Press Release: Statement at the Conclusion of an IMF Staff Mission to Côte d'Ivoire
October 9, 2008Press Release No. 08/241
An International Monetary Fund (IMF) mission visited Abidjan from September 25 to October 8. It reviewed implementation of the economic program for 2008 supported by the IMF's Emergency Post-Conflict Assistance (EPCA), approved in April 2008 in an amount equivalent to US$66 million. The mission also held discussions on a program that could be supported by the IMF's Poverty Reduction and Growth Facility (PRGF), the concessional facility for low-income countries. Staff from the World Bank and the African Development Bank participated in the discussions. The mission held discussions with Minister of Finance Diby, Minister of Planning and Development Bouabré, other senior officials, and representatives of civil society, donors, and the business community. It was received by Prime Minister Soro at the end.
Mr. Arend Kouwenaar, mission chief for Côte d'Ivoire, issued the following statement in Abidjan on October 8:
"Economic activity has continued to expand, helped by strong export growth and a pick-up in private investment. Surging world food prices and adjustments in domestic petroleum prices, however, have pushed up inflation. The mission noted that indirect taxes on certain food items were temporarily reduced to attenuate the impact of these price pressures, but recommended to introduce, instead, measures that directly target the most vulnerable groups.
"Budget execution so far in 2008 did not yet fully meet objectives. Revenues surpassed program targets, thanks to high cocoa and oil prices, but overall budgetary spending expanded even more and exceeded allocations. The mission, in particular, expressed concern that sizeable unprogrammed spending on large construction projects and overruns on subsidies for the electricity sector were at the expense of resources for critical social and post-conflict rehabilitation needs, and that domestic arrears have continued to accumulate.
"The mission welcomed the steps taken to improve transparency in public resource management, notably through regular public reporting on budget execution and on financial flows in the energy sector, and through initiating the restructuring of the cocoa/coffee sector. It stressed, however, that more remains to be done, notably insuring that all public revenue and spending are recorded in the budget, and strengthening transparency in the financial operations between the government and the energy and cocoa sectors.
"The mission emphasized that strong implementation of the 2008 economic program, including remedial actions, is key for moving toward a PRGF arrangement. The broad objectives of a program supported by such an arrangement would be to create fiscal space for pro-growth and pro-poor spending, re-establish debt sustainability, enhance public financial management, pursue civil service reform, and continue to improve transparency and efficiency in the energy and coffee/cocoa sectors. These policies will draw on Côte d'Ivoire's Poverty Reduction Strategy Paper, which is nearing completion.
"Discussions on a PRGF-supported program are expected to continue at the time of the upcoming Annual Meetings in Washington. Their successful conclusion would open the way for IMF Executive Board consideration of a three-year PRGF arrangement and decision point under the enhanced Heavily Indebted Poor Countries (HIPC) Initiative."