Journal Issue

Côte D’Ivoire: Seventh Review Under the Extended Credit Facility Arrangement and Request for Modification of Performance Criteria

International Monetary Fund. African Dept.
Published Date:
June 2015
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Recent Developments, Program Performance, Outlook and Risks

A. Recent Developments

1. The growth momentum remained strong in 2014. Real GDP growth is estimated to have reached 7.9 percent in 2014, driven by a strong performance in services and agriculture, which compensated for relatively sluggish growth in the secondary sector (reflecting in part lower value added in the energy sector).1 However, the precision of the 2014 GDP estimate is somewhat uncertain due to weaknesses in data collection on subsistence agriculture. In particular, the authorities reported an exceptionally strong crop of cassava production (a 74 percent increase which contributed 1.3 percentage points to the overall 7.9 percent GDP growth).

Contribution to Growth, 2012–14


Inflation, December 2012-December 2014

(Twelve-month average inflation, percent)

2. The 2014 fiscal deficit was slightly below the target, with a lower execution of budget appropriations for investment offsetting revenue shortfalls (MEFP, ¶5). Total revenue collection was CFAF 75 billion (0.5 percent of GDP) short of its objective, reflecting (i) lower direct taxes (CIT, PIT and capital gains) and VAT receipts due to the impact of high investment in 2013 and related tax exemptions; (ii) higher provisioning in the banking sector; (iii) unpaid taxes by a few public entities (public oil company and others) facing financial difficulties; and (iv) lower CPI inflation. Total expenditure was CFAF 120 billion (0.7 percent of GDP) below the target due to an under-execution of investment spending. As a result, the overall fiscal deficit (payment order basis) narrowed to 2.2 percent of GDP in 2014 compared with 2.3 percent in 2013, despite a somewhat smaller nominal GDP than programmed. The financing of the 2014 fiscal deficit involved greater recourse to external borrowing (3.2 percent of GDP in 2014 against 1.8 percent of GDP in 2013).

Figure 1.Côte d’Ivoire: Fiscal Developments

Sources: Ivoirian authorities; and IMF staff estimates.

3. The external sector position improved in 2014. The external current account deficit is estimated to have narrowed to 0.7 percent of GDP in 2014 compared with 1.7 percent of GDP in 2013, supported by lower oil prices, an improvement in the terms of trade (4.3 percent) and solid growth of cocoa exports. Combined with inflows on the financial account (project loans, Eurobond issuance and FDI),2 this led to a slight increase in the overall balance of payments surplus (0.6 percent of GDP in 2014 against 0.4 percent of GDP in 2013).

Trade and Current Account Balances, 2012-14

(Percent of GDP)

External Balances, Foreign Direct Investment and Official Loans, 2012-14

(Percent of GDP)

4. Credit conditions are broadly balanced, and financial soundness indicators improved. Supported by ample liquidity, credit to the economy increased by 21.7 percent, in line with robust growth in the agricultural sector (crop credit increased by 59 percent) and services. Preliminary data point to a decline in NPLs to 10.4 percent of total loans (in gross terms) at end-2014 compared with 12.7 percent in 2013. Although still high, they do not represent significant financial stability risks as NPLs net of provisions stood at 2.65 percent at end-2014. The overall banking sector capital adequacy ratio (minimum requirement of 8 percent) rose to 10.1 percent at the end of December 2014, against 9.2 percent in 2013. However, this ratio is not excessive given the rapid credit growth. Furthermore, this aggregate information masks vulnerabilities, though not systemic, in some individual banks, in particular the capital adequacy ratio of public banks and a couple of small banks continue to be persistently below the regulatory minimum.

Credit to the Economy and NPLs


Regulatory Capital

(Percent of risk-weighted assets)

10-Year Sovereign Bond Yields Côte d’Ivoire vs Selected Countries 1/



1/ Bonds issued in 2014.

5. On February 24, 2015, Côte d’Ivoire issued a sovereign bond on the international market for the second time as provided for under the program. Investors’ response was strong, and the country successfully raised US$1 billion (with US$4 billion offered) with a 12-year average maturity and a yield of 6.625 percent. Reflecting the attractiveness of Côte d’Ivoire to international investors, the July 2014 Eurobond has performed well in the secondary market, with yields lower than in other Sub-Saharan frontier markets economies.

6. The socio-political environment remains calm as the country prepares for October 2015 presidential elections (MEFP, ¶3). The two main parties of the ruling coalition, including that of former President Bedié (PDCI) have formally endorsed President Ouattara’s candidacy. The head of the former ruling party, FPI, has announced that the party will participate to the upcoming Presidential elections. The dialogue in 2014 between the government and the opposition, including the FPI, is a sign of progress toward political reconciliation, and appeasement measures, including the liberation of some detainees and unfreezing of bank accounts, have been implemented. The security situation has continued to improve despite sporadic incidents in various parts of the country. Last November’s unrest in the army over late pay appears to have been durably settled. To date the country has had no confirmed Ebola cases.

B. Program Performance

7. All continuous and end-December 2014 quantitative performance criteria (PC) and all but one indicative targets (IT) were met (MEFP, Table 1). More specifically, the basic primary deficit was below the targeted program level by a narrow margin; and the continuous ceiling on new nonconcessionnal external debt (PC) was observed. Despite a larger-than-planned T-bond issuance at the end of the year, the ceiling on net domestic financing (PC) was observed as the excess proceeds were used in large part to reduce floating debt more than programmed and accumulate larger cash balances at the BCEAO. Although budget appropriations were under-executed, pro-poor expenditure (IT) exceeded the program’s objective (107 percent). However, the floor for government revenues (IT) was missed due to factors mentioned in ¶2. The margins on the basic primary deficit and net domestic financing were smaller than identified extra budgetary spending in 2014 (see below). If this spending had been correctly included in the fiscal accounts, offsetting savings would need to have been made elsewhere to allow the primary deficit and domestic financing targets to have been met.

Table 1.Côte d’Ivoire: Selected Economic Indicators, 2012–17
(Annual percentage changes, unless otherwise indicated)
National income
GDP at constant prices10.
GDP deflator4.
Consumer price index (annual average)
Consumer price index (end of period)
External sector (on the basis of CFA francs)
Exports, f.o.b., at current prices−4.1−0.612.39.911.7−
Imports, f.o.b., at current prices35.−
Export volume8.
Import volume49.
Terms of trade (deterioration –)−−1.5
Nominal effective exchange rate−
Real effective exchange rate (depreciation –)−
Central government operations
Total revenue and grants51.916.011.58.413.616.19.810.8
Total expenditure38.310.911.88.419.522.78.810.1
(Changes in Percent of Beginning-of-Period Broad Money)
Money and credit
Money and quasi-money (M2)4.411.617.115.917.814.314.014.0
Net foreign assets−
Net domestic assets9.811.515.812.013.811.310.310.0
Of which: government5.−
Of which: private sector5.310.613.811.212.711.810.09.2
(Percent of GDP unless otherwise indicated)
Central government operations
Total revenue and grants18.919.819.619.819.620.920.921.2
Total revenue18.418.517.717.917.718.819.019.4
Total expenditure22.122.121.822.023.024.624.424.6
Overall balance, incl. grants, payment order basis−3.1−2.3−2.3−2.3−3.4−3.7−3.5−3.4
Primary basic balance 1/−1.2−0.1−0.5−0.5−0.2−
Gross investment16.517.017.316.818.518.318.218.8
Central government4.
Nongovernment sector12.
Gross domestic saving20.620.019.219.721.421.120.720.1
Central government1.
Nongovernment sector18.716.816.517.218.718.517.516.5
Gross national saving15.315.714.216.116.617.617.016.2
Central government1.
Nongovernment sector13.911.810.212.412.513.813.112.2
External sector
Current account balance (including official transfers)−1.2−1.4−3.1−0.7−1.9−0.7−1.3−2.6
Current account balance (excluding official transfers)−1.8−2.7−5.0−2.5−3.8−2.8−3.2−4.5
Overall balance−2.60.4−−
Gross public debt 2/44.543.739.946.639.445.643.942.2
External public debt 3/28.026.426.527.927.631.630.629.5
External public debt (excluding C2D)17.216.418.919.121.626.926.425.6
Public external debt-service due (CFAF billions)245243326324386413490560
Percent of exports of goods and services3.
Percent of government revenue9.78.610.510.812.312.012.813.2
Memorandum items:
Nominal GDP (CFAF billions)13,83515,34617,33316,65519,67018,30320,04521,914
Nominal exchange rate (CFAF/US$, period average)510494484494
Nominal GDP at market prices (US$ billions)
Population (million)21.522.124.822.725.523.323.924.5
Population growth (percent)
Nominal GDP per capita (CFAF thousands)642694699735770787840895
Nominal GDP per capita (US$)1,2591,4061,4441,4891,5781,3581,4511,561
Real GDP per capita growth (percent)
Poverty rate (in percent)48.9
Sources: Ivoirien authorities; and IMF staff estimates and projections.

Defined as total revenue minus total expenditure, excluding all interest and foreign-financed investment expenditure.

Central government only.

Currency definition.

Sources: Ivoirien authorities; and IMF staff estimates and projections.

Defined as total revenue minus total expenditure, excluding all interest and foreign-financed investment expenditure.

Central government only.

Currency definition.

8. There has also been progress on structural reforms (MEFP, Table 2). All end-December 2014 structural benchmarks were implemented, albeit with a minor delay regarding the selling of most of the state’s holdings in the capital of a bank to private investors. In addition, the government took measures to improve the business climate and tax administration. However, several important measures in the authorities’ reform agenda have experienced significant delays, notably the implementation of the financial sector reform strategy, and the reorganization of the public debt department into front-middle-back offices; domestic arrears clearance has also not yet been completed.

Table 2.Côte d’Ivoire: Balance of Payments, 2012–17(Billions of CFA Francs; unless otherwise indicated)
Current account−164−209−533−109−374−127−256−572
Current account excl. grants−245−410−859−413−750−503−640−979
Trade balance1,5661,4791,7311,8142,1492,0172,1832,114
Exports, f.o.b.6,1895,9536,9696,5387,8467,1857,7138,021
Of which: cocoa1,7221,9322,4002,4312,3922,7192,7522,588
Of which: crude oil and refined oil products2,0041,6931,5841,4471,4751,2101,4551,581
Imports, f.o.b.4,6244,4745,2394,7245,6985,1685,5305,907
Of which: crude oil1,4051,4451,4141,5971,2841,1931,4171,565
Services (net)−994−1,026−1,402−1,331−1,583−1,499−1,682−1,839
Primary Income (net)−470−445−726−555−792−647−732−807
Of which: interest on public debt153998994114148254305
Secondary Income (net)−266−217−135−36−1472−26−41
General Government−2265289269335338342361
Other Sectors−244−282−425−306−482−336−368−402
Capital and financial account−19926947220451151388763
Capital account00000000
Financial account−19926947220451151388763
Foreign direct investment161198472324580393491646
Portfolio investment, net7386175020182022
Acquisition of financial assets−4−1−1−1−1000
Incurrence of liabilities−76−88−18−51−21−19−20−22
Other investment, net−433−15−18−170−88−360−12394
Official, net−26276382354719737237235
Project loans54220260249462402509524
Other loans0035335749057200
Central government amortization due316144230226233236272289
Nonofficial, net−170−91−400−524−807−1,097−359−141
Errors and omissions00000000
Overall balance−36260−6195137−76131191
Reserve assets, includes reserve position in the Fund362−60−38−93−269−50−286−358
Operations account266−133−71−72−240−22−252−294
IMF (net)96723333−29−29−34−63
Financing gap0099.0−1.7131.3126.2154.1167.2
Possible financing 2011–14 (excluding IMF)
Residual gap48.4−1.772.879.8154.1167.2
Of which: IMF-ECF 1/
Memorandum items:
Overall balance (percent of GDP)−2.60.4−−
Current account inc. grants (percent of GDP)−1.2−1.4−3.1−0.7−1.9−0.7−1.3−2.6
Current account exc. grants (percent of GDP)−1.8−2.7−5.0−2.5−3.8−2.8−3.2−4.5
Trade balance (percent of GDP)11.39.610.010.910.911.010.99.6
Gross imputed official reserves (stock - end of year)1,2971,3001,3701,5461,6281,7362,0092,343
(months of imports of goods and services)
(percent of broad money)12.411.810.411.29.69.810.110.4
WAEMU gross official reserves (billions of US$)24.227.830.534.7
(percent of broad money)58.651.846.241.1
(months of WAEMU imports of GNFS)
Nominal GDP (billions of CFA francs)13,83515,34617,33316,65519,67018,30320,04521,914
Exchange rate (CFAF/US$) average510494484494
Exchange rate (CFAF/US$) end-of-period500479491532
Sources: Ivoirien authorities; and IMF staff estimates and projections.

In the CFA franc zone, Fund resources are channeled via the regional central bank that provides equivalent domestic currency credit to the relevant government.

Sources: Ivoirien authorities; and IMF staff estimates and projections.

In the CFA franc zone, Fund resources are channeled via the regional central bank that provides equivalent domestic currency credit to the relevant government.

C. Outlook and Risks

9. The macroeconomic outlook remains favorable:

  • Growth is projected at 7.9 percent in 2015, and would average 7.6 percent over the next two years, in response to the authorities’ continued efforts to improve the business climate and address infrastructure gaps. The authorities’ projections are more ambitious (9.4 percent growth in 2015 and double-digit growth over the medium term). While the staff recognizes that a post-election end to the wait-and-see attitude of some private investors could push growth rates above its estimate in 2016, the mission felt that this factor is too uncertain to be incorporated in the baseline scenario.
  • Inflation would hover around 2 percent, assuming continued good harvests, prudent monetary policy and stability in international prices of oil and food.
  • The current account deficit is projected to increase to 2.6 percent of GDP on average over the medium term, on the back of less favorable terms of trade and stronger import growth.
  • Public debt (central government) is expected to hover around 43 percent of GDP over the medium term assuming that the overall fiscal deficit remains close to 3 percent of GDP, while debt service (including C2D) is projected to rise to above 13 percent of total revenue from 10.8 percent in 2014.

10. The positive outlook is subject to a few domestic and external risks. Over the medium term, further extra budgetary spending could result in unsettled domestic liabilities that would negatively affect private investment. Unfavorable weather conditions could also adversely affect agricultural production, which remains a key engine of growth, and also weigh on the performance of the electricity sector. On the external front, tighter global financial conditions may complicate the financing of the large public investment program. Sluggish growth in advanced and emerging economies could have an adverse bearing on economic activities. As noted in paragraph 9, there is, however, an upside risk to growth performance.

Figure 2.Côte d’Ivoire: Medium-Term Outlook, 2012–17

(Percent of GDP, unless otherwise indicated)

Sources: Ivoirien authorities;and IMF staff estimates and projections.

Policy Discussions

Discussions focused on (i) containing the expansion of the 2015 fiscal deficits in light of projected revenue shortfalls and emerging spending pressures, and strengthening PFM; and (ii) moving forward the reform agenda in favor of private sector development.

A. Fiscal Policy—Containing the 2015 Fiscal Deficit and Strengthening PFM

11. The authorities agreed to factor in new fiscal pressures that have emerged since the adoption of the 2015 budget (MEFP, ¶26–31):

  • On the revenue side, some shortfalls are expected on direct taxes, VAT, customs duties and dividends. These are due to a base effect (lower 2014 revenue outturn,) lower import prices, and a larger fall in international oil prices than assumed in the budget. The impact of lower oil prices on the oil company Petroci will not allow it to distribute dividends. These revenue shortfalls total CFAF -116.8 billion (-0.6 percent of GDP).
  • On the expenditure side, new spending needs have emerged (0.6 percent of GDP). These are mainly related to putting on budget: (i) the audited amounts of extra budgetary spending in 2014 in the education (private schools) and military (fuel supply) sectors, which amounted to CFAF 58.4 billion; and (ii) the implications on the electricity subsidy of a higher use of heavy vacuum oil (HVO) by the electricity sector in 2014 than foreseen in the 2015 budget, and higher interest because of the appreciation of the US dollar.
Text Table 1.Changes to Fiscal Projections, 2015(Billions of CFA Francs)
Total Revenue−26.6
Revenue shortfalls−116.8
Direct taxes-69.1
Customs duties-18.8
Dividend (Petroci)-14.0
Additional Revenue90.2
Of which
Fuel tax30.8
Social security contributions16.4
Recovery of claims on Petroci15.0
Bonus de signature15.0
Total Expenditure−22.2
New spending112.9
Of which
Extra budgetary spending58.4
Subsidies to electricity sector19.7
Interest due15.3
Spending cuts−135.1
Of which:
Capital expenditure−91.8
Wage bill−19.6
Change in primary basic balance−49.1
Change in overall balance−4.4
Sources: Ivoirien authorities; and IMF staff estimates and projections.
Sources: Ivoirien authorities; and IMF staff estimates and projections.

12. In face of these new fiscal pressures, the authorities committed themselves to raising additional revenue and cutting spending to contain the expansion of the fiscal deficit (MEFP, ¶26–31). Additional revenues (0.5 percent of GDP) will mainly come from higher petroleum product tax revenue3 (see Box 1), expected signature bonuses for new mining exploration contracts, the recovery of tax claims on Petroci as part of a settlement of cross arrears (see below), and higher social security contributions (reflecting the higher 2014 outturn). The authorities also agreed to revise downward the amount of projected investment spending based on the 2014 execution rate, the wage bill (salary increases have been delayed from January to later in the year,) and to take the equivalent of CFAF 12 billion out of the budget provision for unforeseen spending to offset part of the extra budgetary spending. As a result, the revised overall and primary basic fiscal deficits in 2015 are now projected to be 0.3 percent of GDP higher than budgeted, reaching 3.7 percent of GDP and 0.5 percent of GDP, respectively.

13. Staff is of the view that the revised fiscal targets remain appropriate. The modest deterioration of the primary basic deficit (the program performance criterion) compared with the program objective agreed upon at the time of the sixth review is largely due to the drop in oil and imported prices (exogenous shocks) and the integration of audited amounts of extra budgetary spending in the 2015 budget. Excluding the audited amount of extra budgetary spending put on budget (0.3 percent of GDP), the projected basic primary balance in 2015 would be, in percentage of GDP, the same as the one programmed at the time of the 6th review. Furthermore, in CFA francs, the projected overall deficit (including the extra budgetary spending) is about the same as the one planned in the 2015 initial budget. Staff called on the authorities to resist elections-related spending pressures, and to pay attention to increases in current spending over the medium term.

14. While welcoming the settlement of audited extra budgetary spending liabilities, staff inquired about the existence of other such liabilities. Staff concluded that off-budget expenditures do not give rise to the accumulation of arrears or misreporting because, under the TMU, only expenditures on a payment order basis are taken into account for purposes of the PCs. The authorities gave assurances that they had not been able to trace any further recent extra budgetary spending liabilities (MEFP, ¶32). They will, nevertheless, organize a rotation of the directors of administrative and financial affairs of line ministries to facilitate the “discovery” of any recent extra budgetary spending. They also underscored the existence of sizable extra budgetary spending incurred prior to 2011. The results of the ongoing audit of this past extra budgetary spending are expected to be available in the second half of 2015, and a regularization strategy will need to be decided thereafter. Staff recommended frequent audits of line ministries by the Inspector-General’s office. It encouraged the authorities to promptly complete the ongoing audits and regularize the verified amounts.

Box 1.Côte d’Ivoire: Automatic Fuel Pricing Mechanism for Petroleum Products

An automatic fuel pricing mechanism has been in place in Côte d’Ivoire since April 2013. The mechanism aims at transmitting international oil price fluctuations to domestic retail prices while smoothing fluctuations in pump prices through adjustments to the taxable base (the “price” on which tax rates are applied) subject to a floor to protect fuel tax revenues. The smoothing mechanism operates by triggering adjustments to retail prices only when international price changes exceed specified thresholds. However, the mechanism gives some discretion to the government regarding the full pass-through of changes in international oil prices. As a safeguard, the mechanism incorporates a floor on the taxable base (25 percent of the cif import price) to ensure a minimum level of fuel tax revenues. It also includes a cross-price subsidy between gasoline and diesel, the latter being used in the transport sector and hence is socially and politically sensitive. The cross-subsidy kicks in when the diesel price exceeds a certain threshold (CFAF 615), to mitigate further increases in the pump price of diesel.

In the initial 2015 budget, fuel tax revenues were projected at 1.2 percent of GDP compared to 1.0 percent of GDP in 2014. This projection was based on a level of taxation of CFAF 194.4 per liter for gasoline products and CFAF 88.4 per liter for diesel products. As of January 2015, because of the partial pass through of the drop in international oil prices to retail fuel domestic prices (Fig.2) and full application of the taxable base/price for tax revenue purposes, the amount of fuel taxation stood at CFAF 262 per liter for gasoline products and CFA 156.6 for diesel products (Fig.3). Preserving this amount of fuel taxation through the end of the year would generate additional fuel tax revenues of about 0.4 percent of GDP in 2015.

Figure 1.Côte d’Ivoire - Fuel Pricing Structure, April 2013-January 2015

 (FCFA per litre)

Source: Ivoirien authorities.

Figure 2.Côte d’Ivoire: Pass-Through of Fluctuations in Import Oil Prices to Retail Fuel Pump Prices, April 2013–January 2015

Sources: Ivoirien Authorities and IMF staff estimates.

Figure 3.Côte d’Ivoire - Fuel Taxation, April 2013–January 2015

(CFA Francs per liter)

Source: Ivoirien authorities.

15. The authorities concurred with staff on the importance of enforcing the regulatory framework for preventing and punishing spending outside the budget (MEFP, ¶33). An April 23, 2015, Council of Ministers reaffirmed the existing regulatory framework established by decree in 1998.4 The government indicated to the mission its firm intention to forcefully apply the provisions of the 1998 decree, including by disciplining contraveners. In addition, the government committed to a number of measures to prevent extra budgetary spending by (i) increasing suppliers’ awareness of budget appropriations through the establishment of an information center;5 (ii) ensuring realistic budget appropriations, starting in the 2015 budget, for subsidies to private schools, the electricity sector and for military fuel purchases; and (iii) strengthening control over line ministries (increasing the frequency of staff mobility and audits). Staff suggested that the authorities also consider establishing a specialized budgetary and financial discipline chamber within the planned Court of Auditors, and indicated that the Fund was ready to provide technical assistance to reform PFM practices to ensure that new off-budget spending is avoided.

16. The mission discussed with the authorities on the following PFM issues:

  • Off-budget operations through public entities (i.e., extra budgetary funds). The mission expressed concerns about the growing use of off-budget mechanisms (financed through borrowing by public entities) to carry out fiscal and quasi-fiscal activities. In particular, the mission expressed its lack of support for the envisaged borrowing6 to carry out the rural electricity program (through CI-Energies) and the universal access program to telecom services (through ANSUT). The staff noted that these activities are in nature fiscal (noncommercial activities), and should therefore be included in the budget. It underscored that this practice violates the universality principle of the budget, leads to an excessively narrow budget perimeter, and weakens budget control. The mission called on the government to refrain from using public entities to conduct fiscal and quasi-fiscal activities and to broaden the budget’s scope.
  • Expenditure management. While acknowledging recent progress, staff called for further efforts to drastically reduce the recourse (about 2 percentage points of GDP currently) to cash advances, imprest accounts (régies d’avances), and other exceptional spending procedures. The staff notes with satisfaction that the above mentioned April 23, 2015 Communication includes provisions to limit the recourse to cash advances.

17. Cash management (MEFP, ¶40). The authorities are taking steps toward the setting up of a Treasury Single Account (TSA). Staff discussed with the authorities their timetable for closing public accounts, which foresees the closure of inactive public accounts at commercial banks by end-April 2015 and the rest over three years, and the architecture of the envisaged Treasury Single account. It was encouraged by the government’s intention to start four pilot cases in 2015, but noted that the scope of the TSA would, at least in the short term, be limited by the need to maintain a fairly large number of a public accounts in a specific public bank open to keep this bank liquid.

18. The mission also urged the authorities to further strengthen the management of public debt (MEFP, ¶45–47).

  • Debt management. While welcoming the finalization of the updated medium-term debt strategy, staff expressed concerns over excessive delays in reorganizing the debt department into front-, middle-, and back-offices (due to staffing issues) and the accumulation of debt (in national currency) by public sector entities in fragile financial situation. The authorities committed to completing the reorganization of the debt management unit before end-June 2015 (MEFP, ¶45). They noted that the development of a centralized database covering public enterprises’ and government guaranteed debt is well advanced, and its finalization (end-June 2015) will enable a better monitoring of loans contracted by these public entities.
  • Development of the regional secondary market. The authorities agreed with staff on the crucial need to foster the development of a secondary market to deepen the market and limit the accumulation of foreign exchange risk. Currently, the attractiveness of the regional market for foreign investors willing to buy sovereign bonds in CFA is limited because of the buy and hold nature of this market. Staff urged the authorities to consider the recommendations made by a December 2014 joint World Bank-IMF TA mission to deepen, unify, and add liquidity to the regional market.

B. Structural Reforms: Fostering Private Sector Development

Business climate

19. Notwithstanding recent major improvements in the business climate7(MEFP, ¶48–50), there remains room for further convergence toward best performers. Discussions focused on two areas:

  • Domestic arrears clearance. Staff pressed the authorities to rapidly complete the regularization of the remaining audited arrears to suppliers (CFAF 15.5 billion out of CFA 152.9 billion) and the past securitized debt to the banking and non-banking sectors (about CFAF 43 billion or 0.2 percent of GDP out of 142.9 billion or 0.8 percent of GDP). The authorities explained that the remaining arrears creditors have resisted the proposed haircuts and financial terms, but promised to reach out to them to complete the process before the year ends.
  • Commercial courts. While welcoming the effective operation of the commercial court of Abidjan, staff emphasized the importance of creating other commercial courts in the country and a court of appeal. The authorities indicated that actions are being planned in this regard.
  • Relations with suppliers and taxpayers. Staff noted with concern that private operators met were claiming that (i) the treasury had recently been paying bills with long delays; and (ii) the tax and customs directorate had been repeatedly harassing larger tax payers. Staff took note of the response of the authorities indicating that no new domestic arrears had been accumulated since 2011, and that larger taxpayers were not subject to any tax harassment. Staff, nevertheless, considers that transparency of tax control procedures should be enhanced.

Financial sector reform (MEFP, ¶41–44)

20. The mission expressed concern over delays, and called on the authorities to step up their reform efforts:

  • Financial sector development strategy. The implementation of the financial sector development strategy has been held up by the delay in staffing the organizational structure. Staff emphasized that implementing the financial sector development strategy is necessary to foster financial inclusion and access to credit by small and medium-sized enterprises. The authorities highlighted steps already taken to promote financial sector deepening and financial inclusion (laws and regulations on treasury bond primary dealers and credit bureaus, preparation of a draft law on leasing, measures to provide certain bank services free of charge and to improve the financial position of microfinance institutions, and announced that the process of appointing the program project manager is in its final stage.
  • Restructuring of public banks. Staff welcomed the resolution of the Banque pour le Financement de l’Agriculture (BFA) in September 2014 and the government’s sale of most of its share in the capital of Société Ivoirienne de Banque (SIB) in February 2015. However, staff pushed for prompt action on the remaining ailing public banks to minimize the fiscal cost of their restructuring and reduce vulnerabilities in the banking system.

Energy sector (MEFP, ¶15, 38–39)

21. The authorities and staff agreed on a course of actions to improve the financial situation in the energy sector:

  • Electricity sector. While the financial situation of the sector has improved following a series of measures taken over the last three years (e.g., better targeting of the social tariff, increase in export prices, fight against fraud, etc.), it remains fragile. Staff noted that, in due course, additional measures should be considered to strengthen the financial sustainability of the sector. The authorities indicated that the coming on stream of several projects in the near future will help by reducing the cost of generating electricity.
  • Oil sector companies. The fragile financial situation of the oil refinery (SIR) and the state-owned oil company (Petroci), which was compounded by the large amounts of government IOUs on their balance sheets, was exacerbated, by the impact of rapidly falling international oil prices and the appreciation of the US dollar. The two companies made large losses in 2014, and Petroci was unable to pay its taxes and 2013 dividends. The mission reached understandings with the authorities on (i) the settlement of cross arrears between the government and Petroci and an increase in the electricity subsidy in 2015 to reflect the higher use of HVO in 2014; and (ii) the payment in cash of IOUs to SIR in an amount of CFAF 56.9 billion by end-June 2015 (structural benchmark) which would be financed through a bond issuance on the regional market.8 Further, the authorities committed themselves to the timely payment of HVO (heavy fuel) bills owed to these companies. These measures will give some breathing room to SIR and Petroci pending the adoption of longer-term solutions after the completion of strategic audits for Petroci (underway) and SIR (to be launched; structural benchmark).

C. Other Issues

Improving the statistical system

22. Significant weaknesses in the statistical system cloud the precise measurement of growth performance (see paragraph 1). The lack of source data in a few sectors (e.g., subsistence agriculture, construction and public works, real estate services) leads to the use of proxies or recourse to statistical methodologies (focus groups) that provide only imprecise measurements. Difficulties are compounded by (i) staffing and capacity constraints at the National Statistical Office (INS); and (ii) occasional errors made in the compilation of national accounts. In particular, in 2014, staff identified weaknesses in the 2012 national accounts, the latest year for which final estimates have been produced, concerning the computation of nominal taxes on products along with some unexplained movements in sector value added in real terms, which directly affect GDP growth.

23. The authorities and staff agreed that the production of quality economic data needs to be significantly upgraded to strengthen decision-making. The government in particular requested technical assistance from STA to diagnose the key weaknesses in the production of source date and the compilation of national accounts, and a mission is planned for the first quarter of FY16. Notwithstanding, staff regretted that the weaknesses identified in the national accounts for 2012 had not been addressed before the ongoing finalization of the national accounts for 2013. More broadly, as Côte d’Ivoire now has access to international financial markets, the authorities should upgrade and disseminate economic data to facilitate monitoring by private investors and credit rating agencies.

National Development Plan

24. The government has issued a progress report on the implementation of the 2012–15 National Development Plan (MEFP, ¶18). This report, prepared in broad consultation with stakeholders and development partners, describes Côte d’Ivoire’s achievements in macroeconomic, structural and social policies. Overall, Côte d’Ivoire has achieved strong economic growth, restored macroeconomic stability and made significant inroads in structural reforms and poverty reduction. However, challenges remain to consolidate peace and strengthen social cohesion.

Program Monitoring, Financing and Risks

25. The authorities have requested modifications to end-June performance criteria (primary basic balance and net domestic financing), and indicative targets, in light of the revised fiscal projections (MEFP, Table 1). The continuous ceiling on non-concessional borrowing has been increased by $793 million to accommodate an external loan to finance the extension of the Port d’Abidjan.9 New structural benchmarks on PFM, financial sector reform and business climate are proposed for the remainder of 2015 (MEFP, Table 2).10

26. The program is fully financed. There are firm commitments from multilateral partners to cover the projected financing gap.

27. Risks to the attainment of the program’s objectives are moderate. On the domestic front, deterioration in the political and/or security situation, as well as the persistence of Ebola11 outbreak in neighboring countries, could delay private investment decisions in the short term. Social tensions marked by periodic strikes in the public sector and the unfinished political reconciliation agenda involve some risks in the run up to the 2015 elections. Given significant weaknesses in the statistical system, there are risks that the recent and near-term growth outlook could be somewhat optimistic, which could complicate fiscal management in 2015. However, the political climate has been improving noticeably over the last four years and the occurrence of major violent incidents linked to the elections seems to a fairly unlikely scenario. Overall, staff assesses risks to the program as manageable. The authorities agreed to carefully reexamine revenue projections at the time of the eighth review mission in September and adjust expenditures as necessary to achieve the fiscal targets. Furthermore, the strong implementation of the program since 2011 lends credibility to the government’s commitment to stay on course with the ECF-supported program despite the electoral context.

Staff Appraisal

28. The authorities are to be commended for continued strong macroeconomic performance under the Fund-supported program. Over 2012–14, the growth in real GDP per capita has reached 20 percent. All performance criteria and all but one indicative targets for end-2014 were met. Significant progress has been made toward improving the business climate and the tax administration, and some inroads have been made towards public bank restructuring.

29. Sustaining high growth rates will require further reforms to improve the business climate. This calls for further efforts including the creation of other commercial courts in the country and of a commercial court of appeal, the reduction of domestic payments delays, and the improvement of relations between tax payers and tax collection agencies through enhanced transparency in tax control procedures. This also calls for implementing the financial sector development strategy to foster access to credit by SMEs.

30. Staff considers that the fiscal stance for 2015 remains appropriate despite emerging budgetary pressures. It welcomes the fact that the proposed adjustments to the 2015 budget include additional revenues and spending cuts allowing limiting the deterioration of the basic primary and of the overall deficit to 0.3 percent of GDP (i.e., the amount of extra budgetary spending put on budget). It also welcomes the fact that the 2015 overall budget deficit is, in CFA francs, similar to the amount projected at the time of the 6th review. Despite the adjustments, the budget remains broadly growth-friendly and pro-poor, with significant increases in public investment and poverty-reduction expenditures. Staff calls on the authorities to stick to these fiscal objectives despite budget pressures and the electoral context. It emphasizes the need to control increases in current spending over the medium term, and take forceful actions to put the energy sector on a more solid financial footing to limit corresponding fiscal risks.

31. The recent discovery of extra-budgetary spending is worrisome. Staff notes the assurances provided by the authorities that they do not have knowledge of any further extra budgetary spending other than the amounts reported in this review. It welcomes the Communication in the April 23, 2015 Council of Ministers reaffirming that extra budgetary spending should be avoided. It, however, calls on the government to remain vigilant and to strictly respect its commitment to forcefully apply the provisions of the 1998 decree aimed at avoiding extra budgetary spending, including through disciplinary, civil, and penal sanctions of the contraveners. Furthermore, staff, welcomes the authorities’ initiative to launch audits of extra-budgetary spending undertaken before 2011.

32. While welcoming actions taken to improve PFM and public debt management, further steps are urgently needed. In particular, staff urges the authorities to broaden the budget’s scope to ensure that it covers all governmental activities and to avoid that public entities borrow to execute expenditures that should normally be included in the budget. It presses them to reduce further the sizable amount of public spending undertaken through exceptional spending procedures, notably treasury advances. It calls on the government to pay close attention to the accumulation of debt by public sector entities. The implementation of the long-delayed restructuring of the public debt directorate into front-, middle-, and back-office and the setting up of a centralized database covering public enterprises’ and government guaranteed debt are steps needed to strengthen debt management. Furthermore, the deepening of the regional fixed-income market and the development of a secondary market are crucial to limiting foreign exchange risk on public borrowing in the future.

33. Staff supports the authorities’ commitment to address weaknesses in the national accounts statistics. Staff urges them to strengthen staffing and capacity at the INS, address information gaps on several economic sectors, review the compilation of national account statistics, and correct weaknesses identified in the final accounts for 2012. More broadly, Côte d’Ivoire should upgrade and disseminate its economic data to facilitate monitoring by private investors and credit rating agencies. Staff is encouraged by the authorities’ request for technical assistance as it reflects their willingness to address this issue.

34. Staff supports the authorities’ requests for the modification of the end-June 2015 performance criteria. It recommends completion of the seventh review and the disbursement of an amount equivalent to SDR 48.78 million.

Table 3a.Côte d’Ivoire: Fiscal Operations of the Central Government, 2012–17(Billions of CFA francs, unless otherwise indicated)
Total revenue and grants2,621.43,039.53,390.03,293.43,851.03,824.44,197.84,652.1
Total revenue2,540.22,838.03,064.62,989.43,474.83,448.23,814.64,245.3
Tax revenue2,213.02,408.62,645.92,573.32,942.42,881.13,265.73,638.0
Direct taxes720.4765.5785.1741.1889.4820.3912.01,035.0
Indirect taxes1,492.51,643.11,860.81,832.22,053.02,060.72,353.62,603.0
Nontax revenue327.2429.5418.6416.1532.4567.1548.9607.3
Total expenditure3,054.03,385.63,784.83,669.54,523.14,500.94,896.05,388.1
Current expenditure2,436.02,451.42,689.42,677.83,053.63,123.33,416.23,779.0
Wages and salaries934.61,038.91,175.71,183.31,347.41,328.41,470.01,560.0
Subsidies and other current transfers410.6325.0312.5304.1324.6380.3420.9504.0
Other current expenditure572.1545.2687.4656.1773.5793.9781.8876.6
Of which: Ebola0.
Crisis-related expenditure56.575.447.562.255.655.60.00.0
Interest due233.0214.8207.3213.6286.5301.9402.8460.9
On domestic debt79.6115.6118.5119.5172.9154.0148.9155.5
On external debt153.499.188.894.2113.6147.8253.9305.4
Capital expenditure615.8934.21,095.4994.21,469.51,377.71,479.81,609.1
Domestically financed510.3618.0667.0608.0784.8753.0734.0809.4
Primary basic balance−170.4−11.6−81.6−80.4−41.6−90.767.1117.8
Overall balance, including grants−432.7−346.1−394.8−376.1−672.1−676.6−698.2−736.0
Overall balance, excluding grants−513.9−547.5−720.2−680.1−1,048.3−1,052.8−1,081.4−1,142.8
Change in domestic arrears and float (excl. on debt service)190.739.7−120.0−162.4−100.0−50.0−55.3−40.0
Overall balance (cash basis)−242.0−306.3−514.8−538.5−772.1−726.6−753.5−776.0
Domestic financing158.124.3−185.910.8−117.9−207.067.459.0
Bank financing (net)192.0134.2−39.3131.9−97.4−113.718.0−0.9
Nonbank financing (net)−33.9−109.9−146.6−121.2−20.4−93.349.459.9
External financing245.7273.9601.8529.4758.7807.4532.0549.8
Financing gap (+ deficit / - surplus)
Possible financing 2011–14 (excluding IMF)58.546.40.00.0
World Bank45.044.9
Residual gap72.879.8154.1167.2
Of which: IMF-ECF 1/72.879.80.00.0
Memorandum items:
Nominal GDP - Fiscal Year13,83515,34617,33316,65519,67018,30320,04521,914
External debt (central government)3,8744,0454,5694,6515,3605,7876,1396,466
Pro-poor spending (including foreign financed)9801,3371,5221,6221,7161,716
Sources: Ivoirien authorities; and IMF staff estimates and projections.

In the CFA franc zone, Fund resources are channeled via the regional central bank that provides equivalent domestic currency credit to the relevant government.

Sources: Ivoirien authorities; and IMF staff estimates and projections.

In the CFA franc zone, Fund resources are channeled via the regional central bank that provides equivalent domestic currency credit to the relevant government.

Table 3b.Côte d’Ivoire: Fiscal Operations of the Central Government, 2012–17(Percent of GDP, unless otherwise indicated)
Total revenue and grants18.919.819.619.819.620.920.921.2
Total revenue18.418.517.717.917.718.819.019.4
Tax revenue16.015.715.315.515.015.716.316.6
Direct taxes5.
Indirect taxes10.810.710.711.010.411.311.711.9
Nontax revenue2.
Total expenditure22.122.121.822.023.024.624.424.6
Current expenditure17.616.015.516.115.517.117.017.2
Wages and salaries6.
Subsidies and other current transfers3.
Other current expenditure4.
Of which: Ebola0.
Crisis-related expenditure0.
Interest due1.
On domestic debt0.
On external debt1.
Capital expenditure4.
Domestically financed3.
Primary basic balance−1.2−0.1−0.5−0.5−0.2−
Overall balance, including grants−3.1−2.3−2.3−2.3−3.4−3.7−3.5−3.4
Overall balance, excluding grants−3.7−3.6−4.2−4.1−5.3−5.8−5.4−5.2
Change in domestic arrears (excl. on debt service)1.40.3−0.7−1.0−0.5−0.3−0.3−0.2
Overall balance (cash basis)−1.7−2.0−3.0−3.2−3.9−4.0−3.8−3.5
Domestic financing1.10.2−1.10.1−0.6−
Bank financing (net)1.40.9−0.20.8−0.5−
Nonbank financing (net)−0.2−0.7−0.8−0.7−0.1−
External financing1.
Financing gap (+ deficit / - surplus)
Possible financing 2011–14 (excluding IMF)
World Bank grant0.20.2
AfDB grant0.0
Residual gap0.
Of which: IMF-ECF 1/
Memorandum items:
External debt (central government)28.026.426.427.927.331.630.629.5
Pro-poor spending (including foreign financed)
Sources: Ivoirien authorities; and IMF staff estimates and projections.

In the CFA franc zone, Fund resources are channeled via the regional central bank that provides equivalent domestic currency credit to the relevant government.

Sources: Ivoirien authorities; and IMF staff estimates and projections.

In the CFA franc zone, Fund resources are channeled via the regional central bank that provides equivalent domestic currency credit to the relevant government.

Table 4.Côte d’Ivoire: Monetary Survey, 2012–17
(Billions of CFA francs)
Net foreign assets1,5561,5591,7721,9622,2342,569
Central bank1,2971,3001,5461,7362,0092,343
Net domestic assets3,3563,9224,5795,2946,0406,867
Net credit to the government1,1331,3071,4901,4571,4751,537
Central Bank632646591645613616
Credit to the economy2,3082,8313,4464,1944,9235,688
Crop credits156186276286288271
Other credit (including customs bills)2,1522,6443,1713,9084,6345,417
Other items (net) (assets = +)−86−215−358−358−358−358
Broad money4,9115,4816,3517,2568,2749,435
Currency in circulation1,5911,7481,8642,1302,4292,770
Other deposits695462718192
Memorandum item:
Velocity of circulation2.
(Changes in percent of beginning-of-period broad money)
Net foreign assets−
Net domestic assets9.811.512.011.310.310.0
Net credit to the government5.53.53.4−
Central bank2.20.3−1.00.8−0.40.0
Credit to the economy5.310.611.211.810.09.2
Broad money4.411.615.914.314.014.0
(Changes in percent of previous end-of-year)
Net foreign assets−
Net domestic assets16.016.916.715.614.113.7
Net credit to the government29.615.314.1−
Central bank19.12.2−8.59.1−4.90.4
Credit to the economy12.422.621.721.717.415.5
Broad money4.411.615.914.314.014.0
Sources: Central Bank of West African States (BCEAO); and IMF staff estimates and projections.
Sources: Central Bank of West African States (BCEAO); and IMF staff estimates and projections.
Table 5.Côte d’Ivoire: External Financing Requirements, 2012–16(Billions of CFA francs)
External financing requirements−125.2−253.5−995.2−1037.2−1401.8−1690.9−729.8
Current account balance (excluding official transfers)−244.9−410.3−858.5−412.7−749.8−503.3−639.6
Of which: government−316.2−144.2−229.7−226.0−232.6−236.3−272.3
Fund repayments5.
Private capital, net62.6192.589.7−150.5−207.6−685.3151.2
Change in net external reserves without IMF (- = increase367.7108.50.0−251.6−240.3−294.5−3.1
Available financing133.3357.0938.4912.01287.21312.1870.2
Project financing54.0219.9259.6249.1461.8401.8508.9
Program financing353.0357.0490.0572.10.0
Fund disbursements101.572.436.436.
Official transfers−22.164.6289.4269.4335.4338.2361.2
Financing gap−98.91.7−131.3−126.2−154.1
Expected sources of financing57.057.058.446.40.0
World Bank25.
Debt relief0.
Residual gap48.4−1.772.879.8154.1
Possible IMF ECF48.40.072.879.80.0
Sources: Ivoirien authorities; IMF staff estimates and projections.

In 2012, the amount includes the impact of the HIPC Completion Point.

Sources: Ivoirien authorities; IMF staff estimates and projections.

In 2012, the amount includes the impact of the HIPC Completion Point.

Table 6.Côte d’Ivoire: Financial Soundness Indicators for the Banking Sector, 2010–14
Capital adequacy
Risk-weighted capital to assets ratio12.
Asset quality
Total loans/total assets59.0252.2252.1255.4054.2158.29
Concentration of loans to the 5 biggest borrowers to capital217.27264.97129.4691.11138.72293.14
Nonperforming loans (NPLs) (gross)/total loans17.1116.8715.5312.3011.9310.44
NPLs net of provisions/total loans4.815.413.773.573.662.65
NPLs net of provisions/capital72.70108.8249.4648.9650.3428.18
Earnings and profitability
Return on assets (net income/total assets)
Return on net income (net income/equity)−9.301.607.0817.36
Personnel costs/net revenu31.8832.8029.8228.87
Liquid assets/total assets40.7036.6835.2837.1435.0249.83
Liquid assets/total deposits53.2846.2246.1149.9746.8267.52
Source: BCEAO.
Source: BCEAO.
Table 7.Côte d’Ivoire: Proposed Schedule of Disbursements and Timing of Reviews Under the ECF Arrangement(SDR 2011–15millions), 2011–15
In percent of quotaAmountDate of availabilityCondition for disbursement
25.0081.30November 4, 2011Executive Board approval of the three-year arrangement under the ECF.
20.0065.04April 1, 2012Observance of PCs for end-December 2011, continuous PCs and completion of the first review under the ECF arrangement.
20.0065.04October 1, 2012Observance of PCs for end-June 2012, continuous PCs and completion of the second review under the ECF arrangement.
15.0048.78April 1, 2013Observance of PCs for end-December 2012, continuous PCs and completion of the third review under the ECF arrangement.
15.0048.78December 6, 2013Observance of PCs for end-June 2013, continuous PCs and completion of the fourth review under the ECF arrangement.
15.0048.78April 1, 2014Observance of PCs for end-December 2013, continuous PCs and completion of the fifth review under the ECF arrangement.
20.0065.04October 1, 2014Observance of PCs for end-June 2014, continuous PCs and completion of the sixth review under the ECF arrangement.
15.0048.78April 1, 2015Observance of PCs for end-December 2014, continuous PCs and completion of the seventh review under the ECF arrangement.
15.0048.78October 1, 2015Observance of performance criteria for end-June 2015, continuous PCs and completion of the eighth review under the ECF arrangement.
Appendix I. Letter of Intent
Minister at the Prime Minister’s Office
Republic of Côte d’Ivoire
In Charge of Economy and Finance----------
N°2097/MPMEF/CAB/DGE/DCPE/SPEF/HSAbidjan, May 19, 2015
Managing Director of the
International Monetary Fund

Subject: Letter of Intent

Madame Managing Director:

1. Côte d’Ivoire has made considerable progress since the end of the post-election crisis in 2011, thus putting the country on a path to strong, sustainable, and inclusive growth. On the economic front, implementation of the National Development Plan (PND 2012–15) has resulted in the completion of the first major infrastructure projects related to transport, communication, and water supply. On the political front, political institutions, such as the Independent Electoral Commission, have been reinforced and have the confidence of all political parties and the civil society. Building on this progress, Côte d’Ivoire will hold free, democratic, and transparent presidential elections at the constitutionally scheduled date in 2015.

2. The attached Memorandum of Economic and Financial Policies (MEFP) describes the progress made under the program and the outlook and policies for 2015. Implementation of the program supported by an arrangement under the Extended Credit Facility was satisfactory in 2014. All the performance criteria and indicative targets at end-December 2014 were met with the exception of the indicative target on fiscal revenue. In terms of macroeconomic performance, with GDP growing at 8.5 percent in 2014 (after 10.7 percent in 2012 and 9.2 percent in 2013) Côte d’Ivoire continues to be ranked among the countries with the highest growth in the world. Buoyed by these good economic outcomes, per capita GDP has risen by more than 21 percent over three years. In addition to public investment, this performance reflects the marked increase in private investment associated with the improved business climate, resulting from simplified business start-up procedures, tax incentives included in the new investment code, the existence of a legal and institutional framework for settling commercial disputes, and the empowerment and activation of the public-private sector consultation committee, all of which continue to bear fruit.

3. In accordance with our vision of turning Côte d’Ivoire into an emerging country by 2020 and substantially reducing poverty, the government will seek to maintain strong, sustainable growth in a stable macroeconomic framework. In 2015, we expect the dynamic growth trend that has been ongoing since 2012 to persist, with a GDP growth rate of 9.4 percent and a moderate inflation rate of 1.7 percent. This goal would be supported by the implementation of structural measures and the completion of the National Development Plan (PND 2012–15) whose implementation has created the economic foundations needed for sustainable development. In the medium term, a new PND 2016–20, based on private investment, is expected to facilitate the structural transformation of the economy and substantially lower the poverty rate. Investment is therefore expected to increase from 16.1 percent of GDP in 2014 to 18.6 percent of GDP in 2015, of which 10.7 percent from private investment, while preserving debt sustainability.

4. To take account of developments since the adoption of the 2015 budget law, the government will prepare a draft supplementary budget. The fiscal deficit is projected to reach 3.6 percent (consistent with the program performance criteria). The government requests the modification of the program performance criteria on the primary basic balance and net domestic financing as of end-June 2015, as well as the indicative targets, consistent with the framework of the economic and financial program.

5. The attached Memorandum of Economic and Financial Policies (MEFP), describes the policies we plan to implement to achieve our objectives. In that context, under the seventh program review of the ECF-supported program, we are requesting financial assistance in an amount equivalent to SDR 48.78 million. Further, the government will take any further measures that may be appropriate to meet its objectives. Nonetheless, the government will consult with the IMF on the adoption of these measures and in advance to the revisions to the policies contained in the Memorandum, of Economic and Financial Policies in accordance with the IMF’s policies on such consultation.

6. The Ivoirien authorities consent to the release of this Letter of Intent, the attached Memorandum of Economic and Financial Policies (MEFP) and Technical Memorandum of Understanding (TMU), as well as the IMF staff report on the seventh review under the ECF arrangement. We hereby authorize their publication and posting on the IMF’s website, after completion of the review of the program by the IMF Executive Board.

Very truly yours,


Niale Kaba

Minister at the Prime Minister’s Office in charge of Economy and Finance


- Supplement to the Memorandum of Economic and Financial Policies

- Technical Memorandum of Understanding

Attachment I. Côte d’Ivoire: Supplement to the Memorandum of Economic and Financial Policies

May 19, 2015


1. Since 2011, Côte d’Ivoire has achieved considerable progress that has placed the country on a path toward strong, sustainable and inclusive growth. The final stages of implementation of the National Development Plan (2012–15 PND) has resulted in the completion of the first major infrastructure projects undertaken to improve transportation and water supply and to upgrade processing units for coffee, cocoa and cashews. The large-scale structural reforms undertaken in key economic sectors have contributed to promoting and maintaining a trend of sustained economic growth. The GDP growth rates of 10.7 percent, 9.2 percent and 8.5 percent in 2012, 201, and 2014, respectively, have thus allowed Côte d’Ivoire to maintain its position among the countries with the highest growth rates in the world. This high level of economic performance contributed to an increase in per capita GDP of over 21 percent in three years. In addition to public investments, this performance may be attributed to the significant increase in private investments resulting from an improvement in the business climate. The latter continues to improve as a result of the simplification of business start-up procedures, tax incentives contained in the new investment code, the existence of a legal and institutional regulatory framework for commercial disputes, and the upgrading of the committee for dialogue between the public and private sectors. These gains led to a 40 percent increase in foreign direct investment during the period from 2012 to 2014 and the net creation of 43,293 jobs in the formal sector as of end-December 2014. The government intends to continue to support this growth while preserving macroeconomic stability. To this end, it will work to implement the economic and financial program supported by the Extended Credit Facility (EFP-ECF) with an end date of December 31, 2015.

2. Côte d’Ivoire has consolidated its domestic stability, solidified its status as a leading member of the West African Economic and Monetary Union (WAEMU) and reclaimed its position as the second largest economy of the Economic Community of West African States (ECOWAS) after Nigeria. At the national level, the conclusion of the work of the Commission for Dialogue, Truth and Reconciliation has paved the way for ensuring that victims are compensated. To that end, a new National Commission for Reconciliation and Compensation of Victims (CONARIV) has been established. At the international level, the return of the headquarters of the African Development Bank to Abidjan in June 2014 has contributed to strengthening the position of Côte d’Ivoire. In addition, the government has invested heavily in major regional infrastructure projects in the energy and communication sectors to strengthen sub-regional integration.

3. Côte d’Ivoire will organize free, democratic and transparent elections at the constitutionally scheduled date in 2015. Members of the Independent Electoral Commission (CEI), the body responsible for organizing the elections, have been appointed by consensus. They represent the major political parties, civil society, and government. The CEI has begun its work with a view to holding the first round of the presidential election in October 2015.

This memorandum first describes the progress made under the economic and financial program in 2014 and then presents the main trends for 2015, as well as medium-term prospects.

Recent Economic Developments and Program Implementation

A. Recent Developments in the Macroeconomic Environment

4. In 2014, economic activity remained strong within a stable macroeconomic environment.

  • Developments in economic activity were driven by growth in the primary and tertiary sectors. The primary sector registered a growth rate of 12 percent driven primarily by the strong performance of subsistence agriculture, and particularly the significant increase in the production of manioc, yams and corn resulting from the implementation of the National Agricultural Investment Program (PNIA). Agricultural exports also increased by 2.8 percent owing to the strong performance registered in the areas of cashew (+15.8 percent), cotton seed (+13.3 percent), rubber (+9.4 percent) and sugar (+6.9 percent) production. Cocoa production registered a modest increase (+0.3 percent). The secondary sector likewise experienced an upward trend underpinned by growth in the public works sector (15.5 percent) and agro-food industries (+8.6 percent). Performance in these areas was hindered by a slowdown of mining, petroleum products and in the energy sector. The latter, despite having registered an increase in electricity production, incurred more costly intermediate consumption of Heavy Vacuum Oil (HVO.) The tertiary sector remains primarily driven by retail trade (11.1 percent) and transportation (9.4 percent), particularly air transport, which registered a record number of passengers.
  • Inflation remains low, particularly owing to the decline in food prices. On average, the price index has remained stable compared to 2013, displaying a slight variation of 0.4 percent as a result of the modest decrease in the price of food products (-2.1 percent) and transportation costs (-0.4 percent). This trend is evidence of the strong performance of subsistence agriculture and the government’s efforts to promote better trade flows and improved market supply. Moreover, the price of gas at the pump benefited from the decline in international petroleum prices, a gain resulting from the implementation of the automatic pricing mechanism for petroleum products.
  • The trade balance remained in surplus owing to a marked improvement in the terms of trade and volume of exports. The terms of trade improved by 3.2 percent as a result of the significant increase in export prices (+5.2 percent) relative to import prices (1.7 percent.) Exports of goods increased by 9.8 percent] owing to increased sales of agro-food and manufacturing products, as well as an increase in agricultural exports. Imports of goods registered an increase of 5.6 percent, owing to a higher demand of consumption and equipment goods.
  • Credit to the private sector continued to increase (+27.4 percent). This growth involved medium- and long-term credits (+30.5 percent), as well as ordinary short-term credits (+13.6 percent). This development reflects the return of economic agents’ confidence and the country’s strong economic growth. The ratio of credit to the economy in relation to GDP increased slightly to 20.4 percent.
  • The solidity of the banking system has improved. Its capital adequacy ratio was recorded at 10.1 percent in December 2014, compared with 9.2 percent in December 2013. In addition, the percentage of non-performing loans decreased from 12.3 percent at end-December 2013 to 10.44 percent at end-December 2014.
  • Formal employment posted a gain of (+6.2 percent) from end-December 2013, a development driven by the private (+6.6 percent) and public (+4.9 percent) sectors. This gain was largely underpinned by growth in the private sector, where 82 percent of net job creation took place.
  • The stock market continued to grow, owing to the favorable economic outlook and the modernization of the Regional Stock Exchange (BRVM) with the shift to continuous trading. Capitalization of the stock market rose year-on-year by 11.4 percent, with an average increase in trading volume of 75.6 percent from 2013. This renewed vitality is also evidence of the strong economic performance of Côte d’Ivoire within WAEMU, marked by a 7 percent increase in GDP.
  • The number of business start-ups and rate of private investment have increased significantly. According to figures from the Investment Promotion Center in Côte d’Ivoire (CEPICI), 6,487 businesses were created at end-December 2014, compared with 2,775 in 2013. Private investment amounted to CFAF 968 billion, representing an increase of 28 percent, and was primarily concentrated in the secondary and tertiary sectors. The overall rate of private investment amounted to 9.9 percent in 2014, compared with 6.7 percent of GDP in 2012 and 8.3 percent of GDP in 2013. This strong performance is indicative of investors’ renewed confidence in the Ivoirian economy and of the ongoing improvement in the business climate.

5. The budget balance at end-December 2014 was in line with targets despite the revenue shortfall.

  • Total revenues amounted to CFAF 2,989.4 billion (17.7 percent of GDP) compared with the target figure of CFAF 3,064.6 billion (18 percent of GDP), representing a shortfall of CFAF 75.2 billion. The gaps observed in relation to projections may be attributed to (i) a shortfall in VAT revenues owing, among other things, to exemptions stemming from the investment code and higher than predicted VAT refunds; (ii) lower than expected revenues from taxes on income and wages, particularly as a result of low collection from some businesses experiencing cash flow constraints in 2014; (iii) a shortfall in tax revenues from investment income, particularly in view of the higher than predicted level of investment by certain sectors and of reinvested earnings; (iv) shortfalls in income from petroleum and gas; and (v) lower than expected revenues from export duties and taxes owing to the concomitant decline in volume and prices relative to projections. Mobilized revenues nevertheless increased by 5.3 percent relative to end-2013 outturn.
  • Total expenditure was lower than predicted, amounting to CFAF 3,669.6 billion (21.7 percent of GDP) compared with the target figure of CFAF 3,784.9 billion (22.2 percent of GDP). Operating expenditure (excluding staff-related expenditure, subsidies and post-crisis spending) was contained at CFAF 617.4 billion, in line with targets. Investment expenditure (excluding post-crisis spending) was lower than expected, amounting to CFAF 994.2 billion, compared with the programmed amount of CFAF 1,095.4 billion. Domestic resources were used to fund 61.2 percent of this expenditure, while 38.8percent was externally funded. The implementation rate of projects funded with external resources was 90.1 percent. Expenditures were able to be contained to the levels mentioned above as a result of efforts undertaken to regulate the pace of project implementation, with a view to keeping expenditure in line with balance targets. As a result, an overall budget deficit of CFAF 376.2 billion was registered, equivalent to 2.2 percent of GDP, compared with the target of 2.3 percent of GDP. This deficit was covered, among other components, by financing on the regional market amounting to CFAF 1,101.6 billion and by mobilization of external budget supports amounting to CFAF 144.3 billion. In addition, the government successfully launched its first bond on the international financial market in the form of a Eurobond. This issuance allowed the country to raise US$750 million at 5.625 percent compared with an initial offering of US$500 million at 5.875 percent.

B. Implementation of the Program

6. All the performance criteria and indicative benchmarks at end-December 2014 were observed, with the exception of the floor on tax revenues. Despite the tax revenue shortfall,, the primary basic balance target was met as a result of sound budgetary regulation. Cash advances, as defined in the Technical Memorandum of Understanding (TMU), amounted to CFAF 112.4 billion, under the target ceiling of CFAF 124.5. Budget execution at end-December 2014 resulted in a moderate level of floating debt (CFAF 201.7 billion). With respect to debt remaining from 2013 and previous years, the government was able to clear CFAF 354.1 billion, leading to a net reduction in payables in the amount of CFAF 152.3 billion, as compared to a target floor of CFAF 110 billion. Pro-poor expenditures were registered at CFAF 1,622.4 billion, above the target floor, an outcome that attests to the social orientation of the country’s public expenditure policy.

7. Nonconcessional loans contracted since the start of 2013 amounted to US$2,441.5 million (including the Eurobond and the loan to finance the extension of the Autonomous Port of Abidjan), below the cumulative ceiling of US$2,444.4 million at end-December 2014. These loans were used to finance key priority projects in the energy, economic infrastructure, and transport sectors. Moreover, the government successfully raised US$750 million on the international market by issuing a Eurobond at 5.625 percent, as compared with the initial offering of US$500 million at 5.875 percent. This issuance allowed the country to lengthen debt maturities and accelerate repayment of domestic arrears, in keeping with program targets. The success of this operation is a testament to the confidence of international investors in the government’s economic strategy and reflects marked improvement in public debt management.

8. The structural benchmarks at end-December 2014 were observed, with the exception of the restructuring of a new state-owned bank, a process that was slightly delayed.

  • Subsidies for HVO (Heavy Vacuum Oil) in the amount of CFAF 40.37 billion have been provided to the energy sector.
  • A detailed timetable for closing public accounts at commercial banks was adopted in December 2014. An action plan for implementing the recommendations of assistance missions regarding government accounts, along with a timetable and quantitative indicators for the clearing of suspense accounts, was also adopted in this context.
  • The government continued to implement the plan to clear the full range of domestic arrears on audited debt, securitized and agreed debt. At end-December 2014, of the validated stock of CFAF 152.9 billion, 69 percent had been paid. An audit of domestic arrears covering the period from 2000 to 2010 validated an amount of CFAF 92.8 billion excluding taxes corresponding to private creditors of the state and of local and national government establishments and institutions. This debt-clearing plan enabled the government to repay CFAF 56.7 billion of its arrears in 2013, of which tax debts accounted for CFAF 5.5 billion, to the companies concerned. Of the remaining debt balance of CFAF 41.7 billion, the state cleared CFAF 26.2 billion in 2014. The remaining CFAF 15.5 billion may be broken down as follows:
    • - CFAF 11.5 billion, of which CFAF 3.0 billion are owed for refunds of VAT credits, an amount that could be converted into treasury securities.
    • - CFAF 3.9 billion in counterfoils [mandats souches] for which a separate audit is needed.
  • The restructuring of Société Ivoirienne de Banque (SIB) took place with a three months delay. Discussions with prospective buyers regarding the valuation of the state’s shares took longer than expected.

9. A regulatory framework for monitoring and supervising government procurement timelines was established and strengthened through the adoption of Decree No. 2014-306 of May 27, 2014, enacted to amend Decree No. 2009–259 of August 6, 2009 establishing the public procurement code. The decree provides for greater leniency and flexibility in the procurement process by reducing the timeline for government procurement to 88 days. Thus, the average time for procurement, from examination of the call for tender documents to approval of contracts, decreased from 322 days at end-2013 to 126 days at end-2014. Moreover, Order No. 068/MPMB/CAB of February 21, 2014 established a committee for monitoring procurement deadlines and execution of expenditure. A general procurement plan and procurement plan have been developed in the context of 2014 budget management efforts in order to ensure that transactions can be traced and anticipated. Efforts have also been undertaken to update simplified documents on procurement procedures and to disseminate call for tender documents. Lastly, new tools are currently being developed to improve estimation of investment budgets and categorization of businesses.

10. Use of non-competitive procurement contracts declined considerably. Non-competitive procurement contracts accounted for 5.6 percent of the government contracts approved in 2014, compared with 10.7 percent in 2013; they accounted for 23 percent of the value of those contracts in 2014, compared with 42.8 percent in 2013. Efforts undertaken to disseminate simplified bidding documents and procedural guides and to strengthen the capacities of procurement actors, as well as to carry out the specific measures planned for 2015, including development of a database for classifying businesses, will contribute to the continuation of this trend.

11. An audit of the public procurement stock was begun with a view to consolidating the database of the public procurement management system. The audit, begun in December 2014, covers procurement contracts from 1993 to 2012 contained in the database of the public procurement management system ((SIGMAP). Its goal is to conduct an appraisal of the physical and financial execution of these contracts with a view to consolidating the system’s database. At the conclusion of the audit, steps will be taken to dissolve unexecuted contracts that can no longer justifiably be maintained. The government will also follow up on contracts that are still of relevance but require review given their age. The audit will also enable appropriate steps to be taken to improve traceability and to conduct more effective monitoring of public procurement management. The final audit report is expected at the end of the first semester of 2015.

Box 1.Côte d’Ivoire: Reforms Implemented to Improve Public Procurement Procedures

The government has put tools in place to guarantee more effective management of public procurement operations. Steps taken include:

  • the adoption, implementation and dissemination of Decree Nos. 2013–404, 2013–405, and 2013–406 of June 5, 2013 and of new tender documents for public works projects, provision of supplies and related services and intellectual services to ensure that standard bidding documents are made available to all public procurement actors and that all national and international bids may be processed;
  • the design of three (03) simplified bidding documents to serve as reference for projects relating to fuel provision, routine public works and provision of routine supplies, in order to make the bidding process faster and more efficient for procurement stakeholders;
  • a review of the procedural manual in 2009 to reflect a more simplified version of the public procurement code and again in April 2014 to align it with the procedures and regulations in effect;
  • completion of the establishment of procurement units in seven pilot ministries;
  • the production of procedural guides aimed at improving the design of bidding documents;
  • the inclusion of a database of reference prices (BDPR) on the website of the Directorate of Public Procurement (DMP).

All of these steps aim to facilitate the operational implementation of Decree No. 2014-306 of May 27, 2014, adopted to amend Decree No. 2009-259 of August 6, 2009 establishing the public procurement code, with a view to reducing the overall timeline for government procurement from over 300 days to 88 days. Thus, the average time for procurement has decreased from 322 days in 2013 to 126 days in 2014.

12. The government continued to optimize tax potential in order to improve monitoring of taxpayers and tax revenue collection. In terms of internal revenue, the government has reviewed the organization of the Directorate of Large Entreprises (Direction des Grandes Entreprises), a designation now reserved for taxpayers with a turnover in excess of CFAF 3 billion. In addition, the government established two Centers for Medium-Sized Enterprises (Centres des Moyennes Entreprises), operational since July 2014, to improve management and monitoring of taxpayers with a turnover of between CFAF 400 million and CFAF 3 billion. The government also launched an electronic land register to allow business professionals to consult online documents relating to land ownership. Additionally, in the interest of expanding the tax base and strengthening controls, the government set up an automatic data exchange framework between the Tax and Customs Departments. With respect to import duties, the government has begun implementing customs clearance operations at border checkpoints for goods from outside the WAEMU. It has also begun to clean up the records for the operators who have benefited from special customs arrangements for periods exceeding the periods allowed by regulations.

13. Significant progress was made in the area of public financial management reform. In June 2014, the National Assembly adopted a new organic budget law and an organic law establishing a transparency code, thereby transposing the WAEMU directives into the national legal framework. The government also adopted four implementing decrees for those laws in July 2014. Additionally, the government established a committee for monitoring the timely execution of expenditure. Thus, for financial auditors, the timeframe for authorizing payment orders decreased from 8 business days in 2013 to 5 days in 2014. Furthermore, the government has undertaken efforts to integrate technical ministries in multi-year programming relating to medium-term expenditure. In that context, 6 additional ministries were integrated in 2014, bringing the total number of ministries covered to 22.

14. The government established and gradually strengthened a legal and institutional framework to encourage investment and promote support for small and medium-sized enterprises (SMEs). As a result of these efforts, Côte d’Ivoire improved by 30 places in the World Bank Group’s Doing Business ranking between 2012 and 2014 and ranked among the world’s top ten reformers in 2014 and 2015. Côte d’Ivoire also advanced 11 spots in the rankings of the World Economic Report’s Global Competitiveness Report 2014–15. The country likewise rose by 21 places in the latest rankings published by Transparency International, a testament to the effectiveness of its anti-corruption efforts. In December 2014, Côte d’Ivoire received the prize for the most improved country in terms of mining reform at the Mines and Money conference in London. Lastly, the selection of Côte d’Ivoire for the Millennium Challenge Corporation’s Threshold Program is a testament to the progress achieved by the country in several areas, particularly macroeconomic policy, good governance, and transparency.

Box 2.Côte d’Ivoire: Key Measures Taken to Improve the Business Climate in 2013 and 2014

Among other measures, the government took steps to lower costs, simplify procedures and reduce timetables applicable to the Doing Business indicators. The following specific actions were taken:

Business creation

  • Publication of companies’ incorporation notice on the CEPICI website.
  • Reduction of companies’ fiscal costs for registration fees for a limited liability company (LLC) [French acronym, SARL] whose equity does not exceed 10 million CFAF.
  • Reduction in the time required to start up a business at the CEPICI Single Window from 48 hours to 24 hours.
  • Implementation of the optional procedure of using a notary for establishing charters of LLC companies.
  • Elimination of the minimum capital requirement for LLCs.

Construction permits

  • Reduction in the number of procedures for granting construction permits from 16 to 11, and in the time required from 364 to 87 days.

Provision of electricity

  • Reduction in the number of procedures from 8 to 4, and in the time required from 55 to 28 days, for providing electricity to a warehouse on the national electrical power grid at an agreed voltage of 160 KVA and a connection distance of 200 meters.

Property transfer

  • Reduction in the preparation time of the notary document from 10 days to 2 days, and in the combined procedure for the registration and publication of the act of sale by the land registry from 25 to 15 days.
  • Reduction in the rate of registration fees on real estate transfers from 7 percent to 6 percent.
  • Launching of the electronic land register.


  • Adoption of the legal framework for the creation, approval, organization and supervision of credit bureaus tasked with gathering data on credit and monitoring borrowers.

Investor protection

  • Strengthening of investor protection with an increase in the ease of shareholder suits index and the extent of director liability index.

Cross-border trade

  • Establishment of the One-Stop Window for Foreign Trade (GUCE).
  • Creation of the import declaration form (FDI) through combining the import information form (FRI) and the advance import declaration form (DAI) in one single document.

Execution of contracts

  • Establishment of the Commercial Court of Abidjan in addition to:
    • ✓ attainment of an average of 56 days for dealing with commercial disputes (average for trials and hearings);
    • ✓ appointment of commercial court judges alongside professional judges;
    • ✓ regulation of costs for court services with a view to avoiding incidental court expenses.

15. The financial equilibrium of the electricity sector remains a priority for bolstering financing for investment projects aimed at increasing the electricity supply, with a view to promoting robust economic activity. The effective implementation of the strategy to reduce the deficit in the electricity sector led to significant improvements in the operational accounts of the electricity sector. However, the higher than projected use of HVO fuel needed to keep up with domestic demand led to additional costs. The state granted additional support in the amount of CFAF 19.7 billion to help defray those costs. Furthermore, transfer rates were negotiated upward for export sales (EDM and Sonabel) for amounts in excess of the agreed quantities on the basis of the real costs of production. The decline in the per-barrel price of oil, the appreciation of the dollar, and delays in defraying costs incurred by the use of HVO fuel delivered to the electricity sector are expected to have an adverse impact on the operational and treasury accounts of the Ivoirian Refinery Company (Société Ivoirienne de Raffinage (SIR)) and the National Petroleum Operations Company (Société Nationale des Opérations Pétrolières (PETROCI)).

16. Actions are being undertaken to strengthen development of the financial sector and increase its role in the financing of the economy. In this context, a financial sector development strategy was adopted at the beginning of 2014. This strategy is aimed at improving access to financial services and addressing the legal and judicial obstacles that financial institutions encounter in carrying out their functions. To implement it, the government adopted a Financial Sector Development Program (PDESFI). This program takes into account the action plan for the financial development strategy, as well as the design and monitoring of the implementation of projects to support and develop financial inclusion, the development of leasing in Côte d’Ivoire, and all programs related to the support of the country’s financial sector. Certain activities included under the strategy have been applied in the context of ongoing efforts to consolidate the microfinance sector. The microfinance sector thus registered an increase in capital from CFAF -10.9 billion in 2013 to CFAF -3.3 billion in 2014, an increase linked to the 39.2 percent rise in credit volume to households and SMEs. Progress regarding public bank restructuring primarily included the liquidation of the Bank for Agricultural Financing (Banque pour le financement de l’agriculture (BFA)) in December 2014 and the transfer, in March 2015, of the 44 percent of shares that were held by the state in the SIB.

17. The government strengthened implementation of its social policy:

  • Regarding the social housing project, the first complexes are expected to be delivered in 2015.
  • With respect to employment, the government is implementing a national strategy for boosting employment (Stratégie Nationale de Relance de l’Emploi (SNRE)) that is designed to (i) strengthen and consolidate existing programs; (ii) establish trainee positions for first-time employment and implement decentralized job creation strategies; and (iii) improve the availability of information on the job market. In this context, the government organized a jobs forum in Abidjan to provide a platform for networking, exchange, and knowledge sharing among job training professionals, job seekers, and employers in the public and private sectors. In addition, the regular conduct of the national survey on employment and child labor provides valuable information to guide the reorientation of the strategy.
  • Regarding gender, the Women’s Support Fund of Côte d’Ivoire (FAFCI), with abudget of CFAF 1.5 billion and additional private sector funding of CFAF 500 million, focused primarily in the interior, particularly on women in rural areas.
  • In the agricultural sector, coffee-cocoa sector reform has yielded good results. Sharing of best practices between the coffee-cocoa and cotton-cashew sectors led to the establishment of a guaranteed price system for cotton and cashew producers. Additionally, the Rural Investment Fund (FIMR) increased its investments in basic infrastructure. In the rubber sector, which was adversely affected by the decline in global rubber prices, a tax relief arrangement was established to enable plant owners to maintain their margins and to avoid the collapse of the sector.
  • In the area of education, the government has pursued its commitment to improving the access of children, and particularly of girls, to education. In that context, more than 15,000 classrooms have been built since 2012. The number of school cafeterias increased by 6000 in 2014 and inspections were strengthened in order to improve the quality of teaching. In the context of efforts to expand free access to primary schooling, free textbooks were distributed to more than 3 million students in 2014. Special emphasis was placed on girls’ education, particularly in terms of raising awareness regarding school pregnancy and combating school violence.
  • In terms of health, although no cases have been noted in Côte d’Ivoire, a contingency plan of CFAF 57.1 billion was adopted in the context of Ebola prevention efforts, given the spread of the epidemic in the sub-region. The implementation of this plan, with the support of foreign partners, led to the establishment of 16 treatment centers, a medical laboratory in Abidjan, and the strengthening of prevention and awareness-raising efforts nationwide. These steps allowed for ties to be re-established and trade to be maintained among countries of the sub-region. In addition, universal health coverage (CMU) facilities are now able to provide basic healthcare to all members of the population.

These results are a reflection of the successful execution of pro-poor expenditure, which was registered at CFAF 1,622.4 billion at end-2014, or 9.6 percent of GDP, versus 8.6 percent of GDP in 2013. These expenditures increased by 21.3 percent with respect to end-December 2013, owing to reforms undertaken by the government in key sectors, including agriculture, health, education, energy, water, and public sanitation.

18. The mid-term review of the 2012–15 PND highlighted the favorable results achieved in the context of its implementation, results that should serve as a guide for crafting the new 2016–20 PND in 2015.

Box 3.Côte d’Ivoire: Key results achieved in the implementation of the 2012–15 PND

The implementation of the PND resulted in strong, sustained, and inclusive economic growth, thereby allowing Côte d’Ivoire to reposition itself on the regional and international scenes. Per capita GDP increased by 21 percent during the period from 2012 to 2014 against a backdrop of moderate inflation, below the WAEMU 3 percent threshold.

In terms of road and transport infrastructure, the implementation of the National Development Plan (PND 2012–15) resulted in the completion of the first major infrastructure projects planned in the context of the strategy to turn Côte d’Ivoire into an emerging country by 2020. These projects included the northern highway (Abidjan-Yamoussoukro), the Riviera II highway interchange, and the Henri Konan Bédié, Bouaflé and Jacqueville bridges. In terms of roadwork, 140 km of the Gesco-Singrobo highway were reinforced and paving was completed for 86 km of the Singrobo-Yamoussoukro section and for 120 km of the Boundiali-Tengrela section. In addition, more than 5000 km of rural roads were updgraded.

Significant improvements were made in the social sectors. The number of jobs in the formal sector increased from 722,567 in 2012 to 756,597 in 2013, and again to 799,890 in 2014. This progress was achieved in the context of efforts to address youth unemployment.

Marked improvements were made in terms of access to education; 9,291 primary school classrooms were built, in addition to 3,500 secondary school classrooms and 45 middle schools. These achievements, in addition to a massive recruitment of staff, contributed to an increase in access to education. In that context, the gross primary school admission rate increased from 73.4 percent in 2008 to 97.8 percent in 2014. The gross school enrollment rate increased from 76.2 percent in 2008 to 94.7 percent in 2014.

Efforts undertaken to rehabilitate and re-equip hospitals and health centers contributed to an improvement in access to health services, as did the implementation of the initiative to provide mothers and children with free healthcare, C-sections, and medicines. In addition, efforts to equip and bring technical platforms of health facilities in line with standards contributed to an improvement in the quality of health services.

In terms of access to drinking water, the construction of 794 pumps and 76 water towers, as well as maintenance work performed on 11,446 human-powered pumps, contributed to a significant increase in access to drinking water infrastructure. Moreover, Abidjan’s water treatment station now operates with a ground storage capacity of 10,000 m3. All of these developments are contributing to positive changes in the population’s health and quality of life.

The commencement of 71 social housing construction projects throughout the country and allocation of 3,060 hectares of land for the low-cost social housing program is expanding the access of low-income populations to property.

Efforts to connect roughly 800 rural towns to the electrical power grid and to ease service subscription costs for households has increased rates of access and coverage.

The private sector contributed significantly to the implementation of the PND, particularly through sizeable investments in the energy and mining sectors, especially the Tongon mine, oil and gas exploration, and the establishment of several processing units in the coffee, cocoa, and cashew sectors. During the period from 2012 to 2014, private sector investment amounted to CFAF 4,699 billion, compared with the predicted level of CFAF 3,946 billion, a 118.3 percent implementation rate. This performance attests to the role of the private sector as a driver of economic growth.

Economic and Financial Program for 2015 and Medium-Term Objectives

19. The government will work to maintain strong, sustainable, inclusive, gender-sensitive and environmentally conscious growth in a stable macroeconomic environment. Based on the recommendations contained in the report on the implementation of the PND 2012–15 published in March 2015, a new PND 2016–20 framework should be finalized before end-June 2015. The effective implementation of this new PND should allow Côte d’Ivoire to achieve its goal of becoming an emerging economy by 2020 and lead to a substantial reduction in poverty. With respect to the funding of the public portion of the new PND, special emphasis will continue to be placed on mobilization of domestic resources and on expenditure control. Mobilization of external resources will be conducted in accordance with the medium-term debt management strategy in order to preserve debt sustainability.

20. Reforms aimed at improving the business climate, transparency, good governance and competitiveness will continue to be pursued proactively. Such reforms should place Côte d’Ivoire in the upper 50% of countries ranked at the top of the World Bank’s Doing Business ranking, Transparency International’s anti-corrupting ranking and the global competitiveness ranking issued by the World Economic Forum. They should also allow Côte d’Ivoire to rise considerably in the UNDP’s human development ranking. Growth will also help to promote gender sensitivity and environmental consciousness. With respect to gender, the government will accelerate the implementation of the policy for the economic empowerment of women and revitalize the Institutions for the Training and Education of Women (IFEF). Efforts to protect the environment will focus on improving and strengthening environmental conditions as well as overseeing the protection and reforestation of the forest canopy, taking into account the effects of climate change.

21. The GDP growth rate is thus expected to reach 9.4 percent in 2015 and 9.6 percent in 2016–17. Investments are projected to increase by 25.1 percent and amount to 18.6 percent of GDP in 2015. In 2016 and 2017, they would increase by 17.5 percent and 12.4 percent respectively, to reach 20.2 percent of GDP in 2016 and 21.1 percent in 2017, respectively. In addition, the government will pursue efforts to ensure that the benefits of economic growth are distributed among the most vulnerable populations, including by increasing pro-poor expenditure and developing local infrastructure to promote job creation. Steps to increase, diversify, and modernize national agricultural production (subsistence and export agriculture) will continue to be undertaken in the context of implementing the national program for agricultural investment (PNIA), and efforts to increase local processing of basic commodities will be redoubled. Self-sufficient levels of rice production should be reached by 2016/2017. Lastly, the enactment of the new industrial policy, which is aimed primarily at modernizing existing industrial areas and creating new industrial areas in Abidjan and in the interior of the country, should ultimately allow for 50 percent of basic commodities to be processed locally.

A. Macroeconomic Framework

22. Growth should reach 9.4 percent in 2015, with solid performance in all sectors.

  • The primary sector will be driven by subsistence farming and will benefit from the implementation of the PNIA since 2012, as well as from efforts to strengthen sectors and improve processing of exports, particularly cocoa, cashews, and cotton.
  • The secondary sector will grow, driven primarily by the construction and public works sector, development of manufacturing and agro-food industries, as well as by mining and energy production stimulated by significant investments in those sectors.
  • The tertiary sector will register growth, particularly in transportation and telecommunications, and in terms of an increase in the number of regional and international conferences owing to the return of the African Development Bank (ADB) headquarters to Abidjan in late 2014.

23. Average annual inflation is expected to remain moderate at 1.7 percent in 2015. Moderate price increases will be bolstered by the ongoing increase in the local supply of food products and from improved transportation of persons and goods.

24. The current account balance deficit is expected to be -1.2 percent of GDP in 2015, while the trade balance would continue to post a surplus despite an increase in imports. The capital and financial operations account would also post a surplus owing to increases in portfolio investment and foreign direct investment. Finally, the overall balance of payments should record a surplus of CFAF 60 billion (0.3 percent of GDP.) In addition, the international economic climate, characterized by a decline in crude oil prices and the depreciation of the euro against the dollar, should contribute to improving the terms of exchange and strengthening Côte d’Ivoire’s price competitiveness.

25. Money supply is expected to grow by 11 percent. This increase will originate, in particular, from an increase in credits to the economy and in net foreign assets.

B. Public Financial Management

26. The government will continue to strengthen public financial management. With this goal, it will continue to mobilize tax revenues, rationalize expenditure, and preserve debt sustainability. The government has begun implementing a new VAT credit management procedure aimed at speeding up payments and improving monitoring of VAT revenue collection. The government will also improve monitoring to ensure that VAT credit refund files are processed in a timely manner. It will acquire at least one mobile scanner to improve customs clearance control for goods arriving at border checkpoints. In the context of the multi-year program relating to medium-term expenditure, the government will integrate 7 additional ministries in the preparation of program budgets.

27. Total tax revenues in 2015 are expected to increase to CFAF 2,881.1 billion or 15.3 percent of GDP, compared with 15.2 percent of GDP in 2014. This increase is linked to the expected growth of direct and indirect tax revenues, particularly non-oil corporate profits taxes (14.2 percent), VAT (15.6 percent), and payroll taxes (17.6 percent). These targets take into account anticipated tax reform measures. Among these measures, priority will be given to operationalizing Centers for Medium-Sized Enterprises (CME), developing the tax bases of excise taxes on tobacco and beverages by fixing a minimum price, decentralizing tax control, securing local taxes frameworks, modernizing tax management by introducing online tax reporting, and simplifying business tax systems.

28. Expenditure in 2015 is expected to increase to CFAF 4,500.9 billion or 23.9 percent of GDP, compared with 22.7 percent of GDP in 2014. This rise in expenditures is largely linked to the revaluation of wages and income at the level of public administration, an increase in public investment, strengthening of social policy with the launch of CMU, pursuit of policies dedicated to underprivileged populations (CFAF 1,716.4 billion), and the organization of elections.

29. With respect to securitized and agreed debt, of a total predicted amount of CFAF 142.9 billion, 69.9 percent has been treated through the bond issued by the Treasury in December 2014. In view of the encouraging results of this operation, the remainder of the securities will be exchanged for new market securities, bearing in mind the current maturity profile of each type of debt.

30. The government is committed to ensuring the financing for additional subsidies required for HVO is incorporated in the budget. HVO consumption, initially expected to amount to CFAF 31 billion according to projections by the energy sector and provided for accordingly in the budget, was ultimately registered at CFAF 50.7 billion, exceeding the projected figure by CFAF 19.7 billion. An examination of debts and cross-debts at end of 2014 between the government and the energy sector, which took into account this overrun, allowed establishing a net requirement of approximately CFAF 8.3 billion to cover the relevant debts, an amount that will be reflected in the state’s budget for 2015. In addition, to improve the SIR’s cash flow situation, the next maturities of securitized debt coming due will be paid up to CFAF 56.9 billion, through market issuances. Furthermore, a consultation framework will be established to conduct monthly examinations of liquid fuel consumption (HVO) needs with a view to avoiding potential unanticipated budget overruns.

31. Budget allocations for 2015 will be adjusted upward to cover recently emerging needs for private school and fuel subsidies.

  • The education and training sector has expressed the need for an additional CFAF 36 billion for the 2014–2015 academic year, of which CFAF 12 billion will be financed through budgetary reallocations and CFAF 24 billion will be financed through upward budgetary adjustments. Furthermore, the government will undertake efforts to audit liabilities stemming from school fees amounting to CFAF 46.7 billion and will sign, before end-2015, a memorandum of understanding for the treatment of these debts with private school administrators.
  • The government will make an additional effort of CFAF 4 billion to fully cover fuel needs in 2015. Additionally, liabilities in the amount of CFAF 22.4 billion incurred as a result of budget overruns in recent years will be treated in the context of an agreement for the repayment of debts and cross-debts between the government and the energy sector.

32. The government has decided to conduct a general audit of liabilities incurred during the period from 2000 to 2010. This audit, to be performed by the financial auditing department (Inspection Generale des Finances), excludes liabilities stemming from school fees, HVO subsidies, and fuel. The results of the audit are expected during the second half of 2015. On the basis of the available information, the government has confirmed that no liabilities constituting recognized debt on the part of the state currently exist, apart from those identified in this memorandum. These liabilities consist of extra-budgetary expenditures, meaning expenditures executed outside of the expenditure chain for which no budget line exists.

33. The government will ensure that expenditures are strictly executed through the state budget and will undertake rigorous measures to prevent extra-budgetary liabilities from being incurred. In this regard, the following steps will be taken with a view to preventing extra-budgetary liabilities from being incurred:

  • The government will establish, within the General Directorate of Budget and Finance, an information unit for economic agents. The role of the unit will be to provide information on the availability of budgetary allocations to cover operations initiated by staff in charge within public entities. It will also be in charge of explaining public financial procedures, including regulations for procurement and spending execution.
  • In addition, the government will ensure that regulatory mechanisms aimed at imposing sanctions for non-compliance with budget execution procedures are strictly enforced. In this regard, article 35 of Decree No. 98-716 of December 16, 1998 on the reform of the chains and procedures of expenditure and general state budget revenue execution, special Treasury Accounts, and the implementation of the integrated system for public financial management (SIGFIP) states that, at the national level, the state is only responsible for execution of expenditures that have been duly committed in the SIGFIP system and, at the local level, for expenditures that have been duly committed for specific allocations. Article 36 of the aforementioned Decree also stipulates that any agent of the state who commits expenditures by unofficial means will incur sanctions of a disciplinary, civil or criminal nature, without prejudice to the sanctions that may be imposed by the financial jurisdiction.
  • The government will also ensure that public financial management procedures are strictly observed with respect to fuel expenditures.
  • Lastly, the government will explore the possibility of creating a chamber for the enforcement of budgetary discipline in the context of establishing the court of auditors.

34. The basic primary balance is expected to amount to CFAF 90.6 billion or -0.5 percent of GDP, versus -0.5 percent in 2014. The overall budget deficit, including grants, is expected to be CFAF 676.5 billion (or -3.6 percent of GDP, as compared with -2.2 percent of GDP in 2014).

35. The government will ensure that measures adopted to improve budget execution are effectively implemented. In doing so, it will continue its efforts to rationalize expenditures by: (i) limiting recourse to cash advances to emergency situations; (ii) reducing the number of régies d’avance [petty cash or imprest mechanisms]; (iii) using the database of reference prices in an effective manner; (iv) reducing public procurement granted on a non-competitive basis to 20 percent of the total number of procurement contracts approved. The government will also ensure that inter-ministerial Order No. 0011 MPMB /MPMEF/CAB of November 29, 2013 establishing regulatory measures for the use provisional payment orders.

36. The government will continue its efforts to strengthen good governance and redouble anti-corruption efforts. To this end, it will reinforce the work of the high authority on good governance tasked with fighting corruption and strengthen control of government contracting management through (i) simplifying procedures, as well as training and information for actors involved in the procurement chain and (ii) ongoing efforts to reduce timetables in the procurement chain to ensure the smoother flow of expenditure during the year. The government will also establish audit committees within the executive boards of public companies to enhance public enterprise management. Moreover, it will ensure that yearly governance assessments are produced by public companies and companies in which the state is a majority stakeholder. The legal framework governing public enterprise management will be strengthened, particularly through the adoption of the implementing decree for the laws pertaining to those enterprises. The government will also develop and begin to implement a computer application for public enterprise management.

C. Improving Management and Strengthening the Long-Term Viability of Public Finances

37. The government has adopted a master plan for public financial reform and reform of internal and external controls. Developed with the support of technical and financial partners, this master plan outlines, in an organized and comprehensive manner, the reform efforts currently underway and those expected to be undertaken in the future. It comprises a plan outlining strategic actions relating to budget, fiscal, procurement, accounting, and treasury reform to be implemented during the period from 2014 to 2016. The implementation of this plan will contribute to the development of a modern public financial management system in Côte d’Ivoire that is consistent with relevant international standards.

38. The government will consistently and gradually reduce subsidies to the electricity sector as a result of the completion of major infrastructure projects enabling the increase and diversification of the power supply. Investments totaling CFAF 5,300 billion will be devoted to building new production facilities or to overhauling existing sites with production units using new types of inputs, including biomass, and improving the network for transporting and distributing electricity. These investments will also promote an increase in the supply of gas and obviate the need for HVO. As a result, the government will be able to reduce its subsidies to the sector in support of production costs to meet national needs.

39. The government will continue to undertake efforts to ensure the long-term equilibrium of the energy sector. In that context, it will issue a call for bids by end-June 2015 to recruit a group of consultants to conduct a strategic diagnostic study of the SIR. In addition, it will adopt a protocol for the treatment of HVO deliveries and payments, by end-June 2015. In the interest of monitoring HVO consumption, monthly technical meetings will be held among the Ministry of Petroleum and Energy, the Ministry for Budgetary Affairs, the Ministry of Economy and Finances, and actors from the energy sector. In addition, the government will define the terms governing fuel supply with a view to reducing the budgetary overruns observed.

40. The government will focus its efforts on establishing a Treasury Single Account (TSA) with a view to centralizing the government’s treasury operations. To this end, 1,400 out of a total of 2,500 public accounts held with commercial banks will be closed. Dormant accounts, however, will be closed at end-April 2015 after the relevant accounting instructions are drafted or updated, as applicable. The remaining accounts will be treated progressively over the next three years in order to guarantee the stability of the financial system and gauge the strength of the financial architecture adopted. Moreover, meetings intended to raise awareness of the TSA mechanism are already underway with members of government units that hold accounts in commercial banks and members of senior management from those banks. The implementation process will begin in 2015, when the mechanism will be tested on four account headings.

D. Consolidation and Development of the Financial Sector

41. The government will focus on ensuring the stability and promoting the expansion of the financial sector. To this end, it will implement the program to develop the financial sector (PDESFI). The program’s director will be named by end-June, 2015. In addition, a draft law on leasing will be adopted by the government by end-September 2015 to develop and enable greater usage of this program. Lastly, to improve the soundness of the banking sector, the government is committed to ensuring that banks comply with regulations adopted by the Central Bank of West African States (BCEAO) and the Banking Commission.

42. The government will continue with the restructuring of public banks. Remaining steps include:

  • The transfer of a majority of shares to another bank with a minority share. The privatization committee is working to expedite discussions with purchasers regarding the selling price of state shares.
  • For the four banks in which the state is a majority shareholder, the government will name a program director by end-June 2015, under the supervision of a steering committee, in order to conduct the privatization or resizing strategy required for each bank, bearing in mind the need to maintain public service functions, especially as regards financing the economy, savings, and the availability of bank services.

43. The government will continue to take steps to overhaul the microfinance sector. In that context, it has begun to implement measures designed to overhaul and consolidate the microfinance sector on the basis of three (3) major strategic orientations: (i) the need to revoke licenses held by non-viable institutions and to exercise caution in granting prior authorization to operate; (ii) the need to strengthen supervision through enforcing sanctions and regulations; (iii) the need to provide support for the microfinance sector in the context of the national strategy for financial inclusion. Steps taken in pursuit of these goals will be aimed at strengthening supervision in the sector as well as the managerial and operational capacities of participants from Decentralized Financial Systems (SFD). Therefore, in implementing the national strategy for financial inclusion, the government plans to carry out a number of measures on the basis of the two agreements signed with the French Development Agency (AFD) with a view to improving training, technical assistance, research, and capacity-building to support review of applications for licenses and off-site and on-site audits carried out by the supervision entity. These efforts should contribute to the consolidation of a portfolio of sound, credible, and viable structures with the capacity to assist the government in implementing its policy to ensure cost-effective access to financing for the poorest sectors of the population.

44. The government will support the BCEAO’s efforts to improve access to financial services and bring about a reduction in the cost of financial operations. It will undertake, in conjunction with the BCEAO, all of the steps necessary to finalize the establishment of credit bureaus during 2015. A leading company in this area has already been selected following a call for bids. Concerning the measures establishing the provision of some banking services free of charge, the instructions adopted by the BCEAO establish sanctions against violators of these measures.

E. Debt Policy and Strategy

45. The government will continue to strengthen public debt management in accordance with the medium-term debt management strategy (SDMT 2015–19) adopted in 2014. This strategy outlines actions for optimal management of debt instruments in 2015 and incorporates sustainability analysis needed to ensure debt sustainability. In addition, efforts undertaken to develop a centralized database on the debt of public enterprises as well as government guarantees on that debt should be completed before end-June 2015 and will enable improved monitoring of debt incurred by public enterprises. Finally, the government will also complete, before end-June 2015, its reorganization of the Directorate of Public Debt (DDP) in the front, middle, and back offices on the basis of technical assistance recommendations provided by the IMF in order to ensure comprehensive public debt management. The government likewise intends to assess the performance of debt management (DEMPA) with the technical assistance of the World Bank, following the reorganization of the DDP.

46. The government intends to undertake a number of measures aimed at developing the sub-regional financial market with the support of the IMF and the World Bank. Particular emphasis will be placed on reopening already existing bond facilities (increasing the total number of bonds within a given category). In the context of implementing the TSA mechanism, which is expected to promote pro-active management of cash flow and debt, the government will progressively resume issuance of very-short term securities (1, 3, 6 months), which may potentially be issued at floating rates and for refinancing purposes. In addition, the government will improve its communication with the market by publishing on its website, or by other appropriate means, its medium-term debt management strategy (SDMT). The success of these measures depends on adequate strengthening of technical capacities needed to conduct active cash position management and management of refinancing risk.

47. The government will continue to diversify sources of funding in order to fully implement its development policy. In view of the increasing scarcity of concessional resources to cover the financing needs of major development projects in 2015, the government will continue to diversify its sources of funding in line with its debt strategy. To this end, the government is exploring the possibility of participating in the Islamic financial markets by issuing Sukuk in order to complete certain projects under the 2012–15 PND. In 2015, non-concessional external loans contracted over the period during 2013–15 have been limited to a ceiling of US$3.843 billion (including the Eurobond), with the possibility of adjusting the ceiling upward by a maximum amount of US$820 million to include the development and rehabilitation of Côte d’Ivoire’s electrical grid, in the event the terms were nonconcessional.

F. The Private Sector as a Driver of National Economic Growth

48. The government will pursue structural and sector reforms aimed at improving the economy’s competitiveness and making the private sector the main engine of growth. Efforts to reinforce the network of economic infrastructure (telecommunications, the road system, energy, and port facilities) as well as to create, rehabilitate, and extend industrial zones will be redoubled as part of the government’s industrialization policy. Efforts to develop health services and a pharmaceutical industry that produces generic medications will also be undertaken with a view to making Côte d’Ivoire a hub for hospital services in the sub-region. An assessment of training and employment policies will also allow for more effective targeting of training programs in order to provide companies with a well-qualified workforce and to support innovation by entities involved in research and training. The continued implementation of the PNIA will improve food security and promote the development of the agro-industrial sector. Lastly, the results of the General Population and Housing Census and of the household survey will be used to better define and guide sector and anti-poverty policies.

49. With respect to the business climate, the government will continue to build upon existing measures with a view to ensuring that Côte d’Ivoire is ranked among the African countries with the best business climate (See Box 4).

Box 4.Côte d’Ivoire: Reforms To Improve the Business Climate in 2015

For the third year in a row, Côte d’Ivoire is continuing its efforts to improve the business climate, with a focus on the Doing Business indicators. For this task, the country is drawing upon the recommendations of the Doing Business evaluation team from the World Bank, which visited Abidjan from July 7–10, 2014, on-site diagnostic studies by the CEPICI team, and information from a benchmarking mission to Rwanda on September 10-21, 2014. The recommendations emanating from these activities concerned the consolidation of existing gains, the rationalization of the procedures covered by the business indicators, and the implementation of reforms relating to these indicators. During 2015, efforts will be undertaken with a view to achieving the following aims:

  • Promoting electronic, geographically-unified management of the registry of guarantees under the Trade and Personal Property Credit Register (Registre du Commerce et du Crédit Mobilier - RCCM) with a database indexed by debtors’ names.
  • Promoting the dissemination of information up to 3 years old from BCEAO’s Centrale des Risques (credit risk database).
  • Reducing the time for moving import and export merchandise at ports.
  • Establishing a legal framework for trade mediation.
  • Revising articles 31 and 39 of Decision No. 01/PR on the creation, organization, and functions of commercial courts to endow the president of the Commercial Court with the authority to enforce decisions.
  • Encouraging the completion of insolvency proceedings by the relevant professionals.
  • Guaranteeing quality of construction projects by introducing a building permit issuing mechanism based on risk management.
  • Improving the security level of real estate transactions by incorporating technological solutions and expediting the formalities for real estate transfers by introducing electronic publication.
  • Making credit bureaus operational in Côte d’Ivoire.
  • Establishing and organizing a group of mediators on trade and commercial matters.
  • Introducing online business start-up procedures.
  • Strengthening the procedures for quality control of electrical equipment on the market.
  • Establishing a prior, external examination of transactions presenting conflicts of interest to enable auditors to issue their opinion prior to the completion of such transactions.

All of these efforts should contribute to improving Côte d’Ivoire’s ranking in the 2016 Doing Business report.

50. The government will continue to promote SMEs and the development of the industrial sector. Government policy in this area will focus on implementing the Phoenix program with a view to supporting the creation and development of a robust and diverse network of SMEs. This program provides a global support strategy for SME development. The strategy’s coherence is ensured through the framework law for the promotion and development of SMEs and the establishment of an SME development agency. The agency is responsible for coordinating all policies and actions aimed at promoting SMEs. To this end, a National Program for the Restructuring and Upgrading of Industries (PNRMN), launched for a total amount of CFAF 152 billion, is currently being implemented to strengthen the operating and management capacities of SMEs and Small and Medium-Sized Industries (SMIs.) The government has also undertaken efforts to sign agreements with banks aimed at promoting financing of SMEs.

G. Employment and Social Policy

51. The government will pursue the programmed activities outlined in the 2014–15 operational action plan under the government’s national strategy for boosting employment. In this context, a database will be developed to identify potential trainees. The government will also focus on producing and periodically disseminating an employment scoreboard (tableau de bord). Additionally, a decentralized job creation strategy will be implemented, including through regional divisions and branches of the Agency for Employment Research and Promotion (AGEPE). Self-employment promotion initiatives will be strengthened. Lastly, labor market monitoring activities will continue to be conducted, including in the form of surveys and employment-related research.

52. To improve the living conditions of the population, the government will promote, inter alia, enrollment in the CMU, for which the registration period has begun, and will continue to ensure that producers of cacao, coffee, cashews and cotton receive 60 percent of the “farm gate” price (prix bord champ)for their products. Law No. 2014-131 establishing the CMU, which was adopted by the National Assembly on March 6, 2014 and published on March, 24, 2014, created a legal framework for this new health insurance system aimed at ensuring that all of Côte d’Ivoire’s population has access to quality and affordable healthcare. CMU is a basic healthcare system that allows the majority of the population to have access to health insurance that protects them against the most prevalent health risks, for CFAF 1,000/month per person.

53. Efforts will be undertaken to improve the healthcare system in the context of operationalizing the CMU. To this end, the implementation of the National Healthcare Development Plan (PNDS 2012–15) will be stepped up, with particular attention to improving first-contact health services. Efforts in this context will focus on: (i) launching a special program to extend coverage in first-contact facilities; (ii) rehabilitating and re-equipping emergency care services in health facilities; (iii) re-organizing existing channels for admitting emergency patients and introducing new procedures for managing emergency services; (iv) developing regulatory mechanisms within hospitals to reduce overcrowding; (v) improving the distribution of healthcare staff throughout the country and achieving an equitable geographic distribution of healthcare facilities; and (vi) rehabilitating and re-equipping maternity wards. In addition, the 2016–20 PNDS will be drafted and approved in time for implementation to begin in 2016. The government will use the CFAF 24 billion provided by the IMF to prevent the outbreak and spread of epidemics like Ebola through redoubling efforts to improve the healthcare system.

54. Efforts in the area of education will be strengthened through the implementation of the “universal schooling” program. This program, for which funding is currently being secured, will enable the establishment of middle schools in local communities and allow for an extension of the network of technical and professional high schools to effectively address the challenge of workforce integration after training. This program will: (i) make school enrollment obligatory for all children up to the age of 15; (ii) allow for the recruitment of more than 20,000 teachers; (iii) enable the establishment of distance training programs for teachers; (iv) promote the acceleration of literacy programs, particularly in bus terminals and markets. In addition, efforts will be undertaken to reform school curricula through: (i) introducing courses on information technology and communications, as well as financial management, business, and human rights; and (iii) developing textbooks for teachers. The government also intends to fulfill Côte d’Ivoire’s commitments in the context of the Sahel Women’s Empowerment and Demographics Project, for which the World Bank has provided financing in the amount of US$30 million. The project is aimed at improving the economic prospects of women and young girls and encouraging voluntary fertility reduction.

Program Financing and Monitoring

55. The government deems that the funding needs of the 2015 program will be met. Additional financing will be mobilized on the regional money market and the international financial market, as well as from foreign partners. The government intends to raise CFAF 648.7 billion on the sub-regional money and financial markets, compared with CFAF 1,101.6 billion in 2014. External financing, including budget support, is expected to amount to CFAF 1,100.1 billion, owing in particular to the assistance of the World Bank, the International Monetary Fund, the African Development Bank, the European Union, the French Development Agency, the Islamic Development Bank, and Eximbank China. The government issued a Eurobond in the amount of US$1 million in 2015 in order to benefit from favorable financing conditions on international markets. Moreover, the government is exploring the possibility of participating in the Islamic financial market by issuing Sukuk in national currency in 2015. Lastly, it will continue its bilateral discussions with remaining creditors regarding debt relief under the Heavily Indebted Poor Countries (HIPC) initiative of the World Bank and IMF.

56. The program will continue to be monitored biannually by the IMF Executive Board on the basis of quantitative indicators and structural benchmarks (Tables 1 and 2). These indicators are defined in the attached Technical Memorandum of Understanding (TMU). The eighth review will be based on performance criteria and indicative targets at end-June 2015, and structural benchmarks centered on public expenditure management, financial soundness and business climate. The eighth review is expected to be completed by December 2015 at the latest. To this end, the government undertakes to:

  • Refrain from accumulating new domestic arrears and from any kind of advances on revenue, as well as from contracting any nonconcessional external borrowing other than that specified in the TMU.
  • Issue government securities only by auction through the BCEAO or through any other form of competitive bidding on the local financial market and the WAEMU market, and to consult with IMF staff on any new financing.
  • Refrain from introducing or intensifying any restrictions on payments and transfers related to current international transactions and from introducing multiple currency practices or entering into bilateral payment agreements that are inconsistent with Article VIII of the IMF Articles of Agreement, or from imposing or intensifying import restrictions for balance of payments purposes.
  • Adopt any new financial or structural measures that may prove necessary for the success of its policies, in consultation with the IMF.
Table 1.Côte d’Ivoire: Performance Criteria and Indicative Targets, ECF 2014–15 1/

(Billions of CFA francs) 2/

ITActualStatusPCActualStatusITAdjusted ITActualStatusPCAdjusted PCActualStatusITAdjusted ITPCModified PCITModified ITITModified IT
A. Performance criteria
Floor on primary basic balance7.37.0Met−135.42.7Met−80.1−77.6Met−81.6−80.4Met−10.5−14.4−150.7−108.0−151.8−41.6−90.7
Ceiling on net domestic financing
(incl. WAEMU paper)5/43.6113.1Not Met315.3286.6Met360.2110.262.9Met107.6100.7Met−56.496.5186.887.9104.336.3−17.4
Ceiling on new nonconcessional external
debt (in $ million)3/4/5/6/900.0717.3Met900.0738.4Not Met3/900.01,488.6Not Met1,650.02,443.42,441.5Met3,050.03,843.43,050.03,843.43,050.03,843.43,050.03843.4
Ceiling on accumulation of new external arrears0.00.0Met0.00.0Met0.00.0Met0.00.0Met0.
Ceiling on accumulation of new domestic arrears0.00.0Met0.00.0Met0.00.0Met0.00.0Met0.
Floor on the overall fiscal balance (incl. grants)−76.1−81.7Met7/−310.6−143.4Met−364.5−356.1Met−394.8−376.1Met−179.3−331.0−451.2−533.2−584.7−672.1−676.6
Ceiling on expenditures by treasury advance19.825.8Met55.654.6Met81.580.5Met124.5112.4Met29.463.474.7107.7109.9146.1144.9
Floor on pro-poor expenditure259.4300.4Met676.7717.8Met1,022.31,086.1Met1,521.81,622.4Met292.6763.3763.31,153.11,153.11,716.41716.4
Floor on net reduction of government
amounts payable (- = reduction)−5.0−85.8Met−50.0−129.7Met−70.0−170.9Met−110.0−152.4Met−20.0−50.0−30.0−70.0−40.0−100.0−50.0
Floor on government revenue621.8659.9Met1,392.11,462.3Met2,167.92,167.7Not Met3,064.62,989.4Not Met749.51,642.21,630.52,486.42,472.83,474.83,448.2
Memorandum items:
Net banking sector claims on government11.361.5129.3122.917.429.59.1127.3−41.0−11.954.8−35.11.4−24.5−33.9
Program grants0.09.082.882.882.882.8156.6167.00.073.873.873.873.8147.6147.6
Program loans0.
Project grants44.354.4123.3113.7166.0125.3168.8137.057.2114.3114.3137.2137.2228.6228.6
Project loans61.373.5170.7134.1229.9218.7259.6249.1115.5230.9241.1277.1281.2461.8401.8
Sources: Ivoirien authorities and IMF staff.Note: The terms in this table are defined in the TMU.

Cumulative change from December 31, 2013 for 2014 targets, and from December 31, 2014 for 2015 targets.

Except for ceiling on new nonconcessional external debt.

Continuous performance criterion. It was breached in July 2014 with the US$750 million Eurobond issuance.

The new non-concessional external debt will be used for infrastructure, energy, and transport projects.

Adjusted for the China Exim-bank loan for the Port of Abidjan (US$793.4 million).

If concessional terms are not obtained for the electricity network (US$820 million) project, the ceiling on new nonconcessional external debt will be ajusted upward pro tanto. See paragraph 10 on the adjustor in the TMU.

See paragraph 10 on the adjustor in the TMU.

Sources: Ivoirien authorities and IMF staff.Note: The terms in this table are defined in the TMU.

Cumulative change from December 31, 2013 for 2014 targets, and from December 31, 2014 for 2015 targets.

Except for ceiling on new nonconcessional external debt.

Continuous performance criterion. It was breached in July 2014 with the US$750 million Eurobond issuance.

The new non-concessional external debt will be used for infrastructure, energy, and transport projects.

Adjusted for the China Exim-bank loan for the Port of Abidjan (US$793.4 million).

If concessional terms are not obtained for the electricity network (US$820 million) project, the ceiling on new nonconcessional external debt will be ajusted upward pro tanto. See paragraph 10 on the adjustor in the TMU.

See paragraph 10 on the adjustor in the TMU.

Table 2a.Côte d’Ivoire: Structural Benchmarks, 2014–15, ECF
Seventh Program Review
MeasuresMacroeconomic RationaleTimeframeStatus
Public expenditure management
Pay subsidies to support the electricity sector (HVO [Heavy Vacuum Oil]) in the amount of CFAF 40 billionReduce fiscal risksSB end-December 2014Met
Adopt a detailed timetable for closing public accounts at commercial banksImprove cash-flow managementSB end-December 2014Met
Restructuring of banking sector
Restructure a state-owned bankReduce banking sector vulnerabilities and fiscal risksSB end-December 2014Not met (implemented with delay in February 2015)
Improving the business environment
Limit the current fiscal year’s VAT arrears pending refund to under CFAF 10 billionImprove business climateContinuous SBMet
Implement plan to settle the full range of domestic arrears on audited debt, securitized and agreed debtImprove business climateSB end-December 2014Met

Statistics and Capacity-Building

57. Further efforts will be undertaken to develop the statistical system to better guide government policy and inform the decisions of economic agents. To this end, the implementation of the 2012–15 statistics master plan, aligned with the 2012–15 PND, will be completed. The master plan comprises the following activities: (i) conducting national and sector surveys; (ii) strengthening and monitoring economic indicators; (iii) setting up a database for the Integrated Information Management System; (iv) changing the base year of national accounts and establishing quarterly national accounts; (v) reforming the Harmonized Consumer Price Index (HCPI); and (vi) preparing a directory of ministerial statistical offices. In this connection, the final reports from the 2013/2014 General Population and Housing Census and from the employment survey are now available. Analysis of the data from the household survey and the General Agricultural Survey is currently being conducted. With respect to the work to change the base of the annual national accounts, a new classification system for activities and products has been developed and published. The year 2014 was chosen as the new base year for the annual national accounts as the General Population and Housing Census was conducted in 2014. Lastly, good progress has been made toward the preparation of the quarterly national accounts, and efforts to produce a breakdown of government financial operations based on the 2001 GFSM are being undertaken and may be completed by the end of December 2015. Eventually, Côte d’Ivoire intends to migrate to the Special Data Dissemination Standard, as this will allow it to gain access on better terms to international financial markets.

58. The government will continue to support capacity-building in government administration. The National Governance and Capacity-Building Secretariat will assist various public entities with training through gauging needs and skills, designing customized programs, and seeking the financing arrangements necessary to promote modern and effective government management. The technical assistance needs identified for 2015 comprise the following: (i) modernization of the customs administration, especially on economic regimes and risk analysis systems; (ii) support for setting up quarterly accounts; (iii) strengthening the tax administration, and especially of the tax base and the VAT; (iv) preparation of balances of payment forecasting; (v) tax revenue forecasts; (vi) support for the production of the government financial operations table (TOFE) in accordance with the 2001 GFSM; and (vii) support for developing short-term economic indicators for the real sector. In addition, the government is requesting an IMF technical assistance arrangement of at least one year to create and establish long-term financing instruments in local currency on the international market in support of the two CFAF zones (the West African Economic and Monetary Union (WAEMU) and the Economic and Monetary Community of Central Africa (CEMAC)).

Table 2b.Côte d’Ivoire: Proposed structural Benchmarks, 2015, ECF
Eight Program Review
MeasuresMacroeconomic RationaleTimeframe
Public expenditure management
Payment in cash of the securitized debt held by SIR and PETROCIImprove the financial position of the energy sectorSB end-June 2015
Adopt a protocol clarifying the responsibilities of the respective parties, including the government, as regards the payment of HVOReduce fiscal risksSB end-June 2015
Issue a call for tender for the selection of an audit company that would complete a strategic audit aiming to restructure SIR.Reduce fiscal risksSB end-June 2015
Strengthening the soundness and development of the financial sector
Adopt a draft law aimed at developing leasingDevelop the financial sectorSB end-September 2015
Restructure a public bankStrengthen financial sector soundnessSB end-November 2015
Improving the business environment
Limit the current fiscal year’s VAT arrears pending refund to under CFAF 10 billionImprove the business climateContinuous SB
Clear the full range of domestic arrears on audited debt from 2010 and earlier years.Improve the business climateSB end-September 2015
Regularize domestic arrears on securitized and contractual debt (“dette conventionnée”)Improve the business climateSB end-September 2015

Attachment II. Côte d’Ivoire: Technical Memorandum of Understanding—Arrangement Under the Extended Credit Facility, 2011–15

May 19, 2015

1. This Technical Memorandum of Understanding (TMU) describes the quantitative and structural assessment criteria established by the Ivoirian authorities and the staff of the International Monetary Fund (IMF) to monitor the program supported by the Fund’s Extended Credit Facility (ECF). It also specifies the periodicity and the deadlines for the transmission of data to Fund staff for program monitoring purposes. Unless otherwise specified, the government is defined as the central government of Côte d’Ivoire, including the National Social Security Fund (Caisse Nationale de Prévoyance Sociale, CNPS) and the Civil Service Pension Fund (Caisse Générale de Retraite des Agents de l’État, CGRAE), and Treasury operations for public companies in liquidation; it does not include any local government authorities, the Central Bank of West African States (BCEAO), or any other government-owned entity with separate legal status.

Quantitative Indicators

2. For program monitoring purposes, the performance criteria (PC) and indicative targets (IT) are set for June 30, 2015; the same variables are indicative targets for these variables for September 30, 2015 and December 31, 2015.

The performance criteria include:

  • (a) a floor on the primary basic fiscal balance;
  • (b) a ceiling for net domestic financing (including the issuance of securities in Francs of the Financial Community of Africa (CFA)—or Communauté Financière Africaine in French);
  • (c) a ceiling on new nonconcessional external debt;
  • (d) a zero ceiling for the accumulation of new external arrears; and
  • (e) a zero ceiling for the accumulation of new domestic arrears.

The indicative targets are:

  • a) a floor on the overall fiscal balance (including grants);
  • b) a ceiling on expenditures by treasury advance;
  • c) a floor on “pro-poor” expenditures;
  • d) a floor on the net reduction of the government amounts payables;
  • e) a floor on total government revenue.

3. The PCs, the ITs, and the adjustors are calculated as the cumulative change from December 31, 2014 for the 2015 targets, with the exception of new nonconcessional external loans for which the cumulative change starts from December 31, 2012 (Table 1 of the Memorandum of Economic and Financial Policies, or the MEFP).

Table 1.Côte d’Ivoire: Pro-Poor Spending (incl. Social Spending), 2009–15
BudgetActualSBL 1/ActualBudgetDraft Budget
Agriculture and rural development49.
General administration8.
Agriculture promotion and development program10.610.810.812.018.715.115.917.823.4
Training of supervisory staff8.48.310.38.413.515.718.416.921.5
Water system works1.
Other investments in the rural area (FRAR, FIMR)
Fishing and animal husbandry6.
General administration3.
Milk production and livestock farming2.
Fishing and aquaculture1.
General administration19.624.924.723.619.819.519.520.625.2
Pre-schooling and primary education336.7366.7301.1398.2379.2454.4449.2316.6403.8
Secondary education and vocational training83.083.874.280.374.883.787.7296.8306.9
University and research93.7114.5117.0113.0140.0153.0156.1155.4178.1
Emergency/Presidential program/Education0.00.011.712.836.943.543.546.546.5
General administration45.847.749.255.463.989.571.4123.0150.7
Primary health system30.730.025.234.847.553.970.538.763.3
Preventive healthcare (enlarged vaccination program)
Disease-fighting programs1.
Infant/mother health and nutrition0.
Health centers and specialized programs26.626.625.725.131.833.932.334.241.4
Emergency/Presidential program/Health0.00.011.312.
Water and De-contamination20.419.836.339.949.573.5118.482.183.3
Access to drinking water and de-contamination4.
Environmental protection spending15.513.813.113.022.423.624.018.117.6
Emergency/Presidential program/healthiness and de-
Emergency/Presidential program/drinking water0.
Access to electricity16.
Emergency/Presidential program/Electricity0.
Roads and Art Works39.145.433.447.151.4101.780.2112.7118.7
Road maintenance0.
Construction of art works3.
Other road projects35.640.622.223.534.152.249.965.567.0
Emergency/Presidential program/maintenance and development0.
Social spending13.615.024.714.
General administration8.
Training for women0.
Orphanages, day nurseries, and social centers1.
Training of support staff1.
Indigents and victims of war or disaster1.20.511.
Decentralization (excl. education, health and agriculture)
Reconstruction and rehabilitation1.
Emergency/Presidential program0.
Other poverty-fighting spending9.611.916.215.913.06.77.910.510.8
Promotion and insertion of youth8.48.913.713.
Support and follow-up of DSRP0.
Development of tourism and craftmanship0.
Source: Ivorien authorities.

Supplementary Budget Law.

Source: Ivorien authorities.

Supplementary Budget Law.

A. Government Revenue (IT)

4. Total government revenue is defined as all revenue collected by the Tax Administration (DGI), the Directorate-General of the Treasury and Public Accounting Administration (DGTCP), the Customs Administration (DGD), the CNPS, and the CGRAE, and other nontax revenue as defined in the fiscal reporting table (TOFE).

B. Pro-poor Expenditures (IT)

5. Pro-poor expenditures are derived from the detailed list of “pro-poor expenditures” in the SIGFIP system (see Table 1).

C. Treasury Advances (IT)

6. Within the framework of the program, Treasury advances are defined as spending paid for by the Treasury outside normal and simplified execution and control procedures, and which have not been subject to prior commitment and authorization. They exclude the “régies d’avances”, as set out in the ministerial decree n° 2013–762, as well as the extraordinary procedures set out in decree n° 1998-716 for expenditures financed by external resources, wages, subsidies and transfers, and debt service. The cumulative amount of expenditures by treasury advance as defined by the program will not exceed the cumulative quarterly ceilings representing 10 percent of quarterly budget allocations (excluding externally financed expenditures, wages, subsidies and transfers, and debt service). The nominative and restrictive list of expenditures eligible as treasury advances is as defined by ministerial Decree No. 178/MEF/CAB-01/26 of March 13, 2009.

D. Primary Basic Fiscal Balance (PC)

7. The primary basic fiscal balance is the difference between the government’s total revenue (excluding grants) and total expenditure plus net lending, excluding interest payments and externally-financed capital expenditure, and expenditure related to the Ebola outbreak (on a payment order basis for all expenditure items):

Tax and nontax revenue (excluding grants) – {Expenditure + Net lending – Interest payments – Externally-financed capital expenditure- Expenditure related to the Ebola outbreak (on a payment order basis for all expenditure items)}

8. The floor on the primary basic fiscal balance will be adjusted downward (upward) for an excess (shortfall) of external budget support (program grants/loans) relative to the programmed amount.

E. Overall Fiscal Balance (Including Grants) (IT)

9. The overall fiscal balance is the difference between the government’s total revenue (including grants except World Bank budget support grants- AfDB budget support grants) and total expenditure plus net lending (on a payment order basis):

Tax and nontax revenue + (Grants – World Bank budget support grants – AfDB budget support grants) – {Expenditure + Net lending (on a payment order basis for all expenditure items)}

10. The floor on the overall fiscal balance will be adjusted downward (upward) for an excess (shortfall) of project loans relative to the programmed amount.

F. Net Domestic Financing (PC)

11. The net domestic financing by the central government is defined as the sum of (i) the banking system’s net claims on the government (including C2D deposits); and (ii) net non-bank financing (including proceeds from privatization and sales of assets, and of correspondent sub-account of the Treasury and excluding the net variation of the amounts payable); and (iii) any financing borrowed and serviced in Francs of the Financial Community of Africa (FCFA). This ceiling includes a margin of CFAF 10 billion above the net cumulative flow projected for each quarter.

Net domestic financing = Variation of banking system’s net claims on the government (TOFE) + net non-bank domestic financing (excluding the variation of the amounts payable) + borrowing denominated and serviced in Francs of the Financial Community of Africa (FCFA) + financing margin of CFAF 10 billion.

This ceiling does not apply to either new agreements on restructuring domestic debt and securitization of domestic arrears or to new project loans from the Bank for Investment and Development (BIDC) of the Economic Community of West African States (ECOWAS). For any new borrowing over and above a cumulative amount of CFAF 50 billion during 2015, the government undertakes not to issue government securities except by auction through the BCEAO or through competitive public auction (appel d’offres compétitif) on the WAEMU financial markets registered with the Regional Council for Public Savings and Financial Markets (CREPMF), in consultation with Fund staff.

G. New Nonconcessional External Debt (PC)

12. The definition of debt is set out in Executive Board Decision No.6230-(79/140), Point 9, as revised on August 31, 2009 (Decision No. 14416-(09/91)): Debt will be understood to mean a current, i.e., not contingent, liability, created under a contractual arrangement through the provision of value in the form of assets (including currency) or services, and which requires the obligor to make one or more payments in the form of assets (including currency) or services, according to a specific schedule; these payments will discharge the obligor of the principal and/or interest liabilities incurred under the contract. Debts can take a number of forms, the primary ones being as follows: (i) loans, i.e., advances of money to the obligor by the lender made on the basis of an undertaking that the obligor will repay the funds in the future (including deposits, bonds, debentures, commercial loans, and buyers’ credits) and temporary exchanges of assets that are equivalent to fully collateralized loans, under which the obligor is required to repay the funds, and usually pay interest, by repurchasing the collateral from the buyer in the future (such as repurchase agreements and official swap arrangements); (ii) suppliers’ credits, i.e., contracts where the supplier permits the obligor to defer payments until sometime after the date on which the goods are delivered or services are provided; and (iii) leases, i.e., arrangements under which property is provided that the lessee has the right to use for one or more specified period(s) of time that are usually shorter than the total expected service life of the property, while the lessor retains the title to the property. For the purpose of this guideline, the debt is the present value (at the inception of the lease) of all lease payments expected to be made during the period of the agreement, excluding those payments necessary for the operation, repair, or maintenance of the property. Under the definition of debt set out above, arrears, penalties, and judicially awarded damages arising from the failure to make payment under a contractual obligation that constitutes debt are debt. Failure to make payment on an obligation that is not considered debt under this definition (e.g., payment on delivery) will not give rise to debt.

13. External debt is defined as debt borrowed or serviced in a currency other than the CFA franc of the Financial Community of Africa (FCFA).

14. The quantitative performance criterion concerning external debt applies to all nonconcessional external debt, irrespective of maturity, and whether it has been contracted or guaranteed by the government. It applies not only to the debt as defined above, but also to commitments contracted or guaranteed for which no value has been received. This performance criterion does not apply to:

  • normal import-related commercial debts having a maturity of less than one year;
  • rescheduling agreements;
  • debts to the BIDC, up to the equivalent of CFAF 20 billion, for the period from January 1 to December 31, 2015;
  • drawings on the IMF.

15. A debt is considered concessional if its grant element is at least 35 percent, the net present value (NPV) of the debt being calculated with a 5 percent discount rate. The government undertakes not to contract or guarantee nonconcessional external debt under the conditions defined in paragraphs 12–15, with the exception of debt constituting rescheduling of maturities and new debt contracted or guaranteed by the government as specified in paragraphs 14 and 17. To this end, the government undertakes to consult with IMF staff on the terms and concessionality of any proposed new debt in advance of contracting such external debt.

16. A cumulative ceiling for 2013–15 of US$800 million for the period through December 31, 2013, US$1,650 million through December 31, 2014, and US$3,843.4 million through December 31, 2015 applies to new nonconcessional external loans other than those specified in paragraph 14 (performance criterion). This ceiling would be applicable to debt-financing of projects, in the energy, infrastructure and transport sectors, and to the issuance of a Eurobond in 2015 for a maximum amount equivalent to U$1 billion. The ceiling on new nonconcessional foreign borrowing will be adjusted upward to reflect the loan to finance the rehabilitation and expansion of the electric power grid by a maximum amount equivalent to US$ 820 million, if the terms of this loan should prove to be nonconcessional. The government will inform staff in a timely manner before contracting any debt of this type and provide information on the terms of the new debt as well as a brief summary of the projects to be financed and their profitability, including an independent evaluation. The government will report on the use of funds and project implementation (in subsequent MEFPs or to staff). The US dollar value of eligible loans subject to this ceiling will be calculated using the exchange rates at end-August 2013 in the IFS (International Financial Statistics) database of the IMF. The amount of the Eurobond deemed contracted will be the amount subscribed/purchased at the end of the subscription/purchase period as specified under the final terms of exchange. The amounts subscribed/purchased of the Eurobond prior to the end of the subscription/purchase period of the Eurobond will not impact the performance criterion on external debt (paragraph 14).

H. External Payment Arrears (PC)

17. External arrears are considered to be the nonpayment of any interest or principal amounts on their due dates (taking into account relevant contractual grace periods, if any). This performance criterion applies to arrears accumulated under external debt of the government and external debt guaranteed by the government for which the guarantee has been called by creditors, consistent with the definitions given under the external debt criterion (paragraph 15). This performance criterion is monitored on a continuous basis.

I. Amounts Payable, Including Domestic Payment Arrears (IT and PC)

18. The “amounts payable” (or “balances outstanding”) include domestic arrears and floating debt and represent the government’s overdue obligations. They are defined as expenditures assumed (prise en charge) by the public accountant, but yet to be paid. For the program definition, these obligations represent (i) bills due and not paid to non financial public and private companies; and (ii) the domestic debt service (excluding the BCEAO).

19. For program purposes, domestic payment arrears are those balances outstanding to nonfinancial public and private companies and the domestic debt service (excluding the BCEAO). Arrears to non financial and private companies are defined as overdue obligations to non financial and private companies for which the payment date exceeds the deadline for payment stipulated by the administrative regulations of 90 days; arrears on the domestic debt service refer to debt service obligations for which the payment date exceeds 30 days.

20. Floating debt refers to those balances outstanding for which the payment date does not exceed the deadline for payment stipulated by the administrative regulations (90 days for debt to nonfinancial public and private companies and 30 days for debt service to commercial banks, insurance companies, and other financial institutions).

21. The balances outstanding are broken down by payer and type, as well as by maturity and length of overdue period (< 90 days, 90–365 days, > 1 year for nonfinancial companies, and <30 days, 30-365 days, > 1 year for financial companies).

22. For program purposes, the government undertakes: (i) to reduce the stock of amounts payable by at least CFAF 50 billion in 2015; and (ii) to not accumulate new domestic arrears in 2015.

Memorandum Items

A. Net Bank Claims on the Government

23. Net bank claims on the government are defined as the difference between government debts and government claims with the central bank and commercial banks, (including the C2D deposits). The coverage of net bank claims on the government is that used by the BCEAO, and is the same as that shown in the net government position (NGP) (including the C2D deposits).

B. External Financing (Definitions)

24. Within the framework of the program, the following definitions apply: (i) project grants refer to non-repayable money or goods intended for the financing of a certain project; (ii) program grants refer to non-repayable money or goods not intended for the financing of a specific project; (iii) project loans refer to repayable money or goods received from a donor to finance a specific project, on which interest is charged; and (iv) program loans are repayable money or goods received from a donor and not intended for the financing a specific project, on which interest is charged.

C. Program Monitoring and Data Reporting

25. A quarterly assessment report on the monitoring of the quantitative performance criteria, indicative targets, and structural benchmarks will be produced by the authorities at the latest within 45 days of the end of each quarter.

26. The government will report the information specified in Table 2 on a monthly basis, at the latest within 45 days of month-end or quarter-end, unless otherwise indicated. Tables F.3.1, F.3.2, and F.3.3 are updated to take into account the expanded coverage of arrears.

Table 2.Côte d’Ivoire: Document Transmittals
Detailed tables to be transmitted monthly, quarterly, or annually to the IMF staff. Examples of each of these tables have been provided for illustration. The documents expected monthly are indicated by “M,” those expected quarterly by “Q,” and those expected annually by “AN.” This list is not necessarily exhaustive.
Real sector (R)
Table R.1: Cyclical Indicators (M)

Table R.2.1: Macroeconomic Framework (AN)

Table R.2.2: Supply-use accounts, current francs (AN)

Table R.2.3: GDP in francs (n-1): annual variation in volume (AN)

Table R.2.4: GDP deflators year (n-1) (AN)

Table R.2.5: Macroeconomic framework, underlying assumptions (AN)

Table R3: Price index (M)
Table R.4.1: Summary crude oil and gas production (M)

Table R.4.2: Crude oil and gas production – CI11 (M)

Table R.4.3: Crude oil and gas production – CI26 (M)

Table R.4.4: Crude oil and gas production – CI27 (M)

Table R.4.5: Crude oil and gas production – CI40 (M)

Table R.4.6: Crude oil and gas – volume, price, and financial flows (M)

Table R.4.7: Ivorian Refinery (SIR) activities (M)

Table R.4.8: SIR: transfers to warehouses and exports (M)

Table R.4.9: Activities of marketers (M)

Table R.4.10: Goods released to market by type of tax (M)

Table R.4.11: Financial flows in cash, Electricity Sector Asset Management Company (Société de Gestion du Patrimoine du Secteur Electricité, SOGEPE) (M)

Table R.4.12: Operating financial flows, SOGEPE (Q)

Table R.4.13: Crude oil: Shipment report (Q)

Table R.4.14: Petroleum revenue: Structure of maximum sales prices (M).
Table R.5.1: Quasi-fiscal levies and fees, and utilization – operations (Q)

Table R.5.2: Quasi-fiscal levies and fees, and utilization – investment (Q)

Table R.5.3: Investments in funds managed by the Coffee/Cocoa Committee (Q)

Table R.5.4: Bank accounts (Q)
Balance of Payments sector (B)
Table B.1.1: Summary table of foreign trade (AN)

Table B.1.2: Imports (source DGD - monthly) (M)

Table B.1.3: Exports (source DGD - monthly) (M)

Table B2.1: Detailed balance of payments (including capital account) CFA francs (AN)

Table B.2.1.a: Exports – quantities (Q)

Table B.2.1.b: Exports – unit prices (Q)

Table B.2.2.a: Imports – quantities (Q)

Table B.2.2.b: Imports – unit prices (Q)

Table B.3: Balance of Payments: Summary presentation (AN)
Monetary sector (M)
Table M.1: Banks (M)

Table M.2: Summary BCEAO position (M)

Table M.3: Net government position (M)

Table M.4: Changes in net foreign assets (NFA) (M)

Table M.5: Integrated Monetary Survey (M)

Table M.6: Government liabilities to banks (M)
Fiscal sector (F)
Table F.1: Table of government financial operations (TOFE) (M)

Table F.2: Estimated government tax revenue (M)
Domestic arrears:
Table F.3.1: Domestic arrears (M)

Table F.3.2: Consolidated Treasury balances outstanding (M)

Table F.3.3: Treasury balances outstanding - targets/execution (M)

Table F.3.4: Clearings and securitizations (M)
Domestic and foreign debt:
Table F.4.1: Domestic debt (M)

Table F.4.2: Total domestic debt (M)

Table F.4.3: Negotiable instruments (M)

Table F.4.4: Explanation of variances in domestic debt service (M)

Table F.5.1: Foreign debt (M)

Table F.5.2: Details of foreign debt (M)

Table F.5.3: Analysis of projected foreign debt service variances (M)

Table F.5.4: Projected debt service (Q)
Table F.6: Crisis- and election-related expenditures (M)
Treasury advances:
Table F.7.1: Advances from the Treasury (M)

Table F.7.2: Treasury advances reclassified (M)
Table F.8: Investment expenditures (M)
Social/pro-poor expenditures:
Table F.9.1: Education and health expenditures – other (M)

Table F.9.2: Education and health expenditures – personnel/operations/transfers/investments (M)

Table F.9.3: Subsidies and transfers: Targeted social expenditures (M)

Table F.9.4: Execution of social expenditures (M)

Table F.9.5: Execution of pro-poor expenditures (M)

Table F.9.6: Budget execution report (SIGFIP) detail/category (Q)
Other revenue and expenditures:
Table F.10: Other operating expenses (M)

Table F.11: CNPS and CGRAE social security and civil service pension contributions (M)

Table F.12: Summary table of expenditures (M)

Table F.13: Summary table of nontax revenue and grants (M)
VAT credits:
Table F.14.1: Summary statistical statement of VAT credit refunds (monthly) (M)
Table F.15.1: Issues/redemptions of public debt (M)

Table F.15.2: Bridge loans and other Treasury advances (M)
Wage bill:
Table F.16.1: Projected wage bill (Q)

Table F.16.2: Changes in wage bill (Q)

Table F.16.3: Wage bill framing (AN)

Table F.16.4: Projected new recruits (AN)
Special accounts:
Table F.17.1: ECOWAS levy (PCC) (AN)

Table F.17.2: WAEMU levy (PCS) (AN)

Table F.18: Proceeds from privatization and sale of assets (AN)
Cash flow plan:
Table F.20.1: Annual cash flow, resources/expenditures plan (AN)

Table F.20.2: Execution of cash flow plan (M)

Table F.20.3: Overall balance of Treasury account

27. The government will report final data provided by the BCEAO within 45 days of the end of the period in question. The information provided will include a complete, itemized listing of public sector liabilities and assets with: (i) the BCEAO; (ii) the National Investment Bank (Banque Nationale d’Investissement, or BNI); and (iii) the banking sector (including the BNI).

28. The authorities will consult with the Fund staff on any proposed new external debt contracts or government guarantees on new external debt, including leases. The authorities will inform the Fund staff, following signature, of any new external debt contracted or guaranteed by the government, including the terms of these contracts or guarantees. Data on new external debt, the amount outstanding, and the accumulation and repayment of external payment arrears will be reported monthly within six weeks of the end of each month.

29. More generally, the authorities will report to the IMF staff any information needed for effective monitoring of the implementation of economic policies.


The authorities estimate that the growth rate in 2014 reached 8.5 percent on account of somewhat higher growth rates in parts of the tertiary sector.


FDI is poorly captured by available BOP statistics.


This could be achieved by preserving the full amount of fuel taxation achieved in early 2015 (because of the partial pass through of the drop in international oil prices to consumers); i.e., by fully passing through to the consumer any future changes, in international oil prices.


In particular, the Council of Ministers approved a Communication reaffirming, as stated in the 1998 decree (no. 98–716) that (i) extra budgetary spending is forbidden; (ii) extra budgetary or irregular spending does not legally constitutes a public liability; and (iii) extra budgetary spending constitutes a “management fault” subject to disciplinary, civil, and penal sanctions.


The Center will inform all potential suppliers that contracts will not be honored if they are not entered in the budget information management system (SIGFIP) and carry a commitment control number.


Domestic borrowing by these public entities is covered by earmarked taxes collected by these public agencies.


Côte d’Ivoire in two years moved from the 177th position to the 147th position in the World Bank’s Doing Business report. The 2014 and 2015 reports also ranked Côte d’Ivoire among the 10 best reformers.


In effect a change in the composition of domestic debt from IOUs to treasury bonds.


The TMU formerly included an adjuster to provide for such borrowing, should financing not be available on concessional terms. Including this and other programmed borrowing, Côte d’Ivoire’s risk of external debt distress remains unchanged at moderate.


The end-June 2015 structural benchmark to adopt an action plan to settle cross-debts of the energy sector has been replaced by two new benchmarks (also end-June 2015) to settle the stock of debt to SIR and Petroci and to clarify payment obligations for heavy fuel oil.


Recent progress toward containing the Ebola crisis in neighboring countries, coupled with precautionary measures in Côte d’Ivoire, limit the risk of major economic disruptions.

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