ii) assisting war-affected populations; and (iii) kick-starting economic recovery and reform. Both the EGRG and ISN are tentatively scheduled for a joint review by the Bank’s Board on February 12, 2008.

6. The World Bank arrears clearance is taking place within a credible macroeconomic fiscal framework supported by and closely coordinated with an IMF-supported program. A joint Bank-IMF mission visited Cote d’Ivoire in September 2007 for discussions on the EGRG operation and starting a PEM and Financial Accountability Review (PEMFAR). During the September mission the teams reached preliminary agreement with the government on the main elements of the proposed EGRG structural reform program, implementation of the process of arrears clearance with the Bank, and preparation of the new PEMFAR, in collaboration with the African Development Bank (AfDB), the European Union (EU), and IMF.

7. Following discussions at the Annual Meetings in October 2007, the Bank’s reengagement strategy and dialogue with the authorities center on the following:

  • Finalization of the last of three audits in the energy sector and continuing efforts to build a credible track record on transparency and governance.

  • Implementation of the PCAP grant in support of the Ouagadougou Peace Accord (toward political normalization, beginning with the identification process and elections).

  • Progress on arrears clearance, the PRSP process, debt reconciliation, and improvements in macroeconomic performance to work towards debt relief under HIPC.

  • Upon full arrears clearance, reactivation of the Bank portfolio (comprising US$104 million and operations in education, rural development, transport and distance learning) and financing two new operations for governance and institution building (US$15 million) and HIV/AIDS (US$20 million). The Bank is also exploring the possibility of an emergency urban reconstruction program of US$90 million to support water management and road maintenance.

  • After an adequate economic framework is implemented for a reasonable period of time, with a track record of policy performance under the IMF’s EPCA, full clearance of Bank arrears, and basic measures taken to strengthen governance and transparency in the energy, cocoa/coffee, and financial sectors and PEM, a follow-up emergency credit to the EGRG operation could be provided to support further structural reforms.

  • Building country capacity to engage the government and other partners in a more detailed assessment of needs, resource mobilization, and program support, leading to a donor consultative group meeting.

  • As soon as satisfactory progress is made on the DDR program and the security front (to guarantee safe access to conflict-affected areas), as part of the reconstruction process the Bank is expected to take the lead in organizing a multi-donor assessment mission (MAM) in close collaboration with the IMF, the EU, and other partners (the LICUS-financed activities will inform the MAM). The purpose of the MAM is to identify reconstruction financing needs, new expenditure priorities, and likely sources of external finance.

  • Regarding analytical work, a post-conflict poverty diagnostic, based on a limited survey in the Abidjan region was completed. Since the signing of the Ouagadougou accord the Bank has also undertaken a number of critical Analytical and Advisory Activities (AAA) and knowledge-building activities to lay the knowledge and analytical foundation for accelerated Bank support. These include informal policy notes on oil and gas, cotton, cocoa, and the finance sector; audits with a particular focus on the energy sector, especially oil/gas and electricity; and a country social assessment setting out macro and micro elements of the crisis. As part of the analytical agenda, a number of other studies will be undertaken up to and beyond the arrears clearance phase in preparation for more intensive Bank engagement in Côte d’Ivoire: a governance assessment, a rapid decentralization study, the PEMFAR, a poverty diagnostic, a cocoa review (supported by LICUS funds), a sources of growth and competitiveness study, and informal Economic and Sector work (ESW) in the agricultural, rural and environment sectors to conduct an investment climate survey and look at such essential commodities as rubber and agricultural cash crops and forestry.

8. The IFC portfolio has been showing strains from the continued economic crisis as clients struggle in the prolonged uncertainty and economic downturn. IFC’s primary role for most of the crisis has been to preserve the committed portfolio, which as of February 28, 2007, stands at US$ 77 million, invested mostly in oil and gas and electricity generation. Throughout the crisis IFC’s Special Operations Unit has been consistently working with clients facing difficulties in dealing with prevailing economic conditions. With the country’s return to stability and arrears clearance expected early in 2008, IFC is now considering new investments in selected sectors and is ready to heighten its involvement; it is committed to taking an active role in the private sector strategy as soon as a sensible economic recovery program is in place.

9. MIGA’s portfolio in Côte d’Ivoire consists of one project in support of agribusiness and manufacturing. It has issued coverage to French investors against the risks of expropriation, war, and civil disturbance for its investment in rehabilitation of three cocoa plantations and expansion of cocoa production in Côte d’Ivoire. In addition to increasing cocoa production, the project will have a positive impact on the country’s balance of payments. The remaining gross exposure from this investment is US$10.6 million. MIGA accepts applications for guarantees for projects in Côte d’Ivoire but has not received any requests for support as of the first quarter of FY08.

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Source: World Bank Controller’s debt-service projections.

IMF-World Bank collaboration in specific areas

10. Collaboration between the Bank and the IMF has been close with both institutions using their post-conflict instruments to assist the country. There is broad agreement on the core reform program the authorities intend to pursue: (i) improving public expenditure management and tax policy; (ii) enhancing governance and transparency in the energy and cocoa/coffee sectors; and (iii) strengthening the financial sector. The Bank is leading efforts on crisis-related programs, post-conflict reconstruction needs, sectoral reforms, and poverty reduction. The IMF is taking the lead on macroeconomic and financial issues, including fiscal, monetary, and banking supervision policies. More specific details on this division of labor are given in Table 1 below.

Table 1.

Bank-Fund Collaboration

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III. African Development Bank Group Operations Strategy

1. Bank Group Portfolio and Management. Of a total of 49 operations4 approved since the start of intervention in Côte d’Ivoire, for a net commitment of UA1,030 million, the current project portfolio comprises of a one active operation financed with a UA3.7 million grant. This excludes the Human Resource Development Programme (PVRH) II (UA20 million) for which disbursements were suspended due to the arrears as well as projects financed by loans and whose balances should be cancelled after payment of the last invoices received by the Bank. The ongoing operation—National Good Governance and Capacity Building Programme (PNBGRC)—is an institutional support project whose activities will contribute to improving governance and capacities of several ministries. Specifically, its purpose is to (i) contribute to improving operation of the legal system; (ii) strengthen structures and institutions involved in the decentralization process; (iii) support public resources management capacity; and (iv) strengthen the PNBGRC coordination structure.

2. As for portfolio management, the current projects have been seriously affected by the crisis arising from the suspension of disbursements starting in February 1, 2003. Following discussions with an Ivoirien delegation in Tunis in July 2004 and July 2005, the AfDB began canceling the balances of 10 operations in accordance with its procedures. As of February 2007, the total amount cancelled was UA65.7 million. The AfDB has not made any further cancellations because there is hope of resumption of financial cooperation with Côte d’Ivoire. Although loan disbursements have been suspended for accumulation of arrears, the AfDB has continued to implement operations financed with grants, among them studies for formulation of the irrigation development plan, the road toll and weighbridge study plan, and the Agneby plan, which are almost completed.

3. Status of Arrears to the AfDB Group and Payment Schedule. Côte d’Ivoire’s arrears to the Group stood at UA365 million at end-2007. The private sector arrears amounted to UA1.62 million as of April 30, 2007. Côte d’Ivoire has no arrears on its subscription to AfDB capital.

Projected Côte d’Ivoire Reimbursements in UA millions

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4. Steps by the AfDB to facilitate arrears clearance. After arrears were cleared early in 2002, the Board approved an interim strategy under ADF VII on April 3, 2002, but the strategy could not be carried out because arrears began building up again in February 2003. The AfDB suspended all disbursements on loans, and approved no operations under AfDB IX and X. However, it maintained dialogue with the government so as to be able to implement its strategy as soon as it could re-engage in Côte d’Ivoire. During several consultative missions the Ivoirien authorities reaffirmed their commitment to stabilize arrears and stay current on maturities. However, the commitments have not been carried out.

5. On April 28, 2007, the Ivoirien authorities and the Bank came to an agreement on the modalities of an arrears clearance scheme (see the Memorandum of Economic and Financial Policies elaborated by the IMF in May 2007). Based on the framework of the Post-Conflict Countries Facility (PCCF), the agreed scheme entails moving the cut-off date from end-December 2003 to end-April 2007, effective clearance of arrears in April 2008 and start of payment of the maturities falling due between May 2007 and April 2008 no later than September 2007 in full by April 2008. By this date, Côte d’Ivoire will also have to pay one-third of arrears outstanding as of April 2007. The rest will be paid by the PCCF and donors. Côte d’Ivoire has already paid the debt service due for April 30, 2007, through December 31, 2007.

Strategy and Instruments for Economic Dialogue and Arrears Clearance

6. Objective and Strategy. The strategy consists in identifying and implementing a new solution for arrears settlement that will enable the AfDB to resume full cooperation with Côte d’Ivoire. This strategy entails two pillars, namely: (i) the continuation of dialogue on fulfilling the criteria for accessing the Bank’s post-conflict arrears facility (PCCF); and (ii) participation in the reconstruction effort and building of institutional capacities. The solution to the problem of arrears under the PCCF will be embodied in a specific proposal to be presented to the Boards in the course of the first half of 2008. Subject to approval of this proposal and its implementation as well as the satisfactory implementation of the IMF’s EPCA, the Bank will initiate the following actions: (i) presentation of a Country Strategy Paper to the Board on the proposed use of the ADF XI allocation; (ii) start of the appraisal of new operations under post-conflict reconstruction programme; and (iii) restructuring of the portfolio for the resumption of disbursements on ongoing operations. This strategy will also be updated in accordance with principles to be adopted under the new Bank facility for fragile countries currently nearing finalization.

IV. Côte d’Ivoire - Statistical Issues

While adequate for surveillance purposes, and the authorities have generally provided the required statistical indicators to the Fund (see attached table) on a timely basis, there are weaknesses in the areas of national accounts, balance of payments, and public finance, and in conciliation of fiscal and monetary data. Côte d’Ivoire has participated in the General Data Dissemination System (GDDS) since May 2000, but the metadata posted on the Data Standards Bulletin Board have not been updated since June 2001.

Real sector statistics

The authorities have published comprehensive national accounts data for 1987–95 using 1986 as the base year and a new set covering the period 1996–2006 aligned with the 1993 System of National Accounts using 1996 as the base year. Technical assistance (TA) on national accounts has been provided by AFRITAC West in August 2007 covering several topics including a review of implicit deflators. A harmonized consumer price index (CPI) (base 1996) has been adopted by all members of the West African Economic and Monetary Union (WAEMU).5 There are no regular publications on wages and employment.

Public finance statistics

The Ministry of Finance has reported data up to 2006 for publication in the Government Finance Statistics Yearbook. The authorities do not provide monthly or quarterly fiscal data for publication, but the Ministry of Finance has generally made available to the IMF African Department detailed monthly government finance data. Documentation on the coverage of general government units and public enterprises is lacking. While the government has committed to addressing this weakness and making a comprehensive effort to reconcile fiscal and monetary data, there has been little progress to date. Deficiencies in the recording of expenditures undermine sound fiscal reporting.

Monetary and financial statistics

Monetary data for Côte d’Ivoire are prepared by the national agency of the Central Bank of West African States (BCEAO) and officially released by BCEAO headquarters. Some of the problems with monetary statistics are common to all eight member countries of the WAEMU; others are specific to systemic issues in Côte d’Ivoire’s bank and nonbank financing of the operations of the central government and the rest of the public sector. There has been improvement in the timeliness of depository corporations and interest rate data. The authorities now report monetary data to the IMF Statistics Department (STA) regularly, and the lag has been reduced from about six months to four or less. The BCEAO has also improved the estimates of currency in circulation in each WAEMU member country by addressing the large backlog of unsorted banknotes held by the BCEAO’s national agencies. In 2005 the BCEAO made substantial revisions to the estimates of banknotes in circulation in member states resulting from cross-border banknote movement. These revisions were due to changes in the method of estimating currency in circulation in the WAEMU. The revised method, based on updated sorting coefficients (initially established in 1990), has been applied retroactively from December 2003. The BCEAO is using sorting coefficients to evaluate the amounts of currency issued by each country, which in turn are used to estimate currency in circulation and to adjust the net foreign assets of each member country.

A monetary and financial statistics mission visited BCEAO headquarters in May 2001, and STA participated in a BCEAO-sponsored seminar on monetary statistics in April 2003. In these regional forums STA reviewed with BCEAO representatives methodological issues that concern WAEMU member countries and discussed the BCEAO’s plans to adopt the Monetary and Financial Statistics Manual.

In August 2006, the BCEAO reported to STA monetary data for June 2006 for all member countries using Standardized Report Forms (1SR-central bank, 2SR-other depository corporations, and 5SR-monetary aggregates). In response to STA’s comments, the BCEAO has recently provided a revised 1SR and indicated that 2SR is being revised.

Balance of payments

Since December 1998 responsibility for compiling and disseminating balance of payments statistics has been formally assigned to the BCEAO by legislation adopted by all WAEMU member countries. The national agency of the BCEAO in Abidjan is responsible for completing and disseminating the balance of payments statement while BCEAO headquarters delineates the methodology and calculates international reserves managed on behalf of participating countries. Data consistency has significantly improved over the past few years with the full transition to the Balance of Payments Manual, Fifth edition (BPM5), improved sourcing methods, and the training of staff. The BCEAO national agency disseminates balance of payments statistics with a seven months lag, longer than the recommendation of the GDDS, as well as annual international investment position data. External sector data are reported regularly to STA for publication.

Regarding trade, the customs computer system allows for satisfactory monitoring of trade data, but the coverage of services and transfers (especially worker remittances) needs to be improved.

Concerning the financial accounts, foreign assets of the private nonbanking sector are not adequately covered. Reporting of private capital flows, especially foreign direct investment in Côte d’Ivoire, is unsatisfactory. There is also not sufficient information on private debt stocks and debt service flows.

The new BCEAO compilation system allows commercial banks to report data on payments involving nonresidents. The balance of payments compilers receive payment statements every 10 days. However, the information is used not in compilation of the annual balance of payments but to support data quality controls and provide for early information to the BCEAO authorities.

Côte d’Ivoire: Table of Common Indicators Required for Surveillance

(As of March 12, 2008)

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Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.

Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.

Including currency and maturity composition.

Daily (D), weekly (W), monthly (M), quarterly (Q), annually (A), irregular (I); and not available (NA).


Assistance committed under the original framework is expressed in net present value (NPV) terms at the completion point, and assistance committed under the enhanced framework is expressed in NPV terms at the decision point. Hence these two amounts cannot be added.


Under the enhanced framework, an additional disbursement is made at the completion point corresponding to interest income earned on the amount committed at the decision point but not disbursed during the interim.


This Appendix has been prepared by the World Bank. Questions may be addressed to: Mr. Zeljko Bogetic, Lead Economist (202-473-2143).


Not including four projects initiated by the private sector, for a total of UA33 million.


Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal, and Togo.