Côte d’Ivoire remains at a moderate risk of debt distress. This debt sustainability analysis (DSA) updates the joint IMF/IDA DSA from June, 2012 to integrate some planned new external borrowing on nonconcessional terms. The baseline scenario includes almost US$250 million of additional nonconcessional borrowing over 2013–14 (0.57 percent of GDP in 2013, 0.35 percent of GDP in 2014), largely to finance infrastructure and energy projects.2 All external debt indicators remain under their indicative thresholds3 throughout the projection period, except the present value of debt-to-GDP, which breaches its threshold at the beginning of the projection period. The country remains vulnerable to macroeconomic shocks, including lower exports and GDP growth. The inclusion of domestic debt raises debt burden indicators somewhat, but does not alter the overall assessment.
The DSA was prepared jointly by the staffs of the International Monetary Fund and the World Bank, in collaboration with the authorities of Côte d’Ivoire. The fiscal year in Côte d’Ivoire is January–December.
The additional nonconcessional borrowing will be allocated through two separate windows under the ECF program: one will be for up to a cumulative amount during 2013–14 of $200 million ($100 million in 2013 and a further $100 million in 2014), equivalent to 0.39 and 0.35 percent of GDP in 2013 and 2014, respectively, which will be limited to infrastructure and energy sector investment projects that are economically profitable (as assessed by an internationally reputable entity); and the other will be an increase of CFAF 25 billion (equivalent to 0.18 percent of GDP or about $50 million) in an existing program window for nonconcessional borrowing from the West African Development Bank (BOAD)—this window would then amount to CFAF 50 billion or slightly over $100 million in total.
For the threshold for countries weak policy environment, see http://www.imf.org/external/np/pp/eng/2012/011212.pdf
The last DSA can be found here: http://www.imf.org/external/pubs/cat/longres.aspx?sk=26061.0
The DSAs presented in this document are based on the low-income countries (LIC) DSA framework. Under the Country Policy and Institutional Assessment (CPIA), Côte d’Ivoire is rated as a weak performer with an average rating of 2.79 in 2009–11, and the DSA uses the indicative threshold indicators for countries in this category. See “Debt Sustainability in Low-Income Countries: Proposal for an Operational Framework and Policy Implications” (http://www.imf.org/external/np/pdr/sustain/2004/020304.htm and IDA/SECM2004/0035, (2/3/04) and “Debt Sustainability in Low-Income Countries: Further Considerations on an Operational Framework, Policy Implications” http://www.imf.org/external/np/pdr/sustain/2004/091004.htm and IDA/SECM2004/0629, 9/10/04) and “A Review of Some Aspects of the Low-Income Country Debt Sustainability Framework” (http://www.imf.org/external/np/pp/eng/2009/080509a.pdf) and “Staff Guidance Note on the Application of the Joint Bank-Fund Debt Sustainability Framework for Low-Income Countries” (http://www.imf.org/external/np/pp/eng/2010/012210.pdf
The projected level of the debt stock at end-2012, is somewhat higher than previously projected because: (i) pre-cutoff ODA claims of the French Development Agency (Agence France de Développement, (AFD) which previously had been assumed to be cancelled were instead included with post-cutoff ODA claims eligible for the C2D debt for development swap program, in which debt service is paid and Côte d’Ivoire receives an equivalent amount of grants to be used for development expenditures; and (ii) the estimates of accumulated late interest on Eurobond arrears and on arrears to Sphynx and Standard Bank-BNI creditors were revised up.
These are for the most part ODA debt to France that will be converted into debt-for-development swaps over time, and existing debt service is assumed to be reprofiled over 15 years (2012–27) and the €350 million 2011 emergency loan from France.
Under C2D the existing debt service claims are reprofiled over 15 years (2012–27), and when they are repaid they are channeled through matching grants into development spending.
To date no such guarantees exist.