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Côte d'Ivoire: IMF Executive Board Concludes 2011 Article IV Consultation with Côte d'Ivoire


IMF Executive Board Concludes 2011 Article IV Consultation with Côte d'Ivoire


On November 4, 2011, the Executive Board of the International Monetary Fund (IMF) concluded the 2011 Article IV consultation with Côte d'Ivoire.


Côte d’Ivoire is emerging from a decade-long sociopolitical crisis that has held back economic growth. In particular, growth has been constrained by low investment and a poor business environment. As a result, per capita income fell by about one-sixth in the past ten years and almost half the population was living below the poverty line in 2010.

In 2009, Côte d’Ivoire adopted an economic and financial program supported by a three-year Extended Credit Facility (ECF) arrangement with the aim of ensuring a stable macroeconomic framework, promoting sustained growth, and reducing poverty. Debt relief in support of the ECF arrangement and the Decision Point under the Heavily Indebted Poor Countries (HIPC) Initiative, which was reached in 2009, restructured arrears and reduced the debt service burden. Broadly satisfactory progress was made in implementing this program in 2009–10. Economic growth accelerated to 3.8 % in 2009—driven by the secondary and tertiary sector—before slowing down to 2.4 in 2010 due to an electricity crisis, a decline in crude oil production, and uncertainty linked to the election process. Inflation remained moderate at below 2 %. The fiscal deficit averaged 2 % of gross domestic product (GDP), and the external current account recorded a surplus, albeit declining.

The post-election crisis (December 2010-April 2011) had severe economic consequences. Real GDP is projected to decline by 5.8 % in 2011; inflation spiked to 9 % in April. Most banks were closed for 2-3 months and their financial situation, particularly of public banks, worsened. The central bank (BCEAO) rolled-over maturing T-bills to avoid a default that would have had serious consequences for the regional banking system. Arrears were accumulated on external debt service.

Following the end of the post-election crisis, the new government quickly put in place an economic recovery program and started the process of sociopolitical normalization. The reunification of the country is moving forward with the formation of new mixed security forces, and the redeployment of the public administration in the former Center-North-West zones. Security has improved considerably, but further efforts are needed. Parliamentary elections are scheduled for mid-December 2011, and a Truth and Reconciliation Commission has been set up to rebuild and consolidate social cohesion.

Economic activity appears to be recovering faster than expected; inflation receded from its April spike to 4½ % in June-August, and fiscal performance has been stronger than anticipated.

The authorities’ medium-term priorities are to achieve high and sustained growth, reduce poverty, create jobs (for youth in particular), and establish fiscal and external sustainability. These objectives are in line with the 2009–13 Poverty Reduction Strategy that the government plans to update following broad-based consultations. They form the basis of the program supported by a new three-year ECF arrangement that would help the country advance toward the HIPC Completion Point. The medium-term outlook is conditional on further progress in the security situation and political normalization, as well as the implementation of structural reforms to remove impediments to economic growth.

Executive Board Assessment

Directors commended Côte d’Ivoire’s rapid progress in reviving the economy, restoring a functioning public administration, and improving security following the post-election crisis. Nevertheless, they noted that major economic and political challenges remain. They encouraged the authorities to continue to pursue national reconciliation, security sector reform, and sound economic policies, in order to consolidate peace, fully restore law and order, and lay the foundation for sustained and inclusive economic growth.

Directors welcomed the authorities’ good performance under the economic recovery program, especially the prudent budgetary stance. They endorsed the authorities’ comprehensive and ambitious new medium-term economic program, particularly its emphasis on social services, peace building, and job creation. They stressed that decisive implementation will be critical to achieve the objectives of sustained economic growth, poverty reduction, and fiscal and debt sustainability, while acknowledging the significant risks to the program.

Directors considered the fiscal program to be an appropriate balance between fiscal prudence and the need for higher investment and social spending. They emphasized the importance of broadening the tax base, limiting current spending, and strengthening tax and expenditure administration in order to create the fiscal space needed for the higher investment and social spending. Directors welcomed the intention not to commit expenditures until the financing has been obtained.

Directors gave high priority to financial sector deepening and strengthening to support private sector development. They highlighted the need to improve banking supervision and restore the banking sector’s capacity to intermediate savings and provide credit to small and medium-sized enterprises. They also urged quick action to address the vulnerabilities of state-owned banks.

Directors welcomed the proposed reforms in the energy and the coffee/cocoa sectors. They noted that a significant effort will be needed to place the energy sector on a sound financial footing. Directors stressed the importance of governance and other reforms, including the new investment code, to improve the business climate and enhance external competitiveness.

Directors urged the authorities to take steps to reach the completion point under the HIPC Initiative as early as possible, and to maintain debt sustainability thereafter. They encouraged development of a debt management strategy to guide future borrowing, with IMF and World Bank technical assistance.

Côte d'Ivoire: Selected Economic Indicators, 2008–12
(Annual %age changes, unless otherwise indicated)
  2008 2009 2010 2011 2012

National income


Real GDP growth

2.3 3.8 2.4 -5.8 8.5

Consumer prices (end of period)

9.0 -1.7 5.1 3.0 2.5

Money and credit


Broad money

5.7 17.2 18.8 11.3 16.0

Net credit to government (% of

beginning of period broad money)

-1.1 7.4 5.3 2.4 4.5

Central government operations 1/


Total revenue and grants (% of GDP)

20.6 19.5 19.7 18.8 18.1

Total revenue (% of GDP)

18.9 17.0 18.4 19.2 18.9

Total expenditure (% of GDP)

21.1 21.1 22.0 26.9 22.6

Primary basic balance (% of GDP) 2/

0.3 0.4 -0.2 -4.8 -2.0

Overall balance (including grants, payment

order, % of GDP)

-0.6 -1.6 -2.3 -8.1 -4.4

External sector


Exports, f.o.b. (millions of SDRs)

6597 6887 7121 7155 7412

Imports, f.o.b. (millions of SDRs)

4488 4159 4937 4949 5454

Export volume growth

-2.5 8.3 -9.9 -9.6 6.6

Import volume growth

3.0 6.4 -1.7 -3.6 8.7

Current account balance (% of GDP)


Including official transfers

1.9 7.0 1.1 -1.4 -4.0

Excluding official transfers

0.8 4.9 0.4 1.0 -1.5

Gross official reserves (millions of SDRs)

1541 1763 2094 2647 2758



External public debt (% of GDP)

61.9 53.9 50.6 53.8 49.1

External public debt in arrears (% of GDP)

26.2 6.7 1.9 4.0 0.2

Domestic public debt (% of GDP)

13.4 12.6 15.8 20.6 14.4

Domestic public debt in arrears (% of GDP)

2.7 1.9 0.7 0.6 0.2

Sources: Ivoirien authorities and IMF staff estimates and projections.

1/ Fiscal data for 2011 are for the budget covering April-December over period GDP.

2/ Primary basic balance = (Tax and non tax revenue) - (Total expenditure + Net lending - Interest payments - Foreign financed expenditure).

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