## 1civea2024002-print-pdf ## Source details **Canonical URL:** [1civea2024002-print-pdf](https://www.imf.org/-/media/files/publications/cr/2024/english/1civea2024002-print-pdf.pdf) ## Other formats - [Markdown version](/-/media/files/publications/cr/2024/english/1civea2024002-print-pdf.pdf.md) - [Structured JSON version](/-/media/files/publications/cr/2024/english/1civea2024002-print-pdf.pdf.json) --- ### Executive summary and context - EFF/ECF-supported program approved May 2023 (400 percent of quota) helped safeguard macro stability and a moderate rating of debt distress; RSF arrangement approved recently (150 percent of quota) addresses climate challenges. - Authorities’ commitment to reforms under both programs expected to support transformation toward upper middle-income status and enhance climate resilience. - Outlook drivers: - Favorable support from still strong consumption and investment demand and new oil exploration and production activity (Baleine field came online August 2023). - Lower than expected cocoa production is a material downside; risks have become more balanced with increased foreign investor interest and rating upgrades. - Political/social context: - Socio-political context remains calm. - Approximately 6.5 million migrants live in the country (nearly 22 percent of the total population). ### Program performance, implementation, and modifications - Performance through end-May 2024: - All end-December performance criteria and end-December and end-May structural benchmarks were met. - All end-September 2023, end-December 2023, and end-May 2024 structural benchmarks were met. - Requested adjustments: - Authorities request modifications to some QPCs and ITs to reflect the January 2024 Eurobond issuance and updated macro projections (staff supports QPC modifications and completion of second EFF/ECF review and first RSF review). - Financing to be unlocked on approval: - 57.143 percent of quota (equivalent to SDR 371.657 million) under the EFF/ECF. - 9.375 percent of quota (equivalent to SDR 60.975 million) under the RSF. - Program monitoring and conditionality: - Semi-annual program reviews based on QPCs, ITs, and SBs. - Proposed modifications: increase ceilings on PV of external debt contracted or guaranteed for June/Sept/Dec 2024; marginally increase nominal fiscal balance and basic primary balance targets for end-December 2024; increase targeted social spending IT; augment SBs on DRM, PFM, and data dissemination. ### Recent macroeconomic developments and key indicators - Growth: - Staff estimates 2023 real GDP growth at 6.2 percent (staff), 2023 growth is also reported as 6.5 percent in the Letter of Intent (document contains both figures). - Growth supported by CAN 2023 infrastructure completion, stronger secondary sector (energy and mining), Baleine oil field online August 2023; tertiary sector supported by telecommunication and transportation. - Weak external demand, tight financial conditions, weather shocks and disease outbreaks affected export agriculture in 2023H2. - Inflation: - 2023 headline CPI inflation averaged 4.4 percent (down from 5.2 percent in 2022). - Headline inflation declined to 3.5 percent in 2024Q1. - Core inflation has risen somewhat due to transport and services. - Financial sector (selected): - Interbank rates declined by about 100 basis points after BCEAO sovereign debt purchases in July and September 2023. - Private sector credit growth: 7.3 percent in 2022Q4 → 16.2 percent in 2023Q4. - Banks’ Tier 1 capital: 13.2 percent in June 2023 (13.8 percent at end-December 2023 reported elsewhere). - Non-performing loans: 8.7 percent (June 2023). - At end-2023 authorities finalized terms for divesting most of their ownership of one of two remaining state-owned banks. ### Cocoa sector: shock, prices, and balance effects - Role and shock: - Côte d’Ivoire supplies about 40 percent of global cocoa exports. - Sector provides income to about one-fifth of the population; accounts for export revenue of 7 percent of GDP and fiscal revenue of about 1.1 percent of GDP. - Cocoa production slumped 23 percent to 1.8 million tons in 2023, mainly due to adverse weather; estimated drag on 2023 output growth ~1.2 percentage points. - Price dynamics and projections: - Average export price recorded in 2023 was up about 14 percent (y/y). - Staff projects average export price to jump almost 50 percent in 2024 and another 30 percent in 2025. - Staff baseline corresponds to a total price increase of about 110 percent in 2025 relative to 2022 level (current 12-month forward price showed a 180 percent increase relative to 2022 average as of early May). - Price paid to farmers raised by 50 percent effective April 2024. - Production outlook and balance-sheet effects: - With the end of El Niño, 2024 output projected to recover to 2 million tons. - CCC generally aims to sell about 80 percent of anticipated production 12 months ahead (forward contracts delay pass-through). - Staff projects cocoa-related export proceeds to rise from about 7 percent of GDP in 2023 to 11 percent of GDP in 2025. - Cocoa-related fiscal revenues projected to rise from about 1.1 percent of GDP in 2023 to 1.8 percent of GDP in 2025. ### Fiscal performance, public finances, and PFM commitments - Fiscal consolidation and outcomes: - Fiscal deficit fell from 6.8 percent of GDP in 2022 to 5.2 percent in 2023. - Tax revenue estimated at 13.6 percent of GDP in 2023 (up from 12.8 percent in 2022); tax revenue CFAF 200 billion higher than program floor. - Nominal tax revenue for the year was CFAF 130 billion less than anticipated at first review, mainly due to petrol tax shortfall (0.9 percent of GDP, about 0.2 percent of GDP lower than anticipated). - Total expenditure: 21.5 percent of GDP in 2023, 0.2 percent of GDP lower than program projections at first review. - Main policy commitments: - Implement tax policy and administration measures amounting to an additional 0.5 percent of GDP of revenue in each of 2024 and 2025 to converge to 3 percent of GDP WAEMU fiscal deficit target by 2025. - Incorporate into the budget revenues collected by line ministries but not recorded in fiscal accounts. - MTRS adopted May 2024 to boost tax revenue toward long-run WAEMU 20 percent of GDP target. - PFM and transparency: - Publish quarterly central government debt data within one quarter after the reference quarter on the National Summary Data Page (end-September 2024 SB). - Increase use of e-procurement from 50 to 80 percent of all ordinary operations (> CFAF 100 million) between July 2024 and June 2025 (end-July 2025 SB). - Publish annual reviews of PPP portfolio (end-February 2025 SB). - Adoption of GFSM 2014 accounting standards recommended to reduce SFAs over medium term. ### Debt, debt management operation (DMO), and DSA findings - Public debt and composition: - Stock of public debt rose to 58.1 percent of GDP in 2023 from 56.6 percent in 2022 (central government debt including on-lending reported as 59.1 percent of GDP end-2023 in Letter of Intent). - External debt about 60 percent of overall debt; external debt 35.9 percent of GDP (end-2023 figure). - DMO and Eurobond issuance: - January 2024 Eurobond issuance of US$2.6 billion used mostly for a DMO smoothing debt liquidity and improving debt sustainability; issuance composition included $1.5 billion traditional Eurobond (13-year, yield 8.5 percent) and $1.1 billion ESG bond (9-year, yield 7.875 percent). - About $1.9 billion (>70 percent) used for a DMO (partial buyback of 2025 and 2032 eurobonds and early repayments); DMO finalized April 2024. - DMO generated cumulated gross debt service saving of 2.3 percent of GDP between 2024 and 2032 with a peak of 0.9 percent of GDP in 2025. - Debt sustainability assessment: - Debt remains at a moderate risk of debt distress. - PV of external debt-to-GDP: 32 percent in 2024 and 2025; relevant threshold 40 percent. - PV of public debt-to-GDP baseline below 55 percent threshold but vulnerable in stress scenarios; public debt stood at 59.1 percent of GDP at end-2023 (other sources in report cite 58.1 percent). - PPG debt service-to-exports ratio spikes to 20.7 percent in 2024 (due to DMO) then drops to 11 percent in 2025. - Debt service-to-revenue ratio breaches threshold once at 31.8 percent in 2024. - Tailored natural disaster shock: one-off 9 percentage points decline in real GDP growth and export shock of 3.5 percentage points; PV of debt-to-GDP would spike to 60 percent in 2025; debt service-to-revenue would surge to 61 percent in 2024. - Authorities’ stance: - Intend to favor domestic over external debt over the medium term in line with medium-term debt strategy. - Committed to active debt management and to strengthen revenue mobilization. ### External sector, reserves, and financing needs - Current account and reserves: - 2023 current account deficit estimated at 7.8 percent of GDP (other measures show 8.1 percent); 2024 projected to narrow to 5.7 percent of GDP and below 3 percent in 2025 (staff projections). - Goods surplus rose to 2.6 percent of GDP in 2023 despite lower cocoa volumes; large services and primary income deficits more than offset goods surplus. - Large negative change in reserves of nearly 2½ percent of GDP in 2023; net foreign assets picked up in early 2024. - Financing and gap: - Cumulative financing gap projected for 2024-26: about CFAF 2.5 trillion (or 4.4 percent of GDP). - Gross financing under EFF/ECF program would cover about 60 percent of the gap over 2024-26 (about 25 percent when including project financing). - Program remains fully financed with financing assurances from multilateral and bilateral partners for next 12 months. - Selected exact External Financing Requirements (Billions of CFA francs): - A. External Financing Requirements: 2019: 2,131; 2020: 1,987; 2021: 3,587; 2022: 3,966; 2023: 4,091; 2024: 5,604; 2025: 4,120; 2026: 4,272; 2024-26 Cumulative: 13,995. - Current account deficit excl. official transfers (Billions CFAF): 2019: 1,065; 2020: 1,328; 2021: 1,778; 2022: 3,591; 2023: 4,032; 2024: 3,234; 2025: 1,520; 2026: 1,514; 2024-26 Cumulative: 6,268. - Change in official reserves (without RSF, + = increase) (Billions CFAF): 2019: 625; 2020: 185; 2021: 1,118; 2022: -588; 2023: -1,149; 2024: -196; 2025: 1,200; 2026: 1,316; 2024-26 Cumulative: 2,319. - B. External Financing Sources (Billions CFAF): 2019: 3,369; 2020: 3,403; 2021: 4,823; 2022: 3,943; 2023: 2,923; 2024: 4,533; 2025: 3,161; 2026: 3,783; 2024-26 Cumulative: 11,477. - C. Financing Gap (= A - B) (Billions CFAF): 2019: 0; 2020: 0; 2021: 0; 2022: 0; 2023: 1,168; 2024: 1,071; 2025: 958; 2026: 489; 2024-26 Cumulative: 2,518. - D. Prospective Financing (selected, Billions CFAF): IMF ECF/EFF (2024-26): 601, 601, 605, 304 — 2024-26 Cumulative: 1,509. World Bank (2024-26): 182, 122, 122, 122 — Cumulative: 366. AfDB (2024-26): 28, 74, 49, 49 — Cumulative: 172. Bilateral creditors (2024-26): 355, 269, 168, 0 — Cumulative: 437. - RSF disbursements (as shown): 0, 246, 347, 199, 793 (pattern as in table). - F. Reserve accumulation (with RSF): -1,149, 50, 1,547, 1,515, 3,112 (values as shown). - Memorandum: Nominal GDP (CFAF billions): 2019: 36,278; 2020: 40,367; 2021: 43,771; 2022: 47,843; 2023: 47,843; 2024: 52,368; 2025: 57,057; 2026: 61,922. ### Economic outlook and risks - Growth and inflation projections: - Staff projects 6.5 percent output growth in 2024; growth to average around 6.6 percent over 2025–2029 with a 7.5 percent peak in 2027 (hydrocarbon production), then converge to potential ~6 percent. - Inflation expected to fall within BCEAO’s 1 to 3 percent target range by end-2024; CPI projections: 2024: 3.8 percent; 2025: 3.0 percent; 2026: 2.2 percent. - Fiscal targets: - Fiscal deficit projected to decline to 4 percent of GDP in 2024 and reach WAEMU target 3 percent by 2025. - Risks — upside and downside (selected): - Upside risks: sustained high cocoa prices; more favorable financing conditions (ratings upgrades, Eurobond issuance); higher-than-anticipated oil and gas extraction (Calao field discovery); new gold deposits. - Downside risks: regional security challenges; renewed oil price spikes affecting petrol tax revenue; weaker-than-anticipated recovery in pooled regional FX reserves; election-related uncertainty. - Recommended mitigation: - Reduce non-priority spending to meet security spending needs; increase pump prices to avoid petrol tax revenue losses; advance DRM and PFM reforms. ### Tax reform, MTRS, and revenue measures - MTRS objectives: raise tax revenue toward WAEMU 20 percent of GDP over long run; overhaul general tax code; streamline VAT exemptions; introduce carbon and e-commerce taxation; reforms to corporate income and property taxation. - Excise policy: gradual increases by 2 percentage points each year from 2024 to 2028 to converge to WAEMU standards. - Implementation and governance: - Tax Policy Council chaired by Minister of Finance and Budget. - MTRS Coordination Unit under the Minister to manage daily coordination, monitoring. - Structural benchmark: establish and publish criteria/procedures for granting/eliminating reduced VAT rates/exemptions by end‑June 2025. - Expected revenue impacts and measures: - Authorities committed to tax policy and administration measures of ½ percent of GDP revenue in each of 2024 and 2025. - 2025 budget expected to include a one-off increase of about 0.3 percent of GDP from high cocoa prices and tax policy measures raising tax revenue to 14.4 percent of GDP; reclassification/inclusion of off-budget revenues expected to increase recorded tax revenue in TOFE by around 0.1 percent of GDP in 2025. ### Climate, RSF reform measures, and green finance - RSF pillars and priorities: integrate climate into PFM; strengthen governance of climate policies; reduce exposure of agriculture; mobilize green and sustainable financing; reduce vulnerability to flooding/coastal erosion; reduce greenhouse gas emissions. - Selected RSF Reform Measures and timing (selected exact RMs): - RM1: Tag climate-related investment at programming stage and publish climate budget statement attached to 2026 budget law — End October 2025. - RM2: Establish modelling framework and integrate quantitative analysis of climate-related fiscal risks — End October 2025. - RM3: Adopt interministerial arrêté to integrate climate considerations into public investment appraisal and modify decree 96-894 — End October 2025 (decree modification end June 2024). - RM4: Set up national commission on climate change under Prime Minister and publish annual progress report — End October 2024 (decree end-June 2024). - RM8: Make Green Finance Platform operational (website; training; MRV) — End October 2024. - RM11: Operationalize mandatory energy audit system; first 5 audits by end-September 2025; energy labeling notice by December 2024. - RM12/RM14: Develop carbon taxation strategy and examine vehicle environmental taxation — Strategy adopted end-December 2025; IMF TA requested October 2024. - RM13: Adopt decree to promote electric mobility to help achieve 10 percent electric vehicle fleet by 2030 — End April 2024 (decree adopted May 2024 reported). - RM16: Competitive procurement for solar power plants completed by end-2025 to install at least 100 MW — End December 2025. - Cooperation and financing: - RSF meant to catalyze official and private financing; authorities requested Fund engagement in a roundtable co-convened with the World Bank to enhance climate financing. ### Stock-flow adjustments (SFA), fiscal data transparency, and recommendations - SFAs: - Historically important in Côte d’Ivoire’s public debt dynamics; persistent positive SFAs may undermine debt sustainability. - SFAs measured as residual: change of debt to GDP minus fiscal deficit and exchange rate effects. - Persistently positive SFAs in order of 1–2 percent of GDP can mask policy inconsistency. - Remedies: - Adoption of GFSM 2014 accounting standards could reduce SFAs over medium term by enforcing stock-flow consistency and expanding TOFE coverage beyond central government. - Data transparency commitments: - Authorities committed to publish quarterly central government debt data on National Summary Data Page within one quarter after reference quarter (end-September 2024 SB). - Regular and timely publication of central government operations and debt data would help shed light on SFAs and boost confidence. ### Financial inclusion, governance, AML/CFT, and SOE reforms - Financial inclusion: - End-2021 financial inclusion rate: 51 percent (up from 41 percent in 2017); authorities target further improvements and greater access for women. - AML/CFT: - IMF-led assessment found poor technical compliance and limited effectiveness; authorities adopted decrees to designate AML/CFT supervisors (end-May 2024 SB) and transposed WAEMU AML/CFT uniform law; submitted laws on asset recovery, international cooperation, and CFT. - SOEs and PPPs: - Continue to improve SOE viability and limit fiscal risks via performance contracts and audits; publish annual PPP portfolio review (end-February 2025 SB). - SOE debt stock: CFAF 979.7 billion (2.0 percent of GDP) at end-December 2023; 1.0 percent guaranteed. - PFM reforms: - Continue TSA consolidation; extend TOFE scope and produce general government TOFE according to GFSM 2014 for 2023 (planned June 2024). - Increase e-procurement targets and publish procurement transparency reports. ### Capacity development and technical assistance priorities - IMF TA priorities and horizons (selected): - Tax policy, TPU capacity building — Horizon: FY 2024/25. - Property tax reforms — Horizon: FY2024. - PFM green integration (C-PIMA) — Horizon: FY 2024. - STA: Government finance and public sector debt statistics alignment to GFSM14 and TOFE directives — Horizon: FY2024/2025. - LEG: AML/CFT priority actions — Horizon: FY 2024. - Main risks to CD delivery: - Weaknesses in tax administration could undermine reform delivery; mitigants include measures already in place, targeted SBs, customized training, and TA coordination. ### Key macro and fiscal projections (selected exact values) - Population (2021): 29 million. - Per capita GDP (2021): 2,445 USD. - Share of population below poverty line (2018): 39.5%. - GDP growth (annual %): 2021: 7.1; 2022: 6.2; 2023: 6.2; 2024: 6.5; 2025: 6.4; 2026: 6.4; 2027: 7.5; 2028: 6.5; 2029: 6.2. - Consumer price index (annual average): 2021: 4.2; 2022: 5.2; 2023: 4.4; 2024: 3.8; 2025: 3.0; 2026: 2.2; 2027: 1.9; 2028: 2.0; 2029: 2.0. - Central government gross debt (percent of GDP): 2021: 50.2; 2022: 56.6; 2023: 58.1; 2024: 60.0; 2025: 56.7; 2026: 55.0; 2027: 53.1; 2028: 52.4; 2029: 51.8. - Current account balance (including official transfers) (percent of GDP): 2021: -3.9; 2022: -7.7; 2023: -7.8; 2024: -5.7; 2025: -2.3; 2026: -2.3; 2027: -2.0; 2028: -2.2; 2029: -2.9. - Total revenue and grants (percent of GDP): 2021: 15.6; 2022: 15.3; 2023: 16.5; 2024 (program): 16.2; 2025 (program): 16.8; 2026 (program): 17.6. - Total expenditure (percent of GDP, program): 2021: 20.5; 2022: 22.1; 2023: 21.7; 2024: 21.5; 2025: 20.8; 2026: 20.7. - Overall balance, incl. grants (percent of GDP, program): 2021: -4.9; 2022: -6.8; 2023: -5.2; 2024 (program): -5.2 / (revised program: -4.0); 2025 (program): -3.0; 2026 (program): -3.0. - Basic primary balance (percent of GDP, program): 2021: -1.1; 2022: -1.8; 2023: 0.4; 2024: -0.1 (outturn) / 0.0 (program); 2025: 1.6; 2026: 1.3. ### Risk matrix highlights and recommended policy responses - External risks of high likelihood/impact: intensification of regional conflicts; social discontent — recommended responses include advancing DRM, targeted fiscal transfers, and measures to preserve inclusive growth. - Country-specific risks: deterioration of regional security (Likelihood: High; Impact: High) — recommended responses: promote security, strengthen social safety nets, create fiscal space via revenue mobilization and reprioritization. - Other risks: commodity price volatility, monetary policy miscalibration, cyberthreats, extreme climate events — recommended responses include adjusting retail fuel price mechanism, build fiscal buffers, invest in resilience, develop cyber response strategies, and pursue climate adaptation measures. *IMF staff report content (excerpts) from the provided chapter.* ### EXECUTIVE SUMMARY ### EXECUTIVE SUMMARY ### Context - The EFF/ECF-supported program approved in May 2023 (400 percent of quota) has helped safeguard macroeconomic stability and a moderate rating of debt distress; growing challenges from climate change are being addressed under the recently approved RSF arrangement (150 percent of quota). - The authorities’ ongoing commitment to reforms under both programs is expected to support Côte d’Ivoire’s transformation towards upper middle-income status over the medium-term and enhance resilience to climate change. - Outlook drivers: - Favorable outlook supported by still strong consumption and investment demand and new activity in the oil exploration and production sector. - Lower than expected cocoa production is a material downside but risks have become more balanced, reflected in increased foreign investor interest and ratings/upgrades by ratings agencies. - Political and social context: - Socio-political context remains calm. - Approximately 6.5 million migrants live in the country (nearly 22 percent of the total population). ### Program performance and risks - Program implementation: - All end-December performance criteria and end-December and end-May structural benchmarks were met. - Authorities are requesting modifications to some QPCs and ITs to reflect the January 2024 Eurobond issuance and updated macroeconomic projections. - Track record and risk mitigation: - Implementation risks are mitigated by Côte d’Ivoire’s satisfactory track record, confirmed by two previous Fund-supported arrangements. ### Recent economic developments and macro indicators - Growth: - Staff estimates 2023 real GDP growth at 6.2 percent, broadly unchanged from 2022. - Growth supported by completion of infrastructure works for CAN 2023 and a stronger secondary sector (energy and mining), with the Baleine oil field coming online in August 2023; tertiary sector supported by telecommunication and transportation. - Weak external demand, tight financial conditions, weather shocks and disease outbreaks affecting export agriculture (cocoa, coffee, cotton) weighed on activity in 2023H2. - Inflation: - 2023 headline CPI inflation averaged 4.4 percent, down from 5.2 percent in 2022. - Headline inflation declined to 3.5 percent in 2024Q1. - Core inflation has risen somewhat recently, mainly due to transport and services. - Financial sector: - Following BCEAO policy tightening in 2022 and 2023H1, financial conditions eased from late 2023 after BCEAO sovereign debt purchases in July and September 2023. - Interbank rates declined by about 100 basis points. - Private sector credit growth rebounded from 7.3 percent in 2022Q4 to 16.2 percent in 2023Q4. - Banks’ Tier 1 capital reached 13.2 percent in June 2023. - Non-performing loans fell by 0.2 percentage points compared to June 2022 to 8.7 percent. - At end-2023 authorities finalized terms for divesting most of their ownership of one of the two remaining state-owned banks. ### Cocoa sector: key facts and implications (Box 1) - Role and shock: - Côte d’Ivoire supplies about 40 percent of global cocoa exports. - The sector provides income to about one-fifth of the population and accounts for export revenue of 7 percent of GDP and fiscal revenue of about 1.1 percent of GDP. - Cocoa production slumped 23 percent to 1.8 million tons in 2023, mainly due to adverse weather conditions (and to a lesser extent aging trees and deforestation). - Estimated drag on 2023 output growth was about 1.2 percentage points. - Price dynamics and projections: - Global cocoa prices surged due to production shortfalls in Côte d’Ivoire and Ghana; average export price recorded in 2023 was up about 14 percent (y/y). - Staff projects the average export price to jump almost 50 percent in 2024 and another 30 percent in 2025. - This staff baseline projection corresponds to a total price increase of about 110 percent in 2025 relative to the 2022 level (noting the current 12-month forward price showed a 180 percent increase relative to the 2022 average as of early May). - Price paid to farmers was recently raised by 50 percent effective April 2024. - Production outlook and balance-sheet effects: - With the end of the El Niño weather phenomenon, 2024 output is projected to recover to 2 million tons (the level targeted by the authorities and reflecting historical averages). - Most production is sold in advance using forward contracts; the Coffee Cocoa Board (CCC) generally aims to sell about 80 percent of anticipated production 12 months ahead, which delays the full pass-through of price gains. - Staff projects cocoa-related export proceeds to rise from about 7 percent of GDP in 2023 to 11 percent of GDP in 2025, driving most of the narrowing in the current account deficit of 5.5 percent during that period. - Cocoa-related fiscal revenues are projected to rise from about 1.1 percent of GDP in 2023 to 1.8 percent of GDP in 2025, helped in part by increases in the cocoa exporter registration tax. ### Fiscal performance and public finances - Fiscal consolidation: - Revenue-based fiscal consolidation proceeded broadly in line with the program. - The fiscal deficit fell from 6.8 percent of GDP in 2022 to 5.2 percent in 2023, driven by strong upfront revenue measures in the first year of the program. - Revenue outcomes: - Tax revenue was CFAF 200 billion higher than the targeted tax revenue floor under the program. - Tax revenue is estimated to have reached 13.6 percent of GDP, up from 12.8 percent of GDP in 2022. - Nominal tax revenue for the year was CFAF 130 billion less than anticipated at the first review, mainly due to a shortfall in petrol tax revenue (0.9 percent of GDP, about 0.2 percent of GDP lower than anticipated under the program). - Expenditure: - Total expenditure was 21.5 percent of GDP, 0.2 percent of GDP lower than program projections at the first review. ### Main policy commitments - Fiscal and debt sustainability: - Fiscal consolidation in 2024 and 2025 is underpinned by a commitment to implement tax policy and administration measures amounting to an additional 0.5 percent of GDP of revenue in each year. - This supports convergence to the 3 percent of GDP WAEMU fiscal deficit target by 2025 and helps sustain the country’s moderate debt distress rating. - Authorities will incorporate into the budget revenues collected by line ministries but not recorded in fiscal accounts. - Domestic revenue mobilization (DRM): - Authorities committed to boosting tax revenue into the medium term and to implementing the medium-term revenue strategy (MTRS) approved in May 2024. - Implementation of the MTRS will require continued engagement with stakeholders, including external technical assistance providers, to overhaul the tax system and finance critical investment and priority spending needs. - Structural reforms and climate: - Ongoing structural reforms aim to improve the business climate and increase private sector involvement. - Key reform areas include enhanced transparency and accountability of public enterprises, strengthened governance and financial integrity (particularly AML/CFT), investment in human capital, broader financial inclusion, and climate resilience to support higher productivity growth. - Progress is being made on RSF-supported reforms with an early emphasis on adaptation, focused on six challenges: (i) integration of climate into PFM; (ii) strengthening governance of climate policies; (iii) reducing exposure and vulnerability of the agricultural sector; (iv) increasing green and sustainable financing; (v) reducing vulnerability to flooding and coastal erosion; and (vi) reducing greenhouse gas emissions. *IMF staff and mission discussions (March–April 2024).* ### 0.5 percent of GDP lower than projected capital expenditure, with offsets from higher than ### 1civea2024002-print-pdf - 0.5 percent of GDP lower than projected capital expenditure, with offsets from higher than ### Fiscal and expenditure developments - Total expenditure is expected to fall by 0.8 percent of GDP, mainly from reductions in wasteful subsidies and transfers and lower security spending. - The end-December 2023 indicative target (IT) on the floor of the basic primary balance was missed mainly due to lower than anticipated externally financed capital expenditure. - The end-March 2024 IT on the present value of external commercial debt contracted was missed due to the Eurobond issuance. - If higher international oil prices were to erode petrol tax revenues, pump price adjustments would be required to ensure maintaining petrol tax revenues at around 1 percent of GDP. - Revenue-side developments: - Tax revenue and the fiscal deficit as of March 2024 are in line with program targets. - The 2025 budget is expected to include a one-off increase of about 0.3 percent of GDP in tax revenue from high cocoa prices. - 2025 budget will include tax policy and administration measures amounting to ½ percent of GDP, increasing tax revenue to 14.4 percent of GDP. - Reclassification and inclusion of off-budget revenues are expected to increase recorded tax revenue in the TOFE by around 0.1 percent of GDP in 2025. ### Debt sustainability and public debt metrics - Public debt: - Stock of public debt rose to 58.1 percent of GDP in 2023 from 56.6 percent of GDP in 2022. - External debt is about 60 percent of overall debt. - Debt management operation (DMO): - In January 2024, the authorities issued two Eurobonds; issuance was mostly used for a DMO which smoothed debt liquidity ratios and improved debt sustainability. - Risk assessment: - Debt remains at a moderate risk of debt distress. - Liquidity ratios have improved compared to the last DSA thanks to the DMO financed by the January 2024 Eurobond issuance and DRM efforts. - Authorities intend to favor domestic debt over external debt over the medium term in line with their medium-term debt strategy. ### Current account, reserves, and external flows - 2023 external balances and flows: - The 2023 current account deficit is estimated at 7.8 percent of GDP, little changed from 2022. - Goods surplus rose to 2.6 percent of GDP despite lower cocoa export volumes. - Large services and primary income deficits more than offset the goods surplus, related in part to scaling up of multinationals’ investment in oil extraction activities. - Financial account surplus eased to about 5 percent of GDP. - Large negative change in reserves of nearly 2½ percent of GDP. - Early 2024 developments: - Net foreign assets picked up in early 2024. - Côte d’Ivoire's reserve contribution to the WAEMU pool rose, helped by seasonal factors and the large Eurobond issuance. - Projections: - The 2024 current account deficit is projected to narrow to 5.7 percent of GDP and further to below 3 percent of GDP in 2025, reflecting significant terms of trade gains and supporting gradual recovery in international reserves (authorities expect a smaller decline to about 4 percent of GDP). ### Program performance (EFF/ECF and RSF) and structural reforms - Program performance through end-May 2024 has been strong. - EFF/ECF: All quantitative performance criteria (QPCs) and almost all indicative targets (ITs) for end-2023 and end-March 2024 were met, with the noted exceptions in paragraph above. - All end-September 2023, end-December 2023, and end-May 2024 structural benchmarks (SBs) were met. - Authorities expect to meet end-June QPCs and ITs and are making good progress on remaining June, July and September 2024 SBs. - RSF achievements: - Authorities adopted a decree to promote electric mobility in Côte d’Ivoire in May 2024, to help achieve the NDC’s goal of a 10 percent share of electric vehicles in the vehicle fleet by 2030 (RM13). The decree covers import, assembly and production of e-transport vehicles (excluding e-bikes and e-scooters) and recharging infrastructure planning, development, construction and operation. - Progress on 2024 reform measures: - Adoption of (i) the road design manual; (ii) the notice to importers on administrative procedure for energy labelling; and (iii) an inter-ministerial arrêté to create “climate action transparency in Côte d’Ivoire (ICAT)” to coordinate design of a transition taxonomy and related financial information architecture, an MNV system, a transition national taxonomy and a training plan for climate finance and green taxonomy. - Modifications of decree 96-894 to incorporate climate considerations and the decree to create the national commission in charge of climate change issues have been drafted and are following review to be adopted by end-June 2024. ### Economic outlook and risks - Growth and inflation: - Strong private consumption and investment should support 6.5 percent output growth in 2024. - Staff expect growth to average around 6.6 percent over 2025 to 2029, with a 7.5 percent growth peak in 2027 due to strong hydrocarbon production, before gradually converging back to potential of around 6 percent. - Inflation is expected to fall within the BCEAO’s 1 to 3 percent target range by end-2024. - Fiscal targets: - Fiscal deficit projected to decline to 4 percent of GDP in 2024 and to reach the WAEMU deficit target of 3 percent of GDP by 2025. - Risks: - Upside risks: sustained high cocoa prices; more favorable financing conditions (recent credit ratings upgrade and Eurobond issuance); higher than anticipated oil and gas extraction (new discovery in the Calao field) and new potentially substantial gold deposits. - Downside risks: regional security challenges generating spending pressures and weighing on confidence; renewed oil price spikes affecting petrol tax revenue; weaker-than-anticipated recovery in pooled regional FX reserves; election-related uncertainty. - Authorities’ mitigating commitments: reduce non-priority spending to meet unforeseen security spending needs and increase pump prices to avoid revenue losses. ### Tax reform and medium-term revenue strategy (MTRS) - MTRS objectives and measures: - MTRS aims to increase tax revenue towards the 20 percent of GDP WAEMU tax revenue target over the long run. - Strategic tax policy measures include overhauling the general tax code, streamlining exemptions in VAT and tax expenditures, introducing carbon and e-commerce taxation, and reforms to corporate income and property taxation. - On excises, gradual increases by 2 percentage points each year from 2024 to 2028 to converge to WAEMU standards. - Tax administration measures: boost public confidence in tax/customs authorities, strengthen capacity, digitalization (electronic invoicing, interoperability), and establish permanent consultation mechanisms with private sector. - Implementation and governance: - A Tax Policy Council chaired by the Minister of Finance and Budget will provide strategic oversight. - An MTRS Coordination Unit under the Minister will manage daily coordination, communication, quarterly monitoring and annual review. - The MTRS foresees thematic working groups for technical areas (tax administration, tax base broadening, corporate taxation, combating fraud). ### Public financial management (PFM), climate integration, and procurement - PFM improvements and commitments: - Increase average number of operations for which procurement procedure starts from January 2024 from 10 percent to 25 percent. - Increase use of e-procurement from 50 to 80 percent of all ordinary operations (i.e., larger than CFAF 100 million) between July 2024 and June 2025 (end-July 2025 SB). - Publish annual reviews of the PPP portfolio in coordination with contracting agencies (end-February 2025 SB). - Continue independent evaluation of SOE boards and periodic audits of underperforming public bodies with majority government ownership. - Climate-related PFM measures (RSF RMs 1, 2 and 3): - Establish and integrate into the budget a system for tagging climate-related investment at the programming stage and integrate/prioritize projects based on climate at appraisal stage. - Prepare and publish a climate budget statement on related investment expenditure in the 2026 budget law. - Establish a modelling framework to integrate quantitative analysis of climate-related fiscal risks in the fiscal risk statement from October 2025. ### Stock-flow adjustments (SFA) and fiscal risks - Nature and implications of SFAs: - SFAs are historically important in Côte d’Ivoire’s public debt dynamics; persistent and positive SFAs may undermine debt sustainability and fiscal consolidation efforts. - SFAs are measured as the residual of the change of debt to GDP minus the fiscal deficit and exchange rate effects. - SFAs in Côte d’Ivoire are generally not higher than in other regional countries, but saw a spike in 2020 due to Covid-related spending. - Available data points to a positive correlation between changes in SFA and changes in domestic debt, notably debt securities (mostly treasury loans). - Persistently positive SFAs in the order of 1-2 percent of GDP (even before the spike in 2020) can mask policy inconsistency and represent significant future fiscal commitments. - Remedies and recommendations: - Adoption of GFSM 2014 accounting standards could reduce SFAs over the medium term by enforcing stock-flow consistency and expanding TOFE coverage beyond central government, thus clarifying sources of debt accumulation and the role of asset accumulation. *Source: https://www.imf.org/-/media/files/publications/cr/2024/english/1civea2024002-print-pdf.pdf* ### 19. Improving fiscal data transparency could help resolve high and persistent Stock- ### 19. Improving fiscal data transparency could help resolve high and persistent Stock-Flow Adjustment (SFA) issues. ### Fiscal data transparency and Stock-Flow Adjustments (SFAs) - Persistent and large SFAs have contributed to debt sustainability risks beyond the central government’s above-the-line fiscal stance and undermined the efficacy of fiscal consolidation efforts. - Regular and timely publication of up-to-date central government operations and debt data would: - Help shed light on factors underpinning SFAs. - Improve data dissemination and transparency. - Boost confidence and garner broader public awareness and buy-in for reforms. - Authorities’ commitment: - Publish quarterly central government debt data in line with the enhanced general data dissemination system (e-GDDS) within one quarter after the end of the reference quarter on Côte d’Ivoire’s National Summary Data Page (end-September 2024 SB). - e-GDDS guidance note: - Côte d'Ivoire is a participant in eGDDS and is thus encouraged to disseminate central government debt broken down by foreign and domestic components according to the residency of the creditors. - Additional useful breakdowns that could be disseminated include by original maturity (short-term, long-term); by instrument; by currency of issue (not required). ### Inclusive and private sector-led growth - Private sector investment is expected to be instrumental in implementing the 2021-25 NDP and the country’s economic transformation. - Structural reforms needed to achieve development objectives include measures to: - Improve the business environment. - Safeguard financial stability and the viability of public enterprises. - Promote financial inclusion. - Boost human capital. - Strengthen governance and fight corruption (MEFP, ¶ 39, 45, 46 and 47). - Energy sector: - Reliable electricity delivery is foundational for transformation; full electrification is within reach. - Authorities committed to ensuring commercial viability of the sector (MEFP ¶ 17). - Electricity tariffs were adjusted upwards in July and December 2023 to restore financial viability of CIE. - Recurring shortfalls have hampered CIE’s ability to cover costs, pay suppliers (including independent power producers), and maintain profitability to fund investments. - Contributing factors may include a weak electricity regulator, static tariffs, and non-payment by neighboring countries for electricity exports. - Authorities are monitoring potential budgetary risks from the electricity sector and devising plans to reduce CIE’s payment arrears to domestic suppliers. - Financial inclusion and development: - Financial inclusion improved under the 2019-24 National Financial Inclusion strategy (SNIF). - End-2021 financial inclusion rate: 51 percent (up from 41 percent in 2017). - Discrepancy between male and female access to finance has widened. - Authorities identified initiatives targeting women’s financial integration, including developing microfinance institutions. - Revised WAEMU Uniform Law integrating fintech providers into the payments system and recent Financial Sector Development Plan regulations expected to promote financial inclusion. - Following the mid-term review of the SNIF (May 2024 SB), government committed to prioritizing greater access of women to a wide range of financial services as part of a new national strategy on financial inclusion (MEFP, ¶48). - Governance, AML/CFT, and SOE transparency: - IMF-led assessment found poor technical compliance with FATF Standards and limited effectiveness, notably on supervision of financial institutions and high-risk non-financial businesses and professions. - Authorities’ measures to address deficiencies and avoid grey listing include: - A decree by the Council of Ministers designating AML/CFT supervision authorities, their attributions, terms/conditions of sectoral risk assessment, and financing arrangements (end-May 2024 SB). - Transposition of a new WAEMU AML/CFT uniform law. - Submission to Parliament of several new laws on asset recovery, international cooperation, and CFT. - Strengthening SOE governance, increasing public spending transparency, and fighting corruption via: - 2023-27 National Strategy for the Fight Against Corruption and the System of Detection and Prevention of Acts of Corruption and Related Offenses (SPACIA). - Commitment to raise compliance rate of public officials with asset declaration to 90 percent by end 2024. ### Addressing challenges from climate change - Authorities committed to an ambitious climate reform agenda with mitigation and adaptation measures. - The Fund-supported RSF is intended to: - Aid inclusion of climate into key aspects of PFM. - Strengthen governance of climate policies. - Reinforce safeguards for the agricultural sector. - Create a framework for green and sustainable financing. - Build resilience to climate hazards and control/reduce greenhouse gas emissions. - Serve as a catalyst for official and private financing and enhanced collaboration with development partners. - Cooperation with development partners: - Authorities advancing RSF reform agenda and exploiting synergies with partners on reforestation, cocoa traceability, energy efficiency, and climate finance. - Requested Fund engagement in a roundtable to enhance climate financing, to be co-convened with the World Bank. - Authorities assessing TA needs and coordinating with TA providers to fulfill reform commitments. ### Financing and program modalities; risks and monitoring - Program financing and gap: - Program remains fully financed with financing assurances from multilateral and bilateral partners for the next 12 months and good prospects for the remainder. - Cumulative financing gap projected for 2024-26: about CFAF 2.5 trillion (or 4.4 percent of GDP). - Coverage of the gap: - Budget support from bilateral creditors: about CFAF 437 billion. - World Bank: about CFAF 366 billion. - AfDB: CFAF 172 billion. - Other multilateral creditors. - Gross financing under the EFF/ECF supported program would cover about 60 percent of the gap over 2024-26 (about 25 percent when including project financing). - Program risks and adjustments: - Enterprise and program implementation risks are manageable; mitigated by satisfactory track record and two previous Fund-supported arrangements. - Debt stays at moderate risk of debt distress over the twenty-year projection period. - Risks could increase due to regional instability or the 2025 presidential election; if risks materialize, proactive macroeconomic policy adjustment would be needed. - Capacity to repay the Fund: - Capacity remains adequate but subject to risks; standard metrics indicate elevated Fund credit outstanding and debt service indicators for government revenue and exports (above the 75th percentile) mitigated by moderate debt distress rating and solid fundamentals. - Fund credit outstanding projected to rise from 4.2 percent of GDP to 5.3 percent of GDP at its peak in 2026 (above the 75th percentile of PRGT comparator countries). - Program monitoring and conditionality: - Monitoring through semi-annual program reviews based on QPCs, ITs (Table 9), and SBs (Table 10). - Proposed modifications: - Increase June, September, and December 2024 QPCs and ITs on the ceiling on the present value of external debt contracted or guaranteed by the central government to reflect the Eurobond issuance (see paragraph 18). - Marginally increase the nominal fiscal balance and the nominal basic primary balance targets for end-December 2024 to reflect updated estimates. - Increase targeted social spending IT reflecting progress in implementing universal health insurance. - Augment structural conditionality with new SBs on DRM, PFM, and data dissemination (Table 10, and MEFP Table 2). - Safeguards and technical assistance: - Recent safeguards assessment of the BCEAO (completed August 2023) found well-established audit arrangements and a strong control environment; BCEAO is addressing recommendations to align its Statute with changes in the 2019 cooperation agreement with France. - Further Fund TA to support reforms in domestic revenue mobilization (including tax policy reform and carbon taxation), PFM, and statistical system upgrades. ### Key financing and external flow figures (selected exact values from the External Financing Requirements table) - A. External Financing Requirements (Billions of CFA francs): - 2019: 2,131 - 2020: 1,987 - 2021: 3,587 - 2022: 3,966 - 2023: 4,091 - 2024: 5,604 - 2025: 4,120 - 2026: 4,272 - 2024-26 Cumulative: 13,995 - Current account deficit excl. official transfers (Billions of CFA francs): - 2019: 1,065 - 2020: 1,328 - 2021: 1,778 - 2022: 3,591 - 2023: 4,032 - 2024: 3,234 - 2025: 1,520 - 2026: 1,514 - 2024-26 Cumulative: 6,268 - Official sector amortization + net acquisition of fin assets (Billions of CFA francs): - 2019: 441 - 2020: 474 - 2021: 691 - 2022: 963 - 2023: 1,208 - 2024: 2,566 - 2025: 1,400 - 2026: 1,442 - 2024-26 Cumulative: 5,408 - of which: Fund repayments: - 2019: 85 - 2020: 84 - 2021: 103 - 2022: 98 - 2023: 196 - 2024: 291 - 2025: 229 - 2026: 158 - 2024-26 Cumulative: 678 - Change in official reserves (without RSF, + = increase) (Billions of CFA francs): - 2019: 625 - 2020: 185 - 2021: 1,118 - 2022: -588 - 2023: -1,149 - 2024: -196 - 2025: 1,200 - 2026: 1,316 - 2024-26 Cumulative: 2,319 - B. External Financing Sources (Billions of CFA francs): - 2019: 3,369 - 2020: 3,403 - 2021: 4,823 - 2022: 3,943 - 2023: 2,923 - 2024: 4,533 - 2025: 3,161 - 2026: 3,783 - 2024-26 Cumulative: 11,477 - Capital flows to private sector, net (Billions of CFA francs): - 2019: 1,846 - 2020: 705 - 2021: 2,172 - 2022: 200 - 2023: 735 - 2024: 1,474 - 2025: 1,372 - 2026: 1,825 - 2024-26 Cumulative: 4,671 - Project financing (Billions of CFA francs): - 2019: 415 - 2020: 574 - 2021: 840 - 2022: 1,433 - 2023: 1,737 - 2024: 1,033 - 2025: 1,338 - 2026: 1,225 - 2024-26 Cumulative: 3,596 - Government gross borrowing from private sector (Billions of CFA francs): - 2019: 820 - 2020: 1,923 - 2021: 1,627 - 2022: 2,231 - 2023: 217 - 2024: 1,926 - 2025: 315 - 2026: 521 - 2024-26 Cumulative: 2,762 - of which: Eurobonds: - 2019: 17 - 2020: 578 - 2021: 768 - 2022: 0 - 2023: 0 - 2024: 1,577 - 2025: 0 - 2026: 350 - 2024-26 Cumulative: 1,927 - C. Financing Gap (= A - B) (Billions of CFA francs): - 2019: 0 - 2020: 0 - 2021: 0 - 2022: 0 - 2023: 1,168 - 2024: 1,071 - 2025: 958 - 2026: 489 - 2024-26 Cumulative: 2,518 - D. Prospective Financing (selected entries, Billions of CFA francs): - IMF ECF/EFF (2024-26): 601, 601, 605, 304 (2024, 2025, 2026 entries) — 2024-26 Cumulative: 1,509 - World Bank (2024-26): 182, 122, 122, 122 — 2024-26 Cumulative: 366 - AfDB (2024-26): 28, 74, 49, 49 — 2024-26 Cumulative: 172 - Bilateral creditors (2024-26): 355, 269, 168, 0 — 2024-26 Cumulative: 437 - E. Exceptional Financing/Residual Gap (C - D): - 2019–2022: 0 - 2023–2026: 0 (table reports 0) - RSF disbursements: - 0, 246, 347, 199, 793 (years/pattern as shown in table) - F. Reserve accumulation (with RSF): - -1,149, 50, 1,547, 1,515, 3,112 (values as shown in table) - Memorandum items (selected): - Change in official reserves excl. all IMF financing: - 2019: 695 - 2020: 777 - 2021: 1,011 - 2022: -691 - 2023: -1,750 - 2024: -797 - 2025: 595 - 2026: 1,012 - 2024-26 Cumulative: 810 - Nominal GDP: - 2019: 36,278 - 2020: 40,367 - 2021: 43,771 - 2022: 47,843 - 2023: 47,843 - 2024: 52,368 - 2025: 57,057 - 2026: 61,922 *IMF staff report content (excerpts) from the provided chapter.* ### 32. Côte d’Ivoire’s economic resilience has been maintained despite a series of ### Côte d’Ivoire’s economic resilience has been maintained despite a series of ### Macroeconomic performance and program status - The Ivorian economy has continued to exhibit robust growth and interest from foreign investors has remained strong. - The authorities’ economic program remains on track and appropriately focused. - All performance criteria and SBs for the second review have been met. - The authorities’ track record remains strong. - New program commitments on revenue mobilization will support continued increases in tax revenue to close the gap relative to other frontier and emerging market economy peers. - New PFM and data dissemination structural benchmarks will help boost transparency on fiscal accounts and the conduct of fiscal policy. ### Revenue mobilization and fiscal consolidation - Sustaining a revenue-based fiscal consolidation in 2024 and 2025 will: - Strengthen the country’s moderate rating of debt distress. - Support convergence to the 3 percent of GDP WAEMU deficit target. - Authorities commit to implementing high-quality policy and administrative measures to sustain tax revenue increases of ½ percent of GDP in each of 2024 and 2025. - Revenue measures already in train in the 2024 budget remain sufficient to reach the revenue floor under the program. - Recommendations and safeguards: - Continue to include off-budget revenues from services and fees collected by line ministries into the TOFE. - Ensure off-budget revenues and any windfall from more favorable cocoa export prices do not weaken reform resolve. - Reprioritize capital and non-priority expenditure to safeguard the deficit target if unanticipated spending pressures arise from deterioration in the regional security situation. - Continue to streamline non-priority expenditure. ### Tax policy reform: MTRS - Adoption of a comprehensive MTRS is a significant reform providing an overall vision for tax policy and administration reforms. - The MTRS plan focuses on wide-ranging enhancements to boost transparency, fairness, and efficacy of the tax system to achieve sufficient domestic revenue mobilization for long-run sustainable and equitable growth and economic transformation. - Critical implementation factors: - Full implementation of the strategy. - Concerted monitoring of reform implementation. - Active communication with the public on merits and progress, especially concerning rationalizing tax exemptions and expenditures. - The MTRS is an opportunity to: - Induce higher levels of public confidence in the tax authorities’ role. - Build a culture of tax compliance. ### Debt management and sustainability - The DMO has been instrumental in ensuring debt sustainability risks remain within the moderate rating of debt distress. - Keeping debt at a level consistent with a moderate rating of debt distress remains a priority. - Aligning new investment financing with overall debt carrying capacity is critical. - Staff welcomes the authorities’ continued commitment to prudent management of the debt portfolio and efforts to mitigate higher financing costs through DMOs and a focus on concessional financing. ### Structural reforms, governance, and other risks - Maintaining momentum on structural reforms under the program is critical to support the objectives of the NDP. - Promote private sector-led growth by strengthening governance, financial inclusion, and reducing the cost of doing business. - Monitor potential budgetary risks arising from the electricity sector. - Accelerate plans to reduce payment arrears to domestic suppliers, including through potential further tariff adjustments. - Continue efforts to address deficiencies in the AML/CFT framework to boost transparency and attract private investment. - Other reform areas noted as critical to unlocking necessary financing for economic transformation: - Further tax policy and administration reforms underpinned by the recently adopted MTRS. - Continuing to advance governance and PFM reforms. - Inducing higher levels of financial inclusion and climate resilience to support rebuilding fiscal buffers and enhancements to the business environment. *Source: IMF staff report excerpt on Côte d’Ivoire.* ### 38. Staff supports the authorities’ request for QPC modifications, and for completion ### 1civea2024002-print-pdf - 38. Staff supports the authorities’ request for QPC modifications, and for completion ### Program approval, financing, and staff assessment - Staff supports the authorities’ request for QPC modifications, and for completion of the second review of the EFF/ECF arrangements, and the first review of the RSF. - Approval and disbursements to unlock: - 57.143 percent of quota (equivalent to SDR 371.657 million) under the EFF/ECF. - 9.375 percent of quota (equivalent to SDR 60.975 million) under the RSF. - The Letter of Intent and the Memorandum of Economic and Financial Policies set out appropriate policies to pursue program objectives. - Financing from the Fund will continue to have a strong catalytic role, and the capacity to repay the Fund is adequate. - Risks to program implementation remain manageable, given the authorities’ strong implementation track record under Fund-supported programs. ### Key macroeconomic projections and indicators (selected) - Population (2021): 29 million - Per capita GDP (2021): 2,445 USD - Share of population below the poverty line (2018): 39.5% - GDP at constant prices (annual growth): - 2021: 7.1 - 2022: 6.2 - 2023: 6.2 - 2024: 6.5 - 2025: 6.4 - 2026: 6.4 - 2027: 7.5 - 2028: 6.5 - 2029: 6.2 - Consumer price index (annual average): - 2021: 4.2 - 2022: 5.2 - 2023: 4.4 - 2024: 3.8 - 2025: 3.0 - 2026: 2.2 - 2027: 1.9 - 2028: 2.0 - 2029: 2.0 - Current account balance (including official transfers) (percent of GDP): - 2021: -3.9 - 2022: -7.7 - 2023: -7.8 - 2024: -5.7 - 2025: -2.3 - 2026: -2.3 - 2027: -2.0 - 2028: -2.2 - 2029: -2.9 - Central government gross debt (percent of GDP): - 2021: 50.2 - 2022: 56.6 - 2023: 58.1 - 2024: 60.0 - 2025: 56.7 - 2026: 55.0 - 2027: 53.1 - 2028: 52.4 - 2029: 51.8 - External debt-service due (CFAF billions): - 2021: 803 - 2022: 973 - 2023: 1,280 - 2024: 2,764 - 2025: 1,770 - 2026: 1,851 - 2027: 1,852 - 2028: 2,158 - 2029: 2,579 ### Balance of payments and financing plan (selected) - Current account (Billions of CFA): - 2021: -1,593 - 2022: -3,357 - 2023: -3,716 - 2024: -2,979 - 2025: -1,289 - 2026: -1,394 - 2027: -1,378 - 2028: -1,652 - 2029: -2,321 - Trade balance (Billions of CFA): - 2021: 1,692 - 2022: 669 - 2023: 1,260 - 2024: 2,938 - 2025: 4,816 - 2026: 4,922 - 2027: 5,887 - 2028: 6,166 - 2029: 6,135 - Exports, f.o.b. (Billions of CFA): - 2021: 8,491 - 2022: 10,144 - 2023: 10,485 - 2024: 12,575 - 2025: 15,095 - 2026: 15,940 - 2027: 17,784 - 2028: 19,018 - 2029: 20,302 - Use of Fund Credit: ECF/EFF in financing gaps (Billions of CFA): - 2023 residual gap filled by IMF: 601 - 2024 residual gap filled by IMF: 601 - 2025 residual gap filled by IMF: 605 - 2026 residual gap filled by IMF: 304 - RSF Disbursements (Billions of CFA shown in balance sheet): - 2024: 246 - 2025: 347 - 2026: 199 ### Fiscal framework highlights (central government) - Total revenue and grants (percent of GDP): - 2021: 15.6 - 2022: 15.3 - 2023: 16.5 - 2024 (program): 16.2 - 2025 (program): 16.8 - 2026 (program): 17.6 - Total expenditure (percent of GDP, program): - 2021: 20.5 - 2022: 22.1 - 2023: 21.7 - 2024: 21.5 - 2025: 20.8 - 2026: 20.7 - Overall balance, including grants (percent of GDP, program): - 2021: -4.9 - 2022: -6.8 - 2023: -5.2 - 2024 (program): -5.2 / (revised program: -4.0) - 2025 (program): -3.0 - 2026 (program): -3.0 - Basic primary balance (percent of GDP, program): - 2021: -1.1 - 2022: -1.8 - 2023: 0.4 - 2024: -0.1 (outturn) / 0.0 (program) - 2025: 1.6 - 2026: 1.3 ### Monetary and financial sector indicators (selected) - Broad money (M2) annual percentage change: - 2021: 18.7 - 2022: 9.0 - 2023: 3.3 - Credit to the economy (annual percentage change): - 2021: 12.5 - 2022: 7.3 - 2023: 16.2 - Net foreign assets (changes in percent of previous end-of-year): - 2021: 8.2 - 2022: -2.1 - 2023: -7.4 - Financial soundness indicators (selected, 2023 June): - Regulatory capital to risk-weighted assets (CAR): 13.2 (2023 June) - Non-performing loans to total gross loans: 8.7 (2023 June) - Total loans to total deposits: 82.2 (2023 June) ### Capacity to repay the Fund (Table 6 highlights) - Fund Obligations Based on Existing and Prospective Credit (Total obligations, in millions of SDRs): - 2024: 447.5 - 2025: 407.3 - 2026: 365.1 - 2027: 371.8 - 2028: 424.9 - 2029: 513.9 - Outstanding Fund Credit (in millions of SDRs; selected years): - 2023: 2,736.8 - 2024: 3,686.1 - 2025: 4,047.3 - 2026: 3,854.2 - 2027: 3,600.6 - 2028: 3,249.2 - 2029: 2,813.2 - Net Use of Fund Credit (millions of SDRs): - 2023: 688.0 - 2024: 888.3 - 2025: 422.2 - 2026: -193.1 - Total Obligations based on existing and prospective credit expressed in percent of quota: - 2024: 68.8 - 2025: 62.6 - 2026: 56.1 - 2027: 57.2 - 2028: 65.3 - 2029: 79.0 ### External borrowing program (2024 summary) - Type of new external debt (US$ million): - Fixed Interest Rate: 3,289.3 - Variable Interest Rate: 3,179.2 - Unconventional Loans: 0.0 - USD Denominated Loans: 3,300.0 - Loans Denominated in Other Currency: 3,168.5 - By sources of debt financing (USD million; percent): - Total: 6,468.5 (100) - Concessional debt: 122.1 (2) - Non-concessional debt: 6,346.4 (98) - Semi-concessional: 2,658.2 (41) - Commercial terms: 3,688.2 (57) - Uses of debt financing (USD million; percent): - Infrastructure: 191.3 (3) - Social Spending: 1,570.2 (24) - Budget Financing: 2,639.9 (41) - Other: 2,067.2 (32) ### Program conditionality, QPCs, reviews, and disbursement schedule (selected) - EFF/ECF reviews and purchases/disbursements (Table 8a; amounts in SDR): - May 24, 2023 Executive Board approval: total 371.657 (57.143 percent of quota) - November 15, 2023 completion of first review: 371.657 (57.143 percent of quota) - May 15, 2024 completion of second review: 371.657 (57.143 percent of quota) - Subsequent scheduled semiannual reviews through May 15, 2026 each with 371.657 (57.143 percent of quota) - Total ECF/EFF amounts over schedule: 2,601.6 (400.0 percent of quota in aggregate disbursements shown) - Note: Côte d’Ivoire's quota is SDR 650.40 million. - RSF reviews and disbursements (Table 8b; SDR): - RSF scheduled RMs and disbursements of 60.975 SDR each (9.375 percent of quota) across listed dates. - Total RSF: 975.600 (150.00 percent of quota). ### Structural benchmarks and RSF reform measures (selected policy priorities) - Revenue mobilization and tax policy: - Establish and publish clear criteria and procedures for granting and eliminating reduced VAT rates and/or exemptions, including mandatory impact evaluation for the largest tax expenditures — due end-June 2025. - Prepare and implement a plan to manage and collect outstanding tax arrears — Met end-September 2023. - Cabinet approval of a Medium-Term Revenue Mobilization strategy (MTRS), with revenue targets and timeline — Met end-May 2024. - Public financial management (PFM) and procurement: - Enforce e-procurement use by at least 80 percent of all ordinary operations (value > 100 million CFAF) between July 1, 2024, and June 30, 2025 — due end-July 2025. - Adopt a timetable for closing accounts with commercial banks under the Treasury Single Account (TSA) — Met end-December 2023. - Data dissemination: - Publish quarterly central government debt data within one quarter after the end of the reference quarter on Côte d’Ivoire’s National Summary Data Page — due end-September 2024. - Governance and AML/CFT: - Designate AML/CFT supervisors for specified sectors and set out their powers and responsibilities — Met end-May 2024. - RSF Reform Measure Matrix (selected RMs and timing): - RM1: Tag climate-related investment expenditure and integrate into 2026 budget preparation for five ministries; publish first climate budget statement attached to 2026 budget law — End of October 2025; 5th EFF/ECF Review. - RM2: Establish modeling framework and integrate quantitative analysis of climate-related fiscal risks into the fiscal risk statement for end-October 2025 — End of October 2025; 5th EFF/ECF Review. - RM3: Adopt interministerial arrêté to integrate climate considerations into public investment appraisal and modify decree 96-894 on environmental impact assessments — End of October 2025; 5th EFF/ECF Review (with decree modification end June 2024). - RM4: Set up a national commission on climate change under the Prime Minister's Office and publish an annual progress report on the climate transition — End of October 2024; 3rd EFF/ECF Review (decree creating commission end-June 2024). - RM5: Pilot insurance system for cotton sector against climate hazards; awareness and capacity-building, product information available — End of December 2025; 6th EFF/ECF Review. - RM6: Develop climate-related financial information architecture and adopt a decree introducing a transition taxonomy and inter-ministerial coordination — End of April 2025; 4th EFF/ECF Review. *Source: IMF staff report and accompanying tables contained in the provided content unit.* ### introduction of a ### 1civea2024002-print-pdf - introduction of a ### RSF Reform Measures: Climate Finance, Disclosure, and Green Platform - RM7. Adopt a decree that includes: - (i) the introduction of a climate risk disclosure framework for state-owned enterprises and private non-financial private companies, connected to the taxonomy; and - (ii) a disclosure requirement that is integrated within the financial reporting of state-owned enterprises and non-financial companies, based on the climate risk disclosure framework, as well as their implementation timeline. - Diagnostic reference: CCDR - Proposed Timing: End of April 2025; 4th EFF/ECF Review - Expected Outcome: Decree introducing a climate risk disclosure framework and requirement (end April 2025) - Development Partner / Role: IMF/ World Bank TA available - RM8. Adopt a decree that comprises two actions: - (i) make the green finance platform operational by: - setting up a website where domestic and international climate finance actors can find key information on the main pillars of the National Climate Finance Mobilization Strategy, Nationally Determined Contributions, the National Adaptation Plan, the National Development Plan, quantified targets for mobilizing domestic and international climate finance and the role envisaged for the various financial instruments, and the involvement of multilateral donors and other international partners in the National Climate Finance Mobilization Strategy; and - development and implementation of a training and capacity-building plan for national actors on climate finance instruments, taxonomies and disclosure frameworks for climate risks; - (ii) design and implement a framework for monitoring and tracking climate finance through a finance Measurement, Reporting and Verification (MRV) system for the said platform. - Diagnostic reference: CCDR - Proposed Timing: End of October 2024; 3rd EFF/ECF Review - Expected Outcomes: - Decree on the operationalization of the Green Finance Platform: - Website; - Training and capacity-building plan for national players on climate finance instruments, taxonomies and reporting frameworks for climate risks - Framework for monitoring and tracking operational green finance through the Measurement, Reporting and Verification (MRV) system - Development Partner / Role: IMF/ World Bank TA available - Note: Regarding (ii) on the monitoring and traceability framework for green financing, ICAT will support the conceptualization of the MRV tool, the training of stakeholders and the development of a roadmap for its operationalization. ### RSF Reform Measures: Disaster Risk, Infrastructure, and Energy Efficiency - RM9. Strengthen the environment and climate change component and deploy the multi-hazard early warning system in the Adzopé department. - Purpose: enable rapid responses to and mitigation of the impact of disasters; pilot phase in Adzopé before nationwide implementation. - Deliverable: A report summarizing the first alerts will be produced in December 2024. - Diagnostic reference: CCDR - Proposed Timing: End of December 2024; 4th EFF/ECF Review - Expected Outcome: Report summarizing the first alerts (December 2024) - Development Partner / Role: AFD, WMO (World Meteorological Organization) in the framework of Climate Risk Early Warning Systems initiative from the UN, World Bank. - RM10. Design and adopt standardized maintenance methodologies for road infrastructure that take into account the impact of climate change; pilot implementation in the Greater Abidjan area. - Diagnostic reference: C-PIMA and green PFM TA report - Proposed Timing: End of October 2024; 3rd EFF/ECF Review - Expected Outcomes: - Road design manual (end March 2024); - Stocktaking report (end October 2024). - RM11. Implement plans to operationalize the mandatory energy audit system for entities with annual energy consumption equal to or greater than a benchmark for the industrial, tertiary and transportation sectors in 2025, and complete the first 5 audits by the end of September 2025 and an energy labeling system for new air conditioners, refrigerators and electric lamps by December 2024. - Benchmarks (footnote): Industry: 1500 ton of oil equivalent (toe) or 2000 MWh; Tertiary and Transportation: 500 toe or 1000 MWh. - Proposed Timing: End of September 2025; 5th EFF/ECF Review - Expected Outcomes: - First five audits completed (end September 2025) - List of approved energy auditors (end March 2025); - List of organizations subject to energy audits (end March 2025); - Notice to importers on the administrative procedure for applying for an energy label (end December 2024). - Development Partner / Role: KFW, World Bank and EU ### RSF Reform Measures: Carbon Taxation, Electric Mobility, Vehicle Taxation, Renewable Energy - RM12. Continue to apply the existing fuel pricing mechanism with automatic adjustment to smooth price volatility and preserve tax revenues. Develop a carbon taxation strategy tailored to Côte d’Ivoire’s needs in line with IMF technical assistance, and make any necessary adjustments to fuel prices in line with this strategy by the end of December 2025 at the latest. - Diagnostic reference: World Bank reports (Fund TA) - Proposed Timing: End of December 2025; 6th EFF/ECF review - Expected Outcomes: - Request technical assistance from IMF staff (October 2024). - Strategy on carbon taxation adopted by the Government (end December 2025); - If necessary, adopt a legislative text to adjust fuel prices - Development Partner / Role: IMF TA to elaborate the strategy on carbon taxation - RM13. Adopt a decree to promote electric mobility in Côte d’Ivoire to help achieve the 10 percent target for electric vehicles in the vehicle fleet by 2030, as set out in the NDCs. The decree will address installation of electric charging stations, technical inspections of electric vehicles, insurance for electric vehicles, and compliance with standards for battery charging stations. - Diagnostic reference: World Bank reports - Proposed Timing: End of April 2024; 2nd EFF/ECF review - Expected Outcome: Decree to promote electric mobility in Côte d'Ivoire (end-April 2024) - Development Partner / Role: MET; GIZ - RM14. As part of the carbon taxation strategy, examine the existing environmental tax system on combustion engine vehicles and, if necessary, adopt reforms to the taxation of these vehicles in line with the objectives of the NDCs. Put in place a legal framework ensuring coherence between registration fees, import duties, taxes, and other regulations impacting promotion of cleaner, more efficient cars. - Proposed Timing: End of December 2025; 6th EFF/ECF review. - Expected Outcomes: - Strategy on carbon taxation adopted by the Government (end December 2025); - If necessary, issue regulations for environmental vehicle tax reforms - Development Partner / Role: IMF TA to elaborate the strategy on carbon taxation - RM15. Continue to integrate funding from the UNFCCC windows (Global Environment Facility (GEF), Green Climate Fund (GCF) and Adaptation Fund (AF)), associated environmental taxes and earmarked fees, listed in MEFP Annex I, into the State budget, and align them with NDCs where applicable. - Diagnostic reference: World Bank reports (Fund TA) - Proposed Timing: End of October 2024; 3rd EFF/ECF review - Expected Outcome: Draft 2025 budget law (end October 2024) - RM16. Finalize the tendering process for the development, construction and operation of solar power plants to help achieve the NDC targets. Competitive procurement for selected independent power producers must be completed by the end of 2025 for a solar power capacity to be installed equivalent to at least 100 MW. - Diagnostic reference: CCDR; IFC report “Unlocking Private Investment: A Roadmap to achieve Côte d’Ivoire’s 42 percent renewable energy target by 2030” - Proposed Timing: End of December 2025; 6th EFF/ECF review - Expected Outcome: Two decrees approving agreements for the construction, operation and transfer of two solar photovoltaic power plants (end December 2025) - Development Partner / Role: EU, World Bank ### Risk Assessment Matrix (Annex I) — Key Risks, Likelihoods, Impacts, and Recommended Responses - External risks - Intensification of regional conflict(s). - Likelihood: High - Impact if Realized: High - Potential effects: Even higher commodity prices, refugee migration, tighter financial conditions, depleted fiscal resources, increased poverty, social tensions. - Recommended Policy Response: Advance reforms to increase domestic revenue mobilization; mitigate impact on the poor through temporary targeted fiscal transfers. - Commodity price volatility - Likelihood: Medium - Impact if Realized: Medium - Potential effects: Lower fiscal revenues if price changes are not passed through; higher domestic energy prices raising production costs and general prices; reduced disposable income; exacerbated poverty. - Recommended Policy Response: Adjust the retail fuel price mechanism to reflect world energy prices and monitor inflation; mitigate impact on the poor through temporary targeted fiscal transfers; invest in a more diversified and sustainable energy mix. - Social discontent - Likelihood: High - Impact if Realized: High - Potential effects: Lower trade flows, reduced exports and FDI, negative effects on growth and tax revenue. - Recommended Policy Response: Continue policy reforms to alleviate poverty, create jobs, and generate more inclusive growth outcomes; enhance provision of public services. - Abrupt global slowdown or recession - Likelihood: Medium - Impact if Realized: Medium - Potential effects: Weaker global demand, reduced trade flows, slowed growth, decreased revenues. - Recommended Policy Response: Build resilience by creating fiscal space, buffers, and pursuing diversification and industrialization reforms. - Monetary policy miscalibration - Likelihood: Medium - Impact if Realized: Medium - Potential effects: Higher borrowing costs, increased debt vulnerabilities, financial difficulties for SMEs and state-owned enterprises, disrupted progress on financial access. - Recommended Policy Response: Advance reforms to increase domestic revenue mobilization; provide targeted support to vulnerable populations; monitor solvency of state-owned enterprises and government guaranteed debt; develop a bank resolution framework. - Cyberthreats - Likelihood: Medium - Impact if Realized: Medium - Potential effects: Disruption in delivery of critical services, payment systems disruption, loss of confidence. - Recommended Policy Response: Develop response and recovery strategies including “cyber mapping”; incorporate cyber risks into financial stability analysis and stress tests. - Extreme climate events - Likelihood: Medium - Impact if Realized: Medium - Potential effects: Reduced agricultural output and exports, lower cocoa tax revenues, increased subsidy needs, reduced living standards. - Recommended Policy Response: Mitigate impact on the poor via temporary targeted fiscal transfers; monitor second-round effects on inflation; invest in farmer education for sustainable and climate-resilient practices; examine scope for pre-arranged disaster financing (climate risk insurance). - Country-specific risks - Deterioration of security situation in region - Likelihood: High - Impact if Realized: High - Potential effects: Increased security spending pressure; adverse socio-economic effects. - Recommended Policy Response: Promote security, strengthen social safety nets, facilitate private sector job creation; create fiscal space via revenue mobilization and reprioritizing spending. - Financial difficulties for public enterprises and banks - Likelihood: Medium - Impact if Realized: Medium - Potential effects: Adverse impact on budget, public debt, and banking sector. - Recommended Policy Response: Restructure loss-making public companies; enhance monitoring of public enterprises; recapitalize and restructure ailing public banks; develop a bank resolution framework. - Note on RAM: “low” = probability below 10 percent, “medium” = between 10 and 30 percent, “high” = between 30 and 50 percent; RAM reflects staff views as of the time of discussions with the authorities. ### Capacity Development Strategy (Annex II) — IMF TA Priorities and Horizons - Overview: IMF Technical Assistance (TA) continues to support EFF/ECF-supported program objectives and RSF-supported reforms. Core focus: domestic revenue mobilization to safeguard fiscal and debt sustainability and create fiscal space for priority spending. Fund TA also targets strengthening statistical systems and governance. - Key Overall CD Priorities Going Forward (selected items) - Tax policy - Tax Policy Unit (TPU) capacity building: Equip counterparts with technical skills and tools for tax policy design and implementation. - Horizon: FY 2024/25 - Property Tax reforms - Update property values as per market value. - Horizon: FY2024 - PFM - Conduct the C-PIMA and green PFM. Take account of climate change in selecting, budgeting, and implementing investment budgets. - Horizon: FY 2024 - Fiscal risks of SOEs - Capacity building on quantification and monitoring of fiscal risks: stocktaking, intra-annual monitoring, quantification of major risks, management and budget integration. - Tools: SOE Health Check Tool; SOE Stress Test; DGLAT. - Objective: Better monitoring of fiscal risks. - Horizon: FY 2024 - Climate policy TA/Diagnostic - Carbon taxation to be discussed during the mission. - Horizon: FY2024 - STA (statistics) - Government finance and public sector debt statistics: align methodologies to GFSM14 and WAEMU’s TOFE directives; expand coverage to local governments, extrabudgetary units, social security funds, and market SOEs. - Objective: Improve coverage of SOEs in GFS. - Horizon: FY2024/2025 - BOP statistics: improve external sector statistics consistency, compile International Reserves and Foreign Currency Liquidity Template, improve timeliness. - Horizon: FY 2024 - Price Statistics: update harmonized CPI, correct Phoenix software aggregation error, expand PPI to services, develop export-import price indexes. - Horizon: FY2024/2025 - Quarterly national accounts and high-frequency indicators support. - Horizon: FY2024/25 - LEG - Continue key recommended actions from IMF-led AML/CFT assessment; assist in implementing priority reforms. - Horizon: FY 2024 - Reform the asset declarations regime to ensure publication of declarations for high-risk positions and disclosure of interests and beneficial ownership. - Horizon: FY 2024 (Review from HQ) ### Main Risks and Mitigation (Capacity Development section) - Main risks: weaknesses in tax administration undermining reform delivery (noted in 2021 TDAT assessment); high stakes as domestic tax revenue is a performance criterion (PC) under the program. - Mitigating factors: - (i) a great share of tax revenue measures are already in place before program start; - (ii) the program establishes well-targeted and sequenced structural benchmarks, including a strategy to collect tax arrears and development and implementation of an MTRS; - (iii) provision of customized training courses to tax officials; - (iv) efficiency from greater coordination with other TA providers. *Source: 1civea2024002-print-pdf - introduction of a* ### Appendix I. Letter of Intent ### Appendix I. Letter of Intent ### Background and objectives - Côte d’Ivoire reports strengthened macroeconomic framework despite tighter financing conditions and geopolitical tensions. - Objectives of the 2023–2026 Economic and Financial Program include consolidating fiscal sustainability, ensuring sustained inclusive growth, shifting growth toward private‑sector productivity and vertical diversification, developing the financial sector and deepening financial inclusion, and improving resilience to climate change. - The document updates the May 2023 MEFP and its December and March 2024 supplements and reports progress under the EFF/ECF and the RSF as of end‑May or end‑December 2023 (as specified in the text). ### Recent macroeconomic performance (key statistics and drivers) - Growth: - 2023 growth: 6.5 percent. - 2022 growth: 6.2 percent. - Growth in 2023 revised down from 7.0 to 6.5 percent, mainly due to declines in cocoa and seed cotton production and construction and public works activity. - Sectoral contributions: secondary sector grew by 10.3 percent; tertiary sector grew by 8.4 percent; primary sector fell by 4.1 percent (export agriculture -11.8 percent; subsistence agriculture +8.5 percent). - Overall investment rate: 25.5 percent of GDP in 2023, compared to 25.2 percent in 2022. - Inflation and external competitiveness: - Inflation 2023: 4.4 percent. - Inflation 2022: 5.2 percent (also referenced as 4.8 percent in a section—the document contains both). - Real effective exchange rate contracted by an average of 2.8 percent in 2023 compared to 2022. - Terms of trade improved by 8.1 percent in 2023 compared to -6.9 percent in 2022. - External sector: - Current account deficit: 8.1 percent of GDP in 2023, after 7.7 percent in 2022 (alternate figures in the letter: 7.9 percent in 2023 after 7.5 percent in 2022). - Drivers: weaker performance of exports in value terms and an increase in imports of technical services, particularly in the extractive sector (development of oil fields including Baleine). - Monetary and credit conditions: - Claims on the economy rose by 16.2 percent compared to 2022. - Net external assets contracted due to lower mobilization of external resources amid tighter international financial conditions. - Budget and public finances: - Budget deficit: reduced from 6.8 percent of GDP in 2022 to 5.2 percent of GDP in 2023. - 2024 nominal budget deficit updated from 2,109.6 billion to 2,120.6 billion (deficit as a percent of GDP unchanged at 4.0 percent in 2024). - Total revenues and grants at end‑2023: CFAF 7,771.7 billion against a target of CFAF 7,871.6 billion (shortfall CFAF 99.9 billion). - Revenue composition variances: port revenues -CFAF 211 billion; grants -CFAF 4.8 billion; parafiscal revenues +CFAF 43 billion; domestic tax revenues +CFAF 37.9 billion; non‑tax revenues +CFAF 35 billion. - Tax burden: 13.6 percent of GDP (target referenced but not restated). - Debt and risk ratings: - Risk of debt distress: moderate. - Liability management operations contributed to improving debt ratios. - Moody’s sovereign rating upgrade: from Ba3 with a positive outlook in 2023 to Ba2 with a stable outlook in 2024. - Country Policy and Institutional Assessment (CPIA) score: 3.7 in 2022 (sub‑Saharan Africa average cited as 3.1). - Transparency International ranking: moved from 99th place in 2022 to 87th place in 2023. ### Social, governance, and structural developments - Social programs and outcomes: - Government Social Program (PSgouv2) in 2023 supported road repairs, health and school infrastructure, electrification, and improved access to drinking water. - “Fight against the fragility of northern border areas” helped bring the security situation under control amid sub‑regional terrorist threats. - Government Youth Program (PJ Gouv 2023‑2025) implemented priority actions to facilitate youth professional integration and autonomy. - Presidential pardon granted to 51 prisoners to strengthen national cohesion. - Hosting and winning the Africa Cup of Nations (“CAN of Hospitality”) contributed to social cohesion and tourism. - Gender and education: - Government actions to advance equality between men and women and to promote girls’ education, increase access rates, ensure girls stay in school, combat violence against women, and strengthen governance of girls’ education. - Governance: - Continuous improvement of the business climate and good governance highlighted as enabling macroeconomic performance. ### Climate agenda: RSF and NDC implementation - Resilience and Sustainability Facility (RSF) approved March 2024; ambitious reforms initiated. - RSF matrix of reform measures divided into six pillars: 1. Integrating climate into the public finance and investment management process. 2. Strengthening the governance and coordination of climate policies. 3. Enhancing the climate resilience of agriculture. 4. Mobilizing green and sustainable financing for private and public enterprises. 5. Reducing vulnerability to flooding and coastal erosion. 6. Reducing greenhouse gas emissions. - 2024 focus: complete five planned reform measures RM4, RM8, RM10, RM13, and RM15 (see MEFP Annex 3 referenced). - Nationally Determined Contributions (NDCs) implementation plan components: - An investment and financing plan specifying costs. - A partnership plan highlighting key sectoral needs. - A monitoring and evaluation plan. - A communication strategy. - Planned donor roundtable to support NDC implementation and mobilize substantial investments, including through the Green Climate Fund (GCF) and multilateral development bank instruments. ### Program implementation, requests to IMF, and conditionality - Program performance as of end‑December 2023: - All performance criteria met and structural measures completed. - Only the indicative benchmark floor target for the basic primary balance was not met. - Requested modifications to performance criteria and indicative targets for 2024: - Modifications to the June and December 2024 performance criteria and the September 2024 indicative target on the ceiling on the present value of new external debt contracted or guaranteed by the central government. - Modifications to the December 2024 performance criterion on the floor on the overall fiscal balance. - Modifications to the June, September, and December 2024 indicative targets on the floor on targeted social spending. - Modification to the December 2024 indicative target on the floor on basic primary balance. - Rationale: issuance of Eurobonds at the start of 2024, acceleration of social protection programs, and the update to the nominal amount of the budget deficit from 2,109.6 billion to 2,120.6 billion (deficit as a percent of GDP unchanged at 4.0 percent in 2024). - Financing requests to the IMF: - Request for IMF Executive Board completion of the second reviews under the EFF/ECF arrangements with the third disbursement under the ECF and EFF in the amount of SDR 371.657 million. - Request for IMF Executive Board completion of the first review under the RSF, accompanied by an initial disbursement of SDR 60.975 million. - Commitments and information sharing: - Government states policies and measures in the MEFP are adequate to meet program objectives and commits to take additional measures if necessary, consulting the IMF prior to adoption. - Authorities agree to provide the IMF with information on implementation and execution as provided in the attached Technical Memorandum of Understanding on dates agreed by both parties. - Government authorizes IMF to publish and post this letter and its attachments, as well as the staff report, following approval of the review by the IMF Executive Board. *Source: Appendix I. Letter of Intent (supplement to the Memorandum of Economic and Financial Policies 2023–2026), Côte d’Ivoire.* ### 13.9 percent, following a rate of 12.8 percent in 2022. ### 1civea2024002-print-pdf - 13.9 percent, following a rate of 12.8 percent in 2022. ### Fiscal outcomes and financing (2023) - Total expenditures and net loans amounted to CFAF 10,279.4 billion, below the target of CFAF 10,382 billion, due to tight controls on spending. - Shortfall drivers: - Investment expenditures financed by project loans: -CFAF 315.9 billion. - Operating expenses: -CFAF 23.6 billion. - Financing sources: - Recourse to the subregional money and capital markets. - External financing, including financing from the International Monetary Fund. - Tax revenues: CFAF 6,507.5 billion, against a target floor of CFAF 6,306.0 billion (positive difference of CFAF 201.5 billion). - Overall budget balance: -CFAF 2,508.1 billion, or CFAF 5.7 billion above the target floor of -CFAF 2,513.9 billion. - Net domestic financing: CFAF 1,363.6 billion, below the ceiling adjusted for the lower than expected level of external budget support (as agreed in the Technical Memorandum of Understanding, or TMU). - Net present value of new external debt: US$2,641.5 million, against a ceiling of US$4,650.3 million. - No external or domestic arrears accumulated. ### Public debt and debt sustainability (end-December 2023) - Stock of central government debt (including on-lending and government-guaranteed debt): 59.1 percent of GDP (compared to 57.9 percent at end-2022). - External debt: 35.9 percent of GDP (compared to 34.4 percent of GDP at end-2022). - Guaranteed external debt: CFAF 388.2 billion, or 0.8 percent of GDP. - Domestic debt: 22.2 percent of GDP (stable). - Guaranteed domestic debt: CFAF 97.7 billion, or 0.2 percent of GDP. - Stock of debt of state-owned enterprises (SOEs): CFAF 979.7 billion, or 2.0 percent of GDP, of which 1.0 percent was guaranteed debt. - Debt sustainability analysis (DSA): Côte d’Ivoire remains among the countries at moderate risk of debt distress. ### Banking sector performance (end-December 2023) - Average risk-weighted capital ratio of all banks: - 12.4 percent at end-December 2021. - 13.1 percent at end-December 2022. - 13.8 percent at end-December 2023. - WAMU prudential minimum: 11.5 percent. - Banks not meeting the solvency standard at end-December 2023: two (2) banks, holding: - 1.1 percent of the sector’s total balance sheet. - 1.2 percent of outstanding loans. - 1.7 percent of deposits. - Credit portfolio quality: - Gross portfolio deterioration rate: 7.3 percent at end-December 2023 (7.8 percent at end-2022). - Net rate: 2.8 percent at end-December 2023 (2.5 percent in 2022). - Comparison with WAMU average (end-December 2023): - WAMU gross rate: 8.7 percent. - WAMU net rate: 3.4 percent. - Conclusion: Ivoirian banks performing better than WAMU average on these portfolio quality indicators. ### Program implementation and performance criteria (end-December 2023) - All program performance criteria were met at end-December 2023. - Indicative targets: all met except the basic primary balance. - Stock of receivables reduced by CFAF 26.3 billion (floor of CFAF 25.0 billion). - Expenditures by cash advance procedures: CFAF 342.4 billion (ceiling of CFAF 345.0 billion). - Specific social expenditures: CFAF 970.3 billion (floor of CFAF 949.2 billion). - Basic primary balance: -CFAF 47.4 billion (below target floor of CFAF 187.0 billion), due to a lower than expected level of investment financed from external resources. - Structural benchmarks for end-December 2023 and end-May 2024: all met. ### Key structural and governance measures implemented - Treasury Single Account (TSA) process: - Timeline for closure of residual accounts at commercial banks adopted by the Government Council on December 19, 2023. - Timeline foresees five (5) steps and aims to identify and gradually close all public accounts by mid-2025 at the latest. - E-procurement: - Made compulsory for at least 10 percent of conventional public procurement operations starting from October 2023. - At end-December 2023, take-up rates: - 14.8 percent for the Bidding, Opening, Analysis, and Decision stages. - 50.29 percent for the Tender File Review stage. - 29.6 percent for the Tender Notice Publication/Scheduling stage. - AML/CFT supervision: - Council of Ministers adopted decrees in February and May 2024 to designate AML/CFT supervisory authorities for specified sectors and to define their powers in line with FATF Recommendation 28. - Medium-term domestic revenue mobilization strategy (MTRS) adopted and published in May 2024. - Mid-term review of the National Financial Inclusion Strategy (SNIF) completed in May 2024. ### Reforms under the Resilience and Sustainability Facility (RSF) - Energy transition in transport sector: - Draft decree provided for by Reform Measure 13 (RM13) developed and adopted in May 2024. - Climate-resilient road maintenance: - Guide to standardized maintenance methodologies incorporating the impact of climate change adopted in February 2024 (RM10). - National Commission on Combating Climate Change: - Draft decree drawn up as part of RM4; validation process ongoing within agreed timeframe. - Other 2024 reform measures: actions underway to meet deadlines. ### Tax policy and administration reforms (estimated impact on revenue in 2024: approximately CFAF 243 billion) - Tax policy changes: - Cocoa registration duty rate raised from 4 percent to 5 percent in September 2023 (previously increased from 3 percent to 4 percent in April 2023). - Reorganization of General Tax Code provisions relating to real estate taxation to establish market value as the minimum basis for taxation. - Abolition of the preferential tax regime for low-income and subsidized housing. - Increase in fixed registration fee for formalization of civil acts from CFAF 18,000 to CFAF 25,000. - Introduction of a registration fee of 4 percent on land transfers not made before a notary. - Introduction of a tax of 5 percent on the net revenues of online gambling operators, including sports betting. - Introduction of a single tax return for wages and social security contributions. - Public passenger and/or freight transport companies subject to a real tax regime now automatically subject to VAT. - VAT base extended to certain food products that are not basic necessities. - Tax administration measures: - Introduction of a tax stamp on tobacco products to ensure traceability and combat smuggling. - Order on application of the reduced VAT rate on premium rice imports to be adopted in June 2024. - Order on application of the reduced VAT rate on imported offal to be adopted in July 2024. - Measures to ensure better monitoring of transfer pricing. - Expansion of the tax base. - Improvement of real estate agency performance by strengthening risk analysis and adding eight new modules in SIGICI (VAT deduction, Geographic Information System, control, exemptions, real estate taxation). ### Public financial management, business climate, and public sector reforms - SIGOBE (Integrated System for the Management of State Budget Operations) extended to all national public institutions and national representations abroad since Q1 2023. - Annual assessment of fiscal risks carried out in 2023 and included in the 2024-2026 Fiscal Risk Statement appended to the 2024 Budget Law. - Approved private contracts in 2023: 14.8 percent of total approved contracts over the period (below ceiling threshold of 20 percent). - Publication of list of approved contracts and contract audit reports on the public procurement website to ensure transparency. - Order No. 0116/MFB (January 31, 2024) on reform of procedures and channels for execution of state budget revenues and expenditures and implementation of SIGOBE adopted in January 2024. - Material accounting implementation advanced with development of the “asset entry management” module of SIGESCOM and training of asset managers. - Business climate and governance measures: - OCPV reorganized as an agency pursuant to Decree No. 2023-771 of September 28, 2023. - Online search and consultation platform for business permits and licenses operational in December 2023; e-license data to be accessible on the www.225invest.ci portal. - Côte d’Ivoire Export Agency made operational. - Progress on seven (7) industrial clusters via white paper on automotive assembly industry, recommendations on textile industry revival, and completion of five studies on cluster establishment. - Support system for SMEs strengthened with launch of Single Window for the Development of SMEs (GUDE-PME); SME Credit Guarantee Company (SGPME) issued first portfolio guarantees with World Bank support. - PEPITE program: evaluation criteria established and selection of first cohort of beneficiaries completed. - Decree No. 2024-58 implementing Order No. 2022-237 on administrative sanctions for AML/CFT adopted on February 14, 2024. - Order No. 2023-875 of November 23, 2023, on combating money laundering, financing of terrorism, and proliferation adopted to align with FATF recommendations. - First progress report on the National Action Plan linked to the APRM prepared and transmitted on January 25, 2024. - Public sector measures: - Electricity price adjustment: second rate adjustment of 10 percent in December 2023, effective January 2024, increasing general average rate from CFAF 73/kWh to CFAF 87/kWh. - Performance Contracts (COPs) with SOEs: - Seven (7) second-generation COPs signed in 2023; nine (9) extensions of expired COPs signed. - From 2017 to 2023: thirty-seven (37) COPs signed out of a target of forty-seven (47) companies (execution rate of 79 percent) for a total of fifty-three (53) SOEs in 2024, including six (6) newly created ones. - SOE audits: nine (9) audit engagements completed in 2023; total of forty-two (42) SOEs audited to date. ### National statistics and indicators - Final annual national accounts (ANA) for 2020 and 2021, and provisional ANA for 2022, shared by authorities in February 2024. - Regular production and dissemination of infra-annual indicators: IPPI, HIIP, HICP, BTI. ### Medium-term macroeconomic framework and outlook (2024–2026) - Strategic objectives: - Continue implementation of Côte d’Ivoire 2030 Strategic Plan and 2021-2025 NDP. - Goal to join upper-middle-income countries by 2030. - Reduce extreme poverty by half and increase life expectancy by 10 years compared to 2020. - Deploy industrial clusters and develop nine (9) agricultural hubs to accelerate processing of agricultural products. - Strengthen climate mitigation and adaptation actions as per Nationally Determined Contributions (NDCs). - Program commitments: - Continue Economic and Financial Program and Resilience and Sustainability Facility program over 2024-2026 to support NDP implementation and preserve macroeconomic stability while strengthening climate resilience. - Policy aims: (i) preserve sustainability of public finances and debt; (ii) boost domestic revenue mobilization and strengthen PFM and debt management; (iii) deepen structural reforms for inclusive growth, private sector productivity, and vertical diversification; (iv) deepen financial inclusion; (v) invest in human capital; (vi) build resilience to climate change. - Macroeconomic targets and outlook: - Budget deficit: decline from 5.2 percent of GDP in 2023 to 4 percent in 2024, and then to 3 percent of GDP in 2025. - Inflation: kept below the community standard at 2.5 percent by 2026. - Current account deficit: gradually reduced to 4.3 percent of GDP in 2026. - Growth: average growth of 7.0 percent over the 2024-2026 period. - Supply-side contributions: - Secondary sector average growth: 7.9 percent (supported by construction and public works, energy, agricultural food industry, and other manufacturing). - Tertiary sector average growth: 7.1 percent. - Primary sector average growth: 5.4 percent. - Demand-side drivers: - Overall investment expected to grow by 12.7 percent on average over the period, with private and public investment rising by 20 percent and [text cut off in source]. - Risks: - Disruptions in global supply chains, heightened global inflationary pressures, tighter financing conditions in international financial markets, and sub-regional political instability could undermine economic performance if they persist. - Positive potential: launching of phases 2 and 3 of the Baleine field and discovery of a new oil field called Calao could boost economic activity. *Source: 1civea2024002-print-pdf - 13.9 percent, following a rate of 12.8 percent in 2022.* ### 7.4 percent, respectively. ### 1civea2024002-print-pdf - 7.4 percent, respectively. ### Macroeconomic outlook and external position - Inflation should be gradually contained over the period 2024-2026, so that it is below the WAEMU community ceiling of 3 percent. - The current account deficit is expected to gradually reduce to below 5 percent of GDP during 2025-2026. - The current account deficit is projected to decline from 8.1 percent of GDP in 2023 to 4.8 percent in 2026. - The overall balance is expected to show a deficit of about ½ percent of GDP on average over 2024-2026. - Broad money supply is expected to increase by an average of 12 percent over the program period due to higher net claims on the central government and increased claims on the economy driven by financial penetration. - Claims on the economy are expected to increase from 24.9 percent of GDP in 2024 to 26.4 percent in 2026. ### Fiscal policy objectives (Preserve the Sustainability of Public Finances and Debt) - Fiscal policy for 2024-2026 will continue fiscal consolidation by: increasing revenue mobilization, keeping operating expenditures under control, and maintaining debt sustainability while preserving fiscal space for key expenditures including social spending. - Government target: achieve the WAEMU fiscal deficit target of 3 percent of GDP by 2025 and maintain Côte d’Ivoire’s moderate risk of debt distress. - Strategies to achieve objectives: - Continued improvement of tax policies and administration; - Streamlining and efficient management of expenditures; - Continued investment in growth sectors; - Increased spending on poverty reduction; - Public debt sustainability and active public debt management. - Budgetary approach: align spending with available resources to meet the budget deficit target while preserving priority spending. ### 2024 fiscal stance and revenue mobilization - Government intends to increase total tax revenues by 0.8 percentage point of GDP in 2024. - Fiscal deficit in 2024 targeted to fall by 1.2 percentage points of GDP compared to 2023, bringing it to 4.0 percent of GDP. - Tax revenues are projected to rise from 13.6 percent of GDP in 2023 to 15.6 percent of GDP in 2026. - Total spending in the 2024 budget will aim to keep total spending at no more than 20.6 percent of GDP. - Total capital expenditures are expected to represent 7.4 percent of GDP on average during the program period (2.8 percentage points higher than 2019 pre-COVID-19 level). ### Medium-Term Revenue Mobilization Strategy (MTRS) and tax measures - MTRS objectives: - Raise the tax burden toward the WAEMU target of at least 20 percent of GDP. - Simplify the tax system; broaden the tax base; reduce exemptions and tax expenditures; tax new taxable items including international digital products and new transport types using user-contact applications. - Combat tax fraud, smuggling, tax evasion, and tax avoidance; strengthen transfer pricing policy; strengthen environmental taxation; modernize tax administration; consider legal reforms for international and regional taxation. - Governance and implementation: - Governance structure established to manage MTRS and a working group to liaise with IMF and technical assistance providers. - Consultations with private sector and civil society planned. - Structural benchmark: establish and publish criteria and procedures for granting and elimination of reduced VAT rates and exemptions by end-June 2025. - Specific 2024 measures: - Reinstated tax base on the sale of petroleum products to safeguard a floor for associated tax revenues under the petroleum price adjustment mechanism. - Government committed to mobilizing CFAF 624 billion through the tax on petroleum products in 2024, with monthly monitoring of collections and pump price adjustments as needed. - Plan to collect tax arrears; digitize procedures (SIGEFIM, VAT deduction management modules, SIGICI, e-Cadastre enhancements); improve data exchange with CNPS and INS; strengthen local management of services. ### Port and customs tax modernization measures (2024) - Finalize redesign of the Automated Goods Customs Clearance System by putting all modules into production in 2024. - Put the new ASYVAL valuation module into production in 2024. - Interconnect the General Customs Directorate (DGD) and the Public Treasury for accounting of customs revenues by the Chief Customs Collector in 2024. - Deploy video surveillance system at three (3) sites on the north coast (Laleraba, Pogo, and Ouangolodougou) in 2024. - Strengthen valuation of new vehicles using the VIN decoder system in 2024. ### Expected fiscal outcomes from tax policy and expenditure control - Tax policy and administration measures will increase the tax burden revenue ratio by 0.5 percentage point of GDP in line with program commitments. - Government will revise exemptions related to the Investment Code (structural benchmark for end-September 2024). - For 2024, the government will continue efforts to control spending while responding to social and infrastructure needs; improvements to the social registry and expansion of the productive cash transfer program (PTMP) will improve targeting. - With World Bank assistance, PTMP plans to enroll 100,000 additional households per year in the Single Social Registry (RSU) over the next three years. - Pro-poor spending: health, education, social protection, and youth employment sectors account for around 28.8 percent of pro-poor spending (see Table 1 of the TMU). - Total spending on the poor will be tracked to maintain effectiveness and transparency. ### 2025 budget plans - Government plans to reduce the budget deficit by 1 percentage point of GDP, from 4.0 percent of GDP in 2024 to 3.0 percent of GDP in 2025. - Measures to increase the tax revenue ratio by 0.5 percentage point of GDP in 2025, plus an anticipated additional increase in revenues of around 0.4 percentage point of GDP due to inclusion of revenues from services and favorable cocoa prices. ### Debt policy and debt management - For 2024, government intends to cap recourse to new loans at a present value of US$6,493.2 million. - Bond issuance at beginning of 2024: US$2.6 billion in ESG and conventional bonds, largely used for liability management to strengthen debt sustainability. - Financing mix over 2024-2026: on average, 44 percent external and 56 percent domestic financing instruments. - Preference for concessional and semi-concessional borrowing will be maintained. - Debt classification: most recent debt sustainability analysis indicates Côte d’Ivoire remains classified as having “moderate risks of overall and external debt distress.” External debt portfolio remains vulnerable to shocks to GDP growth, total revenues, exports, euro/U.S. dollar exchange rate, and contingent liabilities. - Institutional and operational debt management actions: - Draft law on national public debt policy adopted by Council of Ministers in September 2023 and approved by Parliament in March 2024; implementing legislation to follow. - CNDP to update medium-term debt management strategy (MTDS) covering next five years and append it to the Budget Law for the following year. - Quarterly debt sustainability analysis using the Debt Sustainability Framework (DSF). - Gradual extension of debt coverage to state-owned enterprises in accordance with the Public Sector Debt Statistics Guide (2011). - IMF technical assistance to continue for risk assessment, monitoring, and management of public debt and fiscal risks related to state-owned enterprises. ### Social policy and human capital development - Government recognizes strengthening human capital as essential to improve productivity growth and achieve upper-middle-income status; actions to improve quality and performance of national health care and education systems while preserving fiscal sustainability. - Universal Health Coverage (CMU): - In 2023, nearly 6,425,088 people were enrolled in the CMU, bringing total enrolled to 10,147,107 at end-2023. - In Situ production of CMU cards introduced to enable immediate card issuance after enrollment; 11 enrollment and In Situ card production sites opened in 2023; plan to open In Situ enrollment and production sites in each regional capital in 2024. - Enrollment target: enroll 60 percent of the population by 2027, equal to some 20.7 million people. - Collection targets: increase contribution collection rate from private sector employees from 42 percent in 2022 to 85 percent in 2027; increase collection rate for enrolled persons in the informal sector from 1 percent in 2022 to 37.3 percent in 2027 via mechanisms for contribution payment in agricultural sectors. - Strengthen legal framework for collection from informal sector with regulation for sustainable mechanisms, including payment of contributions from coffee-cocoa, palm-rubber, and cotton-cashew producers by their councils. - PSGouv 2022-2024 program for poverty reduction and social inequality: - Five strategic directions: (i) combating fragility in northern border areas; (ii) improving primary and secondary school learning environment; (iii) improving household living conditions; (iv) professional integration of young people and community service; (v) strengthening support for vulnerable populations. - 2024 funding allocated to PSGouv estimated at CFAF 561.3 billion, 62.1 percent financed by the state budget. - Gender and education commitments: - Advance equality between men and women across public and private life, empower women economically, socially, and politically. - Step up actions to promote girls’ education, increase access rates, ensure girls stay in school, combat all forms of violence against women, and strengthen governance of girls’ education. ### Structural reforms for inclusive, private-sector-driven growth and Public Financial Management (PFM) - Current expenditure reforms: - Continue implementing budget regulations; hold program performance conferences; implement wage bill strategy measures; classify enterprises and update reference price database. - Capital expenditure reforms: - Continue efforts to reduce public procurement contracting delays; gradually digitize public procurement procedures; improve capital expenditure absorption capacity. - Planned PFM actions: - Set up a system to coordinate and improve reliability of ministries’ management control systems; design and operate analytical tools for financial control as part of 2024 budgetary reform. - Implement a single budget management system in 2024 covering General Directorate of the Budget and General Directorate of the Treasury and Public Accounting. - Adopt in September 2024 a Communication to the Council of Ministers to strengthen collection of service revenues. - Strengthen mechanism for monitoring the debt of state-owned enterprises. - Complete digitization of public procurement contracting via deployment of version 2 of SIGOMAP and ensure e-procurement use for, on average, at least 50 percent of transactions for which procurement procedures begin from January to June 2024 (structural benchmark for end-July 2024) and require e-procurement for at least 80 percent of all conventional transactions (structural benchmark for end-June 2025). - Continue strengthening effectiveness of public investment in line with recommendations of 2017 and 2021 PIMA, 2023 Climate PIMA (C-PIMA), and Green PFM to incorporate climate change in project selection, budgeting, and implementation. - Treasury digitization and non-tax revenue collection: - Public Treasury platform TresorPay - TresorMoney introduced in December 2020 to expedite payments and secure public resource collection. - Funds recovered through TresorPay - TresorMoney increased from CFAF 16.9 billion in 2022 to CFAF 26.9 billion in 2023. - Platform to be rolled out across all ministries and public institutions as unique tool for non-tax revenue collection in Côte d’Ivoire in line with Law No. 2023-996 of December 18, 2023, on the non-tax revenue procedure manual. *International Monetary Fund* ### 38. The government will continue to have recourse to public-private partnerships (PPP) ### 38. The government will continue to have recourse to public-private partnerships (PPP) ### PPP commitments and fiscal risk management - The National PPP Steering Committee (CNP-PPP) will ensure that PPP commitments do not expose the government to near-term budgetary risks. - The government will continue to improve the published annual assessment of fiscal risks associated with PPP contracts. - The government will publish annual reviews of the PPP portfolio in coordination with contracting authorities, including information on the PPP portfolio in accordance with Article 24 of Decree No. 2018-358 setting out the rules for PPP contracts (structural benchmark for end-February 2025). - Continued improvements to public investment effectiveness will follow the 2017 and 2021 PIMA recommendations, specifically: - Improve coordination between the central government and local governments. - Improve PPP management. - Improve alignment of current and capital expenditures. - Improve asset reporting. ### State-owned enterprises (SOEs): viability and fiscal control - Commitment to improve financial viability of SOEs and limit fiscal risks by strengthening budgetary control and SOE management. - From 2017 to end-2022, a total of 37 performance contracts were signed and have been regularly monitored. - In 2024, the government will sign five (5) new performance contracts. - Follow-up actions: - Evaluate the 2023 mission letter between managing directors and Boards of Directors. - Implement recommendations from independent firms that evaluated Boards of Directors. - Audit and oversight: - In accordance with the Communication to the Council of Ministers on fiscal risks adopted in 2018, audits will continue; 15 audits are provided for in the 2024 audit plan. - Follow up on implementation of recommendations from audits conducted over the last three (3) years. - Adopt a decree on oversight of the recruitment process for certain key positions in state-owned enterprises. ### Treasury Single Account (TSA) consolidation - Progress on TSA consolidation will continue. - An additional survey confirmed no new accounts opened at commercial banks. - Closure of inactive accounts is ongoing, with 50 accounts closed by end-March 2024. - Implementation of the timetable for closing public accounts held with commercial banks will continue as quickly as possible. - Medium-term plan: include expenditures on public debt repayment and operations involving co-financed projects in the TSA, based on arrangements to be defined with technical and financial partners. ### Public procurement efficiency and transparency - Continue implementing the 2019 public procurement code. - Structural benchmark: make the use of e-procurement mandatory for at least 50 percent of operations under conventional procedures from January to June 2024 (structural benchmark for end-July 2024). - Cap exceptional public procurement procedures at 20 percent of all contracts. - Increase procurement transparency by publishing a list of approved contracts identifying their holders and publishing contract audit reports. ### Government financial reporting: TOFE / TOF expansion and GFSM 2014 implementation - Continue work to extend the scope of the Table of Government Financial Operations (TOFE) in accordance with the Government Finance Statistics Manual 2014 (GFSM 2014), aiming to gradually produce a consolidated Table of Financial Operations (TOF) for the public sector. - The general government TOFE according to GFSM 2014 for the year 2023 will be produced in June 2024. - Recent scope additions: inclusion of five (5) state-owned enterprises and fourteen (14) extrabudgetary units, other than national public institutions. - 2024 plans: extend TOF to four (4) new entities depending on availability of accounting data. - Continue quarterly TOFE production for the budgetary central government in accordance with GFSM 2014 within ninety (90) days of the end of the quarter. - Benefits in kind: establish a methodology for valuing benefits in kind related to government vehicles with technical assistance from AFRITAC West and gradually implement GFSM 2014 provisions to control stock adjustment flows and strengthen fiscal consolidation. ### Improving the business climate and private investment - Adopt a new three-year reform action plan for 2024-2026 focusing on the World Bank’s Business Ready (B-Ready) index, to be adopted in 2024 by the Council of Ministers. - Unique Business Identifier (UBI) rollout: - Adopt an order amending the law on the widespread introduction of the unique registration identifier in the interior of the country, exclusive of the UBI for businesses in Côte d’Ivoire. - Issue a circular through the Prime Minister requiring the UBI. - Enable UBI issuance in the 10 competitive economic hubs in the interior of the country by November 2024. - Council of Ministers expected to adopt a communication on strengthening mobilization of private investment (domestic and foreign). - E-license platform: finalize development and launch for submission and renewal of business license and permit applications by users in November 2024. - Single Window for Foreign Trade (GUCE) to implement six (6) new modules over 2023-2027: - (i) E-visit in June 2024; - (ii) EXEMPTION in June 2024; - (iii) E-COO in December 2024; - (iv) E-MOVEMENT in December 2024; - (v) E-RELEASE in December 2024; - (iv) E-BOOKING in December 2024. ### Industrialization, clusters, and agricultural hubs - Industrial clusters: - After two (2) “automotive” and “textile” clusters, finalize development strategies for five (5) additional clusters: “Agro-industry,” “Chemicals and plastics,” “Building materials, furniture and equipment,” “Pharmaceutical industry,” and “Packaging.” - Studies and proposed strategies with action plans completed; findings to be presented and adopted by the Council of Ministers in 2024. - Agricultural hubs: - Nine (9) hubs identified; gradual deployment following launching of Agricultural Hubs 1 and 2: 2PAI-Bélier at Yamoussoukro and 2PAI-Nord in Sinématiali. - Industrial infrastructure ecosystem: - Draft law on creation and management of industrial zones to be adopted by the Council of Ministers in 2024; once passed by Parliament, will allow government to turn over management, construction, and operation of industrial zones to the private sector. - An Industrial Development Fund dedicated to financing industry in Côte d’Ivoire will be set up with support from donors. ### Governance, anti-corruption, and asset declarations - National Anti-Corruption Strategy for 2023-2027 to be adopted by the Council of Ministers. - High Authority for Good Governance (HABG) measures: - Implemented an integrated IT system for control of the number of persons subject to reporting. - Implemented a targeted awareness-raising policy focusing on groups with the lowest declaration rates. - After completing an awareness campaign nationwide, HABG began application of sanctions related to asset declaration as of November 13, 2023. - Target: improve asset declaration rate to 90 percent by end-December 2024 through application of regulations and penalties. ### Extractive industry transparency and AML/CFT measures - Implement recommendations from the 2019 EITI assessment of Côte d’Ivoire. - Implement the AML/CFT supervision, control, and administrative penalties regime adopted by the Order of March 2022 for Designated Non-Financial Businesses and Professions (DNFBP), including: - Real estate agents and developers. - Dealers in precious stones and metals. - Casinos and gambling establishments. - Account managers. - Corporate and trust service providers. - Alignment with priority reforms of the IMF’s AML/CFT assessment (structural benchmark for end-May 2024). - Adopt other priority reforms identified in the assessment; a matrix of specific measures has been defined to improve compliance with the 40 FATF recommendations and the effectiveness of Côte d’Ivoire’s AML/CFT system. ### Financial sector development, inclusion, and public banks - Continue efforts to strengthen the financial system and promote financial inclusion. - Restructuring public banking portfolio: - Banque de l’Habitat de Côte d’Ivoire (BHCI): complete recapitalization to bring the bank’s equity up to regulatory standards by end-December 2024. - Banque Populaire de Côte d’Ivoire (BPCI): ensure fulfillment of commitments resulting from the sale at end-2023 to Africa Financial Group (AFG) Bank through partial contribution of assets. - Financial market and inclusion measures under the Financial Sector Development Strategy (FSDS): - Ensure application of the Factoring Act, adopted in December 2022. - Step up promotion of leasing among financial ecosystem participants. - Make the Agricultural Commodities Exchange (BMPA) operational through adoption of related legal framework and launch of activities in 2023. - Increase mobilization of long-term resources by stepping up activities of the Deposit and Consignment Fund. - Continue implementation of the National Strategy for Financial Inclusion (SNIF 2019-2024), which aims to increase the financial inclusion rate from 41 percent in 2017 to 60 percent in 2024. - Conducted a mid-term review of SNIF in May 2024 (structural benchmark for end-May 2024) to reflect new priorities related to the NDP; prepare a new SNIF for 2025-2029 by end-2024. ### Climate resilience reforms (2024 focus) - Continue efforts to complete the five (5) planned reform measures (RMs) for 2024: - RM10: Manual for the design and construction of new interurban roads adopted in February 2024; monitor implementation and produce the first steering report by end-October 2024. - RM13: Draft decree promoting electric mobility adopted in May 2024. - RM4: Draft decree establishing the National Commission expected to be adopted by the government before end-June 2024; National Commission to produce the annual report on climate change before end-2024. Draft law on climate change finalized end-July 2024. - RM8: Inter-ministerial decree created a committee to recruit consultants for the Initiative for Climate Action Transparency (ICAT) project to develop: - A financial reporting architecture. - A Measurement Reporting Verification (MRV) system for traceability of green financing. - A national transition taxonomy. - A training plan for climate finance and the green taxonomy. - RM15: Government will take steps to ensure UNFCCC funding is included in the draft 2025 budget. ### Strengthening the statistical system and SDDS adherence - Adopt implementing regulations for Law No. 2020-950 of December 7, 2020, amending and supplementing Law No. 2013-537 of July 30, 2013, on organization of the National Statistical System, including draft decrees for: - National Public Statistics Authority (ANSP). - National Statistics Council (CNStat). - National Statistics Agency (ANStat). - National Statistics Development Fund (FNDS). - Enhance production and dissemination of statistical data by: - Introducing new indicators. - Strengthening national accounts. - Improving the company database. - Adhering to the Special Data Dissemination Standard (SDDS) by end-2025. - Specific statistical actions: - Complete alignment of Quarterly National Accounts (QNA) with rebased Annual National Accounts (ANA) and begin production of the expenditure-based QNA; recent support from a West AFRITAC technical assistance mission in April 2024. - Continue developing high-frequency indicators: revamped Construction and Public Works Leading Indicator (IA BTP), industry opinion surveys, Services Sales Index (ICA), Services Producer Price Index (IPPS). - Complete updating the Harmonized Index of Consumer Prices with a new base year of 2023; continue regular production of the IPPI and HIIP; develop unit value indices (UVI) for exports and imports. - Conduct the General Census of Companies and Establishments in Côte d’Ivoire (RGEE-CI 2022-2023) under the Program for the Harmonization and Improvement of Statistics (PHAS) to obtain an up-to-date economic and financial database and establish a Geographic Information System (GIS). - Overhaul the INS website to be more user-friendly and disseminate all available indicators. - Publish quarterly data on central government debt in the quarter following the end of the reference quarter on Côte d’Ivoire’s national summary data page (structural benchmark for end-September 2024). - Continue efforts to adhere to the SDDS in 2025 to become the sixth sub-Saharan African country to do so. ### Program financing and monitoring (2024–2026) - Government estimate: funding needs of the 2024–2026 program will be met and funding sources identified for the next 12 months. - Additional financing sources: - Mobilize financing on the regional money market and with external partners. - Domestically, optimize use of fund-raising on the regional market to preserve private sector access to credit. - Externally, recourse to the international market depending on financial conditions, with preference for the community of donors to contribute to strengthening regional exchange reserves. *Source: 38. The government will continue to have recourse to public-private partnerships (PPP), 1civea2024002-print-pdf* ### 53. The program will be subject to semi-annual monitoring by the IMF’s Executive Board, ### 53. The program will be subject to semi-annual monitoring by the IMF’s Executive Board ### Monitoring framework, modifications, and basis for assessment - The program will be subject to semi-annual monitoring by the IMF’s Executive Board on the basis of quantitative criteria and indicators, structural benchmarks, and reform measures (Tables 1, 2, and 3). - These criteria and indicators are defined in the attached Technical Memorandum of Understanding (TMU) containing a summary of the projection assumptions, which serve as a basis for the assessment of certain performance aspects. - Modifications proposed: - Increase the June, September, and December 2024 QPCs and ITs on the ceiling on the present value of external debt contracted or guaranteed by the central government, to reflect the Eurobond issuance. - Marginally increase the overall fiscal balance and the basic primary balance targets for end-December 2024 to reflect updated estimates. - Increase the targeted social spending IT reflecting progress in implementing the universal health insurance. ### Government commitments (policy and financing restrictions) - Refrain from accumulating new domestic arrears and all types of advances on revenue and from contracting non-concessional external loans other than those specified in the TMU. - Issue public securities through auctions held by the Central Bank of West African States (BCEAO) or any other form of public securities issue on the WAEMU financial market, in consultation with IMF staff for any new financing. - Refrain from introducing or tightening restrictions on payments and transfers for current international transactions, introducing multiple currency practices, entering into bilateral payment arrangements that are inconsistent with Article VIII of the IMF Articles of Agreement, or introducing or tightening import restrictions for balance of payments purposes. - Adopt any new financial or structural measures that may be necessary for the success of its policies, in consultation with the IMF. ### Selected quantitative performance indicators and targets (Table 1 highlights) - Floor on the overall fiscal balance (incl. grants): (2,007); (1,507) MET; (2,514) ... (2,508) MET; (507) (504) Met; (1,085) ... (1,505) ... (2,110) (2,121) (554) (950). - Ceiling on net domestic financing (incl. the issuance of securities in CFAF): 952; 952 MET; 1,160; 1,420; 1,364 MET; 14; (197) Met; 594 ... 1,036 ... 1,355 ... 387 650. - Ceiling on the present value of new external debt (with a maturity of more than one year) contracted or guaranteed by the central government (millions of US$): 4,242; 2,451 MET; 4,650 ... 2,642 MET; 1,157; 3,286 Not Met 3/; 2,205; 4,422; 3,233; 5,505; 4,286 6,063 1,781 2,667. - Floor on government tax revenue: 4,620; 4,791 MET; 6,306 ... 6,507 MET; 1,643; 1,646 Met; 3,538 ... 5,299 ... 7,156 ... 1,855 3,976. - Continuous performance criteria: - Ceiling on accumulation of new external arrears by the central government (continuous basis): - ; - MET ; - ... - MET ; - ; - Met ; - ... - ... 0 ... 0 0. - Ceiling on accumulation of new domestic arrears by the central government (continuous basis): - ; - MET ; - ... - MET ; - ; - Met ; - ... - ... 0 ... 0 0. - Indicative targets: - Floor on targeted social spending: 700; 736 MET; 949 ... 970 MET; 230; 264 Met; 462; 463; 765; 767; 989 994 241 481. - Ceiling on expenditure by treasury advance: 263; 259 MET; 345 ... 342 MET; 82; 75 Met; 192 ... 307 ... 446 449 93 223. - Floor on net reduction of central government amounts payable (- = reduction): (78); (82); (25) ... (26) MET; (54); (176) Met; (41) ... (33) ... (25) ... (80) (85). - Floor on basic primary balance: (130); 295 MET; 187 ... (47) Not Met; 55; 118 Met; 86 ... 150 ... (20) (26) 119 262. - Memorandum items (selected): - Program grants (millions of US$) 2/: 160; 97 ... 324 ... 322 ... - ; - ; 160 170 160 170 329 331 0 141. - Program loans (millions of US$) 2/: 169; 439 ... 930 ... 608 ... ,,, 957 - ... 982 3,169 1,022 3,209 1,265 3,537 508 508. - Project loans (millions of US$) 2/: 1,860; 934 ... 2,785 ... 2,294 ... 354; 224 ... 952 983 1,284 1,248 1,656 1,667 384 864. - Total pro-poor spending: 2,403 ... 3,318 ... 3,497 ... 748 838 ... 1,655 ... 2,467 ... 3,405 ... 770 1,750. - Footnote: 3/ This is due to the January 2024 Eurobond issuance. ### Structural benchmarks under the EFF/ECF (Table 2 highlights) - Proposed new structural benchmarks: - Revenue Mobilization: Informed by the MTRS, establish, and publish clear criteria and procedures for granting and eliminating reduced VAT rates and or exemptions, including mandatory impact evaluation for the largest tax expenditures with distributional impact, to be used in rationalizing existing and future use of reduced VAT rates. Rationale: Boost domestic revenue to preserve fiscal and debt sustainability and create fiscal space for public investment and poverty reduction. Due: end-June 2025. - PFM: Continue to enforce e-procurement use by at least 80 percent of all ordinary operations (those with larger than 100 million CFAF) between July 1, 2024, and June 30, 2025. Rationale: Improve the efficiency and transparency in procurement. Due: end-July 2025. - PFM: Publish annual reviews of the PPP portfolio in coordination with contracting authorities, including information on the PPP portfolio in accordance with article 24 of Decree No. 2018-358 setting out the rules for PPP contracts. Rationale: Improve efficiency and transparency of public investment and limit fiscal risks. Due: end-February 2025. - Data Dissemination and Transparency: Publish quarterly central government debt data within one quarter after the end of the reference quarter on Côte d’Ivoire’s National Summary Data Page (https://nso-côtedivoire.opendataforafrica.org/awirqrf/national-summary-data-page-nsdp). Rationale: Improve data dissemination and transparency. Due: end-September 2024. - Current structural benchmarks (status and due dates): - Prepare and implement a plan to manage and collect outstanding tax arrears. Met end-September 2023. - Cabinet approval of a Medium-Term Revenue Mobilization strategy (MTRS), with revenue targets and a timeline, and publication of a comprehensive summary. Met end-May 2024. - Strengthen automated VAT management module by incorporating control of VAT deduction collected at customs. Due end-June 2024. - Issue an ordinance to streamline provisions relating to exemptions linked to the investment code. Due end-September 2024. - Adopt by the council of ministers the draft law on national debt policy. Met end-September 2023. - Treasury Single Account (TSA): Adopt timetable for closing accounts with commercial banks. Met end-December 2023. - Enforce e-procurement usage targets (various milestones). Met end-December 2023; subsequent targets due end-July 2024 and end-July 2025. - Approve ministerial decree to designate AML/CFT supervisors for specified sectors. Met end-May 2024. - Complete mid-term review of National Strategy for Financial Inclusion. Met end-May 2024. ### RSF Reform Measure Matrix (Table 3 highlights — climate, governance, sectoral reforms) - RM1 (Integration of climate into public financial management): Adopt a ministerial arrêté establishing a system for tagging climate-related investment expenditure at the stage of public investment programming; integrate into the 2026 budget preparation process with coverage initially limited to five (5) ministries. Prepare and publish first climate budget statement attached to the 2026 budget law. Diagnostic reference: C-PIMA and green PFM TA report. Proposed timing: End of October 2025 (5th EFF/ECF review). Expected outcomes: Ministerial arrêté (October 2024); Climate budget statement attached to the 2026 budget law. Development partner/IMF CD: GCA/ IMF TA. - RM2: Establish a modeling framework and integrate quantitative analysis of climate-related fiscal risks into the fiscal risk statement for end-October 2025. Diagnostic: C-PIMA and green PFM TA report. Proposed timing: End of October 2025 (5th EFF/ECF review). Expected outcome: Annex to the 2026 budget law on the declaration of budgetary risks incorporating the quantification of climate risks. IMF TA. - RM3: Adopt an interministerial arrêté making it mandatory to integrate climate considerations into appraisal and selection of public investment projects; modify decree 96-894 on environmental impact assessments to integrate climate considerations. Diagnostic: C-PIMA and green PFM TA report. Proposed timing: End of October 2025 (5th EFF/ECF review). Expected outcomes: Interministerial arrêté implementing decree no. 2022-742 (end October 2025); Decree 96-894 modified (end June 2024). - RM4 (Strengthening governance of climate policies): Set up a national commission in charge of climate change issues under the Prime Minister's Office; produce and publish an annual progress report on the climate transition. Diagnostic: CCDR; AfDB report. Proposed timing: End of October 2024, 3rd EFF/ECF review. Expected outcomes: Decree creating the National Commission (end June 2024); Official communication on the annual progress report at the Council of Ministers (end October 2024); Publication of the annual progress report. - RM5 (Exposed and vulnerable agriculture sector): Gradually implement an insurance system against climate hazards; pilot insurance for the cotton sector and prepare insurance products. Proposed timing: End of December 2025; 6th EFF/ECF review. Expected outcomes: Report on awareness-raising and capacity-building activities; Information note on the insurance product for the cotton sector available (end December 2025). Development partner role: BOAD. - RM6–RM8 (Green and sustainable financing, financial information architecture, climate risk disclosure, Green Finance Platform): - RM6: Develop architecture for climate-related financial information and adopt a decree introducing a transition taxonomy and inter-ministerial coordination mechanism. Proposed timing: End of April 2025; 4th EFF/ECF review. Expected outcomes: Interministerial arrêté on coordination (March 2024); Decree on transition taxonomy (end of April 2025). IMF/World Bank TA available. - RM7: Adopt a decree introducing a climate risk disclosure framework for SOEs and non-financial companies, connected to the taxonomy. Proposed timing: End of April 2025; 4th EFF/ECF review. Expected outcome: Decree introducing a climate risk disclosure framework (end April 2025). IMF/World Bank TA available. - RM8: Adopt a decree to operationalize the Green Finance Platform (website; training and capacity-building plan) and design/implement an MRV system for monitoring/tracking climate finance. Proposed timing: End of October 2024, 3rd EFF/ECF review. Expected outcomes: Decree operationalizing the Green Finance Platform; Website; Training and capacity-building plan; MRV framework. ICAT support noted for MRV conceptualization and roadmap. - RM9–RM10 (Disaster warning, resilient infrastructure): - RM9: Deploy a multi-hazard early warning system pilot in the Adzopé department; produce report summarizing the first alerts in December 2024. Proposed timing: End of December 2024; 4th EFF/ECF review. Expected outcome: Report summarizing the first alerts (December 2024). Partners: AFD, WMO, World Bank. - RM10: Design and adopt standardized maintenance methodologies for road infrastructure accounting for climate change; pilot in Greater Abidjan. Proposed timing: End of October 2024 (3rd EFF/ECF review). Expected outcomes: Road design manual (end March 2024); Stocktaking report (end October 2024). - RM11–RM13 (Energy efficiency, carbon taxation, electric mobility): - RM11: Operationalize mandatory energy audit system for entities above benchmarks; complete first 5 audits by end-September 2025; energy labeling system for new appliances by December 2024. Proposed timing: End of September 2025 (5th EFF/ECF review). Expected outcomes: First five audits completed (end September 2025); List of approved energy auditors (end March 2025); List of organizations subject to energy audits (end March 2025); Notice to importers on procedure for energy label (end December 2024). Partners: KFW, World Bank and EU. - RM12: Continue existing fuel pricing mechanism with automatic adjustment; develop a carbon taxation strategy and adjust fuel prices in line with this strategy by end-December 2025 at the latest. Proposed timing: End of December 2025; 6th EFF/ECF review. Expected outcomes: Request technical assistance from IMF staff (October 2024); Strategy on carbon taxation adopted by Government (end December 2025); If necessary, adopt a legislative text to adjust fuel prices. IMF TA to elaborate strategy. - RM13: Adopt a decree to promote electric mobility to help achieve 10 percent target for electric vehicles in the vehicle fleet by 2030 (decree planned by end of April ...). *Source: Côte d’Ivoire program documents, Tables 1–3 as provided in the source content.* ### 2024. The decree will address issues such as the installation of ### 1civea2024002-print-pdf - 2024. The decree will address issues such as the installation of ### Electric mobility, carbon taxation, and climate finance measures - Decree topics to be addressed: - Installation of electric charging stations. - Technical inspections of electric vehicles. - Insurance for electric vehicles. - Compliance with standards for battery charging stations. - Carbon taxation and vehicle taxation reforms: - Government will examine the existing environmental tax system on combustion engine vehicles and, if necessary, adopt reforms to the taxation of these vehicles in line with the objectives of the NDCs. - Aim to create a legal framework to ensure coherence between registration fees, import duties, taxes, and other regulations affecting promotion of cleaner, more efficient cars. - Timing: End of December 2025; linked to the 6th EFF/ECF review. - Expected deliverables: - Strategy on carbon taxation adopted by the Government (end December 2025). - If necessary, issue regulations for environmental vehicle tax reforms. - IMF role: IMF TA to elaborate the strategy on carbon taxation (RM14). - Integration of UNFCCC windows and earmarked revenues: - Continue to integrate funding from UNFCCC windows (GEF, GCF, AF), associated environmental taxes and earmarked fees (listed in MEFP Annex I), into the State budget and align them with NDCs where applicable. - Timing: End of October 2024, 3rd EFF/ECF review. - Expected deliverable: Draft 2025 budget law (end October 2024). - Development partner role: World Bank reports (Fund TA). ### Renewable energy procurement - RM16: Finalize tendering process for development, construction and operation of solar power plants to help achieve NDC targets. - Competitive procurement to be completed by the end of 2025 for solar power capacity installed equivalent to at least 100 MW. - Timing: End of December 2025; 6th EFF/ECF review. - Expected outcomes: - Two decrees approving agreements for the construction, operation and transfer of two solar photovoltaic power plants (end December 2025). - Development partners: EU, World Bank; diagnostic reference: IFC report “Unlocking Private Investment: A Roadmap to achieve Côte d’Ivoire’s 42 percent renewable energy target by 2030”. ### Technical Memorandum of Understanding (TMU) — scope and institutional definitions - TMU purpose: Describes quantitative and structural assessment criteria for monitoring the program supported by the ECF and EFF and specifies data periodicity and deadlines. - Government definition for TMU purposes: - Central government of Côte d’Ivoire, including CNPS and CGRAE, and Treasury operations for public companies in liquidation. - Excludes local government authorities, BCEAO, and other government-owned entities with separate legal status. - Public entities definition: - Majority government-owned companies, SIR, and other public entities receiving earmarked tax and quasi-tax revenues. ### Quantitative indicators, performance criteria (PCs) and indicative targets (ITs) - Reporting and target dates: - PCs and ITs set for June 30, 2024; December 31, 2024; June 30, 2025. - Same variables are ITs for September 30, 2024 and March 31, 2025. - Performance criteria (PCs) include: - (a) a floor on the overall fiscal balance (including grants); - (b) a ceiling on net domestic financing (including issuance of securities in CFAF); - (c) a ceiling on the present value of new external debt (maturity > one year) contracted or guaranteed by the central government; - (d) a floor on government tax revenue; - (e) a zero ceiling on accumulation of central government new external arrears; - (f) a zero ceiling on accumulation of central government new domestic arrears. - Indicative targets (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; - (d) a floor on the basic primary balance. - Baseline for cumulative calculations: - PCs, ITs and adjustors calculated as cumulative change from January 1, 2024 for 2024 targets and from January 1, 2025 for 2025 targets. ### Definitions and calculation methods - Overall fiscal balance (including project grants) (PC): - Defined as: {Total government revenue (tax and nontax) + (Project grants)} – {Expenditure + Net lending (on a payment order basis)}. - Government expenditures defined as expenditures for which payment orders have been issued and taken over by the Treasury. - Net Domestic Financing (NDF) (PC): - NDF = Variation of banking system’s net claims on the government (TOFE) + Net non-bank domestic financing (excluding net variation of amounts payable) + Borrowing denominated and serviced in CFAF, excluding BOAD loans + Financing margin of CFAF 15 billion. - Ceiling includes a margin of CFAF 15 billion above the net cumulative flow projected for each quarter. - For any new borrowing over a cumulative amount of CFAF 50 billion, the government undertakes to issue government securities only by auction through the BCEAO or other forms on the WAEMU financial market registered with AMF-UMOA, in consultation with Fund staff. - Adjustor: NDF ceiling adjusted upward by the full difference between effectively disbursed and projected budget support; specifically adjusted by the amount of C2D grant expected for that quarter but not yet deposited by AFD into the C2D account at the BCEAO on the test date. - External debt (PC): - Definition of debt follows Guideline paragraph 8(a) of the Guidelines on Public Debt Conditionality (Decision No. 16919-(20/103), October 28, 2020). - External debt = debt contracted or serviced in a currency other than CFAF, except CFAF-denominated debt owed to BOAD which is also external debt. - PC on PV of new external debt applies to all new external debt (whether or not concessional), including commitments contracted or guaranteed for which no value has been received. - Exclusions from this PC: normal import-related commercial debts with maturity < one year; rescheduling agreements; IMF disbursements. - For eurobond issuance, amount deemed contracted is amount subscribed/purchased at end of subscription/purchase period as specified in final clauses. - For program purposes, the value in U.S. dollars of new external debt is calculated using the average exchange rate for December 2022 in IFS: 619.481 FCFA per U.S. dollar, 1.059 U.S. dollar per euro, and 1.329 U.S. dollar per SDR. - Present value (PV) calculation: - PV of new external debt calculated by discounting all future debt service payments (principal and interest) at a program discount rate of 5 percent and taking account of loan conditions (maturity, grace period, payment schedule, front-end fees, management fees). - A debt is concessional if PV/face value < 65 percent (grant element at least 35 percent). - If grant element is zero or less, PV is set equal to face value. - Variable-rate debt in the form reference rate plus fixed margin: PV calculated on the basis of program reference rate plus fixed margin specified in loan agreement. - Program reference rate for the euro six-month FIRF is 2.63 percent; spread of the US$ six-month FIRF over the euro six-month FIRF is 50 basis points. - Adjustors for PV of new external debt: - Program ceiling on PV of new external debt adjusted upward up to a maximum of 5 percent of the ceiling on the PV of external debt where differences are caused by variations in financing conditions (interest, maturity, grace period, payment schedule, front-end fees, management fees). - Adjustor may not be applied when differences result from an increase in the face value of total debt contracted or guaranteed. - Notification requirement: - Authorities will inform IMF staff of any planned external borrowing and conditions before loans are contracted or guaranteed. ### External borrowing plan (PPG External Debt) — selected figures from Table 1 (2024–June 2025) - By sources of debt financing (Volume of New Debt, US$ million / PV of New Debt, US$ million) — presented across periods January–June 2024; January–September 2024; January–December 2024; January–March 2025; January–June 2025: - Total (by sources): 4613.6 / 4422.1 ; 5768.5 / 5505.2 ; 6468.5 / 6063.1 ; 1925.0 / 1780.9 ; 2945.2 / 2667.1 - Concessional Debt: 42.1 / 19.6 ; 42.1 / 19.6 ; 122.1 / 59.7 ; 0.0 / 0.0 ; 13.3 / 7.4 - Multilateral debt: 23.9 / 13.3 ; 23.9 / 13.3 ; 103.9 / 53.5 ; 0.0 / 0.0 ; 13.3 / 7.4 - Bilateral debt: 0.0 / 0.0 ; 0.0 / 0.0 ; 0.0 / 0.0 ; 0.0 / 0.0 ; 0.0 / 0.0 - Other: 18.1 / 6.3 ; 18.1 / 6.3 ; 18.1 / 6.3 ; 0.0 / 0.0 ; 0.0 / 0.0 - Non-Concessional Debt 2/: 4571.6 / 4402.5 ; 5726.4 / 5485.6 ; 6346.4 / 6003.4 ; 1925.0 / 1780.9 ; 2931.9 / 2659.7 - Semi-concessional debt 3/: 1594.9 / 1425.8 ; 2038.2 / 1797.4 ; 2658.2 / 2315.2 ; 1100.6 / 956.5 ; 1962.9 / 1690.7 - Commercial terms 4/: 2976.6 / 2976.6 ; 3688.2 / 3688.2 ; 3688.2 / 3688.2 ; 824.4 / 824.4 ; 969.0 / 969.0 - By uses of debt financing (Volume of New Debt, US$ million / PV of New Debt, US$ million) — same periods: - Total (uses): 4613.6 / 4422.1 ; 5768.5 / 5505.2 ; 6468.5 / 6063.1 ; 1925.0 / 1780.9 ; 2945.2 / 2667.1 - Infrastructure: 164.7 / 134.6 ; 191.3 / 157.3 ; 191.3 / 157.3 ; 1311.5 / 1245.7 ; 1649.9 / 1554.1 - Social expenditure: 870.2 / 771.6 ; 870.2 / 771.6 ; 1570.2 / 1329.5 ; 393.7 / 339.9 ; 796.6 / 673.6 - Budget financing: 2639.9 / 2634.0 ; 2639.9 / 2634.0 ; 2639.9 / 2634.0 ; 0.0 / 0.0 ; 0.0 / 0.0 - Other: 938.9 / 881.8 ; 2067.2 / 1942.3 ; 2067.2 / 1942.3 ; 219.8 / 195.3 ; 498.7 / 439.4 - Notes in table: - 1/ Contracting and guaranteeing of new debt. The present value of debt is calculated using the terms of individual loans and applying the 5 percent program discount rate. - 2/ Concessional debt is defined as debt with a grant element that exceeds the minimum threshold of 35 percent. - 3/ Debt with a positive grant element which does not meet the minimum grant element. - 4/ Debt without a positive grant element. For commercial debt, the present value would be defined as the nominal/face value. ### Fiscal revenue, earmarks, and tax revenue floor - Floor on central government tax revenue (PC): - Total tax revenue defined as all fungible tax revenue collected by DGI, DGTCP and DGD, as well as earmarked tax revenue as defined in TOFE; excludes revenues from asset sales, grants, and non-tax revenues. - Floor set at 95 percent of the projected tax revenue for the rest of the current year to take into account fluctuations due to unforeseen factors (the margin of 95 percent does not apply to realized quarterly tax revenue). - Revenue target calculated as the cumulative flow from the beginning of the calendar year. - Earmarked tax revenues (as of end-April 2024) — Table 2 list includes: - Recettes affectées aux collectivités - Redevances Café Cacao Part CCC- Sacherie brousse - Fonds d'Investissement Agricole (2QC) - Parafiscalité anacarde - Péréquation - FER - FIMR - Taxe pour l'enlèvement des ordures ménagères (TEOM) - FDFP - Taxe de sureté (ex SGS) - TSU SIR - PCC-PCS et PUA - Impôt foncier reversé - Reversement TVA électricité - Autres dépenses liées aux taxes affectées DGI (hors TEOM) - Authorities will notify the Fund of any changes in the list of earmarks. ### External payments arrears, amounts payable, and definitions of arrears - External arrears (PC): - Defined as nonpayment of any interest or principal amounts on their due dates (taking into account contractual grace periods). - Applies to arrears on external debt contracted by the government and external debt guaranteed by the government for which the guarantee has been called. - Continuous performance criterion monitored continuously by authorities; any non-observance to be reported promptly to the Fund. - Amounts payable, including domestic payment arrears (IT and PC): - “Amounts payable” or “balances outstanding” include domestic arrears and floating debt; expenditures assumed (prise en charge) by the public accountant but yet to be paid. - Obligations include (i) bills due and not paid to nonfinancial public and private companies; and (ii) domestic debt service. - Domestic payment arrears: - Arrears to suppliers: overdue obligations to nonfinancial and private companies for which payment delay exceeds regulatory delay of 90 days. - Arrears on domestic debt service: debt service obligations for which payment delay exceeds 30 days beyond contractually stipulated time, including any applicable grace period. - Floating debt: balances outstanding for which payment delay does not exceed regulatory delay (90 days for debt to nonfinancial companies and 30 days for debt service). *Source: Ivoirian authorities/International Monetary Fund (excerpts from the TMU and reform matrix).* ### 23. Balances outstanding are broken down by payer and type, as well as by maturity and ### 23. Balances outstanding are broken down by payer and type, as well as 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) ### Domestic payments arrears and monitoring - Performance criterion: ceiling on the accumulation of new domestic payments arrears is zero (continuous performance criterion). - Monitoring: authorities will monitor continuously and report any non-observance promptly to the Fund. ### Treasury advances (Indicative Target) - Definition: 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. - Exclusions: “régies d’avances” (ministerial decree n° 2013-762) and extraordinary procedures in decree n° 1998-716 for expenditures financed by external resources, wages, subsidies and transfers, and debt service. - Limit: cumulative expenditures by treasury advance will not exceed cumulative quarterly ceilings representing 10 percent of quarterly budget allocations (excluding externally financed expenditures, wages, subsidies and transfers, and debt service). - Eligibility: nominative and restrictive list as defined by ministerial Decree No. 178/MEF/CAB-01/26 of March 13, 2009. ### Targeted Social Spending (Indicative Target) - Source: derived from the detailed list of targeted programs in the SIGOBE system (see Table 3). - Program components: - Social protection: productive cash-transfer program and social registry budget. - Health: 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. - Key totals from Table 3 (in billions of FCFA): - Social Protection (selected quarterly values): Q1 3.8, Q2 8.9, Q3 18.5, Q4 29.4 (2024); Q1 3.8, Q2 8.9 (2025). - Health (selected quarterly values): Q1 66.1, Q2 128.4, Q3 211.9, Q4 280.1 (2024); Q1 75.5, Q2 141.9 (2025). - Education (selected quarterly values): Q1 158.6, Q2 323.5, Q3 532.1, Q4 679.4 (2024); Q1 159.9, Q2 327.7 (2025). - Youth Employment (selected quarterly values): Q1 1.2, Q2 2.1, Q3 4.3, Q4 5.0 (2024); Q1 1.2, Q2 2.2 (2025). - TOTAL (Table 3 totals): Q1 229.7, Q2 462.9, Q3 766.8, Q4 993.9 (2024); Q1 240.5, Q2 480.7 (2025). - Source noted: Ivorian authorities. ### Primary basic fiscal balance (Indicative Target) - Definition: difference between government’s total revenue (excluding grants) and total expenditure (including expenditure corresponding to earmarked revenues) plus net lending, excluding interest payments and externally financed capital expenditure. - Formula provided in source: 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: defined as expenditures for which payment orders have been issued and which have been assumed by the Treasury. ### Program monitoring, data reporting, and transmittal deadlines - Quarterly assessment report on monitoring of quantitative performance criteria, indicative targets, and structural benchmarks: provided no later than 45 days following the end of each quarter. - Government reporting: specified information in Table 5 to be reported no later than 45 days following the month-end or quarter-end, except where later timing is specified in Table 5. - BCEAO final data: reported within 45 days following the month-end; includes complete itemized listing of public sector assets and liabilities vis-à-vis: (i) the BCEAO; (ii) Banque Nationale d’Investissement (BNI); and (iii) the banking system (including the BNI). - New external debt: authorities will consult Fund staff on any proposed new external debt; will inform Fund staff of the signature of any new external debt contracted or guaranteed by the government and report monthly data on new external debt, amount outstanding, and accumulation and repayment of external payments arrears within six weeks of the end of each month. - General: authorities will report any information needed for effective monitoring. - Data transmittal table (selected items and deadlines from Table 5): - Cyclical indicators: Monthly — End of month + 45 days. - Budget execution report: Quarterly — End of quarter + 45 days. - Pro-poor expenditures: Monthly — End of month + 45 days. - Treasury advances: Monthly — End of month + 45 days. - Central government domestic arrears: Monthly — End of month + 45 days. - Detailed external debt statement: Monthly — End of month + 45 days. - Banking survey: Monthly — End of month + 45 days (provisional); end of month + 60 days (final). - Debt statement of public companies: Quarterly — End of quarter + 90 days. ### Pro-poor spending (Table 4 totals and selected items) - TOTAL (Table 4, Billions of CFA Francs): 720.0 (Q1 2023), 1,623.4 (Q2 2023), 2,403.4 (Q3 2023), 3,317.6 (Q4 2023), 756.0 (Q1 2024). - Selected sector quarterly totals (2023‒24, Billions of CFA Francs): - Agriculture and rural development: 21.8 (Q1 2023), 44.6 (Q2), 65.4 (Q3), 87.2 (Q4), 22.9 (Q1 2024). - Education: 376.4 (Q1 2023), 881.9 (Q2), 1,261.2 (Q3), 1,674.1 (Q4), 395.2 (Q1 2024). - Health: 110.1 (Q1 2023), 262.6 (Q2), 425.8 (Q3), 640.3 (Q4), 115.6 (Q1 2024). - Water and Sanitation: 30.1 (Q1 2023), 72.2 (Q2), 111.0 (Q3), 140.4 (Q4), 31.6 (Q1 2024). - Roads and Public Works: 89.9 (Q1 2023), 162.8 (Q2), 258.4 (Q3), 382.7 (Q4), 94.4 (Q1 2024). - Social spending (subcomponent): 19.0 (Q1 2023), 38.0 (Q2), 59.1 (Q3), 76.1 (Q4), 20.0 (Q1 2024). - Source noted: Ivoirian authorities. ### Selected economic indicators (Table 6; percent of GDP unless otherwise indicated; Program; Annual percentage changes unless otherwise indicated) - National income — GDP at constant prices (annual % change): 7.1 (2021), 6.2 (2022), 6.2 (2023), 6.5 (2024), 6.4 (2025), 6.4 (2026). - Consumer price index (annual average): 4.2 (2021), 5.2 (2022), 4.4 (2023), 3.8 (2024), 3.0 (2025), 2.2 (2026). - External sector (on the basis of CFA francs): - Exports of goods, f.o.b., at current prices: 18.2 (2021), 19.5 (2022), 3.4 (2023), 19.9 (2024), 20.0 (2025), 5.6 (2026). - Imports of goods, f.o.b., at current prices: 24.3 (2021), 39.4 (2022), -2.6 (2023), 4.5 (2024), 6.7 (2025), 7.2 (2026). - Export volume (annual % change): 10.2 (2021), 8.0 (2022), 4.6 (2023), 0.2 (2024), 6.9 (2025), 8.2 (2026). - Import volume (annual % change): 7.8 (2021), 3.8 (2022), 7.7 (2023), 6.8 (2024), 7.1 (2025), 6.7 (2026). - Central government operations (percent of GDP): - Total revenue and grants: 15.6 (2021), 15.3 (2022), 16.2 (2023), 16.8 (2024), 17.6 (2025), 17.9 (2026). - Total revenue: 15.1 (2021), 14.7 (2022), 15.6 (2023), 16.3 (2024), 17.2 (2025), 17.7 (2026). - Tax revenue: 13.0 (2021), 12.8 (2022), 13.6 (2023), 14.4 (2024), 15.3 (2025), 15.9 (2026). - Total expenditure: 20.5 (2021), 22.1 (2022), 21.5 (2023), 20.8 (2024), 20.7 (2025), 20.9 (2026). - Current expenditure: 14.7 (2021), 14.9 (2022), 14.7 (2023), 13.5 (2024), 13.9 (2025), 13.6 (2026). - Capital expenditure: 5.8 (2021), 7.2 (2022), 6.8 (2023), 7.3 (2024), 6.7 (2025), 7.4 (2026). - Basic primary balance: -1.1 (2021), -1.8 (2022), -0.1 (2023), 0.0 (2024), 1.6 (2025), 1.3 (2026). - Overall balance, incl. grants, payment order basis: -4.9 (2021), -6.8 (2022), -5.2 (2023), -4.0 (2024), -3.0 (2025), -3.0 (2026). - External sector — Current account balance (percent of GDP): -3.9 (2021), -7.7 (2022), -7.8 (2023), -5.7 (2024), -2.3 (2025), -2.3 (2026). - Non-interest current account balance: -2.8 (2021), -6.5 (2022), -6.3 (2023), -4.3 (2024), -0.8 (2025), -0.8 (2026). - Memorandum: Nominal GDP (CFAF billions): 40,367 (2021), 43,771 (2022), 47,843 (2023), 52,368 (2024), 57,057 (2025), 61,922 (2026). - Sources: Ivorian authorities, and IMF staff estimates and projections. ### Debt sustainability analysis — key findings and risk assessment - Overall and external public debt: assessed at Moderate risk of debt distress. - Developments: - Côte d’Ivoire returned to international capital markets after a 3-year hiatus and used proceeds to improve short-term maturities through a debt management operation (DMO). - Compared to the last DSA, debt sustainability improved with lower debt ratios, especially external debt liquidity ratios. - Mechanical risk rating: Moderate risk of debt distress (contrasts with previous DSA which required judgement to reach moderate risk). - External debt service-to-revenue indicator: breaches threshold once, in 2024, mainly owing to the DMO financed by the January 2024 Eurobond issuance; the ratio remains below the threshold during the remainder of the projection period under the baseline. - Stress scenarios: all indicators are susceptible to breaches; the most extreme involves a shock to exports. - PV of overall debt-to-GDP ratio: below its threshold in the baseline, but exceeds it in most stress scenarios (most extreme is the exports shock). - Customized stress test: natural disaster shock identified as the most extreme shock to public debt. - Conclusion: space to absorb shocks remains limited. ### Public debt coverage and treatment of SOE debt - Coverage: central government debt and guarantees provided by the central government, including guarantees that pertain to SOE debt. - Classification: external and domestic debt classified on the currency criterion (residency criterion not used due to data constraints). - Exclusions: debt of local governments excluded (no information available). - SOE debt treatment: - At end-2023, both SOE guaranteed and non-guaranteed commercial debt amounted to 1 percent of GDP. - Baseline inclusion: all guaranteed SOE debt and on-lent debt included in the debt stock in the baseline. - Contingent liability shock: non-guaranteed SOE debt captured as a contingent liability shock set at 1 percent of GDP. - Data and reform efforts: authorities committed to enhancing SOE data coverage and monitoring, consolidating general government fiscal accounts with SOE financial statements and 20-year projections; reforms (PPAs) implemented in debt transparency, fiscal sustainability, and debt management (including publishing on-lent loans to SOEs quarterly, adopting legal framework for non-tax revenue oversight, and mechanism for approving on-lending to SOEs). *Source: Ivorian authorities; International Monetary Fund (excerpts from the provided chapter).* ### 3. The magnitude of the shock in the contingent liability stress test applied in the ### 3. The magnitude of the shock in the contingent liability stress test applied in the ### Contingent liability shock magnitude - LIC-DSF default settings are applied for the contingent liabilities shock. - Potential additional liabilities could emanate from SOE debt not captured in the data coverage (especially from non-guaranteed debt and domestic arrears), public-private partnership agreements, and the financial sector. - Total contingent liabilities for the CL test are estimated at 6 percent of GDP (Text Table 2). - The stock of public private partnerships represents about 2 percent of GDP as of October 2023. - The tailored stress test includes: - a 1 percent of GDP shock for risks related to SOEs, and - a financial sector shock of 5 percent of GDP. ### Debt background and composition - Public debt increased significantly over 2018-2023, with external debt growing as a share of total debt. - Drivers of the 2018-2023 indebtedness increase: higher recourse to external debt to finance investment and social spending under the National Development Plan 2021-2025, the COVID-19 pandemic, economic spillovers from the war in Ukraine, and adverse external financing conditions. - Public debt indicators: - Public debt stood at 59.1 percent of GDP at end-2023, compared with 36.8 percent in 2018. - External debt stood at 36.9 percent of GDP at end-2023, compared to 24.5 percent in 2018—representing 62.4 percent of total debt at end-2023, well below the peak of 68.5 percent in 2019. - External borrowing and market milestone: - Successful eurobond issuance in January 2024 in the amount of US$2.6 billion. - Domestic debt features: - Most domestic debt is in the form of CFAF-denominated securities with maturities between 3 months and 15 years. - Debt financing shifted to shorter term debt issuance in 2023 at substantially higher interest rates. - BCEAO policy interest rate increased to 3.5 percent in December 2023, the sixth increase since June 2022. - External debt holders and composition (end-2023): - Multilateral creditors: 32 percent of external debt. - Bilateral creditors: about 17 percent of external debt. - Commercial creditors: about 49 percent of external debt (close to half). - Guaranteed debt: 2.8 percent of external debt. - Close to 60 percent of commercial debt is in the form of eurobonds. ### Recent developments and macroeconomic performance (2023 and near term) - Real GDP growth: - Real GDP growth is estimated at 6.2 percent in 2023. - GDP growth projected to range between 6 and 6.5 percent through the medium term. - Real GDP growth projected at 6.5 percent in 2024, around 6.4 percent in 2025-26, and 7.5 percent in 2027 (due to strong hydrocarbon production in phase 3 of the Baleine oilfield). Convergence to potential of around 6 percent over the medium term. - Inflation: - Inflation eased to an estimated 4.4 percent in 2023 from 5.2 percent in 2022. - Annual average inflation (CPI) projected to ease to 3.8 percent in 2024 and remain around 2 percent in the medium term. - Fiscal balances and revenue: - Primary and overall fiscal deficits decreased to, respectively, 2.7 and 5.2 percent of GDP in 2023 from 4.6 and 6.8 percent of GDP in 2022. - Tax revenue reached 13.6 percent of GDP in 2023 from 12.8 percent in 2022. - Tax revenue assumed to increase from 12.5 percent of GDP in 2022 to 15.6 percent of GDP in 2026, reaching close to 18 percent by the end of the projection period. - Authorities committed to converging to the regional target of 3 percent of GDP overall fiscal deficit in 2025. - Current account: - External current account deficit estimated at 7.8 percent of GDP in 2023 after 7.7 percent of GDP in 2022. - Current account deficit expected to narrow to about 2 percent of GDP in 2028. - Official reserves remained under pressure in 2023, with Côte d’Ivoire contributing to the decline in FX reserves at the regional level. ### Projections, macro assumptions, and fiscal settings - Text Table 4 macro projections (selected entries; percent of GDP or values as labeled): - Nominal GDP (USD Billion): 106.6 (2024-2029 previous DSA), 162.6 (2030-2034), 278.0 (2035-2043); 107.0, 165.0, 282.1 (current DSA columns). - Real GDP (y/y % change): 6.2 (2024-2029 previous DSA), 5.8 (2030-2034), 5.6 (2035-2043); 6.6, 5.8, 5.6 (current DSA columns). - Fiscal (Central Government) — Revenue and grants: 17.8, 18.9, 19.4 (previous DSA); 17.9, 18.9, 19.3 (current DSA). - Primary expenditure: 18.6, 18.5, 19.6 (previous DSA); 18.6, 18.0, 19.1 (current DSA). - Primary balance: -0.8, 0.4, -0.2 (previous DSA); -0.9, 0.5, 0.4 (current DSA). - Exports of goods and services: 23.9, 21.9, 19.3 (previous DSA); 25.6, 24.2, 22.5 (current DSA). - Imports of goods and services: 18.0, 16.4, 15.0 (previous DSA); 17.8, 16.6, 15.0 (current DSA). - Non-interest current account balance: -1.6, -2.4, -3.7 (previous DSA); -1.5, -2.0, -2.2 (current DSA). - Current account balance: -2.8, -3.2, -4.3 (previous DSA); -2.9, -2.9, -2.9 (current DSA). - Foreign direct investment (net inflows): 2.0, 2.4, 2.7 (previous DSA); 3.1, 2.8, 3.1 (current DSA). - Central government operations (selected historical and projected percent of GDP): - Total revenue and grants: 15.6 (2021), 15.3 (2022), 16.2 (2023), 16.8 (2024), 17.6 (2025), 17.9 (2026), 18.1 (2027), 18.3 (2028), 18.6 (2029). - Total expenditure: 20.5 (2021), 22.1 (2022), 21.5 (2023), 20.8 (2024), 20.7 (2025), 20.9 (2026), 21.1 (2027), 21.2 (2028), 21.6 (2029). - Primary balance: -2.9 (2021), -4.6 (2022), -2.7 (2023), -1.6 (2024), -0.5 (2025), -0.7 (2026), -0.7 (2027), -0.8 (2028), -0.9 (2029). - Overall balance, incl. grants, payment order basis: -4.9 (2021), -6.8 (2022), -5.2 (2023), -4.0 (2024), -3.0 (2025 onward). - Debt financing strategy and maturities: - Domestic financing assumed issuances of CFAF securities from 2024 onwards with maturities: less than one-year (24 percent of issuances), one to three years (6 percent), three to seven years (37 percent), and more than seven years (33 percent). - Multilateral and bilateral financing projected to gradually decline from 4.3 percent of GDP in 2023 to 1.6 percent in 2044. - Authorities borrowed externally around 70 percent of total financing in 2023 and intend to reduce external borrowing to 36 percent by 2026. - Debt service on Eurobonds represents 28 percent of external debt service over the next three years, including the DMO cost. ### Risks, realism, and residuals - Realism assessment: - The macroframework is broadly plausible but will require relatively strong fiscal consolidation efforts to meet targets. - Projected medium-term debt-creating flows are below those observed in the past five years. - The 2.3 percent of GDP residual calculated for 2023 mostly reflects different recording of project loan disbursements in fiscal accounts and debt statistics, and non-integration in fiscal accounts of flows associated with new debt contracted by the government and on-lent to SOEs (included in public debt). - Risk assessment: - The balance of risks is assessed as broadly balanced. - Downside risks: regional security challenges could generate spending pressures and weigh on confidence; renewed spike in international oil prices could put pressure on tax revenue from petroleum products; renewed deterioration in external financing conditions could increase debt service costs; weaker-than-anticipated recovery in regional FX reserves; deteriorating regional security situation. - Upside risks: strict implementation of the NDP; higher-than-anticipated oil and gas extraction (notably with a substantial new discovery in the Calao field); global inflationary pressures subsidizing faster than anticipated leading to more favorable financing conditions; sustained high cocoa prices boosting disposable income and cocoa-related export and fiscal revenue. ### Country classification and scenario stress tests - Debt-carrying capacity: - Côte d’Ivoire is assessed to have medium debt-carrying capacity. - Composite indicator: 2.94 (based on October 2023 WEO macroeconomic framework and World Bank’s 2022 CPIA index), above the lower cut-off of 2.69 but below the strong capacity cut-off value of 3.05. - Tailored market financing stress test: - Given reliance on global capital markets and sizeable Eurobond issuances, a tailored test for international market financing was conducted. - The tailored test assumes: - a temporary increase in the cost of new commercial external borrowing by 400 basis points, - a nominal depreciation of 15 percent of the CFAF vis-à-vis the US$, and - a shortening of maturities and of grace periods. *Source: IMF staff synthesis of the Côte d'Ivoire DSA chapter content provided in the source PDF.* ### 21. Standard stress tests on real GDP growth, primary balance, exports, current transfers, ### 21. Standard stress tests on real GDP growth, primary balance, exports, current transfers, ### Stress test design and tailored shocks - Standard shocks: each of real GDP growth, primary balance, exports, and current transfers is set to the lower of its historical average minus one standard deviation, or its baseline projection minus one standard deviation. - FX shock: nominal depreciation of 30 percent of the CFAF vis-à-vis the US$ in the first year of the projection. - Commodity price shock: sudden one standard deviation decline in commodity prices. - Tailored natural disaster shock: calibrated using World Bank flooding cost estimates — one-off 9 percentage points decline in real GDP growth and an associated export growth shock of 3.5 percentage points. ### External debt sustainability — baseline and projections - Overall classification: country remains at moderate risk of external debt distress (no judgment applied in this DSA). - PV of external debt-to-GDP: - 32 percent in 2024 and 2025 - 19 percent in 2034 - relevant threshold: 40 percent - PV of external debt-to-exports: peaks at 126 percent at the beginning of the projection period and then decreases. - External debt service-to-exports ratio: - spike to 20.7 percent in 2024 (due to the DMO) - expected to drop to 11 percent in 2025 and stay below the 15 percent threshold thereafter. - Debt service-to-revenue ratio: - remains below the 18 percent threshold during the projection period except for one breach at 31.8 percent in 2024 (mainly owing to early repayments and debt service associated with the DMO). - projected to steadily decline well below the threshold under the Fund-supported program before returning closer to the threshold around 2030 and then decreasing steadily in the long run. - Sensitivity: an export shock would cause the debt service-to-export ratio to breach the threshold from 2026 onward, and most shocks would cause the debt-service-to-revenue indicator to breach the threshold starting in 2024. ### Public debt sustainability — baseline and vulnerabilities - PV of public debt-to-GDP (baseline): below the 55 percent threshold and expected to decline to around 33 percent by 2034. - PV of debt-to-revenue and grants ratio: - around 317 percent in 2024 - declines to 172 percent in 2034 - Debt service-to-revenue and grants ratio: - projected to soar to 61 percent in 2024 - decline back to around 15 percent at the end of the projection period - Standard stress tests: - exports shock is the most extreme public debt vulnerability: under the standard exports stress test, PV of public debt-to-GDP would breach the 55 percent threshold starting in 2024 and continue increasing until 2026. - exports shock leads to an explosive pattern for PV of public debt-to-GDP and PV of debt-to-revenue ratios, highlighting dependence on exports and the need to accelerate diversification policies. ### Eurobond issuance and Debt Management Operation (DMO) — key facts and impact - On January 23, 2024: Côte d'Ivoire placed $2.6 billion Eurobond issuances in international markets; proceeds mainly used for a debt management operation (DMO). - Issuance composition: - $1.5 billion traditional Eurobond, 13-year maturity, yield 8.5 percent. - $1.1 billion ESG bond, 9-year maturity, yield 7.875 percent. - EUR-USD hedge resulting in effective interest rates in euro terms of 6.85 percent and 6.3 percent, respectively. - Market signals and ratings: - EMBIG spreads fell and remained well below 600 basis points since the issuance. - Moody’s raised the country’s credit rating one notch to Ba2 in March 2024. - Standards & Poor upgraded outlook from stable to positive and kept credit rating at BB- in May 2024. - Use of proceeds and savings: - About $1.9 billion, representing over 70 percent of the issuance, was used for a DMO (partial buyback of 2025 and 2032 Eurobonds and early repayments of commercial loans). - DMO finalized in April 2024. - Operation generated a cumulated gross debt service saving of 2.3 percent of GDP between 2024 and 2032 with a peak of 0.9 percent of GDP in 2025. - Effect on 2024 indicators: DMO explains spikes in debt-service ratios in 2024. ### Climate change exposure, costs, and implications for debt sustainability - Exposure: rising temperatures, higher sea levels, greater rainfall variability, increased flood and coastal erosion risks by 2050. - Economic vulnerabilities: - Heavy reliance on agriculture and concentration of industrial and services activity in coastal areas. - Agriculture: employs about half of the workforce, contributes about 17 percent of GDP and 10 percent of tax revenues. - 56 percent of population live in an urban coastal area. - NDC implementation cost: US$22 billion (US$12 billion in adaptation and US$10 billion in mitigation). - Private financing assumed to cover 74 percent of the National Development Plan; international sources (Green Climate Fund, Adaptation Fund) also expected to contribute. - Flooding cost: estimated annual cost (expected value) of about 3 percent of GDP due to fluvial and pluvial floods along the coast (World Bank estimate; seawater damage not accounted for due to lack of data). - Tailored natural disaster stress test results: - Calibration: one-off 9 percentage points decline in real GDP growth and export shock of 3.5 percentage points. - Outcomes: debt service-to-revenue ratio would surge to 61 percent in 2024; PV of debt-to-GDP would spike to 60 percent in 2025. - Policy implication: urgent need for investments in resilient infrastructure and greater revenue mobilization to attenuate negative effects on debt sustainability. ### Risk rating, vulnerabilities, and policy priorities - Overall risk: - External debt: moderate risk of external debt distress with limited capacity to absorb shocks. - Overall debt sustainability: overall risk of debt distress remains moderate. - Vulnerabilities: - Limited space to absorb shocks, especially given debt service ratios to exports and to revenue. - Standard stress tests: PV of public debt-to-GDP breaches 55 percent starting in 2025 under the most extreme shock (exports). - Three out of four external debt indicators would breach thresholds under the most extreme shocks (exports and depreciation). - Risks exacerbated by post-pandemic environment, war in Ukraine, and global monetary tightening. - Policy recommendations and priorities emphasized: - Intensify domestic revenue mobilization (strengthening DRM). - Promote private-sector-led economic transformation and diversify the export base. - Adopt a prudent external borrowing strategy balancing costs and risks to preserve borrowing space and medium-term debt sustainability. - Continue careful and active debt management, including balancing domestic and external debt and full oversight of SOE debt contracting; integrate SOE debt into debt sustainability assessment. - Leverage ECF/EFF and RSF arrangements and World Bank DPO to catalyze donor and private financing at concessional terms. - Develop a full green finance strategy and consider blended financing, international climate funds, and private financing to meet climate adaptation and mitigation financing needs. - Convene a financing roundtable in mid-year to catalyze donors and private sector financing for climate resilience. *IMF staff summary based on the DSA chapter content.* ### 37. The authorities agreed that Côte d’Ivoire remains at moderate risk of debt distress. ### 37. The authorities agreed that Côte d’Ivoire remains at moderate risk of debt distress. ### Authorities' assessment and commitment - The authorities agree that Côte d’Ivoire remains at moderate risk of debt distress. - They are strongly committed to keeping the country’s debt at moderate risk. - The authorities continue to show strong commitment to active debt management, notably with the January Eurobond issuance and an extensive liabilities management exercise in Q1 2024. - The authorities are strongly committed to the policies and targets under the Fund arrangements for increasing domestic revenue mobilization, as shown by the satisfactory EFF/ECF performance so far. - The authorities have committed to improving the quality of their credit ratings: - Moody’s: upgraded to Ba2. - S&P: outlook changed from BB- stable to BB- positive. ### Recent debt-management actions and effects - January Eurobond issuance and the Q1 2024 liabilities management exercise: - As intended, the issuance and liabilities management exercise strengthened debt sustainability, including liquidity indicators, and reduced debt vulnerabilities. - These actions contributed to improved Côte d’Ivoire credit ratings. - The liabilities management exercise in Q1 2024 contributed to a temporary breach of the debt service-to-export ratio (see monitoring section below). ### Monitoring, composition, and policy focus - The authorities are closely monitoring their debt portfolio, including: - The composition between external and domestic borrowing. - The concessionality of loans. - Investment prioritization and the pace of disbursement. - Continued policy focus under the Fund arrangement: - Increasing domestic revenue mobilization. - Active debt management to maintain moderate risk. ### Indicators, projections, and vulnerabilities (selected figures preserved exactly as in the source) - External debt (nominal, percent of GDP): - 2024: 37.9 - PV of PPG external debt-to-GDP ratio: - 2024: 31.5 - PPG debt service-to-exports ratio (percent): - 2024: 20.7 - PPG debt service-to-revenue ratio (percent): - 2024: 32.2 - Public sector debt (percent of GDP): - 2024: 58.8 - Gross external financing need (Million of U.S. dollars): - 2024: 1,638.2 - Key macroeconomic assumptions: - Real GDP growth (in percent) 2024: 6.5 - GDP deflator in US dollar terms (change in percent) 2024: 2.5 - Effective interest rate (percent) 2024: 3.7 - Government revenues (excluding grants, in percent of GDP) 2024: 16.4 - Debt decomposition highlights (selected items, end-period shares): - Total public debt (US$ billions, end-period): 46.2 (100.0 percent total debt) - External share of total debt: 61.8 percent (US$ 28.5 billion) - Domestic share of total debt: 38.2 percent (US$ 17.6 billion) - Multilateral creditors (US$ 9.4 billion; 20.4 percent of total debt) - Bonds (US$ 8.6 billion; 18.7 percent of total debt) - Commercial creditors (US$ 5.6 billion; 12.2 percent of total debt) - Domestic Bonds (US$ 5.0 billion; 10.8 percent of total debt) - Loans and others (domestic) (US$ 11.4 billion; 24.8 percent of total debt) ### Risks, thresholds, and stress-test outcomes - The external debt service-to-revenue ratio and the debt service-to-export ratio temporarily breach their respective thresholds in 2024 before remaining below them for the rest of the projection period. - Stress-testing framework notes: - The most extreme stress test is the test that yields the highest ratio in or before 2034. - All additional financing needs generated by shocks under the stress tests are assumed to be covered by PPG external MLT debt in the external DSA. - Default terms of marginal debt are based on baseline 10-year projections. - Sensitivity analysis (selected projections, PV of debt-to-GDP and debt service indicators): - PV of debt-to-GDP ratio (baseline projections shown in sensitivity tables): values decline over time from early-2020s levels toward lower ratios by 2034 under baseline and many scenarios. - Tailored and bound tests present potential breaches for some indicators under adverse scenarios; detailed scenario values and thresholds are reported in the DSA tables and figures. ### Policy implications and recommendations implied by the analysis - Maintain active debt management to preserve liquidity indicators and reduce vulnerabilities, building on the January Eurobond issuance and Q1 2024 liabilities management exercise. - Continue strengthening domestic revenue mobilization to improve debt service coverage and reduce reliance on external financing, in line with EFF/ECF program targets. - Monitor closely: - Composition of borrowing (external vs. domestic). - Concessionality of new loans. - Pace and prioritization of public investment and disbursements to avoid unnecessary debt creation. - Pursue measures to continue improving sovereign credit metrics and the quality of credit ratings. *Source: IMF staff report excerpts and associated DSA tables and figures.* --- _Source: https://www.imf.org/-/media/files/publications/cr/2024/english/1civea2024002-print-pdf.pdf_