IMF. Published: November 22, 2011. The Ivoirien economy is recovering quickly from the impact of the post-election crisis, and considerable strides have been made in restoring security. But challenges remain, notably to strengthen security throughout the country, to solidify social and political stability, and to transition to a robust growth path.
Performance under the RCF-supported program has been good, with most targets either met or exceeded. Fiscal policy has supported the recovery and addressed post-crisis humanitarian needs, while rebuilding public services. Conservative budget management has kept spending in line with available resources. In addition, the preparation of a medium-term structural reform was started, external arrears to multilateral institutions were cleared and progress has been made to regularize relations with other external creditors.
The authorities’ medium-term priorities are to achieve high sustained growth, reduce poverty, and restore a sustainable fiscal and external position. To achieve this, it will be essential to implement structural reforms to improve governance, the business climate, reduce vulnerabilities in the financial system, and strengthen competitiveness. Fiscal space is needed for pro-poor and investment spending and debt restructuring should be carried forward. These goals and policies reflect the country’s poverty reduction strategy, form the basis of the authorities’ medium-term program, and will also contribute to the external stability of the WAEMU.
The authorities request IMF support under the ECF and HIPC Initiative to support their medium-term program. The program’s objectives are in line with the authorities’ priorities: fiscal policy aims to expand the tax base, strengthen revenue administration, shift expenditure in favor of investment and pro-poor spending while strengthening public financial management and implementing civil service reform; and structural reforms focus on improving governance and efficiency in the energy and coffee/cocoa sectors, financial sector reform, and measures to improve the business climate and support private investment.
There are risks to the program, but the economy’s potential together with successful implementation of the authorities’ program could yield strong sustainable growth. Key risks to the outlook are a lack of decisive improvements in the security situation and in political normalization, an inability to implement much-needed structural reforms, or to access to the regional financial markets, external shocks, but there could also be a stronger-than-expected rebound in economic activity. Overall, the strong performance of the economy since May 2011 and the authorities’ commitment to their medium-term policy agenda bode well.
Côte d'Ivoire: 2011 Article IV Consultation and Requests for a Three-Year Arrangement Under the Extended Credit Facility and for Additional Interim Assistance Under the Enhanced Initiative for Heavily Indebted Poor Countries - Staff Report; Public Information Notice and Press Release on the Executive Board Discussion; and Statement by the Executive Director for Côte d'Ivoire.
