IMF mission teams bring together economists and other specialist staff from different departments throughout the organization. Each team member specializes in one or more aspects of the work related to a particular visit to the country. The team describes how their recent work has contributed toward Côte d’Ivoire’s goal of becoming the first Sub-Saharan African country to change its status from “developing” to “developed” within one generation.

Today Abidjan is a much calmer place than in 2005, when the mission team—under heavy security—visited the commercial and administrative center of Côte d’Ivoire six months after the bombing of the rebel armed forces, Forces Nouvelles, by the government. “At that time, we were advised not to speak openly in French, and we could not take French nationals on the mission,” says former Mission Chief, Arend Kouwenaar. Although the security situation has since stabilized, the government continues to provide security escorts for Fund missions, a reminder of the country’s post-conflict environment.

With a GDP of $24 billion, the world’s largest cocoa exports, and relatively well-developed oil extraction, agricultural, textile, and chemical industries, Côte d’Ivoire is the largest economy in the West African Economic and Monetary Union (WAEMU). At the same time, it is a poor country. As a result of a civil conflict and economic decline, about half of its 21 million people now live in poverty, a steep increase from 10 percent as recent as 1985. “Côte d’Ivoire is a difficult post-conflict case,” says Kouwenaar, “a country that is desperately trying to reverse the downward spiral and which needs assistance from the international community.”

The spiral

The economy of Côte d’Ivoire flourished in the years immediately following independence in 1960 through its exports of cash crops, such as cocoa, coffee, and cotton. With real average growth exceeding 11 percent in the 1960s and 7 percent in the 1970s, the country was prepared to emerge as the first country in Sub-Saharan Africa to change its status from “developing” to “developed” within one generation.

However, as desk economist Jean-Baptiste Le Hen explains, this prosperity did not protect it from political turmoil. “Côte d’Ivoire began to suffer from political instability following a coup in 1999. Political crisis ensued after a brief civil war in September 2002, leading to a sharp polarization of the country. After the arrival of UN peacekeepers in February 2004 and successive international mediation efforts, the security and political situation gradually stabilized, albeit with setbacks, such as the outbreak of violence in November 2004.” In early 2007, peace talks were successful and set a roadmap for the UN’s Disarmament, Demobilization and Reintegration (DDR) program, the dismantling of militias, the reunification of the country, and preparations for elections.

This political turmoil, however, took a big toll on the country. Côte d'Ivoire now faces a large external financing gap—some 25 percent of GDP—which reflects large post-conflict reconstruction needs as well as an unsustainable debt situation. In March 2009, the IMF agreed to lend $565 million to Côte d'Ivoire under its Poverty Reduction and Growth Facility, a lending facility geared to low-income countries. “The PRGF helps close the external financing gap and catalyze external support,” says Louis Dicks-Mireaux of the IMF’s Strategy, Policy, and Review department. “It also opens the door to further debt relief under the Heavily Indebted Poor Countries (or HIPC) initiative and debt restructuring, including on very large external arrears—eliminating the latter should improve access to new loans.”

Turning the curve

PRGF negotiations began in September 2008 and concluded about five months later in February 2009. “The authorities welcomed Fund assistance, and are highly committed to a successful outcome,” says IMF economist Camelia Minoiu, who worked with Ivorian government authorities at the time. “After two Emergency Post-Conflict Assistance programs, which built substantial reform momentum, negotiating the PRGF was a massive undertaking. The authorities’ and the team’s task was to put together policies to spur economic growth and more effectively fight poverty.”

Senior Desk Economist Alexei Kireyev says that the government’s medium-term macroeconomic program supported by the PRGF is designed to help create fiscal space for pro-growth and pro-poor spending policies, and improve the prospect for debt sustainability, among other things. Although the Ivorian economy has so far shown remarkable resilience to the global economic downturn, says Kireyev, the authorities’ program is subject to risks. For instance foreign direct investment may be lower than expected because of the overall international downturn.

Ground presence

The team agrees that the successful negotiation of the program would not have been possible without the Fund’s ground presence.

After 20 months without an IMF Resident Representative in Cote d’Ivoire, Philippe Egoume, arrived in January 2007. “My role at the outset was to re-establish the physical presence of the Fund and to prepare the ground for the negotiations and implementation of a Fund-supported program,” says Egoume. “This included working with the authorities to re-establish entities and practices necessary for implementing a program, such as a program monitoring committee, a Treasury committee, regular transmission of data to the Fund, and regular discussions with the authorities on program implementation and economic developments.”

“Philippe soon became an essential member of the donor community represented in Abidjan. He also engaged in extensive outreach efforts with political parties, academia, private sector and civil society that were critical in making the Fund presence visible and welcome,” notes Kouwenaar.

Focus on the poor

In many respects, the PRGF program is designed to help the poorest, says Le Hen. “It sets up a floor on social spending, which includes significant hiring in key social sectors (especially teachers), as well as rural infrastructure investments.”

Kireyev also explains that the program seeks to improve the composition of expenditure so more funds can be allocated to post-crisis rehabilitation and infrastructure, while protecting key social and pro-poor spending. “The Poverty Reduction Strategy Paper targets four principal outcomes: reestablish the foundations of the Republic, transform Côte d’Ivoire into an emerging economy, achieve social well-being for all, and make the country a dynamic actor on the regional and international scene.” No small order, to be sure.

Glimmers of hope

Kouwenaar believes that one of the high points and best learning experiences for the mission team came during a mid-2008 visit to rural communities that had benefited from investment financed from cocoa taxes. “Out of several trips within the country, a reception by a poor rural community of government officials stood out,” he says. “The walking orchestra, the chanting and dancing women, the speeches by village elders, and perhaps, most tangibly, the tour around the new construction of the pharmacy, nurse buildings, and school classes, and the technical and financial conversations with workmen and villagers.”

This engagement has allowed the team to see that the Fund is now widely viewed as part of the solution—as an essential element in turning the country around.