IMF reaches staff level agreement with Côte d’Ivoire on review of EFF/ECF arrangements
Abidjan, Côte d’Ivoire (PANA) - An International Monetary Fund (IMF) staff team and the authorities in Côte d’Ivoire have reached a agreement on both the second semi-annual review of the country’s economic reform programme supported by the Extended Fund Facility (EFF) and Extended Credit Facility (ECF) arrangements.
Both sides have also agreed on the first review of the country’s climate change reform programme supported by the Resilience and Sustainability Facility (RSF) arrangement.
The IMF team, led by Mr. Olaf Unteroberdoerster, held discussions with the Ivoirian authorities from 25 March – 6 April on progress under both the economic programme and the climate reform programme supported by the Fund.
“I am pleased to announce that performance under the programmes has been satisfactory so far and that we reached staff-level agreement on all policies and reform measures in line with the programs’ objectives,” Mr. Unteroberdoerster said.
“On the EFF/ECF arrangement, the authorities and staff agreed on key policy parameters including further revenue-based fiscal consolidation to reduce the fiscal deficit to 3 percent of GDP by 2025 and on structural reforms which will continue to further strengthen domestic revenue mobilisation, public financial management, and governance. On the RSF, the authorities are on track in implementing the reform measures expected to become effective over the coming months in 2024,” he added.
Completion of the reviews by the IMF Executive Board will lead to two disbursements for a total of US$574 million of which US$493 million and US$81 million will respectively be on account of the EFF/ECF and RSF arrangements.
The Board approved the EFF/ECF and RSF arrangements respectively in the amounts of US$3.5 billion and US$1.3 billion on 24 May, 2023, and 15 March, 2024.
According to the IMF staff, the Côte d’Ivoire economy remains resilient despite a difficult external environment. In 2023, growth remained robust and inflation declined.
Despite a sustained current account deficit in part reflecting the impact of adverse weather conditions on cocoa exports volume, the underlying imbalances have begun to shrink as fiscal deficit narrowed by 1.6 ppt over 2022-23 reaching 5.2 percent of GDP.
The medium-term outlook remains favourable. Growth is projected to average 6.5 percent supported by stronger private domestic demand, a recovery in cocoa production, capital deepening and gradually improving external conditions. Inflation is projected to decline and remain within the BCEAO target range from end-2024 onwards.
Under the ongoing domestic revenue mobilisation efforts, the fiscal deficit is expected to further decline from 4 to 3 percent of GDP over 2024-25, converging with the WAEMU target. The recent successful Eurobond issuance and associated liability management operation are expected to contribute to strengthen public debt sustainability.
Mr. Unteroberdoerster remarked that the current account deficit is projected to gradually narrow down from 5.7 to 2 percent of over 2024-26 on the back of favourable terms of trade and more diversified exports, setting the stage for a gradual recovery in international reserves.
According to the IMF official, a comprehensive medium-term revenue mobilisation strategy is expected to be adopted by the government in May 2024. It will help advance tax policy and administration reforms for a simpler, more equitable and broader system with a view to gradually achieve the WAEMU tax ratio target of at least 20 percent of GDP.
Other structural reforms will focus on strengthening public financial management and fiscal data transparency, improving the business climate to support private sector-led and more inclusive growth and financial inclusion, as well as enhancing governance and anti-corruption.
-0- PANA AR/MA 9April2024
