Panafrican News Agency

Coronavirus: Côte d’Ivoire’s economy remains resilient due to quick response

Washington, DC, US (PANA) – The coronavirus pandemic has presented an unprecedented challenge to Côte d’Ivoire but the country’s authorities reacted swiftly through confinement measures and closing of international borders.

In addition, the authorities have implemented a comprehensive response centred on a health spending package and an economic, social and humanitarian response plan aimed at containing the spread of the pandemic and helping the most affected households and firms, according to the International Monetary Fund (IMF).

“Thanks to the swift policy response and subsequent removal of confinement measures, strong starting fundamentals and Cote d’Ivoire’s relatively diversified economy, growth has been more resilient than elsewhere and is projected to reach 1.8 percent this year,” said the IMF in a statement issued on Thursday, following completion of the Fund’s review mission to the West African country.

“The socio-economic impact of the pandemic has been significant with several economic sectors negatively affected,” observed the IMF staff team leader, Ms. Céline Allard.

“The deterioration of the fiscal deficit in 2020 was appropriate to address the significant challenges presented by the COVID-19 crisis, and in that vein, the rapid adoption of the revised 2020 budget law will be key to frame this policy response.”

The international community has provided financial support for the implementation of these plans. The authorities have carefully established the mechanisms and qualification criteria for this support, which has meant that it has been slowly disbursed up to now.

Welcoming the careful and transparent set up of assistance, the IMF team has encouraged the authorities to accelerate disbursements of these resources as these mechanisms are now fully operational.

Côte d’Ivoire authorities and the IMF team have reached a staff-level agreement on the combined seventh and eighth reviews of the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF) arrangements, subject to approval by IMF management and the Executive Board.

According to the statement, consideration by the Executive Board is expected in early December 2020. The seventh review of the programme, initially scheduled for March 2020, was delayed because of the outbreak of the Covid-19 pandemic and was overtaken by discussions that led to an emergency assistance under the Fund’s Rapid Credit Facility (RCF) and Rapid Financing Instrument (RFI) in April 2020.

Ms. Allard pointed out that programme performance was satisfactory through end-2019 but several programme targets were not met at end-June 2020 including two performance criteria out of five, namely the floor on overall fiscal balance and the ceiling on the present value of new external debt contracted by the central government; as the budget execution was altered to address the Covid-19 crisis.

“The authorities and staff concurred on the importance of carefully balancing the need to support the recovery next year while re-anchoring the fiscal path toward the regional fiscal deficit,” said the IMF team leader.

 “The authorities and IMF staff concurred on the need to boost domestic revenue mobilisation to support the economic recovery and continue to fund the authorities’ ambitious economic development strategy, notably their forthcoming National Development Plan (2021-25) in a sustainable manner while preserving debt sustainability. The authorities’ tax policy efforts contained in the draft 2021 budget are welcome,” she added.

Besides, IMF staff highlighted the importance of carefully monitoring the financial pressures brought upon state-owned enterprises by the crisis and which could threaten the achievements made by the authorities in restoring their financial health.

The team noted that the financial sector has, thus far, “seemingly weathered the crisis relatively well and progress has been achieved in strengthening some of the public banks although additional efforts are still needed”.

-0- PANA AR/MA 8Oct2020