December 13, 2024
PRESS OFFICER: Kwabena Akuamoah-Boateng
Phone: +1 202 623-7100Email: MEDIA@IMF.org
Washington, DC: On December 11, 2024, the Executive Board of the International Monetary Fund (IMF) completed the Third Reviews of the Extended Fund Facility (EFF) and Extended Credit Facility (ECF) Arrangements and the Second Review of the Resilience and Sustainability Facility Arrangement (RSF) (see PR 24/464), and concluded the 2024 Article IV consultation[1] with Cote d’Ivoire.
Côte d’Ivoire’s performance has been strong under both the 40-month EFF/ECF arrangements with a combined access of SDR 2,601.6 million (or 400 percent of quota) and under the RSF with an access of SDR 975.6 million (or 150 percent of quota). Program implementation has been satisfactory thus far, with all performance criteria, structural benchmarks and reform measures scheduled for the reviews met or implemented. The completion of the reviews allows for an immediate disbursement of about US$ 808.5 million under the EFF/ECF and RSF arrangements.
The authorities’ ongoing commitment to reforms under both programs should support Côte d’Ivoire’s transformation towards upper middle-income status over the medium-term and enhance its resilience to climate change. At the same time, longstanding structural impediments, including high and persistent informality, the focus of the 2024 Article IV consultation discussions, along with gaps in gender equality, present challenges to higher and more inclusive growth.
Côte d’Ivoire’s economy continues to display resilience. Strong consumption and investment demand underpin robust economic activity in 2024 despite weaker than expected agricultural production, and construction activity. Nevertheless, further buoyant growth is expected over the near to medium term with a recovery of agricultural production, stronger extractive industries activity which will benefit from the Baleine oil field fully coming onstream, and growth in energy production supported by the ongoing investment upgrades. Inflation continues to moderate. Headline annual average CPI inflation is projected to fall from 4.4 percent (yoy) in 2023 to 3.8 percent (yoy) by end-2024 as key food and commodity prices continue to ease. The financial sector remains sound. The commitments announced during the November COP 29 will help catalyze climate financing in Côte d’Ivoire.[2]
Fiscal and external imbalances have been steadily receding since 2023. Decisive revenue-based fiscal consolidation is on track and debt sustainability has improved. The fiscal deficit fell from 6.8 percent of GDP in 2022 to 5.2 percent of GDP in 2023, on the back of strong upfront revenue measures. Further revenue measures in 2024 and 2025 are expected to support an additional fiscal consolidation to reach a fiscal deficit of 4 percent of GDP in 2024 and 3 percent of GDP in 2025. The risk of debt distress is confirmed as moderate, and the debt outlook improved mainly due to improved liquidity ratios and proactive debt management operations. After a widening of the current account deficit to 7.9 percent of GDP in 2023, a sharp improvement is expected in 2024, on the back of significant terms-of-trade gains. Record-high cocoa prices, along with increased production prospects, are expected to support export revenue and narrow the current account deficit to about 5.1 percent of GDP in 2024.
Executive Board Assessment[3]
Executive Directors agreed with the thrust of the staff appraisal. They commended the authorities’ strong performance under the Fund‑supported programs, and the resulting strengthening of macroeconomic fundamentals. However, noting significant downside risks, Directors stressed the importance of staying the course on important reforms to entrench fiscal and debt sustainability, strengthen climate resilience, and lay the foundation for sustained higher inclusive growth and economic transformation.
Directors welcomed the authorities’ commitment to revenue‑based fiscal consolidation to reduce the deficit to the WAEMU target of 3 percent of GDP in 2025. They underlined the need for effective implementation of the Medium‑Term Revenue Strategy and emphasized the importance of expanding the tax base and streamlining tax expenditures and VAT exemptions to support a simpler, more transparent, and equitable tax system. Given the challenges associated with achieving ambitious revenue targets, Directors highlighted the importance of increasing spending efficiency, reducing non‑priority spending, and preparing contingency measures. They stressed that any unforeseen spending pressures from regional security conditions should be accommodated within the budget envelope. Directors welcomed the improvement in debt sustainability and encouraged continued efforts to strengthen debt management capacity. They welcomed ongoing tax‑administration reforms, which will be aided by efforts to improve spending efficiency and enhance coverage, transparency, and management of public finances, especially for state owned enterprises.
Directors positively noted the authorities’ continued efforts to improve governance and financial integrity and reduce corruption risks. They emphasized the need to take decisive steps to address weaknesses in the AML/CFT framework in line with the agreed FATF action plans to ensure an expeditious exit from the FATF grey list.
Directors stressed the importance of sustaining structural reforms to strengthen the business environment and financial inclusion and induce higher private sector investment. They emphasized the need to reduce the high levels of informality and promote diversification, which in turn should support more inclusive growth and the country’s transformation toward upper middle‑income status. Directors underlined the importance of pursuing efforts to strengthen resilience to climate risks for a sustainable transformation of the Ivorian economy and welcomed the commitments to catalyze climate finance.
It is expected that the next Article IV consultation with Cote d’Ivoire will be held in accordance with the Executive Board decision on consultation cycles for members with Fund arrangements.
[1] Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country's economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.
[2] Government of Côte d'Ivoire Collaborates with International Financial Institutions, Development Partners, and the Private Sector to Catalyze Climate Finance
[3] At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country's authorities. An explanation of any qualifiers used in summings up can be found here: http://www.IMF.org/external/np/sec/misc/qualifiers.htm.
