Press Release: IMF Executive Board Approves Three-Year, US$615.9 Million Extended Credit Facility Arrangement and Additional Interim Debt Relief for Côte d'Ivoire

IMF News, November 4, 2011

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Canonical URL: Press Release: IMF Executive Board Approves Three-Year, US$615.9 Million Extended Credit Facility Arrangement and Additional Interim Debt Relief for Côte d'Ivoire

The Executive Board approved a three-year arrangement for Côte d’Ivoire under the Extended Credit Facility (ECF) in an amount equivalent to SDR 390.24 million (about US$615.9 million), representing 120 percent of Côte d’Ivoire’s quota in the IMF.
Approval makes immediately available a first disbursement of an amount equivalent to SDR 81.3 million (about US$128.3 million).
The Executive Board also approved interim assistance under the enhanced Heavily Indebted Poor Countries (HIPC) Initiative in an amount equivalent to SDR 5.04 million (about US$8 million), representing relief on debt service pending irrevocable debt relief when the country reaches the HIPC completion point.
The Executive Board concluded the Article IV consultations with Côte d’Ivoire; these will be covered in a separate Public Information Notice.

Côte d’Ivoire experienced a prolonged sociopolitical crisis that led to widespread violence and a sharp decline in economic activity in early 2011.
The new government, since late-April 2011, embarked on an ambitious investment-led recovery.
The IMF approved support under the Rapid Credit Facility in July equivalent to SDR 81.3 million (about US$128 million) (see Press Release No. 11/272).
The projected decline in real gross domestic product (GDP) was reduced in September to a 5.8 percent contraction from 6.3 percent previously.
Real GDP is expected to bounce back with growth of 8–9 percent in 2012.
Specific economic observations:
- Real GDP is now expected to decline by slightly less than 6 percent in 2011.
- Inflation is receding from its peak in April, although it remains above its pre-2011 trend.
- The financial sector, weakened during the crisis, is fully operational again.
- Performance under the authorities’ 2011 program supported under the IMF’s Rapid Credit Facility has been good.

Côte d’Ivoire reached the decision point under the HIPC Initiative on March 31, 2009 (see Press Release No. 09/104).
The country could qualify for irrevocable debt relief on the vast majority of its external debts through the HIPC and Multilateral Debt Relief initiatives in 2012 once it completes the completion point triggers.
Completion point triggers include:
- Key structural and social reforms, including in public financial management, debt management and governance, and the coffee and cocoa sector.
- Standard HIPC requirements of implementing a national poverty reduction strategy and satisfactory implementation of the government’s ECF-supported economic program.
Reaching the HIPC completion point will reduce Côte d’Ivoire’s external debt to a sustainable level.
The authorities have requested technical assistance from the IMF and the World Bank to formulate a comprehensive debt management strategy, and intend to set up a national debt agency in line with West African Economic and Monetary Union guidelines.

The authorities’ new medium-term economic program, supported under the IMF’s Extended Credit Facility, aims to:
- Fully restore law and order and consolidate peace through economic growth and job creation, in particular for the youth.
- Implement ambitious and broad investment and structural reform plans to maintain a robust growth path over the medium term.
Fiscal program observations and guidance:
- The fiscal program for 2011-12 is described as realistic in the face of continued large uncertainties.
- The emphasis on investment is considered appropriate.
- Expenditures will remain relatively high, while revenues will still reflect the impact of the post-election crisis.
- Over the medium term, implementation of the authorities’ structural reform program is expected to improve the business climate and tax administration, create fiscal space needed to support investment, and allow renewed access to foreign direct investment and other foreign financing.

The Extended Credit Facility (ECF) replaced the Poverty Reduction and Growth Facility (PRGF) as the Fund’s main tool for medium-term financial support to low-income countries.
ECF features described:
- Provides a higher level of access to financing, more concessional terms, enhanced flexibility in program design features, and more focused streamlined conditionality.
- Financing under the ECF carries a zero interest rate, with a grace period of 5½ years, and a final maturity of 10 years.
- The Fund reviews the level of interest rates for all concessional facilities every two years.

Press Release No. 11/399, November 4, 2011