IMF Executive Board Concludes 2022 Article IV Consultation with Côte d’Ivoire

IMF News, June 17, 2022

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Canonical URL: IMF Executive Board Concludes 2022 Article IV Consultation with Côte d’Ivoire

The Ivorian economy proved resilient to the COVID-19 pandemic due to the authorities’ effective policy response.
Growth recovered strongly in 2021, with growth estimated at 7 percent (from 2 percent in 2020).
COVID-related fatalities remain at low levels by international standards.
Vaccination efforts: about 70 percent of the target population has already received a first dose.
Annual inflation rose to 4.2 percent in 2021 due to external and supply shocks.

The impact of the war in Ukraine and regional security challenges are expected to weigh on the macroeconomic outlook in 2022.
IMF staff forecasts growth to slow down to 6 percent in 2022 due to subdued global demand, worsened terms of trade, and increased uncertainty.
Inflation is expected to increase further to about 5½ percent in 2022.
Near-term negative risks:
- Global repercussions of the war in Ukraine.
- Tighter monetary policy in advanced countries and associated increase in borrowing cost.
- New COVID-19 variants’ outbreaks.
- Continued instability in some neighboring countries.
Authorities’ temporary measures to contain the impact of the war in Ukraine include introducing price ceilings on several food items.
Medium-term growth projections remain robust, with upside risks related to the discovery of substantial oil and gas reserves.
It is expected that the next Article IV consultation for Cote d'Ivoire be held on the standard 12-month cycle.

2021 fiscal outcomes:
- Overall fiscal deficit reached 5.1 percent of GDP, lower than anticipated.
- Better outturn mainly due to improvements in customs collection and tax administration which offset higher security spending.
The current circumstances could warrant a slightly higher-than-budgeted deficit in 2022.
Convergence to the WAEMU target deficit of 3 percent of GDP in 2024 remains feasible.
Debt sustainability analysis: continues to point to a moderate risk of debt distress, but with very limited space to absorb future shocks amid worsening market conditions.
Policy priorities:
- Accelerate efforts to mobilize domestic revenue.
- Pursue fiscal reforms to make room to finance priority spending and support inclusive growth.
- Continue improving tax administration and customs collection, including digitalization.
- Rationalize tax exemptions.
- Redesign and simplify the personal income tax regime to improve progressivity.
- Find the right balance between accommodating urgent spending pressures (including higher security spending) and preserving fiscal space to cope with future shocks.
Recent measures to contain inflation and economic impact should remain temporary and become increasingly targeted to the most vulnerable if the shock proves persistent.

A resolute implementation of reforms under the 2021-25 National Development Plan (NDP) would boost medium-term growth.
The new social program can continue enhancing human capital.
Education and health priorities:
- Further efforts aimed at improving the quality of basic education and professional training systems would help ease skills mismatch in the labor market.
- Ensuring equitable access to health care remains a priority.
Structural reforms to boost inclusive and sustainable growth:
- Tackle infrastructure bottlenecks.
- Address regulatory framework deficiencies.
- Enhance protection of land tenure and property rights.
- Streamline bureaucracy.
- Strong involvement of the private sector is key to focus efforts and contain fiscal costs.
- Further improvements in governance and the fight against corruption to attract private investment.
- Adopt sound climate adaptation and mitigation policies, including sustainable farming and forest preservation.

Deepening financial inclusion and access to finance remain crucial for unlocking the private sector’s potential.
Reform priorities:
- Tackle deficiencies in insolvency procedures.
- Improve credit infrastructure.
- Prompt restructuring of undercapitalized public banks to improve the banking sector’s capacity to support growth.

Exchange rate — REER (% change, depreciation –)
- 2019: -3.9
- 2020: 5.1
- 2021 Est.: 1.9

IMF Executive Board concludes 2022 Article IV consultation with Côte d’Ivoire — Press Release No. 22/210