IMF Executive Board Completes Second Review Under Côte d'Ivoire’s Three-Year Credit Facility, Approves US$53.5 Million DisbursementPress Release No. 10/284
July 9, 2010
The Executive Board of the International Monetary Fund (IMF) completed today the second review of Côte d'Ivoire’s economic performance under a three-year arrangement under the Extended Credit Facility (ECF). The completion of the review enables Côte d'Ivoire to request a disbursement in the amount equivalent to SDR 35.772 million (about US$53.5 million), bringing total disbursements under the program to an amount equivalent to SDR 230.892 million (about US$345.4 million).
Côte d'Ivoire’s ECF arrangement was approved in March 2009 (see Press Release No. 09/96) in an amount of SDR 373.98 million. In completing the review, the Executive Board also granted two waivers of non-observance of the performance criteria on the overall fiscal balance and on the non-accumulation of new external payment arrears.
Following the Executive Board’s discussion of Côte d'Ivoire, Naoyuki Shinohara, Deputy Managing Director and Acting Chair, stated:
“Côte d'Ivoire’s performance under the ECF-supported program has been broadly satisfactory. Economic activity strengthened in 2009 but is expected to slow in 2010 due to the political environment, electricity outages and strikes.
“The 2009 fiscal targets were largely met, including achieving a primary budget surplus. The fiscal program for 2010 is being eased modestly to accommodate unexpected one-off outlays to maintain power supply, to support the troubled oil refinery, and to cover the cost of the delay in elections. Looking ahead, the authorities remain committed to medium-term fiscal consolidation.
“Tight expenditure management and a reorientation of spending to poverty reduction are critical. To this end, the authorities plan to address past unpaid wage commitments and ensure a sustainable wage bill, reduce electricity subsidies, and strengthen the financial position of the pension funds. Improvements in fiscal transparency and further reductions in domestic arrears will continue. A comprehensive customs reform and the rationalization of exemptions are central to efforts to strengthen revenue administration.
“Further advances have been made in normalizing relations with external creditors, notably Paris Club rescheduling and the successful exchange of Brady bonds.
“Structural reforms are needed to strengthen growth and reduce poverty. Reforms aim to address the electricity sector’s problems, improve productivity in the coffee/cocoa sector and ensure the financial viability of public utilities and the oil refinery. A financial sector restructuring and development strategy is being prepared that aims to further improve financial intermediation and reduce sector vulnerabilities. Improvements in the business climate will also be crucial to raise investor confidence.
“Progress has been made toward meeting the HIPC completion point triggers. Strong performance under the program and meeting the other triggers will be important for reaching the completion point” Mr. Shinohara added.