IMF Executive Board Concludes 2021 Article IV Consultation with Côte d’Ivoire
IMF News, July 22, 2021
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- Published: July 22, 2021
Overview and recent performance
- Executive Board concluded the Article IV 2021 consultation with Côte d’Ivoire on July 21, 2021.
- Côte d’Ivoire demonstrated strong resilience to the pandemic, supported by:
- strong pre-crisis fundamentals;
- a rapid policy response;
- relatively lower dependency on sectors hit hardest elsewhere;
- support from the international community including the IMF.
- Economic growth was estimated at 2 percent in 2020 despite a drop of "some 4½ percent" compared to the pre-COVID-19 forecast, ranking among sub-Saharan Africa’s best performing frontier market economies.
Growth, inflation, and outlook
- Rebound in activity that started in the second half of 2020 remains strong.
- Growth projections:
- 2020: 2.0 percent (estimated)
- 2021: 6 percent (projected)
- Medium-term: around 6-6½ percent over 2021-26, contingent on receding pandemic and implementation of reforms.
- Drivers of 2021 growth: recovery in exports and investment, abating pandemic headwinds, despite short-term electricity shortages.
- Inflation:
- Temporarily on the rise, driven by pandemic-induced supply disruptions and energy shortages.
- Inflation figures: 2018: 0.4; 2019: 0.8; 2020: 2.4; 2021: 2.5 (in %).
Fiscal developments and public debt
- Fiscal outcomes:
- Fiscal deficit reached 5.6 percent of GDP in 2020 as authorities increased spending to support firms and households.
- Authorities are continuing economic and social support policies while stepping up efforts to secure and administer vaccines.
- Public debt:
- Public debt including debt guarantees rose to 49.8 percent of GDP in 2020.
- Public debt (table, does not include debt guarantees): 2018: 36.0 percent of GDP; 2019: 38.8; 2020: 47.7; 2021: 49.4; 2022: 50.5.
- Current account:
- Expected to have widened to 3.5 percent of GDP in 2020 (text).
- Table: Current account (% GDP): 2018: -3.9; 2019: -3.5; 2020: -4.3; 2021: -4.2.
- Central government finances (table series):
- Revenue and grants (% GDP): 2018: 14.8; 2019: 15.0; 2020: 14.7; 2021: 15.3; 2022: (value blank in table header context).
- Expenditure (% GDP): 2018: 17.7; 2019: 17.3; 2020: 20.6; 2021: 20.3; 2022: 19.9.
- Fiscal balance (% GDP): 2018: -2.9; 2019: -2.3; 2020: -5.6; 2021: -4.7.
- Money and credit:
- Broad money (% change): 2018: 13.5; 2019: 11.0; 2020: 21.4; 2021: 7.9; 2022: 8.2.
- External debt (table, does not include debt guarantees):
- 2018: 23.2 percent of GDP; 2019: 25.5; 2020: 30.0; 2021: 31.2; 2022: 30.9.
- WAEMU reserves (in months of imports): 2018: 4.3; 2019: 4.6; 2020: … (ellipsis as in source).
Risks and vulnerabilities
- Downside risks highlighted:
- Pandemic could prove harder to contain due to new variants or protracted vaccine rollout, muting global recovery.
- Sharp rise in global risk premia could complicate access to international markets.
- Domestically: prolongation of energy shortages and delays in reforms could reduce confidence and dampen private investment.
- Debt metrics could weaken if revenue mobilization continues to underperform.
- Security risk: potential deterioration at the Northern border.
- Upside scenario:
- Implementation of a strong reform agenda under the incoming National Development Plan would further boost growth and investment.
Executive Board assessment and policy recommendations
- Directors agreed with the thrust of the staff appraisal and welcomed the Ivoirian economy’s resilience, attributing it to:
- authorities’ prompt response to COVID-19;
- a decade of sound macroeconomic policies;
- international support including the IMF.
- Policy guidance and recommendations:
- Continue supportive policies until the recovery is well entrenched while preserving debt sustainability and fostering economic transformation.
- Relax fiscal stance in 2021 to accommodate additional investment and security spending.
- Return to the WAEMU fiscal deficit target as soon as feasible.
- Significantly boost domestic resource mobilization by:
- rationalizing tax expenditures;
- broadening the tax base;
- strengthening tax administration.
- Strengthen public financial management, promote digitalization, and improve fiscal transparency.
- Enhance social safety nets through proactive social policies.
- Maintain financial stability as supportive measures are withdrawn, requiring:
- continued strong financial sector supervision;
- swift restructuring of public banks.
- Support the New National Development Plan to promote inclusive growth, structural transformation, and private sector development.
- Promote good governance and improve the business environment, including swift adoption of the national strategy to fight corruption.
- Promote financial inclusion, improve labor market effectiveness to support formalization, and enhance resilience to climate change.
- Rebuild fiscal buffers, pursue a prudent debt strategy, and advance reforms to deepen regional financial markets.
- Directors concluded that Côte d’Ivoire’s capacity to repay the Fund remains adequate and noted a moderate risk of debt distress with limited space to absorb shocks.
Selected economic indicators and social statistics
- Population (2020): 26.9 million
- Gini Index (2015): 41.5
- Per capita GDP (2020): 2278 USD
- Life Expectancy (years): 58
- Share of population below the poverty line (2018): 39.5%
- Literacy rate: 47.2%
- Output — Real GDP Growth (%): 2018: 6.9; 2019: 6.2; 2020: 2.0; 2021: 6.0; 2022: 6.5.
- Prices — Inflation (in %): 2018: 0.4; 2019: 0.8; 2020: 2.4; 2021: 2.5; 2022: 2.2.
- Balance of payments — FDI (% GDP): 2018: 1.3; 2019: 1.0; 2020: 1.1; 2021: 1.2.
- Exchange rate — Real effective exchange rate (% change): 2018: -4.0; 2019: 5.2.
Press Release No. 21/223 — IMF Communications Department — July 22, 2021.
