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Côte d'Ivoire 2022 Article IV Consultation Summary

Core Content

The 2022 Article IV consultation with Côte d'Ivoire by the IMF highlights the country's resilience to the pandemic, economic recovery, and the impact of external shocks such as the war in Ukraine. It also outlines the medium-term outlook, risks, and policy recommendations to ensure sustainable and inclusive growth.

Main Points

Economic Resilience and Recovery

• Côte d'Ivoire's economy proved resilient to the COVID-19 pandemic due to effective policy responses.
• GDP growth rebounded strongly in 2021, reaching 7% compared to 2% in 2020.
• Inflation increased to 4.2% in 2021, driven by external and supply shocks, and is projected to rise to 5.5% in 2022.

Impact of External Shocks

• The war in Ukraine and regional security challenges are expected to slow growth to 6% in 2022.
• Current account deficit is projected to reach 4.8% of GDP in 2022 due to worsened terms of trade and higher import prices.

Medium-Term Outlook

• The medium-term growth remains robust, with projections of 6.5% for 2023–2025.
• Inflation is expected to decline and stabilize around 2% by 2024.
• Fiscal deficit is projected to converge to the WAEMU target of 3% of GDP by 2024.

Key Risks

• Near-term risks are tilted to the downside due to the war in Ukraine, global financing conditions, and regional instability.
• Uncertainty remains high, especially regarding the impact of the war and new variants of the virus.

Policy Recommendations

Fiscal Sustainability

• The fiscal deficit in 2021 fell to 5.1% of GDP, lower than expected, due to improved tax administration and customs collection.
• Tax reforms should continue, including streamlining the personal income tax (PIT) regime and removing tax exemptions when the crisis subsides.
• A moderately higher-than-budgeted deficit is warranted in 2022 to address the impact of the Ukraine war, but the authorities must preserve fiscal space for future shocks.

Inclusive Growth

• Fiscal reforms are critical to support priority spending and inclusive growth.
• Public services and business climate improvements are key to boosting growth.
• Private sector involvement is necessary to ensure efficient use of resources and reduce fiscal costs.

Structural Reforms

• The 2021–2025 National Development Plan (NDP) should be implemented swiftly to support structural transformation.
• Infrastructure, regulatory frameworks, and land tenure reforms are needed to enhance productivity and investment.
• Climate change adaptation and mitigation policies, including sustainable farming and forest preservation, are crucial for long-term development.

Financial Sector

• The financial sector remains sound, but non-performing loans (NPLs) increased during the pandemic.
• Credit to the private sector grew by 9.9% in 2021, and the lending rate fell to 5.3%.
• Insolvency procedures and credit infrastructure need improvement to enhance access to credit, especially for SMEs.

Social and Human Capital

• Education access has expanded, but quality improvements and professional training are needed to reduce skills mismatch.
• Healthcare access remains a priority, especially for vulnerable populations.

Key Economic Indicators (2019–2023)

Conclusion

The IMF Executive Board concluded the 2022 Article IV consultation with Côte d'Ivoire and endorsed the staff appraisal without a meeting on a lapse-of-time basis. The next consultation is expected to follow the standard 12-month cycle.

The 2022 Article IV consultation underscores the importance of fiscal discipline, structural reforms, and inclusive growth strategies for Côte d'Ivoire to navigate current challenges and ensure long-term economic stability.