IMF Country Report No. 09/33
EXECUTIVE SUMMARY
- After more than a decade of civil strife and economic hardship, Côte d'Ivoire is in the process of economic recovery and political normalization. The March 2007 Ouagadougou Political Accord (OPA) provides a roadmap for reunification, national reconciliation, demobilization, and presidential elections. The latter, originally scheduled for November 30, 2008, have, however, been postponed with a new date to be set by end-December 2008. Economic activity is improving despite the adverse effects of the volatility in food and fuel prices, but the speed of recovery is subject to risks related to the global environment and domestic policy implementation. - Côte d'Ivoire's public and publicly-guaranteed external debt was estimated at US$14.3 billion as of end-December 2007 (US$12.8 billion in NPV terms after assuming full application of traditional debt relief mechanisms). A preliminary Debt Relief Analysis (DRA) shows that Côte d'Ivoire meets the HIPC Initiative indebtedness criterion under the fiscal window based on end-2007 data. HIPC debt relief is estimated at US$3,004.9 million in NPV terms, based on a common reduction factor of 23.6 percent.
- As of now, Côte d'Ivoire has already received about 55 percent of its estimated HIPC debt relief. In debt restructurings with Paris Club creditors (in 1998 and 2002) and London Club creditors (in 1998), Côte d'Ivoire obtained debt relief in excess of traditional debt relief mechanisms, with the excess counted as HIPC debt relief. Furthermore, the NPV reduction embedded in the concessional arrears clearance operation undertaken by IDA (in April 2008) and expected to be undertaken by the AfDB Group (in early-December 2008) has been counted as HIPC debt relief.
- Côte d'Ivoire could reach the decision point in early 2009, subject to strengthened implementation of the IMF-supported program through end-2008, and having in place a poverty reduction strategy. The country will also need to agree on appropriate completion point triggers to be included in the decision point document. Furthermore, before approval of a PRGF arrangement Côte d'Ivoire would also need to have cleared outstanding arrears with multilateral creditors or have reached an agreement to clear them during the program period.
- Upon reaching the HIPC completion point, Côte d'Ivoire will also qualify for relief under the Multilateral Debt Relief Initiative. Under MDRI, nominal debt service (principal and interest) to IDA and the African Development Fund is expected to be reduced by US$1,732.1 million and US$311.6 million (respectively). Reduction in the outstanding debt stock to the IMF is estimated at US$9.3 million.