Coronavirus: Côte d’Ivoire weathers economic consequences of the pandemic - IMF
Abidjan, Côte d’Ivoire (PANA) - Strong pre-crisis fundamentals, relative economic diversification, and timely relaxing of the fiscal stance allowed Côte d’Ivoire to remain among few sub-Saharan African countries that maintained growth in 2020, currently projected to stand at 1.8 percent, according to the International Monetary Fund (IMF).
“Assuming global conditions gradually normalise, growth is projected to revert to 6½ percent in 2021, but with numerous downside risks,” the IMF said in a press statement on Thursday,
It follows completion by the Fund’s Executive Board of the seventh and eighth reviews under the Extended Credit Facility (ECF) Arrangement and the Extended Arrangement under the Extended Fund Facility (EFF) for Côte d’Ivoire.
Completion of the final reviews enables the immediate disbursement of US$278.2 million, bringing total disbursements under the arrangements to US$1,207.71 million or 129.8 percent of Côte d’Ivoire’s quota, the IMF said in a press statement,
“The four-year programme performance was satisfactory, and the authorities reacted swiftly to the unprecedented challenge of the pandemic,” the Fund’s Executive Board attested as it approved waivers of nonobservance of performance criteria on the overall budget balance and the new external debt.
Côte d’Ivoire’s three-year ECF/EFF arrangements with a total access of US$896.7 million were approved by the IMF on 12 December 2016. It was augmented by about US$278.2 million, as well as extended by one year on 6 December 2019.
“Strong record of sound macroeconomic policies, a swift COVID response, and substantive government support to the most impacted has helped Côte d’Ivoire in weathering the immediate consequences of the pandemic reasonably well,” remarked the Board’s Acting Chair and Deputy Managing Director, Mr. Mitsuhiro Furusawa. “Performance under the Fund-supported programme was satisfactory through end-2019 although several programme targets were missed at end-June 2020 due to the pandemic response.”
Mr Furusawa pointed out that the Ivorian authorities appropriately responded to the COVID shock by relaxing the fiscal stance to accommodate revenue setbacks, implement the government’s emergency spending plan and limit the growth deceleration.
He said that the gradual fiscal consolidation projected over the next three years strikes the right balance between supporting the recovery and re-anchoring the fiscal path. A return to the West Africa Economic and Monetary Union (WAEMU) norm of a fiscal deficit of 3 percent of GDP by 2023 is key for regional stability.
“Over the medium term, it is essential to address pressing development needs, build buffers, and limit debt vulnerabilities. This hinges on implementing a much more ambitious strategy for domestic revenue mobilisation, centred on bringing the informal economy into the fiscal net and limiting the proliferation of tax exemptions, complementing ongoing efforts to strengthen the revenue administration.
"State-owned enterprises and public banks need to continue to be carefully monitored, and debt management will require balancing recourse to financing on the regional market and from external commercial sources. Reinforcing the statistical apparatus is key to timely identify policy priorities,” Mr Furusawa suggested.
-0- PANA AR/MA 10Dec2020
