Press Release: Statement of an IMF Staff Mission at the Conclusion of a Staff Visit to Côte d'Ivoire
March 3, 2008Press Release No. 08/39
An International Monetary Fund (IMF) mission led by Mr. Arend Kouwenaar visited Abidjan from February 21 to 29, 2008. The purpose of this visit was to look at budget execution in 2007 and to discuss a revised 2008 budget framework taking into account the provisions of the recent Complementary Ouagadougou Agreements. The mission reached an agreement on an economic program for 2008 that it intends to take to the IMF's Executive Board to be supported by further IMF Emergency Post-Conflict Assistance (EPCA).
The mission issued the following statement on February 29, 2008 in Abidjan:
"The mission welcomes the progress in reunification and the return of calm in most areas of the country. It notes that this had helped launch economic activity despite persistent military roadblocks causing large economic costs. Growth reached 1½ percent in 2007 and inflation remained moderate despite a temporary rise in the prices of certain foodstuffs in the third quarter. With several other encouraging signs, such as a strong upturn in investment and credit to the economy, growth should climb to 3 percent in 2008.
"The government managed to stay close to its overall fiscal targets in 2007 although the composition of expenditure did not meet expectations. Operating spending, especially those of national institutions (including sovereignty outlays) exceeded budget allocations at the expense of crisis-resolution and investment needs. Thanks to exceptional efforts to mobilize revenue and resources in regional financial markets, the government improved relations with its creditors by settling a significant portion of arrears to domestic creditors and staying up-to-date on current debt obligations to almost all multilateral creditors. The authorities have just paid Côte d'Ivoire's share in the clearance of arrears to the World Bank, which they hope would pave the way for a grant from the Bank to clear remaining arrears and for fresh financing.
"The main objectives of the program for 2008 are to bring Côte d'Ivoire to its pre-crisis growth rate and relaunch a poverty reduction strategy. The program seeks to achieve peace dividends in several ways: mobilizing revenue in the whole country, in particular through the redeployment of tax administration in the Central, Northern, and Western areas; combating tax evasion and corruption; and reducing non-priority spending to create space for meeting education, health, and basic infrastructure needs. Public expenditure management should improve through strict adherence to budget allocations-particularly in this election year-and publication of budget execution statements every quarter. To meet exceptional financing needs during this crisis-exit year, the program foresees considerable contributions to the budget from the national oil company, PETROCI.
"Structural reforms in the program continue to stress governance in public resource management. Greater information in physical and financial resource flows in the energy sector and an adjustment in utility rates for electricity and petroleum products in line with sharply higher world prices should help increase efficiency and budget revenue. More transparent management in the coffee/cocoa sector and a reduction in quasi-fiscal levies should help boost farmers' incomes.
"The mission stresses that the IMF will continue to support Côte d'Ivoire in its efforts to emerge from the crisis, first with EPCA to be followed in due course by a Poverty Reduction and Growth Facility (PRGF) arrangement and debt relief under the Heavily Indebted Poor Countries (HIPC) Initiative."