• Social demands gave rise to additional budget spending
• Economic growth is expected to remain strong in 2017
• Drop in world cocoa prices by over 35 percent has reduced the country’s exports and fiscal revenues

An International Monetary Fund (IMF) mission led by Mr. Dan Ghura visited Abidjan from March 22 to April 6, 2017 to begin discussions on the first review of the three-year economic and financial program supported by the IMF through arrangements under the Extended Credit Facility (ECF)[1] and the Extended Fund Facility (EFF)[2].

At the conclusion of the visit, Mr. Ghura issued the following statement:

“The discussions on the first review under ECF and EFF arrangements have allowed the authorities and the IMF team to reach an ad referendum agreement, subject to approval by IMF management and the Executive Board. Executive Board consideration is expected in June 2017.

“Performance under the IMF-supported program was good in 2016. Preliminary estimates show that the economy expanded by about 8 percent last year despite the impact of the drought. The current account deficit stayed low at about 1 percent of GDP. Inflation remained contained at about 1 percent, benefitting from price stability in the WAEMU zone. Fiscal budget deficit, at 4 percent of GDP, was in line with the program objectives, as a small revenue shortfall was offset mostly by downsizing non-priority public investment.

“Recent events and external shocks that affected Côte d’Ivoire warrant revisions of the economic and fiscal projections for 2017. The drop in world cocoa prices by over 35 percent has reduced the country’s exports and fiscal revenues. Rising international oil prices have lowered the fuel tax base. Social demands gave rise to additional budget spending. Economic growth is expected to remain strong in 2017.

“The IMF staff and the authorities agreed on the need to respond to the recent negative shocks in a way that keeps the economy on a stong and sustainable growth path, preserves macroeconomic stability, contributes to regional reserves accumulation, and takes due account of existing social conditions. Specifically, the program includes a moderate easing of the budget deficit ceiling for 2017 and adherence to the WAEMU budget deficit criterion of 3 percent of GDP by 2019. The IMF staff and the authorities agreed on importance of boosting domestic revenue mobilization.

“The IMF staff and the authorities also agreed on the need to carry on with  structural reforms sustaining private sector-led economic growth. The staff team welcomed the ongoing fiscal administration reforms, which facilitate tax payments. Completion of the restructuring of the debts of the national oil refinery should bolster its financial stability. Also, a resolution of liabilities in the energy sector would ensure the sector’s financial viability.

“The IMF team thanks the authorities for their hospitality and productive discussions.”

The mission team met with Vice President Daniel Kablan Duncan; Prime Minister Amadou Gon Coulibaly; Minister of Finance Adama Koné; Minister of Budget and State Holdings Abdourahmane Cissé; Minister of Oil, Energy and Development of Renewable Energies Thierry Tanoh; Minister of Public Service and Modernization of Administration Pascal Abinan Kouakou; Minister of Agriculture and Rural Development Mamadou Sangafowa Coulibaly; the National Director of the BCEAO Chalouho Coulibaly and other senior government officials.

[1] The ECF is a lending arrangement that provides sustained program engagement over the medium to long term in case of protracted balance of payments problems

[2] The EFF was established to provide assistance to countries: (i) experiencing serious payments imbalances because of structural impediments; or (ii) characterized by slow growth and an inherently weak balance of payments position.