## 1civea2021001 — Côte d’Ivoire: Emergency Fiscal Package to Address the COVID-19 Pandemic

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### Emergency fiscal and economic measures
- Emergency health and economic package totaled 1.4 percent of GDP.
- Health spending plan worth 0.3 percent of GDP (designed with WHO) to enable monitoring and containment.
- Economic plan announced March 31, 2020, supporting SOEs (especially transport), private firms with temporary cash-flow difficulties, critical sectors (health, agriculture), and social safety nets.
- Plan envisaged 0.9 percent of GDP of emergency spending and 0.3 percent of GDP of temporary tax deferrals for affected businesses.
- Tax incentives included import duty exemptions for health, transportation and tourism sectors, and a 3-month tax audit moratorium.
- Deferrals of tax, social security contributions, and electricity bills, acceleration of VAT refunds, and a tax control moratorium were operational in April 2020.
- The largest share of revenue measures were deferrals; a large share was subsequently collected by end-2020 so net fiscal cost over 2020 was about 0.1 percent of GDP.

### Implementation, disbursement, and governance
- Authorities enacted emergency procedures and temporary regulations creating four extra-budgetary funds which started operations in April 2020.
- These funds provide loans to large enterprises and grants to small firms, the informal sector, and vulnerable populations.
- An eligibility assessment is required for each request—ensuring enforcement of criteria but affecting pace of disbursements.
- About 60 percent of available credits were disbursed during 2020, with a lower execution rate for the agriculture sector.
- The supplementary budget law regularizing appropriation of spending was adopted in November 2020.
- By end-April 2021, 3 percent of Covid-19 spending allocation for the emergency funds was disbursed in 2021.
- Transparency safeguards: ex-post controls by the internal auditor and annual audits by independent firms (audits are not public); eligibility criteria, lists of beneficiaries (published regularly), and monthly activity reports are released within a month on funds’ websites. Agriculture support end-April 2021 report is public but does not provide lists of beneficiaries. Public procurement contracts are not public.
- Authorities plan to transfer assets of the extra-budgetary funds to an entity with similar objectives or to the Caisse des Dépôts et de Consignation once crisis abates.

### Fiscal and macro outcomes related to the response
- Fiscal deficit increased to 5.6 percent of GDP in 2020.
- Better-than-expected fuel revenue collection close to ½ percent of GDP helped contain the deficit relative to earlier projections.
- The IMF provided emergency financing assistance under the Rapid Financing Instrument and Rapid Credit Facility totaling US$886.2 million in April 2020, and a last disbursement under the ECF/EFF in December 2020.
- The current account deficit widened to 3.5 percent of GDP in 2020, from 2.3 percent in 2019.
- Inflation reached 3.9 percent y-o-y at end-April 2021.

### Health response and vaccination outlook
- As of mid-June 2021, authorities received about 830,000 doses, of which about 84 percent have been utilized.
- About 11 million doses, covering about 20 percent of the population, are expected from COVAX.
- Authorities expect to purchase an additional 7.4 million doses outside COVAX by end 2021.
- Testing capacity increased over time; vaccination process started in March 2021.

### Financial sector measures and indicators
- BCEAO support measures included liquidity provision to banks, a 50bps reduction in the policy rate, widening collateral framework, extension by one year of transition to Basel II/III, and a bank loan repayment moratorium (expired in December 2020).
- Credit to the private sector increased by 8.7 percent y-o-y at end-March 2021.
- Banks’ non-performing loans remained broadly flat at around 8½ percent between March 2020 and March 2021.
- Average capital adequacy ratio was 11.5 percent at end-June 2020 (last observation available).
- Significant progress on restructuring public banks; only two now should need capital injection. Governance and internal control systems strengthened and recovery plans for problem loans are being put in place.

### Implementation challenges and risks
- Implementation of spending measures took more time than revenue measures; definitive regulations were enacted after the summer 2020.
- The multi-layered administration managing agriculture support slowed disbursements.
- Energy supply shocks (thermal plant breakdown, hydropower reservoir depletion, delayed expansion works) led to electricity rationing from April 2020; shortages expected to be resolved by end-August 2021 with completion of expansion works and reservoir replenishment.
- Risks remain tilted to the downside: pandemic variants or protracted vaccine rollout; accelerating de-globalization; sharp rise in global risk premia; prolongation of energy shortages; delays in reforms; scarring of banks’ lending capacity; social tensions if poverty reduction stalls; potential financial sector vulnerabilities upon withdrawal of BCEAO support; security deterioration in the North.
- Upside: strong reform agenda under the National Development Plan could increase confidence, investment, productivity, and growth.

### Outlook and growth projections
- Economy estimated to have grown 2 percent in 2020 (despite a drop of some 4½ percent compared to pre-COVID forecast).
- Exports of goods rebounded by around 11 percent in Q1 2021 (yoy); industrial production index rose by 10.5 percent in March 2021 (yoy).
- Growth in 2021 projected at 6 percent, supported by export and private investment recovery, capital deepening under the National Development Plan, robust domestic consumption, and continuation of reform agenda.
- Medium-term growth expected around 6–6½ percent over 2021–26 despite gradual fiscal consolidation.
- Current account deficit expected to stabilize around 3½ percent of GDP in the medium term.
- Authorities forecast growth at 6.5 percent in 2021, and at 7.7 percent on average from 2021 to 2025, underpinned by an envisaged 8 percentage point increase in the private investment to GDP ratio.

### Fiscal outlook and 2021 deficit (Recent developments)
- Authorities plan to keep the fiscal deficit in 2021 at 5.6 percent of GDP as in 2020 (1 percentage point wider than previously envisaged) to account for:
  - temporary needs associated with delayed investment spending,
  - greater needs for security spending,
  - lower-than-expected fiscal revenue following the transitory electricity shortages.
- New spending additions come in addition to the 1 ppt of GDP set aside to support COVID-19-affected sectors and people’s income and to cover vaccination costs (the latter being estimated at about 0.1 percent of GDP).
- IMF staff view indicated that if the decline in revenues expected by the authorities does not materialize, the deficit could be contained at 5¼ percent of GDP.
- Any unused portion of funds allocated for COVID-spending should be saved and used to finance prospective fiscal deficits.

### Fiscal consolidation path and staff scenario
- Authorities plan to converge to the WAEMU 3 percent of GDP regional deficit target at most by 2024 instead of 2023, citing persistent higher security spending needs and a significant multi-year public investment plan.
- Staff argued convergence to a 3 percent deficit by 2023 remains feasible and appropriate and outlined a consolidation composition:
  - unwinding of COVID-related spending: around 1 percent of GDP,
  - unwinding of extraordinary security spending: 0.4 percent of GDP,
  - higher revenue: 0.6 percent of GDP,
  - lower investment: 0.5 percent of GDP.
- Staff recommended intensifying efforts to boost tax revenues as soon as possible, including within the 2022 budget law.
- The 2022 budget should include potential bank recapitalization needs within an envisaged fiscal deficit of 4.7 percent of GDP.

### Fiscal consolidation — comparative projections (selected exact figures from Text Table 1)
- 7th/8th Review of ECF/EFF arrangement, December 2020 (Total revenue and grants; Total expenditures; Overall balance) for 2021–2025:
  - Total revenue and grants: 15.3 15.4 15.4 15.2 15.2
  - Total expenditures: 20.0 18.9 18.4 18.2 18.2
  - Overall balance: -4.6 -3.5 -3.0 -3.0 -3.0
- 2021 Article IV Consultation projections (Total revenue and grants; Tax revenue; Total expenditures; COVID-related spending; Security spending; Capital expenditure; Overall balance) for 2021–2025:
  - Total revenue and grants: 14.7 15.3 15.4 15.4 15.3
  - of which: Tax revenue: 12.3 12.7 12.9 13.0 13.0
  - Total expenditures: 20.3 19.9 19.2 18.4 18.3
  - of which: COVID-related spending: 1.0 0.0 0.0 0.0 0.0
  - of which: Security spending: 0.4 0.2 0.3 0.2 0.0
  - of which: Capital expenditure: 5.4 6.2 5.5 4.9 4.9
  - Overall balance: -5.6 -4.7 -3.8 -3.0 -3.0

### Debt dynamics, SOEs, and fiscal space
- Debt increased to close to 50 percent of GDP in 2020.
- Côte d’Ivoire’s risk of debt distress remains moderate, but with very limited margin.
- SOE debt in the form of loans or debt securities is moderate at 7.1 percent of GDP, consisting of:
  - 3.9 percent of GDP of on-lent debt,
  - 2.1 percent of GDP of debt guaranteed by the government.
- Staff encouraged improved SOE monitoring and consolidation of SOEs in the Debt Sustainability Analysis (DSA).
- Staff reiterated need for a prudent debt strategy and careful evaluation of debt-financed public investment projects.

### Social policy, PSGouv, and scarring prevention
- The PSGouv (social plan) amounted to a cumulated value of 3 percent of GDP over 2019-20.
- PSGouv main priorities included health and social protection; schools; access to electricity and housing; access of the young and women to jobs; well-being in rural areas.
- Results and outreach:
  - More than 900 villages per year gained access to electricity in 2019-20 against 265 villages per year in 2010-18.
  - 27,000 km of gravel roads have been reprofiled.
- Staff encouraged continued efforts to extend coverage of safety nets and develop a registry of beneficiaries to better target assistance.
- Crisis highlighted limited coverage of vulnerable populations, especially in the informal sector; pandemic threatens to reverse recent gains in poverty reduction.

### Financial sector, public banks, and supervision (selected)
- Three public banks remain undercapitalized; authorities expect one to meet capital adequacy by end-2021.
- Authorities estimate recapitalization needs for two other banks at around FCFA 140 billion (around 0.4 percent of GDP).
- Restructuring process expected to be finalized by 2023 with public and private capital injections.
- Staff recommendations:
  - diversify pool of shareholders for recapitalized banks,
  - help public banks diversify deposit base and integrate government accounts into the treasury single account,
  - require affected banks to submit credible capital restoration plans and monitor their execution.
- Forthcoming FSAP for the WAEMU will allow for a more detailed assessment.

### 2021–25 National Development Plan (NDP) and growth strategy (selected targets)
- Draft NDP six pillars: industrialization; human capital; private sector development; inclusion and social action; balanced regional development and climate; governance and state modernization.
- NDP targets and projections:
  - annual economic growth to reach 7.7 percent on average over 2021-25,
  - strong increase in private investment from 14.4 percent of GDP in 2021 to 22.7 percent in 2025,
  - poverty rate to reach 30 percent by 2025,
  - eventual doubling of GDP per capita by 2030.
- Staff emphasized need for a clear reform agenda, implementation plan with prioritized reforms and cost-benefit analysis including budgetary implications.

### Domestic Revenue Mobilization (DRM) and public spending efficiency
- Tax revenues are expected to amount to 12.7 percent of GDP in 2021.
- Authorities report tax expenditures of about 1 percent of GDP in 2019 (a lower bound).
- VAT issues:
  - VAT revenues below 3 percent of GDP,
  - C-efficiency ratio: 0.25 percent.
- Large share of revenues from customs duties (two fifths of tax revenues).
- Potential revenue measures:
  - removal of some tax expenditures granted through state conventions could yield about 0.3 percent of GDP,
  - reforms to reduce discretionary tax expenditures under the Investment Code.
- Staff urged a detailed DRM plan with quantification and timeline and communication linking higher revenues to improved public services.
- Improving productive public spending efficiency (education and health) can boost productivity and reduce inequality:
  - Education: enrollment rising but test scores below WAEMU average and declined between 2014 and 2019.
  - Health: lower health efficiency spending than peer frontier and emerging markets; maternal and infant mortality rates close to WAEMU levels.

### Public Financial Management and procurement
- Authorities implementing a new public procurement law passed in 2019, with e-procurement module (e-marchés publics) deployed in 2020.
- Budget-programming implemented in 2020 to focus administrations on medium-term objectives.
- Staff concerns:
  - a large share of PPPs awarded outside regular procedures,
  - need to increase fiscal transparency by publishing procurement contracts, beneficial ownership, and related audits.

### Debt Sustainability Analysis — key points and stress-test outcomes
- Risk of external debt distress: Moderate.
- Overall risk of public debt distress: Moderate; space to absorb shocks is limited.
- Public debt stood at 49.8 percent of GDP at end-2020.
- Total contingent liabilities for CL stress test estimated at 9.3 percent of GDP (components: SoE debt shock 2.0 percent of GDP; PPP 35 percent stock → 2.3 percent of GDP; financial market shock 5.0 percent of GDP).
- Under baseline, PV of external debt-to-GDP expected to decrease from 28.4 percent in 2020 to 21.9 percent in 2031 (below threshold 40).
- Under commodity price stress test, PV of public debt-to-GDP would breach the 55 percent threshold starting in 2024.
- Under market-financing or exports shocks, key external indicators could breach thresholds; debt-service-to-revenue indicator projected to increase and could breach thresholds starting in 2023–2024 under many shocks.
- Staff policy implication: accelerate domestic revenue mobilization and adopt prudent external borrowing strategy; fully oversee SOE debt contracting and integrate SOE debt into the DSA.

### Governance, business environment, and structural reforms
- Staff encouraged intensified efforts to improve the business environment:
  - enhance regulatory framework, streamline bureaucracy, modernize the state, improve public services (e.g., reduce days to get permits; simplify business licenses; single stop shop),
  - promote digitalization in public services and public finance management,
  - broaden professional training programs and reduce labor market skill mismatches,
  - reduce informality and safeguard property rights (land),
  - deepen financial inclusion and facilitate access to financial markets including mobile systems and FinTech,
  - ensure timely government payments (90-day payment rule starting from completion of services/goods).
- Governance and anti-corruption:
  - HABG implementing interactive asset declaration platform to be fully operational in 2022; compliance exceeded 79 percent in December 2020.
  - Staff recommended verifying asset declarations, sanctioning failures, ensuring public access to information, and finalizing national anti-corruption strategy 2021-23.
- AML/CFT: technical committee overseeing 2020-2030 national AML/CFT strategy; IMF-led assessment starting August 2021.

### Social, environmental, and sectoral priorities
- Cocoa transformation and sustainability:
  - Draft NDP target: transform locally at least 50 percent of total cocoa produced by 2025 (transformation rate was 28 percent in 2020).
  - Authorities committed to restore forest coverage to 20 percent of the territory by 2030; spatial data indicates continued primary forest loss, estimated additional 2 percent between 2019 and 2020.
  - Staff cautioned incentives should be time-bound, well-targeted, centered on investment, and available to all firms in targeted sectors.
- Gender and inclusion:
  - Gender included in national development policies; institutional reforms and National Observatory for Gender Equity active.
  - Staff recommended continued efforts to close economic and social gender gaps and address high incidence of violence against women.

### Annexed external and macro statistics — selected key figures (exact)
- Population (2020): 26.9 million
- Gini Index (2015): 41.5
- Per capita GDP (2020): 2278 USD
- Life Expectancy (years): 58
- Share of population below the poverty line (2015): 44.4%
- Literacy rate: 47.2%
- Overall balance, including grants (percent of GDP): -2.9 -2.3 -5.6 -5.6 -4.7 -3.8 -3.0 -3.0 -3.0
- Total revenue and grants (percent of GDP): 14.8 15.0 15.0 14.7 15.3 15.4 15.4 15.3 15.1
- Total expenditure (percent of GDP): 17.7 17.3 20.6 20.3 19.9 19.2 18.4 18.3 18.1
- Gross investment (percent of GDP): 21.2 20.1 22.2 22.9 24.6 24.7 24.8 25.8 26.8
- Current account balance (including official transfers) (percent of GDP): -3.9 -2.3 -3.5 -4.3 -4.2 -3.9 -3.7 -3.6 -3.5
- Central government debt, gross (percent of GDP): 36.0 38.8 47.7 49.4 50.5 50.7 50.2 49.7 49.1
- Exports, f.o.b. (percent of GDP): 20.5 21.6 20.1 20.4 19.8 19.5 19.5 19.3 19.0

### Staff appraisal, risks, and policy priorities (summary)
- Assessment: Côte d’Ivoire demonstrated resilience to the COVID-19 pandemic with positive growth in 2020; growth should rebound strongly in 2021 with medium-term support from capital deepening under draft NDP.
- Main risks: pandemic resurgence, protracted vaccine rollout, sharp rise in global risk premia, security risks, commodity price shocks, and energy shortages.
- Policy priorities:
  - contain 2021 deficit and revert to WAEMU fiscal deficit target of 3 percent of GDP by 2023,
  - boost domestic revenue mobilization via rationalizing tax expenditures, broadening tax base, strengthening tax administration,
  - increase public spending efficiency and improve public financial management,
  - adopt national anti-corruption strategy and strengthen HABG,
  - adopt national AML/CFT strategy within the year,
  - complete restructuring of public banks and diversify financing sources.
- Structural agenda: implement draft NDP reforms to boost productivity, revenue mobilization, improve public services, foster private sector participation, and maintain medium-term fiscal targets.

_International Monetary Fund — Côte d’Ivoire: Emergency Fiscal Package to Address the COVID-19 Pandemic (content unit)._

### 1. Emergency Fiscal Package to Address the COVID-19 Pandemic _________________________________7

### 1. Emergency Fiscal Package to Address the COVID-19 Pandemic

### Emergency fiscal and economic measures
- Emergency health and economic package totaled 1.4 percent of GDP.
- Health spending plan worth 0.3 percent of GDP (designed with WHO) to enable monitoring and containment.
- Economic plan announced March 31, 2020, supporting SOEs (especially transport), private firms with temporary cash-flow difficulties, critical sectors (health, agriculture), and social safety nets.
- Plan envisaged 0.9 percent of GDP of emergency spending and 0.3 percent of GDP of temporary tax deferrals for affected businesses.
- Tax incentives included import duty exemptions for health, transportation and tourism sectors, and a 3-month tax audit moratorium.
- Deferrals of tax, social security contributions, and electricity bills, acceleration of VAT refunds, and a tax control moratorium were operational in April 2020.
- The largest share of revenue measures were deferrals; a large share was subsequently collected by end-2020 so net fiscal cost over 2020 was about 0.1 percent of GDP.

### Implementation, disbursement, and governance
- Authorities enacted emergency procedures and temporary regulations creating four extra-budgetary funds which started operations in April 2020.
- These funds provide loans to large enterprises and grants to small firms, the informal sector, and vulnerable populations.
- An eligibility assessment is required for each request—ensuring enforcement of criteria but affecting pace of disbursements.
- About 60 percent of available credits were disbursed during 2020, with a lower execution rate for the agriculture sector.
- The supplementary budget law regularizing appropriation of spending was adopted in November 2020.
- By end-April 2021, 3 percent of Covid-19 spending allocation for the emergency funds was disbursed in 2021, suggesting few candidates meet emergency criteria.
- Transparency safeguards: ex-post controls by the internal auditor and annual audits by independent firms (audits are not public); eligibility criteria, lists of beneficiaries (published regularly), and monthly activity reports are released within a month on funds’ websites. Agriculture support end-April 2021 report is public but does not provide lists of beneficiaries. Public procurement contracts are not public.
- Authorities plan to transfer assets of the extra-budgetary funds to an entity with similar objectives or to the Caisse des Dépôts et de Consignation once crisis abates.

### Fiscal and macro outcomes related to the response
- Fiscal deficit increased to 5.6 percent of GDP in 2020.
- Better-than-expected fuel revenue collection close to ½ percent of GDP helped contain the deficit relative to earlier projections.
- The IMF provided emergency financing assistance under the Rapid Financing Instrument and Rapid Credit Facility totaling US$886.2 million in April 2020, and a last disbursement under the ECF/EFF in December 2020.
- The current account deficit widened to 3.5 percent of GDP in 2020, from 2.3 percent in 2019.
- Inflation reached 3.9 percent y-o-y at end-April 2021.

### Health response and vaccination outlook
- As of mid-June 2021, authorities received about 830,000 doses, of which about 84 percent have been utilized.
- About 11 million doses, covering about 20 percent of the population, are expected from COVAX.
- Authorities expect to purchase an additional 7.4 million doses outside COVAX by end 2021.
- Testing capacity increased over time; vaccination process started in March 2021.

### Financial sector measures and indicators
- BCEAO support measures included liquidity provision to banks, a 50bps reduction in the policy rate, widening collateral framework, extension by one year of transition to Basel II/III, and a bank loan repayment moratorium (expired in December 2020).
- Credit to the private sector increased by 8.7 percent y-o-y at end-March 2021.
- Banks’ non-performing loans remained broadly flat at around 8½ percent between March 2020 and March 2021.
- Average capital adequacy ratio was 11.5 percent at end-June 2020 (last observation available).
- Significant progress on restructuring public banks; only two now should need capital injection. Governance and internal control systems strengthened and recovery plans for problem loans are being put in place.

### Implementation challenges and risks
- Implementation of spending measures took more time than revenue measures; definitive regulations were enacted after the summer 2020.
- The multi-layered administration managing agriculture support slowed disbursements.
- Energy supply shocks (thermal plant breakdown, hydropower reservoir depletion, delayed expansion works) led to electricity rationing from April 2020; shortages expected to be resolved by end-August 2021 with completion of expansion works and reservoir replenishment.
- Risks remain tilted to the downside: pandemic variants or protracted vaccine rollout; accelerating de-globalization; sharp rise in global risk premia; prolongation of energy shortages; delays in reforms; scarring of banks’ lending capacity; social tensions if poverty reduction stalls; potential financial sector vulnerabilities upon withdrawal of BCEAO support; security deterioration in the North.
- On the upside, a strong reform agenda under the National Development Plan could increase confidence, investment, productivity, and growth.

### Outlook and growth projections
- Economy estimated to have grown 2 percent in 2020 (despite a drop of some 4½ percent compared to pre-COVID forecast).
- Exports of goods rebounded by around 11 percent in Q1 2021 (yoy); industrial production index rose by 10.5 percent in March 2021 (yoy).
- Growth in 2021 projected at 6 percent, supported by export and private investment recovery, capital deepening under the National Development Plan, robust domestic consumption, and continuation of reform agenda.
- Medium-term growth expected around 6–6½ percent over 2021–26 despite gradual fiscal consolidation.
- Current account deficit expected to stabilize around 3½ percent of GDP in the medium term.
- Authorities forecast growth at 6.5 percent in 2021, and at 7.7 percent on average from 2021 to 2025, underpinned by an envisaged 8 percentage point increase in the private investment to GDP ratio.

*International Monetary Fund — Côte d’Ivoire: Emergency Fiscal Package to Address the COVID-19 Pandemic (content unit).*

### 12.      Recent developments are likely to require a larger fiscal deficit in 2021 than previously

### 12.      Recent developments are likely to require a larger fiscal deficit in 2021 than previously envisaged.

### Fiscal outlook and 2021 deficit
- Authorities plan to keep the fiscal deficit in 2021 at 5.6 percent of GDP as in 2020 (1 percentage point wider than previously envisaged) to account for:
  - temporary needs associated with delayed investment spending,
  - greater needs for security spending,
  - lower-than-expected fiscal revenue following the transitory electricity shortages.
- New spending additions come in addition to the 1 ppt of GDP set aside to support COVID-19-affected sectors and people’s income and to cover vaccination costs (the latter being estimated at about 0.1 percent of GDP).
- IMF staff view indicated that if the decline in revenues expected by the authorities does not materialize, the deficit could be contained at 5¼ percent of GDP.
- Any unused portion of funds allocated for COVID-spending should be saved and used to finance prospective fiscal deficits.

### Fiscal consolidation path and staff scenario
- Authorities plan to converge to the WAEMU 3 percent of GDP regional deficit target at most by 2024 instead of 2023, citing persistent higher security spending needs and a significant multi-year public investment plan.
- Staff argued convergence to a 3 percent deficit by 2023 remains feasible and appropriate and outlined a consolidation composition:
  - unwinding of COVID-related spending: around 1 percent of GDP,
  - unwinding of extraordinary security spending: 0.4 percent of GDP,
  - higher revenue: 0.6 percent of GDP,
  - lower investment: 0.5 percent of GDP.
- Staff recommended intensifying efforts to boost tax revenues as soon as possible, including within the 2022 budget law.
- The 2022 budget should include potential bank recapitalization needs within an envisaged fiscal deficit of 4.7 percent of GDP.

- Text Table 1. Côte d’Ivoire: Fiscal Consolidation Path (Percent of GDP)
  - 7th/8th Review of ECF/EFF arrangement, December 2020
    - Total revenue and grants: 15.3 15.4 15.4 15.2 15.2 (for 2021 2022 2023 2024 2025)
    - Total expenditures: 20.0 18.9 18.4 18.2 18.2
    - Overall balance: -4.6 -3.5 -3.0 -3.0 -3.0
  - 2021 Article IV Consultation
    - Total revenue and grants: 14.7 15.3 15.4 15.4 15.3
    - of which: Tax revenue: 12.3 12.7 12.9 13.0 13.0
    - Total expenditures: 20.3 19.9 19.2 18.4 18.3
    - of which: COVID-related spending: 1.0 0.0 0.0 0.0 0.0
    - of which: Security spending: 0.4 0.2 0.3 0.2 0.0
    - of which: Capital expenditure: 5.4 6.2 5.5 4.9 4.9
    - Overall balance: -5.6 -4.7 -3.8 -3.0 -3.0
  - Source: IMF staff projections.

### Debt dynamics, SOEs, and fiscal space
- Debt increased to close to 50 percent of GDP in 2020.
- Côte d’Ivoire’s risk of debt distress remains moderate, but with very limited margin.
- Low Domestic Revenue Mobilization (DRM) relative to debt servicing constrains borrowing capacity.
- The increasing share of commercial debt signals market appetite but may increase volatility.
- Staff reiterated the need for a prudent debt strategy and careful evaluation of debt-financed public investment projects.
- SOE debt in the form of loans or debt securities is moderate at 7.1 percent of GDP, consisting of:
  - 3.9 percent of GDP of on-lent debt,
  - 2.1 percent of GDP of debt guaranteed by the government.
- Staff encouraged improved SOE monitoring and consolidation of SOEs in the Debt Sustainability Analysis (DSA).

### Social policy, PSGouv, and scarring prevention
- The PSGouv (social plan) amounted to a cumulated value of 3 percent of GDP over 2019-20.
- PSGouv main priorities included:
  - health and social protection (free program for pregnant women and children below 5 years, regular childhood vaccination, broadening of social safety nets),
  - schools (recruitment of teachers, procurement of tables and benches, school feeding, restrooms in rural schools),
  - access to electricity and housing (reduction of the social tariff of electricity, electricity grid extensions in rural areas, social housing),
  - access of the young and women to jobs,
  - well-being in rural areas (water access, improvement of roads).
- Results and outreach:
  - More than 900 villages per year gained access to electricity in 2019-20 against 265 villages per year in 2010-18.
  - 27,000 km of gravel roads have been reprofiled.
- Staff encouraged continued efforts to extend coverage of safety nets and develop a registry of beneficiaries to better target assistance.
- The crisis highlighted limited coverage of vulnerable populations, especially in the informal sector, and staff warned the pandemic threatens to reverse recent gains in poverty reduction.

### Financial sector, public banks, and supervision
- The financial sector is broadly sound, but close monitoring is warranted given pandemic effects and loan moratoria.
- Three public banks remain undercapitalized; authorities expect one to meet capital adequacy by end-2021.
- Authorities estimate recapitalization needs for two other banks at around FCFA 140 billion (around 0.4 percent of GDP).
- Restructuring process expected to be finalized by 2023 with public and private capital injections.
- Staff recommendations:
  - diversify pool of shareholders for recapitalized banks,
  - help public banks diversify deposit base and integrate government accounts into the treasury single account,
  - require affected banks to submit credible capital restoration plans and monitor their execution.
- The forthcoming FSAP for the WAEMU will allow for a more detailed assessment.

### 2021–25 National Development Plan (NDP) and growth strategy
- Draft NDP aims to accelerate economic and social transformation; six pillars include industrialization, human capital, private sector development, inclusion and social action, balanced regional development and climate, governance and state modernization.
- NDP targets and projections:
  - annual economic growth to reach 7.7 percent on average over 2021-25,
  - strong increase in private investment from 14.4 percent of GDP in 2021 to 22.7 percent in 2025,
  - poverty rate to reach 30 percent by 2025,
  - eventual doubling of GDP per capita by 2030.
- Staff emphasized need for:
  - a clear reform agenda for productivity gains and capital deepening,
  - an implementation plan with prioritized reforms and cost-benefit analysis including budgetary implications.
- Key drivers for sustaining growth: public and private investment, productivity gains (TFP), and human capital accumulation.

### Domestic Revenue Mobilization (DRM) and public spending efficiency
- Tax revenues are expected to amount to 12.7 percent of GDP in 2021.
- Authorities report tax expenditures of about 1 percent of GDP in 2019 (a lower bound as two thirds of tax expenditures enacted in enabling legislation are not included).
- VAT issues:
  - VAT revenues below 3 percent of GDP,
  - C-efficiency ratio: 0.25 percent.
- Large share of revenues from customs duties (two fifths of tax revenues).
- Potential revenue measures noted:
  - removal of some tax expenditures granted through state conventions could yield about 0.3 percent of GDP,
  - reforms to reduce discretionary tax expenditures under the Investment Code.
- Staff urged the authorities to design a detailed DRM plan with quantification and timeline and to communicate links between higher revenues and improved public services.
- Improving productive public spending efficiency (education and health) can boost productivity and reduce inequality.
  - Education: enrollment rising but test scores below WAEMU average and declined between 2014 and 2019.
  - Health: lower health efficiency spending than peer frontier and emerging markets; maternal and infant mortality rates close to WAEMU levels.
- Public investment efficiency could be improved by better coordination between local and central governments and systematic cost and feasibility analyses for new projects.
- Draft NDP includes measures to:
  - improve recruitment, training, monitoring and evaluation of teachers,
  - build new health infrastructures and reduce regional disparities in health personnel coverage,
  - promote digital technologies for health and strengthen universal access to health care.

### Public Financial Management and procurement
- Authorities implementing a new public procurement law passed in 2019, with e-procurement module (e-marchés publics) deployed in 2020.
- Budget-programming implemented in 2020 to focus administrations on medium-term objectives.
- Staff concerns:
  - a large share of PPPs awarded outside regular procedures,
  - need to increase fiscal transparency by publishing procurement contracts, beneficial ownership, and related audits.

*Source: IMF staff; content from the chapter "12. Recent developments are likely to require a larger fiscal deficit in 2021 than previously envisaged."*

### 27.      Staff encouraged the authorities to redouble efforts to improve the business

### 1civea2021001 - 27.      Staff encouraged the authorities to redouble efforts to improve the business

### Business environment and private sector constraints
- Staff encouraged intensified efforts to improve the business environment to secure an inclusive development path.
- Key areas of focus:
  - enhancing the regulatory framework, streamlining bureaucracy, modernizing the state, and improving provision of public sector services (examples: reducing the number of days to get permits; simplifying the process for issuing business licenses; developing a “single stop shop”);
  - promoting digitalization in public services and public finance management;
  - reducing labor market skill mismatches by broadening professional training programs;
  - reducing informality, including via cross-checking of databases;
  - safeguarding property rights, particularly ownership and transfer of land;
  - deepening financial inclusion and facilitating access to financial markets, including via mobile systems and broader FinTech initiatives;
  - reducing uncertainty in government payments timing by ensuring the 90-day payment delay effectively starts from the day the services are completed or goods are provided.
- Authorities’ efforts welcomed: improving public sector services, broadening professional training programs, rolling out the single tax identification number, promoting digitalization and mobile payment systems, and enhancing transport infrastructure.

### Governance, anti-corruption, and AML/CFT
- Governance described as the cornerstone of the draft NDP.
- High Authority for Good Governance (HABG) actions:
  - implementing a new interactive platform to monitor asset declarations; platform to be fully operational in 2022;
  - compliance with asset declaration requirements exceeded 79 percent in December 2020.
- Staff recommendations:
  - verify accuracy of asset declarations and sanction failure or false reporting;
  - ensure public access to information;
  - promptly finalize and adopt the first national strategy to fight corruption for the period 2021-23.
- AML/CFT:
  - a technical committee is overseeing implementation of a 2020-2030 national AML/CFT strategy;
  - preparations are stepping up for the IMF-led AML/CFT assessment starting in August 2021.

### Cocoa transformation, child labor, and forest sustainability
- Authorities’ commitment: accelerate cocoa transformation and ensure sustainable production via industrial parks and fiscal incentives.
- Draft NDP target: build nine integrated Agro-poles; transform locally at least 50 percent of total cocoa produced by 2025 (transformation rate was 28 percent in 2020).
- Staff cautions on incentives: tax incentives should be time-bound, well-targeted, centered on investment (not broad-based tax exemptions), and available to all firms in targeted sectors to ensure fair competition and limit fiscal costs.
- Measures planned: intensify and reinforce measures to combat child labor, including developing an anti-trafficking strategy.
- Poverty reduction in farming sector: help farmers diversify production and lower intermediation costs by reducing the number of transactions between farmers and exporters to facilitate traceability.
- Deforestation:
  - authorities committed to restore forest coverage to 20 percent of the territory by 2030;
  - spatial data analysis suggests Côte d’Ivoire continues to lose a sizable share of its primary forest every year.

### Gender, inclusiveness, and social programs
- Progress on gender: gender included in national development policies; institutional reforms addressing gender inequality and violence against women; National Observatory for Gender Equity important for implementation and monitoring.
- Additional needs: close significant economic and social gender gaps; address high incidence of violence against women.
- Social program (PSGouv) achievements: improvements in electricity coverage, access to drinkable water, rural roads, schools, vaccination; initiated universal health coverage; financially-inclusive cash transfers via mobile phones to poor and rural households (expanded during pandemic).
- Staff recommendation: continue efforts to extend safety nets and develop a registry of beneficiaries to better target assistance.

### Data, statistics, and dissemination
- Authorities stepping up macroeconomic statistics:
  - backcasting of annual national accounts for 1996-2014 finalized and expected to be published in a few months;
  - new rebased quarterly national accounts expected to be released by March 2022.
- National strategy for development of statistics aims to broaden competencies, reinforce independence of the national institute of statistics, and create a national fund for statistics development.
- Staff recommendations: publish quarterly and annual national accounts more timely; release key monthly financial, economic activity, and fiscal indicators more timely; broaden dissemination of information on SOEs and facilitate access to on-line information.

### Fiscal policy, revenue mobilization, and public finance management
- Authorities agreed objective: increase domestic revenue mobilization and enhance business environment, spending efficiency, public finance management, governance, and data dissemination.
- Identified areas to broaden tax base: VAT, mining, digitalization, and property taxes; intention to implement and strengthen an action plan to streamline tax expenditures.
- Public investment and service priorities: improve education and health outcomes (build schools, excellence schools for girls, increase enrollment, better monitor teachers, increase public health spending).
- Public finance management reforms: implement new public procurement code; deploy e-procurement module recommended.
- Fiscal targets and recommendations:
  - staff urged containment of deficit increase expected in 2021 compared to the approved budget;
  - staff encouraged containing the deficit to 5¼ percent of GDP if the decline in revenues materializes differently;
  - staff indicated temporary relaxation should not prevent a gradual return to the WAEMU fiscal deficit target of 3 percent of GDP by 2023.
- Tax revenue metric: tax revenues currently represent less than 12½ percent of GDP (below WAEMU convergence criterion of 20 percent).
- Fiscal transparency: systematic publication of procurement contracts, beneficial ownership, and related audits recommended.

### Financial sector, safeguards, and data on Fund obligations
- Safeguards assessment (updated April 2018): only one recommendation outstanding for BCEAO relating to strengthening risk management function; overall central bank control culture deemed strong.
- Liquidity and financing:
  - sovereign bond yields spiked in March 2020 then normalized;
  - Côte d’Ivoire raised €1.85 billion through Eurobond issuances in November 2020 and February 2021.
  - Fund’s exposure peaked at 3.9 percent of GDP in 2020 and projected to decline over the medium term.
  - Total debt service to the Fund would reach 1.2 percent of total exports (around 0.3 percent of GDP) in 2021 and peak at 3.0 percent of exports in 2023 (0.6 percent of GDP).
  - GRA repurchases and PRGT repayments go until 2030 and interest payments end in 2031.
  - potential SDR allocation (not included in baseline) for Côte d’Ivoire would amount to US$0.889 billion (or about 1.3 percent of GDP) if confirmed.
- Debt and solvency:
  - PV of public debt-to-GDP expected to remain generally stable until 2041 at just above 40 percent;
  - PV of debt-to-revenue ratio would decline marginally while debt service-to-revenue-ratio projected to increase over time;
  - under the standard DSA commodity prices stress test, PV of public debt-to-GDP would breach the corresponding threshold of 55 percent starting in 2024.
- Financial sector stability: completion of restructuring of public banks needed; diversification of shareholders and deposit base, integration of government accounts into the treasury single account, and strong supervision recommended to monitor pandemic impact on banks.

### Staff appraisal, risks, and priorities
- Economic performance and outlook:
  - Côte d’Ivoire demonstrated resilience to the COVID-19 pandemic with positive growth in 2020;
  - growth should rebound strongly in 2021; medium-term growth supported by capital deepening under draft NDP.
- Risks to outlook:
  - resurgence of pandemic, protracted vaccine rollout, sharp rise in global risk premia, and security situation at northern border;
  - downside risk from shocks to commodity prices and exports could elevate debt ratios above thresholds.
- Policy priorities emphasized by staff:
  - contain 2021 deficit and revert to WAEMU fiscal deficit target of 3 percent of GDP by 2023;
  - boost domestic revenue mobilization through rationalizing tax expenditures, broadening the tax base, and strengthening tax administration;
  - increase public spending efficiency and improve public financial management;
  - adopt national strategy to fight corruption and strengthen HABG’s capacity to monitor asset declarations;
  - adopt national strategy to combat money laundering and terrorism financing in the year.
- Structural transformation and sustainability:
  - achieve draft NDP objectives through strong reform agenda to boost revenue mobilization, improve public service provision, foster private sector participation, and remain within medium-term fiscal targets;
  - transition to sustainable cocoa production recommended: help farmers diversify, reduce intermediation costs, intensify measures to combat child labor, and strengthen fight against deforestation;
  - release of the announced white paper for a sustainable cocoa production (“Livre blanc pour une production de cacao soutenable”) considered an important initial step.

*International Monetary Fund — Côte d’Ivoire (excerpt).*

### 52.      Continuous efforts to address gender inequality and violence against women would

### 1civea2021001 - 52.      Continuous efforts to address gender inequality and violence against women would

### Gender, inclusion, and labor market
- Continuous efforts to address gender inequality and violence against women would help promote female labor force participation and increase labor productivity.
- Those efforts would reinforce the inclusive agenda of actions to reduce labor market skill mismatches and to enhance access to health, education and financial services.

### Data provision and dissemination
- While data provision is adequate for surveillance, dissemination should be improved.

### Debt, financing conditions, and capacity to repay
- The post-financing assessment suggests that Côte d’Ivoire maintains an adequate capacity to repay the Fund.
- Financing conditions remain generally favorable, suggested by the recent successful issuance of Eurobonds and manageable gross financing needs.
- Debt risk is generally contained despite relatively weak revenue.
- Potential risks (e.g., shocks to the external financial environment) could undermine this capacity.
- Policy priorities recommended:
  - Advance reforms to strengthen regional financial markets.
  - Rebuild fiscal buffers through enhanced domestic revenue mobilization.

### IMF engagement
- It is proposed that the next Article IV Consultation with Côte d’Ivoire take place on the standard 12-month cycle.

### Key statistics and projections (selected)
- Population (2020): 26.9 million
- Gini Index (2015): 41.5
- Per capita GDP (2020): 2278 USD
- Life Expectancy (years): 58
- Share of population below the poverty line (2015): 44.4%
- Literacy rate: 47.2%
- Overall balance, including grants (percent of GDP): -2.9 -2.3 -5.6 -5.6 -4.7 -3.8 -3.0 -3.0 -3.0
- Total revenue and grants (percent of GDP): 14.8 15.0 15.0 14.7 15.3 15.4 15.4 15.3 15.1
- Total expenditure (percent of GDP): 17.7 17.3 20.6 20.3 19.9 19.2 18.4 18.3 18.1
- Gross investment (percent of GDP): 21.2 20.1 22.2 22.9 24.6 24.7 24.8 25.8 26.8
- Current account balance (including official transfers) (percent of GDP): -3.9 -2.3 -3.5 -4.3 -4.2 -3.9 -3.7 -3.6 -3.5
- Central government debt, gross (percent of GDP): 36.0 38.8 47.7 49.4 50.5 50.7 50.2 49.7 49.1
- Exports, f.o.b. (percent of GDP): 20.5 21.6 20.1 20.4 19.8 19.5 19.5 19.3 19.0

*Sources: Ivorian authorities, World Bank, and IMF staff estimates and projections.*

### Annex I. Risk Assessment Matrix

### Annex I. Risk Assessment Matrix

### External risks — likelihood, impact, and recommended policy responses
- Unexpected shift in the Covid-19 pandemic  
  - Relative Likelihood: Medium  
  - Impact if Realized: High  
  - Key implications: Limited access to vaccines and protracted outbreak could reduce growth, worsen the external and fiscal positions, increase debt vulnerabilities, and poverty.  
  - Recommended Policy Response: Reintroduce containment and mitigation measures; improve support to affected firms and households; step-up efforts to acquire the vaccine.

- Widespread social discontent and political instability  
  - Relative Likelihood: High  
  - Impact if Realized: High  
  - Key implications: Could lower trade flows, reduce exports and FDI, and negatively affect growth and tax revenue.  
  - Recommended Policy Response: Implement the economic plan to support the recovery in a transparent manner. Improve inclusiveness of government policies and the social safety net system.

- Intensified geopolitical tensions and security risks  
  - Relative Likelihood: High  
  - Impact if Realized: Medium/High  
  - Key implications: Spillovers from tensions in the Sahel could increase security spending pressures on the fiscal budget and have adverse socio-economic effects.  
  - Recommended Policy Response: Promote security, strengthen social safety nets, and facilitate job creation in the private sector. Obtain necessary fiscal space by increasing revenue.

- Accelerating de-globalization  
  - Relative Likelihood: Medium  
  - Impact if Realized: Medium/High  
  - Key implications: Protectionist measures could lead to fragmentation, less trade, and lower potential growth.  
  - Recommended Policy Response: Strengthen regional bond markets, rebuild fiscal buffers through domestic revenue mobilization, improve public financial management, and design prudent public investment plans.

- Sharp rise in global risk premia  
  - Relative Likelihood: Medium  
  - Impact if Realized: Medium/High  
  - Key implications: Could jeopardize access to international debt markets, increase funding and debt service costs, and crowd-out private sector credit via increased government reliance on domestic financing.  
  - Recommended Policy Response: (Policy response listed in source under this risk; see source for the specific recommended actions.)

- Large swings in energy prices  
  - Relative Likelihood: Medium  
  - Impact if Realized: Medium  
  - Key implications: Large increases in global energy prices could lower fiscal revenues if price changes are not passed through to consumers; higher domestic energy prices would raise production costs and general prices.  
  - Recommended Policy Response: Adjust the retail fuel price mechanism to reflect world energy prices and monitor inflation. Mitigate the impact on the poor through temporary targeted fiscal transfers.

- Decline in cocoa prices  
  - Relative Likelihood: Medium  
  - Impact if Realized: High  
  - Key implications: Lower cocoa prices would adversely impact cocoa producers, fiscal revenues, and economic growth.  
  - Recommended Policy Response: Adjust regulated cocoa prices in line with the world market price. Mitigate the impact on the poor through temporary targeted fiscal transfers.

- Higher frequency and severity of natural disasters  
  - Relative Likelihood: Medium/Low  
  - Impact if Realized: High  
  - Key implications: Adverse weather would reduce agricultural output and exports, lower cocoa tax revenues, increase subsidy needs, and reduce living standards.  
  - Recommended Policy Response: Mitigate the impact on the poor through temporary targeted fiscal transfers. Monitor second-round effects on inflation.

### Domestic risks — likelihood, impact, and recommended policy responses
- Financial difficulties of public enterprises and banks  
  - Relative Likelihood: Medium  
  - Impact if Realized: Low/Medium  
  - Key implications: Could adversely impact the budget, the stock of public debt and the banking sector, especially in the context of the COVID crisis.  
  - Recommended Policy Response: Restructure loss-making public companies; enhance monitoring of public enterprises; recapitalize and restructure ailing public banks.

- Stronger reform momentum and confidence  
  - Relative Likelihood: Medium  
  - Impact if Realized: High  
  - Key implications: Could boost private sector investment, productivity, growth, and domestic resource mobilization.  
  - Recommended Policy Response: Implement accommodative policies to support growth, align with the regional convergence criteria, and reduce debt vulnerabilities.

- Prolongation of the energy shortages  
  - Relative Likelihood: Low  
  - Impact if Realized: Medium  
  - Key implications: Could reduce industrial production, construction activities, and tax revenue, and would increase prices.  
  - Recommended Policy Response: Accelerate efforts to sustainably address the current situation and promote alternative source of energy.

---

### Annex II. Status of the 2018 Article IV Main Recommendations

- Scale used: fully implemented, broadly implemented, partially implemented, and not implemented.

- Fiscal sector recommendations (selected highlights and status)
  - 1. Accelerate tax revenue mobilization to fund infrastructure and social safety nets while meeting budget deficit targets.  
    - Status: Partially implemented. Notes: Tax-to-GDP broadly flat after 2017; 2020 tax revenues reflect the pandemic (boosted fuel tax revenues but reduced most other tax revenues). In 2021, tax policy measures amount to 0.3 ppt of GDP, including repealing some exemptions, higher registration fee for cocoa exports, VAT rates and excises on non-basic products.
  - 2. Swiftly implement a single tax identification number for businesses and, eventually, individuals.  
    - Status: Partially implemented. Notes: STIN attributed to 80 percent of large and medium-sized firms; re-registration and database connectivity remain work in progress.
  - 3. Overhaul the investment code and its tax incentives.  
    - Status: Partially implemented. Notes: Revised Investment Code still offers scope for foregone revenue from tax incentives.
  - 4. Speed-up rationalization of exemptions.  
    - Status: Partially implemented. Notes: Action plan adopted in 2019; some temporary exemptions expired and some were removed in 2021, but substantial share remains.
  - 5. Simplify the tax regime for small businesses.  
    - Status: Partially implemented. Notes: New regimes and VAT registration threshold established, but additional simplification needed.
  - 6. Full implementation of the Single Treasury Account.  
    - Status: Partially implemented. Notes: TSA-designated account became operational on June 3, 2019, for the central government; 4 extra-budgetary funds were created for Covid-19 response and 1,217 accounts held at the BNI remained to be closed as of 5 March 2021.
  - 7. Swift restructuring of the energy sector.  
    - Status: Broadly implemented. Notes: Following debt restructuring, SIR and CI-Energies cleared most arrears and reduced financial costs; netting out cross-debts and agreed repayment schedules with Petroci; SIR and CIEnergie still need to generate revenue to reimburse restructuring debt.

- Banking sector
  - 8. Address remaining pockets of vulnerability in the financial system.  
    - Status: Partially implemented. Notes: Restructuring plans for public banks and the cooperative system ongoing; privatization of the Banque de l'Habitat de Côte d'Ivoire (BHCI) was reversed; recapitalization and asset sales involved social security institutions.

- Real sector
  - 9. Improve the business environment to make private investment the main growth driver.  
    - Status: Broadly implemented. Notes: Improvements via digitalization, contract enforcement, streamlined procedures, energy sector clean-up, transport investments; resulted in strong private investment growth in 2018 and 2019, though obstacles remain.

- Statistics
  - 10. Sustain progress in improving the quality and dissemination of economic statistics.  
    - Status: Partially implemented. Notes: National accounts rebased for 2015-19; new high frequency indicators (HFIs); National Statistics Development Strategy (SNDS) elaborated. Backcasting prior to 2015, quarterly alignment, and other HFIs delayed due to the pandemic.

- Debt Management
  - 11. Limit the need for external financial resources to mitigate foreign exchange and rollover risks.  
    - Status: Broadly implemented. Notes: Issued euro-denominated Eurobonds in 2019 and 2020; liability management operations to extend maturities; reduced recourse to international markets in 2019 and 2020 relative to 2018; plans to further develop the domestic bond market and attract international asset managers to the regional bond market.

---

### Annex III. External Sector Assessment

### Overall assessment and current account
- Overall Assessment: Côte d’Ivoire’s external position in 2020 was assessed to be broadly aligned with medium-term fundamentals and desirable policies.  
- Current account (CA) gap: 0.9 percent (of GDP) in 2020.  
- CA developments and projections:
  - 2020 current account deficit widened to 3.5 percent from 2.3 percent in 2019, mainly due to weaker external demand.  
  - Staff projects the current account deficit to hover around 3½ percent of GDP by 2026, reflecting both improved exports and strong imports supported by domestic demand.

### Model-based assessment and key model numbers
- EBA-lite current account model indicates:
  - Current account gap: 0.9 percent of GDP in 2020.  
  - Policy gap (part of the CA gap): 2 percent of GDP (driven mainly by relatively larger fiscal expansion in advanced economies).  
  - Model-based norm for the cyclically adjusted current account deficit: -4.0 percent of GDP.  
  - Assuming an elasticity of the current account balance with respect to the exchange rate of -0.16, the real exchange rate would need to appreciate by 5.4 percent to eliminate the gap between the norm and the actual current account.  
- Adjustments and values shown in source table for 2020:
  - CA-Actual: -3.5 (percent of GDP)  
  - Cyclical contributions (from model): (-)-0.4  
  - COVID-19 adjustor (+): 1/ -0.2  
  - Additional temporary/statistical factors (+): 0.0  
  - Natural disasters and conflicts (-): -0.1  
  - Adjusted CA: -3.1  
  - CA Norm (from model): -4.0 2/  
  - Adjusted CA Norm: -4.0  
  - CA Gap: 0.9 0.3 (table shows CA Gap 0.9 and 0.3 split by models)  
  - o/w Relative policy gap: 2.1  
  - Elasticity: -0.16  
  - REER Gap (in percent): -5.4 -1.9

  Notes from table:
  - 1/ Additional cyclical adjustment to account for the temporary impact of the pandemic on oil trade balances (-0.09 percent of GDP) and on tourism (-0.2 percent of GDP).  
  - 2/ Cyclically adjusted, including multilateral consistency adjustments.

### Real exchange rate
- Background: CFAF had depreciated by 16 percentage points over 2009-2019 in real terms; in 2020 the CFAF appreciated by 5 percent reflecting the nominal appreciation of the Euro vis-à-vis the USD.  
- REER model assessment:
  - The EBA-Lite Real Exchange Rate model suggests the real exchange rate was undervalued by 1.9 percent in 2020 and that the corresponding current account gap was 0.3 percent of GDP.  
  - Overall, CA and REER models indicate a moderate degree of undervaluation of the real effective exchange rate.

### Trade performance and competitiveness
- Trade performance:
  - Exports to GDP declined from around 25 percent in 2015 to 20 percent in 2020.  
  - Global market share remained stable.  
  - Export composition shifted toward primary products: primary products increased from around 58 to 67 percent of total exports over the last five years.
- Competitiveness and structural indicators:
  - Logistics Performance Index (LPI) indicates substantial improvement in 2018; Côte d’Ivoire’s LPI ranking improved between 2016 and 2018 while comparator WAEMU and Sub-Saharan frontier markets did not make much progress.  
  - Worldwide Governance Indicators show significant progress in government effectiveness, regulatory quality and voice and accountability in recent years.  
  - Source cautions: Interpretation of these indicators requires care due to possible sample size, questionnaire, nonresponse bias, and data availability issues.

---

### Annex IV. IMF Technical Assistance

### Objectives and general assessment
- TA supported ECF/EFF-supported program objectives and the 2016-2020 National Development Plan to strengthen the fiscal position, domestic revenue mobilization, and build resilience to shocks.  
- Implementation of TA recommendations has been uneven: actions to enhance customs administration and public finance management have been relatively more sustained than those targeted at improving tax design and domestic tax administration.

### Tax policy TA and outcomes
- Recent TA focused on the VAT, the informal economy, property taxation and income taxation.  
- Recommendations included a multi-year strategy, expanding the VAT base (including gradual taxation of the agricultural sector), simplifying income taxation, and rationalizing investment tax incentives.  
- From 2018 to 2021, tax rates on beverages and tobacco have been more closely aligned with regional directives, in line with TA advice.  
- The March 2019 plan to rationalize exemptions built on TA recommendations.  
- The 2021 budget removed some exemptions and widened the VAT base in the agricultural sector.

### Revenue administration TA and outcomes
- Main priorities in TA recommendations:
  - Modernize tax and customs administration: streamline the tax registry, improve IT systems, introduce a binding VAT threshold, dematerialize customs clearance procedures, strengthen transit and special procedure monitoring, and optimize control of values.
  - Digitalize the tax administration: electronic tax payments, capacity to collect and analyze tax data, implement a single taxpayer identification number, secure digital transactions, and extract performance indicators.
  - Modernize human resources management: redesign managerial procedures and staff evaluation, enhance skills and competencies, reduce fragmentation, and improve communication with taxpayers.
- Progress reported:
  - Introduction of a threshold for VAT registration in 2021.  
  - Integration of risk analysis in the tax audit system.  
  - Mandating certified financial statements from firms.  
  - Restructuring the Direction Générale des Impôts (DGI), including establishing Medium Taxpayer Offices.  
  - Introduction of customs data mirror analysis and use of results for audits and inspections.  
  - Cleansing the taxpayer database and improving the taxpayer census.  
  - Modernization of VAT refund processing, and transferring to customs the value analysis function.  
  - Digitalization outcomes: VAT e-filing rate for large and medium firms increased from one third in 2017 to four fifth in 2018. The new IT system (SIGICI) has been rolled out in all DGI offices. All new firms now receive a unique tax identification number and re-registration of existing large and medium firms is ongoing. A long-term expert has supported the digitalization strategy since June 2019. From 2020, the customs administration developed and started to implement its digitalization plan.

- Human resources modernization activities included redesigning managerial procedures and staff evaluation guidance, enhancing skills and competencies, reducing fragmentation, and improving communication and relationships with taxpayers.

*Prepared by IMF staff as presented in the Annexes of the source document.*

### 4.      Public Financial Management: TA has focused on fiscal transparency and accountability,

### 4.      Public Financial Management: TA has focused on fiscal transparency and accountability,

### Public Financial Management — main TA activities and progress
- Targeted areas: strengthening framework for cash advances; consolidating the Treasury Single Account; curbing recourse to unorthodox spending procedures; improving information-sharing and controls across government units; integrating cash and debt management; building a state opening balance sheet; transitioning toward accrual accounting; extending coverage of financial reporting; improving data availability and compatibility; enhancing internal and external communication within administration entities and with the general public.
- Concrete progress and outputs:
  - Publication of the citizen budget.
  - A cash advance management module used to earmark allocations by ministry.
  - Implementation of the Integrated Public Financial Management System.
  - Closing some commercial bank accounts.
  - Consolidation and operationalization steps toward the Compte Unique du Trésor (Treasury Single Account).
- Fiscal transparency and reporting extensions emphasized: transition toward accrual accounting and expanding coverage of financial reporting.

### Fiscal risks, SOEs, PPPs, and DGSP
- TA aimed to enhance management of fiscal risks related to SOEs, PPPs, local governments, and extra-budgetary funds through more systematic identification, analysis, and communication, and by strengthening the strategic role and capacities of the General Directorate of the State Portfolio (DGSP).
- Progress:
  - Improved management of fiscal risk related to PPPs and SOEs, including regular publications.
  - Strengthening of DGSP capacities and communication.
  - Regular publication of a fiscal risks statement noted as an example of best regional practices.
- SOE surveillance and management:
  - Reinforced surveillance beginning with the largest SOEs through monitoring tools, stronger oversight of performance contracts, greater accountability of stakeholders, and gathering data to integrate SOEs in the Debt Sustainability Analysis (DSA).
  - Authorities produce a summary table on SOEs debt service and a quarterly dashboard of SOE’s financial indicators.

### Public Investment Management and Budget Processes
- Public Investment Management:
  - TA focused on tighter coordination on the National Development Plan between central and local governments, better integration between planning and budgeting, intensified risk monitoring (e.g., control of recurrent investment costs), and more credible planning and budgeting.
- Budget preparation and execution:
  - Enhancements targeted better forecasting of budget spending and revenues, strengthening conjunctural analysis capacity, and supporting the transition towards program budgeting starting in 2020.
  - TA deliveries included regional workshops and technical assistance on budget forecasting and conjunctural analysis.

### Debt Management and DSA
- TA centered on strengthening debt management and sharpening tools for debt sustainability assessment (DSA) to foster a sustainable level of public debt.
- Debt management support and recommendations:
  - Development and implementation support for a Medium-Term Debt Management Strategy.
  - Strategy informed the need to lengthen the maturity of domestic debt and increase the share of external debt denominated in Euros as opposed to U.S. dollars.
  - Recommendations to reflect evolving market conditions more closely, improve communication, broaden the investor base, and develop the regional market for sovereign debt.
  - Authorities received training on the new DSA framework.

### Statistics — national accounts and external sector
- TA objectives and contributions:
  - National accounts: improve quality of quarterly national accounts and compile new high-frequency indicators of economic activity.
  - Intensive TA to assist the National Statistics Institute (INS) in rebasing GDP from 1996 to 2015 and elaboration of new national accounts according to the SNA 2008 methodology.
  - Balance of Payments: improvements for trade in goods and services and the international investment position.
  - Fiscal statistics: integrating local governments and extrabudgetary units in fiscal accounts according to GFSM 2001/2014 and expanding coverage of debt statistics to include major state owned enterprises.
  - External sector statistics: support to improve consistency between gross external debt liabilities reported in the international investment position and the World Bank’s Quarterly External Debt Statistics database; compile the International Reserves and Foreign Currency Liquidity Template; improve timeliness of annual external sector data to support the external balance assessment.
- Data sources and specific methodological notes:
  - Real GDP per capita data from IMF’s WEO.
  - Employment, human capital proxy, depreciation rate, and population data from PWT 10.0.
  - Initial capital stock assumption: ratio of capital stock to GDP of 2.6 in 1979 (in line with PWT 9.1).

### Growth accounting (Annex V) — methodology, assumptions, and findings
- Coverage: growth accounting exercise for the period 1980-2026 to analyze sources of growth and forecast future growth under expected policies.
- Production function and decomposition:
  - Standard production function: Yt = At Kt^(1-β) (Ht Lt)^β with the share of the labor force β assumed to be 2/3.
  - Per capita variables used: Lt = νt wt Nt where νt is participation rate, wt is working-age population-to-total population, Nt total population. Output per capita yt and capital per worker kt defined accordingly.
  - Capital stock accumulation: Kt+1 = (1−δ) Kt + It where It is investment and δ is depreciation rate.
- Data and calibration:
  - Initial capital stock calibrated using capital/GDP ratio 2.6 in 1979; subsequent capital stock estimated via the accumulation equation with investment (real gross fixed capital formation) from IMF’s WEO.
- Key historical results (2001-2019):
  - TFP was negative during the civil war period (2001-2011), increased significantly in 2012-15 as recovery occurred, and slowed by half in 2016-19 as the initial upswing normalized.
  - Capital stock contribution to growth was negative during the civil war but improved post-conflict.
  - Education contribution was positive and broadly flat; employment recovered from the civil war but remained a small contributor.
- Projections and 2020 impact (1980-2026 decomposition):
  - Before the civil war, TFP contribution was negative, highlighting productivity weaknesses.
  - In 2020, TFP fell significantly, reflecting a temporary decline in GDP below potential due to the pandemic.
  - Capital stock contribution remained strong in 2020 as authorities increased public investment in response to the health and economic crisis.
  - Going forward, capital deepening is expected to remain a strong driver of economic growth, fueled mostly by private investment.
  - TFP is expected to recover from the pandemic and return to positive growth as authorities continue a policy reform agenda to boost productivity.

### Poverty reduction and social protection (Annex VI) — trends, impacts, and policy implications
- Recent poverty and inequality trends:
  - Post-conflict improvements: in 2011 more than half of the population (55 percent) was in poverty compared to 10 percent in 1985.
  - Between 2015 and 2018 more than 197 thousand people were lifted out of poverty, lowering the poverty rate to 39.4 percent.
  - Extreme poverty declined from 16.3 percent in 2015 to 11.6 percent in 2018.
  - Per capita consumption changes between 2015 and 2018: grew by 6.5 percent for the bottom 20 percent of the population and declined by 2.3 percent for the richest 20 percent.
  - Gini index dropped from 41 percent to 35 percent between 2015 and 2018.
- Uneven progress and regional/urban-rural disparities:
  - Urban areas: poverty rate declined by 11.7 percentage points (or 1 million people) between 2015 and 2018; reduction concentrated in Abidjan (around one-third of people lifted out of poverty).
  - Rural areas: poverty rate increased by 2.4 percentage points (or 825 thousand people).
  - Regional differences: some northern regions saw poverty decline by more than 20 percentage points (Folon, Bagoue, Gbeke), while some southeastern regions saw poverty increase by more than 10 percentage points (San-Pedro, Cavally, Agneby-Tiassa).
  - In 2018, the richest 20 percent in Abidjan claimed 68 percent of total consumption against 0.8 percent of the poorest 20 percent.
- Growth-poverty elasticity:
  - Economic growth averaged 9 percent between 2012-15 and 7.1 percent between 2016-18.
  - World Bank estimates: during 2008-15, a 10 percent increase in GDP per capita growth resulted in a decline of the proportion of poor people by 4.3 percent; this increased to 7.1 percent in 2015-18.
  - The growth elasticity of poverty in Côte d’Ivoire remains low compared to the Sub-Saharan Africa average where a 10 percent per capita GDP growth is associated with a 19 percent reduction in poverty.
- Access to basic services and human capital improvements (2015–2018):
  - Share of the bottom 40 percent with access to electricity increased from 50 percent to 71 percent.
  - Access to health infrastructure increased from 58 percent to 91 percent.
- Covid-19 impacts and the new poor:
  - World Bank surveys (April and October 2020) suggest the pandemic’s impact on poverty is significant but declining.
  - Estimated national increase in poverty between 2.1 and 3.6 percentage points.
  - Those driven into poverty by the pandemic are likely to be predominantly urban, working in services and informal businesses.
  - Negative effects on poverty and inequality may extend and intensify in the medium term.
- Policy recommendations and social protection responses:
  - Capitalize on PSGouv (PSGouv 2019-20) success; strengthen social protection system to avoid scarring from the pandemic and further reduce poverty.
  - Implementation of the emergency cash transfer program to foster an adaptive social protection system able to respond to emergencies.
  - Develop a management information system to track beneficiaries of emergency programs and cash transfers to improve coordination, effectiveness, and efficiency.
  - Establishment of the Informal Sector Support Fund to develop tools to support informal workers, collect information on informal workers’ characteristics, and design programs (training, financial inclusion) to boost productivity.

_Italic: IMF staff and technical assistance reports and associated annexes as presented in the source content._

### Annex VII. Policies to Mitigate or Adapt to Climate Change in

### Annex VII. Policies to Mitigate or Adapt to Climate Change in Côte d’Ivoire

### Climate change projections and socioeconomic risks
- Climate change could reduce GDP by 2% to 4% across Africa by 2040 and by 10% to 25% by 2100 according to the Intergovernmental Panel on Climate Change (IPCC, 2007).
- By 2050, Côte d’Ivoire is expected to face:
  - an increase in temperatures of +1.3 to 2.3°C,
  - variation in rainfall from -2 to +7 percent, with increased frequency and intensity of heavy rainfall events,
  - change in the length of dry spells from -8 to +1 days,
  - rising sea levels of +18 to 45 cm (USAID, 2018).
- Climate change could push nearly one million more people into extreme poverty (living on less than $1.90 per day - World Bank, 2018).
- These projections motivate policies to both mitigate emissions and adapt to climate risks.

### Mitigation Policies
- Baseline emissions and commitments:
  - Côte d’Ivoire’s carbon emission per capita is 0.4 metric ton, compared with a world average of 4.6 metric ton per person.
  - The authorities have committed to reduce greenhouse gas emissions by 28% by 2030, to increase the share of renewables in the electricity mix to 42% by 2030, and to slow down deforestation (INDC, 2015).
- Fiscal and regulatory measures:
  - Fuel is taxed and proceeds represent at least 1.2 percent of GDP.
  - The government has invested in public transportation, especially in Abidjan.
  - A ban on imported second-hand vehicles older than 5 years (7 years for minivans) has been in place since 2018.
- Energy mix targets and investments:
  - Investments in hydropower and biomass and solar energy projects are expected to decrease the share of fossil energy sources in electricity production from the current 66 percent to 62 percent by 2026 and 58 percent by 2030 as agreed in the INDC.
- Forest protection and the Cocoa and Forest Initiative (CFI):
  - Côte d’Ivoire and Ghana launched the CFI in 2017 with cocoa and chocolate companies to end sourcing from farmers producing cocoa in National Parks and Reserves, map farms for deforestation monitoring, and establish 244,400 hectares of cocoa agroforestry and distribute and plant 8.3 million native trees for off-farm reforestation.
  - A new Forest Code and a National Strategy for preservation, recovery and extension of forests were adopted in 2019.
  - Despite initiatives, spatial data analysis estimates Côte d’Ivoire lost another 2 percent of its primary forest between 2019 and 2020, with more than 75 percent of observed deforestation taking place in unprotected rural forests.
- Economic rationale:
  - Climate change mitigation has direct economic benefits: improvements in energy efficiency reduce production costs, and green investments (public transportation, renewable energy) can drive growth.

### Adaptation Policies
- Vulnerable sectors and adaptation cost estimates:
  - Côte d’Ivoire’s INDC (2015) identifies 6 sectors most vulnerable to climate change: agriculture, livestock, and aquaculture; land use; forestry; water resources; energy; and coastal areas.
  - The INDC estimates the total cost of adaptation measures at US$1.76 billion (about FCFA 950bn).
  - 80 percent of that cost would be borne by programs aimed at strengthening the agricultural sector, including subsidizing new seeds to improve yields and supporting farmers’ income to reduce poverty.
  - The draft NDP for 2021-25 envisages measures for a total cost of around CFAF 50bn.
- Implementation status and ongoing planning:
  - Implementation of envisaged measures has so far been limited, with some progress in World Bank-funded projects on agricultural employment and social cohesion.
  - Authorities are working with UNDP and the Green Climate Fund to develop a National Adaptation Plan (PNA) and to update their nationally determined contribution ahead of COP26.
  - Faster adaptation requires involvement of all stakeholders beyond environment ministries, since decisions of other ministries as well as firms and households also play a role.

### Key findings and policy implications
- Even with low per capita emissions (0.4 metric ton), Côte d’Ivoire has set ambitious mitigation targets (28% emissions reduction by 2030; 42% renewables by 2030).
- Existing fiscal instruments (fuel taxation generating at least 1.2 percent of GDP) and regulatory measures (vehicle import age limits) are part of the mitigation toolkit.
- Forest loss remains a critical challenge: 60% of Ivorian forests disappeared between 1990 and 2015; additional 2 percent primary forest loss estimated between 2019 and 2020.
- Adaptation needs are concentrated in agriculture, with US$1.76 billion estimated adaptation costs and 80 percent aimed at agricultural programs.
- Strengthening cross-ministerial coordination and engaging firms and households are necessary to accelerate adaptation.

*Prepared by Jean-Marc Fournier and Frederic Lambert.*

### References

### 1civea2021001 - References

### Key cited works
- Ding, Xiaodan and Metodij Hadzi-Vaskov, 2017, "Composition of Trade in Latin America and the Caribbean," IMF Working Papers 2017/042, International Monetary Fund.
- Hausmann, Ricardo, César A. Hidalgo, Sebastián Bustos, Michele Coscia, Alexander Simoes, Muhammed A. Yildirim, 2013, “The Atlas of Economic Complexity: Mapping Paths to Prosperity,” The MIT Press.
- Hidalgo, Cesar and Ricardo Hausmann, 2009, "The Building Blocks of Economic Complexity," Proceedings of the National Academy of Sciences of the United States of America, 106 (26), pp. 10570-10575.
- Giri, Rahul, Saad N Quayyum, Rujun Yin, 2019, "Understanding Export Diversification: Key Drivers and Policy Implications," IMF Working Papers 19/105, International Monetary Fund.
- Salinas, Gonzalo, 2021, “Proximity and Horizontal Policies: The Backbone of Export Diversification”, IMF Working Paper WP/21/64, Washington, DC.

### Relations with the Fund — snapshot (As of May 31, 2021)
- Membership status: Joined March 11, 1963; Article VIII.
- Quota: 650.40 SDR Million = 100.00 percent of Quota.
- Fund holdings of currency (Exchange Rate): 1,563.73 (SDR Million) and 240.43 (percent? presented as values).
- Reserve tranche position: 83.41 (SDR Million) = 12.82 percent.
- SDR Department net cumulative allocation: 310.90 SDR Million = 100.00 percent.
- SDR holdings: 1,129.81 SDR Million = 363.40 percent.
- Outstanding purchases and loans (SDR Million; % Quota):
  - RCF loans: 224.93 = 34.58
  - Emergency Assistance 1/: 433.60 = 66.67
  - ECF Arrangements: 561.00 = 86.25
  - Extended Arrangements: 562.65 = 86.51
- Latest financial arrangements:
  - EFF: Date of Arrangement Dec 12, 2016; Expiration Dec 11, 2020; Amount Approved 562.65 (SDR Million); Amount Drawn 562.65 (SDR Million).
  - ECF 1: Dec 12, 2016 to Dec 11, 2020; Amount Approved 281.32 (SDR Million); Amount Drawn 281.32 (SDR Million).
  - ECF: Nov 04, 2011 to Dec. 31, 2015; Amount Approved 520.32 (SDR Million); Amount Drawn 520.32 (SDR Million).
- Overdue obligations and projected payments to Fund (SDR Million; based on existing use of resources and present holdings of SDRs):
  - 2021 Principal: 110.68
  - 2022 Principal: 123.80
  - 2023 Principal: 242.22
  - 2024 Principal: 360.15
  - 2025 Principal: 281.85
  - Charges/Interest by year: 2021: 5.26; 2022: 10.28; 2023: 9.71; 2024: 7.21; 2025: 4.31
  - Total by year: 2021: 115.94; 2022: 134.08; 2023: 251.93; 2024: 367.35; 2025: 286.16

### HIPC and related debt relief implementation
- Implementation of HIPC Initiative:
  - Decision point date: Mar 1998 (Original Framework) and April 2009 (Enhanced Framework) noted.
  - Assistance committed by all creditors (US$ Million): Original Framework 345.00; Enhanced Framework 3,109.58.
  - IMF assistance (US$ Million): Original Framework 22.50; Enhanced Framework 38.66.
  - IMF assistance (SDR equivalent in millions): Enhanced Framework 16.70 and 25.85 (presented in two places).
  - Completion point date: -- (Original Framework); June 2012 (Enhanced Framework).
- Disbursement of IMF assistance (SDR Million):
  - Assistance disbursed to the member: -- (Original); 25.85 (Enhanced); Total 25.85
  - Interim assistance: -- (Original); 15.13 (Enhanced)
  - Completion point balance: -- (Original); 10.72 (Enhanced)
  - Additional disbursement of interest income 2/: 0.57
  - Total disbursements: 26.42 (SDR Million)

### Safeguards, exchange arrangements, and Article IV cycle
- Safeguards assessment (BCEAO):
  - Update completed April 2018: central bank maintained a strong control environment since 2013; governance arrangements broadly appropriate.
  - IFRS adopted as accounting framework beginning with the 2015 financial statements.
  - 2016 external quality review of internal audit function found broad conformity with international standards.
  - One recommendation outstanding from 2018 safeguards assessment: strengthening of the risk management function (in process).
- Exchange arrangements:
  - Côte d’Ivoire is a WAEMU member; exchange system free of restrictions on payments and transfers for current international transactions.
  - Common currency CFA franc pegged to the euro at the rate of €1 = CFAF 655.957.
- Article IV Consultation:
  - Côte d’Ivoire is on the 12-month Article IV consultation cycle.
  - Executive Board concluded the last Article IV consultation in June 2018.
- Resident representative:
  - First posted in Abidjan in 1984; interruptions 2005–06 and 2010–11; continuously assigned since May 2011.

### Relations with other international organizations (As of June 22, 2021)
- Côte d’Ivoire collaborates with:
  - World Bank Group
  - African Development Bank

### Statistical issues (As of June 18, 2021)
- General: Data provision broadly adequate for surveillance; timeliness of some indicators could be improved.
- National Accounts:
  - NIS adopted the 2008 SNA and updated base year to 2015.
  - Annual national accounts available for 2015-17; preliminary national accounts for 2018-19 produced.
  - Backcasting work underway for 1996-2014.
  - Quarterly national accounts still under 1993 SNA with 1996 base year; upgrade to 2008 SNA with 2015 base year underway.
  - New high frequency indicators produced with 2015 base year.
  - AFRITAC West supporting finalization, methodological improvements, and development of financial accounts.
- Price statistics:
  - Harmonized CPI compilation methods adopted with 2014 as weight reference year.
  - Assistance planned for developing and disseminating a producer price index (PPI).
- Labor market statistics:
  - Employment in the formal sector published monthly.
- Government Finance Statistics:
  - Annual general government data provided for 2018-19 to GFS Yearbook.
  - No monthly or quarterly fiscal data for publication, but available to IMF African Department.
  - Authorities committed to improving coverage of general government units and public enterprises.
  - Assistance sought from AFRITAC WEST to implement the 2009 WAEMU TOFE directive for transition to GFSM 2001.
- Monetary and Financial Statistics:
  - Monetary data prepared by national agency of BCEAO and reported monthly to STA with timeliness ~ two months after reference period.
  - August 2016: migration to Standardized Report Forms completed.
  - BCEAO reports some Financial Access Survey indicators, including commercial bank branches per 100,000 adults and ATMs per 100,000 adults used to monitor SDG Target 8.10.
- Financial Soundness Indicators (FSIs):
  - BCEAO finalized development of FSIs for deposit takers in 2018.
  - BCEAO has used FSIs internally but has not granted approval to publish on IMF’s FSI website.
- External Sector Statistics:
  - National agency of BCEAO in Abidjan compiles and disseminates annual BOP and IIP; data reported to STA in BPM6 format with timeliness ~ one year after reference period.
  - BCEAO headquarters determines methodology and calculates international reserves managed for WAEMU countries.
  - Four TA missions conducted in Côte d’Ivoire between 2016-20 under a Japan-administered project.
  - Ongoing effort to publish quarterly BOP and IIP data.
  - Virtual mission in April 2021 examined consistency between IIP and QEDS; discrepancies due to external debt coverage, currency classification and time of reporting.
- Data standards and quality:
  - Participation in GDDS since May 2000; NSDP posted December 2017, participating in enhanced GDDS.
  - As of June 18, access to Central Bank Survey and Deposit Corporation Survey needs BCEAO authorization.
  - No data ROSC available.
  - Côte d’Ivoire reports data to STA for re-dissemination.

### Table of Common Indicators Required for Surveillance (As of June 18, 2021) — selected entries with latest observation and reporting frequency
- Exchange Rates: Date of Latest Observation: Current; Frequency of Data: M; Frequency of Reporting: M; Frequency of Publication: M.
- International Reserve Assets and Reserve Liabilities of the Monetary Authorities: Date of Latest Observation: Current; Frequency: M/M/M.
- Reserve/Base Money: Date of Latest Observation: 04/21; Date Received: 06/21; Frequency: M/M/M.
- Broad Money: Date of Latest Observation: 04/21; Date Received: 06/21; Frequency: M/M/M.
- Central Bank Balance Sheet: Date of Latest Observation: 04/21; Date Received: 06/21; Frequency: M/M/M.
- Consolidated Balance Sheet of the Banking System: Date of Latest Observation: 04/21; Date Received: 06/21; Frequency: M/M/M.
- Interest Rates: Date of Latest Observation: 12/20; Date Received: 02/21; Frequency: I/M/M.
- Consumer Price Index: Date of Latest Observation: 04/21; Date Received: 06/21; Frequency: M/M/M.
- Revenue, Expenditure, Balance and Composition of Financing – Central Government and National Social Security Funds: Date of Latest Observation: 04/21; Date Received: 06/21; Frequency: M/M/M.
- Stocks of Central Government and Central Government-Guaranteed Debt: Date of Latest Observation: 12/20; Date Received: 03/21; Frequency: Q/Q/Q.
- External Current Account Balance: Date of Latest Observation: 2019; Date Received: 01/21; Frequency: A/A/A.
- GDP/GNP: Date of Latest Observation: 2019; Date Received: 09/20; Frequency: A/A/A.
- Gross External Debt: Date of Latest Observation: 12/20; Date Received: 03/21; Frequency: Q/Q/Q.

### Debt Sustainability Analysis — summary points
- Risk assessments:
  - Risk of external debt distress: Moderate.
  - Overall risk of public debt distress: Moderate.
  - Granularity in the risk rating: Limited space to absorb shocks.
  - Application of judgement: No.
- Key observations:
  - Despite the COVID-19 shock, all projected external debt burden indicators are below their thresholds under the baseline.
  - Several indicators exceed their thresholds in the case of the most severe standard shocks.
  - The debt service-to-revenue ratio remains below but close to its threshold throughout the medium-term under the baseline scenario.
  - Space to absorb shocks is limited.
  - Public debt expected to remain generally stable over the projection horizon.
- Composite Indicator:
  - Under the revised Debt Sustainability Framework for Low-Income Countries, Côte d’Ivoire’s Composite Indicator is 2.92 based on the April 2021 WEO and the 2019 CPIA, corresponding to a medium debt carrying capacity.
- Approval and preparation:
  - Approved by Catherine Pattillo and Chad Steinberg (IMF); and Marcello Estevão and Abebe Adugna Dadi (IDA).
  - Prepared by the International Monetary Fund and the International Development Association.
  - Date: July 6, 2021.

### Public debt coverage (summary)
- Coverage:
  - Public debt includes central government debt and central government guarantees, including guarantees for SOE debt (Text Table 1).
  - External and domestic debt classification is based on the currency criterion.
  - Local government debt excluded from DSA coverage; no available information on local government debt.
- SOE debt:
  - At end-2020, SOE guaranteed commercial debt: 2.1 percent of GDP.
  - At end-2020, SOE non-guaranteed commercial debt: 1.1 percent of GDP.
  - Treatment in DSA:
    - All guaranteed SOE debt and on-lent debt included in the debt stock in the baseline.
    - Non-guaranteed SOE debt captured as a contingent liability shock set at the default 2 percent of GDP.

*Prepared from "CÔTE D'IVOIRE — STAFF REPORT FOR THE 2021 ARTICLE IV CONSULTATION—INFORMATIONAL ANNEX" (July 6, 2021) and associated references.*

### 2.      Efforts to step up the government’s capacity to record and monitor public debt and

### 2.      Efforts to step up the government’s capacity to record and monitor public debt and contingent liabilities continue

### Efforts to strengthen public debt and contingent-liability recording
- Further work is needed to enhance data coverage of SOEs in the DSA baseline, including consolidating the general government fiscal accounts with the financial statements of the SOEs (both on the revenue and expenditure sides).
- The authorities see this consolidation as a prerequisite for incorporating SOE debt into total debt (in the baseline) and have received technical assistance (TA) to advance this task.
- Non-guaranteed SOE debt is not included in the baseline because of limited information.
- The debt owed to the West-African Development Bank (BOAD), which is denominated in Franc CFA, is classified as domestic.
- Compared to the previous DSA (IMF Country Report No. 20/321), this DSA excludes external private debt from external debt due to limited information on the outstanding stock of external private debt and related payments.

### Contingent liability (CL) stress test: design and magnitude
- The magnitude of the shock in the contingent liability stress test applied in the sensitivity analysis reflects potential additional liabilities and uses the LIC-DSF default settings for the contingent liabilities shock.
- Total contingent liabilities for the CL test are estimated at 9.3 percent of GDP (Text Table 2).
- The stock of public private partnerships represents about 6.6 percent of GDP, with a large share of investment commitments in the energy sector.
- Text Table 2 (components and default values used in the tailored contingent liability shock):
  - Other elements of the general government not captured in 1.: 0.0 percent of GDP (used for the analysis)
  - SoE's debt (guaranteed and not guaranteed by the government) 1/: 2.0 percent of GDP (default)
  - PPP 35 percent of PPP stock: 2.3 percent of GDP (used for the analysis)
  - Financial market (the default value of 5 percent of GDP is the minimum value): 5.0 percent of GDP (used for the analysis)
  - Total (2+3+4+5) (in percent of GDP): 9.3
- Footnote on SoE shock: "The default shock of 2% of GDP will be triggered for countries whose government-guaranteed debt is not fully captured under the country's public debt definition (1.). If it is already included in the government debt (1.) and risks associated with SoE's debt not guaranteed by the government is assessed to be negligible, a country team may reduce this to 0%."

### Debt background and composition
- Public debt increased significantly over the last few years with external debt growing as a share of total debt.
- Increase over 2016-2019 was driven by higher recourse to external debt including to finance an increase in investment and social spending in the context of the National Development Plan 2015-2020.
- The medium-term debt strategy 2019-2023 initially envisaged that 70 percent of new financing would come from external sources, with an increase in commercial borrowing.
- Public debt stood at 49.8 percent of GDP at end-2020, compared with 31.8 percent in 2016.
- External debt stood at 32.1 percent of GDP at end-2020, compared to 17.2 in 2016—representing 64 percent of total debt in end-2020 as opposed to 54 percent in 2016.
- Within external debt (excluding guarantees), commercial creditors hold more than half of the external debt stock.
  - Close to 90 percent of commercial debt is in the form of Eurobonds.
  - Multilateral creditors represented 28 percent of external debt in 2020.
  - The IMF and the World Bank jointly satisfied close to 25 percent of the country’s financing needs in 2020.
  - Bilateral creditors accounted for 17 percent of the external debt stock at end-2020 compared to 21 percent in 2016.
  - The remaining share (52 percent) is associated with commercial creditors.
- Most domestic debt is in the form of CFAF-denominated securities with maturities between 3 months and 15 years and held by domestic and other WAEMU investors.
- Authorities are mindful of risks of excessive recourse to the regional market, including tightening of financing constraints and crowding-out of private sector credit.

### DSSI participation and impact
- The authorities joined the Debt Service Suspension Initiative (DSSI) in 2020 and sent formal letters to the Paris Club.
- Suspended payments amounted to around 0.2 percent of GDP, or 4.5 percent of total debt service (including C2D) in 2020.
- For 2021, debt service payments that could be suspended under the DSSI extension amount to 0.3 percent of GDP.
- Benefit of DSSI is limited because a significant share of external debt falling due in 2020 and 2021 has been forgiven by bilateral creditors under the C2D.

### Recent developments and baseline macro-fiscal assumptions
- Growth and pandemic impact:
  - Growth in 2020 is estimated at about 2 percent.
  - Côte d’Ivoire experienced a moderate second wave of COVID-19 in January 2021 (with a peak of 400 cases per day); in April 2021 cases fell below 100 cases per day, with low mortality (a total of slightly more than 300 COVID-related deaths since February 2020).
  - Vaccination began in March 2021; as of mid-June 2021, the authorities received about 830,000 doses, of which about 84 percent have been utilized.
- Current account:
  - The current account deficit is expected to have widened to 3.5 percent of GDP in 2020, from 2.3 percent in 2019.
- Baseline macroeconomic framework assumptions:
  - Real GDP: recover from 2 percent in 2020 to 6.0 percent in 2021; peak at 6.5 percent in 2022; revert to potential of 6 percent by 2026.
  - Annual average inflation: temporarily pick up to 2.5 percent in 2021; remain around 2 percent in the medium term.
  - Fiscal deficits: primary and overall fiscal deficits widened to respectively 3.7 and 5.6 percent of GDP in 2020.
    - Authorities plan to keep the overall fiscal deficit in 2021 at 5.6 percent of GDP.
    - Plan to converge to the 3 percent of GDP regional target by 2024 at the latest instead of 2023.
  - Tax revenue: assumed to increase from 12.4 percent of GDP in 2020 to 13 percent in 2026.
  - External current account deficit: expected to moderately narrow from 4.3 percent of GDP in 2021 to 3½ percent of GDP in 2026.
- Medium-term projection highlights (from Text Table 3 and narrative):
  - GDP at constant prices (real GDP growth): 2021: 6.0; 2022: 6.5; 2023: 6.4; 2024: 6.3; 2025: 6.1; 2026: 6.0 (annual percentage changes)
  - Overall balance, incl. grants, payment order basis: 2020: -5.6; 2021: -5.6; 2022: -4.7; 2023: -3.8; 2024: -3.0; 2025: -3.0; 2026: -3.0 (percent of GDP)
  - Current account balance: 2020: -3.5; 2021: -4.3; 2022: -4.2; 2023: -3.9; 2024: -3.7; 2025: -3.6; 2026: -3.5 (percent of GDP)
- The assumptions are subject to downside risks including unfavorable terms-of-trade shocks and weaker-than-expected global growth.

### Debt management strategy and financing assumptions
- Authorities’ strategy aims to meet gross financing needs while ensuring debt sustainability, based on a balanced mix of external and domestic financing instruments.
- Côte d’Ivoire’s financing needs are expected to be met by relying on a mix of sources in domestic and foreign currencies in 2021.
- Authorities aim to limit external borrowing to covering external debt service; external commercial borrowing set close to projected external commercial debt service.
- Multilateral and bilateral financing is projected to gradually decline from 2.9 percent of GDP in 2021 to 1.2 percent in 2041.
- IDA share of total multilateral financing projected to increase in the short run from 59 percent in 2021 to 78 percent in 2025, before declining to 32 percent in 2041.
- Domestic financing is assumed to rely on issuances of CFAF securities with maturities:
  - less than one-year (12 percent of issuances)
  - one to three years (8 percent)
  - three to seven years (46 percent)
  - more than seven years (34 percent)
- The projected increase in domestic financing would require significant purchases of Ivoirian securities by WAEMU residents and could crowd out smaller borrowers; if these purchases do not happen, external commercial financing would have to increase to fill the gap.
- Domestic borrowing assumptions hinge on capacity to double the volume of domestic issuances within the next 3 years (from FCFA billion 1,559 projected in 2021 to 2,980 in 2023) at current yields.
- World Bank support is assisting authorities to strengthen processes related to debt management.

### Assessment of macroeconomic framework realism and residuals
- The realism of the macroeconomic framework is broadly plausible.
- Projected medium-term debt-creating flows are below those observed in the past five years which were driven by a sizable residual.
- The 6.3 percent of GDP residual calculated for 2020 mostly reflects:
  - different recording of project loan disbursements in the fiscal accounts and the debt statistics,
  - non-integration in the fiscal accounts of flows associated with new debt contracted by the government and on-lent to SOEs (included in public debt).
- The projected fiscal adjustment for the next three years is at the bottom of the top quartile of the distribution of approved Fund-supported programs for LICs since 1990.

### Country classification and scenario stress tests
- Côte d’Ivoire is assessed to have medium debt carrying capacity.
  - Composite indicator: 2.92 (above the lower cut-off of 2.69 but below the strong capacity cut-off value of 3.05).
- Thresholds applied for debt risk rating (applicable external debt burden thresholds and total public debt benchmark):
  - PV of debt in % of Exports: 55
  - PV of total public debt in percent of GDP: 180
  - Debt service in % of Exports: 40
  - Debt service in % of Revenue: 15
  - Total public debt benchmark in % of GDP: 18
- Tailored market-financing test:
  - Assumes a temporary increase in the cost of new commercial external borrowing by 400 basis points combined with a nominal depreciation of 15 percent of the CFAF vis-à-vis the US$ and a shortening of maturities and of grace periods.
  - Note on shortening: If original maturity > 5 years, new maturity set to 5 years; if original maturity < 5 years, new maturity shortened by 2/3.
- Tailored contingent liability shock:
  - Standardized 2 percent of GDP for risks related to SOEs.
  - 2.3 percent of GDP shock to accommodate potential fiscal risks on 35 percent of the PPP capital stock.
  - Financial sector shock of 5 percent of GDP.
- Standard sensitivity tests applied on: real GDP growth, primary balance, exports, current transfers, FX depreciation, and commodity prices.
  - First four shocks set each variable to the lower of its historical average minus one standard deviation, or its baseline projection minus one standard deviation.
  - FX depreciation scenario: nominal depreciation of 30 percent of the CFAF vis-à-vis the US$ in the first year of the projection.
  - Commodity price shock: sudden one standard deviation decline in commodity prices.

*Source: IMF staff summary of Côte d’Ivoire DSA chapter content provided in the source PDF.*

### 16.      The external DSA assessment indicates that all PPG debt indicators are below their

### 16.      The external DSA assessment indicates that all PPG debt indicators are below their

### External debt sustainability (baseline)
- All PPG debt indicators are below their corresponding thresholds for the next ten years in the baseline scenario.
- The PV of external debt-to-GDP is expected to decrease from 28.4 percent in 2020 to 21.9 percent in 2031, well below the relevant threshold of 40.
- The debt-service-to-revenue ratio is projected to come just short of its threshold in 2024 and remain just below it throughout the following years.
- Policy implication: improving domestic revenue mobilization is critical to provide sustainable funding for development needs and buffers on debt service.

### External shock and market-financing scenarios
- Exports shock:
  - Would cause the PV of external debt-to-export ratio and debt service-to-export ratio to breach their thresholds.
- Market financing shock:
  - GFN and EMBI spread remain below the benchmark in the analysis, but a realized market financing risk would cause the debt service-to-revenue indicator to breach the threshold for prolonged periods.
  - Such market risks could arise from a deterioration in global risk sentiment or from a shortening of maturities of new external commercial borrowing.
- Overall message: exports shocks or rollover risks pose significant downside risks to external debt sustainability.

### Public debt sustainability (baseline)
- Under the baseline scenario, the PV of public debt-to-GDP ratio is below its threshold of 55 percent.
- The PV of public debt-to-GDP is expected to gradually decline to around 43½ percent by 2031.
- The PV of debt-to-revenue ratio would decline marginally from 294.9 percent in 2020 to 283.5 percent in 2031.
- The debt service-to-revenue ratio, at 32.9 in 2020, is projected to increase and reach 55.2 in 2031.
- Policy implication reiterated: strengthening domestic revenue mobilization is important.

### Stress tests and vulnerabilities
- Commodity price shock (standard commodity price stress test):
  - Would cause the PV of public debt-to-GDP to breach the 55 percent threshold starting in 2024 and continue growing afterwards.
  - Would lead to an explosive pattern of the three debt and debt service indicators.
- Contingent liability shock:
  - Would trigger a temporary breach of the PV of debt-to-GDP threshold for three years.
- Under most shocks, the debt-service-to-revenue indicator would breach the threshold starting in 2023 and 2024.
- The DSA highlights that the most extreme public debt vulnerability arises from a shock to commodity prices.

### Risk rating, overall vulnerabilities, and implications
- Risk rating: Côte d’Ivoire remains at moderate risk of external debt distress (as in the December 2020 DSA), but with limited capacity to absorb shocks.
- Under the most extreme shocks (exports and market financing), three out of four external debt indicators would breach their thresholds.
- Under the most extreme growth shock, the PV of public debt-to-GDP breaches its 55 percent threshold starting in 2023.
- COVID environment exacerbates risks: global growth recovery and Ivorian exports could be more protracted than projected.

### Policy recommendations and priorities
- Carefully monitor debt indicators and conduct prudent GDP growth projections.
- Create fiscal space and implement judicious policies to preserve macroeconomic stability.
- Fully oversee SOE debt contracting and work toward fully integrating SOE debt into the DSA.
- Accelerate efforts to mobilize domestic revenue while remaining committed to containing medium-term public expenditure.
- Adopt a prudent external borrowing strategy to balance costs and risks of new loans and preserve borrowing space and medium-term debt sustainability.

*Source: IMF DSA excerpt provided in the content unit.*

### 23.      The authorities agreed that Côte d’Ivoire remains at moderate risk of debt distress.

### 1civea2021001 - 23.      The authorities agreed that Côte d’Ivoire remains at moderate risk of debt distress.

### Authorities' assessment and strategy
- The authorities agreed that Côte d’Ivoire remains at moderate risk of debt distress.
- They emphasized the importance of mobilizing more revenue, notably to improve their ability to weather shocks.
- They recognized the need of deepening the regional market.
- They reiterated their commitment to lift productivity and growth via critical structural reforms.
- They highlighted the generally sound sovereign rating that allowed successful Eurobond issuances following the pandemic shock.
- Their medium-term debt strategy aims at:
  - reducing the refinancing and exchange rate risks;
  - lengthening maturities;
  - achieving a balanced portfolio structure in terms of external and domestic debt.

### Stress tests, market-financing risk, and realism tools
- Stress-test framework notes:
  - "The most extreme stress test is the test that yields the highest ratio in or before 2031."
  - All additional financing needs generated by shocks under the stress tests are assumed to be covered by PPG external MLT debt in the external DSA.
  - Default terms of marginal debt are based on baseline 10-year projections.
- Market-financing risk indicators (Figure 6):
  - Benchmarks: GFN = 14; EMBI = 570.
  - Values reported: GFN = 10; EMBI = 350.
  - Breach of benchmark: No.
  - Potential heightened liquidity needs: Low.
- Qualification of the Moderate Category (Figure 5) uses thresholds where:
  - For PV debt/GDP and PV debt/exports thresholds, x is 20 percent and y is 40 percent.
  - For debt service/Exports and debt service/revenue thresholds, x is 12 percent and y is 35 percent.

### Key public and external debt indicators (selected exact figures from tables)
- External debt (nominal), selected years (Percent of GDP):
  - 2018: 24.8
  - 2019: 27.7
  - 2020: 32.1
  - 2021: 33.2
  - 2026: 29.6
  - 2031: 26.3
  - 2041: 18.7
- Change in external debt (Percent of GDP):
  - 2018: 5.8
  - 2019: 3.0
  - 2020: 4.4
  - 2021: 1.1
  - 2026: -0.5
  - 2031: -0.7
- Identified net debt-creating flows (Percent of GDP):
  - 2018: 2.7
  - 2019: 3.3
  - 2020: 3.3
  - 2021: 3.7
  - 2026: 3.2
  - 2031: 3.6
- Endogenous debt dynamics (contribution, Percent of GDP):
  - 2018: -1.4
  - 2019: 0.6
  - 2020: -0.1
  - 2021: -0.8
- PPG debt service and ratios (selected):
  - PV of PPG external debt-to-GDP ratio (selected years): 28.4; 28.0; 27.6; 26.9; 26.0; 25.2; 24.7; 21.9; 15.4
  - PV of PPG external debt-to-exports ratio (selected): 133.3; 127.2; 127.7; 126.0; 121.6; 118.9; 117.9; 108.3; 80.0
  - PPG debt service-to-exports ratio (selected years): 6.1; 6.9; 8.3; 8.1; 9.5; 10.8; 12.3; 12.2; 10.6; 12.8; 8.6
  - PPG debt service-to-revenue ratio (selected years): 9.8; 11.4; 12.3; 12.6; 14.0; 15.6; 17.5; 17.2; 14.8; 16.9; 10.7
- Gross external financing need (Million of U.S. dollars), selected years:
  - 2018: 3,146.6
  - 2019: 2,528.7
  - 2020: 3,145.6
  - 2021: 4,376.8
  - 2026: 6,518.9
  - 2031: 10,486.7
  - 2041: 19,359.5
- Key macroeconomic assumptions (selected exact values):
  - Real GDP growth (in percent): 2018: 6.9; 2019: 6.2; 2020: 2.0; 2021: 6.0; 2022: 6.5; 2023: 6.4; 2024: 6.3; 2025: 6.1; 2026: 6.0; 2031: 5.8; 2041: 5.6
  - GDP deflator in US dollar terms (change in percent): 2018: 5.2; 2019: -5.0; 2020: 2.6; 2021: 7.6; 2022: 3.3; 2023: 2.7
  - Effective interest rate (percent): 2018: 4.2; 2019: 3.6; 2020: 4.2; 2021: 3.2; 2022: 3.5
  - Growth of exports of G&S (US dollar terms, in percent): 2018: 1.8; 2019: 5.4; 2020: -5.6; 2021: 18.0
  - Government revenues (excluding grants, in percent of GDP): 2018: 14.0; 2019: 14.2; 2020: 14.5; 2021: 14.1; 2022: 14.7; 2023: 14.9; 2024: 15.0; 2025: 15.0; 2026: 15.0; 2031: 15.2; 2041: 15.6

### Public sector debt indicators (selected)
- Public sector debt (Percent of GDP), selected years:
  - 2018: 37.6
  - 2019: 41.0
  - 2020: 49.8
  - 2021: 51.4
  - 2026: 50.3
  - 2031: 47.8
  - 2041: 45.6
- Change in public sector debt (Percent of GDP):
  - 2018: 3.9
  - 2019: 3.5
  - 2020: 8.8
  - 2021: 1.5
  - 2026: -0.8
  - 2031: -0.4
- Identified debt-creating flows (Percent of GDP): 2018: 1.9; 2019: 1.0; 2020: 2.5; 2021: 1.5
- Primary deficit (Percent of GDP), selected: 2018: 1.6; 2019: 0.8; 2020: 3.7; 2021: 3.6; 2022: 2.7; 2023: 1.8
- PV of public debt-to-GDP ratio (selected): 44.3; 45.9; 47.0; 47.2; 46.6; 46.1; 45.4; 43.3; 42.3
- Debt service-to-revenue and grants ratio (selected): 29.1; 30.7; 32.9; 34.9; 42.3; 51.5; 52.1; 54.2; 52.3; 55.2; 57.6
- Gross financing need (Percent of GDP) (selected): 6.7; 5.5; 8.7; 8.8; 9.6; 10.1; 9.3; 9.5; 8.9; 9.4; 10.0

### Sensitivity analysis highlights (selected)
- Publicly guaranteed external debt sensitivity (Table 3) shows baseline and alternative scenarios for:
  - PV of debt-to-GDP ratio (baseline 28.0 in 2021; various scenario outcomes shown through 2031).
  - PV of debt-to-exports ratio (baseline 127 in 2021; scenario ranges reported).
  - Debt service-to-exports and debt service-to-revenue ratios (baseline and scenario paths provided).
- Public debt sensitivity (Table 4) shows:
  - Baseline public debt at 46 in 2021, with alternative and bound tests projecting higher or lower trajectories depending on shocks (e.g., under B1 Real GDP growth, public debt rises to 72 by 2031 in that scenario).
  - TOTAL public debt benchmark used: 55 (across projection horizon).

### Policy implications and measures discussed
- Fiscal policy:
  - Mobilize more revenue to improve shock resilience.
  - Relaxed fiscal stance in 2020 to 5.6 percent (to accommodate COVID-related spending), compared to 2.3 percent pre-pandemic.
- Debt management:
  - Medium-term strategy to reduce refinancing and exchange rate risks, lengthen maturities, and balance external/domestic composition.
  - Default assumption in external DSA: additional financing needs under stress tests covered by PPG external MLT debt.
- Structural and market actions:
  - Deepen regional market access.
  - Continue critical structural reforms to lift productivity and growth.
- Crisis response:
  - Swift health and economic measures in response to COVID-19, including disbursement under the RCF and purchase under the RFI.
  - BCEAO measures to maintain liquidity and support credit flow; framework with banks to help affected firms facing loan repayment difficulties.
  - Vaccine roll-out via COVAX and government purchases.

*Source: IMF staff and country authorities, statement and debt sustainability analyses as presented in the provided content.*

### 4. Thanks to these decisive steps and an early reopening in mid-2020, growth was resilient,

### 4. Thanks to these decisive steps and an early reopening in mid-2020, growth was resilient,

### Economic performance and near-term outlook
- Real GDP growth expected to stand at 2 percent in 2020.
- Current account deficit expected to have widened to 3.5 percent of GDP in 2020, from 2.3 percent in 2019.
- Inflation pushed upward to 3.9 percent y-o-y at end-April (pandemic-related supply-chain disruptions and energy shortages cited); authorities expect shortages to dissipate and inflation to fall back to its normal path.
- Authorities forecast growth of 6.5 percent in 2021, and 7.7 percent on average over 2021-25, conditional on implementation of reforms under the National Development Plan (NDP 2021-25).

### Authorities’ assessment, risks, and policy stance
- Authorities share staff’s positive analysis while recognizing downside risks.
- Optimism stems from the broadly easing global pandemic trend and stepped-up vaccination campaigns locally and internationally.
- Authorities are committed to implementing far-reaching reforms to realize upside risks, guided by the NDP 2021-25.

### Post-Pandemic policy priorities
- Key near- to medium-term policy focuses:
  - Stepping up domestic revenue mobilization to finance infrastructure and social spending while ensuring debt sustainability.
  - Further strengthening the financial sector to support credit to the economy.
  - Bolstering structural reforms to further economic transformation.

### Stepping up domestic revenue mobilization
- Domestic revenue mobilization described as the "Achilles’ heel" despite past progress under IMF-supported programs.
- Past pre-pandemic achievements:
  - Adoption in March 2019 of an action plan to streamline tax expenditures over 2020–23.
  - Revision of the Investment Code in 2018 to prepare for gradually replacing investment incentives with moderate tax rates.
- Planned further actions:
  - Rationalizing tax expenditures, broadening the tax base, strengthening tax administration.
  - Reinforcing collection of property tax and incentivizing the transition of entrepreneurs from the informal to the formal sector.
  - Accelerating digitalization of the tax administration as the pandemic recedes.
- Fiscal targets and implications:
  - Increase tax-to-GDP ratio from 12.7 percent of GDP in 2021 to the WAEMU target of 20 percent of GDP (requires strong policy resolve).
  - Achieve the WAEMU fiscal deficit target of 3 percent of GDP at the latest by 2024, instead of 2023.
  - Meeting revenue objectives is important to lift vulnerabilities associated with the debt-service-to-revenue ratio and ensure debt sustainability.
  - Authorities committed to maintaining a prudent debt strategy, continuously improving debt management, and closely monitoring fiscal risks associated with State-owned enterprises (SOEs) and public-private partnerships (PPPs).
  - Combined efforts expected to help preserve the moderate risk of debt distress assessed by the DSA.

### Strengthening the financial sector
- Financial-sector resilience:
  - The sector weathered the pandemic well and is broadly sound, aided by strong supportive measures by the BCEAO.
  - Credit to the private sector increased by 8.7 percent y-o-y at end-March 2021.
  - Non-performing loans (NPLs) remained broadly flat at around 8½ percent y-o-y in March 2021.
- Supervisory stance:
  - Authorities closely monitor sector developments and stand ready to take further actions to maintain financial stability.
- Public banks restructuring:
  - Progress noted after overhauling management of Banque Nationale d’Investissement (BNI) and Banque Populaire: strengthened financial position due to entry of new shareholders, improved governance, and asset sales.
  - Similar efforts planned for Banque de l’Habitat de Côte d’Ivoire (BHCI).

### Addressing scarring and bolstering structural reforms
- Social and anti-scarring measures:
  - PSGouv social plan (started in 2019) accelerated in 2020 to mitigate lasting pandemic effects on vulnerable populations.
  - Actions targeted health and social protection, access to electricity and housing, basic services in rural areas, and facilitation measures for schools in remote areas.
  - Resources allocated to PSGouv cumulated to 3 percent of GDP over the two years.
- National Development Plan (NDP 2021−25):
  - Framework for ambitious structural reforms to further economic transformation and move Côte d’Ivoire towards middle-income status.
  - Six pillars of the draft plan:
    1. Acceleration of structural transformation through industrialization and development of industrial clusters.
    2. Human capital development and employment.
    3. Private sector development and investment.
    4. Strengthening inclusion, national solidarity and social action.
    5. Balanced regional development, environmental preservation, and fight against climate change.
    6. Strengthening governance, modernization of the State, and cultural transformation.
  - Expected outcomes:
    - Annual GDP growth of 7.7 percent on average over 2021-25.
    - Private investment to rise from 14.4 percent of GDP in 2021 to 22.7 percent in 2025.
  - Important reforms to complement the pillars:
    - Further improving the business climate, strengthening governance, supporting economic diversification.
    - Improving the judiciary system and enforcing contracts.
    - Reinforcing actions to improve governance and fight corruption.
    - Creating industrial parks and supplying infrastructure and utilities to attract manufacturing investors.
    - Promoting new sectors such as ICT and tourism and supporting young entrepreneurs.
    - Enhancing and better targeting investment in education to boost human capital and productivity.

### Conclusion and request
- Sound policymaking and past achievements in maintaining macroeconomic stability contributed to Côte d’Ivoire’s resilience before COVID-19.
- Swift policy response helped minimize the pandemic’s impact on growth.
- Authorities will continue to accelerate vaccination, avoid scarring, and bolster structural reforms to achieve broad-based and inclusive growth.
- Authorities request Executive Directors’ support for conclusion of the 2021 Article IV consultation with Côte d’Ivoire.

*From the provided IMF country report excerpt.*

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_Source: https://www.imf.org/-/media/files/publications/cr/2021/english/1civea2021001.pdf_