Key Questions on Côte d’Ivoire

Last Updated: May 26, 2023

Read the key questions regarding the IMF arrangements with Côte d’Ivoire

Back to Top

Why did Côte d'Ivoire need an IMF program?

Despite Côte d’Ivoire sustaining record growth in the past decade, consecutive global shocks have led to a widening of the budget and current account deficits. This has put a serious strain on public finances as well as regional reserves, and further exposed longstanding constraints to economic transformation toward upper-middle income status. Financing constraints resulting from a more challenging global environment have resulted in a balance of payments need for Côte d’Ivoire. This need comes at a time when tax revenue remains low relative to other low-income and developing countries, and the country’s continued development requires large social priority and investment spending needs.

Back to Top

How much will Côte d'Ivoire receive and by when?

The IMF Executive Board approved, on May 24, an SDR 2.6 billion (about US$3.5 billion) 40-month Extended Credit Facility (ECF) and Extended Fund Facility (EFF) arrangement for Côte d’Ivoire. This decision enabled an immediate disbursement equivalent to SDR 371.7 million (about US$495 million). The rest is expected to be disbursed in six equal tranches every six months, following program reviews approved by the IMF Executive Board.

Back to Top

What are the objectives of Côte d’Ivoire’s extended credit facility arrangement?

The ECF/EFF program aims to meet the country’s pressing financing needs, preserving macroeconomic stability, safeguard debt sustainability, and anchor the National Development Plan (NDP) in key structural reforms to support Côte d’Ivoire’s transformation toward upper-middle income status. Specifically, under the program the authorities are committed to fiscal consolidation in line with WAEMU fiscal deficit target of 3 percent of GDP by 2025, maintaining a favorable risk of debt distress rating of its public and external debt at moderate, and increasing domestic revenues to provide adequate fiscal space for investment and social priority spending consistent with the NDP.

Back to Top

What are the policy priorities?

Policy priorities under the program reflect the authorities’ commitment to revenue-based fiscal consolidation to support convergence of the fiscal deficit, which stood at 6.8 percent of GDP at end 2022, to the West African Economic and Monetary Union (WAEMU) deficit target of 3 percent of GDP by 2025.

This will be underpinned by improvements in domestic revenue mobilization, mainly relying on building a simpler, more broad-based and equitable tax system and further improvements in tax administration with a front-loaded increase in tax revenue of 1.1 percent of GDP during the first year of the program, and 0.5 percent of GDP increases in tax revenue between 2024 and 2026. The re-instatement of the petroleum pricing mechanism in early 2023 is expected to help recover VAT tax revenues on petroleum products of about 0.7 percentage points of GDP lost in 2022.

A set of public financial management reforms will continue to boost dividends from the tax administration reforms that have been carried out in recent years.

To aid the authorities in their commitments to boost domestic revenue mobilization, the Fund will be providing Technical Assistance to help develop a medium-term revenue mobilization strategy, which is expected to be adopted by cabinet and published by May 2024.

Critical social spending in education and health will also be protected under the program. In addition, wasteful blanket subsidies (notably indirect tax subsidies on fuel products), will over time be replaced with better targeted social assistance in the form of cash transfers to the most vulnerable.

The authorities reform agenda under the Fund-supported program also reflects a strong commitment to improving the business climate, inducing higher levels of private sector investment and financial inclusion, along with generating the necessary conditions for inclusive growth. To this end, structural reforms under the program will help strengthen governance; boost human capital development, especially among youth and women; and strengthen resilience to climate change.

Back to Top

How will the program protect the most vulnerable? Will the program result in cuts in social programs?

While the authorities committed to fiscal consolidation, their efforts are focused on domestic revenue mobilization while preserving priority spending towards the most vulnerable segments of the population. Moreover, the program encourages developing targeted cash transfers for the most vulnerable and avoiding blanket subsidies. To that effect, the IMF-backed program will monitor targeted social spending in key social areas such as social protection, education, health, and youth employment, in addition to also following overall pro-poor spending. A minimum floor with a view protecting such spending is set as an indicative target under the program.

Back to Top

How will the program promote transparency and fight corruption?

The program will promote transparency and fight corruption through the following measures:

  • -Increased digitalization, including the utilization of e-procurement and e-supplier IT modules;
  • -Improvement in the compliance rate with the constitutional requirement of asset declaration by top-level officials from 79.2 percent in August 2020 to 90 percent in 2024;
  • -Strengthening institutions responsible for implementing the 2023-2027 National Anti-Corruption Strategy (SNLC), including the Council of the High Authority for Good Governance (HABG);
  • -Systematic publication of data on procurement contracts and beneficial owners;
  • -Implementing the recommendations from the 2019 assessment of Côte d’Ivoire by the International Secretariat for the Extractive Industries Transparency Initiative (EITI), and;
  • -Strengthening the AML/CFT supervisory regime and adoption of the priority reforms emanating from the AML/CFT evaluation soon to be concluded by the IMF.

Back to Top

How will the program help Côte d’Ivoire face climate change?

The program supports the authorities’ agenda to build resilience against climate change. The authorities expressed interest in Fund financial support from the Resilience and Sustainability Facility (RSF). The authorities have also requested significant technical assistance to inform the design of the RSF arrangement, notably on Climate Public Investment Management (C-PIMA) and green Public Financial Management (PFM). After the completion of these technical assistance engagements and the completion of the World Bank’s Country Climate and Development Report (CCDR), IMF staff will be able to design with the authorities a comprehensive strategy to address the challenges faced by Côte d’Ivoire with the goal of strengthening resilience to climate change. This effort will also build on the authorities’ “Abidjan Legacy programme” launched in May 2022.