Ivory Coast poverty declines, macroeconomic imbalances curtailed: IMF

An IMF staff team led by Dan Ghura, visited Abidjan, from February 29 to March 15 for the 2016 Article IV consultation discussions with the authorities.

At the conclusion of the mission, Mr. Ghura said, "over the past four years economic performance under the authorities' program, supported by an Arrangement under the Extended Credit Facility, has been impressive. GDP growth has been robust, permitting a decline in poverty, and macroeconomic imbalances have been curtailed." "Economic activity remained buoy- ant in 2015 in most sectors. Our preliminary estimates indicate that real GDP growth was 8.6 percent, while inflation remained subdued. An external current account deficit was registered, as the dynamism of imports more than compensated the increase in exports, but remained at a manageable 1.7 percent of GDP. The overall fiscal deficit was 3.0 percent of GDP compared to a target of 3.7 percent in the revised 2015 Budget Law, mainly due to under-execution of capital expenditures and higher-than-budgeted proceeds from the sale of telecom licenses.

"Against the backdrop of accommo- dating financing conditions and rising business and consumer confidence, bank credit to the private sector accelerated in 2015, after strong increases the two preceding years, contributing to a decline in overall banks' capital adequacy ratio.

"The macroeconomic outlook for 2016 and the medium term remain favorable. Real GDP growth is projected at 8.5 percent, with low inflation.

"Staff supports the broad objectives and reforms underlying the National Development Plan for 2016-20 (NDP) as well as the leading role of the private sector to foster structural transformation. The mission made recommendations aimed at ensuring that the NDP can be implemented without disruption in the face of possible adverse shocks, including from international commodity prices and tighter financing conditions. In this context, sustaining strong economic performance will require maintaining a disciplined fiscal policy and increasing banks' capital in order to build sufficient buffers to allow for the conduct of counter-cyclical policy in the event of the materialization of these risks, as well as to preserve debt sustainability. The mission highlighted the importance of increased revenue mobilization by rationalizing exemptions and broadening the tax base, continuing a prudent debt policy, and carefully monitoring of associated risks linked to public-private partnerships."

The Executive Board of the IMF is expected to consider the staff report for the Article IV consultation in May 2016. Authorities have requested Fund support for a new program. Discussions on that matter are planned for later this year.

"The IMF mission wishes to express its gratitude to the Ivorien authorities for the constructive discussions and their hospitality during its visit to Abidjan."

The mission had discussions with H.E. Mr. Alassane Ouattara, President of the Republic of Côte d'Ivoire; H.E. Mr. Daniel Kablan Duncan, Prime Minister and Minister of Economy, Finance and Budget; Mr. Adama Kone, Minister at the Prime Minister's Office in charge of Economy and Finance; Mr. Abdourahmane Cisse, Minister at the Prime Minister's Office in charge of the Budget and State Assets; Mr. Philippe Serey Eiffel, Minister and Secretary General at the Presidency, in charge of major projects; Mr. Thierry Tanoh, Minister and Secretary General at the Presidency and donor communities.