IMF Executive Board Approves US $3.5 billion Extended Fund Facility and Extended Credit Facility for Côte d’Ivoire
IMF News, May 24, 2023
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- Published: May 24, 2023
Program overview and objectives
- Executive Board approved 40-month arrangements under the Extended Fund Facility (EFF) and the Extended Credit Facility (ECF) for Côte d’Ivoire in the amount of SDR 2,601.6 million (equivalent to 400 percent of quota or about US$3.5 billion).
- The program is consistent with the authorities’ 2021-25 national development plan (NDP).
- Program aims:
- Maintain macroeconomic stability in the near term while laying the foundation for deeper economic transformation towards upper middle-income status over the medium term.
- Help Côte d’Ivoire raise its contribution to the regional international reserves pool.
- Immediate financing:
- Immediate disbursement of SDR 371.7 million (US$495.4 million) intended for budget support.
Macroeconomic context and challenges
- Country has been hit by triple shocks: the pandemic, the adverse spillovers of Russia’s war in Ukraine, and the global monetary tightening, resulting in growing macroeconomic imbalances.
- Authorities’ stated commitments:
- Promote private sector-led and inclusive growth.
- Strengthen fiscal consolidation efforts mainly through domestic revenue mobilization supported by upfront measures and a comprehensive medium-term revenue strategy.
- Preserve means for an ambitious social and capital investment program.
- Implement key structural reforms to improve business climate, strengthen governance, increase financial inclusion, invest in human capital, and strengthen resilience to climate change.
Policy priorities and structural reforms
- Fiscal policy and debt sustainability:
- Revenue-based fiscal consolidation complemented by Fund financing under the EFF/ECF arrangements.
- Strong upfront revenue measures, including reinstating the petroleum pricing mechanism in early 2023, to reduce risks to debt sustainability and support convergence to the WAEMU deficit target.
- Improve institutional and legislative framework for debt management to safeguard debt sustainability.
- Domestic revenue mobilization:
- Development, publication, and implementation of a medium-term revenue mobilization strategy.
- Strategy should seek significant reductions in wasteful tax expenditures and tax exemptions, particularly for the VAT, to broaden the tax base with a simpler, more transparent, and equitable tax system.
- Enhance coverage, transparency, and management of public finances, especially to cover state-owned enterprises, to safeguard fiscal space.
- Structural reforms to support inclusive growth and investment:
- Strengthen governance and the institutional framework (including National Anti-Corruption Strategy and National Strategy Against Money Laundering and Terrorism Financing).
- Expand financial inclusion and improve the business environment to attract private investment.
- Invest in human capital development, especially amongst youth and women.
- Enhance resilience to climate change for sustainable economic transformation.
Selected economic indicators (2019–2023) and social statistics
- Population (2020): 27 million
- Gini Index (2018): 37.2
- Per capita GDP (2020): 2,279 USD
- Life Expectancy (2020): 59
- Share of population below the poverty line (2018): 39.5%
- Output: Real GDP Growth (%)
- 2019: 8.3
- 2020: 1.7
- 2021: 7.0
- 2022: 6.7
- 2023 Prel./Proj.: 6.2
- Prices: Inflation (annual average, %)
- 2019: 0.8
- 2020: 2.4
- 2021: 4.2
- 2022: 5.2
- 2023 Prel./Proj.: 3.7
- Central government finances (% GDP)
- Revenues
- 2019: 14.3
- 2020: 14.4
- 2021: 15.3
- 2022: 14.8
- 2023 Prel./Proj.: 15.8
- Expenditure
- 2019: 17.3
- 2020: 20.4
- 2021: 20.7
- 2022: 22.1
- 2023 Prel./Proj.: 21.7
- Fiscal balance
- 2019: -2.2
- 2020: -5.4
- 2021: -4.9
- 2022: -6.8
- 2023 Prel./Proj.: -5.3
- Public debt
- 2019: 37.5
- 2020: 46.3
- 2021: 50.9
- 2022: 56.8
- 2023 Prel./Proj.: 58.1
- Money and Credit
- Broad money (% change)
- 2019: 11.0
- 2020: 21.4
- 2021: 18.1
- 2022: 9.8
- 2023: …
- Credit to private sector (% change)
- 2019: 6.1
- 2020: 9.2
- 2021: 12.5
- 2022: 7.3
- Balance of payments
- Current account (% GDP)
- 2019: -2.3
- 2020: -3.1
- 2021: -4.0
- 2022: -6.5
- 2023 Prel./Proj.: -5.6
- Net FDI Inflows (% GDP)
- 2019: 1.2
- 2020: 1.1
- 2021: 1.5
- 2022: 1.4
- 2023 Prel./Proj.: 1.8
- WAEMU reserves (in months of imports)
- 2019: 5.6
- 2020: 5.4
- 2021: 4.5
- 2022: (not listed)
- External public debt (% GDP)
- 2019: 24.9
- 2020: 29.7
- 2021: 30.9
- 2022: 34.5
- 2023 Prel./Proj.: 35.6
- Exchange rate: REER (% change, depreciation –)
- 2019: -3.9
- 2020: 5.1
- 2021: -0.6
- 2022: -5.2
Executive Board statement highlights (Mr. Kenji Okamura, Deputy Managing Director, Acting Chair)
- Emphasized that consecutive global shocks have strained Côte d’Ivoire’s public finances and regional reserves.
- Endorsed revenue-based fiscal consolidation and strong upfront revenue measures to reduce debt sustainability risks and support WAEMU deficit target convergence.
- Stressed importance of medium-term revenue mobilization strategy, reduction of wasteful tax expenditures and VAT exemptions, and broader, simpler, more transparent, and equitable tax system.
- Highlighted the need to enhance coverage, transparency, and management of public finances, including state-owned enterprises.
- Underlined that steadfast implementation of structural reforms under the National Development Plan will promote private sector-led growth, expand financial inclusion, boost transparency, attract private investment, and make growth more inclusive through human capital investments and climate resilience.
IMF Executive Board Approves US $3.5 billion Extended Fund Facility and Extended Credit Facility for Côte d’Ivoire — Press Release No. 23/178 (May 24, 2023).