Front Matter Page
IMF Country Report No. 17/165
CÔTE D’IVOIRE
FIRST REVIEWS UNDER EXTENDED ARRANGEMENT UNDER THE EXTENDED FUND FACILITY AND AN ARRANGEMENT UNDER THE EXTENDED CREDIT FACILITY, AND REQUESTS FOR MODIFICATION OF PERFORMANCE CRITERIA AND AUGMENTATION OF ACCESS—PRESS RELEASE; STAFF REPORT; AND STATEMENT BY THE EXECUTIVE DIRECTOR FOR CÔTE D’IVOIRE
June 2017
In the context of the first reviews under Extended Arrangement under the Extended Fund Facility and an arrangement under the Extended Credit Facility, and requests for Modification of Performance Criteria and Augmentation of Access, the following documents have been released and are included in this package:
A Press Release including a statement by the Chair of the Executive Board.
The Staff Report prepared by a staff team of the IMF for the Executive Board’s consideration on June 19, 2017, following discussions that ended on April 23, 2017, with the officials of Côte d’Ivoire on economic developments and policies underpinning the IMF arrangement under the Extended Credit Facility. Based on information available at the time of these discussions, the staff report was completed on June 2, 2017.
A Debt Sustainability Analysis prepared by the staffs of the IMF and the International Development Association (IDA).
A Staff Statement of June 19, 2017 updating information on recent developments.
A 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 included in Staff Report
The IMF’s transparency policy allows for the deletion of market-sensitive information and premature disclosure of the authorities’ policy intentions in published staff reports and other documents.
© 2017 International Monetary Fund
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Front Matter Page
CÔTE D’IVOIRE
FIRST REVIEWS UNDER EXTENDED ARRANGEMENT UNDER THE EXTENDED FUND FACILITY AND AN ARRANGEMENT UNDER THE EXTENDED CREDIT FACILITY, AND REQUESTS FOR MODIFICATION OF PERFORMANCE CRITERIA AND AUGMENTATION OF ACCESS
June 2, 2017
Executive Summary
Context. In late 2016, peaceful legislative elections in December and adoption of a new constitution in the national referendum in October added more certainty to the political environment. However, social tensions arose in early 2017 with soldiers’ mutinies and a general strike of civil servants.
Economic outlook. Côte d’Ivoire’s economic performance remains strong despite external shocks and domestic events. Growth is projected at about 7 percent per year in 2017–19 and inflation is expected to remain subdued. Falling world cocoa prices and rising oil prices are cutting into export receipts and fiscal revenues. While the current account deficit will worsen in 2017, it would gradually improve over the medium term in view of the programmed fiscal adjustment.
Program policies. The reduction of the regulated cocoa producer price by 36½ percent and fiscal adjustment measures of about 1½ percent of GDP will limit the fiscal deficit to 4.5 percent of GDP in 2017 despite external shocks and domestic social demands. The authorities reaffirmed their commitment to the fiscal deficit converging to the WAEMU norm of 3 percent of GDP by 2019. Fiscal consolidation will be anchored on the reprioritization of current spending, curtailing of investment outlays, and the implementation of new revenue measures starting in 2018 to offset the fiscal losses from the terms of trade shocks.
Staff views. Staff supports the authorities’ requests for completion of the first review of the program supported by the ECF and EFF arrangements and augmentation of access under the arrangements by 25 percent of quota (to 100 percent of quota), and modification of performance criteria for end-June 2017. Completion of this review would release the disbursement equivalent to SDR 96.79 million.
Approved By
Dominique Desruelle (AFR) and Peter Allum (SPR)
Discussions were held in Abidjan during March 22–April 6 and in Washington during April 21–23. The mission team comprised Messrs. Dhaneshwar Ghura (head), Michael Gorbanyov, Jose Gijon, Matthieu Bellon, Ms. Mathilde Perinet (all AFR), Mr. Benoit Wiest (FAD), and Mr. Fabio Comelli (SPR). Mr. Marcellin Koffi Alle (OED) participated in the discussions.
Contents
Glossary
CONTEXT
RECENT ECONOMIC DEVELOPMENTS AND PROGRAM PERFORMANCE
OUTLOOK AND RISKS
ECONOMIC POLICIES FOR 2017–19
A. Fiscal Policy: Adjusting to Shocks
B. Public Financial Management (PFM): Advancing Reforms
C. Debt Management Policy: Maintaining Sustainability
D. Financial Sector: Addressing Vulnerabilities
E. Structural Reforms: Improving the Business Climate
PROGRAM MODALITIES AND FINANCING ASSURANCES
STAFF APPRAISAL
FIGURES
1. Economic Growth, 1965–2016
2. Recent Economic Developments, 2014–17
3. Medium Term Outlook, 2013–20
4. Fiscal Developments, 2012–19
5. Sovereign Bond Yield Spreads, 2012–17
TABLES
1. Selected Economic Indicators, 2014–20
2. Balance of Payments, 2014–20
3a. Fiscal Operations of the Central Government, 2015–19 (Billions of CFA francs)
3b. Fiscal Operations of the Central Government, 2015–19 (Percent of GDP)
4. Monetary Survey, 2013–20
5. Financial Soundness Indicators for the Banking Sector, 2013–16
6. External Financing Requirements, 2014–19
7. Indicators of Capacity to Repay the Fund, 2016–25
8a. Original Schedule of Disbursements and Timing of Reviews Under ECF/EFF Arrangements, 2016–19
8b. Proposed Schedule of Disbursements and Timing of Reviews Under ECF/EFF Arrangements, 2016–19
ANNEXES
I. Cocoa Sector Snapshot
II. Risk Assessment Matrix (RAM)
APPENDIX
I. Letter of Intent
Attachment I. Supplementary Memorandum of Economic and Financial Policies for 2016–19
Attachment II. Technical Memorandum of Understanding
Glossary
| AfDB | African Development Bank |
| BADEA | Banque Arabe de Développement économique |
| BCEAO | Central Bank of West African States |
| C2D | Debt Reduction and Development contract |
| CGRAE | Civil Service Pension Fund |
| CME | Medium-Sized Enterprise Centers |
| CNDP | National Public Debt Committee |
| CNPS | Private Sector Pension Fund |
| DGBF | General Directorate of Budget and Finance |
| DGD | General Directorate of Customs |
| DGTCP | General Directorate of the Treasury and Public Accounting |
| DSA | Debt Sustainability Analysis |
| ECF | Extended Credit Facility |
| EFF | Extended Fund Facility |
| E-GDDS | Enhanced General Data Dissemination System |
| EIB | European Investment Bank |
| EPN | National Public Establishments |
| FDI | Foreign Direct Investment |
| FIRST | Financial Sector Reform and Strengthening Initiative |
| FISF | Financial Inclusion Support Framework |
| GCI | Global Competitiveness Index |
| GFSM | Government Finance Statistics Manual |
| IHPI | Harmonized Industrial Production Index |
| MEFP | Memorandum of Economic and Financial Policies |
| MTAP | Multi-year Technical Assistance Project |
| MTBF | Medium-Term Budget Framework |
| MTEF | Medium-Term Expenditure Framework |
| NDF | Net Domestic Financing |
| NDP | National Development Plan |
| NSDP | National Summary Data Page |
| PDESFI | Financial Sector Development Program |
| PFM | Public Financial Management |
| PIMA | Public Investment Management Assessment |
| PINA | National Agricultural Investment Program |
| PRGF | Poverty Reduction and Growth Facility |
| TMU | Technical Memorandum of Understanding |
| TOFE | Tableau des Opérations Financières de l’état |
| TSA | Treasury Single Account |
| UNDP | United Nations Development Program |
| WAEMU | West African Economic and Monetary Union |
| WEO | World Economic Outlook |
Front Matter Page
CÔTE D’IVOIRE
FIRST REVIEWS UNDER EXTENDED ARRANGEMENT UNDER THE EXTENDED FUND FACILITY AND AN ARRANGEMENT UNDER THE EXTENDED CREDIT FACILITY, AND REQUESTS FOR MODIFICATION OF PERFORMANCE CRITERIA AND AUGMENTATION OF ACCESS—DEBT SUSTAINABILITY ANALYSIS UPDATE
June 2, 2017
Approved by Dominique Desruelle and Peter Allum (IMF); and Paloma Anos-Casero, (IDA)
Prepared by the International Monetary Fund and the International Development Association
This debt sustainability analysis (DSA) update reflects revisions since the previous DSA carried out in November 2016 for the requests for an arrangement under the Extended Fund Facility and an arrangement under the Extended Credit Facility (Country Report 16/383). 1 This analysis reflects updated information on the macroeconomic outlook in light of the external and domestic shocks, the proposed access augmentation from the IMF, and revised financing scenario. Côte d’Ivoire faces a moderate risk of debt distress, based on the assessment of public external debt. All external debt indicators lie below their thresholds under the baseline scenario. Under worst-case stress scenarios, all solvency and liquidity indicators in the framework breach their respective thresholds (as in the 2016 DSA). Public sector debt indicators (including domestic liabilities) point toward a stabilization of public debt in the medium term under the baseline scenario.
Front Matter Page
Press Release No. 17/232
FOR IMMEDIATE RELEASE
June 19, 2017
International Monetary Fund
Washington, D.C. 20431 USA
