IMF Executive Board Completes the Final Reviews of Côte d’Ivoire’s Extended Credit Facility and Extended Fund Facility Arrangements

IMF News, December 9, 2020

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Published: December 9, 2020

Disbursement and Program Details

Completion of the 7th and 8th reviews of ECF/EFF arrangements enables an immediate disbursement of US$278.2 million.
The three-year ECF/EFF arrangements had a total access of SDR 650.4 million (about US$896.7 million) and were approved on December 12, 2016.
The arrangements were augmented by about US$278.2 million, and extended by one year on December 6, 2019.
Completion of the final reviews enables the immediate disbursement of SDR 193.572 million (about US$278.2 million), bringing total disbursements under the arrangements to SDR 844 million (about US$1,207.71 million or 129.8 percent of Côte d’Ivoire’s quota).
Waivers approved for nonobservance of performance criteria on:
- the overall budget balance
- the new external debt

Economic Performance and Projections

The four-year program performance was satisfactory.
Côte d’Ivoire is weathering the economic consequences of the pandemic reasonably well so far, reaping the rewards of sound pre-COVID macroeconomic policies and a decisive policy response to the pandemic.
Growth in 2020 is currently projected to stand at 1.8 percent.
Assuming global conditions gradually normalize, growth is projected to revert to 6½ percent in 2021.
The authorities intend to gradually consolidate the fiscal deficit to 3 percent of GDP by 2023.
Several program targets were missed at end-June 2020 due to the pandemic response.
Return to the WAEMU norm of a fiscal deficit of 3 percent of GDP by 2023 is emphasized as key for regional stability.

Policy Recommendations and Priorities

Implement a much more ambitious strategy for domestic revenue mobilization, centered on:
- bringing the informal economy into the fiscal net
- limiting the proliferation of tax exemptions
- complementing ongoing efforts to strengthen the revenue administration
Carefully monitor state-owned enterprises and public banks.
Debt management should balance recourse to financing on the regional market and from external commercial sources.
Reinforce the statistical apparatus to timely identify policy priorities.
Strike the right balance between supporting the recovery and re-anchoring the fiscal path through gradual fiscal consolidation over the next three years.

Board Statement Highlights (Mr. Mitsuhiro Furusawa, Acting Chair and Deputy Managing Director)

“Strong record of sound macroeconomic policies, a swift COVID response, and substantive government support to the most impacted has helped Côte d’Ivoire in weathering the immediate consequences of the pandemic reasonably well.”
Performance under the Fund-supported program was satisfactory through end-2019 although several program targets were missed at end-June 2020 due to the pandemic response.
“Provided global economic conditions gradually normalize, growth is projected to revert to its medium-term trend in 2021, but with substantial downside risks.”
“The authorities appropriately responded to the COVID shock by relaxing the fiscal stance to accommodate revenue setbacks, implement the government’s emergency spending plan and limit the growth deceleration.”
“Over the medium term, it is essential to address pressing development needs, build buffers, and limit debt vulnerabilities.”

Next Steps and Surveillance

The completion of the current program will be followed by Post-Program Monitoring discussions.
It is recommended that Côte d’Ivoire returns to the standard 12-month cycle for Article IV consultations and engages in Post-Program Monitoring, as outstanding credit to the Fund exceeds the 200 percent of quota threshold.

IMF Executive Board Completes the Final Reviews of Côte d’Ivoire’s Extended Credit Facility and Extended Fund Facility Arrangements, December 9, 2020. IMF Communications Department.