IMF Executive Board Concludes 2009 Article IV Consultation with Côte d'Ivoire

Public Information Notice (PIN) No. 09/129
November 25, 2009

Public Information Notices (PINs) form part of the IMF's efforts to promote transparency of the IMF's views and analysis of economic developments and policies. With the consent of the country (or countries) concerned, PINs are issued after Executive Board discussions of Article IV consultations with member countries, of its surveillance of developments at the regional level, of post-program monitoring, and of ex post assessments of member countries with longer-term program engagements. PINs are also issued after Executive Board discussions of general policy matters, unless otherwise decided by the Executive Board in a particular case.

On November 18, 2009, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Côte d'Ivoire.1


Côte d’Ivoire, the largest economy in the West African Economic and Monetary Union (WAEMU), is moving toward full social, political, and economic normalization. The political crisis that began in 1999 and erupted in civil conflict in September 2002 took a heavy toll on growth and social conditions: per capita income fell by one-sixth and by 2008 almost half the population was living below the poverty line. Conducting the presidential election scheduled in the near future is important to complete the political normalization and allow the country’s economy to recover and the well-being of the population to improve.

Côte d’Ivoire has embarked on comprehensive reform policies to address the challenges of enhancing growth and reducing poverty. It adopted a Poverty Reduction Strategy Paper (PRSP) in February 2009, which covers the seven-year period 2009–15 and aims to transform the country into an emerging economy. In March 2009 the IMF approved a three-year arrangement under the Poverty Reduction and Growth Facility (PRGF) to support the authorities’ economic program, as well as the Decision Point under the Heavily Indebted Poor Countries (HIPC) Initiative.

The Ivorian economy began to pick up slowly in 2007. Growth rose to some 2.3 percent in 2008, primarily reflecting construction activity and the energy sector. Driven by high food and fuel prices, inflation rose to a temporary spike of 9 percent in late 2008, but since returned to its previous moderate level of around 3 percent. Economic growth is expected to reach 3.7 percent in 2009, pushed up by oil production, agriculture and agro-processing, and to accelerate to 4 percent in 2010 as confidence begins to return and private investment rises. Although these levels of growth begin to reverse the decline in per capita incomes during the internal crisis, investment levels are still low at 10 percent of GDP—too low to meet the needs of a growing economy.

The authorities have strengthened fiscal control and the transparency of budget implementation in recent years, while making room to increase pro-poor spending. Significant revenue efforts have facilitated an increase in spending for urgent needs. However, there are risks to fiscal stability related, among other factors, to the electricity subsidies and accumulated unpaid wage commitments.

The external current account (including official transfers) has strengthened significantly reflecting a 30 percent increase in cocoa prices since 2007 as well as strong oil production and prices. At the same time, the authorities regularized the country’s high external arrears through debt restructuring agreements with Paris Club and, on a preliminary basis, with London Club creditors. Gross official reserves are projected to rise to over 4 months of import cover in 2009.

Transparency and governance in the cocoa and energy sectors are being improved. Reforms are also under way to strengthen public financial management, including procurement and tax administration; to tackle financial sector challenges, judicial reform, and other structural impediments that weigh on the business climate.

Executive Board Assessment

Executive Directors commended Côte d’Ivoire’s progress in strengthening macroeconomic management and improving the fiscal position and public financial management. Higher growth and lower inflation, helped by favorable terms of trade and political normalization, have helped arrest the severe deterioration in social indicators resulting from Côte d’Ivoire’s sociopolitical crisis. Near-term economic prospects appear favorable, although many challenges still lie ahead, and continued donor assistance will be needed to support the authorities’ reform efforts.

Directors welcomed the achievement of a primary budget surplus. However, continued current spending pressures arise from the electricity subsidy, large contingent wage commitments, and discretionary spending. Directors underscored that fiscal consolidation remains critical to expand the fiscal space gained from the reforms and political normalization. They welcomed the authorities’ commitment to begin winding down crisis-exit spending and the emphasis on pro-poor and investment outlays in the draft 2010 budget.

Directors welcomed the significant progress made in clearing external arrears and normalizing relations with external creditors, including with the Paris Club and the preliminary restructuring agreement with Brady bond holders on comparable terms. They encouraged the authorities to pursue their discussions with a view to reach a similar agreement with other creditors. Directors looked forward to adequate internal coordination to prevent a recurrence of arrears to multilateral creditors, and supported the authorities’ request for technical assistance on public debt management.

Directors supported the authorities’ efforts to strengthen tax and customs administration, reduce domestic arrears, and improve fiscal transparency, including in large public works. They called for strong implementation of the plans to improve public resource management and to continue reorienting spending to areas critical to reducing poverty and improving infrastructure. They also looked forward to the establishment of a National Procurement Regulation Authority, reforms in the pension funds and the civil service, a strategy for a sustainable wage bill, and the restructuring of the electricity sector.

Directors noted the staff’s assessment that Côte d’Ivoire’s real effective exchange rate appears to be in line with fundamentals. Nonetheless, the export base is narrow and the business climate needs to be improved. Directors therefore encouraged the authorities to vigorously pursue structural reforms and integrate Côte d’Ivoire more closely with its neighbors to bolster efficiency and create new export opportunities. Priorities include further reducing the taxation of cocoa income, reforming the cocoa sector institutions, improving transparency in the energy sector, and judicial reforms. Directors looked forward to the adoption of the National Plan for Good Governance and Fight Against Corruption.

Directors urged the authorities to address financial sector vulnerabilities identified by the 2009 FSAP. In particular, they underscored the need to improve the solvency and asset quality of some local banks, reduce connected lending and loan concentration, and rehabilitate microfinance institutions. They encouraged the authorities to resolve problem banks without recourse to public funds and to support the Banking Commission in ensuring bank compliance with prudential norms. Directors welcomed the authorities’ plans to establish a National Financial Sector Reform Committee and to formulate a Financial Sector Development Strategy, which will clarify the government’s role in the financial system.

Côte d'Ivoire: Selected Economic Indicators, 2004–09
(Annual percentage changes, unless otherwise indicated)

  2004 2005 2006 2007 2008 2009

National income


Real GDP growth

-1.6 -1.7 0.7 1.6 2.3 3.7

Consumer prices (end of period)

4.4 -0.1 2.0 1.5 9.0 3.4

Money and credit


Broad money

9.5 7.4 10.3 23.6 5.6 18.9

Net credit to government (percent of

beginning of period broad money)

-3.6 1.8 -1.6 3.7 -1.1 6.7

Central government operations


Total revenue and grants (percent of GDP)

18.4 18.1 19.0 19.7 20.6 20.4

Total revenue (percent of GDP)

17.5 17.0 18.4 19.2 18.9 19.6

Total expenditure (percent of GDP)

20.1 19.9 20.8 20.5 21.1 21.7

Primary basic balance (percent of GDP) 1/

0.9 0.4 0.3 0.6 0.3 0.7

Overall balance (including grants, payment

order, percent of GDP)

-1.7 -1.7 -1.8 -0.8 -0.6 -1.4

External sector


Exports, f.o.b. (millions of SDRs)

4530 5063 5603 5544 6239 5726

Imports, f.o.b. (millions of SDRs)

2789 3444 3531 3880 4157 3531

Export volume growth

21.7 4.2 6.0 -8.4 -7.8 6.0

Import volume growth

21.6 3.0 3.9 5.1 -4.6 5.7

Current account balance (percent of GDP)


Including official transfers

1.6 0.3 2.8 -0.7 2.4 2.7

Excluding official transfers

1.7 0.4 3.0 -1.5 1.0 2.1

Gross official reserves (millions of SDRs)

1057 1000 1178 1542 1534 1764



External public debt (percent of GDP)

72.4 73.4 71.4 64.8 61.8 53.7

External public debt in arrears (percent of GDP)

13.3 20.9 22.1 21.6 23.6 0.0

Domestic public debt (percent of GDP)

12.5 12.8 12.8 10.8 11.1 10.5

Domestic public debt in arrears (percent of GDP)

5.3 4.6 4.5 2.5 2.7



Sources: Ivorian authorities; and IMF staff estimates and projections.
1/ Total revenue (excluding grants) minus expenditure net of scheduled interest and foreign-financed capital expenditure.

1 Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country's economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board. At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country's authorities. An explanation of any qualifiers used in summings up can be found here:


Public Affairs    Media Relations
E-mail: E-mail:
Fax: 202-623-6220 Phone: 202-623-7100