Côte d’Ivoire: Ivorian authorities, IMF in talks on proposed economic programme

Abidjan, Côte d’Ivoire  (PANA) – Authorities in Côte d’Ivoire and the International Monetary Fund (IMF) have agreed to continue discussions in the weeks ahead on the fiscal path and the financing modalities of a new three-year economic programme that could be supported by the IMF through arrangements under the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF).

The discussions, held from 21-27 September, built on progress made during the previous IMF staff visit in June-July 2016, according to a statement the Fund made available to PANA on Friday.

At the conclusion of the visit to the Ivorian capital, IMF team leader Dan Ghura said that his mission and the authorities agreed on measures to address fiscal risks emanating from some public enterprises in financial difficulties.

Agreement was also reached on steps to accelerate the restructuring of public banks as well as public enterprise reforms, he said, noting that the mission welcomed the Ivorian authorities’ request for further technical assistance in support of their efforts to improve the quality and dissemination of economic statistics.

The mission welcomed measures to enhance public financial and debt management practices, including through the establishment of a comprehensive database to monitor the evolution of debt contracted by public entities beyond the central government.

Ghura stated that Côte d’Ivoire has experienced an impressive turnaround since 2011, with economic growth averaging about 9 percent per year and the economic outlook remains strong.

The authorities’ 2016-20 National Development Plan (NDP) prioritises inclusive and sustainable growth, focusing on structural transformation and improving living standards.

“Solid macroeconomic performance continued in the first half of 2016 notwithstanding the impact of a drought on agriculture, and real GDP growth is projected at around 8 percent for the year as a whole. The budget deficit is projected at 4 percent of GDP in 2016, reflecting higher spending, including for security, health and education,” Ghura noted.

Côte d’Ivoire’s economic growth is forecast to remain strong over the medium term, averaging 7.7 percent per year during 2017-19, reflecting buoyant domestic demand.

Inflation is projected to remain below 3 percent, and reflecting investment-driven imports, the external current account deficit would widen to about 2.5 percent of GDP.

“To preserve public debt sustainability and support the regional international reserves pool, the government’s budget deficit would converge to the WAEMU norm of 3 percent of GDP by 2019,” Ghura pointed out. (WAEMU is a sub-regional monetary union for French-speaking West Africa.)

To this end, the IMF mission agreed with the authorities on the need to strengthen revenue mobilization, through further improvements in tax administration but also tax policy measures aimed at widening the tax base, and to contain recurrent expenditure, which would create space for infrastructure investment and social spending.
-0- PANA AR/MA 30Sept2016

30 september 2016 10:10:57

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