Front Matter Page
IMF Country Report No. 18/182
CÔTE D’IVOIRE
STAFF REPORT FOR THE 2018 ARTICLE IV CONSULTATION AND THIRD REVIEWS UNDER THE ARRANGEMENT UNDER THE EXTENDED CREDIT FACILITY AND EXTENDED ARRANGEMENT UNDER THE EXTENDED FUND FACILITY, AND REQUEST FOR MODIFICATION OF A PERFORMANCE CRITERION
June 2018
In the context of the Staff Report for the 2018 Article IV Consultation and Third Reviews Under the Arrangement Under the Extended Credit Facility and Extended Arrangement Under the Extended Fund Facility, and Request for Modification of a Performance Criterion, 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 18, 2018, following discussions that ended on April 5, 2018, with the officials of Côte d’Ivoire on economic developments and policies underpinning the IMF arrangement. Based on information available at the time of these discussions, the staff report was completed on June 4, 2018.
An Informational Annex prepared by the IMF staff.
A Debt Sustainability Analysis prepared by the staffs of the IMF and the International Development Association (IDA).
A Staff Supplement updating information on recent developments.
A Statement by the Executive Director for Côte d’Ivoire.
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.
© 2018 International Monetary Fund
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Front Matter Page
CÔTE D’IVOIRE
STAFF REPORT FOR THE 2018 ARTICLE IV CONSULTATION AND THIRD REVIEWS UNDER THE ARRANGEMENT UNDER THE EXTENDED CREDIT FACILITY AND EXTENDED ARRANGEMENT UNDER THE EXTENDED FUND FACILITY, AND REQUEST FOR MODIFICATION OF A PERFORMANCE CRITERION
June 4, 2018
Executive Summary
Context: Strong economic performance since 2012, with average annual growth of 9 percent, reflected the economic recovery following political normalization, improved business environment, strong program of reforms, and supportive fiscal policy. A key policy challenge is to sustain robust growth and make it more inclusive and private sector-driven.
Outlook and risks: Robust medium-term growth is expected to be supported by domestic demand. Yet, risks relate to priority spending hampered by underperforming revenue mobilization, rollover challenges from tighter global financing, and external debt liquidity and solvency indicators approaching the threshold for high risk of debt distress. Higher exports prices and rising investor confidence are upside potential.
Fiscal policy: The government is committed to lower the budget deficit to the West African Economic and Monetary Union criterion of 3 percent of GDP by 2019. Prudent debt and financial management is required to firmly anchor Côte d’Ivoire’s debt on a sustainable path. Côte d’Ivoire should catch up with peers and mobilize needed revenue through new tax policy measures and accelerated reforms in revenue administration. The authorities are also improving public financial management.
Financial stability: While new prudential rules are reinforcing banking sector stability, pockets of vulnerabilities in the banking sector should be addressed. The very few remaining noncompliant banks should face stringent application of prudential rules.
Program performance and policies: All performance criteria, all but one indicative targets, and all but one structural benchmarks were met at end-2017. Negotiations on the debt restructuring of the national oil refinery SIR are ongoing. The government plans to adopt new tax measures, ensure that adjustment mechanisms for the prices of petroleum products and farmgate cocoa reflect changes in world prices, restrain spending, pursue structural fiscal reforms, and restructure a public bank.
Staff supports completion of the third reviews and modification of the performance criterion on the new external debt contracted by the government to reflect the new Eurobond issuance.
Approved By
Dominique Desruelle (AFR) and Mary Goodman (SPR)
Discussions were held in Abidjan during March 22 to April 5, 2018. The mission team comprised Messrs. Dhaneshwar Ghura (head), Michael Gorbanyov, Kader Amadou and Ms. Dominique Simard (all AFR), Ms. Aleksandra Zdzienicka (FAD), Messrs. Fabio Comelli (SPR), Jose Gijon (IMF resident representative) and Hermann Yohou (local economist). Mr. Marcellin Koffi Alle (OED) participated in the discussions. Mr. Mathieu Bellon (FAD) contributed to the analysis. Ms. Cooray, Ms. Malouf-Hardesty, and Mr. Magno assisted the team from headquarters.
Contents
CONTEXT
KEY TRENDS AND RECENT DEVELOPMENTS
A. Catching Up After Lost Momentum
B. Recent Economic Developments and Program Performance
OUTLOOK AND RISKS
ARTICLE IV POLICY DISCUSSIONS: FOSTERING SUSTAINED AND INCLUSIVE GROWTH
A. Structural Reforms to Improve the Investment Climate and Growth Sustainability and Inclusiveness
B. Fiscal Consolidation
C. National and Regional Policy Consistency
D. Debt Management
E. Strengthening the Banking and Financial Sector
PROGRAM ISSUES
A. Fiscal Policy
B. Financial Sector
PROGRAM MODALITIES AND FINANCING ASSURANCES
DATA AND SAFEGUARDS ISSUES
STAFF APPRAISAL
BOXES
1. Mobilizing Tax Revenue
2. Eurobond Issuances in 2017 and 2018
FIGURES
1. Social and Poverty Indicators
2. Bank Credit to the Economy by Sector
3. Recent Economic Developments, 2014–18
4. Medium-Term Outlook, 2015–23
TABLES
1. Selected Economic Indicators, 2015–23
2a. Balance of Payments, 2015–23 (Billions of CFA Francs)
2b. Balance of Payments, 2015–23 (Percent of GDP)
3a. Fiscal Operations of the Central Government, 2016–23 (Billions of CFA Francs)
3b. Fiscal Operations of the Central Government, 2016–23 (Percent of GDP)
4. Monetary Survey, 2015–23
5. Financial Soundness Indicators for the Banking Sector, 2013–17
6a. External Financing Requirements, 2015–23 (Billions of CFA Francs)
6b. External Financing Requirements, 2015–23 (Percent of GDP)
7. Indicators of Capacity to Repay the Fund, 2018–26
8. Schedule of Disbursements and Timing of Reviews Under the ECF/EFF Arrangements, 2016–19
ANNEXES
I. Medium-Term Growth
II. Status of the 2016 Article IV Main Recommendations
III. Intraregional Spillovers in the West African Economic and Monetary Union: The Role of Côte d’Ivoire
IV. Risk Assessment Matrix
V. External Sector Assessment
VI. Mobilizing Domestic Tax Revenue
VII. Capacity Development Strategy
APPENDIX
I. Letter of Intent
Attachment I. Supplementary Memorandum of Economic and Financial Policies for 2017–19
Attachment II. Technical Memorandum of Understanding
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CÔTE D’IVOIRE
STAFF REPORT FOR THE 2018 ARTICLE IV CONSULTATION AND THIRD REVIEWS UNDER THE ARRANGEMENT UNDER THE EXTENDED CREDIT FACILITY AND EXTENDED ARRANGEMENT UNDER THE EXTENDED FUND FACILITY, AND REQUEST FOR MODIFICATION OF A PERFORMANCE CRITERION— INFORMATIONAL ANNEX
June 4, 2018
Prepared By
African Department
(In Consultation with other departments)
Contents
RELATIONS WITH THE FUND
JOINT BANK-FUND WORK PROGRAM, 2018–19
AFRICAN DEVELOPMENT BANK GROUP STRATEGY AND OPERATIONS IN CÔTE D’IVOIRE
STATISTICAL ISSUES
Front Matter Page
CÔTE D’IVOIRE
STAFF REPORT FOR THE 2018 ARTICLE IV CONSULTATION AND THIRD REVIEWS UNDER THE ARRANGEMENT UNDER THE EXTENDED CREDIT FACILITY AND EXTENDED ARRANGEMENT UNDER THE EXTENDED FUND FACILITY, AND REQUEST FOR MODIFICATION OF A PERFORMANCE CRITERION—DEBT SUSTAINABILITY ANALYSIS UPDATE
June 4, 2018
Approved by Dominique Desruelle and Mary Goodman (IMF); and Paloma Anos-Casero (IDA)
Prepared by the International Monetary Fund and the International Development Association
This debt sustainability analysis (DSA) update reflects new information since the last DSA completed in December 2017, prepared for the second ECF and EFF reviews (Country Report 17/372).1 This update concludes that Côte d’Ivoire remains at moderate risk of debt distress, in line with the December 2017 DSA. All external debt burden indicators under baseline conditions lie below their thresholds. However, under the worst-case stress scenarios, solvency and liquidity indicators breach their respective thresholds, reflecting vulnerability to adverse domestic and external shocks. Under the baseline scenario, total public debt is projected to stabilize only in the long-term. Stress test scenarios confirm the existence of considerable risks to overall public debt sustainability. The authorities are making efforts to address data gaps on public enterprises debt. Further progress would allow treatment of related contingent liabilities in the new Debt Sustainability Framework for Low-Income Countries, which will become effective from July 1, 2018.
Front Matter Page
CÔTE D’IVOIRE
STAFF REPORT FOR THE 2018 ARTICLE IV CONSULTATION AND THIRD REVIEWS UNDER THE ARRANGEMENT UNDER THE EXTENDED CREDIT FACILITY AND EXTENDED ARRANGEMENT UNDER THE EXTENDED FUND FACILITY, AND REQUEST FOR MODIFICATION OF A PERFORMANCE CRITERION— SUPPLEMENTARY INFORMATION
June 11, 2018
Approved By
Dominique Desruelle (AFR) and Mary Goodman (SPR)
Prepared by the African Department in consultation with other Departments
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Press Release No. 18/241
FOR IMMEDIATE RELEASE
June 18, 2018
International Monetary Fund
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