Press Release No. 09/309

Press Release No. 09/309
September 17, 2009

An International Monetary Fund (IMF) mission led by Ms. Doris Ross visited Côte d’Ivoire during September 2-17. The mission met with the Minister of Economy and Finance Charles Kofi Diby, several other ministers, the National Director of the West African Central Bank (BCEAO), senior officials of the administration, representatives of the private sector and of donors. It was received in audience by His Excellency, President of the Republic, Laurent Gbagbo, as well as by the Prime Minister Guillaume Soro. Representatives of the World Bank participated in the discussions.

The mission analyzed the economic situation and outlook of Côte d’Ivoire in the context of Article IV Consultation and conducted the first review of the implementation of the economic program supported by the Poverty Reduction and Growth Facility (PRGF) ., the IMF’s concessional window for low-income countries. The report of the recent Financial Sector Assessment Program (FSAP) mission was officially presented to the authorities.

At the end of the mission Ms. Doris Ross, Mission Chief for Côte d’Ivoire, issued the following statement:

“Despite the global financial crisis, the Ivorian economy remained sound during the first half of the year, and the growth objective of 3½ percent in 2009 is achievable. Agricultural production is benefiting from abundant rainfall, the extraction of hydrocarbons and mining are increasing, and there has been progress in industrial production. The services sector has generally continued to grow. The decline in oil and food prices has led to a fall in prices since the start of the year, and this has brought annual inflation back down to near the West African Economic and Monetary Union (WAEMU) norm of 3 percent.

“The country’s economic outlook remains positive. Elections in a calm atmosphere should boost investor confidence and economic activity. On this basis, growth is expected to accelerate if, at the same time, the reforms launched to streamline the economy and promote good governance are intensified.

“The implementation of the 2009 budget during the first half of the year was broadly satisfactory, and the annual objectives are expected to be reached. Revenue exceeded expectations as a result of the sound performance of tax and oil receipts and despite poor customs performance. Expenditure also exceeded the projections, especially as a result of the electricity subsidy. The mission was pleased to note the efforts made to increase pro-poor spending.”

“The mission called on the government to accelerate the implementation of its poverty reduction strategy. The remarkable progress made with respect to the structural reforms should be continued. There has been progress in the reform of fiscal management in the areas of public procurement, transparency of the expenditure management system, and fiscal discipline. In the cocoa-coffee sector, tax and para-fiscal levies will continue to be reduced while the reform of the sector is being prepared. However, there have been delays in the implementation of key reforms to improve governance and the business climate, and courageous measures are needed to ensure the recovery of the electricity sector.

“The discussions confirmed that the authorities are using the resources recently made available to them by the IMF, in the form of an allocation of Special Drawing Rights equivalent to CFAF 175 billion, towards an accelerated reduction of domestic arrears. These resources will also allow a substitution for other, more expensive, financing.

“The mission discussed with the authorities the main features of the 2010 budget, which will be aimed primarily at continuing to increase the scope for social expenditure and investment. Revenue collection efforts will be intensified, including in the CNO (Centre-Nord-Ouest) areas. Tax and customs duty exemptions will be curtailed, and action against fraud and tax evasion will be pursued. The mission urges the government to improve the financial position of the electricity sector and to streamline and control the wage bill and operating expenditure. The mission appreciates the government’s commitment to continue reducing the domestic arrears and encourages the authorities to pursue restructuring the public debt with all of its external creditors.

“Following an assessment by the Managing Director of the IMF, the first review of the PRGF-supported program will be submitted for consideration by the IMF’s Executive Board before year-end. A positive conclusion should enable Côte d’Ivoire to receive an additional disbursement of the financial assistance planned under the PRGF.”

“The mission would like to thank the Ivorian authorities for the warm reception and the quality of the discussions.”