IMF expects Côte d’Ivoire to boost recovery of regional official reserves
Abidjan, Cote d’Ivoire (PANA) – International Monetary Fund (IMF) staff and the Cote d’Ivoire authorities have reached a staff-level agreement on both the third review of the country’s economic reform programme supported by the the Extended Fund Facility (EFF) and Extended Credit Facility (ECF) arrangements, and the second review of their climate change reform programme supported by the by the Resilience and Sustainability Facility (RSF).
An IMF statement said that the authorities are advancing their reform agendas for safeguarding macroeconomic stability, deepening economic transformation towards meeting upper-middle income status, and building greater climate resilience through adaptation and mitigation reforms.
In addition, the Ivorian authorities seek to boost inclusive growth, by advancing reforms in reducing informality and social inequality and tackling gender disparities.
Completion of the reviews by the IMF Executive Board will lead to two disbursements for US$825 million of which US$498 million and US$327 million will respectively be on account of the EFF/ECF and RSF arrangements.
An IMF staff team, led by Mr. Olaf Unteroberdoerster, held discussions with the Ivoirian authorities from Sept. 23 – Oct 9 on progress under both the authorities’ economic and financial programme supported by the three facilities and the climate reform programme as well as on the 2024 Article IV consultation.
“After constructive discussions with the Ivoirian authorities, I am pleased to announce that performance under the two programs has been satisfactory so far and that we reached staff-level agreement on all policies and reform measures in line with the programmes’ objectives,” Mr. Unteroberdoerster remarked.
On the EFF/ECF arrangement, he said that the authorities and staff agreed on additional revenue measures to meet 2024 fiscal targets, on the 2025 key policy measures including further revenue-based fiscal consolidation to reduce the fiscal deficit to 3 percent of GDP by 2025, and on structural measures to further strengthen domestic revenue mobilisation, public financial management, and governance.
On the RSF, understandings were reached on the timely implementation of reform measures falling due in the remainder of 2024, focusing on strengthening climate policies governance , reducing greenhouse gas emissions, and increasing green and sustainable financing for private and public companies.
Discussions also focused on the coordination between stakeholders and national development plans, and the next steps following the Climate Financing Round table of July 2024 with a view to announcing specific financing and technical assistance pledged at the COP29 in mid-November 2024.
According to Mr. Unteroberdoerster, completion of the programmes’ reviews and disbursement of the next tranches for a total of about US$825 million will be subject to approval of the IMF’s Executive Board.
He said that Côte d’Ivoire’s economy remains resilient, notwithstanding a slight moderation of growth in 2024 to 6.1 percent from 6.2 percent in 2023, in part reflecting weaker agricultural production and construction activity in first half of the year and a challenging regional and external environment.
More favourable terms of trade, led by higher cocoa prices, is expected to narrow the current account deficit to less than 5 percent of GDP in 2024. The budget deficit is expected to fall to 4 percent of GDP in line with programme targets.
The medium-term outlook remains favourable. Growth is projected to average 6.7 percent over the period 2025-2029 supported by a recovery in cocoa production and higher hydrocarbon and mining production. Inflation is projected to average 4 percent in 2024 and continue to decline over the medium term within the BCEAO target range by end 2025.
“Thanks to continued strong domestic revenue mobilisation (DRM) efforts under the government’s comprehensive medium-term revenue mobilisation strategy (MTRS) adopted in May 2024, the fiscal deficit is expected to further decline to 3 percent of GDP in 2025, converging to the WAEMU target.
The IMF team noted that prudent fiscal and debt management will help safeguard a moderate risk of debt distress rating for public and external sector debt. The current account deficit is projected to decline further to average about 2 percent of GDP on the back of favourable terms of trade, a rebound in agricultural exports, and further increases in hydrocarbon exports.
Côte d’Ivoire is expected to contribute significantly to recovery of regional official reserves. In the view of the IMF team, reducing informality across the economy could help deliver higher and more inclusive growth, support poverty reduction, boost human capital, sustain domestic revenue mobilisation, and steadfast efforts to reach upper-middle income status.
-0- PANA AR/MA 11Oct2024
