## 1civea2023001

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### Executive summary — context, objectives, and recent performance
- Authorities requested Fund support of 400 percent of quota (SDR 2,601.6 million) to meet pressing financing needs, preserve macroeconomic stability, and anchor the National Development Plan (NDP).
- Pre-pandemic dynamics and social indicators:
  - Real growth averaged close to 8 percent for the 8 years preceding the pandemic.
  - Inflation averaged under 2 percent over the same period.
  - Poverty declined from 44 to 39.5 percent from 2015 to 2018-2019.
  - Gini coefficient fell 3 percentage points over the same interval.
- Recent shocks and spillovers:
  - Triple shock: Covid-19 pandemic, adverse spillovers from the war in Ukraine, and rapid global monetary tightening.
  - Public debt stock rose to close to 57 percent of GDP in 2022 from around 51 percent in 2021.
  - Current account deficit widened to around 6.5 percent of GDP in 2022 from about 4 percent in 2021.
  - WAEMU regional reserves declined to about 4.1 months of imports in February 2023.

### Growth outlook and program baseline
- Authorities’ NDP target: average growth of over 7 percent for 2021–25.
- Authorities’ revised GDP projection: average of 7.1 percent for the next three years (MEFP ¶29).
- Fund-supported program baseline:
  - Near-term: growth forecast to slow to 6.2 percent in 2023.
  - Annual inflation expected to decrease to 3½ percent in 2023 and to decline to 2 percent in the medium term.
  - Current account deficit expected to decline to 5.7 percent of GDP in 2023.
  - Medium term: growth >6½ percent in 2024-25, converging to estimated long-term potential around 6 percent thereafter.
- Key macro projections (selected):
  - Real GDP growth (percent): 2020: 1.7; 2021: 7.0; 2022: 6.7; 2023: 6.2; 2024: 6.6; 2025: 6.4; 2026: 6.3.
  - Consumer price index (annual average): 2023: 3.7; 2024: 1.8; 2025: 1.7; 2026: 1.7.
  - Current account balance (percent of GDP): 2022: -6.5; 2023: -5.6; 2024: -4.7; 2025: -4.0; 2026: -3.4.

### Fiscal policy — diagnosis and consolidation strategy
- Tax performance and gap:
  - Average tax revenue about 12.4 percent of GDP since 2016 versus WAEMU target of 20 percent of GDP.
  - Indirect tax (VAT) average about 3 percent of GDP; large VAT gap estimated over 5 percent of GDP due to reduced/zero VAT rates and exemptions.
- Fiscal consolidation objective:
  - Return to WAEMU deficit target of 3 percent of GDP by 2025.
  - Fiscal consolidation of 3.8 percent of GDP over the program period composed of:
    - Tax revenue measures amounting to 2.9 percent of GDP.
    - Streamlining of expenditure around 1.2 percent of GDP.
  - Program includes a performance criterion (PC) floor on tax revenues.
- Crisis-era subsidies and expenditure adjustments:
  - Direct subsidies averaged around 1.4 percent of GDP over 2021-22 (versus around 0.4 percent over 2016-19).
  - Implicit indirect fuel subsidy in 2022 alone estimated around 0.9 percent of GDP.
  - Subsidies and transfers rose to 1.8 percent of GDP in 2022; expected to fall by 0.5 percent of GDP to 1.3 percent of GDP in 2023.
  - Security spending averaged around 0.5 percent of GDP between 2020 and 2022.
- Revenue package in 2023 — expected yields (percent of GDP):
  - Taxes on petrol products: 0.72 (authorities increased gasoline price and reinstated automatic pricing mechanism).
  - Cacao registration fee increase: 0.05 (from 3 to 4 percent).
  - Rationalizing certain tax exemptions: 0.01.
  - VAT on non-essential food items (luxury rice, 18 percent): 0.01.
  - Coverage of Telecom services VAT: 0.05.
  - Other tax administration measures: 0.20.
  - Total upfront package: 1.05.
  - Additional ongoing tax administration gains expected: 0.2 percent of GDP.

### Medium-term revenue mobilization and fiscal reporting improvements
- MTRS commitment:
  - Following front-loaded Year 1 increases, sustain increases of about 0.5 percent of GDP per year until 2026 to deliver a 3-percentage point increase relative to the 2016–2022 average.
  - MTRS to focus on reducing tax exemptions, broadening VAT base, and simplifying tax system.
- Fiscal accounts coverage and recording:
  - Incorporate off-budget earmarked revenues collected by public enterprises (e.g., SIR).
  - Retroactive inclusion of Perequation Produit expected to increase recorded tax revenue by 0.3 percent of GDP in the TOFE.
  - Inclusion of taxes collected in relation to donor externally financed projects expected to retroactively increase recorded tax revenue by 0.3 percent of GDP.

### Public Financial Management (PFM) and safeguards
- Key PFM measures and structural benchmarks:
  - Integrate public enterprises into consolidated public sector accounts in line with GFSM 2014 and PSDSG 2011 by end-2025.
  - Publish procurement contracts, beneficial owners, related audits, and increase use of e-procurement (Structural Benchmark, December 2023).
  - Adopt timetable to close commercial bank accounts in favor of the Treasury Single Account (Structural Benchmark, December 2023).
  - Modernize IT for public investment (SINAPSE) and implement PIMA recommendations to strengthen investment efficiency.
- BCEAO safeguards:
  - BCEAO implemented all recommendations from the 2018 safeguards assessment; an update assessment is in progress.

### Debt management, sustainability assessment, and institutional reforms
- Risk classification and DSA findings:
  - Overall and external debt distress risks assessed as "moderate" (2023 joint World Bank IMF DSA).
  - Public debt stock around 57–58 percent of GDP in 2022 (close to 57 percent reported; central government debt gross 2022: 56.8 percent of GDP).
  - Debt service indicators projected to peak in 2024 with temporary breaches of thresholds (external debt service-to-revenue breaches in 2024 and 2025).
- Debt management commitments:
  - Favor concessional borrowing to keep PV of new borrowing compatible with moderate risk, i.e., below $4,650 million for 2023 (MEFP, Table 1).
  - Not accumulate arrears (continuous PC for central government and IT for public entities).
- Institutional/legal reforms:
  - New debt department (Direction générale des financements, DGF) created March 2023.
  - New law on public debt policies to be adopted by Council of Ministers (Structural Benchmark September 2023) to define objectives, prudential rules, and on-lending procedures.
- Selected DSA indicators (highlights):
  - PV of external debt-to-GDP: 30.5 percent in 2023, decreasing over the projection period.
  - Central government debt, gross (percent of GDP): 2022: 56.8; 2023: 58.1; 2024: 58.4; 2025: 57.5; 2026: 56.8.
  - Debt service vulnerabilities: debt service-to-revenue spikes in 2024–25 (noted as breaching thresholds twice).

### External sector, reserves, and external financing needs
- External position assessment:
  - External position in 2022 moderately weaker than implied by fundamentals and desirable policies (Annex I).
  - NIIP estimated at -46 percent of GDP in 2022 (Gross Assets: 29; Gross Liabilities: 75; Debt Liabilities: 21; Debt Assets: 5).
- Current account and trade:
  - Current account deficit: 2022 estimated -6.5 percent of GDP (cyclically adjusted CA -6.6 percent of GDP; CA model gap -1.5 percent of GDP).
  - Merchandise trade surplus fell to about 2.2 percent of GDP in 2022 from 4.2 percent in 2021.
- Reserves and WAEMU context:
  - Regional WAEMU reserves declined to about 4.5 months of import cover by end-2022; adequacy range estimated 4.5 to 6.4 months (ARA metric).
  - Fund and development partner credit expected to lift regional reserve coverage by almost 10 percent (0.4 month of imports).
- Projected financing gap and composition (2023-26 cumulative, in Billions of CFA francs):
  - A. External Financing Requirements: 17,343
  - Current account deficit excl. official transfers: 10,483
  - Official sector amortization + net acquisition of fin assets: 5,898
  - Change in official reserves (excl. IMF; + = increase): 62
  - B. External Financing Sources: 13,482
  - Project financing: 4,849
  - Government gross borrowing from private sector: 1,478 (of which Eurobonds: 850)
  - C. Financing Gap (= A - B): 3,861
  - D. Expected Budget Financing From Official Sector: 1,680
  - E. Residual Financing Gap: 2,181
  - IMF ECF Financing (cumulative): 727
  - IMF EFF Financing (cumulative): 1,454
  - Memorandum: Change in official reserves incl. IMF financing: 3,143
  - Nominal GDP (2026): 65,568
- Eurobond issuance expectations:
  - CFA 850 billion in eurobonds projected to be issued over 2024-26, accounting for over 20 percent of the financing gap.

### Program financing, access, modality, and disbursement schedule
- Proposed IMF access: 400 percent of quota (SDR 2,601.6 million) blended:
  - ECF: 133 percent of quota (SDR 867.2 million).
  - EFF: 267 percent of quota (SDR 1,734.4 million).
- Arrangement length: 40-month ECF/EFF.
- Review and tranche schedule (selected):
  - May 24, 2023 — Executive Board approval: 371.657 million SDR (57.143 percent of quota) disbursed (ECF: 123.886; EFF: 247.771).
  - Subsequent semi-annual disbursements of 371.657 million SDR (57.143 percent of quota) subject to observance of PCs and reviews through May 15, 2026.
  - Program total: 2,601.6 millions of SDRs (400.0 percent of quota); Côte d’Ivoire's quota: SDR 650.40 million.

### Program conditionality, monitoring, and reporting
- Monitoring framework:
  - Semi-annual reviews via quantitative performance criteria (PCs), indicative targets (ITs), and structural benchmarks (SBs) (MEFP, Tables 1 and 2).
  - PCs include: overall fiscal balance (floor), net domestic financing (ceiling), PV of new external debt (ceiling), government tax revenue (floor), and non-accumulation of arrears (zero ceilings).
  - ITs include: targeted social spending (floor), expenditures by treasury advance (ceiling), net reduction of amounts payable (floor), and basic primary balance (floor).
- Reporting timetable and data requirements:
  - Quarterly assessment report provided no later than 45 days following the end of each quarter.
  - Detailed monthly and quarterly transmission deadlines for TOFE, debt statements, banking surveys, and other sectoral data (Table 5).
- TMU definitions and adjustors (selected):
  - PV of new external debt discounted at program discount rate of 5 percent.
  - Currency conversion rates for program purposes: 619.481 FCFA per U.S. dollar; 1.059 U.S. dollar per euro; 1.329 U.S. dollar per SDR.
  - NDF ceiling includes a margin of CFAF 15 billion above the net cumulative flow projected for each quarter.

### Social protection, cash transfers, and human capital
- Cash transfer program (PTMP) — current and expansion:
  - Quarterly targeted cash transfers to 227,000 households (about 14 percent of the country’s poor households).
  - Beneficiaries receive quarterly transfers of CFAF 36,000 via mobile money.
  - World Bank support to expand PTMP by an additional 100,000 households per year over next three years; expansion cost US$163.5 million (about 0.2 percent of GDP) over 2022–2026, with US$22.5 million in the first year.
  - Shock response component and capacity-building to ensure targeted support when oil prices spike or shocks occur.
- Universal Health Coverage (UHC) targets:
  - Enrollment target: 8.2 million by end-2023; 60 percent of population (20.7 million) by 2027.
  - Collection rate targets for private sector employee contributions: 42 percent (2022 baseline) → 70 percent (2023 target) → 85 percent (2027 target).
  - Enrolled informal sector collection target: 1 percent (2022 baseline) → 38.3 percent (2027 target).

### Structural reforms, governance, and private-sector development
- Program pillars for inclusive private-sector-led growth:
  - Improve business climate, governance, AML/CFT measures, financial inclusion, and human capital investment.
  - 2023 designated the year of the youth, supported by PJGouv to accelerate professional training, youth labor market integration, and entrepreneurship.
- SOE transparency and energy sector actions:
  - Enforce performance contracts, independent board assessments, and audits for SOEs.
  - CI-Energies: investment program to 2040, periodic tariff adjustments, and arrears clearance plan for IPPs and gas suppliers.
- Governance and anti-corruption:
  - Finalize National Strategy for the Fight against Corruption (SNLC) 2023-27.
  - Operationalize SPACIA established in 2022.
  - Improve asset-declaration compliance from 79.2 percent (August 2020) to 90 percent in 2024.
  - Implement AML/CFT supervisory regime for select DNFBPs enacted March 2022 and priority AML/CFT reforms.

### Climate change, agriculture, and resilience
- Climate vulnerabilities and impacts:
  - Forest cover fell from 37 percent (1960) → 14 percent (2010) → 8 percent (2019).
  - Between 2010 and 2022, 11 percent of land degraded following deforestation.
  - Agriculture employs more than two-thirds of the workforce and contributes about 28 percent of GDP; cocoa accounts for 58 percent of export revenue.
  - Average temperature increase between 1970 and 2021: 0.5°C–0.8°C; average 5-year temperature rose from 26.29°C (1970) to 27.22°C (2021), an increase of 0.93°C.
- Policy responses and programs:
  - Launch of the Abidjan Legacy Programme (May 2022) to strengthen climate resilience.
  - World Bank CCDR expected June 2023; Fund TA on C-PIMA and Green PFM to feed into an RST financing request.
  - Authorities committed to reduce CO2 emissions from 0.41 (2019) to 0.37 metric ton per capita by 2025.

### Capacity development, technical assistance, and risks
- TA priorities (FY 2024 and FY 2024/25 where noted):
  - Tax policy diagnostics, tax expenditure socio-impact assessment, TPU capacity building.
  - Tax arrears recovery plan and MTRS action plan development.
  - Customs surveillance, AI in pre-clearance control, petroleum product controls.
  - C-PIMA and green PFM, SOE fiscal risk tools, GFS and BOP statistics improvements, AML/CFT legal assistance.
- Program risks and capacity to repay:
  - Risks tilted to the downside: global spillovers from the war in Ukraine, regional security risks, and potential election-related risks (presidential election scheduled for 2025).
  - Fund credit outstanding projected to rise from 3.5 percent of GDP to 4.3 percent of GDP at its peak in 2025.
  - Outstanding Fund credit (millions of SDRs): 2023: 2,048.8; 2024: 2,432.0; 2025: 2,893.4; 2026: 3,071.7; peak outstanding in projections then declining through 2032.

*Source: Executive Summary and selected sections, 1civea2023001 (IMF).*

### EXECUTIVE SUMMARY

### EXECUTIVE SUMMARY

### Context and strategic objective
- Authorities requested Fund support of 400 percent of quota (SDR 2,601.6 million) for an economic program to meet pressing financing needs, preserve macroeconomic stability, and anchor the National Development Plan (NDP) in key structural reforms to support Côte d’Ivoire’s transformation towards upper-middle income status.
- Recent performance and structural constraints:
  - Real growth averaged close to 8 percent for the 8 years preceding the pandemic.
  - Inflation averaged under 2 percent over the same period.
  - Poverty declined from 44 to 39.5 percent from 2015 to 2018-2019.
  - Gini coefficient fell 3 percentage points over the same interval.
  - Persistent weaknesses remain in education outcomes, health (including life expectancy), and domestic revenue mobilization, constraining fiscal space for social spending and infrastructure investment.
- Recent shocks and spillovers:
  - Triple shock from the Covid-19 pandemic, adverse spillovers from the war in Ukraine, and rapid global monetary tightening widened macroeconomic imbalances and raised financing needs.
  - Côte d’Ivoire maintained global market access during the pandemic but shifted to domestic and regional issuances and external commercial loans as global conditions tightened; the planned Eurobond issuance for 2022 was abandoned.
- Socio-political and humanitarian context:
  - Political environment described as peaceful ahead of regional and municipal elections scheduled for early September 2023.
  - Refugee flows surged to over 13,700 in early 2023, more than doubling totals for 2021–2022, adding pressure on local communities.

### Main policy commitments under the program
- Fiscal and debt sustainability:
  - Near-term strategy focuses on revenue-based fiscal consolidation with strong commitments to reach the WAEMU deficit target of 3 percent by 2025 and to maintain a moderate risk of debt distress rating.
  - Program financing is expected to help boost regional international reserves.
- Domestic revenue mobilization:
  - Significantly improving revenue mobilization is central to near-term objectives and to create fiscal space for transformation.
  - Strong upfront revenue measures will be sustained by developing, publishing, and implementing a comprehensive medium-term revenue mobilization strategy (MTRS).
- Spending efficiency and social protection:
  - Authorities have begun rolling back crisis-era spending, especially blanket food and fuel subsidies, while supporting the most vulnerable through targeted cash transfers.
  - Critical social spending in education and health will be protected under the program.
  - A set of public financial management reforms will continue to enhance returns from recent tax administration reforms.
- Structural reforms:
  - Commitments to reforms aimed at improving the business climate, increasing private sector investment and financial inclusion, strengthening governance, and investing in human capital development, especially among youth and women.
  - Authorities committed to strengthening resilience to climate change as complementary to the ECF/EFF supported development agenda.

### Recent economic developments and risks
- Growth and inflation:
  - Real growth rebounded to around 7 percent in 2021 from 1.7 percent in 2020; growth softened to an estimated 6.7 percent in 2022.
  - Inflation rose to 5.1 percent (y/y) by end-2022, driven mainly by higher international oil, food, and fertilizer prices.
- Fiscal developments:
  - The 2022 fiscal deficit is estimated at 6.8 percent of GDP, up from 4.9 percent of GDP in 2021 and about 2 percentage points of GDP worse than initially budgeted, driven by higher security spending, revenue forgone to curb petroleum-related price pressures, and subsidies related to Russia’s war in Ukraine.
- Debt and external sector:
  - Public debt stock reached close to 57 percent of GDP in 2022 from around 51 percent of GDP in 2021.
  - Debt service increased sharply due to higher interest payments, shorter maturities from non-concessional borrowing, tightening market conditions, and exchange rate depreciation versus the US dollar; debt sustainability risks worsened though no external arrears were reported.
  - Current account deficit widened to around 6.5 percent of GDP in 2022 from about 4 percent in 2021.
  - WAEMU regional reserves declined to about 4.1 months of imports in February 2023.
- Financial sector indicators:
  - Nonperforming loans: 8.4 percent (December 2019) → 9.7 percent (June 2021) → 8.8 percent (June 2022).
  - Tier 1 capital to risk-weighted assets ratio: 9.7 percent (end-2019) → 12.4 percent (end-June 2022).
  - Net credit to the private sector growth slowed from 12.6 percent in 2021 to 7.3 percent in 2022; SMEs continue to face financing constraints.
  - Net bank claims on the central government increased sharply in 2020–2022 as the government used the domestic banking system to finance budget deficits.
  - BCEAO policy interest rate was increased to 3 percent in March 2023, tightening monetary stance and curbing demand for newly issued sovereign securities across the WAEMU region.
- External position assessment:
  - The external sector assessment indicates Côte d’Ivoire’s external position in 2022 was moderately weaker than implied by fundamentals and desirable policies (Annex I).

### Program design elements and safeguards
- Program aims to anchor fiscal consolidation on revenue measures while protecting priority social and investment spending and supporting targeted cash transfers.
- Public financial management reforms and continued tax administration improvements are integral to sustaining higher revenue mobilization.
- Structural reform agenda and climate resilience measures are included to support inclusive, private sector–led growth and to advance human capital development.

*Source: Executive Summary, 1civea2023001 - EXECUTIVE SUMMARY (IMF).*

### 7.      The authorities’ revised projections under the NDP target an average growth of over

### 7.      The authorities’ revised projections under the NDP target an average growth of over

### Growth outlook and baseline for Fund-supported program
- Authorities’ revised NDP projections target an average growth of over 7 percent for 2021–25.
- Authorities slightly revised downwards GDP projections to an average of 7.1 percent for the next three years, fueled by continued robust investment and reforms to support the private sector (MEFP ¶29).
- Fund-supported program baseline:
  - Reflects the NDP’s objectives and policies but incorporates greater near-term uncertainty and persistence in structural bottlenecks over the medium-term.
- Near-term outlook:
  - Growth is forecasted to slow to 6.2 percent in 2023 mainly due to an unfavorable external environment, including weakening demand from advanced economies, and, to a lesser extent, planned fiscal consolidation.
  - Annual inflation is expected to decrease to 3½ percent in line with easing global food and commodity price pressures, as well as BCEAO’s monetary tightening.
  - Current account deficit is expected to decline to 5.7 percent of GDP as terms of trade are expected to improve.
- Medium-term outlook:
  - After an average of more than 6½ percent in 2024-25, reflecting a rebound as the current adverse global environment improves, growth is expected to converge to its estimated long-term potential around 6 percent.
  - Staff projections assume capital deepening remains a strong driver of economic growth, fueled in large part by private investment.
  - TFP growth would recover from the pandemic on continued improvements in health and education.
  - Inflation would continue to decline to 2 percent.

### Risks and upside considerations
- Risks are tilted to the downside.
  - Global risks: Uncertainty surrounding the war in Ukraine with adverse spillovers of a potential escalation on growth, terms of trade, inflation, financing conditions and prospects for a return to international financial markets.
  - Country-specific near-term risks: Instability in the northern part of the country linked to terrorist activities in neighboring countries; authorities emphasize ensuring living conditions and delivery of services in affected areas.
- Medium-term upside: Discovery of important oil and gas reserves could provide an additional boost to growth prospects (Annex II).

### ECF/EFF objectives and policies for 2023–26
- Program aims to ensure macroeconomic stability in the near-term and lay the foundation for deeper economic transformation towards upper middle-income status over the medium term.
- Authorities are committed to anchoring debt sustainability at a moderate risk of debt distress rating and to meet the WAEMU fiscal deficit target while protecting social and infrastructure spending.
- Significant progress in domestic revenue mobilization, starting with strong upfront measures, is central to meeting key program commitments.
- Revenue mobilization is expected to become more self-sustaining through a comprehensive medium-term revenue strategy.
- Key structural reforms to promote private sector-led and inclusive growth will focus on:
  - Improving business climate.
  - Strengthening governance and AML/CFT measures.
  - Increasing financial inclusion.
  - Investing in human capital.
- Strengthening resilience to climate change will complement the development agenda.
- Fund financial support will help Côte d’Ivoire raise its contribution to the regional international reserves pool.

### Fiscal policy: diagnosis and strategy
- Tax performance:
  - At an average of about 12.4 percent of GDP since 2016, tax revenue falls significantly short of the WAEMU target of 20 percent of GDP.
  - Largest gap relative to peers is in indirect tax revenue: at an average of three percent of GDP, Côte d’Ivoire’s VAT collection is only about half of that of other frontier market economies due to a narrow base.
  - Gap in direct tax revenue significant: personal income tax regime is complex and regressive; business profit tax weakened by numerous tax exemptions, generous investment code, and informality.
  - Progress in tax administration noted, notably through digitalization, though scope remains for further reforms including management of tax arrears.
- Fiscal strategy under the program centers on revenue-based fiscal consolidation:
  - Authorities committed to returning to the WAEMU fiscal deficit target of 3 percent of GDP by 2025.
  - Revenue-based fiscal consolidation aims to protect high-priority social expenditures and investment spending along with critical security spending.
  - Indicative target designed to safeguard selected social budget lines including youth employment programs, social protection, health and education spending.
  - Fiscal consolidation of 3.8 percent of GDP over the period of the program will consist of:
    - Tax revenue measures amounting to 2.9 percent of GDP.
    - Streamlining of expenditure of around 1.2 percent of GDP.
  - Program includes a performance criterion on a floor on tax revenues.

### Subsidies, security spending, and expenditure adjustments
- Crisis-era direct and indirect subsidies:
  - Direct subsidies averaged around 1.4 percent of GDP over 2021-22, compared to around 0.4 percent of GDP over 2016-19.
  - Indirect fuel subsidies (foregone revenue to keep fuel pump prices stable) resulted in an implicit subsidy of around 0.9 percent of GDP in 2022 alone (Box 1).
- Authorities’ actions:
  - Increased gasoline prices in early 2023 and reinstated the fuel price mechanism, allowing implicit blanket fuel subsidies to unwind and resuming revenue collection from petrol products.
  - If oil prices spike, authorities can leverage existing cash transfers system to provide targeted support to the most vulnerable (Annex IV).
  - Unwinding COVID-era spending and streamlining the state budget to reduce non-priority current expenditure; this will help make room for additional security outlays, which averaged around 0.5 percent of GDP between 2020 and 2022.
- Subsidies and transfers:
  - Subsidies and transfers during 2022 rose to 1.8 percent of GDP, mainly due to the policy response to the war in Ukraine.
  - In 2023 subsidies and transfers will be reduced by 0.5 percent of GDP to 1.3 percent of GDP.
  - A further reduction in current expenditure of about 0.5 percent of GDP will be realized from winding down costs associated with Plan de riposte sanitaire et dépenses sur dons privés.

### Revenue measures in 2023 — expected fiscal yields
- A package of upfront policy measures in 2023 will boost tax revenue by about 1.1 percent of GDP.
  - Revenue gains driven by tax policy measures amounting to 0.9 percent of GDP, of which 0.7 percent of GDP is due to resuming tax revenue collection on petrol related products.
  - Measures and yields (percent of GDP):
    - Taxes on petrol products: 0.72
      - Authorities increased price of gasoline and reinstated the automatic pricing mechanism
    - Cacao registration: 0.05
      - Cacao registration fee increased from 3 to 4 percent
    - Rationalizing certain tax exemption: 0.01
      - Enforcement of expiring tax exemptions
    - VAT on non-essential food items: 0.01
      - Introduction of an 18 percent VAT on luxury rice
    - Coverage of Telecom services VAT: 0.05
      - Enforcement of existing VAT on telecom providers through measures to broaden the amount of transactions taxed
    - Other Tax administration measures: 0.20
      - Realization of higher tax revenue from ongoing digitalization, application of risk controls and measures to capture fraud and broaden the tax base.
    - Total: 1.05
  - Additional gains from ongoing tax administration reforms (digitalization, land taxation, enhanced risk and fraud controls, taxpayer census) expected to yield another 0.2 percent of GDP (noted earlier), contributing to the total package.
- The package balances revenue needs with political economy constraints and aims to maintain sufficient public support.

### Box 1 — Fuel subsidies (summary of findings and policy stance)
- Historical mechanism:
  - Fuel pricing mechanism has kept retail prices stable but implied higher tax revenue volatility.
  - With dramatically higher oil prices in 2022, stabilizing pump prices required sizeable subsidies estimated at about 1.6 percent of GDP, of which about half was foregone tax revenue.
  - Cumulative 2022 increases in gasoline and diesel pump prices were kept at just around 25 and 6 percent, respectively.
- Staff estimates:
  - Earlier increases in prices at the pump during 2022, which would have been reversed as oil prices fell, would have allowed for lower foregone revenues by 0.4 percent of GDP.
- Policy actions:
  - Authorities reinstated the automatic fuel pricing mechanism, including the taxable base, effectively instituting a floor for tax revenue on petrol products and allowing scope for recouping part of the foregone revenue during 2023.
  - Authorities committed to applying the fuel pricing mechanism as designed, with a maximum of 40 CFAF increases per month if international oil prices were to increase by 2.5 percent or more in the previous 3 months.
  - Going forward, authorities will limit blanket subsidies and leverage the cash transfers mechanism, which currently can reach 200 thousand households and is expected (with support from the World Bank) to reach an additional 300 thousand households (Annex V).

### Medium-term revenue mobilization strategy (MTRS)
- Following front-loaded revenue increases in Year 1, authorities committed to sustaining further increases of about 0.5 percent of GDP per year until 2026, resulting in a 3-percentage point increase relative to the average between 2016 and 2022.
- Achieving the goal hinges on tax policy reforms to broaden the tax base, including reducing wide-ranging tax exemptions and tax expenditures.
- VAT gaps and exemptions:
  - Reduced and zero VAT rates prevalent in agriculture, manufacturing and industry, as well as services, result in a gap in VAT tax collection by some estimate of over 5 percent of GDP.
- IMF technical assistance will support development, publication and implementation of a comprehensive MTRS to broaden the tax base, create a simpler, more transparent and equitable tax system, and improve taxpayer morale.

### Fiscal accounts coverage and recording improvements
- Ongoing efforts to broaden fiscal accounts and include off-budget government revenue:
  - Authorities working to incorporate off-budget earmarked revenues collected by public enterprises such as the refinery (Société ivoirienne de raffinage) into the budget.
  - Retroactive inclusion of the Perequation Produit is expected to increase tax revenue collection recorded in the TOFE by 0.3 percent of GDP.
  - Following a WAEMU council directive and consistent with GFSM 2014, authorities will begin including taxes paid for and collected by the state in relation to donor externally financed projects, expected to retroactively increase tax revenue to GDP recorded in the TOFE by 0.3 percent of GDP.
  - These enhancements improve transparency but the resulting increase in the recorded ratio of tax revenue to GDP is not considered a revenue mobilization effort under the program.

### Public Financial Management (PFM) strengthening measures
- Key measures envisaged under the program:
  - Enhancing fiscal control and transparency:
    - Integrate public enterprises into consolidated public sector accounts in line with GFSM 2014 and PSDSG 2011 by end-2025, with a view to adhere to the Fund’s Special Data Dissemination Standards (SDDS).
    - Systematically publish data on procurement contracts, beneficial owners, related audits, and increase utilization of the e-procurement module (Structural Benchmark, December 2023).
  - Strengthening investment efficiency:
    - Implement PIMA recommendations: strengthen coordination between central government and territorial collectivities, PPP management, coherence between current and capital spending, and asset reporting.
    - Modernize IT system for public investment (SINAPSE) to aid project monitoring.
  - Finalizing full operability of the Treasury Single Account:
    - Adopt timetable for closing commercial bank accounts in favor of consolidating all transactions and accounts within the Treasury Single Account (Structural Benchmark, December 2023).

*Source: Ivorian authorities and IMF staff calculations, extracted from the provided IMF content.*

### 18.      The authorities are committed to further improvements in debt management thus

### 1civea2023001 - 18.      The authorities are committed to further improvements in debt management thus

### Debt management and debt sustainability
- Risks of overall and external debt distress are assessed as "moderate" (2023 joint World Bank IMF DSA).
- Deterioration in debt burden metrics is mitigated by:
  - strong track record of market access;
  - sustained active debt management;
  - continued improvement in the quality of policies and institutional framework.
- Authorities will:
  - actively manage portfolio liabilities, including liabilities management operations;
  - favor concessional borrowing to keep the PV of new borrowing compatible with a moderate risk of debt distress, i.e., below $4,650 million for 2023 (MEFP, Table 1);
  - not accumulate arrears (continuous PC for the central government and IT for public entities).

### Institutional and legal reforms for debt management
- New debt department (Direction générale des financements, DGF) created in March 2023 to:
  - optimize mobilization and management of financing resources;
  - ensure technical coordination of donors’ financed projects with co-financing;
  - provide central oversight of the design and implementation of the medium-term debt management strategy (MTDS), public debt data and analysis;
  - develop new financing strategies and instruments.
- New law on public debt policies (Adoption by the Council of Ministers, Structural Benchmark September 2023) will:
  - define general objectives for public debt and prudential rules;
  - establish public debt commitment procedures;
  - rationalize the framework for debt operation and debt management;
  - clarify rules and purposes for government on-lending;
  - strengthen the institutional framework for public debt management.

### Inclusive and private-sector-led growth (policy focus under Fund-supported program)
- Program policy pillars: (i) improving the business environment; (ii) safeguarding financial stability and promoting financial inclusion; (iii) strengthening monitoring and transparency of public enterprises; (iv) improving governance and fighting corruption (MEFP, ¶¶57-61).
- 2023 designated the year of the youth, supported by the PJGouv to accelerate professional training, youth labor market integration, and youth entrepreneurship.

Key measures to improve the business environment
- Make the tax system more efficient, transparent and equitable within the planned MTRS.
- PFM reforms to strengthen public sector accountability, notably through systematic use of e-Procurement.
- Reduce cost of doing business via:
  - digitalization of administration;
  - overhaul of the Single Investor Services Portal (PUSI);
  - simplification of procedures for business formalities for SMEs.
- Promote industrial clusters and agri-poles, support entrepreneurship, and encourage resilient SMEs and start-ups.

Financial stability and inclusion
- Complete restructuring of two public banks (note: "These banks entail no systemic risk for the banking system or significant fiscal risks.").
- Accelerate implementation of the Financial Sector Development Plan (PDESFI) to deepen financial markets and promote financial inclusion.
- Enhance land registry and land tenure rights to improve SME access to bank financing.
- Mid-term review of the National Financial Inclusion Strategy (SNIF 2019-2024) to account for NDP priorities, particularly access to financial services for women (Structural Benchmark, May 2024).

Strengthening SOE transparency and accountability
- Enforce performance contracts, independently assess SOE boards, and conduct audits.
- Improve financial health of SOEs, notably CI-Energies, through:
  - investment program for 2040 to boost and diversify production;
  - periodic tariff adjustments to ensure cost recovery;
  - a clearance plan for arrears due to Independent Power Producers (IPPs) and gas suppliers.
- Note: Financial performance at CI-Energies deteriorated due to recourse in Q4 2021 to more expensive heavy vacuum oil (HVO) and accumulation of payment arrears by Energies du Mali (EDM).

Governance and anti-corruption measures
- Finalize National Strategy for the Fight against Corruption (SNLC) 2023-27 for Council of Ministers adoption.
- Operationalize SPACIA (System for the Detection and Prevention of Acts of Corruption and Similar Offenses), established in 2022.
- Strengthen HABG, PPEF, and AJT.
- Improve compliance with constitutional asset-declaration requirement for top-level officials from 79.2 percent in August 2020 to 90 percent in 2024.
- Implement recommendations from Côte d'Ivoire's 2019 EITI evaluation.
- AML/CFT: implement supervisory regime for select DNFBPs enacted March 2022; adopt priority AML/CFT assessment reforms, designate supervision authorities for other key nonfinancial sectors, implement UN targeted financial sanctions, improve legal-entity transparency per revised FATF standards, and update National Risk Assessment and National AML/CFT Strategy.

### Climate change
- Côte d’Ivoire is vulnerable to climate change, especially via deforestation and coastal exposure (Annex V).
- May 2022: launch of the Abidjan Legacy Programme to strengthen climate resilience.
- Measures taken to enhance export traceability in line with EU legislation to reduce deforestation.
- Country Climate and Development Report (CCDR) prepared by the World Bank expected for June 2023; Fund TA on C-PIMA and Green PFM will feed into an RST financing request.

### Financing and program modalities
- Proposed IMF access: 400 percent of quota to address substantial, protracted and structural BOP financing needs and support policy commitments.
  - Under blending rules: 133 percent of quota (or SDR 867.2 million) under the ECF; 267 percent of quota (or SDR 1,734.4 million) under the EFF. All disbursements for budget support.
- Regional reserve impact: Fund and development partner credit would lift regional reserve coverage by almost 10 percent (0.4 month of imports).
- Projected cumulative financing gap over 2023-26: about CFAF 3.7 trillion (or 6.3 percent of GDP).
  - Expected coverage from budget support and multilateral partners:
    - Bilateral creditors: about CFA 1,064 billion;
    - World Bank: about CFAF 435 billion;
    - AfDB: CFAF 119 billion;
    - Other multilateral creditors and project financing.
- Gross Fund financing would cover over half of the gap over 2023-26 (about a quarter when including project financing).
- New net Fund financing would account for about a third of the financing gap before repayments.
- Catalytic expectations:
  - CFA 850 billion in eurobonds projected to be issued over 2024-26, accounting for over 20 percent of the financing gap and reducing the Fund’s net share to less than 30 percent of a counterfactual financing gap excluding the bond issuance.
- Selected table aggregates (2023-26, cumulative):
  - A. External Financing Requirements: 17,343 (Billions of CFA francs)
  - Current account deficit excl. official transfers: 10,483
  - Official sector amortization + net acquisition of fin assets: 5,898
  - Change in official reserves (excl. IMF; + = increase): 62
  - B. External Financing Sources: 13,482
  - Project financing: 4,849
  - Government gross borrowing from private sector: 1,478 (of which: Eurobonds: 850)
  - C. Financing Gap (= A - B): 3,861
  - D. Expected Budget Financing from Official Sector: 1,680
  - E. Residual Financing Gap: 2,181
  - IMF ECF Financing (cumulative): 727
  - IMF EFF Financing (cumulative): 1,454
  - Memorandum: Change in official reserves incl. IMF financing: 3,143
  - Nominal GDP (2026): 65,568
  - (Projections 2023-26 presented in table format in source.)

### Program risks, capacity to repay, and conditionality
- Program implementation risks described as manageable given satisfactory record of previous programs (2016-20 and 2012–15) and strong commitment to program objectives.
- Downside risks: economic growth setbacks, deterioration in the global economic environment, and potential election-related risks (presidential election scheduled for 2025).
- Even disbursement schedule intended to mitigate implementation risks.
- Capacity to repay:
  - Fund credit outstanding projected to rise from 3.5 percent of GDP to 4.3 percent of GDP at its peak in 2025 (above the 75th percentile of PRGT comparator countries).
  - Debt service indicators (exports and government revenue) projected to peak in 2024 at levels above the 75th percentile for comparators.
- Program conditionality and monitoring:
  - Semi-annual reviews via quantitative performance criteria (PCs), indicative targets (ITs), and structural benchmarks (SBs) (MEFP, Tables 1 and 2).
  - PCs: overall fiscal balance, net domestic financing, present value of new external debt, government tax revenue, and non-accumulation of arrears.
  - ITs: targeted social spending, non-accumulation of new arrears by public entities, spending by the treasury advances, reduction of amounts payable, and basic primary balance.
  - PCs and ITs defined in the TMU.
- Safeguards: BCEAO implemented all recommendations from the 2018 safeguards assessment; an update assessment is in progress.

### Capacity development and technical assistance
- Substantial Fund TA required to implement the program.
- Strong donor coordination essential for effective TA and capacity building in:
  - tax policy and tax administration;
  - PFM;
  - AML/CFT;
  - debt management;
  - statistics;
  - climate change (Annex VI).

### Staff appraisal and macroeconomic outlook
- Global shocks strained public finances and regional reserves; pandemic resilience followed by subsequent shocks that widened fiscal deficits (subsidies, security spending) and current account deficits.
- Despite shocks, growth outlook:
  - 2023 growth forecast: 6.2 percent;
  - Inflation expected to moderate further.
- Medium-term prospects: growth should reach potential with steadfast NDP reforms and improvements in health and education supporting recovery of TFP to pre-crisis levels.
- Discovery of important oil and gas reserves could provide additional medium-term growth boost.
- Fiscal strategy highlights:
  - High-quality permanent revenue measures to reduce debt sustainability risks and support WAEMU deficit target convergence.
  - Revenue floor PCs reflect ambitious fiscal consolidation; two thirds of consolidation in first year driven by tax revenue increases.
  - Reinstating petroleum pricing mechanism in early 2023 to remove future budgetary risks from indirect fuel subsidies.
- Medium-term revenue strategy (MTRS) objective:
  - Achieve sustained tax revenue increases of 0.5 percent of GDP per year until 2026, underpinned by development, publication, and implementation of MTRS.
  - MTRS to focus on reducing tax exemptions (particularly for VAT) and wasteful tax expenditures, broadening the tax base, and creating a simpler, more transparent and equitable tax system.
  - Successful implementation expected to finance investment and social spending needs and facilitate reaching upper-middle income status by 2030.
- Public finance transparency and management:
  - Include off-budget earmarked revenue collection facilitated through SOEs;
  - More complete coverage of public debt to develop comprehensive fiscal accounts in line with GFSM 2014 and pave way for SDDS adoption;
  - Enhance PFM to boost transparency, accountability, spending and investment efficiency, and minimize budgetary risks.

*Source: IMF staff report content provided in the supplied PDF excerpt.*

### 39.      The authorities’ focus on improving debt management will further safeguard debt

### 39.      The authorities’ focus on improving debt management will further safeguard debt

### Debt sustainability and debt management
- With debt reaching around 57 percent in 2022 and debt servicing costs rising, maintaining Côte d’Ivoire’s moderate risk rating for debt distress has become a more urgent and challenging task.
- The authorities’ efforts to strengthen capacity in debt management, as well as the underlying institutional and legislative framework are important steps in this regard.

### Structural reforms and private-sector development
- Structural reforms under the program are appropriately focused and aligned with the objectives of the NDP.
- Higher and more inclusive growth will be underpinned by efforts to promote private sector-led growth, including by:
  - strengthening governance,
  - financial inclusion,
  - reducing the cost of doing business.
- Adoption of the National Strategy for the Fight against Corruption (SNLC), strengthening the implementation of the National Anti-Corruption Strategy and of the National Strategy against Money Laundering, Terrorism Financing and the Financing of Proliferation of Weapons of Mass Destruction will help:
  - boost transparency, and
  - further attract private investment.

*Source: 1civea2023001 - 39.      The authorities’ focus on improving debt management will further safeguard debt*

### 41.      Staff supports the authorities’ request for 40-month arrangements under the

### 41.      Staff supports the authorities’ request for 40-month arrangements under the

### Program approval and financing
- Staff supports the authorities’ request for 40-month arrangements under the Extended Credit Facility and Extended Fund Facility.
- Access:
  - Extended Credit Facility (ECF): 133 percent of quota (SDR 867.2 million).
  - Extended Fund Facility (EFF): 267 percent of quota (SDR 1,734.4 million).
  - Total: 400 percent of quota (equivalent to SDR 2,601.6 million).
- Rationale:
  - The Letter of Intent and Memorandum of Economic and Financial Policies set out appropriate policies to pursue the program’s objectives.
  - Financing from the Fund will have a strong catalytical role.
  - Capacity to repay the Fund is assessed as adequate.
  - Risks to program implementation are manageable given the government’s solid track record for policy implementation under previous Fund-supported programs.

### Key macroeconomic projections and indicators (selected)
- Real GDP growth (percent):
  - 2020: 1.7
  - 2021: 7.0
  - 2022: 6.7
  - 2023: 6.2 (Prel.)
  - 2024: 6.6
  - 2025: 6.4
  - 2026: 6.3
- Consumer price index (annual average): 2023: 3.7; 2024: 1.8; 2025: 1.7; 2026: 1.7
- Current account balance (including official transfers, billions of CFAF):
  - 2020: -1,135
  - 2021: -1,593
  - 2022: -2,834
  - 2023: -2,659
  - 2024: -2,463
  - 2025: -2,256
  - 2026: -2,084
- Current account balance (percent of GDP):
  - 2020: -3.1
  - 2021: -4.0
  - 2022: -6.5
  - 2023: -5.6
  - 2024: -4.7
  - 2025: -4.0
  - 2026: -3.4
- Trade balance (percent of GDP):
  - 2020: 4.7
  - 2021: 4.2
  - 2022: 2.2
  - 2023: 2.4
  - 2024: 2.9
  - 2025: 3.4
  - 2026: 3.7

### Fiscal stance and public finance (selected)
- Total revenue and grants (percent of GDP):
  - 2020: 15.0
  - 2021: 15.8
  - 2022: 15.3
  - 2023: 16.4
  - 2024: 17.0
  - 2025: 17.4
  - 2026: 17.9
- Total expenditure (percent of GDP):
  - 2020: 20.4
  - 2021: 20.7
  - 2022: 22.1
  - 2023: 21.7
  - 2024: 21.1
  - 2025: 20.4
  - 2026: 20.9
- Overall balance, including grants (percent of GDP):
  - 2020: -5.4
  - 2021: -4.9
  - 2022: -6.8
  - 2023: -5.3
  - 2024: -4.1
  - 2025: -3.0
  - 2026: -3.0
- Basic primary balance (percent of GDP):
  - 2020: -2.3
  - 2021: -1.1
  - 2022: -1.8
  - 2023: -0.1
  - 2024: -0.3
  - 2025: 0.8
  - 2026: 1.2
- Gross investment (percent of GDP): 2020: 17.7; 2021: 24.7; 2022: 27.3; 2023: 27.8; 2024: 27.8; 2025: 27.3; 2026: 28.4
- External debt (central government, billions of CFA francs, memorandum): 2020: 10,757; 2021: 12,291; 2022: 15,084; 2023: 16,973; 2024: 17,992; 2025: 18,778; 2026: 19,784

### Public debt, Fund obligations, and capacity to repay
- Central government debt, gross (percent of GDP):
  - 2020: 46.3
  - 2021: 50.9
  - 2022: 56.8
  - 2023: 58.1
  - 2024: 58.4
  - 2025: 57.5
  - 2026: 56.8
- External debt (percent of GDP):
  - 2020: 29.7
  - 2021: 30.9
  - 2022: 34.5
  - 2023: 35.6
  - 2024: 34.7
  - 2025: 33.4
  - 2026: 32.5
- Fund obligations based on existing and prospective credit (total obligations, in millions of SDRs):
  - 2023: 292.3
  - 2024: 426.9
  - 2025: 363.3
  - 2026: 298.3
  - 2027: 300.0
  - 2028: 354.0
  - 2029: 442.6
  - 2030: 508.8
  - 2031: 503.9
  - 2032: 502.4
- Total obligations in billions of CFA francs:
  - 2023: 240.6
  - 2024: 354.0
  - 2025: 303.5
  - 2026: 251.2
  - 2027: 254.9
  - 2028: 305.1
  - 2029: 381.5
  - 2030: 438.6
  - 2031: 434.4
  - 2032: 433.1
- Total obligations as percent of government revenue:
  - 2023: 3.1
  - 2024: 4.0
  - 2025: 3.1
  - 2026: 2.3
  - 2027: 2.2
  - 2028: 2.4
  - 2029: 2.7
  - 2030: 2.8
  - 2031: 2.6
  - 2032: 2.4
- Outstanding Fund credit (in millions of SDRs):
  - 2023: 2,048.8
  - 2024: 2,432.0
  - 2025: 2,893.4
  - 2026: 3,071.7
  - 2027: 2,878.6
  - 2028: 2,625.0
  - 2029: 2,273.7
  - 2030: 1,837.6
  - 2031: 1,387.5
  - 2032: 925.0
- Outstanding Fund credit (in percent of quota):
  - 2023: 315.0
  - 2024: 373.9
  - 2025: 444.9
  - 2026: 472.3
  - 2027: 442.6
  - 2028: 403.6
  - 2029: 349.6
  - 2030: 282.5
  - 2031: 213.3
  - 2032: 142.0
- Net use of Fund credit (millions of SDRs):
  - 2023: 501.1
  - 2024: 383.2
  - 2025: 461.5
  - 2026: 178.3
  - 2027: -193.1
  - 2028: -253.6
  - 2029: -351.4
  - 2030: -436.0
  - 2031: -450.1
  - 2032: -462.5

### Financial sector soundness (selected indicators)
- Regulatory capital to risk-weighted assets (CAR):
  - 2015: 8.7
  - 2016: 7.9
  - 2017: 9.0
  - 2018: 9.5
  - 2019: 10.5
  - 2020: 11.6
  - 2021: 12.7
  - 2022 (June): 12.9
- Non-performing loans to total gross loans:
  - 2015: 10.4
  - 2016: 9.1
  - 2017: 9.8
  - 2018: 9.3
  - 2019: 8.4
  - 2020: 8.7
  - 2021: 8.7
  - 2022 (June): 8.8
- Return on assets (ROA) net of tax:
  - 2015: 1.4
  - 2016: 1.6
  - 2017: 1.4
  - 2018: 1.3
  - 2019: 1.6
  - 2020: 1.4
  - 2021: 1.8

### Program reviews and disbursement schedule (under the 40-month ECF/EFF, 2023–26)
- Date of availability and conditions: (amounts in millions of SDRs; percent of quota)
  - May 24, 2023 — Executive Board approval of the ECF/EFF arrangements.
    - Total: 371.657 (57.143 percent of quota)
    - ECF: 123.886 (19.048 percent of quota)
    - EFF: 247.771 (38.095 percent of quota)
  - November 15, 2023 — Observance of PCs for end-June 2023, continuous PCs and completion of the first review.
    - Total: 371.657 (57.143 percent of quota)
    - ECF: 123.886 (19.048 percent of quota)
    - EFF: 247.771 (38.095 percent of quota)
  - May 15, 2024 — Observance of PCs for end-December 2023, continuous PCs and completion of the second review.
    - Total: 371.657 (57.143 percent of quota)
    - ECF: 123.886 (19.048 percent of quota)
    - EFF: 247.771 (38.095 percent of quota)
  - November 15, 2024 — Observance of PCs for end-June 2024, continuous PCs and completion of the third review.
    - Total: 371.657 (57.143 percent of quota)
    - ECF: 123.886 (19.048 percent of quota)
    - EFF: 247.771 (38.095 percent of quota)
  - May 15, 2025 — Observance of PCs for end-December 2024, continuous PCs and completion of the fourth review.
    - Total: 371.657 (57.143 percent of quota)
    - ECF: 123.886 (19.048 percent of quota)
    - EFF: 247.771 (38.095 percent of quota)
  - November 15, 2025 — Observance of PCs for end-June 2025, continuous PCs and completion of the fifth review.
    - Total: 371.657 (57.143 percent of quota)
    - ECF: 123.886 (19.048 percent of quota)
    - EFF: 247.771 (38.095 percent of quota)
  - May 15, 2026 — Observance of PCs for end-December 2025, continuous PCs and completion of the sixth review.
    - Total: 371.658 (57.143 percent of quota)
    - ECF: 123.884 (19.047 percent of quota)
    - EFF: 247.774 (38.096 percent of quota)
- Program total under schedule:
  - Total amount: 2,601.6 millions of SDRs (400.0 percent of quota)
  - ECF total: 867.2 millions of SDRs (133.3 percent of quota)
  - EFF total: 1,734.4 millions of SDRs (266.7 percent of quota)
- Note: Côte d’Ivoire's quota is SDR 650.40 million.

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

### Annex I. External Sector Assessment

### Annex I. External Sector Assessment

### Overall assessment
- Côte d’Ivoire’s external position in 2022 was moderately weaker than the level implied by fundamentals and desirable policies, based on preliminary estimates.
- The current account deficit is estimated to have expanded to 6.5 percent of GDP in 2022 from 4.1 percent of GDP in 2021, driven mainly by a deterioration in the terms of trade of over 11 percent.
- Staff finds a cyclically adjusted CA of -6.6 percent of GDP, which is 1.5 percent of GDP lower than the adjusted norm.

### Potential policy responses
- Sustained fiscal consolidation driven by domestic revenue mobilization to maintain external balance broadly in line with fundamentals and desirable policies and to promote external stability in the WAEMU currency union.
- Revenue mobilization to facilitate greater health spending, which accounts for the largest (gross) contribution to Côte d’Ivoire’s policy gap under the EBA lite model.
- Structural reforms to support diversification and growth of the export sector to benefit the external position in the medium-term.

### A. Foreign assets and liabilities: position and trajectory
- Background and recent trajectory:
  - NIIP estimated to have deteriorated to -46 percent of GDP in 2022 from -41 percent of GDP in 2021, driven by the sizeable current account deficit.
  - Gross assets remained broadly unchanged while liabilities rose; about half of the increase in liabilities was in the form of debt liabilities.
  - Foreign direct investment accounts for just over 20 percent of gross external liabilities.
- Key 2022 figures (% GDP):
  - NIIP: -46
  - Gross Assets: 29
  - Debt Assets: 5
  - Gross Liab.: 75
  - Debt Liab.: 21
- Assessment and projections:
  - NIIP is sustainable under the baseline.
  - NIIP projected to deteriorate further before stabilizing around -55 percent of GDP, reflecting smaller projected current account deficits and strong nominal GDP growth.
  - Risks to external sustainability: slower than projected fiscal consolidation, further deterioration in the terms of trade, slowdown in real GDP growth.

### B. Current account
- Background:
  - Robust domestic demand amid worsening terms of trade pushed the current account into a deficit around 6.5 percent of GDP in 2022 (from 4.1 percent in 2021 and an average of 2.5 percent of GDP in 2016-2020).
  - Merchandise trade surplus estimated to have fallen to about 2.2 percent of GDP from 4.2 percent in 2021, reflecting a nearly 30 percent increase in the value of imports partially offset by rising exports.
  - Services trade deficit expanded by about 0.7 percentage points to 5 percent of GDP due to rising freight and insurance costs.
- Assessment (EBA lite current account model):
  - Gap in 2022: -1.5 percent of GDP (adjusted current account -6.6 percent of GDP; adjusted norm -5.0 percent of GDP).
  - In 2021, the gap was 0.9 percent of GDP.
  - Estimated policy gap is zero on a net basis: a large positive contribution of 0.9 percent of GDP from low public health expenditure (precautionary savings channel) offset by negative contributions from expansionary fiscal policy, a loss of reserves, and a more restrictive financial account than desirable.

### C. Real exchange rate
- Background:
  - Côte d’Ivoire is part of the WAEMU currency union, with the CFA franc pegged to the euro.
  - The real effective exchange rate depreciated by 5.6 percent in 2022, driven by depreciation of the euro against third currencies amid spillovers from the war in Ukraine.
  - The 2022 average REER was about 4 percent lower than during the five preceding years.
- Assessment:
  - EBA current account model REER gap: 9.6 percent (positive number indicates overvaluation), using an elasticity of the REER with respect to the current account balance of -0.16 percent.
  - REER model estimates a REER gap of -11.0 percent (negative number indicates undervaluation).
  - The CA model has a better fit; assessment is based on the CA model.

### D. Capital and financial accounts: flows and policy measures
- Background:
  - Private sector capital flows slowed in 2022 amid sharp tightening in global financial conditions and reduced capital flows to emerging and frontier markets.
  - Official financial account data for 2022 not available; alternative sources point to robust inflows of loans to the government from multilateral and bilateral creditors, including project loans.
  - Authorities substituted planned Eurobond issuance for 2022 with external commercial loans and domestic/regional borrowing.
- Assessment:
  - Rising interest rates in advanced economies and higher risk premia on Côte d’Ivoire’s debt create a very challenging external financing environment.
  - Substantial external financing needs expected to be met through a combination of Fund credit and budget support from multilateral and bilateral creditors.
  - Fiscal consolidation will help reduce external borrowing needs over the medium term.

### E. FX intervention and reserves level
- Background:
  - Regional WAEMU reserves declined to about 4.5 months of import cover by end-2022.
  - Reserve import coverage ratio projected to decrease before recovering and stabilizing around 4.6 months of prospective imports.
  - Côte d’Ivoire’s contribution to the reserve pool declined substantially since August 2022; the country’s total reduction estimated around 1.3 months of import cover to 4.8 months.
  - The prior reserve accumulation included the first two years of the COVID-19 pandemic, helped by large-scale IMF financial support to the region.
- Assessment:
  - ARA metric for credit constrained economies estimates an adequacy range for reserves of 4.5 to 6.4 months of prospective import coverage for the WAEMU (based on available data for 2021).
  - End-2022 level (4.5 months) and medium-term projection (4.6 months at end-2027) are assessed as being somewhat adequate.
  - Growth-friendly fiscal consolidation and structural reforms to diversify the export base would help rebuild reserves and contribute to external stability at the WAEMU level.

*Source: Annex I. External Sector Assessment (Côte d’Ivoire).*

### 6.      At the same time, work should commence on a comprehensive medium-term revenue

### 6.      At the same time, work should commence on a comprehensive medium-term revenue mobilization strategy (MTRS).

### Medium-term revenue mobilization (MTRS) — rationale and approach
- A comprehensive MTRS would address Côte d’Ivoire’s challenges in a more comprehensive manner and integrate key societal and government stakeholders in a sustained process of enhancing domestic revenue mobilization.
- The MTRS is commensurate with the government’s view that domestic revenue mobilization is a national priority and a key building block in the country’s economic transformation to an emerging market economy.
- The program includes well-targeted and sequenced structural benchmarks, including:
  - a strategy to collect tax arrears; and
  - the development and implementation of an MTRS.
- Mitigating factors supporting revenue reforms:
  - strong commitment of the highest authorities to domestic revenue mobilization as a national priority for the success of the 2021-2025 NDP;
  - a great share of tax revenue measures are already in place before the start of the program;
  - provision of customized training courses to tax officials;
  - efficiency from greater coordination with other TA providers, namely the World Bank and France.

### Tax administration and reform priorities (findings and planned TA)
- Core Fund TA focus: domestic revenue mobilization to safeguard fiscal and debt sustainability while creating fiscal space for priority spending.
- Key TA-supported priorities (FY 2024, FY 2024/25 unless noted otherwise):
  - Tax Policy
    - Conduct a tax policy diagnostic assessment to identify revenue raising policy reforms for the short to medium term. (FY 2024)
    - Conduct tax expenditure socio-impact assessment to evaluate the relative merits of existing tax expenditures in addition to foregone revenues. (FY 2024/25)
    - Tax Policy Unit (TPU) capacity building to equip counterparts with technical skills and tools for tax policy design and implementation. (FY 2024/25)
  - Revenue Administration
    - Tax arrears recovery plan support to identify concrete revenue mobilization administrative measures. (FY2024/25)
    - Assist on developing the MTRS action plan to strengthen capacity in developing a medium-term strategy reform. (FY2024/25)
    - Advise on modernization of core procedures and governance framework to improve the efficiency of the tax administration. (FY 2024/25)
  - Customs administration
    - Develop the surveillance and intelligence function to combat smuggling and frauds and improve transit monitoring. (FY2024/25)
    - Support the use of AI in pre-clearance control and automated selection for inspection to identify fraud, optimize case selection, improve control efficiency. (FY2024/25)
    - Advise on controlling petroleum products (both imported and locally refined) to reduce possibilities of fraud and diversion of exempt products. (FY2024/25)
    - Strengthen control of suspensions and exemptions and the collection of corresponding customs duties debt to identify concrete revenue mobilization administrative measures. (FY2024/25)
  - Public Financial Management (PFM)
    - Conduct the C-PIMA, building on the PIMA conducted in 2017, and green PFM to take account of climate change in selecting, budgeting, and implementing investment budgets. (FY 2024)
  - Fiscal risks of SOEs
    - Capacity building for quantification and monitoring of fiscal risks, using tools for (i) monitoring the financial health of public enterprises (SOE Health Check Tool); (ii) stress-testing public enterprises (SOE Stress Test); and (iii) analyzing guarantees and on-lending to public enterprises (DGLAT). (FY 2024)
  - Statistics (STA)
    - Continue TA to improve timeliness, comprehensiveness, and accuracy of government finance statistics (GFS) and align methodologies to GFSM 2014 and WAEMU’s TOFE directives; expand institutional coverage of GFS to local governments, extrabudgetary units, and social security funds; broaden coverage of public sector debt to include all market SOEs (public nonfinancial corporations). (FY2024/25)
    - Improve BOP statistics to enhance consistency between gross external debt liabilities in IIP and the World Bank’s Quarterly External Debt Statistics database, and improve timeliness of annual external sector data. (FY 2024)
  - LEG
    - Complete the ongoing AML/CFT assessment and assist in implementing priority reforms recommended by the IMF-led AML/CFT assessment. (FY 2024)
    - Assess or develop the framework for beneficial ownership to strengthen governance and transparency in procurement and AML/CFT. (FY 2024 (Review from HQ))
    - Assess the framework for asset declaration to strengthen governance and transparency. (FY 2024 (Review from HQ))

### Cash transfers (Annex IV) — design, coverage, and expansion plans
- Existing mechanism: Programme de Transferts Monétaires Productifs (PTMP).
  - Current operations:
    - quarterly targeted cash transfers to 227,000 households, representing about 14 percent of the country’s poor households.
    - beneficiaries enrolled for three years; receive quarterly cash transfers of CFAF 36,000 via mobile money transfers.
    - PTMP implementation supported by: Registre Social Unique (RSU), a management information system (MIS), a digital payment system, and a Grievance Redress Mechanism (GRM).
  - Targeting method: proxy means testing and community validation.
  - Coverage and efficiency constraints:
    - coverage limited by the existing social registry;
    - payment system deficiencies leave beneficiaries unable to choose payment providers and cause delays in information on payment delivery.
- Expansion with World Bank support:
  - Aim to expand PTMP to cover an additional 100,000 households every year over the next three years.
  - Support aims to:
    - define a sustainable institutional arrangement to manage PTMP;
    - adopt an operational manual on key implementation standards and processes;
    - plan and mobilize adequate resources to ensure timely payments;
    - further expand coverage, especially in underserved regions;
    - deploy additional “frontline workers” to help beneficiaries access PTMP.
  - Cost and timing:
    - Expansion from 2022 until 2026 will cost a total of US$163.5 million (or about 0.2 percent of GDP), of which US$22.5 million are in the first year of the program.
  - PTMP shock response component:
    - aims to develop clear protocols and institutional arrangements to prepare shock response plans to help the most vulnerable cope with shocks and reduce the likelihood of sustained poverty.

### Climate change challenges (Annex V) — impacts, vulnerabilities, and policy directions
- Forest cover and deforestation (findings and implications):
  - Forest coverage fell from 37 percent in 1960 to 14 percent in 2010, and by 2019 forest coverage was down to 8 percent.
  - Deforestation contributes to CO2 emissions, increases flooding risks, and loss of biodiversity, thereby enhancing climate vulnerability.
  - Between 2010 and 2022, following deforestation, 11 percent of the land became degraded and suffered a decline of productivity driven by unsustainable agricultural production.
  - Degradation mainly caused by intensive production of cash crops (cocoa, rubber, palm oil and coffee); in the transition and savannah zones, driven by cashew and cotton; mining also contributes.
- Agriculture exposure and economic significance:
  - Agriculture employs more than two-thirds of the workforce and contributes about 28 percent of GDP and 10 percent of tax revenues.
  - Cocoa accounts for 58 percent of the country’s export revenue and provides income to about one-fifth of its population; Côte d’Ivoire is the source of 40 percent of total cocoa exports.
- Observed and projected climate impacts:
  - The average temperature increased between 0.5°C and 0.8°C between 1970 and 2021.
  - The average 5-year temperature went from 26.29°C in 1970 to 27.22°C in 2021, an increase of 0.93°C; using yearly temperatures the rise is 0.70°C for the same period.
  - Studies project by 2050: hotter average temperatures (up to 4°C), greater variability in rainfall (-9 percent in May and +9 percent in October), higher sea levels, increased frequency and intensity of marine heatwaves; low confidence in future precipitation patterns.
  - By 2030, the World Bank estimates that 2 to 6 percent more households could slide into extreme poverty due to adverse impacts of climate change.
  - Infrastructure (housing, roads, schools, health centers) could be affected; agriculture vulnerable to soil drying and reduced fertility; potential increase in climate migrants.
- Coastal and fisheries vulnerability:
  - 566-kilometer coastline is home to 7.5 million people, about 30 percent of the population and 80 percent of economic activity.
  - Sea level rise impacts: flooding, shoreline retreat, loss of beaches, potential relocation of low-lying settlements, saltwater intrusion affecting water supplies.
  - Fisheries threatened by overexploitation and further negatively impacted by increasing ocean temperature, acidity and deoxygenation.
- Emissions and mitigation commitments:
  - Côte d’Ivoire committed to reduce CO2 emissions from 0.41 in 2019 to 0.37 metric ton per capita by 2025, or about 3 percent of the level in the United States.
  - Authorities announced introduction of electric cars in the capital in 2022. CIV is a signatory of the Paris Climate Agreement.
- Policy directions and programs:
  - Priority actions identified by authorities:
    - (i) reinforce governance in the agricultural sector to promote sustainable development;
    - (ii) develop citizen consciousness through better natural resources and biodiversity management;
    - (iii) integrate sustainable development into policies and strategies;
    - (iv) reinforce the fight against climate change to improve population resilience.
  - The Abidjan Legacy Programme intends to:
    - support sustainable transition of key commodity value chains toward more sustainable pathways;
    - identify risk profiles for key commodity value chains and possible alternative value chains with high climate resilience and positive land impact;
    - work on legislative reforms (implementing the forest code, updating the environmental code) and fiscal measures (introducing an environmental tax mechanism and carbon market).
  - Further work and available support:
    - The World Bank CCDR expected for June 2023 and available Fund technical assistance, and potential support from an RSF arrangement, could help develop a comprehensive integrated resilience strategy.

### Main risks, mitigation, and authorities’ views on capacity development
- Main risks:
  - Weaknesses undermining the tax administration’s ability to conduct reforms and deliver better tax revenue outcomes, as stressed in the 2021 TDAT assessment.
  - High stakes given that domestic tax revenue constitutes a performance criterion (PC) under the program.
- Mitigating factors:
  - See list under “Medium-term revenue mobilization” above (strong political commitment, measures in place, targeted benchmarks, customized training, coordination with TA providers).
- Authorities’ views and priorities:
  - Strong commitment to the program and satisfaction with Fund TA, noting its role in enabling key tax and administrative reforms.
  - Keen interest in:
    - (i) formulation of the MTRS and the tax arrears strategy;
    - (ii) TA on the C-PIMA and green PFM in preparation for access to RST resources;
    - (iii) capacity building for quantification and monitoring of fiscal risks;
    - (iv) LEG assistance in implementing priority reforms from the IMF-led AML/CFT assessment.

*Source: IMF staff compilation from the provided content.*

### Appendix I. Letter of Intent

### Appendix I. Letter of Intent

### Background and recent performance
- Real GDP growth averaged 6.5 percent per year during 2016–2019.
- Real per capita income increased by 13.0 percent to USD 2238.8 in 2019.
- Budget deficit narrowed to 2.2 percent of GDP in 2019 (also reported as 2.3 percent in the MEFP text).
- Inflation was kept below 3 percent prior to 2020.
- Debt ratio stood at 37.9 percent of GDP in 2019.
- CPIA rating rose to 3.5 in 2019 from 2.7 in 2010 (World Bank assessment).
- Moody’s sovereign rating upgraded from B1 in 2015 to Ba3 in 2019.
- Banking system capital adequacy ratio raised to 10.5 percent at end-December 2019 (from 7.9 percent at end-December 2016), above the WAMU prudential minimum of 8.625 percent.
- Poverty and human capital: poverty rate fell from 55 percent in 2011 to 44 percent in 2015 and 39.5 percent in 2018–2019; Gini declined from 38.5 to 35.1; middle class share rose from 34.5 percent in 2015 to 36.5 percent in 2018; human capital index (HCI) rose from 0.30 to 0.38 between 2010 and 2020.

### Shocks, resilience, and recent macro outcomes
- Covid-19 pandemic (from 2020) and the crisis in Ukraine (beginning February 2022) disrupted marketing channels, trade, and supply chains and raised international prices for crude oil, agricultural inputs, and food.
- Real GDP growth: 1.7 percent in 2020; estimated 7.4 percent in 2021; 6.7 percent in 2022.
- Côte d’Ivoire outperformed peers in 2020 when global and sub-Saharan Africa growth were (3 percent) and (2 percent), respectively.
- Fiscal balances widened: budget deficit moved from 2.2 percent in 2019 to 5.4 percent in 2020, 4.9 percent in 2021, and 6.8 percent in 2022.
- Inflation accelerated from 2.4 percent in 2020 to 4.2 percent in 2021 and 5.2 percent in 2022, above the WAEMU community standard of 3 percent.
- Current account deficit: 3.1 percent in 2020, 4.0 percent in 2021, and 6.9 percent in 2022.
- Investment: overall investment rate 26.4 percent of GDP in 2022 versus 24.0 percent of GDP in 2021; public investment 9.7 percent of GDP in 2022 versus 8.5 percent in 2021.
- Comparative inflation: average inflation in sub-Saharan Africa stood at 8.0 percent in 2022.
- Credit rating: Fitch Ratings maintained sovereign rating at BB- with stable outlook in February 2023.

### Program objectives and financing request
- Government seeks IMF support through 40‑month arrangements under the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF) for a total of SDR 2,601.6 million (400 percent of the quota).
  - SDR 867.2 million under the ECF.
  - SDR 1,734.4 million under the EFF.
- Government requests approval of the first disbursement under both arrangements.
- Program objectives include:
  - Maintain fiscal and debt sustainability through a gradual increase in the tax ratio and convergence of the fiscal deficit with the WAEMU community standard by 2025.
  - Combat poverty and stimulate job creation for young people.
  - Shift growth paradigm toward private sector productivity and vertical diversification.
  - Develop the financial sector and increase financial inclusion.
  - Improve resilience to climate change.
- Government plans to seek funding under the Resilience and Sustainability Trust to pursue climate change reforms.

### Policy responses and measures already taken
- Health and social support in response to Covid-19:
  - Health Response Plan (PRS) amount CFAF 95.9 billion.
  - Economic, Social and Humanitarian Support Plan (PSESH) amount CFAF 1,700.9 billion.
- Measures to protect supply and purchasing power (selected):
  - Civil service compensation: expansion of housing tax allowance, increase in monthly transportation allowance, increase in family allowance, introduction of an exceptional year-end bonus at a cost of CFAF 74.6 billion in 2022.
  - 25 percent increase in the minimum wage (SMIG) from CFAF 60,000 to CFAF 75,000 in December 2022.
  - Oil product subsidies held down at a cost of CFAF 380 billion at end-December 2022.
  - Ceiling on prices of consumer staples (refined palm oil, sugar, milk, rice, tomato concentrate, beef and pasta, cement, etc.) starting in 2020; list expanded to 21 categories from 4.
  - Exemption of wheat imports from customs duties from April to December 2022.
  - Support for millers to limit wheat flour price increase at CFAF 6.4 billion starting May 2022.
  - Reform of domestic bread prices adopted in May 2022: CFAF 150 for 174 g loaves and CFAF 200 for 232 g loaves.
  - Introduction of principle of advance notification and coordination before any price increase for consumer staples in March 2022.
  - Creation of consumer monitoring tools and enforcement: mobile app “Contrôle citoyen” (October 2022) and Rapid Control Brigade (October 2022).
  - Creation of 31 local committees to combat the high cost of living, operational in 2022.
  - Enhanced communications on actions to combat the high cost of living.

### Government commitment and reporting
- Government believes MEFP policies are adequate to achieve program objectives and will take additional measures if necessary, consulting the IMF prior to adoption of such measures in accordance with IMF consultation policies.
- Authorities commit to provide information on implementation as specified in the Technical Memorandum of Understanding (TMU).
- Government authorizes IMF to publish and post this letter and its attachments as well as the staff report on the IMF website following Executive Board approval.

*Letter of Intent, Appendix I (Côte d’Ivoire) — Abidjan, May 11, 2023*

### Box 1. Measures to Combat the High Cost of Living (Concluded)

### Box 1. Measures to Combat the High Cost of Living (Concluded)

### Short-Term Measures to Improve the Supply on the Local Market
- Production standards for bread were revised in March 2022 and now allow the use of at least 15 percent flour from local grains.
- Financial support and agricultural equipment and inputs in the amount of CFAF 2 billion were allocated to women involved in food production in December 2022 to facilitate the supply of the markets.
- The requirement of prior authorization for all exports of food products, particularly plantains, cassava and its derivatives, yams, and local rice, to ensure the supply of the domestic markets was adopted in March 2022.
- Investigations by the Competition Bureau were stepped up with the aim of dismantling cartels and combating abuse of dominant positions.

### Fiscal Position and Budget Execution (end-2022)
- Budget deficit rose to 6.8 percent of GDP in 2022, from 4.9 percent in 2021; deterioration driven by slower growth of tax revenues and increased spending on security and measures to combat the high cost of living.
- Total revenues and grants: 14.5 percent of GDP in 2022 versus 15.4 percent in 2021 (owing to shortfalls on oil products).
- Total expenditure and net lending: 21.3 percent of GDP in 2022 versus 20.3 percent of GDP in 2021 (mainly due to increased security spending, continued implementation of the coronavirus response plan and rising investment expenditures).
- The financing gap was essentially covered by recourse to the subregional money and capital markets.

### External Competitiveness and External Balances (2022)
- Real effective exchange rate contracted 6.5 percent on average in 2022 owing mainly to a favorable inflation differential of -3.0 percent and a 13.1 percent appreciation of the US$ vis-à-vis the euro.
- Terms of trade deteriorated 16.2 percent on average owing to falling cocoa prices and rising prices for imported goods.
- Current account deficit: estimated at 6.9 percent of GDP.
- Overall external balance: overall deficit of 0.7 percent of GDP in 2022, after a surplus of 2.8 percent of GDP in 2021.
- End-2022 WAEMU exchange reserves represented 4.4 months of imports.

### Public Debt and Debt Service (end-December 2022)
- Central government stock of debt (including debt on-lent and guaranteed by the government): 58.0 percent of GDP at end-December 2022 versus 52.5 percent at end-December 2021.
- External debt: 34.5 percent of GDP at end-December 2022 versus 30.9 percent at end-December 2021.
- Guaranteed external debt: CFAF 464.8 billion, or 1.1 percent of GDP.
- Domestic debt: 22.2 percent of GDP at end-December 2022 versus 20 percent a year earlier.
- Guaranteed domestic debt: CFAF 111.0 billion, or 0.3 percent of GDP.
- Stock of debt of public enterprises: CFAF 896.3 billion at end-2022, or 2 percent of GDP (1.3 percent guaranteed debt and 0.7 percent unguaranteed debt).
- For on-lent loans, debt service paid: CFAF 61 billion at end-2022 versus CFAF 35.3 billion at end-2021.

### Monetary and Banking Developments (end-2022)
- Money supply increased 9.0 percent in 2022 following an acceleration of 18.1 percent in 2021; driven by rising domestic claims and declining net foreign assets due to a higher import bill.
- Claims on the economy increased 7.3 percent, bringing the credit-to-GDP ratio to 22.3 percent, a decline of 0.5 percentage point from 2021.
- Increase in net claims on the central government related to greater recourse to the banking system to finance the fiscal deficit as international financial conditions tightened.
- Banking system soundness:
  - Average risk-weighted capital adequacy ratio: 13.1 percent (above WAEMU prudential minimum of 11.5 percent).
  - Only three banks do not respect this ratio; they hold 2.6 percent of the total sector balance sheet, 2.3 percent of outstanding loans and 2.9 percent of deposits.
  - Gross portfolio deterioration rate: 7.8 percent at end-2022 versus 8.8 percent at end-2021.
  - Net portfolio deterioration rate: 2.5 percent at end-2022 versus 3.1 percent at end-2021.

### Structural Reforms Implemented — Tax Policy Measures
- Plan to reduce exemptions, adopted in 2019, implemented in 2021 and 2022.
- Coffee and cocoa registration duties increased from 1.5 percent to 3 percent in 2021.
- Excise duties introduced in 2021: 15 percent on cosmetics and beauty products containing hydroquinone and 10 percent on those not containing hydroquinone.
- Taxation of SMEs reorganized with creation in 2021 of the micro-enterprise and entrepreneur regimes.
- Excise tax rate (tobacco and beverages) raised by 1 point in 2021 and 2022 to align with WAEMU directive.
- Tax arrangements for petroleum services providers simplified in 2021.
- Minimum tax for taxpayers eligible for the régimes du réel, RNI and RSI introduced in 2021.
- Trade taxation changes:
  - 10 percent excise duty on vehicles exceeding 13 HP introduced in 2020.
  - Single export duty (DUS) of 1.5 percent of the c.i.f. reference price on dry natural rubber introduced in 2022.
  - Reduced VAT rate of 9 percent on baby milk introduced in 2022.
- The overall impact of the tax policy measures is estimated at CFAF 100.0 billion in 2022 and CFAF 109.0 billion in 2022.

### Structural Reforms Implemented — Tax Administration Measures and Impact
- Deployment of Côte d’Ivoire’s Tax Management System (SIGICI) in all DGI units in 2021.
- SIGICI functionality improvements:
  - Implementation of the module for VAT credit refund applications in 2021.
  - Implementation of the automated module to manage allowable VAT deductions in 2022.
  - Introduction of the tax audit module in 2022.
- Introduction of e-filing in 2020 to digitalize management of financial statements and provide units with tax base data in real time.
- Deployment of the digital land inventory (E-cadastre Côte d’Ivoire) in 2021.
- Implementation of the electronic land registry (Livre Foncier Electronique—LIFE) in 2020.
- Decentralization of tax audits through creation in 2020 of audit teams in all regional directorates.
- Improvement of land registration in Yamoussoukro, Bouaké, and Korhogo in 2022 with World Bank and AfDB assistance.
- These tax administration measures enabled the DGI to increase its collections by CFAF 165 billion in 2021 and CFAF 204 billion in 2022.
- Customs and trade administration measures:
  - Interconnection of Ivoirian Customs computer systems with those of Burkina Faso and Niger in 2019 and 2021, respectively.
  - Installation in 2022 of three scanners in customs bureaus of Takikro, Ouangolodougou and the Autonomous Port of Abidjan.
  - Purchase in 2022 of three new water surveillance vessels.
  - Introduction of video surveillance at border posts of Takikro, Noé and Niablé.
  - Increase in reassessment rate from 2.3 percent in 2018 to 4.0 percent in 2022 due to enhanced controls on value of goods.
  - Introduction in 2022 of a mobile app for accessing and authenticating customs documents.
  - Construction and renovation of regional customs directorate premises (Man, Aboisso, San Pedro).
- Impact of these customs administration measures totaled CFAF 73 billion in 2022.

### Public Finance Management and Digitalization
- Consolidation of program budgeting through:
  - Introduction in 2021 of the Integrated Government Fiscal Operations System (SIGOBE).
  - Preparation of Annual Performance Reports and the General Report on program performance for 2020 and 2021.
  - Establishment in 2022 of a performance conference for the preparation of Annual Performance Plans (PAP).
  - Adoption in 2020 of Law No. 2020-885 on the financial regime for communities and autonomous districts.
  - Issuance in December 2020 of the order establishing government budgetary nomenclature codes applicable to program budgeting.
  - Introduction and dissemination of budget preparation tools and publication of the accounts; appointment of operational staff and presentation of the budget to Parliament by ministry.
  - Creation of ministerial accounting positions and appointment of staff in 2020; signing of new accounting instructions in July 2020.
- Transparency improvements:
  - Introduction of Budget Orientation Debates in both chambers of Parliament in 2019.
  - Dissemination of the “citizen budget” since 2021.
  - Establishment in 2022 of the e-supplier platform accessible at www.efournisseur.gouv.ci enabling suppliers to track invoices.
  - Preparation of the Fiscal Risk Declaration as an annex to the Budget Law since 2020.
- Digitalization of government financial flows via TresorPay – TresorMoney introduced in December 2020:
  - Resources recovered through TresorPay - TresorMoney increased from CFAF 3.2 billion in 2021 to CFAF 16.9 billion in 2022.
- TSA and payment performance:
  - At end-2022, the SyGACUT tool was 87 percent deployed.
  - Ninety-four (94) EPNs were connected to the Treasury Single Account (TSA) out of ninety-five (95); the Professional Training Development Fund (FDFP) was the exception.
  - Public debt operations and co-financed projects not yet included in TSA pending donor agreement.
  - At end-2022, central government accounts payable were paid within an average of 20 days versus the regulatory requirement of 90 days.

### Business Climate and Digitalization of Procedures
- As of December 31, 2022, out of sixteen (16) projects planned in the 2020-2022 Reform Agenda:
  - Two (02) executed, seven (07) in progress and seven (07) initiated.
- Executed projects include:
  - e-business platform established enabling online business creation with a single registration identifier since October 4, 2018.
  - “e-connection” platform established in March 2021 to facilitate SME/SMI electricity connections.
  - Property Complaints Observatory (OPF) established by Order No. 008/MBPE of February 5, 2021 and operational since July 2021.
  - e-filing and e-payment of social contributions available since July 2021.

### Property Rights, Land Titling, and Geospatial Developments (end-2022)
- Almost 52,000 property title (Arrêté de Concession Définitive—ACD) files were digitalized.
- 420,000 plots were drawn on basis of housing development plans.
- 55 percent of greater Abidjan covered by aerial views.
- 3D digital mapping completed over 2100 km².
- Legal and institutional measures:
  - Decree No. 2021-784 on procedures for housing development plans issued to facilitate mass creation of property titles (ACDs).
  - Decree No. 2021-862 creating the Urban Property Information and Management System (SIGFU) issued.
- Technical developments:
  - Development of a new national geodetic reference frame in 2022.
  - Establishment of a new management system for the Property and Housing Database (BDFH) as of April 2022.
  - Development of a new application for receiving, processing and tracking deed applications (new SGFH).

### Industrial Infrastructure Governance and Development
- Creation of the Industrial Infrastructure Development and Management Corporation (SOGEDI) by Decree No. 2022-245 of March 30, 2022, replacing AGEDI and FODI; governing bodies set up by end-2022.
- Rehabilitation projects for three industrial zones in Abidjan:
  - Yopougon (469 ha), Koumassi (120 ha) and Vridi (120 ha).
- Development of new industrial zones:
  - Akoupé-Zeudji (864 ha) and Bonoua (329 ha) in the south.
  - San Pedro (540 ha) in the southwest.
  - Yamoussoukro (750 ha) and Bouaké (150 ha) in the central region.

### Social Program (PSGouv) Implementation and Achievements (through end-December 2022)
- Phase 2 of PSGouv adopted in December 2021; program expanded responses to fragility in northern areas.
- Counteracting fragility in northern border areas:
  - 13,000 bench desks, 406,784 school kits and 285,903 textbooks distributed.
  - 142 premises electrified.
  - 50 productive boreholes drilled, 15 borehole superstructures constructed, 31 pumps installed, 577 manual pumps (PMHs) repaired and 3,354 PMHs maintained (above 3,129 scheduled for 2022).
  - 645.5 km dirt roads graded for rehabilitation and opening lanes.
  - 21,507 young people benefited from supplementary qualification and apprenticeship programs.
  - 1,102 individuals received grants for development of income-generating activities (IGA).
  - 30,418 households received monthly cash transfers, 384 Village Savings and Loan Associations (AVEC) established, and 20,109 households trained in IGA management.
- Education:
  - 10,282 contractual teachers absorbed into the civil service.
  - 43 colleges constructed (31 with C2D financing and 12 financed with government resources).
  - 1,164 school latrines constructed in rural areas.
- Household living conditions:
  - Electricity coverage rate increased from 79.6 percent in 2020 to 82.41 percent in 2022.
  - 3 Regional Hospital Centers, 3 General Hospitals and 36 First Contact Health Care Establishments (ESPC) constructed; 133 ESPCs rehabilitated.
  - 1,375 input kits and small agricultural equipment kits distributed.
- School-to-work and civic service:
  - 2,282 young people received training in the second chance school.
  - 33 groups out of 34 received loans for creation of MSMEs, including 2,376 beneficiaries from vulnerable segments.
- Solidarity with vulnerable populations:
  - Under social safety nets, all 175,000 beneficiaries received cash transfers totaling CFAF 15.58 billion.
  - Under targeted free health care: out of 684,788 vaginal deliveries, 402,737 were free of charge; all 41,784 cesarean sections were free of charge; 1,253,822 children under age 5 suffering from malaria and 341,161 pregnant women were treated free of charge.

### Statistical System Strengthening
- Reconstruction of past series of the annual national accounts (ANA) using the 2008 SNA format (base year 2015); ANAs reconstructed for 1996-2015.
- Final 2018 and 2019 ANAs and provisional 2020 ANAs disseminated in February 2023.
- Fifth General Population and Housing Census (RGPH-5) completed in 2021; final report published in February 2023 showing total estimated population of 29.39 million in 2021 and a population growth rate of 2.9 percent.
- Recruitment of 48 young statistics professionals under the Statistics Improvement and Harmonization Project (PHAS).

### 2023–26 Economic and Financial Program — Objectives
- Government adopted the Côte d’Ivoire 2030 Strategic Plan focusing on six areas:
  - (i) complete transformation of the economy;
  - (ii) building of human capital and promotion of employment;
  - (iii) support for private operators and increase in physical and private capital;
  - (iv) strengthening of the social sector and promotion of solidarity and inclusion;
  - (v) development of the country’s regions and promotion of sustainable development;
  - (vi) structural and cultural transformation of the government and governance.
- Goals through 2030:
  - Double per capita income and bring Côte d’Ivoire closer to higher middle-income status.
  - Halve poverty.
  - Increase life expectancy by 10 years.

*Source: Box 1. Measures to Combat the High Cost of Living (Concluded), IMF document.*

### 26. In accordance with this vision, the government is committed to implementing the

### 1civea2023001 - 26. In accordance with this vision, the government is committed to implementing the

### Vision, structural strategy, and social programs
- Government commitment to implement the 2021-2025 NDP to ensure industrialization and reduce poverty, including deployment and development of industrial clusters to create a solid and competitive industrial base.
- Nine agricultural clusters located around the country will enter into operation to increase processing of agricultural products.
- Continued efforts to develop critical socioeconomic infrastructure and build human capital.
- Continued implementation of the social program (PSGouv) and establishment of the Government Youth Program (PJGouv) to target youth (see Box 5).
- Commitment to implement initiatives and respect commitments aimed at protecting the environment and mitigating and adapting to climate challenges.

### 2023–2026 economic and financial program objectives
- Support 2021-2025 NDP while maintaining a sound macroeconomic framework with specific objectives:
  - maintain fiscal and debt sustainability by progressive increase in tax revenue and convergence of the budget deficit with the WAEMU community standard by 2025;
  - combat poverty and stimulate the creation of jobs for young people;
  - evolve the growth paradigm to focus on private sector productivity and vertical diversification;
  - develop the financial sector and expand financial inclusion;
  - make Côte d’Ivoire more climate resilient.

### Macroeconomic projections and balances (2023–25)
- Fiscal and price targets:
  - Fiscal deficit expected to stand at 5.3 percent of GDP in 2023 and then gradually decline to 3 percent of GDP in 2025.
  - Inflation projected to average 3.7 percent in 2023 and should be kept below the community standard of 3 percent starting in 2024.
  - Current account deficit projected to decline from 5.7 percent of GDP in 2023 to 4.8 percent in 2026; an overall external deficit averaging 2.1 percent is expected in 2023–26.
- Growth outlook 2023–25:
  - Average growth projected at 7.1 percent over 2023‒25.
  - Demand side: overall investment rate expected to average 28.9 percent over the period, with average public and private investment rates of 18.2 percent and 10.7 percent, respectively.
  - Supply side:
    - Secondary sector expected to grow on average by 11.0 percent, supported by construction and public works, energy, agrifood industries and other manufacturing industries.
    - Tertiary sector expected to grow 8.3 percent on average, supported by telecommunications, transport, commerce and other services.
    - Primary sector expected to grow (0.9 percent) owing to stagnation of export agriculture.
- External outlook: current account deficit to be reduced gradually to 4.3 percent of GDP in 2026 (text also reports decline to 4.8 percent in 2026 and below 5 percent starting in 2026).

### Box 4 — Baleine field development outlook (2023–27)
- Initial and updated reserve estimates:
  - Initial reserves estimated at between 1.5 and 2 billion barrels of crude oil and between 1.8 and 2.4 billion ft³ of natural gas.
  - Following a second discovery in July 2022, estimates now 2.5 billion barrels of crude oil and 3,300 billion ft³ of natural gas (approximately 25 percent increase).
  - Proven phase 1 reserves to date: 35.4 MMbbl and 58 BCF of natural gas.
- Development phases and investment intensity:
  - Focus on phases 1 and 2 during 2023–27; Baleine field (CI-101/802) should absorb 79 percent of the investment and 41.7 percent of the operational expenditures forecast for all oilfields in the sedimentary basin.
  - Investments made through end-2022 should allow entry into production of phase 1 starting in the second half of 2023.
  - Start-up studies for phase 2 underway with first oil expected by end-2024.
- Production forecasts:
  - National crude oil output should triple between 2022 and 2027, from 25,481 barrels/day in 2022 to 76,539 barrels/day in 2027.
  - Natural gas output should increase approximately 11 percent, from 247,452 MMSCF/D in 2022 to 274,000 MMSCF/D in 2027.
  - Crude oil output from Baleine expected to increase from 4,537 barrels/day in 2023 to 12,000 barrels/day in 2024, to peak yield of 42,000 barrels/day starting in 2025.
  - Baleine field expected to represent more than 52 percent of oil production on average over the period.
  - Baleine field expected to account for 12.2 percent of total natural gas production over 2023–27.

### Monetary and financial sector outlook
- Broad money expected to expand in response to financial deepening.
- Net foreign assets expected to build up in 2023 following a 7.6 percent decline in 2022.
- Claims on the economy expected to increase from 22.5 percent of GDP in 2022 to over 24.0 percent of GDP by 2025, reflecting increased bank financing of government deficits and private activity.

### Fiscal policy stance and measures (2023–25)
- Fiscal policy aims:
  - Contain negative impact of external and domestic shocks and focus on priority program objectives.
  - Achieve WAEMU fiscal deficit target of 3 percent of GDP by 2025 and maintain moderate risk of debt distress.
  - Increase mobilization of domestic revenues and continue active debt management.
  - Maintain budget envelope for investment spending and poverty reduction in line with 2021-2025 NDP.
  - Prioritize public finance management reforms to improve management, transparency, and accountability.
- Budgetary approach priorities:
  - continued improvement of collection effectiveness for domestic revenues, particularly tax revenues;
  - efficient management of operating expenses;
  - acceleration of investment in growth sectors;
  - increase in poverty reduction spending; and
  - public debt sustainability.
- Consolidation targets and composition:
  - Government determined to reduce fiscal deficit by 3.8 percentage points of GDP to 3 percent of GDP by 2025.
  - Adjustment based in particular on an increase in tax revenues of 2.2 percentage points, bringing tax revenues from 12.9 percent of GDP in 2022 to 15.1 percent of GDP by 2026.
  - Emphasis on concessional loans and public investment best practices recommended by PIMA.
- Specific revenue mobilization and tax administration measures:
  - Prepare a comprehensive medium-term revenue strategy (MTRS) for approval and publication, with revenue targets and implementation timetable (SB for end-May 2024).
  - MTRS focus areas: (i) simplification of tax arrangements; (ii) expansion of the tax base and decrease tax exemptions and other exceptional measures; (iii) combating fraud, smuggling and tax evasion; (iv) developing environmental taxation and taxing new items such as international digital transactions and new transport types using user networking apps; (v) aligning tax system with WAEMU tax provisions. IMF technical assistance to support development.
  - Other measures to increase mobilization and improve compliance (with timing where specified):
    - deploy mechanism for auditing telecommunications flows in the first quarter;
    - improve tax audit module and module for managing automatic VAT deductions;
    - continue land registration plans and enhance security of plots financed by PAGEF, PIDUCAS;
    - continue Committee for the Optimization of Property Tax Yields (CORIF);
    - review and simplify property taxation to increase yield (reform to take place in the second half of 2023);
    - digitalize procedures via SIGEFIM (Integrated Personal and Real Property Taxation Management System);
    - step up property investigations;
    - step up monitoring of special regimes and exceptional measures to prevent fraud;
    - introduce monthly tax return for taxpayers under the Simplified Tax Regime (RSI) replacing quarterly returns;
    - strengthen risk-based tax audits using a model for assessing fraud risks inherent to taxpayers;
    - prepare and implement plan to manage and collect outstanding tax arrears (SB for end-September 2023);
    - continue to reduce exemptions;
    - gradually increase registration duty rate on cocoa from 3 percent to 4 percent of the c.i.f. price starting with the small second season in April 2023;
    - expand the VAT to certain food products that are not staples in September 2023;
    - implement plan to decrease tax exemptions to reduce their amount by approximately CFAF 37 billion in 2024.
- Targeted social and investment spending:
  - Expansion of productive cash transfers program (PTMP) by registering 100,000 additional households in the Single Social Registry (RSU) per year over the next three years (with World Bank assistance).
  - Targeted social spending in health, education, social protection, and youth employment to account for approximately 28.6 percent pro-poor spending (see Table 3 of the TMU).
  - Total capital expenditures projected to reach 7.1 percent of GDP on average during the program period, 2.5 percentage points higher than the pre-COVID-19 level in 2019.
- 2023 financing plan:
  - Deficit reduction target for 2023: reduce overall fiscal deficit in 2023 by 1.6 percentage point of GDP relative to 2022 to 5.2 percent of GDP by increasing total tax revenues by 1.1 percent of GDP.
  - Mobilize CFAF 522 billion or 1.2 percent of GDP via the tax on oil products in 2023; monitor monthly collections and adjust pump prices if necessary while protecting vulnerable populations.
  - Anticipated net financing from domestic and regional sources limited to CFAF 1, 160 billion (government commits not to exceed this ceiling).
  - Net external resources will total CFAF 1, 439.1 billion, including project loans, budgetary support and recourse to the international capital market.

### Debt policy, management, and limits
- Current risk assessment:
  - Recent DSA indicates Côte d’Ivoire remains classified as having a moderate risk of debt distress.
  - External debt portfolio vulnerable to negative shocks to GDP growth, export revenues, the euro-US$ exchange rate and contingent liabilities; total public debt vulnerable to shock to economic growth rate.
- Policy aims 2023–25:
  - Contain increases in liquidity ratios, particularly external debt service-to-exports and external debt service to fiscal revenues excluding grants, to maintain moderate risk of debt distress and strengthen resilience to external shocks.
- 2023 borrowing cap and composition:
  - Cap recourse to new lending at a present value of $ 5.9 billion for 2023.
  - Borrowing plan financing composition: 6.4 percent concessional resources, 68.5 percent semi-concessional resources, 25.1 percent commercial debt.
  - Preference to concessional loans and adherence to PIMA public investment best practices.
- Institutional and operational debt management reforms:
  - Supplementary regulation established the National Public Debt Committee (CNDP), assisted by the Committee of Debt Experts (CED).
  - Draft law on national debt policy to be adopted by the Council of Ministers by end-September 2023 (SB for end-September 2023).
  - General Financing Directorate (DGF) created by Decree No. 2021-454 of September 8, 2021 to replace the Public Debt and Grants Directorate (DDPD); DGF to be operational by end-2023 with appointment of managers and organization of units.
  - Operationally: CED will prepare annually a medium-term debt strategy (MTDS) covering subsequent five years to be annexed to the Budget Law.
  - Debt Sustainability Analysis (DSA) to be produced quarterly using the Debt Sustainability Framework (DSF).
  - Assessment, monitoring and management of public debt risks, including fiscal risks related to public enterprises, will continue to receive IMF technical assistance.
  - Coverage of the debt will be gradually expanded to include public enterprises.

### Social policy, vocational training, and youth employment
- Social policy focus:
  - Continued proactive social policy focusing on reduction of poverty and social inequality through PSGouv with particular emphasis on youth in 2023.
  - Government Youth Program (PJGouv 2023-2025) total cost estimated at CFAF 1,183.0 billion, with 36 percent financed by the 2023 budget, or CFAF 426.0 billion.
- Vocational and technical training targets:
  - Continue implementation of Strategic Vocational and Technical Training and Education Reform Plan adopted in 2016.
  - Plan targets an employment rate for graduates of 80 percent by 2025 and a cohort of 400,000 individuals trained and in jobs via the second chance school (E2C).
  - ETFP institutional improvements and admission capacity increases in industrial maintenance, hotel services and tourism, and construction and public works.
  - Planned measures: (i) increase access to EFTP through construction of “garage-schools,” “worksite-schools,” and “field-schools” in context of E2C; (ii) adapt curricula and training programs to needs of economic sectors.

*Source: IMF content unit 1civea2023001 - 26. In accordance with this vision, the government is committed to implementing the*

### 44. Moreover, the government will ensure that Universal Health Coverage continues to

### 1civea2023001 - 44. Moreover, the government will ensure that Universal Health Coverage continues to

### Universal Health Coverage (UHC) — enrollment and contribution collection targets
- Enrollment operations stepped up starting in 2023 with target volume of 8.2 million by the end of 2023.
- Enrollment target of 60 percent of the population, or 20.7 million individuals, by 2027.
- Collection rate targets for private sector employee contributions:
  - 42 percent in 2022 (baseline).
  - 70 percent in 2023 (target).
  - 85 percent in 2027 (target).
- Collection rate target for enrolled informal sector individuals:
  - 1 percent in 2022 (baseline).
  - 38.3 percent in 2027 (target).
- Increase in informal-sector contribution collection to be achieved through payment of contributions by various agricultural management and regulation units (coffee-cocoa, rubber-palm oil, cotton-cashews).

### Box 5 — Major Actions of the 2023–25 Government Youth Program (PJGouv)
I. Acceleration of Training, Professional Integration and Promotion of Youth Entrepreneurship
- Widen access to knowledge, know-how and interpersonal skills through the Second Chance School.
- Accelerate creation of public incubation centers.
- Establish Initiative for Rapid Youth Entrepreneurship financing Income-Generating Activities.
- Establish "National Program for the acceleration of Digital Start-Ups and SMEs".
- Increase number of pupils and students receiving scholarships and financial support.
- Establish "Digital Campuses Program" deploying digital centers within universities and major public schools.

II. Strengthening Civic Engagement and Social Ethics of Youth
- Establish frameworks for regular exchanges between highest authorities and young people.
- Strengthen civic spirit and commitment of young people.
- Develop self-esteem and intrinsic capacities of young people.
- Institute the youth week and strengthen intergenerational dialogue.

III. Improving Conditions for the Development and Well-Being of Young People
- Promote extracurricular activities in educational establishments.
- Improve purchasing power of young people via the “Youth Card” accessible at low cost offering reductions and other benefits.
- Construct and equip the youth center “Maison de la Jeunesse” in Abidjan.

### Structural Reforms — Public Finance Management (summary of planned actions)
- Current expenditure management:
  - Continue implementing the budget regulations.
  - Continue holding program performance conferences.
  - Continue implementing measures included in the wage bill strategy.
  - Continue work to classify enterprises and update the reference price database.
- Capital expenditure management:
  - Continue efforts to reduce public procurement contracting delays.
  - Gradually digitalize public procurement procedures.
  - Continue efforts to improve capital expenditure absorption capacity.
- Systems and governance improvements:
  - Expand SIGOBE to national representative offices abroad (RNEs) and national public establishments (EPNs) to allow RNE and EPN budget execution within the application.
  - Evaluate boards of public enterprises by an independent consultant to identify measures and reforms to improve governance.
  - Strengthen mechanism for monitoring public enterprise debt.
  - Secure and safeguard the budget information system in 2023.
  - Complete digitalization of public procurement contracting via implementation of version 2 of SIGOMAP.

### Public-Private Partnerships (PPP)
- At end-2022, review showed out of 65 active PPP projects:
  - Three contracts included a government guarantee.
  - One contract had called on the guarantee.
- Government actions:
  - Limit contracting-phase commitments to usual commitments of contracting authorities for PPP contracts, per audit recommendations.
  - National PPP Steering Committee (CNP-PPP) to ensure commitments do not expose government to near-term fiscal risks.
  - Conduct annual assessments of fiscal risks related to PPP projects and annual reviews of PPP portfolio in coordination with contracting authorities.
  - Publish information on PPP portfolio in accordance with Article 24 of Decree No. 2018-358.
  - Improve effectiveness of public investments per 2017 and 2021 PIMA recommendations: improve coordination between central and local government, PPP management, alignment of current and capital expenditure, and asset reporting.
  - Strengthen PPP project review procedures by requiring budget and finance units to prepare brief reports presenting related risks.
  - With IMF assistance, carry out Climate-PIMA (C-PIMA) to account for climate change in selection, budgeting and implementation of investment projects, and implement green PFM to incorporate climate change challenges in the budget framework.

### Single Treasury Account (TSA)
- At end-2022:
  - Centralization and availability of all public revenues achieved for optimal cash flow management.
  - All expenditure operations conducted through the TSA.
  - Payment times and efficiency improved significantly for public debt and releases of funds to public organizations.
- Consolidation measures:
  - Adopt timetable for closing accounts with commercial banks by end-2023 (SB for end-December 2023).
  - Establish specific mechanism for closing accounts with National Investment Bank (BNI) to account for nature of funds managed by BNI.

### Public procurement and expenditure transparency
- Mandatory use of electronic procurement for at least 10 percent of procurement procedures starting in October 2023 (SB for end-December 2023).
- Cap exceptional public procurement procedures at 20 percent of total contracts.
- Continue publication of procurement contracts including identification of beneficial ownership, delivery reports and contract audits.

### TOFE and fiscal reporting
- Continue expanding scope of TOFE in accordance with GFSM 2014 to gradually achieve a public sector flow of funds table (TOF).
- Since 2021, 11 extrabudgetary units other than EPNs incorporated into the TOF.
- In 2022, incorporation of four public enterprises: AIR-CÔTE D’IVOIRE, SIR, PETROCI and CI-ENERGIES.
- Planned for 2023 (with IMF technical assistance): incorporation of four additional public enterprises—SOTRA, Conseil Coton Anacarde, ONECI and ADERIZ.
- Continue to produce quarterly TOFE for central government in accordance with GFSM 2014 within 60 days of the end of the quarter.
- Work to issue the 2022 TOFE in June 2023.
- Plan to establish methodology for valuing benefits in kind related to government vehicles with AFRITAC West technical assistance.
- Ensure coverage of public enterprise debt in accordance with the Public Sector Debt Statistics Compilation Guide (PSDSG 2011) by end-2025.
- Complete gradual transition to GFSM 2014.

### Price regulation and food security measures
- Minimum farm gate prices guaranteed to cocoa, coffee and cashew producers will continue to be set using prevailing mechanisms.
- Measures to combat high cost of living and protect household purchasing power:
  - Short-term market supply measures:
    - Construct three wholesale markets and 12 intermediary markets as part of the Food Value Chain Development Project (PDC2V).
    - Construct 40 local rural markets under the Agricultural Emergency Program (PURGA 2).
    - Adopt a food product marketing strategy.
  - Medium-term actions:
    - Modernize agricultural, livestock and fish production techniques using irrigation, mechanization and fertilizers.
    - Increase means of production, preservation and processing of food products.
    - Establish mechanism to set up and manage an emergency food stock.
    - Establish incentives to increase investments in food transport.
    - Continue rehabilitation of rural access roads to reduce post-harvest losses.
    - Construct modern bus stations and parking lots.

### Financial sector development and inclusion
- Restructure and recapitalize undercapitalized public banks:
  - Banque de l’Habitat de Côte d’Ivoire (BHCI):
    - Capital increases between 2020 and 2022 improved BHCI’s core capital and capital adequacy ratio.
    - Government working to bring the bank into compliance with regulatory requirements through additional capital contributions.
    - Government vision to make BHCI the reference bank for real estate financing; further strengthening planned over the next five years.
  - Banque Populaire de Côte d’Ivoire (BPCI):
    - Efforts over past five years reduced rate of portfolio deterioration by a factor of four at end-2022.
    - 2023–2027 outlook based on measures to improve financial soundness and compliance with capital adequacy ratio, including adopting a recapitalization scheme and opening the bank to capital investments by a financial partner.
- BCEAO monitoring of compliance with transitional Basel II and III provisions.
- Deepening financial markets and promoting inclusion:
  - Enforce Law on Factoring adopted in December 2022.
  - Make Agricultural Commodities Exchange (BMPA) operational through adoption of legal framework and start-up of activities in 2023.
  - Increase mobilization of long-term resources by stepping up activities of Caisse de Dépôt et de Consignation.
  - Continue implementation of the National Financial Inclusion Strategy (2019-2024 SNIF) aiming to increase financial inclusion rate from 41 percent in 2017 to 60 percent in 2024.
    - Mid-term review of SNIF to take account of new priorities by end-May 2024 (SB for end-May 2024).
    - Prepare new SNIF for 2025-2029 by end-2024.

### Public enterprises governance and sectoral support
- Monitoring and audits:
  - From 2017 to end-2022, 37 performance contracts were signed and regularly monitored.
  - Continue signing performance contracts; five new contracts planned in 2023.
  - From 2018 to 2022, 39 audits conducted in public enterprises.
  - Future audits: at least once every three years for each majority government-owned enterprise; systematic audits for enterprises with deficits for the past two years or in financial distress.
- Energy sector support:
  - Restore electricity sector to sound financial footing for 2023–27 by:
    - Adjusting rates periodically.
    - Negotiating mechanism for refinancing arrears owed to IPPs and fuel suppliers.
  - Causes of arrears increase starting February 2022:
    - Delay in entry into operation of new thermal production plants leading to declining export volumes.
    - Recourse in Q4 2021 to heavy vacuum oil (HVO), more expensive than gas.
    - Accumulation of export arrears, primarily by Energies du Mali (EDM).
  - Adopted investment program extending to 2040 to make Côte d’Ivoire a subregional energy hub with solar, biomass, hydroelectric, coal, thermal and LNG projects.
  - Ivoirian Refining Company (SIR):
    - Economic and financial performance improved in 2022 over 2021 due to increases in refining margins and a buoyant subregional market.
    - SIR development plan projects target compliance with international fuel standards, greater energy efficiency and adaptation to energy transition; policy to regain control of hinterland markets to continue.
  - Ensure implementation of memorandum on treatment of cross-claims and debts in the sector.
- Transport sector enterprises:
  - Air Côte d’Ivoire (ACI):
    - Focus on strengthening regional and domestic networks, building human capital and improving operational efficiency to ensure financial profitability within five years.
    - Government plans to fund implementation of company’s Competitiveness Plan (PCOM).
    - Fleet increase in 2023 with entry into service of three leased aircraft.
  - Abidjan Transport Company (SOTRA):
    - Given 2022 performance, financial position to be consolidated based on planned investments to expand the network and diversify activities.

### Business climate, industrialization and SME support
- Reform agenda:
  - Government aims to carry out remaining 14 projects from 2020-2022 reform agenda (seven in progress, seven initiated).
  - Plan to adopt new reform agenda for 2024–26 in 2023.
  - Specific projects to complete: generalized use of Single Enterprise Identifier, rationalization and dematerialization of licenses and business permits, overhaul of Single Investor Services Portal (PUSI), interconnection of IT systems.
- Industrial and agricultural clusters:
  - Industrial clusters:
    - Bonoua industrial zone dedicated to agro-industries; several food processing companies installed.
    - PK 24 (Akoupé-Zeudji) industrial zone dedicated to production of construction materials, particularly cement; almost ¾ of industrial units for cement production located in this zone.
    - Feasibility study for textile free zone in Bouaké underway.
    - Implementation studies for seven clusters to be completed by end-2023.
  - Agricultural clusters:
    - Nine agricultural clusters identified; gradual deployment following startup of Agricultural Clusters 1 and 2:
      - 2PAI-Bélier at Yamoussoukro (center of country).
      - 2PAI-Nord in Sinématiali (north).
- SME support and programs:
  - SME taxation overhaul in 2021:
    - Two new tax regimes:
      - Entrepreneur regime for enterprises with annual turnover below CFAF 50 million.
      - Micro-enterprise regime for businesses with annual turnover exceeding CFAF 50 million but below or equal to CFAF 200 million.
    - Entrepreneur enrollment efforts identified 23,236 entrepreneurs and issued 8,909 entrepreneur certificates by end-December 2022.
  - GUDE-CI (One-Stop Shop for Enterprise Development) created by Ordinance No. 2022-73 of January 26, 2022:
    - A holding company with two subsidiaries: Côte d’Ivoire PME (support company) and SGPME (SME loan guarantee company).
    - SGPME to receive financial support: CFAF 19.7 billion from the World Bank and CFAF 11.6 billion from KfW.
  - PEPITE-CI 2030 (Economic Program for Enterprise Innovation and Transformation) established to support entrepreneurship and promote resilient SMEs and startups within Vision 2030 value chains.

*Source: Excerpt from the provided IMF content unit.*

### Box 6. PEPITE 2030 Beneficiary Selection Process

### Box 6. PEPITE 2030 Beneficiary Selection Process

### Program governance and launch
- Governance framework defined by Order No. 074/PM/CAB of July 1, 2022 on the creation, organization and operation of the governance framework for the PEPITE 2030 program.
- Program launched in October 2022.
- Program objective: identify an initial cohort of 100 to 150 beneficiaries, at a rate of 5 to 15 per sector.
- Call for applications closed on February 28, 2023.

### Selection mechanism
- Submission channels:
  - Online applications through the dedicated program platform (www.pepite2030.gouv.ci).
  - Complete hard copy applications by mail using the form provided online.
- All applications are analyzed on the basis of eligibility criteria and program evaluation criteria.
- Selection process described as rigorous and transparent, covering the entire country.

### Next steps and beneficiary support
- Next steps:
  - Interviewing of shortlisted candidates by a selection panel, which will include private sector representatives.
  - Final selection of beneficiaries in the second quarter of 2023.
  - Deployment of support mechanisms for beneficiaries.
- Support to selected enterprises:
  - Administrative, regulatory, tax, financial, training and communications support from the government.
  - Beneficiaries will be subject to strict requirements set out in a performance contract and an ethics charter.

### Governance and anti-corruption measures (contextual linkages)
- 2023–2027 National Anti-Corruption Strategy adopted by the Council of the High Authority for Good Governance (HABG) in April 2023 and submitted to the government for adoption in the Council of Ministers.
- System for the Detection and Prevention of Acts of Corruption and Related Offenses (SPACIA) established by Decree No. 2022-264 of April 13, 2022:
  - Mission: receive reports of acts of corruption and related offenses, process them and refer them to the competent authorities; provide a statistical database for decision-making.
  - 2022: 519 reported cases received via SPACIA, of which 309 were presumed to involve corruption and related offenses.
  - Long-term objective: increase public participation in efforts to combat corruption and improve the effectiveness of governance actions.
- Preparation in 2023 of the first progress report on the National Action Plan (NAP) related to the African Peer Evaluation Mechanism (APEM) to track progress and identify remaining governance challenges.
- Target: improve the asset disclosure rate to 90 percent at end-December 2024.
- Specific government measures will focus on:
  - strengthening institutions responsible for implementing the 2023-2027 National Anti-Corruption Strategy (SNLC);
  - implementing recommendations from the 2019 EITI assessment;
  - implementing the AML/CFT supervisory regime adopted in March 2022 for certain non-financial professions and adopting priority reforms from the forthcoming IMF AML/CFT evaluation.

### Climate change and sustainable development (relevant environment for programs like PEPITE)
- Revised Nationally Determined Contributions (NDCs) submitted in May 2022:
  - Mitigation target: reduction in greenhouse gas emissions of 30.41 percent by 2030, as against 28.25 percent previously.
  - Adaptation focus: increase in resilience in five key sectors: forestry, agriculture, water resources, coastal zones, and health.
- Mitigation strategies include: National REDD+ Strategy, New Forestry Policy, and National Strategy for the Reduction of SLCPs (Short-Lived Climate Pollutants).
- Adaptation actions reference: National Climate Change and Gender Strategy (2019) and the 2018-2025 National Agricultural Investment Program 2 (PNIA).
- Government plans to seek financing under the Resilience and Sustainability Trust.
- Abidjan Initiative (May 2022, COP 15) objectives and commitments:
  - Restore agriculture to a job creation and income generation role; produce social balance guaranteeing balanced nutrition and a decent standard of living.
  - Focus areas: (i) combating deforestation; (ii) restoring at least 20 percent of forest cover by the end of the decade; (iii) improving agricultural productivity and identifying future value chains; (iv) ensuring the sustainability of existing value chains.
  - Coordination Unit established to monitor the National Anti-Drought Plan and land restoration projects.
  - Investment plan adopted: $1.5 billion covering the next five years; financing requires support from technical and financial partners.
- Sustainable Cocoa Program objectives (summary):
  - Ensure that the majority of cocoa producers (60 percent) and their families have an income level above the “decent income” level by 2030.
  - Gradually increase forest cover from 11 percent in 2015 to 20 percent in 2030.
  - Eliminate the worst forms of child labor (WFCL) and work below the minimum employment age in cocoa farming by 2025.
- Strategic focuses of the Sustainable Cocoa Program include economic, environmental, and social sustainability measures (see source for detailed bullet points).

### Statistics system strengthening (relevance for monitoring and selection transparency)
- Adoption of implementing regulations for Law No. 2020-950 of December 7, 2020 amending and supplementing Law No. 2013-537 of July 30, 2013 on the organization of the National Statistics System, including drafts on:
  - National Public Statistics Authority (ANSP);
  - National Statistics Council (CNStat);
  - National Statistics Agency (ANStat);
  - National Statistics Development Fund (FNDS).
- Plans to step up production and dissemination of statistics via:
  - establishment of new indicators;
  - improvement of national accounts and business database;
  - adherence to the Special Data Dissemination Standard (SDDS) by end-2025.
- Specific statistical actions:
  - Continue work to develop high frequency indicators, including the revamped Advanced Public Works and Construction Indicator (IA BTP), industry opinion balances, the turnover index (ICA) for construction, the final household consumption index.
  - Update and improve the harmonized consumer price index (IHCPI); update and expand the producer price index (PPI); develop export import price indexes (XMPIs).
  - Complete alignment of the Quarterly National Accounts (QNA) with the rebased Annual National Accounts (ANA) by January 2024, and continue development of sectoral accounts.
  - Conduct the 2022-2023 Côte d’Ivoire General Census of Enterprises and Establishments (RGEE-CI) to obtain up-to-date economic and financial data and establish a Geographic Information System (SIG).
  - Overhaul the INS website to disseminate all available indicators.
  - Continue efforts to adhere to the SDDS in 2025 and become the sixth African country to do so.

### Program financing and monitoring (implications for PEPITE and broader support)
- Government estimate: financing gap for the 2023–25 program will be covered.
- Financing sources:
  - Mobilize additional financing on the regional money market and with external partners.
  - Domestically: optimize recourse to fundraising on the regional market to protect private sector access to credit.
  - Externally: recourse to the international market depending on financial conditions; preference for donor community to strengthen regional exchange reserves.
- Monitoring framework:
  - Program to be monitored on a half-yearly basis by the IMF Executive Board based on quantitative performance criteria (PCs), indicative targets (ITs) and structural benchmarks.
  - Reviews semi-annual, with the first two reviews on or after November 15, 2023 and May 15, 2024, based respectively on end-June 2023 and end-December 2023 test dates for periodic PCs.
  - Government commitments include:
    - refrain from all types of advances on revenue and from contracting nonconcessional external loans other than those specified in the TMU;
    - issue public securities only at auction through the BCEAO or other competitive bidding on the local financial market or the WAEMU market and consult IMF staff for all new financing;
    - not to introduce or intensify restrictions on payments and transfers for international current transactions, introduce multiple currency practices, enter into bilateral payments agreements inconsistent with Article VIII of the IMF Articles of Agreement, or impose or intensify import restrictions for balance of payments purposes;
    - adopt any new financial or structural measures necessary for policy success, in consultation with the IMF.

### Technical Memorandum of Understanding (TMU) — quantitative indicators (program monitoring)
- TMU scope:
  - Describes quantitative and structural assessment criteria for monitoring the ECF/EFF-supported program and specifies periodicity and deadlines for data transmission.
  - Government defined as the central government of Côte d’Ivoire, including CNPS and CGRAE, and Treasury operations for public companies in liquidation; excludes local authorities, BCEAO, and other government-owned entities with separate legal status.
  - Public entities defined as majority government-owned companies, SIR, and other public entities receiving earmarked tax and quasi-tax revenues.
- Performance criteria (PCs) and indicative targets (ITs) set for June 30, 2023 and December 31, 2023; same variables are ITs for September 30, 2023 and March 31, 2024.
- PCs include (exact wording preserved):
  (a) a floor on the overall fiscal balance (including grants);
  (b) a ceiling on net domestic financing (including the issuance of securities in francs of the Financial Community of Africa (CFA)—or Communauté Financière Africaine in French);
  (c) a ceiling on the present value of new external debt (with a maturity of more than one year) contracted or guaranteed by the central government;
  (d) a floor on government tax revenue;
  (e) a zero ceiling on the accumulation of central government new external arrears; and
  (f) a zero ceiling on the accumulation of central government new domestic arrears.
- ITs include:
  a) a floor on targeted social spending;
  b) a ceiling on expenditures by treasury advance;
  c) a floor on the net reduction of central government amounts payable; and
  d) a floor on the basic primary balance.
- Calculation basis: PCs, ITs and adjustors calculated as the cumulative change from January 1, 2023 for the 2023 targets and from January 1, 2024 for the 2024 targets.
- Definitions and formulas:
  - Overall fiscal balance (including project grants) = {Total government revenue (tax and nontax) + (Project grants)} – {Expenditure + Net lending (on a payment order basis)}.
  - Net domestic financing (NDF) defined as the sum of:
    - the banking system’s net claims on the government (including C2D deposits);
    - net non-bank financing (including proceeds from privatizations and sales of assets, and of correspondent sub-accounts of the Treasury);
    - any financing denominated and serviced in francs of the Financial Community of Africa (CFAF), excluding BOAD loans denominated in CFAF, which are classified as external debt;
    - this ceiling includes a margin of CFAF 15 billion above the net cumulative flow projected for each quarter.
  - Net domestic financing (NDF) = Variation of banking system’s net claims on the government (TOFE) + Net non-bank domestic financing (excluding the net variation of amounts payable) + Borrowing denominated and serviced in francs of the Financial Community of Africa (CFAF), excluding BOAD loans + Financing margin of CFAF 15 billion.

*Source: IMF staff summary of Box 6. PEPITE 2030 Beneficiary Selection Process (extracted from the cited PDF).*

### 8. For any new borrowing over and above a cumulative amount of CFAF 50 billion, the

### 1civea2023001 - 8. For any new borrowing over and above a cumulative amount of CFAF 50 billion, the

### Borrowing and issuance of government securities
- For any new borrowing over and above a cumulative amount of CFAF 50 billion, the government undertakes to issue government securities only by auction through the BCEAO or through other form of government securities on the WAEMU financial market registered with the WAMU Financial Market Authority (AMF-UMOA), in consultation with Fund staff.

### Net Domestic Financing (NDF) adjustor (Performance criterion)
- The NDF ceiling will be adjusted upward by the full amount of the difference between the effectively disbursed and the projected budget support (MEFP, Table 1).
- Specifically, the NDF ceiling will be adjusted upwards by the amount of C2D grant expected for that quarter, but not yet deposited by AFD into the C2D account (Compte C2D) at the BCEAO, on the test date (MEFP, Table 1).

### Definition of debt for program purposes
- The program uses the definition of debt set out in paragraph 8(a) of the Guidelines on Public Debt Conditionality in Fund Arrangements, adopted by Decision No. 16919-(20/103), of the Executive Board adopted on October 28, 2020.
- Key elements of the definition:
  - “Debt” means a current, i.e., not contingent, liability, created under a contractual arrangement through the provision of value in the form of assets (including currency) or services, which requires the obligor to make one or more payments in the form of assets (including currency) or services at some future point(s) in time; these payments discharge the principal and/or interest liabilities incurred under the contract.
  - Primary forms of debt:
    - (i) loans (including deposits, bonds, debentures, commercial loans and buyers’ credits) and temporary exchanges of assets equivalent to fully collateralized loans (e.g., repurchase agreements and official swap arrangements);
    - (ii) suppliers’ credits (supplier permits obligor to defer payments until after delivery of goods or services);
    - (iii) leases (debt equals the present value at inception of all lease payments expected to be made during the period of the agreement excluding payments that cover operation, repair, or maintenance).
  - Under this definition, arrears, penalties, and judicially awarded damages arising from failure to make payment under a contractual obligation that constitutes debt are debt. Failure to make payment on an obligation that is not considered debt under this definition (e.g., payment on delivery) will not give rise to debt.

### External debt definition and scope
- External debt is defined as debt contracted or serviced in a currency other than the franc of the Financial Community of Africa (CFAF), except for CFAF-denominated debt owed to the BOAD which is also considered external debt.
- The performance criterion (PC) concerning the present value (PV) of new external debt contracted or guaranteed by the central government applies to all new external debt (whether or not concessional), including commitments contracted or guaranteed for which no value has been received.
- Exclusions to this PC:
  - normal import-related commercial debts having a maturity of less than one year;
  - rescheduling agreements;
  - IMF disbursements.
- For program monitoring purposes, external debt is deemed contracted or guaranteed once all conditions for its entrance into effect have been met, including approval of the relevant agreement by the government of Côte d’Ivoire (Council of Ministers) if necessary.
- For eurobonds, the amount deemed contracted is the amount subscribed/purchased at the end of the subscription/purchase period as specified in the final clauses of the exchange.

### Currency conversion for program purposes
- For program purposes, the value in U.S. dollars of new external debt is calculated using the average exchange rate for December 2022 in the IMF’s International Financial Statistics (IFS) database:
  - 619.481 FCFA per U.S. dollar
  - 1.059 U.S. dollar per euro
  - 1.329 U.S. dollar per SDR

### Calculation of Present Value (PV) of new external debt
- The PV of new external debt is calculated by discounting all future debt service payments (principal and interest) on the basis of a program discount rate of 5 percent and taking account of all loan conditions, including maturity, grace period, payment schedule, front-end fees and management fees.
- The PV is calculated using the IMF model for this type of calculation based on the amount of the loan.
- A debt is considered concessional if on the date on which it is contracted the ratio of its present value to its face value is less than 65 percent (equivalent to a grant element of at least 35 percent).
- In the case of loans for which the grant element is zero or less than zero, the PV is set at an amount equal to the face value.

### Variable-rate debt treatment
- For variable interest rate debt in the form of a reference interest rate plus a fixed margin, the PV of the debt is calculated on the basis of the program reference rate plus a fixed margin (in basis points) specified in the loan agreement.
- The program reference rate for the euro six-month FIRF is 2.63 percent and will remain unchanged for the duration of the program.
- The spread of the US$ six-month FIRF over the euro six-month FIRF is 50 basis points.

### Adjustors for the PV of new external debt (Performance criterion)
- The program ceiling applicable to the PV of new external debt is adjusted upward up to a maximum of 5 percent of the ceiling on the PV of external debt in cases in which differences vis-à-vis the PC on the PV of new debt are caused by a variation in financing conditions (interest, maturity, grace period, payment schedule, front-end fees, management fees) of the debt or debts.
- The adjustor may not be applied when the differences are the result of an increase in the face value of the total debt contracted or guaranteed.

### Information and notification requirements
- The authorities will inform IMF staff of any planned external borrowing and the conditions on such borrowing before the loans are either contracted or guaranteed by the government.

### External Borrowing Plan (2023–2024) — summary structure (as presented)
- Table headings and categories presented in the source include:
  - By Sources of Debt Financing: Volume of New Debt, US$ million 1/ and PV of New Debt, US$ million 1/ (columns for January-March 2024, January-June 2023, January-September 2023, January-December 2023)
  - Concessional Debt and Non-Concessional Debt breakdowns with entries for Multilateral debt, Bilateral debt, Semi-concessional debt, Commercial terms.
  - Uses of Debt Financing: Infrastructure, Social expenditure, Budget financing, Other.
- Note: The source indicates the present value of debt is calculated using the terms of individual loans and applying the 5 percent program discount rate and provides the label “Source: Ivoirian authorities.”

### Floor on Central Government Tax Revenue (Performance criterion)
- Total tax revenue is defined as all fungible tax revenue (excluding earmarked revenue) collected by the General Directorate of Taxes (DGI), the General Directorate of the Treasury and Public Accounting (DGTCP) and the General Directorate of Customs (DGD), as well as earmarked tax revenue as defined in the fiscal reporting table (TOFE).
- It excludes all revenues from asset sales, grants, and non-tax revenues.
- The program will have a floor on central government tax revenues set at 95 percent of the projected tax revenue for the rest of the current year to take into account fluctuations in revenue due to unforeseen factors beyond the government's control.
- The revenue target is calculated as the cumulative flow from the beginning of the calendar year.
- The margin of 95 percent does not apply to realized quarterly tax revenue.

### Earmarked tax revenues (as of end-March 2023)
- Earmarked tax revenues include only the following list of earmarks:
  - Earmarked revenues to collectivities
  - Coffee-Cocoa Royalties, CCC share - Harvest bags
  - Agricultural Investment Fund (Fonds d'Investissement Agricole (2QC))
  - Cashew parafiscality
  - Péréquation
  - TSU FER
  - TOEM
  - FIMR
  - TSU SIR
  - PCC-PCS et PUA
- The authorities will notify the Fund with respect to any changes in the list of earmarks.

### External payments arrears (Performance criterion)
- External arrears correspond to the nonpayment of any interest or principal amounts on their due dates (taking into account any contractual grace periods).
- This PC applies to arrears accumulated on external debt contracted by the government and external debt guaranteed by the government for which the guarantee has been called by the creditors.
- This continuous performance criterion will be monitored continuously by the authorities and any non-observance will be reported promptly to the Fund.

### Amounts payable, domestic payment arrears, and floating debt (Indicative target and PC)
- “Amounts payable” (or “balances outstanding”) include domestic arrears and floating debt and represent the government’s overdue obligations; defined as expenditures assumed (prise en charge) by the public accountant, but yet to be paid.
- These obligations include:
  - (i) bills due and not paid to nonfinancial public and private companies; and
  - (ii) the domestic debt service.
- Domestic payment arrears:
  - Arrears to suppliers: overdue obligations to nonfinancial and private companies for which the payment delay exceeds the regulatory delay of 90 days.
  - Arrears on domestic debt service: debt service obligations for which the payment delay exceeds 30 days beyond the time stipulated in the contracts, including any applicable grace period.
- Floating debt: balances outstanding for which the payment delay does not exceed the regulatory delay (90 days for debt to nonfinancial companies and 30 days for debt service).
- Balances outstanding are broken down by payer and type, and by maturity and length of time overdue (< 90 days, 90–365 days, > 1 year for amounts owing to nonfinancial companies; and <30 days, 30-365 days, > 1 year for amounts owing to financial institutions).
- For program purposes, the ceiling on the accumulation of new domestic payments arrears is zero. This continuous performance criterion will be monitored continuously by the authorities and any non-observance will be reported promptly to the Fund.

### Targeted social spending (Indicative target)
- Targeted social spending is derived from the detailed list of targeted programs in the SIGOBE system and comprises:
  - Social protection: productive cash-transfer program and social registry budget.
  - Health: covering the following Régime d’Assistance Médicale de la Couverture Maladie Universelle (RAM-CMU), operating costs of primary health facilities, and Caisse Nationale d’Assurance Maladie (CNAM).
  - Education.
  - Youth employment.
- The source presents detailed quarterly FCFA amounts for specific programs (e.g., Social Protection, Health, Education, Youth Employment) and a TOTAL line with amounts such as:
  - TOTAL 160,533,917,453 (Q1 2023)
  - TOTAL 306,959,006,459 (Q2 2023)
  - TOTAL 699,979,916,260 (Q3 2023)
  - TOTAL 949,214,275,593 (Q4 2023)
  - TOTAL 171,418,105,841 (Q1 2024)

### Treasury advances (Indicative target)
- Treasury advances are defined as spending paid for by the Treasury outside normal and simplified execution and control procedures (see Decree No. 1998-716) that have not been subject to prior commitment and authorization.
- They exclude the “régies d’avances” (ministerial decree n° 2013-762) and the extraordinary procedures in decree n° 1998-716 for expenditures financed by external resources, wages, subsidies and transfers, and debt service.
- The cumulative amount of expenditures by treasury advance as defined by the program will not exceed the cumulative quarterly ceilings representing 10 percent of quarterly budget allocations (excluding externally financed expenditures, wages, subsidies and transfers, and debt service).
- The nominative and restrictive list of expenditures eligible as treasury advances is as defined by ministerial Decree No. 178/MEF/CAB-01/26 of March 13, 2009.

### Primary basic fiscal balance (Indicative target)
- The primary basic balance is defined as:
  - Fiscal revenue (tax and nontax revenue, excluding grants) – {Total expenditure + Net lending – Interest payments – Externally financed capital expenditure (on a payment order basis for all expenditure items)}.
- Government expenditures are defined as expenditures for which payment orders have been issued and which have been assumed by the Treasury.

### Memorandum items and definitions
- Net banking system claims on the government: difference between government debts and government claims vis-à-vis the central bank and commercial banks (including the C2D deposits); scope used by the BCEAO and same as the Net Government Position (NGP).
- External financing definitions used in the program:
  - Project grants: non-repayable money or goods intended for financing a specific project.
  - Program grants: non-repayable money or goods not intended for financing a specific project.
  - Project loans: repayable money or goods on which interest is charged, received from a donor to finance a specific project.
  - Program loans: repayable money or goods on which interest is charged, received from a donor and not intended for financing a specific project.

*Source: CÔTE D’IVOIRE — INTERNATIONAL MONETARY FUND (excerpts from the provided content).*

### 30. A quarterly assessment report on the monitoring of the quantitative performance

### 30. A quarterly assessment report on the monitoring of the quantitative performance criteria, indicative targets, and structural benchmarks

### Reporting and monitoring requirements
- A quarterly assessment report on the monitoring of the quantitative performance criteria, indicative targets, and structural benchmarks will be provided by the authorities no later than 45 days following the end of each quarter.
- The government will report the information specified in Table 5 no later than 45 days following the month-end or quarter-end, except for information specifically noted to be provided later in Table 5.
- The government will report final data provided by the BCEAO within 45 days following the month-end. The information will include a complete, itemized listing of public sector assets and liabilities vis-à-vis: (i) the BCEAO; (ii) the National Investment Bank (Banque Nationale d’Investissement, or BNI); and (iii) the banking system (including the BNI).
- The authorities will consult with Fund staff on any proposed new external debt. The authorities will inform Fund staff of the signature of any new external debt contracted or guaranteed by the government, including the conditions on such debt. Data on new external debt, the amount outstanding, and the accumulation and repayment of external payments arrears will be reported monthly within six weeks of the end of each month.
- More generally, the authorities will report to the IMF staff any information needed for effective monitoring of the implementation of economic policies.

### Document transmittal timetable (highlights from Table 5)
- Real sector:
  - Cyclical indicators: Monthly — End of month + 45 days
  - Provisional national accounts: Annually — End of year + 9 months
  - Final national accounts: Variable — 60 days after revision
  - Disaggregated consumer price indices: Monthly — End of month + 45 days
- Public finances (selected):
  - Fiscal reporting table (TOFE): Monthly — End of month + 45 days
  - Budget execution report: Quarterly — End of quarter + 45 days
  - Pro-poor expenditures: Monthly — End of month + 45 days
  - Central government domestic arrears: Monthly — End of month + 45 days
  - Consolidated Treasury balances outstanding: Monthly — End of month + 45 days
  - Annual cash flow plan: Annually — End of year + 45 days
- Domestic and external debt (selected):
  - Detailed domestic debt statement: Monthly — End of month + 45 days
  - Breakdown of new domestic loans and guarantees: Monthly — End of month + 45 days
  - Detailed external debt statement: Monthly — End of month + 45 days
  - Breakdown of new external loans and guarantees: Monthly — End of month + 45 days
  - Projected external debt service: Quarterly — End of quarter + 45 days
- Monetary and financial sectors:
  - Banking survey: Monthly — End of month + 45 days (provisional); end of month + 60 days (final)
  - Summary BCEAO position: Monthly — End of month + 45 days (provisional); end of month + 860 days (final)
  - Integrated monetary survey: Monthly — End of month + 45 days (provisional); end of month + 60 days (final)
  - Financial soundness indicators: Quarterly — End of month + 45 days

### Pro-poor and social spending (high-level totals and structure)
- Pro-poor spending is defined as the list of “pro-poor expenditures” in the SIGFIP system as detailed in Table 4.
- TOTAL pro-poor spending (Table 4): 720.0; 1,623.4; 2,403.4; 3,317.7; 756.0 (years/periods as in Table 4).
- Major sector totals and selected line items (values in Billions of CFA Francs as in Table 4):
  - Agriculture and Rural Development (subtotal shown across quarters): 21.8 44.6 65.4 87.2 22.9
  - Education: 376.4 881.9 1,261.2 1,674.1 395.2
    - Pre-schooling and primary education: 132.9 329.4 504.4 658.7 139.5
    - Secondary education and vocational training: 147.3 320.3 475.7 640.6 154.7
    - University and research: 72.0 179.5 202.1 269.4 75.6
  - Health: 110.1 262.6 425.8 640.3 115.6
    - General administration (health): 51.7 130.6 179.5 287.0 54.3
    - Primary health system: 21.9 43.0 109.3 167.5 23.0
    - HIV/Aids: 10.2 20.4 30.4 40.9 10.7
  - Water and Sanitation: 30.1 72.2 111.0 140.4 31.6
  - Energy (Access to electricity): 38.7 80.3 101.0 154.7 40.6
  - Roads and Public Works: 89.9 162.8 258.4 382.7 94.4
  - Social Spending (subtotal): 19.0 38.0 59.1 76.1 20.0
  - Decentralization (excl. Education, Health and Agriculture): 22.6 55.1 82.7 110.3 23.7
  - Reconstruction and Social housing: Reconstruction 2.0 6.1 9.1 12.2 2.1; Social housing 1.5 5.0 7.5 10.0 1.6
  - Other Poverty-Fighting Spending: 6.5 11.1 16.6 22.2 6.9
- Source indicated for Table 4: Ivoirien authorities. (2023)

### Selected economic indicators (highlights from Table 6)
- GDP at constant prices (annual percentage change): 1.7 7.0 6.7 6.2 6.6 6.4 6.3
- Consumer price index (annual average): 2.4 4.2 5.2 3.7 1.8 1.7 1.7
- Exports of goods, f.o.b., at current prices: -2.9 18.2 20.7 4.3 9.6 8.9 8.8
- Imports of goods, f.o.b., at current prices: -1.5 24.3 36.5 3.1 6.6 6.3 7.2
- Central Government Operations (percent of GDP):
  - Total revenue and grants: 15.0 15.8 15.3 16.4 17.0 17.4 17.9
  - Total revenue: 14.4 15.3 14.8 15.8 16.5 17.0 17.6
  - Tax revenue: 12.4 13.2 12.9 13.9 14.6 15.1 15.7
  - Total expenditure: 20.4 20.7 22.1 21.7 21.1 20.4 20.9
  - Current expenditure: 14.7 14.9 14.9 14.3 14.0 14.0 14.0
  - Capital expenditure: 5.7 5.8 7.2 7.5 7.1 6.4 6.9
  - Basic primary balance: -2.3 -1.1 -1.8 -0.1 -0.3 0.8 1.2
  - Overall balance, incl. grants, payment order basis: -5.4 -4.9 -6.8 -5.3 -4.1 -3.0 -3.0
- External sector:
  - Current account balance (percent of GDP): -3.1 -4.0 -6.5 -5.6 -4.7 -4.0 -3.4
  - Non-interest current account balance: -2.1 -2.9 -5.3 -4.4 -3.6 -2.9 -2.4
- Memorandum item: Nominal GDP (CFAF billions): 36,252 39,821 43,681 47,642 51,876 56,270 60,858
- Sources: Ivorian authorities, and IMF staff estimates and projections.

### Debt sustainability assessment (DSA) summary and risk ratings
- Overall risk of debt distress: Moderate
- Risk of external debt distress: Moderate
- Composite Indicator (CI) under revised LIC-DSF: 2.94 (based on the October 2022 WEO and the 2021 CPIA) corresponding to a medium debt carrying capacity.
- Key DSA findings:
  - The external debt service-to-revenue indicator breaches twice the threshold, in 2024 and 2025, and remains below the threshold during the remainder of the projection period.
  - Other projected external debt burden indicators are below their thresholds under the baseline.
  - All indicators, except the PV of external debt-to-GDP, are susceptible to a number of stress scenarios; the most extreme involves a shock to exports.
  - The PV of overall debt-to-GDP ratio is below its threshold in the baseline, but exceeds it in a number of stress scenarios, with the most extreme involving a commodity price shock.
  - The impact of deterioration in debt burden metrics is mitigated by: the limited number of breaches, Côte d’Ivoire’s history of successful implementation of reforms under the past two Fund arrangements, strong track record of market access, sustained active debt management, and moderate risk signal from the market financing pressures tool.
  - Nonetheless, the space to absorb shocks remains limited.

### Public debt coverage and contingent liabilities
- Public debt coverage in the DSA:
  - Public debt covers central government debt and guarantees provided by the central government, including guarantees pertaining to SOE debt.
  - Debt of local governments is excluded from DSA coverage.
  - At end-2022, SOE guaranteed and non-guaranteed commercial debt amounted to respectively 1.3 and 0.7 percent of GDP.
  - Treatment in the DSA baseline:
    - All guaranteed SOE debt and on-lent debt is included in the debt stock in the baseline.
    - Non-guaranteed SOE debt is captured as a contingent liability shock set at the default 2 percent of GDP.
- Contingent liability stress test magnitude (Text Table 2):
  - Other elements of the general government not captured: 1.0 percent of GDP
  - SoE's debt (guaranteed and not guaranteed by the government): 2 percent of GDP (default shock)
  - PPP: 35 percent of PPP stock = 2.30 (percent of GDP)
  - Financial market (default value): 5 percent of GDP
  - Total (2+3+4+5) (in percent of GDP): 9.3
  - Note: The stock of public private partnerships represents about 6.6 percent of GDP at end-2022, with more than half of investment commitments in the energy sector.

### Debt background and composition (key figures)
- Public debt levels and evolution:
  - Public debt stood at 58.1 percent of GDP at end-2022, compared with 32.7 percent in 2017.
  - External debt stood at 35.8 percent of GDP at end-2022, compared to 18.7 percent in 2017 — representing 61.7 percent of total debt at end-2022, down from 68.5 percent in 2019 to 57.1 percent (figure cited).
- Composition and creditor shares:
  - 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 28.5 percent of external debt in 2022.
  - Bilateral creditors accounted for about 16 percent of the external debt stock at end-2022 (down from 21 percent in 2016).
- Domestic debt:
  - 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 note the risk that excessive recourse to the regional market could tighten financing constraints and crowd out private sector credit.
  - Regional market conditions have tightened as the BCEAO increased its policy interest rate to 3 percent in March 2023 (the fourth increase since June 2022) and moved from the fixed rate full allotment tender to a flexible rate fixed quantity system, which led to a drop in demand for new sovereign issuances across the WAEMU region.

### Ongoing data and institutional reforms
- Authorities are advancing efforts to increase capacity to record and monitor public debt and contingent liabilities, including:
  - Work to enhance data coverage of SOEs in the DSA baseline, including consolidation of general government fiscal accounts with SOE financial statements and corresponding 20-year projections.
  - Technical assistance has been provided to support consolidation and the incorporation of SOE debt into total debt.
  - Ongoing data reconciliation with the World Bank Debt Reporting System.
  - Under the IDA Sustainable Development Finance Policy (SDFP), authorities have implemented Performance and Policy Actions (PPAs) in areas of debt transparency (quarterly publication of on-lent loans to SOEs), fiscal sustainability (legal framework for collection and oversight of non-tax revenue), and debt management (mechanism for approving on-lending to SOEs).

*Source: Ivoirien authorities and IMF staff (excerpts from the chapter "A quarterly assessment report on the monitoring of the quantitative performance criteria, indicative targets, and structural benchmarks").*

### 2017. The remaining shares are associated with commercial creditors (51.7 percent) and guaranteed

### 1civea2023001 - 2017. The remaining shares are associated with commercial creditors (51.7 percent) and guaranteed

### Recent developments
- After resilience to the pandemic, growth softened amid Russia’s invasion of Ukraine and global monetary tightening.
- Real GDP growth:
  - 2020: 1.7 percent
  - 2021: 7 percent rebound
  - 2022: about 6.7 percent (estimate)
- Inflation:
  - 2022: 5.2 percent (reflecting mostly surge in food prices)

### Baseline assumptions under the ECF/EFF arrangement
- Arrangement requested: 400 percent quota (about US$3.5 billion) to support policies under the National Development Plan (NDP).
- Macroeconomic path assumptions:
  - Growth: converging to 6 percent over the medium term from 6.7 percent in 2022.
  - Inflation: returning to subdued levels in the medium term due to the exchange rate peg to the euro.
  - External position: gradual improvement.
  - Fiscal consolidation: gradual, to reach the 3 percent of GDP regional fiscal deficit norm by 2025.
  - Debt recourse: balanced between domestic and external debt.

### Growth and inflation projections
- GDP growth assumptions and projections:
  - Range through the medium term: between 6 and 6.7 percent.
  - 2023: 6.2 percent.
  - Following years: rebound to around 6½ percent, converging to 6 percent over the medium term.
  - Drivers: investments in human capital, infrastructure, reforms in digital, telecom, financial and transport sectors; industry and services support.
  - Downside risks: insecurity in the north, uncertain global developments.
  - Note: nominal GDP in dollars decreased by 10 percent due to euro depreciation against the dollar compared to the last DSA over the projections’ period.
- Inflation projections:
  - 2023: 3.7. percent (annual average CPI as presented)
  - Medium term: around 2 percent, benefiting from the exchange rate peg to the euro.
  - 2022: inflation reached 5.2 percent.

### Fiscal outlook and revenue mobilization
- Fiscal balances:
  - 2022 primary deficit: 4.6 percent of GDP.
  - 2022 overall fiscal deficit: 6.8 percent of GDP.
- Drivers of wider deficits in short term:
  - Response to Russia’s invasion of Ukraine spillovers.
  - Higher security spending.
  - Acceleration of public investment under the NDP.
- Authorities’ commitment:
  - Converge to 3 percent of GDP regional target by 2025 through strong consolidation and domestic revenue mobilization (DRM) while preserving priority spending.
- Tax revenue projections:
  - 2022: 12.9 percent of GDP.
  - 2025: 15.1 percent of GDP.
  - End of projections’ period: close to 18 percent of GDP.
- Revenue mobilization measures (examples listed in source):
  - Eliminating VAT tax exemptions.
  - Accelerating removal of business tax exemptions.
  - Streamlining personal income tax regime.
  - Improving property regime.
  - Fully rolling out new IT system.
  - Pursuing public finances management reforms.
- Coverage of fiscal accounts:
  - Broadened consistent with GFSM 2014 to include off-budget earmarked revenues collected by public enterprises (specifically retroactive inclusion of the Perequation Produit revenue collected by the refinery (SIR)).
  - Inclusion of taxes paid for and collected by the state in relation to donor externally financed projects following WAEMU directive.

### External sector and current account
- Current account:
  - 2022: deficit estimated at 6.5 percent of GDP.
  - Expected to narrow to 3.1 percent of GDP in 2028.
  - Exports expected to grow more than imports from 2024 onwards due to NDP and Côte d’Ivoire 2030 policies and higher prices in key export crops.
  - Fiscal consolidation expected to support narrowing of current account and revert trade balance to historical surplus.

### Debt management strategy and financing composition
- 2023 financing strategy: mix of domestic and foreign currency sources, balanced mix of external and domestic instruments.
- Multilateral and bilateral financing projected to decline:
  - From 5 percent of GDP in 2022 to 2.3 percent in 2042.
- IDA share of multilateral financing projected:
  - 2022: 70 percent
  - 2042: 21 percent
- Eurobond debt service: represents 25 percent of external debt service over next 3 years.
- Domestic CFAF securities issuance maturity assumptions:
  - 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
- Projected average interest rates over projections’ period:
  - Regional (WAEMU) interest rates: 5.4 percent
  - Eurobonds’ interest rates: 5.7 percent
- Institutional and legal strengthening:
  - New debt department (Direction générale des financements, DGF) created in March 2023 with responsibilities including supervision of mobilization of loans and grants, coordination of donor-financed projects, overseeing MTDS and DSA, centralizing public debt data and analysis.
  - New law on public debt policies planned (Structural Benchmark, September 2023) to: define objectives and prudential rules; establish public debt commitment procedures; rationalize debt operation and management framework; clarify on-lending rules; and strengthen institutional framework.

### Macroeconomic and numerical projections (selected figures from Text Table 3 and projections)
- Real GDP (annual % change, selected):
  - 2020: 1.7
  - 2021: 7.0
  - 2022: 6.7
  - 2023: 6.2
  - 2024: 6.6
  - 2025: 6.4
  - 2026: 6.3
  - 2027: 6.1
  - 2028: 6.0
- GDP deflator (selected): 1.6, 2.7, 2.8, 2.7, 2.1, 1.9, 1.7, 1.5, 2.0 (2020–2028 sequence as in source table).
- Exports of goods, f.o.b., at current prices (2020–2028 sequence as in table): -2.9, 18.2, 20.7, 4.3, 9.6, 8.9, 8.8, 8.1, 7.6
- Imports of goods, f.o.b., at current prices (2020–2028 sequence): -1.5, 24.3, 36.5, 3.1, 6.6, 6.3, 7.2, 6.8, 7.5
- Total revenue and grants (percent of GDP, 2020–2028 sequence): 15.0, 15.8, 15.3, 16.4, 17.0, 17.4, 17.9, 17.9, 17.9
- Total revenue (percent of GDP, 2020–2028 sequence): 14.4, 15.3, 14.8, 15.8, 16.5, 17.0, 17.6, 17.5, 17.6
- Total expenditure (percent of GDP, 2020–2028 sequence): 20.4, 20.7, 22.1, 21.7, 21.1, 20.4, 20.9, 20.9, 20.9
- Primary balance (percent of GDP, 2020–2028 sequence): -3.6, -3.0, -4.6, -3.0, -1.9, -0.8, -0.8, -0.8, -0.9
- Overall balance, incl. grants, payment order basis (percent of GDP, 2020–2028 sequence): -5.4, -4.9, -6.8, -5.3, -4.1, -3.0, -3.0, -3.0, -3.1
- Current account balance (percent of GDP, 2020–2028 sequence): -3.1, -4.0, -6.5, -5.6, -4.7, -4.0, -3.4, -3.1, -3.1
- Nominal GDP (USD Billion) projections (selected horizons): 98.9 (2023-2028), 147.9 (2029-2033), 244.3 (2034-2042), 93.9, 141.2, 242.0 (presented in source table across columns)
- Real GDP (y/y % change) projections (multi-period averages in source): 6.2, 5.8, 5.6, 6.4, 5.9, 5.6 (as presented)

### Debt risk, stress tests, and classification
- Debt carrying capacity: Medium (composite indicator 2.94; cut-offs: lower 2.69, strong 3.05).
- Tailored market-financing stress test assumptions:
  - Temporary increase in cost of new commercial external borrowing by 400 basis points.
  - Nominal depreciation of 15 percent of the CFAF vis-à-vis the US$.
  - Shortening of maturities and grace periods for commercial external borrowing (detailed shortening rules in source).
- Contingent liability tailored shock (to capture fiscal risks from SOEs, PPPs, and financial market):
  - Standardized 2 percent of GDP for SOE risks.
  - 2.3 percent of GDP shock on 35 percent of PPP capital stock.
  - Financial sector shock of 5 percent of GDP.
- Standard stress tests applied on: real GDP growth, primary balance, exports, current transfers, FX depreciation, and commodity prices.
  - FX depreciation shock: nominal depreciation of 30 percent of the CFAF vis-à-vis the US$ in the first year.
  - Commodity price shock: one standard deviation decline in commodity prices.
- External debt sustainability findings:
  - Country remains at moderate risk of debt distress when judgement is applied, despite two temporary breaches under the baseline in 2024 and 2025.
  - Debt service-to-revenue ratio:
    - Breaches at 21.9 percent (2024) and 20.6 percent (2025) which mechanically trigger high risk, but judgement leads to moderate risk assessment.
  - Deterioration factors: euro/US$ exchange deterioration and external commercial debt contracted in 2022 on non-concessional terms with higher interest rates and shorter maturities.
- Rationale for applying judgement to maintain moderate risk classification:
  - Strong track record of market access via eurobond issuance.
  - Consideration of liabilities management operations (LMO) when market conditions improve.
  - Guarantees from regional banks may improve financing conditions if markets normalize.
  - Market financing pressures tool indicates moderate risk.

### Institutional and program implementation considerations
- Required consolidation efforts: the realism tool indicates macroframework is plausible but will require relatively strong consolidation to meet targets.
- Residuals and recording issues:
  - 2.2 percent of GDP residual for 2022 largely reflects different recording of project loan disbursements between fiscal accounts and debt statistics, and non-integration in fiscal accounts of new debt contracted and on-lent to SOEs (included in public debt).
- Planned MTDS update and strengthening of debt management processes with World Bank support.
- Potential crowding-out risk:
  - Projected increase in domestic financing requires significant purchases of Ivoirian securities by WAEMU residents; if not realized, external commercial financing would have to increase to fill the gap.
  - Domestic borrowing assumptions require a 35 percent increase in domestic issuance volume within 4 years (from CFAF 2,600 billion projected in 2022 to CFAF 3,500 billion in 2026) at current yields.
- Institutional reforms under the program: DGF creation (March 2023) and planned new public debt law (Structural Benchmark, September 2023).

*Source: IMF staff estimates, projections, and text as provided in the content unit.*

### 17. All PPG debt indicators are below their corresponding thresholds for the next ten

### 17. All PPG debt indicators are below their corresponding thresholds for the next ten

### External debt sustainability: baseline projections and indicators
- PV of external debt-to-GDP: 30.5 percent in 2023, decreasing to 19.5 percent in 2033; relevant threshold: 40.
- PV of external debt-to-exports: peaks at 126.8 percent at the beginning of the projection period before decreasing; relevant threshold: 180.
- Debt service-to-exports ratio: expected to reach 14.9 percent in 2024; relevant threshold: 15 percent.
- Debt service-to-revenue ratio:
  - Expected spike in 2024–25 with two temporary breaches in 2024 and 2025.
  - Remains below the corresponding threshold for most of the projection period thereafter.
- Policy implication: trajectory underscores the criticality of improving domestic revenue mobilization to provide sustainable funding for development needs and buffers on debt service.

### External shock sensitivity
- Export and depreciation shocks:
  - Would have a significant negative impact on external debt sustainability.
  - An export shock would cause the debt service-to-export ratio to breach the threshold from 2024 onward.
  - Most shocks would cause the debt-service-to-revenue indicator to breach the threshold starting in 2024.
- Policy implication: accelerate policies for active debt management to moderate reliance on external borrowing for liquidity management and strengthen resilience to shocks.

### Public debt sustainability: baseline projections and indicators
- PV of public debt-to-GDP: below threshold of 55 percent under baseline; projected to decline to around 39 percent by 2033.
- PV of debt-to-revenue and grants ratio: decline from around 323 percent in 2023 to 204 percent in 2033.
- Debt service-to-revenue and grants ratio:
  - Projected to soar to 47 percent in 2024 and 2025.
  - Decline back to around 19 percent at the end of the projection period.
- Note: November 2020 liability management operation (buy-back of USD 486 million dollar-denominated bonds maturing in 2028 and 2032 and EUR 85 million euro-denominated bonds maturing in 2025) led to a small improvement in liquidity indicators.

### Stress tests, extreme vulnerabilities, and key sources of risk
- Most extreme public debt vulnerability from commodity price shock and combined contingent liabilities:
  - Under standard commodity price stress test, PV of public debt-to-GDP would breach 55 percent starting in 2023 and continue growing.
  - Shock could lead to an explosive pattern in debt indicators, exacerbated by further commodity price increases.
- Exposure: exports of cocoa products represent more than one third of total exports, increasing sensitivity to commodity price fluctuations and highlighting need to accelerate diversification policies.
- Contingent liability shock: would trigger an important spike in 2025 in the debt service-to-revenue ratio.

### Risk rating, overarching vulnerabilities, and programmatic implications
- Overall risk assessment:
  - Remains at moderate risk of external debt distress (as in June 2022 DSA) with limited capacity to absorb shocks.
  - Standard stress tests: PV of external debt-to-exports ratio, debt service-to-export ratio, and debt service-to-revenue ratio would cross thresholds in most extreme shock scenarios.
  - PV of public debt-to-GDP breaches 55 percent starting in 2024 under the most extreme commodity price shock.
- Recent adverse global developments exacerbating risks: COVID environment, Russia’s invasion of Ukraine, and global monetary tightening could weaken global growth and Ivorian exports relative to projections.
- Policy priorities and program anchors under the ECF/EFF-supported program:
  - Intensify revenue mobilization.
  - Promote private-sector led economic transformation and diversify export base.
  - Adopt a prudent external borrowing strategy to balance costs and risks and preserve borrowing space and medium-term debt sustainability.
  - Continue evaluating desirability and timing of tapping external markets (noting authorities refrained from issuing internationally in 2022 as the EMBI spread deteriorated since the 2022 DSA).
  - Leverage the ECF/EFF arrangement and the World Bank DPO to catalyze other donors’ financing at concessional terms.
- Additional governance and fiscal management measures:
  - Carefully monitor debt indicators and conduct prudent GDP growth projections.
  - Create fiscal space and implement judicious policies to preserve macroeconomic stability.
  - Ensure full oversight of SOE debt contracting and fully integrate SOE debt in debt sustainability assessment.
  - Maintain active debt management, including balancing domestic and external debt equilibrium, to preserve debt sustainability and keep the country at moderate risk of debt distress.

*Source: 1civea2023001 - 17. All PPG debt indicators are below their corresponding thresholds for the next ten*

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

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

### Authorities' assessment and commitments
- The authorities confirmed that "Côte d’Ivoire remains at moderate risk of debt distress."
- They are "strongly committed to keeping the country at moderate risk of debt distress."
- Recognize that "the external debt service to revenue ratio breaches twice the threshold in 2024 and 2025 leaving limited margin to absorb shocks."
- Commitments to policy actions:
  - "Continue actively managing their debt portfolio and monitoring closely the concessionality of new contracts and the pace of disbursements to remain in the same debt distress category."
  - "Strongly committed to the policies and targets under the ECF/EFF program for increasing domestic revenue mobilization."

### Key debt indicators and risks (selected figures and diagnostics)
- Public Sector Debt (historical and projections, percent of GDP):
  - 2020: 48.1
  - 2021: 52.1
  - 2022: 58.1
  - 2023: 59.3
  - 2024: 59.4
  - 2025: 58.6
  - 2026: 57.7
  - 2027: 56.6
  - 2028: 55.6
  - 2033: 44.3
  - 2043: 32.6
- Of which: external debt (percent of GDP):
  - 2020: 31.4
  - 2021: 32.2
  - 2022: 35.8
  - 2023: 36.8
  - 2024: 35.8
  - 2025: 34.4
  - 2026: 33.5
  - 2027: 33.0
  - 2028: 32.2
  - 2033: 25.3
  - 2043: 20.1
- Change in public sector debt (percent of GDP):
  - 2020: 8.0
  - 2021: 4.0
  - 2022: 5.9
  - 2023: 1.3
  - 2024: 0.1
  - 2025: -0.8
  - 2026: -0.9
  - 2027: -1.1
  - 2028: -1.1
  - 2033: -2.0
  - 2043: -0.7
- Identified debt-creating flows (percent of GDP):
  - 2020: 2.0
  - 2021: 2.9
  - 2022: 3.7
  - 2023: 0.0
  - 2024: -0.7
  - 2025: -1.6
  - 2026: -1.4
  - 2027: -1.2
  - 2028: -1.2
  - 2033: -1.4
  - 2043: -0.3
- Primary deficit (percent of GDP):
  - 2020: 3.6
  - 2021: 3.0
  - 2022: 4.6
  - 2023: 3.0
  - 2024: 1.9
  - 2025: 0.8
  - 2026: 0.9
  - 2027: 0.8
  - 2028: 0.9
  - 2033: -0.3
  - 2043: 0.4
- Revenue and grants (percent of GDP):
  - 2020: 15.0
  - 2021: 15.8
  - 2022: 15.3
  - 2023: 16.4
  - 2024: 17.0
  - 2025: 17.4
  - 2026: 17.9
  - 2027: 17.9
  - 2028: 17.9
  - 2033: 18.8
  - 2043: 20.3
- Primary (noninterest) expenditure (percent of GDP):
  - 2020: 18.6
  - 2021: 18.8
  - 2022: 19.9
  - 2023: 19.4
  - 2024: 18.9
  - 2025: 18.1
  - 2026: 18.8
  - 2027: 18.7
  - 2028: 18.7
  - 2033: 18.5
  - 2043: 20.7
- Automatic debt dynamics (percent of GDP):
  - 2020: -1.6
  - 2021: -0.1
  - 2022: -0.6
  - 2023: -3.0
  - 2024: -2.6
  - 2025: -2.4
  - 2026: -2.2
  - 2027: -2.0
  - 2028: -2.1
  - 2033: -1.1
  - 2043: -0.7
- Contribution from interest rate/growth differential (percent of GDP):
  - 2020: 0.6
  - 2021: -2.9
  - 2022: -3.8
  - 2023: -3.0
  - 2024: -2.6
  - 2025: -2.4
  - 2026: -2.2
  - 2027: -2.0
  - 2028: -2.1
  - 2033: -1.1
  - 2043: -0.7
- Residual (percent of GDP):
  - 2020: 6.0
  - 2021: 1.2
  - 2022: 2.2
  - 2023: 1.3
  - 2024: 0.8
  - 2025: 0.8
  - 2026: 0.4
  - 2027: 0.1
  - 2028: 0.1
  - 2033: -0.6
  - 2043: -0.4
- Selected sustainability indicators:
  - PV of public debt-to-GDP ratio (selected projections shown): 52.2, 53.1, 53.0, 52.1, 51.0, 50.0, 49.0, 38.5, 28.2
  - PV of public debt-to-revenue and grants ratio (selected projections shown): 341.0, 323.0, 312.0, 299.5, 285.0, 279.9, 274.5, 204.5, 138.8
  - Debt service-to-revenue and grants ratio 3/ (selected years):
    - 2020: 32.4
    - 2021: 32.8
    - 2022: 41.5
    - 2023: 42.8
    - 2024: 46.8
    - 2025: 46.9
    - 2026: 37.1
    - 2027: 32.6
    - 2028: 29.4
    - 2033: 19.0
    - 2043: 12.5
  - Gross financing need 4/ (percent of GDP):
    - 2020: 8.4
    - 2021: 8.1
    - 2022: 10.6
    - 2023: 10.0
    - 2024: 9.8
    - 2025: 8.9
    - 2026: 7.5
    - 2027: 6.6
    - 2028: 6.1
    - 2033: 3.3
    - 2043: 2.9

### Macroeconomic and fiscal assumptions underlying projections (selected)
- Real GDP growth (percent):
  - 2020: 1.7
  - 2021: 7.0
  - 2022: 6.7
  - 2023: 6.2
  - 2024: 6.6
  - 2025: 6.4
  - 2026: 6.3
  - 2027: 6.1
  - 2028: 6.0
  - 2033: 5.8
  - 2043: 5.6
- Average nominal interest rate on external debt (percent):
  - 2020: 4.1
  - 2021: 3.9
  - 2022: 3.3
  - 2023: 3.5
  - 2024: 3.4
  - 2025: 3.3
  - 2026: 3.2
  - 2027: 3.2
  - 2028: 3.2
  - 2033: 3.1
  - 2043: 3.1
- Average real interest rate on domestic debt (percent):
  - 2020: 4.5
  - 2021: 2.7
  - 2022: 2.7
  - 2023: 2.4
  - 2024: 3.1
  - 2025: 3.4
  - 2026: 3.6
  - 2027: 3.9
  - 2028: 3.4
  - 2033: 3.5
  - 2043: 3.7
- Inflation rate (GDP deflator, percent):
  - 2020: 1.6
  - 2021: 2.7
  - 2022: 2.8
  - 2023: 2.7
  - 2024: 2.1
  - 2025: 1.9
  - 2026: 1.7
  - 2027: 1.5
  - 2028: 2.0
  - 2033: 2.0
  - 2043: 2.0
- Growth of real primary spending (deflated by GDP deflator, percent):
  - 2020: 19.0
  - 2021: 8.2
  - 2022: 13.2
  - 2023: 3.7
  - 2024: 3.4
  - 2025: 2.3
  - 2026: 10.0
  - 2027: 5.5
  - 2028: 6.3
  - 2033: 6.7
  - 2043: 10.8
- Primary deficit that stabilizes the debt-to-GDP ratio 5/ (percent of GDP):
  - 2020: -4.4
  - 2021: -1.1
  - 2022: -1.3
  - 2023: 1.7
  - 2024: 1.8
  - 2025: 1.5
  - 2026: 1.8
  - 2027: 1.9
  - 2028: 1.9
  - 2033: 1.8
  - 2043: 1.1

### Sensitivity analysis and stress tests (high-level)
- Tabled sensitivity analyses present alternative scenarios, bound tests, and tailored tests for key indicators (Debt Service-to-Exports Ratio, Debt Service-to-Revenue Ratio, PV of Debt-to-Exports Ratio, PV of Debt-to-GDP Ratio) across 2023–33.
- Several tests show values relative to thresholds with bold indicating breaches; the document notes instances where "the external debt service to revenue ratio breaches twice the threshold in 2024 and 2025."

### Policy implications highlighted
- The limited margin to absorb shocks (given the 2024 and 2025 breaches of the external debt service-to-revenue threshold) underscores the need to:
  - Actively manage the debt portfolio.
  - Monitor concessionality and disbursement pace of new contracts.
  - Pursue ECF/EFF program policies and targets to increase domestic revenue mobilization to remain in the moderate risk category.

*Source: 1civea2023001 - 24. The authorities agreed that Côte d’Ivoire remains at moderate risk of debt distress.*

### 7.4 percent in 2021 and 6.7 percent in 2022. The recovery was broad-based. However,

### 1civea2023001 - 7.4 percent in 2021 and 6.7 percent in 2022. The recovery was broad-based. However,

### Economic performance, inflation, and risks
- Real GDP growth: 7.4 percent in 2021 and 6.7 percent in 2022.
- Inflation: accelerated from 4.2 percent in 2021 to 5.2 percent in 2022.
- Policy responses to high inflation included:
  - regulatory controls of the prices of the main consumer staples;
  - subsidies for retail oil prices;
  - incentives to increase domestic supply;
  - increases in the minimum wage and civil servants’ salaries to protect household purchasing power.
- Fiscal impacts and external balances:
  - Fiscal deficit rose from 4.9 percent of GDP in 2021 to 6.8 percent of GDP in 2022.
  - External balances deteriorated due to higher import prices.
- Medium-term outlook:
  - Brighter prospects from development of the Baleine oil and gas field and scaling up priority investments under the NDP.
  - Downside risks include volatility of commodity export prices, developments in the war in Ukraine, and spillovers from the security situation in the Sahel region.

### The EFF/ECF program objectives
- Program aims: consolidate macroeconomic stability in the near-term, restore internal and external buffers gradually, and enact a comprehensive structural transformation agenda.
- Alignment: program is in line with the latest NDP and Côte d’Ivoire Vision 2030 and includes wide-ranging reforms to build resilience and lay foundations for stronger and more inclusive growth.
- Request: authorities seek an Extended Arrangement Under the Extended Fund Facility and a 40-Month Arrangement Under the Extended Credit Facility.

### Fiscal policies and revenue measures
- Fiscal consolidation target: large and frontloaded plan to anchor fiscal sustainability and converge towards the regional deficit target of 3 percent of GDP by 2025.
- Revenue-side measures:
  - Estimated yield of 1.1 percent of GDP in 2023 from fiscal and revenue administration measures.
  - Key actions: reinstatement of the automatic pricing mechanism for petroleum products; digitalization and tax administration measures to broaden the tax base, combat fraud, and step up collection of tax arrears.
  - Commitment to design and adopt by end-May 2024 a medium-term revenue mobilization strategy with IMF technical assistance.
  - Expected additional revenue increases of about 0.5 percent of GDP per year from 2024 throughout 2026.
- Spending-side measures:
  - Improve spending efficiency while protecting priority social spending and inclusive growth-enhancing investments.
  - Phase out untargeted crisis-era blanket subsidies and scale up cash transfers to vulnerable households and enrollments in universal health coverage (PSGouv).
  - Retained initiatives to create employment opportunities for women and youth, including vocational training (PJGouv 2023-2025).
  - Advance program budgeting reforms and further rationalize the expenditure chain to realize efficiency gains.
- Debt sustainability and management:
  - Côte d’Ivoire assessed at moderate risk of debt distress.
  - Mitigating factors noted: limited number of breaches of rating thresholds under alternative stress-test scenarios; strong track record of market access; history of successful implementation of reforms.
  - Authorities committed to proactive debt management, close monitoring of new borrowing terms, and reforms to increase domestic revenues.
  - Planned reforms include adoption and implementation of new debt legislation and overhaul of the debt department.

### Monetary and financial sector policies
- Regional monetary policy: conducted at the regional level; BCEAO on a tightening cycle and has repeatedly increased its policy rate to contain inflation and help rebuild international reserves.
- BCEAO stance: readiness to raise rates further as needed to achieve price stability mandate.
- Banking sector resilience:
  - Capital adequacy ratios around 13 percent, higher than required under the regional prudential framework.
  - Ongoing monitoring to ensure sector soundness.
- Financial inclusion and deepening:
  - Implementation of the Financial Sector Development Strategy and the National Financial Inclusion Strategy.
  - Actions include digitalization of payments and mobilization of long-term resources leveraging the Caisse de Dépôt et de Consignation.
- Safeguards and assessments:
  - Regional central bank’s safeguards assessment currently underway.
  - Last IMF assessment concluded BCEAO had strong governance frameworks and robust control systems.
  - Latest FSAP assessment found all recommendations were implemented.

### Structural reforms and governance
- Private sector-led growth and business climate:
  - Deepen ongoing reforms, rationalize public administration, simplify and digitalize procedures to create and register businesses, and improve property registry.
  - Launched e-fournisseur to digitalize and increase transparency of public procurement.
  - Initiatives to foster SMEs: one-stop shop GUDE-CI and PEPITE-CI 2030 with capacity building and financing components.
  - Accelerate creation of industrial and agricultural clusters; dedicated industrial zones and two of nine planned agricultural clusters underway.
- State-owned enterprises (SOEs):
  - Reforms to improve SOE efficiency: strengthen Board of Directors oversight, mandatory performance contracts for CEOs, regular external audits.
  - Independent consultant to evaluate and recommend governance strengthening for SOEs.
  - Electricity sector: scale up investments to consolidate Côte d’Ivoire as a subregional energy hub and restore financial soundness by addressing export arrears by Energies du Mali and arrears to independent power producers.
- Governance and anti-corruption:
  - Commitment to strengthen governance and combat corruption forcefully.
  - Improvements reflected in Transparency International ranking from 105 to 99.
  - Adopted National Anti-Corruption Strategy and begun implementing the System for the Detection and Prevention of Acts of Corruptions and Related Offences.
  - Planned actions: institutional strengthening, implementation of the National Action Plan under the African Peer Evaluation Mechanism, and broadening of assets disclosure.
- Climate strategy and commitments:
  - Commitments under the Abidjan Legacy Program and Nationally Determined Contributions.
  - Mitigation pledge: reduce greenhouse gas emissions by 30.41 percent by 2030.
  - Adaptation: continue implementing actions in the National Climate Change and Gender Strategy.
  - Seek additional actions supported by the IMF’s Resilience and Sustainability Trust (RST); requested green PFM and C-PIMA technical assistance and a Country Climate and Development Report from the World Bank.

### Conclusion and program endorsement request
- Côte d’Ivoire described as an important growth and stability pole for West Africa.
- Authorities have continued reforms to double income of the population in this decade and achieve structural transformation while consolidating macroeconomic stability.
- IMF staff request Executive Directors’ support for the authorities’ requests for an Extended Arrangement Under the Extended Fund Facility and a 40-Month Arrangement Under the Extended Credit Facility.

*Source: 1civea2023001 - 7.4 percent in 2021 and 6.7 percent in 2022. The recovery was broad-based. However,*

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_Source: https://www.imf.org/-/media/files/publications/cr/2023/english/1civea2023001.pdf_