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Document of The World Bank
FOR OFFICIAL USE ONLY
Report No. 108485‐CI
INTERNATIONAL DEVELOPMENT ASSOCIATION PROGRAM
DOCUMENT FOR A PROPOSED DEVELOPMENT POLICY CREDIT
IN THE AMOUNT OF EURO 68.5 MILLION (US$75 MILLION EQUIVALENT) TO
THE REPUBLIC OF CÔTE D’IVOIRE
FOR THE
FIRST FISCAL MANAGEMENT, EDUCATION AND ENERGY REFORMS DEVELOPMENT POLICY FINANCING
November 16, 2016
Macroeconomics and Fiscal Management Global Practice Africa Region
This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.
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CÔTE D’IVOIRE ‐ GOVERNMENT FISCAL YEAR January 1 – December 31
CURRENCY EQUIVALENTS (Exchange Rate Effective as of October 31, 2016)
Currency Unit CFA Franc (CFAF) US$1.00 = CFAF 610.526 US$1.00 = EUR 0.91286686
ABBREVIATIONS AND ACRONYMS
AFD AfDB
French Development Agency (Agence Française de Développement) African Development Bank
ANRMP National Public Procurement Regulatory Authority (Autorité Nationale de Régulation des Marchés Publics)
ASTER Treasury Services Network Application (Application des Services du Trésor en Réseau)
BCEAO BOP
Central Bank of West African States (Banque Centrale des États de l’Afrique de l’Ouest) Balance of Payments
CEA Country Environmental Analysis
CFAF CIE
CFA Franc Côte d’Ivoire Énergies
CME CONFEMEN
Mid‐Sized Enterprise Center (Centre des Moyennes Entreprises) National Education Ministers Conference (Conférence des Ministres de l’Éducation Nationale)
CPF DEVF DGD DGE DGI DPF
Country Partnership Framework Directorate of Tax Verification (Direction des Vérifications Fiscales) Directorate General of Customs (Direction Générale des Douanes) Directorate of Larger Enterprises (Direction des Grandes Entreprises) Directorate General of Taxes (Direction Générale des Impôts) Development Policy Financing
DPO Development Policy Operation
DSA Debt Sustainability Analysis ECF Extended Credit Facility
ECOWAS EEF
Economic Community of West African States Extended Fund Facility
EU EUR
European Union Euro
FDI FOB
Foreign Direct Investment Free‐on‐Board
GDP GER
Gross Domestic Product General Enrollment Rate
GIDP GRS HIPC
Governance and Institutional Development Project Grievance Redress Service Heavily‐Indebted Poor Country
ICRR Implementation Completion and Results Report
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IDA IDB
International Development Association Islamic Development Bank
IFC International Finance Corporation IFRS International Financial Reporting Standards
IMF INS IPP JMAP kW LIC
International Monetary Fund National Statistical Institute (Institut National de la Statistique) Independent Power Producer Joint Management Action Plan Kilowatt Low‐Income Country
LNG Liquefied Natural Gas LSMS Living Standards Monitoring Survey (Enquête sur le Niveau de Vie des
Ménages) MEF MIGA MW
Ministry of Economy and Finance Multilateral Investment Guarantee Agency Megawatt
NDP PASEC
National Development Plan (Plan National de Déeveloppement) Analytical Program for Educational Systems (Programme d’Analyse des Systèmes Éducatifs de la CONFEMEN)
PDO Program Development Objectives PEFA Public Expenditure and Financial Accountability PEMFAR Public Expenditure Management and Financial Accountability Review PER Public Expenditure Review PETROCI Government‐Owned Petroleum Company
PFM PPA PPIAF PPM
Public Financial Management Public‐Private Agreement Public‐Private Infrastructure Advisory Facility Public Procurement Management
PPP Public‐Private Partnership PRSC Poverty Reduction Support Credit PV Present Value SCD Systematic Country Diagnostic
SDR Special Drawing Rights SIGMAP Integrated System for Public Procurement Management
(Système Intégré de Gestion des Marchés Publics) SIR Ivorian Refinery Company (Société Ivoirienne de Raffinerie) SOE State‐Owned Enterprise SORT Systematic Operations Risk‐Rating Tool SME Small and Mid‐Sized Enterprises
SSA Sub‐Saharan Africa TSA Treasury Single Account TA Technical Assistance
USD United States Dollar VAT Value‐Added Tax WAEMU WBG
West African Economic and Monetary Union World Bank Group
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Regional Vice President: Makhtar Diop
Country Director: Pierre Laporte
Senior Global Practice Director MFM: Carlos Felipe Jaramillo
Practice Manager: Lars Christian Moller
Task Team Leader: Samba Ba
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REPUBLIC OF CÔTE D’IVOIRE
FIRST FISCAL MANAGEMENT, EDUCATION AND ENERGY REFORMS DEVELOPMENT POLICY FINANCING
TABLE OF CONTENTS
SUMMARY OF PROPOSED CREDIT AND PROGRAM..................................................................... VII
1. INTRODUCTION AND COUNTRY CONTEXT ............................................................................ 1
2. MACROECONOMIC POLICY FRAMEWORK ............................................................................ 2
2.1 Recent Economic Developments ......................................................................................... 2
2.2 Macroeconomic Outlook and Debt Sustainability ............................................................... 7
2.3 IMF relations ........................................................................................................................ 10
3. THE GOVERNMENT PROGRAM ............................................................................................. 10
4. THE PROPOSED OPERATION................................................................................................. 11
4.1 Link to the Government Program And Operation Description ............................................ 11
4.2 PRIOR ACTIONS, RESULTS AND ANALYTICAL UNDERPINNINGS .......................................................... 11
4.3 Link to the CPF, Other World Bank Operations and the WBG Strategy .............................. 25
4.4 CONSULTATIONS AND COLLABORATION WITH DEVELOPMENT PARTNERS ........................................... 25
5. OTHER DESIGN AND APPRAISAL ISSUES ............................................................................... 26
5.1 Poverty and social impacts .................................................................................................. 26
5.2 Environmental Aspects ........................................................................................................ 27
5.3. PFM, Disbursement and Auditing Aspects .......................................................................... 27
5.4 Monitoring, Evaluation and accountability.......................................................................... 28
5.5 Summary of Risks and Risk Mitigation ................................................................................. 29
List of Annex:
Annex 1: Policy and Results Matrix ............................................................................................................. 31 Annex 2: Letter of Development Policy ...................................................................................................... 33 Annex 3: Fund Relations Note .................................................................................................................... 58 Annex 4: Environment and Poverty /Social Analysis Table......................................................................... 60
List of Tables:
Table 2.1: Selected Economic and Financial Indicators, 2013‐2019 ............................................................. 5 Table 2.2: Consolidated Operations of the Central Government, 2013‐2019 .............................................. 6 Table 2.3: Balance of Payments Financing Requirements and Sources, 2013‐2019 .................................... 6 Table 2.4: External Debt Stock Composition at Year‐End (LIC ‐ DSA, October 2016) ................................... 9 Table 4.1: Côte d’Ivoire: Performance in VAT collection ............................................................................ 12 Table 4.2: Status of Prior Actions ................................................................................................................ 22 Table 4.3: Prior Actions and Analytical Underpinnings ............................................................................... 24 Table 5.1: Systematic Operations Risk‐rating Tool (SORT) ......................................................................... 29
List of Figure
Figure 2.1: Debt sustainability analysis, 2016‐2036 ..................................................................................... 9
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The World Bank team responsible for preparing this operation is led by Samba Ba (Task Team Leader, Senior Economist, GMF08) under the guidance of Lars Christian Moller (Practice Manager, GMF08), Pierre Laporte (Country Director, AFCF2), Jacques Morisset (Program Leader, AFCF2), Sona Varma (Lead Economist, GMF08) and Susana M. Sanchez (Senior Economist, GMF08). The core team consists of Maimouna Mbow Fam (Senior Financial Management Specialist, GGO26), Maiko Miyake (Head GTCA1), Robert Yungu (Senior Public Sector Specialist, GGO13), Godwill Kan Tange (Senior Economist, GMFDR), Maurice Adoni (Senior Procurement Specialist, GGO07), Hamoud Abdel Wedoud Kamil (Senior Education Specialist, GED07), Andre Francis Ndem (Education Specialist, GED07), Yussuf Uwamahoro (Energy Specialist, GEE07), Mouhamadou Hayatou (Private Sector Development Specialist, GTC07), Abdoulaye Gadiere (Senior Environmental Specialist, GEN07), Silvia Gulino Passera, (Operations Analyst, GMF01), Akoua Gertrude Tah (Team Assistant, AFCF2), Maude Jean‐Baptiste (Program Assistant, GMF08) and Kadidiatou Bah (Program Assistant, AFMGN). The peer reviewers are: Thomas Blatt Laursen (Lead Economist, GMF05) and Philip Schuler (Senior Economist, GMF09). The team worked in collaboration with the International Monetary Fund (IMF) and the Delegation of European Union Commission in Côte d’Ivoire.
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SUMMARY OF PROPOSED CREDIT AND PROGRAM
REPUBLIC OF CÔTE D’IVOIRE
Borrower: Government of Côte d’Ivoire.Implementation Agency:
Ministry of Economy and Finance (MEF).
Financing Data: An IDA credit in the amount of EURO 68.5 million (US$75 million equivalent) on blend IDA terms. Term: Single Currency IDA credit with 25‐year maturity including 5‐year grace period plus single currency charge (standard service charge plus basis adjustment plus interest charge plus basis adjustment).
Operation Type: First single‐tranche operation of a programmatic series of two consecutive development policy financing (DPF) operations.
Pillars of the Operation and Program Development Objectives:
The Program Development Objectives (PDOs) is to support Government reforms in the areas of fiscal management, education and electricity. The series is organized around three pillars: (i) enhance tax revenue and public procurement; (ii) strengthen efficiency and equity in the education sector; and (iii) improve the performance of the electricity sector and enable private participation.
Results Indicators:
Enhancing tax revenue and public procurement1. Number of taxpaying firms and individuals recorded in the government’s taxpayer
database. Baseline 2015: 86.945. Target 2018: 105,000. 2. Increase in VAT revenue collected by DGI (Tax Administration): Baseline 2015: 1.7 percent
of GDP; Target 2018: 2.0 percent of GDP. 3. Number of days on average to complete a public procurement from the preparation of
tenders to approval. Baseline 2014: 159 days. Target 2018: 120 days. Strengthening efficiency and equity in the education sector 4. Reduction in the repetition rate in primary schools: Baseline 2015: 15.6 percent. Target
2018: less than 10 percent. 5. Increase in the completion rate in lower secondary education of children from the
poorest families: Baseline 2015: Boys 25 percent, girls 13 percent. Target 2018: Boys 33 percent; girls 22.
Improving the performance of the electricity sector and enabling private participation 6. Improved CI‐Energies financial performance as measured by its net income. Baseline
2015: CFAF 63 billion (deficit). Target 2018: CFA 70 billion (surplus). 7. Reduced losses as measured and reported by CIE on an annual basis. Baseline 2015: 22
percent. Target 2018: 20 percent. 8. The Government has signed at least two power purchase agreements (PPA) with
Independent Power Producers (IPP) including one for renewable energy. Overall Risk: Moderate Climate and disaster risks:
Are there short and long‐term climate and disaster risks relevant to the operation (as identified as part of the SORT environmental and social risk rating)? No.
Operation ID: P158463
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IDA PROGRAM DOCUMENT FOR A PROPOSED CREDIT TO THE REPUBLIC OF CÔTE D’IVOIRE
1. INTRODUCTION AND COUNTRY CONTEXT
1.1 The proposed operation is the first in a programmatic series of two Development Policy Operations. The policy program supported by the Development Policy Financing (DPF) aims at: (i) enhancing tax revenue collection and public procurement; (ii) strengthening the efficiency and equity in the education sector; and (iii) improving the performance of the electricity sector and enabling private participation. The proposed development policy operation (DPO) series is closely aligned with the 2016‐20 National Development Plan (NPD) and an integral element of the World Bank Country Partnership Framework (CPF).
1.2 Côte d’Ivoire’s recent economic performance has been strong. Since the end of the political crisis in 2012, growth has averaged almost 9 percent per year – one the best performances in Sub‐Saharan region. The main drivers have been higher agriculture output, due to good weather and government support, as well as the rapid expansion of communication, transport, finance services as well as construction activity supported by an ambitious public investment program. The improving business environment has also been conducive to higher private investment, including through Foreign Direct Investment (FDI) inflows and Public‐Private Partnership (PPP) projects. Despite a recent slowdown in agriculture owing to bad weather and a weak external environment, the economy remains on an accelerated growth path, with an expected growth rate of 7.9 percent in 2016. In recent years, political and social tensions have declined thanks to economic recovery, and the extension of social programs. This contributed to the successful organization of Presidential elections at end‐2015 and the approval of a new Constitution through a national referendum in November 2016.
1.3 While economic growth has been rapid, poverty remains high. Poverty declined from 51 percent in 2011 to 46.3 percent in 2015. However, this decline is modest compared with the impressive rate of economic growth of 9.3 percent during this period. Poverty continues to be overwhelmingly concentrated in rural areas, which are home to 70 percent of poor households even though recent increases in both farm‐gate prices for cocoa and cashew have led to a gradual improvement in the wellbeing of small producers. Despite this recent improvement, inequality and poverty in Côte d’Ivoire remain critical issues that need to be addressed by the Government with a sense of urgency.
1.4 The proposed DPO series aims at supporting the Government in its overall effort to promote sustainable and inclusive growth over the next few years. The Government’s strategy was well defined in the recently adopted National Development Plan (NDP) for the period 2016‐2020, which was presented to the international community at the Consultative Group meeting organized in Paris in May 2016. The proposed series deliberately focuses on a sub‐set of critical challenges linked to fiscal policy, education, and energy. This selectivity was based on the combination of the Government’s priorities, the recent findings of the Systematic Country Diagnostic (SCD) and other analytical work, and the lessons derived from previous budget support’s operations in Côte d’Ivoire and in other low‐income countries. Other 2016‐2020 NDP priorities, in particular job creation and private sector development, are being – and will continue to be – supported by other World Bank Group (WBG) operations, including the regional DPO on trade facilitation between Burkina Faso and Côte d’Ivoire as well as several investment projects aimed at improving Côte d’Ivoire’s competitiveness in priority sectors such as agriculture and industrial transformation.
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1.5 To support the Government’s reforms in the areas of fiscal management, education and electricity, the series is organized around three pillars:
Pillar 1: enhancing tax revenue collection and public procurement. The Government needs to increase domestic revenue in order to finance its ambitious program of infrastructure and social sectors and to maintain public debt at a manageable level. Concurrently, the efficiency of public spending must be improved, especially complex and non‐transparent procurement procedures that lead to unnecessary delays and costs.
Pillar 2: strengthening the efficiency and equity in the education sector. In spite of recent efforts, education outcomes are lagging in Côte d’Ivoire compared to regional peers. International experience suggests that improving the efficiency and equity of the national education system is a prerequisite to skill development and ultimately job creation for the fast growing young population.
Pillar 3: improving the performance of the electricity sector and enhancing private sector participation. Access to electricity remains low in Côte d’Ivoire and the sector has become a fiscal burden. Sector performance needs to be improved, including through the enhanced participation of the private sector in power generation, especially in renewable energy. Very little recent investment has taken place, maintenance has been neglected, and the State‐owned enterprises (SOEs) operating in the sector have been under financial stress. Finally, access in rural areas, where the vast majority of the poor live, remains relatively low.
1.6 The proposed DPF series is closely aligned with the 2016‐2020 National Development Plan and an integral element of the World Bank Country Partnership Framework. It was prepared in close coordination with other partners, including the International Monetary Fund (IMF). It also incorporates lessons from previous budget support operations in Côte d’Ivoire by focusing on critical drivers of change such as the provision of energy, education, and the effectiveness of fiscal policy. The overall risk is considered moderate while ‘Institutional capacity’ and ‘Political environment’ risks are rated substantial, but remain manageable.
2. MACROECONOMIC POLICY FRAMEWORK
2.1 RECENT ECONOMIC DEVELOPMENTS
2.1 Côte d’Ivoire has achieved a strong economic recovery in the wake of its recent political crisis, benefiting from robust aggregate demand and a surge in both private and public investment. Following a decline of gross domestic product (GDP) by 4.7 percent in 2011 caused by the electoral crisis, the return to political stability and the upturn in business and consumer confidence as well as sustained progress made in the area of structural reforms supported the country’s impressive economic performance. Economic growth averaged over 9 percent per year between 2012 and 2015, and is expected to remain in the vicinity of 7.9 percent in 2016 even though unfavorable climatic conditions led to a decline in agricultural output during the first half of the year. This exceptionally strong growth performance was driven by a combination of public and private investments, which generated a boom in the construction sector, as well as the rise in a number of services such as communication, transportation, and finance. This growth performance also resulted from the positive response of agricultural production to improved international prices (most notably cocoa), favorable weather, and Government policies affecting the development of the cocoa, coffee, rice, and cashew subsectors. The renewed momentum of the private sector was reflected in a substantial increase in business registrations, the resurgence of Foreign Direct Investment (FDI), and the growing number of public‐private partnerships (PPP) in priority sectors. These developments reflect the highly positive response of the private sector to the improved business environment and positive prospects for the country as a regional hub.
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2.2 The sustained recovery of the economy has started to have a tangible impact on living standards of the population. The overall poverty rate is estimated to have declined from 51 to 46.3 percent between 2011 and 2015. While this decline remains insufficient, it represents a reversal of the historal trend that had seen a long‐standing fall over the past two decades. Furthermore, the positive dynamics in terms of the provision of better infrastrucure and social services will also lead to a gradual improvement of welfare in the country, including for the poorest segments. Recent public investment projects have improved access to public services (including rural electrification, clean water distribution, road rehabiliation, construction of 65,000 low‐cost housing units, policy of access to education for all and adoption of a universal health coverage). In the cocoa and coffee sub‐sectors, the Government has applied a farm‐gate floor price equivalent to 60 percent of the export price for cocoa, coffee, cotton and cashew nuts, which has helped increase the income of more than one million farmers and about six million household members. The farm‐gate price for cocoa rose by 37.9 percent between 2013 and 20161, while the farm‐gate price for cashew rose by 12.5 percent and cashew production increased by 20 percent during the same period. These recent increases, while also dependent on the evolution of international prices, will translate into a further decline in rural poverty. The Government also increased civil service salaries in 2014, which had been frozen since 1988.
2.3 The external sector has contributed to the country’s economic recovery. Côte d’Ivoire’s terms of trade improved since 2014, due to the combined effect of higher cocoa prices, lower oil prices and the depreciation of the CFA franc vis‐à‐vis the US dollars (USD). These factors have resulted in a significant trade surplus in recent years even if a slowdown in both exports and import flows has been observed in recent months. Notwithstanding improved export performance, the current account deficit (excluding official transfers) has been in deficit since 2015, reaching 2 percent of GDP in 2016. This deficit reflects the chronic deficit in the services balance. However, the current account deficit has been traditionally financed by the combination of foreign direct investment (FDI) and concessional as well as non‐concessional public borrowing. Net FDI inflows are expected to reach 2.9 percent in 2016 from 1.3 percent in 2015, reflecting the increasing establishment of large private firms in the agro‐business (cocoa and cashew nuts processing), telecom and other services.
2.4 Improvements in economic fundamentals and progress in implementing reforms have enabled Côte d’Ivoire to raise capital on international markets. The authorities issued two Eurobonds in July 2014 and February 2015 to a value of US$750 million (10 years, 5.625 percent yield) and US$1 billion (12 years, 6.625 percent yield), respectively. The yield of the first Eurobond was lower than for any other international issue by an African country in 2014. Moreover, both issuances were greatly oversubscribed, and Côte d’Ivoire kept non‐concessional lending below the ceiling agreed to under the IMF program. In 2015, the Government also launched the first tranche of a previously announced CFAF 300 billion Islamic bond (sukuk) program, following an agreement with the Islamic Development Bank (IDB). The total amount of this first tranche was CFAF 150 billion for a yield of 5.75 percent per annum for the period 2015‐2020. The recent change in United States monetary policy coupled with growing fiscal pressures in most emerging markets has contributed to an increase in the cost of borrowing on international markets for many Sub‐Saharan countries. However, Côte d’Ivoire has shown resilience in this volatile context, with the second lowest spread on the secondary debt market as of November 2016.
2.5 Fiscal management has remained sound in recent years. Côte d’Ivoire’s improved fiscal position reflects a sustained increase in revenue collection in a context of tight expenditure controls and a moderate decline in energy subsidies. The overall fiscal deficit (including grants) gradually narrowed from
1 The farm‐gate price was initially set at CFAF 725 per kilogram for the 2012/2013 season, and increased in subsequent years to CFAF 750/kg (2013/2014), CFAF 850/kg (2014/2015), and CFAF 1,000/kg (2015/2016).
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5.6 percent of GDP in 2011 to 2.9 percent in 2015, partly reflecting a decline in electricity subsidies. However, in 2016, the fiscal deficit is expected to reach 4.0 percent of GDP, following additional priority security spending linked to the terrorist attacks in Grand Bassam in March 2016. Due to better than expected tax and non‐tax revenue collection, total revenue in 2016 rose to 20.7 percent of GDP, compared to 20.2 percent of GDP in 2015. Government expenditure expanded from 23.1 percent of GDP in 2015 to 24.7 percent of GDP in 2016, driven by higher investment in infrastructure. The spending rationalization program started by the authorities in early 2013 has helped contain current expenditure, which increased less than 1 percentage point of GDP, at to only 17.3 percent of GDP in 2016, compared to 16.6 percent in 2015. Overall, Côte d’Ivoire’s fiscal stance remains consistent with the authorities’ objective of preserving macroeconomic stability. However, fiscal risks could arise from financial imbalances in the energy sector, the needed restructuring of public banks, rising borrowing costs on international and regional markets, and excessive borrowing by state‐owned enterprises. The Government remains strongly committed to address these potential fiscal risks as evidenced by the recent agreement with the IMF on a new program.
2.6 Regional monetary policies have successfully contained inflation in the wake of supply‐induced price increases. Côte d’Ivoire’s monetary and exchange rate policies are managed at the regional level by the Central Bank of West African States (BCEAO) and by WAEMU, which maintains a peg between the CFA Franc and the Euro. The Central Bank has improved its operational efficiency through recent initiatives such as the introduction of an electronic platform designed to computerize liquidity injections and absorptions as well as the auctioning of government securities. Even though the 2016 IMF staff report on WEAMU suggests that the efficiency of monetary policy is still challenged by excess liquidity, low depth, and segmentation of the interbank market, this regional arrangement has served Côte d’Ivoire well since inflation has remained low, stable, and resilient to global price volatility. In the second quarter of 2016, inflation picked up slightly due to increases in food prices (up by 7 percent in April‐May 2016), while inflation in non‐food items, notably transportation, remained subdued at 1 percent, reflecting the drop in international oil prices and the Euro’s depreciation. In 2016, inflation is projected at 1 percent, well below the WAEMU norm of 3 percent per year.
2.7 After a sluggish start in 2011‐2012, credit to the private sector grew strongly by over 30 percent in 2015 and an expected rate of 14.7 percent in 2016. As of end‐2015, compared to the same period in 2014, the money supply increased by 18.8 percent and credit to the economy by 29.6 percent despite the significant restructuring of public banks. In 2016, it is expected a 14.7 percent increase in credit to the economy which is attributable to medium and long term credits allocated mainly to businesses, as well as short‐term credits granted to businesses and households. This reflects the strengthening of economic activity in the secondary and tertiary sectors as well as enhanced private‐sector confidence. The Government has adopted a comprehensive restructuring plan for the banking system, which is expected to lay the groundwork for the sustainable development of the financial sector.
2.8 Côte d’Ivoire’s debt dynamics and management remain sustainable. At end‐2016, the total debt stock is projected to reach to 48.3 percent of GDP, far below the WAEMU average of 70 percent. Most of the debt is external and on concessional terms. The stock of external public debt rose from 26.2 percent at end‐2013 to 28.9 percent at end‐20162. The level of gross domestic debt fell from 16.9 percent of GDP in 2012 to 12.7 percent in 2014 but increased to 19.4 percent of GDP in 2016. This reflects issuances of government bonds with longer maturities. The Government took taking advantage of the favorable condition in the regional market. About 80 percent of the Government domestic liabilities consists of Government securities issued to the regional bond market.
2 Excluding official claims from France recently cancelled as part of “C2D” debt‐for‐development swaps.
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Table 2.1: Selected Economic and Financial Indicators, 2013‐2019
2013 2014 2015 2016 2017 2018 2019
Annual percentage change, unless otherwise indicated
National income and prices
Real GDP 9.3 8.8 8.9 7.9 7.9 7.8 7.3
Per capita GDP (In US$ Atlas 1,389 1,531 1,382 1,477 1,589 1,709 1,835
Contributions
Consumption 12.5 10.0 10.7 11.2 7.2 7.1 ‐‐
Investment 37.6 16.0 11.8 8.7 15.8 20.7 ‐‐
Net exports 7.8 4.3 11.3 4.4 6.6 6.9 ‐‐
Imports (f.o.b.) ‐3.2 0.5 11.4 7.3 14.9 12.3 11.3
Exports (f.o.b.) ‐3.8 7.7 8.0 3.3 12.2 10.8 10.0
GDP deflator 3.4 3.9 1.8 1.0 1.4 1.9 1.9
Consumer price inflation 2.6 0.4 1.2 1.0 1.5 2.0 2.0
Fiscal Accounts Percent of GDP, unless otherwise indicated
Revenues 19.7 18.9 20.2 20.7 21.1 21.4 21.5
Expenditures 21.9 21.0 23.1 24.7 24.8 24.8 24.5
General Government Balance, incl. grants (payment order basis)
‐2.2 ‐2.2 ‐2.9 ‐4.0 ‐3.7 ‐3.4 ‐3.0
Selected Monetary Accounts Annual percentage change, unless otherwise indicated
Broad Money (M3) 11.6 16.1 18.8 10.7 14.3 13.1 12.3
Credit to the private sector 22.6 21.7 29.6 14.7 13.4 10.1 11.9
Balance of Payments Percent of GDP, unless otherwise indicated
Current Account Balance ‐1.4 1.4 ‐1.0 ‐2.0 ‐2.5 ‐2.5 ‐2.7
Imports (f.o.b.) 28.9 25.7 25.9 25.5 26.8 27.4 27.8
Exports (f.o.b.) 38.5 36.7 35.7 33.9 34.8 35.1 35.2
Foreign Direct Investment 1.3 1.2 1.3 2.9 3.3 3.5
Gross Reserves (in billions of USD, 1,300 1,559 1,791 1,811 2,208 2,653 3,008
In months of next year 2.7 2.8 3.0 2.9 3.2 3.4 3.5
Total Public Debt 43.3 44.8 47.8 48.3 47.9 46.4 44.9
External Debt 26.2 26.8 29.8 28.9 28.2 27.4 26.6
Terms of Trade 3.6 6.3 3.8 2.8 0.1 3.1 3.3
Other memo items
GDP nominal (CFAF billions) 15,449 17,461 19,368 21,102 23,069 25,344 27,736
Source: Ivoirian authorities; World Bank and IMF staff estimates and projections. October 2016.
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Table 2.2: Consolidated Operations of the Central Government, 2013‐2019 2013 2014 2015 2016 (p) 2017 (p) 2018 (p) 2019 (p)
(In percentage of GDP, unless otherwise specified)
Overall Balance (cash basis) ‐2.2 ‐2.2 ‐2.9 ‐4.0 ‐3.7 ‐3.4 ‐3.0
Primary balance ‐0.1 ‐0.5 ‐0.4 ‐1.6 0.1 0.6 1.0
Total Revenue and Grants 19.7 18.9 20.2 20.7 21.1 21.4 21.5
Tax revenues 15.6 14.7 15.3 16.7 16.9 17.1 17.3
Non‐tax revenues 2.8 2.4 3.5 2.4 2.7 2.7 2.5
Grants 1.3 1.7 1.5 1.7 1.5 1.6 1.6
Expenditure 21.9 21.0 23.1 24.7 24.8 24.8 24.5
Current expenditure 15.9 15.3 16.6 17.3 16.9 16.5 16.3
Wages and compensation 6.7 6.8 6.9 6.8 6.5 6.2 6.0
Goods and services 5.7 5.6 6.1 7.1 6.7 6.6 6.6
Transfers 2.1 1.7 2.1 1.7 1.8 1.8 1.8
Interest 1.4 1.2 1.5 1.7 1.9 1.9 1.9
Domestic 0.7 0.7 0.8 0.9 1.0 1.0 1.0
External 0.6 0.5 0.8 0.8 0.9 0.9 0.9
Capital expenditures 6.0 5.7 6.4 7.5 7.8 8.3 8.2
Domestically financed 4.0 3.5 4.1 5.1 4.4 4.7 4.5
Externally financed 2.0 2.2 2.4 2.3 3.4 3.6 3.7
General Government Financing 2.0 3.1 2.8 4.1 3.8 3.5 3.1
External (net) 1.8 3.0 4.1 3.3 2.9 2.1 1.9
Domestic (net) 0.2 0.1 ‐1.2 0.2 0.1 0.6 0.5
Source: Ivoirian authorities; World Bank and IMF staff estimates and projections. October 2016.
Table 2.3: Balance of Payments Financing Requirements and Sources, 2013‐2019
2013 2014 2015 2016 (p) 2017 (p) 2018 (p) 2019 (p)
(In CFAF billions)
BOP financing requirements and sources
Financing requirements 353 ‐26 422 702 870 952 1,120
Current account deficit 209 ‐252 192 426 574 636 747
Amortization of loans 144 226 231 276 296 316 373
Other short‐term capital outflows … … … … … … …
Financing sources 353 ‐26 422 556 687 762 931
FDI 204 209 251 622 761 887 1,026
Portfolio investments (net) ‐93 ‐892 ‐806 ‐492 ‐364 ‐447 ‐553
Capital transfers and grants 95 139 129 128 127 126 125
Short‐term debt disbursements … … … … … … …
Long term debt disbursements (excl. IMF) 212 594 899 375 573 654 712
Change in reserves ‐138 ‐159 ‐96 ‐42 ‐346 ‐375 ‐294
IMF credit (net) 72 83 45 ‐34 ‐63 ‐82 ‐85
Financing gap 0 0 0 146 183 189 189
O/w Prospective IMF financing … … … 57 114 114 113
Source: Ivoirian authorities; World Bank and IMF staff estimates and projections. October 2016
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2.2 MACROECONOMIC OUTLOOK AND DEBT SUSTAINABILITY
2.9 The macroeconomic framework is projected to remain stable in both the short and medium term. Côte d’Ivoire is expected to continue on a positive trajectory of economic expansion as a result of structural reforms and prudent fiscal as well as monetary policies. However, there are risks on both the domestic and external fronts as discussed in Section 5 of this program document.
2.10 Côte d’Ivoire’s growth prospects remain strong, with projected growth rates of 8 percent in the short to medium term. The country’s macroeconomic framework continues to reflect the Government’s willingness to maintain fiscal discipline while prioritizing public investment. The 2017 budget calls for a significant expansion in public investment financed by a combination of donor inflows, domestic borrowing and an increase in tax revenue. The authorities plan to increase the central government’s gross investment from 6.0 percent of GDP in 2014 to about 8.0 percent over the medium term. Assuming that annual GDP growth rates remain at around 8 percent, these levels of investment imply that the overall fiscal deficit (including grants) will be maintained at around 3.0 percent of GDP in the near future. Following more than a decade of wage and hiring freeze in the civil service, the Government has approved a strategy – in line with a medium‐term wage strategy approved under the IMF program and consistent with medium‐term fiscal sustainability – that will lead to a higher wage bill in nominal terms, but not as a percentage of GDP. Projections made under the wage bill strategy take into consideration a front‐loading of increases in the first years (2014 and 2015).
2.11 Broad‐based and robust economic growth is projected to continue into the medium term despite recent declines in the primary sector. The consolidation of political stability is expected to encourage greater private investment, including in sectors such as light manufacturing and agro‐processing, telecommunications and construction. Recent policy measures aimed at further improving the business environment, as well as favorable ratings by international credit rating agencies are expected to boost foreign direct investment, in particular in sectors such as agribusiness and mining. Moreover, several sectors that were affected by the crisis, such as manufacturing, construction, transportation and trade, have not yet fully recovered, suggesting significant potential for further catch‐up growth effects. The increasing use of PPPs, in infrastructure but also in the provision of healthcare and education services, should also help boost domestic and activities as well as facilitate technology transfers.
2.12 The fiscal deficit should increase to 4.0 percent of GDP in 2016, before declining toward an objective that complies with the WAEMU norm of 3.0 percent of GDP by 2019. This objective relies on the assumption that tax revenue will increase from 15.3 percent of GDP in 2015 to 17.3 percent of GDP in 2019. This will require a significant effort over tax collection over the next few years. The level of public spending will remain at approximately 24 percent of GDP over the next few years, with a gradual shift from current to capital expenditure. Overall, Côte d’Ivoire’s fiscal stance is expected to remain consistent with the Government’s objective of preserving macroeconomic stability and of reaching the WAMEU fiscal targets by 2019. However, fiscal risks could arise from: (i) public investment implementation capacity and weaknesses in the public investment management framework; (ii) the realization of contingent liabilities incurred from the use of PPPs; (iii) the banking sector; (iv) financial imbalances in the energy sector; (v) borrowing by SoEs; and (vi) tightening global financial conditions. The Government is attempting to address these potential fiscal risks as explained later in this document.
2.13 Current account deficits are projected to remain moderate in the near future, financed by a combination of FDI and public borrowing. The trade surplus is projected to remain strong at around 8.6 percent of GDP over 2016‐2017, thanks to good export performances in cocoa and other products. The current account deficit (excluding grants) is projected to widen slightly to around 2.5 percent of GDP from
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2017 onward, in part due to further deterioration of the services balance and increased interest payments on the public debt. However, this would be more than compensated by an increase of FDI (up to CFAF 622 billion and FCFA 887 billion in 2016 and 2018, respectively, from CFAF 251 billion in 2015) thanks large private sector’s investments in the agribusiness and energy sectors, as well as by more projects and other loans. The financing gap of about CFAF 146 billion and CFAF 183 billion in 2016 and 2017 (of which CFAF 57 billion and CFAF 114 billion from prospective IMF financing) is projected to be covered mainly through budget support.
2.14 Côte d’Ivoire’s membership of the CFAF zone prevents it from using the exchange rate as a tool of improving competitiveness. Recent IMF estimates of the real exchange rate have shown that it has been on a depreciating trend by 3 percent since 2013 and is broadly in line with its equilibrium level.
2.15 The most recent joint IMF‐World Bank Debt sustainability analysis (DSA) prepared in October 2016, found that Côte d’Ivoire remains a moderate debt distress risk. Under the baseline scenario, the deterioration in debt vulnerability occurs primarily in the early years of the DSA—with the debt stock indicators improving slightly in the longer run compared to the last DSA, while for the debt service indicators the deterioration persists. This deterioration underscored by the DSA reflects three factors: (i) the lower projected levels of fiscal and export revenue; (ii) a reduction in the grant equivalent share of new borrowing; and (ii) the reduction in the dollar value of GDP (appreciation of the USD vis‐à‐vis the CFAF). This worsening is offset partly by the lower amount of projected external borrowing compared with the last DSA, reflecting the smaller external current account deficit and greater recourse of the WAEMU regional debt market. The bump in the debt service indicators is spread over a slightly longer period, as a result of the three‐year amortization profile of the 2015 Eurobond. Under the stress tests, all the debt stock indicators show a slight improvement compared with the last DSA, except for the extreme scenario. In addition, under the negative FDI shock scenario the debt‐to‐exports indicator worsens. In contrast the debt service indicators show a broad but small deterioration under all stress tests. The public debt DSA results do not suggest a change in the assessment of risks. Under the baseline scenario, all public debt indicators would decrease over time. The Present Value (PV) of total public debt would fall, while the debt service‐to‐revenue ratio, after peaking in 2025 with the bullet payment of the 2015 Eurobond, would decline and stabilize during 2026–2036. Overall, the DSA continues to assess Côte d’Ivoire’s external risks of debt distress as moderate.
2.16 The joint DSA emphasizes the need to maintain a prudent debt management strategy, especially if the authorities wish to conduct countercyclical fiscal policies. The DSA highlighted the need to: (i) carefully monitor the accumulation of external debt (especially non‐concessional debt), avoid an excessive clustering of maturities in the mid‐2020s and take adequate consideration of rollover and foreign exchange risks; (ii) take into account potential changes and volatility in international financial market conditions for borrowing plans; and (iii) promote economic diversification and strengthen revenue mobilization in order to increase resilience to exogenous shocks. Furthermore, the analysis stressed the importance of further strengthening the monitoring of related contingent fiscal risks (e.g. the restructuring of the public debt department, the strengthening of the National Debt Policy Committee, the centralized database used to monitor public sector’s debt, and risk stemming from the electricity sector and PPP projects). The DSA considers that the pace of the government’s new borrowing, particularly non‐concessional external debt, should take into account the risk of increased vulnerabilities, including those from the contingent liabilities of SOEs.
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Table 2.4: External Debt Stock Composition at Year‐End (LIC ‐ DSA, October 2016)
2014 2015 2016 2017 2018 2019 US$ Million % of total % of GDP
Total 5,884.3 7,241.9 100.0 23.4 8,484.1 9,594.6 10,872.9 11,967.9
Multilateral creditors 1,502.4 1,748.5 24.1 5.6 1,744.6 1,587.6 1,409.2 1,238.6
IMF 996.9 983.8 13.6 3.2 971.3 853.2 715.2 577.5
World Bank 154.2 394.5 5.4 1.3 410.7 404.4 402.7 402.2
AfDB 43.6 47.0 0.6 0.2 49.2 48.7 49.0 49.4
Other multilaterals 307.7 323.2 4.5 1.0 313.4 281.3 242.3 209.6
Official bilateral creditors 1,113.8 1,161.4 16.0 3.8 1,396.5 1,555.8 1,740.7 1,671.1
Paris Club 545.9 307.0 4.2 1.0 500.2 683.3 878.3 816.4
Non‐Paris Club 567.9 854.4 11.8 2.8 896.2 872.5 862.4 854.7
Commercial; creditors 3,268.1 4,323.9 59.7 14.0 4,275.2 4,139.2 4051.5 3,974.9
London Club 3,209.7 4,272.9 59.0 13.8 4,221.7 4,094.7 4015.3 3,947.0
Other commercials 58.4 51.0 0.7 0.2 53.5 44.5 36.2 27.9
New debt 1,067.9 2,312.0 5083.2 6,378.8 Source: Ivoirian authorities and IMF estimates, October 2016.
Figure 2.1: Debt sustainability analysis, 2016‐2036
Public Debt Sustainability (PV of debt‐to GDP ratio) External Debt Sustainability Analysis (PV of debt‐to GDP ratio)
1/. The most extreme stress test is the test that yields the highest ratio on or before 2026.
1/. The most extreme stress test is the test that yields the highest ratio on or before 2026.
Source: Joint World Bank‐IMF LIC‐DSA, October 2016.
2.17 Côte d’Ivoire’s macroeconomic policy framework for 2016‐2019 provides an adequate basis for the proposed operation. The favorable assessment of the macroeconomic framework is based on the country’s successful implementation of its economic program. Côte d’Ivoire has successfully emerged from a period of extreme economic instability and continues to experience strong economic growth rate at about 8 percent annually in real terms. The country has successfully completed a three‐ year program supported by the IMF through the Extended Facility Credit and has reached a staff level agreement for a new Extended Credit Facility (ECF) and Extended Fund Facility (EFF) arrangements with the IMF. The Côte d’Ivoire’s monetary and exchange rate policies are also well managed at the regional level by the Central Bank of West African States (BCEAO) which contributes to monetary stability. Although risks are not marginal in the current volatile external environment and the narrowing of the fiscal space in recent years,
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the Government has demonstrated its ability to respond to changing circumstances and to meet economic targets while continuing to make tangible progress with its long‐term structural reform agenda.
2.3 IMF RELATIONS
2.18 Côte d’Ivoire has performed well under IMF‐supported programs. The eighth and final review under the ECF arrangement was completed on December 9, 2015. The Ivoirian authorities have requested an IMF arrangement to support the 2016‐2020 National Development Plan and a new three‐year arrangement under the Extended Credit and Extended Fund Facilities (ECF and EFF) will be presented at the IMF Board on December 12, 2016. The World Bank and the IMF have collaborated very closely in Côte d’Ivoire, notably in coordinating past and ongoing national budget support operations. World Bank staff have consistently participated in IMF review missions, providing detailed inputs to the IMF team in all areas where the World Bank is the primary agency (e.g. agricultural development, energy, public administrative reform). Similarly, the IMF team has regularly shared its macroeconomic and financial analyses with its World Bank counterparts.
3. THE GOVERNMENT PROGRAM
3.3 The 2016‐2020 National Development Plan (NDP) builds upon the vision of Côte d’Ivoire becoming an emerging economy by 2020. The NDP has five strategic pillars: (i) strengthening the quality of institutions and good governance; (ii) accelerating the development of human capital and social well‐being; (iii) accelerating the structural transformation of the economy through industrialization; (iv) developing a harmoniously distributed infrastructure throughout the country and the preservation of the environment; and (v) strengthening regional integration and international cooperation. The 2016‐2020 NDP was developed through a participatory process that included consultations held in all regions of the country and with all stakeholders.
3.4 The 2016‐2020 NDP has ambitious targets: 8.7 percent GDP growth per year and halving the poverty rate by 2020. To sustain such targets, the NDP envisions addressing current challenges to macroeconomic stability, including low domestic resources mobilization, opaque and inefficient spending, and fiscal risks from the banking and electricity sectors, and the growing number of PPP projects. Moreover, the NDP envisages large investments in physical and human capital, which will require an estimated investment of CFAF 29.3 billion (US$48.53 billion) over the next four years. The sources of financing are expected from both the Government (37.6 percent) and the private sector (62.4 percent). The authorities presented the NDP to main partners in a Consultative Group meeting in Paris, during May 17–18, 2016. This Consultative Group was successful since development partners and private sector together committed a total of US$34 billion (of which US$19 billion from the private sector), including US$5 billion from the WBG. The authorities will continue with their efforts to mobilize additional private investment. As the NDP includes a list of priority projects there is a need to fully reflect these in the Government’s annual budgets, and to improve the Public Investment Management framework.
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4. THE PROPOSED OPERATION
4.1 LINK TO THE GOVERNMENT PROGRAM AND OPERATION DESCRIPTION
4.3 The proposed operation is the first in a programmatic series of two single‐tranche DPOs. The rationale for such a programmatic approach is the cascading nature of the reforms supported by this operation that not only need to be consolidated over time but also require significant behavioral changes if they are to produce the expected results. For example, reforms in education and procurement as well as tax mobilization can only become fully effective after a certain period of time.
4.4 This DPO series is designed to address the important and increasing challenges associated with the implementation of the National Development Plan. The focus is on three of the five strategic pillars in the government’s program: Pillar 1 ‐ quality of institutions and good governance, Pillar 2 ‐ accelerating the development of human capital and social well‐being, and Pillar 3 ‐ accelerating the structural transformation of the economy through industrialization. Selectivity has been a key guiding principle in the preparation of this DPO series. The selection of the specific areas was made in close collaboration with the Government, taking into account the major binding constraints identified in the NDP and the comparative advantage of the World Bank. Such selectivity also accounted for the complementarity with the current and projected WBG portfolio as well as other interventions by partners and stakeholders, including in the areas of agriculture, transportation, water, healthcare, social protection, and private sector development.
4.5 The Program Development Objectives (PDOs) are intended to support the Government’s ability to: (i) enhance tax revenue and public procurement; (ii) strengthen efficiency and equity in the education sector and; (iii) improve the performance of the electricity sector and enable private participation. There aims mutually reinforcing complementarities within the three pillars since the creation of additional fiscal space through higher revenue mobilization will help increase financing of education expenditure. Similarly, improved access to electricity will boost private sector activities and help collect additional revenue.
4.6 The DPOs series proposes a combination of cross‐cutting and specific actions. This balance is necessary because crosscutting actions help to address weaknesses in the overall preparation and implementation of the budget. For example, all sectors suffer from the lack of domestic revenue and inconsistent procurement procedures. However, a degree of granularity is useful in addressing specific deficiencies and promoting rapid implementation of the proposed actions. While all sectors are exposed to fiscal risks, those appear especially important in the electricity sector due to the fragile financial condition of SOEs operating in this sector. The focus on the education sector is also warranted in light of its role in the NDP and its major share of the national budget (4.5 percent of GDP in 2015). Education accounts for approximately one quarter of total public expenditure.
4.2 PRIOR ACTIONS, RESULTS AND ANALYTICAL UNDERPINNINGS
4.7 This operation is designed around three pillars that aim to support the Government’s effort in the areas of fiscal management, education, and electricity. This section provides details on these three pillars, starting with a description of the context and main challenges for each one. The selection of prior
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actions for the first operation and indicative triggers for the second operation are explained as well as the results expected to be achieved at the end of the series.
Pillar 1. Enhancing tax revenues and public procurement 4.8 This pillar aims at supporting the authorities in their effort to consolidate their fiscal policy both by mobilizing additional revenue and by improving fiscal management with a specific focus on procurement that remains highly inefficient owing to persistent weaknesses in the institutional framework.
A. Tax collection 4.9 Côte d’Ivoire’s current tax collection is insufficient to finance the substantial public investment program. This is recognized by the Government, which has placed the need to increase domestic revenue collection at the center of its strategy. As emphasized in the NDP, such effort will require a significant increase in the tax base and an improved performance by the tax administration.
4.10 In spite of recent efforts, the level of domestic revenue remains low in Côte d’Ivoire. Total tax collection reached 15.9 percent of GDP in 2015, far below the WAEMU target of 20 percent of GDP. Performance was especially weak in the collection of Value Added Tax (VAT), which represented only 4.2 percent of GDP in 2015 compared to 7.3 percent in Senegal and 6.5 percent in Burkina Faso, respectively (see Table 4.1). Meanwhile, value‐added tax (VAT) accounts for about one third of domestic tax revenues.
Table 4.1: Côte d’Ivoire: Performance in VAT collection
Côte d’Ivoire (2015)
Cameroon (2014)
Ghana (2013)
Burkina Faso (2012)
Mali (2014)
Senegal (2012)
VAT collected by DGI (% of GDP) 1.7 2.9 1.4 3.3 2.0 3.4
VAT collected by DGD (% of GDP) 2.4 2.1 2.1 3.2 3.6 3.9
Total VAT (% of GDP) 4.2 5.0 3.5 6.5 5.6 7.3
VAT collected by DGD/Total VAT 59.6 71.8 60.3 48.6 63.5 53.5
Source: Côte d’Ivoire ‐ IMF Technical Assistance Report on Tax Administration, March 2016. DGI: Direction Générale des Impôts (Internal Revenue Services) / DGD: Direction Générale des Douanes (General Customs Services).
4.11 Several factors help explain low tax revenue collection. This includes: (i) a narrow tax base due to the high share of the informal sector in the economy; (ii) an inefficient tax administration; (iii) a complex tax system; (iv) an unbalanced tax structure; and (v) tax evasion. In recent years, partly under IMF Technical Assistance, several actions have been taken to address these deficiencies and boost tax administration. For example, two Mid‐Size Enterprise Center (CME) taxpayer offices were set up in Abidjan in 2014, while the Directorate of Larger Enterprises (DGE) taxpayer office was reorganized and strengthened by broadening its scope and by focusing its activities on the largest corporations. The authorities have also introduced the use of scanners based on risk analysis to reinforce customs control and audits. The strengthening of tax audits has now been initiated with the restructuring of the mission of the Directorate of Tax Monitoring (DEVF). Concurrently, a specific effort was made over VAT reforms, including to refunds, which are now paid on average in less than a week (as against more than one year in 2013). The authorities have also computerized the processing of documentation for the reimbursement of VAT credits, and an interconnection was implemented between the Directorate General of Taxes (DGI) and the Directorate General of Customs (DGC), which has led to an improvement in the review of export certificates. Lastly, VAT monitoring units have been created to reduce tax evasion and so contribute to the expansion of the taxpayer base.
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4.12 The proposed DPO series supports the authorities in their efforts to enhance more revenues through two complementary prior actions, which are also complemented by measures included in the new IMF support program:
First, to broaden the tax base by improving the identification and monitoring of potential taxpayers operating in the informal sector. As a first prior action, the tax administration has incorporated two recent surveys of the informal sector in two highly populated areas of Abidjan accounting for more than 25 percent of the revenues of the capital. These surveys have helped identify a large number of potential taxpayers. The first indicative trigger focuses on the setting up of a single taxpayer identification system, which will eliminate idle or duplicate data and help reduce tax evasion through the exchange of information across different public administration agencies.
Second, to increase the incentives for firms to register and pay taxes. By offering an amnesty to small and medium enterprises, the authorities expect to encourage potential taxpayers to register and pay taxes in the future (prior action 2). This measure was discussed with the IMF through the 2016 Budget Law approved in December 2015 and made effective in January 2016. While tax amnesties have not always lead to higher revenues, their results have been enhanced3 when they have been integrated as part of broader effort to improve tax administration. The second trigger focuses on the creation of two Mid‐Size Enterprises offices (CME) in the District of Abidjan, which will extend the coverage of mid‐sized enterprises, leading to higher tax collection.
4.13 International experience suggest that these measures are effective only if they are part of a broader effort by the tax authorities to increase tax revenue In addition to the above actions, the Government is working in close coordination with the IMF, considering future measures such as the rationalization of tax exemption regimes that are sources of potential fiscal losses. However, the implementation of such actions will require a detailed analysis, which is jointly carried on by the IMF and the tax authorities. The Government is also strengthening its efforts to simplify tax payment procedures through automated systems and e‐payments (as supported by the World Bank project on the financial sector currently under preparation). The authorities also plan to simplify the taxpayer register by using a high integrity identifier and to promote taxpayer compliance through better monitoring and the enforcement of sanctions against tax evaders.
Prior Action #1: With the objective of broadening the tax base, the Tax Administration has incorporated in its tax database the results of its 2016 survey of potential taxpayers in the two sizeable municipalities of Abidjan (Yopougon and Cocody). Prior Action #2: The Ministry in Charge of Budget has launched a tax amnesty program for all firms and individuals who voluntarily register to the Tax Administration before April 30, 2016 pursuant to Loi No. 2015‐840 dated December 18, 2015 for the state budget of 2016. Indicative triggers for the second operation: Indicative trigger 1. The Ministry of Finance has implemented an electronic single taxpayer identification system that will streamline registration and payment procedures as well as improve the identification and monitoring of taxpayers. Indicative trigger 2. The Ministry of Finance has established two centers with responsibility for identifying and monitoring tax payments by medium‐sized enterprises.
Expected results: (i) Number of taxpaying firms and individuals recorded in the government’s taxpayer database. Baseline 2015: 86,945; (i) Target 2018: 105,000. (ii) Increase in VAT revenue collected by the DGI (Tax Administration): Baseline 2015: 1.7% of GDP. Target 2018: 2.0% of GDP.
3 For more evidence, see E. Le Borgne and K Baer, Tax Amnesties: Theory, Trends, and some Alternatives, IMF, 2008.
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B. Public procurement system
4.14 In recent years, the Government has implemented several reforms to improve the efficiency and the transparency of the public procurement system. One of the first actions was to adopt new standard bidding documents and simplified and unified forms. A regulatory framework for monitoring and supervising public procurement timeframes was also implemented and strengthened through the adoption of Decree No. 2014‐306 of May 27, 2014. As a result, the average time for the procurement process—from review of bidding documents to approval of contracts—decreased from 322 days at end‐2013 to 159 days at end‐2014, while the value of noncompetitive procurement contracts as a share of total contracts fell from 42.8 percent to 23 percent.
4.15 For better traceability and more effective monitoring of procurement management, the Government has also finalized the audit of the contracts for the period running from 1993 to 2012 that are in the Integrated System for Public Procurement Management (SIGMAP) database (Procurement Management System). This effort helped the authorities to stabilize the stock of outstanding contracts and to launch a program aimed at clearing domestic arrears. 4.16 The Government implemented a public procurement plan in 2014 and 2015, with a view to ensuring that transactions are traceable and predictable in the budget. The Directorate of Public Procurement has published the results of procurement tenders, and the National Public Procurement Regulatory Authority (Agence Nationale de Régulation des Marchés Publics ‐ ANRMP) has been fully operational since 2011. It has disclosed signed procurement contracts and is working on settling procurement disputes.
4.17 Despite all these improvements, several important challenges remain. These challenges were clearly illustrated by the results of the recently published audit report for 2014. While this report revealed a reduction in the value of single‐source procurement contracts as a share of total contracts from 37 percent in 2012 to 14 percent in 2014, it also highlighted the fact that 59.3 percent of public contracts were awarded with several irregularities and 15.3 percent were approved without the required documentation. The high proportion of irregular contracts raises concerns about the efficiency and transparency of the existing procurement system.
4.18 The proposed DPO series supports the implementation of the institutional framework, which is necessary to improving compliance with the new public procurement code. In June 2015, the Government adopted Decree No. 465/MPMB/DGBF/DMP setting up the responsibilities, organization, and functioning of the Public Procurement Department, within which a Division for Procurement Review, Monitoring, and Evaluation was established. As part of this effort, the Government has set up and started to operationalize: (i) public procurement units in four key sectoral ministries (allocating a budget of CFAF 20 million to each one); and (ii) an effective Monitoring and Evaluation unit within the Ministry of Economy and Finance. This framework has strengthened the following functions at both central and sectoral levels: (i) overseeing the physical and financial execution of contracts and agreements; (ii) maintaining a database of all contracts concluded by the State and the technical and financial partners; (iii) performing quality control of the work, services, and supplies, in accordance with specifications; and (iv) designing a monitoring and evaluation system, etc. The operationalization is visible through the work undertaken by these units in terms of annual public procurement prepared, bidding documents, assessment and approval of biddings, reports prepared and submitted to the National regulatory agency for public procurement and supervision of the execution of public procurement contracts.
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4.19 The second operation of the series includes further measures designed to strengthen the public procurement system for greater efficiency in public resource management. The proposed trigger consists in the implementation of an electronic system for public procurement, which will reduce delays in the procurement of public goods and services and increase efficiency in public resource management.
Prior Action #3: The Government has operationalized (i) public procurement units in four high‐spending sectoral ministries pursuant to Arrêté No. 325 dated May 23, 2014 and Arrêté No. 275 dated April 22, 2015; and (ii) the coordinating unit within the Ministry of Finance to monitor public procurement contracts pursuant to Arrêté No. 465 dated June 23, 2015 from the Ministry of Finance. Indicative trigger for the second operation: Trigger # 3. The Government has put in place and used an electronic system for new public procurement contracts in selected agencies and ministries. Expected results: (i) Number of days on average to complete a public procurement from the preparation of tenders to approval. Baseline 2014: 159 days; Target 2018: 120 days
Pillar 2. Strengthening efficiency and equity in the education sector
4.20 The Government has displayed a strong commitment to improving education outcomes as evidenced by high level of spending. Education spending in Cote d’Ivoire is one of the highest in the region. Between 2012 and 2015, public education spending increased by over 30 percent in nominal terms, or from 4.3 to 4.5 percent of GDP as a part of government efforts to boost human capital. Key sector priorities for the 2012‐2014 period included restoring the facilities and resuming normal activities (following the 2011 crisis) and ensuring progress toward the goals of universal access to quality education. Higher public spending led to the construction of a large number of new classrooms (9,291 primary school classrooms, 3,500 secondary school classrooms and 45 middle schools) and the hiring of a large number of new teachers (19,995 primary school teachers and 6,167 secondary school teachers).
4.21 As a result, the gross enrollment rate across all levels of education increased between 2008 and 2015. The largest gains were at the primary level, where the general enrollment rate (GER) increased from 85 to 101 percent while GERs for lower and upper secondary registered modest increases and remained very low, indicating that gains at the primary level did not spill over into the secondary levels.
4.22 The progress registered is not commensurate with the increase in public resources devoted to the sector. The draft Education Sector Public Expenditure Review (PER) currently under finalization shows a high level of disparities across regions and genders, limited learning outcomes, and low level of value for money. Furthermore, Côte d’Ivoire lags behind when compared to similar developing countries. In fact, the quantitative efficiency index of the education system in Côte d’Ivoire ranks among the lowest in sub‐Saharan Africa, with 1 percent of national GDP spent on education producing 1.55 years of schooling in Côte d’Ivoire as against an average of more than 2.0 in Africa. The completion rates for primary education (63 percent) and secondary education (33 percent) are lower than those observed in the rest of the region (on average 72 and 46 percent, respectively). Available results on learning outcomes indicate a low level of student learning achievements, as shown by the national evaluation conducted in 2012 for third grade, with 87 percent of students having a low or very low level in language arts and 73 percent in mathematics. The Education System Performance in Francophone Sub‐Saharan Africa (PASEC) assessment, which provides a regional comparison, puts Côte d’Ivoire in the middle of the Francophone African countries regarding results in language arts, while the results in mathematics are among the lowest in Francophone Africa.
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4.23 Discrepancies in access to education for girls persisted in 2015, although there were strong improvements at the primary and lower secondary levels. Enrollments in upper secondary as well as in higher education revealed little to no progress in reducing gender inequality. For example, at the upper secondary level, the gap between male and female enrollment remained the same at 16 percentage points. At the higher education level, overall GER remained low for both males (10 percent) and females (7 percent).
4.24 The urban‐rural gap in access to education also persisted in 2015 and in fact worsened for post‐primary levels. While the access rates increased in urban areas at all levels of education, thus reducing the gap at the primary level from 21 to 15 percentage points, rural GERs remained comparatively low. Moreover, the gap at lower and upper secondary levels worsened over the same period, with GERs in rural areas dropping from 28 to 11 percent and from 12 to 5 percent, respectively. Access to higher education in rural areas remained very low at 0.4 percent compared to 14 percent in urban areas. Similar findings are also observed across geographic regions (with the North, Center, and West regions most affected) as well as income groups.
4.25 There remain important sources of inefficiencies within the system, in particular dropout and grade repetition rates. Dropout rates are high at the lower and upper secondary levels (3.7 percent and 6.7 percent, respectively) but are significantly higher for students in rural areas (7.7 percent in lower secondary and 16.2 percent in upper secondary) and among female students (4.3 percent in lower secondary and 9.2 percent in upper secondary). In addition to these inefficiencies, Côte d’Ivoire has very high grade repetition rates at all levels of education (15.9 percent in primary, 13.5 percent in lower secondary, and 14.1 percent in upper secondary education). Repeating grades impacts the students’ ability to complete each education stage on time, increasing the likelihood of dropping out and delaying the student’s ability to join the labor market and therefore reducing potential lifetime earnings. It also increases costs significantly as the system re‐educates children who occupy school spaces over multiple years, thus crowding out those who would otherwise be there.
4.26 Public spending is imbalanced across levels of education and regions. The Government funded 71 percent of total education spending in Côte d’Ivoire in 2015, reflecting its commitment to the provision of education for all, while households funded most of the remainder with a very small contribution from development partners. In 2015, total spending on education amounted to US$2.9 billion, with 71 percent of the contribution coming from the Government, 28 percent from households, and the remaining one percent from development partners.
4.27 Government funding efforts are high at all levels of education, including in higher education. While households tend to participate the most at the secondary level, development partners concentrate their efforts on primary education. The Government’s share of funding amounts to 75.1 percent at primary level, 62.1 percent at secondary level, and 76.2 percent in post‐secondary education. Meanwhile, households assume a higher share of spending at secondary level, with 37.6 percent of total spending, relative to other levels of education, followed by 23.8 percent at post‐secondary level. Development partners tend to focus their activities on the primary level of education, accounting for 2.3 percent of total spending at that level. Households contributed the most to post‐primary levels of education and spent a higher share in private schools, with US$74 million going to post‐secondary education, of which US$48 million went to private institutions. Most public spending in education (56 percent) is allocated to post‐primary levels even though they accommodate only 33 percent of total enrollment, while 25 percent of resources went to higher education, which accommodates only 3 percent of total enrollment.
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4.28 Public resource distribution by regions does not reflect either the population of school‐aged children in the region or students currently enrolled in school. The budget allocation, which is centrally managed, disadvantages rural and remote areas since the largest share of the budget is transferred to regions in the form of staff salaries. Salary spending takes up the largest share of non‐capital spending—91 percent at the national level with large variation by region, leaving less room for spending linked to investment and to quality improvement. Furthermore, there is an imbalance in the resource allocations across regions. The regional level distribution of staff by years of experience and grade level reveals that rural/remote areas receive less experienced staff at lower pay grade levels. This is turn implies that regions that receive lower grade‐level staff or less experienced staff also receive lower levels of public resources. For example, in the Abidjan area, staff with pay grade C or below account for only 10 percent of the total staff, compared with Minignan region, where 44 percent of the staff is at pay grade C or below. Thus, there is great need to formulate a comprehensive policy on equitable distribution of resources, with a major focus on more balanced teacher deployment.
4.29 Private schools are important service providers in the education sector and have helped the Government accommodate children who could not be accommodated in the public school system due to limited capacity. Private schools accommodate 27 percent of enrollment at all levels of education combined (with the exception of higher education). They are especially important providers at the lower and upper secondary level, where they account for 49 and 57 percent of total enrollment, respectively. The Government depends on private schools, especially at lower secondary level, to accommodate close to 33 percent of all public school students. On the other hand, most of the private school students in upper secondary schools, over 90 percent, are directly enrolled without government subsidies. The 1992 convention particularly seeks to ensure that all private schools conform to the standards, regulations, and rules set by the public sector. Private schools have higher learning outcomes than public schools, though it is not clear whether this difference is statistically significant.
4.30 The Government contributes a subsidy for each student it places in a private school. According to the 1992 convention, the public sector commits to covering some of the schooling costs of students assigned to private schools through a subsidy amounting to CFAF 120,000 (US$215) per student per year in lower secondary school, CFAF 140,000 (US$250) in upper secondary school, and CFAF 175,000 (US$312) in technical upper secondary school. However, these levels of subsidies are outdated and do not reflect actual costs. This results in a large dropout rate for students from poor households, who cannot afford to top up Government subsidies to pay the fees of private schools where legal agreements do not allow them to do so. However, the rules are not always clear but vary in agreements with different providers, and there is a great deal of ad hoc interpretation. The Government is currently seeking to revise the Convention to better reflect the current needs and landscape of the education system in Côte d’Ivoire.
4.31 The DPO series aims at supporting the government’s efforts to address some of these imbalances and to work towards developing a more efficient education system. The first operation contributes to improved efficiency of the education system through the implementation of reforms to reduce repetition rates (prior action #4). As mentioned, high repetition rates are closely associated with high dropout rates and show little evidence of improved learning outcomes for those that repeat. In order to reduce the repetition rates, the Government will reorganize primary schooling into sub‐cycles. The proposal is to have three sub‐cycles of two years each (Grade 1&2; Grade 3&4; and Grade 5&6). At the end of each sub‐cycle children will be evaluated before their promotion to the next sub‐cycle. The objective is to have blocs of competencies which makes remediation of students easier, allow for interventions to support students who are having difficulty in particular area and to develop their skills along a continuum of competencies.
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4.32 To ensure that the creation of the sub‐cycles is not a purely administrative measure, the Government will put in place accompanying mechanisms for evaluation and remediation. Regarding evaluations, the unit in charge of the assessment of learning will implement evaluations at the end of each sub‐cycle. This has a twofold purpose: First, to assess the extent to which the competencies of the sub‐cycle are acquired by children before the transition to the next sub‐cycle. Second, to allow the identification of problem areas where children are having difficulties, so that the appropriate remediation measures can be implemented. Regarding the remediation, the Ministry of Education will set up a mechanism to support children facing difficulties, through the implementation of remedial classes and the restoration of class councils. These mechanisms are proposed based on recent evaluations, which show that schools with this type of organization are the most successful.
4.33 Another priority area for reform concerns the system of subsidies to private schools. Those account for about 15 percent of total current education expenditure and are not well managed or targeted. The primary improvement to be made consists of better targeting transfers to the poorest households in the country. The proposed prior action will stimulate demand for education among the poorest families and contribute to better allocation to children from the poorest households. In the current situation, assignment to public and private schools focuses only on scores and does not take into account the socioeconomic situation of students. In addition, the per‐student subsidy for enrollment in private schools does not cover the total cost of such enrollment and still places a burden on families as some students assigned to private schools do not have sufficient resources and remain unable to enroll..
4.34 While the first operation focuses only on demand for education, the second operation will be linked to both supply and demand. Regarding the supply of education, this operation will support the implementation of the recruitment of teachers at regional level in order to reduce regional disparities in the supply of public education and increase opportunities for education in underserved regions. Regarding demand of education, the Government will implement a pilot cash transfer (voucher) system for children from disadvantaged households in selected regions in order to address the transfer challenges described above. The proposed targeting will be conducted on the basis of the mechanisms set up under the World Bank’s Social Safety Nets project. The Ministry of Education will be supported by the World Bank’s Emergency Basic Education Support Project in developing pilot tools and establishing a link with the databases developed under such social safety nets project by September 2017. This pilot project will be assessed before being rolled out nationally.
Prior Action #4: The Ministry of National Education has introduced transitional measures through Circulaire No. 3387 dated August 12, 2016 to reduce repetition in primary education by (i) creating sub‐cycles in primary education; and (ii) defining conditions of transition between the sub‐cycles. Prior Action #5. The Ministry of National Education has established criteria through Arrêté No. 143 dated October 11, 2016 for school assignment of students in the secondary lower cycle that takes into consideration (i) socio‐economic conditions of the household, including income; (ii) distance to school; and (iii) location of residence (urban/rural). Indicative triggers for the second operation: Indicative trigger 4. The Government has set up a national standardized evaluation of learning outcomes at the end of each sub‐cycle of primary education and published the first set of national standardized evaluation by September 2017. Indicative trigger 5. The Ministry of Education has issued a decree to establish the criteria for assignment and redeployment of teachers to improve teacher‐to‐student ratio in underserved regions. Indicative trigger 6. To improve the allocation of students in low secondary schools, the Government has launched a program through which vouchers will be rolled out to poor families in selected regions.
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Expected results: (i) Reduction in the repetition rate in primary school. Baseline in 2015: 15.6 percent. Target in 2018: less than 10 percent. (ii) Increase in the completion rate in lower secondary, of children from families in the poorest strata. Baseline in 2015: Boys 25 percent; Girls 13 percent. Target in 2018: Boys 33 percent; Girls 22 percent
Pillar 3. Improving the performance of the electricity sector and enabling private participation
4.35 Access to electricity is relatively low in Côte d’Ivoire, affecting both firms’ productivity and households’ welfare. While the access rate is close to 75 percent in urban areas, it remains below 30 percent in rural areas.4 Significant variations also exist across income categories. These mixed results justify the Government’s focus on improving the performance of this sector by consolidating its financial position over time and increasing the provision of electricity through private sector participation and the appropriate mix of energy sources.
4.36 The majority of power plants are fueled by natural gas and no new discoveries have been made in recent years. Côte d’Ivoire relies on a combination of imported oil and domestically produced natural gas and hydropower. Increasing domestic demand and a lack of investment in generating capacity have led to a gradual shift toward more expensive hydrocarbon fuels, a trend that is expected to continue over the short to medium term because considerable lead times are necessary for new hydropower projects to come on stream.
4.37 Looking forward, the absence of additional gas reserves could constrain the expansion of generation capacity by the private sector. Côte d’Ivoire currently exports power to its neighbors, and the government is working to secure its position as regional net exporter of energy in addition to meeting increasing domestic demand. However, its efforts are hindered by a lack of generating capacity coupled with rising fuel costs overall. Imports of liquefied natural gas (LNG) will be necessary by 2021‐2022 to provide fuel for new thermal plants. The Government is in the process of negotiating with a private partner to build an LNG import terminal in Abidjan. In the meantime, the Government has secured a deal to increase the volume of gas supply from Foxtrot International to be able to expand the generation capacity of the two IPPs, namely CIPREL and AZITO in 2018 and 2019.
4.38 The Government is also seeking to incentivize private sector participation in renewable energy and is working on a set of incentives for independent power producers. Long‐term objectives set in the country’s energy policy include an increase in the share of renewable energy in the national energy mix from 1 percent in 2015 to 16 percent in 2030. The country also aims at diversifying energy production sources from 80 percent fossil fuel and 20 percent renewable energy in 2015 to 34 percent renewable energy by 2020, and 42 percent renewable energy in 2030. However, there is no yet a clear roadmap or development plan specifying how those targets will be met over time.
4.39 Financial sustainability is the most pressing challenge facing the electricity sector. The SOE operating in this sector (CI‐ENERGIES) suffered financial shortfalls exceeding CFAF 100 billion (US$200 million) in 2011 and 2012, equivalent to 0.7 percent of GDP, and CFAF 85 billion (US$170 million) in 2013, equivalent to 0.5 percent of GDP. However, the 2014 deficit fell to CFAF 55 billion then to CFAF 39.9 billion in 2015 and is expected to further decline in 2016 to about CFAF 5‐10 billion. These financial deficits were covered by transfers from the central government.
4 Source: INS ‐ Living Standard Monitoring Survey (LSMS), 2015.
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4.40 To consolidate the recent financial gains, further improvements in the efficiency of electricity production, reduction in power losses, and adjustments to tariffs are central elements in the Government’s strategy. The power sector is expected to be in a better financial standing because production cost per kWh are expected to decline as inefficient turbines (Vridi, Aggreko) are being replaced by combined cycles (Azito 4 and Ciprel 5) and additional hydro production as the Soubré project comes on stream in mid‐2017. As the result of lower production costs, an average electricity tariff of CFAF 74/kWh is projected to cover the operating expenses and capacity charges of IPPs by 2020. This average tariff is also projected to be sufficient to cover asset renewals and the expansion of the grid, amounting to CFAF 1.6 trillion for the period 2016‐2020. This projection is contingent upon CI‐ Énergies maintaining an adequate optimization of gas supply and demand and ensuring that electricity capacity is added to the grid at the same pace as growth in demand for electricity to avoid recourse to liquid fuels.
4.41 Concurrently with reductions in power production costs, the authorities have taken actions to adjust electricity tariffs closer to operational costs. However, tariff increases remain a politically charged topic and their acceptability depends on improvements in the quality of service. In July 2015, the Government announced a schedule of gradual tariff increases spread over the next 18 months, which was rejected by customers. As a result, a revised tariff adjustment structure was adopted in June 2016, including a capped 10 percent tariff increase in 2016. In addition, ministerial decrees will revise the tariff structure in July of each year starting from July 2017. The adoption of a performance contract between the Government and CI‐ENERGIES will help ensure that the financial sustainability of the sector.
4.42 The DPO series supports the Government in its effort to improve the provision of affordable electricity to all citizens. The participation of the private sector and the use of the most appropriate energy mix, including renewable energy, are central to this objective. The Electricity Bill approved in March 2014 provides the starting point by permitting the unbundling of system operations and bringing Côte d’Ivoire’s legislation into conformity with the Economic Community of West African States (ECOWAS) Energy Protocol. It has also introduced a number of reforms, including: (i) opening up the various segments to competition, (ii) establishing a framework of incentives for promoting renewables, especially for independent power producers and auto‐producers; (iii) setting a methodology and principles for determining tariff structures for electricity sales; (iv) introducing a guaranteed feed‐in tariff for renewable energies for generating capacity below 5 MW; (v) promoting energy efficiency; and (vi) setting up a specific framework for rural electrification. The proposed operation supports the adoption of regulations implementing this new regulatory framework (Prior action # 6).
4.43 Going forward, the Government will need to rationalize the number of PPPs as the 94 projects currently in the pipeline, if all enacted, have the potential to create contingent liabilities in the order of US$25 billion, equivalent to 75 percent of Côte d’Ivoire’s GDP in 2015. The Government is committed to rationalizing the list of PPP projects in the pipeline, implement its least‐cost development plan, and establish a mechanism for updating that plan on a regular basis, taking into account projects under active preparation. As part of this strategy, it will be important to set up the regulations outlining tariffs for future IPPs as this will reduce uncertainty for future private investors.
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Prior Action #6: The Government has issued a set of decrees which (i) adopts a methodology for the determination of tariff rates that enable recovery of costs of efficient service provision through Décret No. 2016‐783 dated October 12, 2016; and (ii) promotes private sector participation and the use of renewable sources of energy through Décret No. 2016‐786 dated October 12, 2016. Indicative trigger for the second operation: Indicative trigger 7. The Government and CI‐ENERGIES/CIE have signed a performance‐based contract with the objective to: (i) define the respective roles to secure cost effective generation and other grid infrastructure investments; (ii) define electricity tariffs and subsidies allocated to CI‐Energies; (iii) reduce losses in transmission and distribution; (iv) improve the billing‐collecting rate; (v) establish clear procedures to measure the output/outcome; and (vi) incorporate a functional bonus‐malus system. Indicative trigger 8. The Government has adopted a regulation: (i) outlining modalities and procedures for setting tariffs for power generated by IPPs through tendering process, including for renewable energy projects of installed capacities greater than 5 MW; and (ii) setting up tariffs by technology type for renewable energy projects below 5MW. Expected results: (i) Improved CI‐ENERGIES financial performance as measured by its net incomes. Baseline 2015: CFAF 63 billion deficit. Target 2018: CFAF 70 billion surplus. (ii) Reduced losses as measured and reported by CIE on an annual basis. Baseline 2015: 22%. Target 2018: 20%. (iii) The Government has signed at least two power purchase agreements (PPA) with Independent Power Producers. (IPP) including one for renewable energy.
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Table 0.1: Status of Prior Actions
Prior Actions Implementation Status/Evidence
Prior Action 1. With the objective of broadening the tax base, the Tax Administration has incorporated in its tax database the results of its 2016 survey of potential taxpayers in the two sizeable municipalities of Abidjan (Yopougon and Cocody).
Implemented Report No.2720/MPMBPE/DGI/DGA/PK/KNH/09‐2016 dated Sept 22, 2016
Prior Action 2. The Ministry in Charge of Budget has launched a tax amnesty program for all firms and individuals who voluntarily register to the Tax Administration before April 30, 2016 pursuant to Loi No. 2015‐840 dated December 18, 2015 for the state budget of 2016.
ImplementedLoi No. 2015‐840 dated December 18, 2015 for the state budget of 2016.
Prior Action 3. The Government has operationalized (i) public procurement units in four high‐spending sectoral ministries pursuant to Arrêté No. 325 dated May 23, 2014 and Arrêté No. 275 dated April 22, 2015; and (ii) the coordinating unit within the Ministry of Finance to monitor public procurement contracts pursuant to Arrêté No. 465 dated June 23, 2015 from the Ministry of Finance.
ImplementedLetter from the Ministry of Finance 6251/2016/MPMBE/DGBF/DMP/33 dated November 10, 2016 following Arrete No. 325 dated May 23, 2014, Arrete No. 275 dated April 22, 2015, Arrete No. 465 dated June 23, 2015 from the Ministry of Finance
Prior Action 4. The Ministry of National Education has introduced transitional measures through Circulaire No. 3387 dated August 12, 2016 to reduce repetition in primary education by (i) creating sub‐cycles in primary education; and (ii) defining conditions of transition between the sub‐cycles.
Implemented.Circulaire No. 3387 dated August 12, 2016
Prior Action 5. The Ministry of National Education has established criteria through Arrêté No. 143 dated October 11, 2016 for school assignment of students in the secondary lower cycle that takes into consideration (i) socio‐economic conditions of the household, including income; (ii) distance to school, and (iii) location of residence (urban/rural).
ImplementedArrete No. 143 dated October 11, 2016
Prior Action 6. The Government has issued a set of decrees which (i) adopts a methodology for the determination of tariff rates that enable recovery of costs of efficient service provision through Décret No. 2016‐783 dated October 12, 2016; and (ii) promotes private sector participation and the use of renewable sources of energy through Décret No. 2016‐786 dated October 12, 2016.
ImplementedDecret No. 2016‐783 dated October 12, 2016 Decret No. 2016‐786 dated October 12, 2016
4.44 The operation was informed by previous operations and recent analytical work. This includes the previous DPO series (the three Poverty Reduction Support Credits ‐ PRSC), the Systematic Country Diagnostics as well as the Education Sector Public Expenditure Review. The overarching lesson is that fiscal sustainability and public spending efficiency are prerequisites for creating the necessary conditions for stable and sustained economic growth and the provision of high quality public services. Specific lessons learned include: (1) Fiscal management reforms remain critical to maintaining budgetary stability and reducing fiscal risk; (2) Upgrading human capital through a better education system is a prerequisite to job creation and inclusive growth; (3) Reform champions are needed for the effective implementation of reforms in strategic areas such as public procurement and energy; (4) Building up gradual consensus for reforms among key stakeholders helps ensure further ownership and accountability over time; and (5) The impact of budget support is leveraged by combining it with Technical Assistance as well as investment projects in relevant sectors. Additional studies undertaken by the Government, the IMF and EU have also
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played an important role in the design of this operation. Table 4.5 describes the six prior actions and summarizes the analytical basis for each.
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Table 0.2: Prior Actions and Analytical Underpinnings
Prior Actions Analytical Underpinnings
Pillar 1. Enhancing tax revenues and public procurement
Prior Action 1. Prior Action 1. With the objective of broadening the tax base, the Tax Administration (DGI) has incorporated in its tax database the results of its 2016 survey of potential taxpayers in the two sizeable municipalities of Abidjan (Yopougon and Cocody). Prior Action 2. The Ministry in Charge of Budget has launched a tax amnesty program for all firms and individuals who voluntarily register to the Tax Administration before April 30, 2016 pursuant to Loi No. 2015‐840 dated December 18, 2015 for the state budget of 2016. Prior Action 3. The Government has operationalized (i) public procurement units in four high‐spending sectoral ministries pursuant to Arrêté No. 325 dated May 23, 2014 and Arrêté No. 275 dated April 22, 2015; and (ii) the coordinating unit within the Ministry of Finance to monitor public procurement contracts pursuant to Arrêté No. 465 dated June 23, 2015 from the Ministry of Finance.
“Evaluation Report ofon Tax and Administration Reforms under the IMF Technical Assistance Funded by ‘the Tax Policy and Administration – Topical Trust Fund’’,Fund,” IMF Fiscal Affairs Department, March 2016
“Diagnostic Study of Governance in Côte d’Ivoire” (January 2013)
Poverty and inequality are exacerbated by corruption. It is necessary to improve processes for awarding public contracts and managing civil servants.
“Côte d’Ivoire: PEMFAR” (2008 and 2013)
The link between official policies and actual budget execution is undermined by excessive recourse to extra‐budgetary procedures.
Procurement processes suffer from the ineffective application of the new procurement code, which is hampered by capacity constraints.
Pillar 2. Strengthening efficiency and equity in the education sector
Prior Action 4. The Ministry of National Education has introduced transitional measures through Circulaire No. 3387 dated August 12, 2016 to reduce repetition in primary education by (i) creating sub‐cycles in primary education; and (ii) defining conditions of transition between the sub‐cycles. Prior Action 5. The Ministry of National Education has established criteria through Arrêté No. 143 dated October 11, 2016 for school assignment of students in the secondary lower cycle that takes into consideration (i) socio‐economic conditions of the household, including income; (ii) distance to school; and (iii) location of residence (urban/rural).
“Côte d’Ivoire: Public Expenditure Review (PER) in the Education Sector” (World Bank, 2016)
‘’A Hybrid Approach to Estimating the Efficiency of Public Spending on Education in Emerging and Developing Economies,” IMF, Francesco Grigoli (2014) 2004 World Development Report (WDR): ‘’Making Service Work for Poor People’’ (World Bank, 2004)
Evidence of large potential gains in enrollment rates by improving efficiency.
Reallocating expenditure to reduce classrooms size and improving the quality of institutions could help improve the efficiency of education spending.
Pillar 3. Improving the performance of the electricity sector and enabling private participation.
Prior Action 6. The Government has issued a set of decrees which (i) adopts a methodology for the determination of tariff rates that enable recovery of costs of efficient service provision through Décret No. 2016‐783 dated October 12, 2016; and (ii) promotes private sector participation and the use of renewable sources of energy through Décret No. 2016‐786 dated October 12, 2016.
“Systematic Country Diagnostic – SCD” (2014)Reforms in the electricity sector are needed to support the country’s objective of becoming an emerging economy while making the sector financially sustainable. Adopt and implement a comprehensive strategy to bring the electricity sector back to financial equilibrium over the coming years.
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4.3 LINK TO THE CPF, OTHER WORLD BANK OPERATIONS AND THE WBG STRATEGY
4.47. The proposed first operation in a programmatic series of two DPOs is an integral part of the World Bank’s support to Côte d’Ivoire under the IDA/IFC/MIGA Country Partnership Framework (CPF) for the period FY16‐FY19 (Report number 96515) approved by the Board of Executive Directors in 2015. The CPF, endorsed by the Board on September 29, 2015, consists of three Focus Areas of engagement: (i) accelerating sustainable private‐sector‐led growth; (ii) building human capital for economic development and social cohesion; and (iii) strengthening public financial management and accountability. CPF activities under each Focus Area fit in with two crosscutting issues specific to Côte d’Ivoire, namely governance and spatial inequalities. The proposed operation is identified in the CPF as a major contributor to the second and third Focus Areas through the strengthening of revenue collection and improvements to public resource management, particularly increasing efficiency in public spending on education.
4.43. This DPO series directly complements other World Bank investment operations and Technical Assistance (TA) projects in Côte d’Ivoire. The proposed operation will be implemented in close collaboration with ongoing World Bank operations. Reforms under Pillar 1 of the proposed operation are closely linked to activities supported by the Governance and Institutional Development Project (GIDP), additional financing for which was approved in November 2014. The GIDP seeks to enhance transparency and efficiency in the management of the public finances. Its main objectives include: (i) supporting the fight against fraud and corruption; (ii) improving the public procurement system; and (iii) enhancing budget transparency at the national and local levels. The World Bank also provided TA to support the implementation of the PFM action plan. An operation focusing on governance is also under preparation. Objectives under Pillar 2 are aligned with the Emergency Basic Education Support project, which has provided direct support for restoring and increasing access to basic education, thus contributing to greater inclusion. The operation is also in line with the Productive Social Safety Net project, which has mechanisms in place for better identification of poorer households and individuals. Finally, under Pillar 2, the PDO is also aligned with the forthcoming Global Partnership for Education project, which will include a Public Expenditure Tracking Survey. In addition, reforms under Pillar 3 are aligned with: (i) Electricity Access Scale Up Program Technical Assistance (TA), which seeks to develop a comprehensive investment prospectus designed to evaluate and prioritize different possibilities for accessing financing from different development partners; (ii) TA on the revision of Côte d’Ivoire’s legal and institutional framework for PPPs; and (iii) TA with the Public‐Private Infrastructure Advisory Facility (PPIAF) on capacity building and help with risk assessment of PPP projects.
4.4 CONSULTATIONS AND COLLABORATION WITH DEVELOPMENT PARTNERS
4.49. Consultations: The design of the proposed DPO series is centered on the objectives of the 2016‐20 NDP, which was developed through an inclusive participatory process. NDP consultations were held with civil society organizations, members of academia, private sector firms, and representatives of Côte d’Ivoire’s development partners. During the identification and design phase of the proposed DPO series, World Bank staff built of the findings of the consultative process related to the NDP and undertook discussions with some stakeholders involved in developing the Government’s reform agenda.
4.50. Collaboration with other development partners: The World Bank team is working closely with both the IMF, the European Union and the French Development Agency (AFD). In addition to participating in reviews of Côte d’Ivoire’s program supported by the ECF, the World Bank also collaborates with the IMF through a Joint Management Action Plan (JMAP). The IMF is preparing a new ECF‐supported program for Côte d’Ivoire that will also focus on domestic resource mobilization and the management of fiscal risk stemming from the electricity sector and PPP projects. Collaboration with the European Union
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(EU) in Côte d’Ivoire is critical since the EU also provides budget support. EU budget support continues to target reforms in PFM, external audit, and basic social services.
5. OTHER DESIGN AND APPRAISAL ISSUES
5.1 POVERTY AND SOCIAL IMPACTS
5.1. None of the prior actions or expected results supported by the proposed DPO series are expected to have adverse poverty or social impacts. In fact, the reform measures are expected to have positive impacts on both poor and non‐poor households by improving the availability of public resources, enhancing the efficiency of their use, contributing to economic growth, and expanding income opportunities.
5.2 Prior actions related to domestic resource mobilization and public procurement are expected to have positive indirect effects on poverty by increasing the Government’s fiscal space and its ability to implement socially beneficial programs. The broadening of the tax base will enhance domestic revenue mobilization and improve equity, especially as regards direct taxes. However, since VAT is a tax on consumption, prices of goods purchased from informal or small retailers could increase slightly and affect poor households’ disposable income. Successful implementation of actions related to the public procurement system will lead to efficiency gains in revenue spent, which may ultimately be used for poverty reduction or improvements in social indicators. The team will undertake the relevant analytical work during the preparation of the second operation to estimate the impact on the poor from the additional VAT. Social protection measures through social safety nets such as conditional cash transfers could be explored and implemented by the Government in order to mitigate the adverse impact.
5.3 By focusing on the quantity and quality of education services, the proposed DPO aims at improving opportunities for poor. In Côte d’Ivoire as in most countries around the world, higher education outcomes are one of the main determinants of long‐term economic growth and poverty alleviation.5 The prior action targeting the assignment of students to public and private schools should have a positive direct effect on the poor. The revision of the assignment criteria intends to make sure that students from poor households are retained in public schools closer to their home instead of paying additional costs that may be required when they are assigned to private institutions. The measures aiming at reducing high grade repetition rates should also benefit poor households, including through the implementation of remedial classes. Lastly, the revision of parameters used to allocate teachers across regions should help reduce the teacher/student ratio in poor regions. In all these measures, specific attention is being – and will continue to be – given to girls’ performance.
5.4 Improving the performance of the electricity sector should have a series of positive impacts, both direct and indirect, on poor households. The most visible impact should be an increase in access to electricity that will improve living conditions of households. Such improved access would also boost firms’ productivity, leading to their expansion as well as to higher demand for labor over time. Although the realignment of tariffs with production costs may impact existing customers negatively in the short term, its magnitude is limited because poor customers have extremely limited access to electricity. Concurrently, the reduction in Government transfers to the electricity sector (which were necessary before the tariff adjustment) will release budgetary resources that can be allocated to pro‐poor
5 Full details can be found the World Bank’s Systematic Country Diagnostic for Côte d’Ivoire, 2015.
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5.6 The proposed DPO series is also expected to have a positive impact on gender equality. Reforms under pillar 2 will contribute to correct gender disparities through a better resource allocation in basic and secondary education in order to facilitate girls’ access to social services.
5.2 ENVIRONMENTAL ASPECTS
5.7 The reforms supported by the proposed operation are not likely to have significant negative effects on the country’s environment, forests, or other natural resources. The reforms being supported aim primarily to strengthen economic governance at the national level. Any adverse environmental effects are expected to be minor and manageable through the existing World Bank framework. Measures aiming to improve PFM are not expected to have any environmental impact.
5.9 The World Bank produced a new Country Environmental Analysis (CEA) for Côte d’Ivoire in 2014, which examined issues in the forestry, mining, urban development, and environmental governance sectors. The study concluded that: (i) in the face of climate change and increasing pressure on the country’s ecosystems, sustainable natural resource management is key to ending extreme poverty and promoting shared prosperity; (ii) the existing mechanisms for collecting environmental data are weak and are not effectively used in the formulation of sectoral policies; (iii) there is limited collaboration between the Ministry of Environment, Urban Environment, and Sustainable Development and the ministries responsible for forestry, water resources management, fisheries, agriculture, mining, and energy; and (iv) environmental and natural resources management lacks sufficient funding on the part of both the Government and its development partners as environmental management accounts for an estimated 0.2 percent of the national budget. Its recommendations include: (i) assisting the Government in developing a green growth strategy within which financial resources can be allocated across sectors; (ii) establishing a national environmental information system; and (iii) strengthening collaboration between sector ministries through coordinated programs.
5.3. PFM, DISBURSEMENT AND AUDITING ASPECTS
5.9 Côte d’Ivoire’s PFM system is sufficiently strong to support the proposed operation. Fiduciary arrangements remain adequate, and the 2013 Public Expenditure and Financial Accountability (PEFA) assessment highlighted important progress made since the 2008 PEFA. Key achievements include: (i) improvements in Côte d’Ivoire’s legal and regulatory framework and its increasing alignment with WAEMU directives for PFM; (ii) enhanced budget preparation processes and debt monitoring mechanisms; and (iii) more comprehensive and reliable public information on budget allocation, execution, and financial management practices. Nevertheless, further improvements in PFM will be necessary if the Government is to achieve its development goals. The PFM component of the proposed operation is essential to the Government’s development program and complements its recent progress in strengthening public resources management and increasing fiduciary transparency.
5.10 Budget preparation and execution procedures have been normalized following the 2011 crisis. The authorities are again publishing regular budget execution reports, clearing the backlog of outstanding draft budget execution bills for submission to the Court of Accounts (Chambre des Comptes), and implementing procurement reforms. The budget is now published on a public website, and a recent staff reorganization should accelerate the implementation of PFM reforms. The 2013 update to the Public Expenditure and Financial Accountability Review (PEMFAR) confirmed the Government’s steady progress in this area. The Government’s PFM reform program is based on PEMFAR recommendations and the goal of achieving compliance with WAEMU PFM directives. With support from the World Bank, the EU, and
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the AfDB, the Government has developed a new strategic framework for PFM and an action plan designed to implement reforms at both national and subnational levels.
5.11 The IMF carried out an on‐site safeguards assessment of the Central Bank of West African States (BCEAO) and found that progress has been made in strengthening the BCEAO’s safeguards framework since 2013. The BCEAO also enhanced its governance framework and now publishes a full set of audited financial statements and is gradually bringing its practices into conformity with International Financial Reporting Standards (IFRS). IMF staff also noted that the BCEAO has improved the quality of the explanatory notes that accompany its financial statements. An internal audit charter has been put in place, mechanisms for improving risk management and risk prevention have been established, and follow‐up of internal and external audit recommendations has been strengthened. As regards the external audit process, the assessment recommended that steps be taken to ensure the adequacy of the mechanism through selection of a second experienced audit firm to conduct joint audits. In response, the BECAO has selected a second audit firm to conduct the audit.
5.12 The proposed operation would consist of a single‐tranche credit of EURO 68.5 million or US$75 million equivalent, to be made available contingent upon effectiveness and disbursed on the basis of a withdrawal application6. The credit will follow the World Bank’s standard disbursement procedures for development policy operations. Once the operation becomes effective, the Government of Côte d’Ivoire will submit a withdrawal application to the IDA requesting that the proceeds of the credit be deposited in the BCEAO into a Dedicated Euro Account that forms part of the country’s official foreign‐exchange reserves7. Within five working days of the credit’s being deposited into that account, the Government will ensure that an equivalent amount is credited to its budget management system in a manner acceptable to the World Bank. It will report to the World Bank on all amounts deposited in the foreign currency account and credited to the budget management system. Disbursement will not be linked to specific purchases. When funds are disbursed from the dedicated account to finance budgeted government expenditures, the official exchange rate for that day will be used. If the proceeds of the credit are used for ineligible purposes as defined in the Financing Agreement, the IDA will require that the Government refund an amount equal to the amount of the ineligible payment to the IDA promptly upon notice from the IDA. Amounts refunded to the World Bank upon such a request will be canceled. The World Bank reserves the right to seek an audit of the dedicated account by independent auditors acceptable to the World Bank.
5.13 The closing date for the operation is June 30, 2019.
5.4 MONITORING, EVALUATION AND ACCOUNTABILITY
5.14 As with the previous operations in the DPO series the Ministry of Economy and Finance (MEF) will be responsible for managing the proposed operation. Day‐to‐day monitoring and evaluation of the program and all outcome indicators will be the responsibility of an inter‐ministerial economic team appointed by the MEF and composed of the Directorate General of the Economy, the Directorate of the Budget and Finance, and the Directorate General of Planning. The team will be chaired by the MEF Cabinet Director and will coordinate the activities of all Government agencies involved in program implementation. This arrangement has proved satisfactory for previous DPOs. The Government will
6 The credits will be financed under Single Currency IDA credit terms, with a 25‐year maturity including a 5‐year grace period. The single currency amounts (EUR 68.5 million) will be converted to the final SDR amount for commitment authority and country allocation management purposes on the day of program approval. 7 The use of a dedicated account is a common feature of budget support operations in WAEMU member states and mitigates fiduciary risk.
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provide quarterly progress reports to the IDA based on the performance indicators in the results framework. The status of the overall reform program will be reviewed by the Government in coordination with regular IDA missions to ensure that the macroeconomic policy framework remains adequate..
5.15 Grievance Redress. Communities and individuals who believe that they are adversely affected by specific country policies supported as prior actions or tranche release conditions under a World Bank Development Policy Operation may submit complaints to the responsible country authorities, appropriate local/national grievance redress mechanisms, or the WB’s Grievance Redress Service (GRS). The GRS ensures that complaints received are promptly reviewed in order to address pertinent concerns. Affected communities and individuals may submit their complaint to the WB’s independent Inspection Panel which determines whether harm occurred, or could occur, as a result of WB non‐compliance with its policies and procedures. Complaints may be submitted at any time after concerns have been brought directly to the World Bank's attention, and Bank Management has been given an opportunity to respond. For information on how to submit complaints to the World Bank’s corporate Grievance Redress Service (GRS), please visit http://www.worldbank.org/GRS. For information on how to submit complaints to the World Bank Inspection Panel, please visit www.inspectionpanel.org.
5.5 SUMMARY OF RISKS AND RISK MITIGATION
5.16. The overall risk rating for the proposed operation is moderate. Table 5.1 presents programmatic risks by category, rating each as low, medium, substantial or high. The three most important categories for the proposed operation are political and governance risks, macroeconomic risks, and institutional capacity for implementation and sustainability risks. A description of each of these risks and their respective mitigation measures is provided below.
Table 5.1: Systematic Operations Risk‐rating Tool (SORT)
Risk Categories Rating
1. Political and governance Substantial
2. Macroeconomic Moderate
3. Sector strategies and policies Moderate
4. Technical design of project or program Low
5. Institutional capacity for implementation and sustainability Substantial
6. Fiduciary Moderate
7. Environment and social Low
8. Stakeholders Moderate
Overall Moderate
5.17. Political, governance and security risks are substantial and their realization could have negative impacts on the proposed operation. The Government is pursuing its reconciliation agenda with opposition parties. Though the peaceful 2015 presidential election helped further normalization of the sociopolitical situation, and the October 31, 2016 referendum for revising the Constitution went well, the upcoming legislative elections in December 2016 need close monitoring. It may also lead to expenditure over runs. However, the 2016 Budget Law already includes the necessary resources and the Government has reiterated its commitment to avoiding the use of extraordinary spending procedures. In addition, security threats such as the recent terrorist attacks in Grand‐Bassam in March 2016 could divert expected financial resources away from the reform program. Increased security spending could raise fiscal deficits
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and reduce the availability of resources for pro‐poor spending. Close collaboration with the IMF, the European Union, and other development partners will help monitor and mitigate these risks.
5.18. Macroeconomic management risks are moderate. The economy continues its strong growth, albeit from a relatively low base. Some macroeconomic risks could unfavorably affect the results expected under this proposed series. Although the realization of contingent liabilities in the electricity sector and in PPP projects under the NDP could threaten macro‐fiscal stability, this risk is mitigated by measures supported by the proposed DPO series. With the tightening of global financial conditions, the Government will need to mobilize additional domestic revenue. The measures proposed in this series will mitigate fiscal sustainability risks through improvements to tax policy and to strengthening efficiency in public spending. Threats to debt sustainability are mitigated by the Government’s observance of ceilings on non‐concessional borrowing, which will be monitored in close collaboration with the IMF in the context of a new ECF arrangement. The authorities continue to implement the medium‐term wage strategy, which reduces risks to fiscal sustainability arising from public sector wage increases. In the longer run, measures to control the size and salaries of the civil service will be pursued through the effective implementation of SIGFAE (Côte d’Ivoire’s Civil Service Management System ‐ Système de Gestion des Fonctionnaires et Agents de l'État de Côte d'Ivoire). Based on the recent biometric census of civil servant and the SIGFAE, the size will be stabilized using places left by future retirees and shadow civil servants to narrow new hiring. However, Côte d’Ivoire continues to be vulnerable to price shocks in a range of international commodity markets, including cocoa and other agricultural products as well as oil products. Successful implementation of the new ECF‐supported program with the IMF and continuous discussion with the Government aiming to promote economic diversification through the DPO would help mitigate these risks.
5.19. Institutional capacity for implementation and sustainability risks are substantial. The risk of reform slippage in the main areas supported by this DPO series is considered substantial. This risk could be mitigated by the maintenance of close collaboration with the IMF and the European Union in the dialogue with the Government aiming at implementing these reforms, which can underpin the success of its National Development Plan. The World Bank will continue to provide Technical Assistance as well as Advisory services to support the strengthening of the Government’s capacity for implementation.
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Annex 1: Policy and Results Matrix
Prior actions and Indicative Triggers Result Indicators
(by end 2018) Prior Actions under DPF 1 Indicative Triggers for DPF 2
Pillar 1 – Enhancing tax revenue collection and public procurement
Prior Action 1. With the objective of broadening the tax base, the Tax Administration has incorporated in its tax database the results of its 2016 survey of potential taxpayers in the two sizeable municipalities of Abidjan (Yopougon and Cocody).
Indicative Trigger 1. The Ministry of Finance has implemented an electronic single taxpayer identification system that will streamline registration and payment procedures as well as improve the identification and monitoring of taxpayers.
Indicator: Number of taxpaying firms and individuals recorded in the government’s taxpayer database.
Baseline 2015: 86,945
Target 2018: 105,000
Prior Action 2. The Ministry in Charge of Budget has launched a tax amnesty program for all firms and individuals who voluntarily register to the Tax Administration before April 30, 2016 pursuant to Loi No. 2015‐840 dated December 18, 2015 for the state budget of 2016.
Indicative Trigger 2. The Ministry of Finance has established two centers with the responsibility of identifying and monitoring tax payments by medium‐sized enterprises.
Indicator: Increase in VAT revenue collected by DGI (Tax Administration):
Baseline 2015: 1.7 % of GDP.
Target 2018: 2.0 % of GDP.
Prior Action 3. The Government has operationalized (i) public procurement units in four high‐spending sectoral ministries pursuant to Arrêté No. 325 dated May 23, 2014 and Arrêté No. 275 dated April 22, 2015; and (ii) the coordinating unit within the Ministry of Finance to monitor public procurement contracts pursuant to Arrêté No. 465 dated June 23, 2015 from the Ministry of Finance.
Indicative Trigger 3. The Government has put in place and used an electronic system for new public procurement contracts in selected agencies and ministries.
Indicator: Number of days on average to complete a public procurement from the preparation of tenders to approval.
Baseline 2014: 159 days
Target 2018: 120 days
Pillar 2 – Strengthening the efficiency and equity in the education sector
Prior Action 4. The Ministry of National Education has introduced transitional measures through Circulaire No. 3387 dated August 12, 2016 to reduce repetition in primary education by (i) creating sub‐cycles in primary education; and (ii) defining conditions of transition between the sub‐cycles.
Indicative Trigger 4. The Government has set up a national standardized evaluation of learning outcomes at the end of each sub‐cycle of primary education and published the first set of national standardized evaluation by September 2017.
Indicator: Reduction in the repetition rate in primary school.
Baseline in 2015: 15.6 percent
Target in 2018: less than 10 percent.
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Prior actions and Indicative Triggers Result Indicators
(by end 2018) Prior Actions under DPF 1 Indicative Triggers for DPF 2
Prior Action 5. The Ministry of National Education has established criteria through Arrêté No. 143 dated October 11, 2016 for school assignment of students in the secondary lower cycle that takes into consideration (i) socio‐economic conditions of the household, including income; (ii) distance to school, and (iii) location of residence (urban/rural).
Indicative Trigger 5. The Ministry of Education has issued a decree to establish the criteria for assignment and redeployment of teachers to improve teacher‐to‐student ratio in underserved regions. Indicative Trigger 6. To improve the allocation of students in low secondary schools, the Government has launched a program through which vouchers will be rolled out to poor families in selected regions.
Indicator: Increase in the completion rate in lower secondary, of children from families in the poorest families.
Baseline in 2015: Boys 25 percent
Girls 13 percent
Target in 2018: Boys 33 percent
Girls 22 percent
Pillar 3 ‐ Improving the performance of the electricity sector and enabling private participation
Prior Action 6. The Government has issued a set of decrees which (i) adopts a methodology for the determination of tariff rates that enable recovery of costs of efficient service provision through Décret No. 2016‐783 dated October 12, 2016; and (ii) promotes private sector participation and the use of renewable sources of energy through Décret No. 2016‐786 dated October 12, 2016.
Indicative Trigger 7. The Government and CI‐ENERGIES/CIE have signed a performance‐based contract with the objective to: (i) define the respective roles to secure cost effective generation and other grid infrastructure investments; (ii) define electricity tariffs and subsidies allocated to CI‐Energies; and (iii)reduce losses in transmission and distribution (iv) improve the billing‐collecting rate (v) establish clear procedures to measure the output/outcome, and (v) incorporate a functional bonus‐malus system Indicative Trigger 8. The Government has adopted a regulation (i) outlining modalities and procedures for setting tariffs for power generated by IPPs through tendering process, including for renewable energy projects of installed capacities greater than 5 MW; and (ii) setting tariffs by technology type for renewable energy projects, below 5 MW.
Indicator: Improved CI‐ENERGIES financial performance as measured by its net incomes.
Baseline 2015: CFAF63 billion deficit
Target 2018: CFAF70 billion surplus
Indicator: reduced losses as measured andreported by CIE on an annual basis.
Baseline 2015: 22%
Target 2018: 20%.
Indicator: The Government has signed atleast two power purchase agreements (PPA)with Independent Power Producers (IPP)including one for renewable energy.
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Annex 2: Letter of Development Policy
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d’emplois ont été créés. Les revenus de la grande majorité des Ivoiriens dans les campagnes et dans les villes tant dans le secteur privé que dans le secteur public ont augmenté. Ces résultats économiques réalisés dans un cadre macroéconomique stable marqué par une maîtrise des équilibres budgétaire et extérieur ont également permis de renforcer les infrastructures économiques et sociales, et ont contribué à améliorer la qualité de vie des ivoiriens.
5. En outre, l’environnement des affaires s’est considérablement amélioré. Selon le rapport 2016 du Forum Economique Mondial, la Côte d’Ivoire est l’une des économies les plus compétitives en Afrique. Elle a progressé de vingt‐cinq (25) places au classement 2015‐2016 de l’Indice de Compétitivité Globale après une progression de onze places au classement précédent. Concernant la gouvernance, le rapport 2016 de l’Institut Mo Ibrahim situe la Côte d’Ivoire parmi les dix pays ayant fait le plus de progrès sur les cinq (05) dernières années. Enfin, l’adhésion de la Côte d’Ivoire au programme Compact du Millenium Challenge Corporation (MCC) atteste des progrès accomplis dans les domaines de la politique macroéconomique, de la bonne gouvernance et de la transparence. Avec la réalisation d’importants investissements dans les domaines de la santé, de la nutrition et de l’éducation, les perspectives en matière de développement du capital humain sont bonnes.
6. Des efforts sont en cours pour consolider le chemin vers l’émergence à l’horizon 2020 et réduire de moitié le taux de pauvreté. Le taux de pauvreté s’est situé à 46,3 % en 2015 grâce à la forte reprise économique enregistrée depuis 2012. Ce taux a diminué de 5 points comparé au pic estimé à 51% durant la crise post‐électorale de 2011, mais cette baisse reste en deçà des ambitions du Gouvernement. A cet égard, les grands objectifs du nouveau Plan National de Développement 2016‐2020 sont l’accélération de la redistribution des fruits de la croissance, surtout au profit des plus défavorisés, l’autosuffisance alimentaire, l’accès à l’eau potable, l’électrification de tous les villages de plus de 500 habitants, l’éducation pour tous, un meilleur accès à l’information grâce au programme « un citoyen, un ordinateur, une connexion internet », un système de santé d’excellence et de proximité, la Couverture Maladie Universelle.
7. A l’instar des pays émergents, la Côte d’Ivoire a engagé des réformes en vue d’améliorer son environnement des affaires et favoriser le développement d’un secteur privé dynamique et compétitif à l’échelle internationale.
8. Les résultats obtenus sur la période 2012 – 2015 montrent une progression significative en matière d’amélioration de l’environnement des affaires, ce qui a favorisé une forte croissance économique sur la même période avec un taux de croissance moyen annuel du PIB réel de 9,0%. Ainsi, la Côte d’Ivoire est classée parmi les 50 premiers pays du monde en matière de climat des affaires et elle fait partie des dix (10) économies les plus compétitives en Afrique, et a été désignée comme le pays le plus attractif d’Afrique subsaharienne pour l’investissement. L’environnement des affaires est une préoccupation nationale, c’est pour cela que le gouvernement en fait une priorité. Dix‐huit (18) mesures de réformes prioritaires, dont (01) une communautaire, ont été réalisées en vue d’impacter les performances de la Côte d’Ivoire au cycle Doing business 2016. Le pays est passé dans le classement Doing Business, de la 177ème sur 185 économies en 2013 à 142ème sur 189 économies en 2016, améliorant son classement Doing business de 35 places depuis 2013.
I. Etat d’exécution des Réformes en 2015
9. Le Gouvernement a continué la mise en œuvre de son vaste programme de réformes structurelles entamé
depuis 2011. Des avancées substantielles ont été enregistrées dans les secteurs clés de l’économie, notamment les finances publiques, le secteur financier, le climat des affaires, et les secteurs sociaux.
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a) Réformes dans le domaine des finances publiques
10. Le Gouvernement a entamé avec l’appui des partenaires techniques et financiers la mise en œuvre du schéma directeur de réforme des finances publiques et des contrôles internes et externes. Ce schéma directeur synthétise et prend en compte de manière ordonnée et exhaustive, les travaux de réforme en cours et à venir. Il se décline en un plan d’actions stratégiques dans les domaines budgétaire, fiscal et de passation des marchés publics, à mettre en œuvre sur la période 2014‐2016. Cet outil a permis à la Côte d’Ivoire de se doter d’un système moderne de gestion des finances publiques respectant les normes internationales en la matière
11. Le Gouvernement a poursuivi ses efforts d’optimisation du potentiel fiscal et de modernisation de l’administration douanière. A cet effet, il veille à la pleine opérationnalité des Centres des Moyennes Entreprises (CME), à l’aménagement des bases d’imposition des droits d’accises (tabac et boissons) par la fixation d’un prix plancher, à la déconcentration du contrôle fiscal, à la sécurisation des formules de patente et à la modernisation de la gestion de l’impôt par l’introduction de la télé‐déclaration et la simplification des régimes d’imposition des entreprises. Dans le sens de la modernisation de l’administration douanière, le Gouvernement a acquis des scanners mobiles en vue de renforcer le contrôle des dédouanements de marchandises dans les postes frontières.
12. Le Gouvernement s’est assuré de l’application effective des mesures d’amélioration de l’exécution budgétaire. Ainsi, il poursuit la rationalisation des dépenses par : (i) la limitation du recours aux avances de trésorerie aux cas d’urgence, (ii) la diminution du nombre de régies d’avance, (iii) l’utilisation effective de la Banque de données des prix de référence, (iv) la réduction de la proportion des marchés de gré à gré en dessous de 20% du total des marchés approuvés. Le Gouvernement veille à l’application de l’arrêté interministériel n°0011 MPMB /MPMEF/CAB du 29 novembre 2013 portant mesures d’encadrement du recours aux mandats‐provision.
13. En outre, le Gouvernement a continué de renforcer le cadre réglementaire pour le suivi et l’encadrement des délais de passation des marchés publics et assainir la base du système de gestion des marchés publics par un audit du stock des marchés.
A cet effet, le Gouvernement a mis en place une cellule d’information des opérateurs économiques à la
Direction Générale du Budget et des Finances depuis le 12 mai 2015. Cette cellule a pour rôle de fournir
les informations sur l’existence de crédits budgétaires pour la couverture des opérations initiées par les
responsables d’entités publiques. Elle explique également les procédures des finances publiques, y
compris les règles de passation de marchés et d’exécution des dépenses.
Dans cette dynamique, le Gouvernement a pris l’arrêté N°465/MPMB/DGBF/DMP du 23 juin 2015 portant
attribution, organisation et fonctionnement de la Direction des Marchés Publics au sein de laquelle une
Sous‐direction des Etudes, du Suivi et de l’Evaluation des Marchés Publics a été mise en place. Elle
comprend un Service Etude et un Service chargé du Suivi et de l’Evaluation des Marchés Publics. Cette
Sous‐Direction a pour mission en ce qui concerne le suivi et l’évaluation des marchés, (i) le suivi de
l’exécution physique et financière des marchés et conventions, (ii) la tenue d’une base de données sur
l’ensemble des marchés passés par l’Etat et les Partenaires Techniques et Financiers (PTF), (iii) le contrôle
de la qualité des travaux, prestations et fournitures, conformément au cahier des charges, (iv) la
conception d’un système de suivi‐évaluation, etc….
Dans le cadre de la mise en place du Système Intégré de Gestion des Collectivités Décentralisées (SIGESCOD), la Direction Générale du Budget et des Finances a procédé, avec l’appui technique de la Société Nationale de Développement Informatique (SNDI), à la connexion de dix (10) collectivités. Ces travaux ont été réalisés avant le 15 avril 2015. Les Collectivités concernées sont : au titre des Régions : (i) la Région du Bélier ; (ii) la région du Sassandra (San‐Pedro) et (iii) Sud Comoé. Au titre des Communes, Aboisso, Agboville, Bingerville, Dabou, San‐Pedro, Toumodi et Yamoussoukro
14. Le Gouvernement a maintenu ses efforts pour renforcer la bonne gouvernance et intensifier la lutte contre la corruption. Dans ce cadre, il a appuyé les activités de la Haute Autorité pour la Bonne Gouvernance chargée de la lutte contre la corruption ainsi que le contrôle de la gestion de la commande publique. Depuis
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juillet 2015, la Haute autorité pour la Bonne gouvernance, a procédé à la remise de formulaires de déclaration de patrimoine aux personnes assujetties, notamment les Présidents d’Institutions, les membres du Gouvernement, les Personnalités Elues, etc. dans le cadre de ses missions de prévention et de répression des actes de corruption et infractions assimilées. En matière de gestion des entreprises publiques, après la mise en place des Comités d’audit au sein des Conseils d’Administration, le Gouvernement veille à la production de bilans de gouvernance annuels par les sociétés d’Etat et les sociétés à participations financières publiques majoritaires.
b) Stratégie d’endettement
15. En droite ligne avec les recommandations de l’Evaluation de la Performance dans la Gestion de la dette (DEMPA) menée en juin 2015, le Gouvernement a continué de renforcer la gestion de la dette publique en cohérence avec la Stratégie de gestion de la Dette à Moyen Terme (SDMT 2015‐2019) adoptée en 2014. Cette stratégie définit notamment une gestion optimale des instruments d’endettement couplée à une analyse de viabilité afin d’assurer la soutenabilité de la dette. Par ailleurs, les travaux d’élaboration d’une base de données centralisée de la dette des entreprises publiques et des garanties gouvernementales se sont achevés en 2015 et permettront d’assurer un meilleur suivi de la dette des entreprises publiques. Enfin, le Gouvernement a achevé la réorganisation de la Direction de la Dette Publique en front, middle et back offices sur la base des recommandations de l’assistance technique du FMI pour assurer une gestion intégrée et garantir la soutenabilité de la dette publique.
16. Le Gouvernement a pris en compte un certain nombre de mesures visant le développement du marché financier sous régional, avec l’appui des services du FMI et de la Banque Mondiale. Ainsi, le Gouvernement a repris progressivement l’émission des titres de très courts termes (1, 3, 6 mois) avec la possibilité d’un recours à des titres flottants et à des émissions de refinancement. Par ailleurs, le Gouvernement a amélioré sa communication avec le marché en publiant sur son site internet, ou en utilisant tout autre moyen approprié, sa stratégie de gestion de la dette à moyen terme (SDMT).
17. Le Gouvernement a poursuivi la diversification de ses sources de financement pour réaliser sa politique de développement. Face à la rareté grandissante des ressources concessionnelles pour couvrir les besoins de financement des grands projets structurants en 2015, le Gouvernement continue de diversifier ses sources de financement, conformément à sa stratégie d’endettement. Dans ce cadre, il a recouru à la finance islamique par l’émission de sukuks afin de parachever certains projets entamés dans le cadre du PND (2012‐2015).
c) Réformes du secteur financier
18. Le Gouvernement veille à l’assainissement et au développement du secteur financier à travers la mise en œuvre du Programme de Développement du Secteur Financier (PDESFI). Par ailleurs, pour faciliter l’accès et accroître l’utilisation du crédit‐bail, un projet de Loi a été adopté par le Gouvernement en 2015. Enfin, pour le renforcement de la solidité du secteur bancaire, le Gouvernement met un point d’honneur au respect par les banques des dispositions réglementaires prises par la BCEAO et la Commission Bancaire.
19. Le Gouvernement a poursuivi la mise en œuvre de la restructuration des banques publiques avec la cession des parts de la SIB (39% en avril 2015), et la mise sous administration provisoire de la CNCE (en juin 2015). La décision de privatiser Versus Bank et la Banque de l’Habitat de Côte d’Ivoire (BHCI) a été prise en mars 2016. S’agissant de la BNI, le Gouvernement est en discussion avec la Banque Mondiale pour l’accompagner dans son renforcement. Quant à l’UNACOOPEC, le Gouvernement a sollicité également l’appui de la Banque Mondiale pour l’adoption d’une stratégie de restructuration. La restructuration de ces banques s’opère sur la base de la nécessité de financement de l’économie, de collecte de l’épargne et d’amélioration de la bancarisation de la population.
20. Le Gouvernement poursuit la mise en œuvre des mesures de redressement et de consolidation du secteur de la microfinance à travers trois (3) axes majeurs. Il s’agit de : (i) la poursuite des retraits d’agréments aux institutions non viables et le maintien de la vigilance en ce qui concerne le respect de l’autorisation préalable d’exercer, (ii) le renforcement de la surveillance par l’application effective des sanctions de la réglementation et (iii) l’appui au secteur dans le cadre de la stratégie nationale de l’inclusion financière. Les actions se poursuivront afin de renforcer la supervision du secteur ainsi que les capacités managériales et opérationnelles des acteurs des
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Systèmes Financiers Décentralisés (SFD). Ainsi, dans le cadre de la mise en œuvre de la stratégie nationale pour l’inclusion financière, le Gouvernement s’appuie sur les deux conventions signées avec l’Agence Française de Développement (AFD) en vue de mettre en œuvre des actions de formation, d’assistance technique, d’études et de renforcement de capacités sur les activités d’examen des dossiers de demande d’agrément, de contrôle sur pièces à distance et de contrôle sur place en faveur du service en charge de la supervision du secteur.
d) Réformes du secteur énergie
21. Le Gouvernement poursuit ses efforts en vue d’assurer un équilibre de long terme au secteur énergie. Dans ce cadre, il a lancé une étude de diagnostic stratégique de la SIR. En outre, il a adopté un Protocole d’accord pour le traitement des livraisons et des paiements de HVO. En ce qui concerne le suivi des consommations de HVO, un comité comprenant les Ministères en charge du Pétrole et de l’Energie, du Budget et celui de l’Economie et des Finances ainsi que les acteurs du secteur énergie est mis en place. Par ailleurs, le Gouvernement a défini les modalités de fourniture du carburant en vue de limiter les dépassements budgétaires observés.
22. Le Gouvernement a réduit de façon continue et graduelle les subventions au secteur électricité grâce à la réalisation d’infrastructures majeures pour accroître et diversifier l’offre d’énergie. Les investissements d’un coût global de 5 300 milliards de FCFA se poursuivront pour la construction de nouveaux ouvrages de production ou le renforcement des sites existants par des unités de production utilisant de nouveaux types d’intrants dont la biomasse, le solaire et la petite hydro électricité, ainsi que l’amélioration du réseau de transport et de distribution de l’électricité en vue d’accroître le rendement. Ces investissements permettront également d’augmenter l’offre de gaz et mettre fin au recours au HVO. De ce fait, la subvention de l’Etat au secteur en vue de soutenir le coût de la production pour les besoins nationaux sera limitée à terme. L’augmentation du tarif de l’électricité dès le 1er juillet 2015 s’est inscrit dans l’objectif de rétablir la viabilité du secteur électricité. Les textes d’application du Code de l’électricité adopté en 2014 ont été préparés grâce à l’appui de l’Union Européenne.
e) Réformes dans le secteur agricole
23. Dans le cadre de la poursuite de la mise en œuvre du Programme National d’Investissement Agricole (PNIA) pour le renforcement des secteurs de l’économie à potentiel de croissance élevée, en collaboration avec la Banque Mondiale et l’Agence Française de Développement (AFD), un appui a été consacré au développement des cinq (5) filières agricoles majeures (Cacao, Hévéa, Palmier, Coton et Anacarde) à travers le Projet d’Appui au Secteur Agricole (PSAC). Cet appui a permis d’apporter des solutions durables à l’entretien des pistes rurales et améliorer dans le même temps les productions agricoles, l’accès aux marchés de petits producteurs et le renforcement de la structure de gouvernance des filières bénéficiaires. A ce titre, la stratégie nationale d’entretien et de Développement du Réseau de Routes Rurales adoptée en mai 2015 est mise en œuvre.
24. Le Fonds d’Investissement en Milieu Rural a poursuivi et élargi ses investissements en milieu rural pour améliorer les conditions de vie des populations à travers le reprofilage des pistes, l’électrification rurale et l’accès à l’eau potable ainsi que la construction d’écoles et de centres de santé. Le Gouvernement appui les initiatives en faveur de la transformation des produits industriels notamment par la mise en œuvre de mesures supplémentaires visant à promouvoir la transformation de la noix de cajou. A cet effet, il a adopté un projet de Loi sur le récépissé d’entreposage en Conseil des Ministres le 22 avril 2015. Un Guichet dédié à la transformation de la noix de cajou est également créé à travers le Fonds de Restructuration et de Mise à Niveau des Entreprises Industrielles (FREMIN).
25. Le Gouvernement entend soutenir les Associations Professionnelles et les Coopératives à se conformer aux normes du secteur agricole notamment à l’Acte uniforme de l’OHADA. Dans cette dynamique, il a mis en œuvre son plan d’actions en vue de l’harmonisation des statuts et règlements intérieurs des Coopératives.
f) Réformes de l’environnement des affaires
26. La Côte d’Ivoire a poursuivi pour sa troisième année consécutive, le processus d’amélioration de l’environnement des affaires, « focus Doing Business ». Pour 2015, les actions ont été orientées sur les mesures suivantes :
La valorisation de la gestion électronique et géographiquement unifiée du Registre des sûretés du RCCM avec une base de données indexée suivant les noms des débiteurs.
La diffusion des informations de la Centrale des Risques de la BCEAO avec un historique de 3 ans.
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L’institution d’un cadre juridique pour la médiation Commerciale.
La révision des articles 31 et 39 de la Décision N°01/PR portant création, organisation et fonctionnement des Tribunaux du Commerce pour donner compétence au Président du Tribunal du Commerce en matière d'exécution des décisions.
La favorisation de l’accomplissement de procédures d’insolvabilité par des professionnels dédiés.
La garantie de la qualité des constructions par l’institution de mécanisme de délivrance du permis de construire fondée sur la gestion des risques.
Le renforcement du niveau de sécurité des transactions immobilières par l’intégration au life des solutions technologiques et le niveau de célérité de réalisation des formalités de mutation immobilière par l’intégration de la télé‐publication.
L’opérationnalisation des bureaux d’information sur le crédit en Côte d’Ivoire.
L’institution et l’organisation d’un corps de médiateurs en matière commerciale.
Le renforcement du dispositif de vérification de la qualité du matériel électrique sur le marché.
L’institution d’un examen préalable et externe des transactions présentant des conflits d’intérêt en permettant aux commissaires aux comptes de donner leurs avis avant leurs conclusions.
Tous ces efforts ont permis d’améliorer le classement de la Côte d’Ivoire au Doing Business 2016.
27. Le Gouvernement a poursuivi la promotion des PME et le développement du tissu industriel. Cette politique prend en compte la conduite du programme PHOENIX pour le soutien à la création et au développement d’un réseau dense et diversifié de PME. Ce programme a permis de disposer d’une stratégie globale d’appui au développement des PME. La cohérence de cette stratégie est assurée par la loi d’orientation pour la promotion et le développement des PME, et la mise en place d’une Agence de développement des PME. Cette Agence a pour rôle de coordonner l’ensemble de la politique et des actions en faveur des PME. Dans ce cadre, un Programme National de Restructuration et de Mise à Niveau des industries (PNRMN) pour un montant global de 152 milliards de FCFA a été adopté, pour renforcer les capacités dans la gestion et le management des PME/PMI. Le Gouvernement a entrepris également de favoriser le financement des PME par la signature de conventions avec les banques. Dans cette dynamique, il a adopté en Conseil des Ministre le 15 juillet 2015, une communication relative à l’amélioration des conditions d’accès des PME aux marchés publics et un décret modifiant le décret n° 2009‐259 du 06 août 2009 portant Code des Marchés Publics, tel que modifié par le décret n°2014‐306 du 27 mai 2014. Ce décret a modifié le Code des marchés publics afin d’adapter les procédures de passation des marchés au contexte des Petites et Moyennes Entreprises (PME). Ce décret fait notamment obligation aux autorités contractantes de réserver aux PME un quota de la valeur prévisionnelle des marchés. Il a introduit également dans les procédures de passation des marchés, une marge de préférence en faveur des PME dans le cadre de la sous‐traitance. Le Gouvernement entend ainsi faciliter l’accès des PME aux marchés publics et leur permettre de contribuer davantage à la croissance économique ainsi qu’à la création de richesses et d’emplois.
III. Programme Economique et Financier 2017‐2019
28. L’objectif principal du programme économique et financier 2017‐2019 soutenu par la Facilité Elargie de Crédit (FEC) et le Mécanisme Elargi de Crédit (MEDC) est d’accompagner le Gouvernement dans la mise en œuvre des politiques structurelles de grande ampleur pour la réalisation des objectifs du PND 2016‐2020. Le taux de croissance annuel moyen projeté sur la période 2016‐2019 est d’environ 8,8% en liaison avec la mise en œuvre de certains grands projets dans les domaines de l’agriculture, des mines, de l’énergie, des infrastructures et du tourisme. Le Gouvernement poursuivra également les réformes structurelles pour consolider les bases de la bonne gouvernance mises en place de 2012 à 2015, pour développer le secteur financier et rendre davantage attractif l’environnement des affaires.
29. Au cours de la période du programme, les équilibres internes et externes seront préservés. En effet :
Le déficit du solde budgétaire s’établirait à 4,0% du PIB en 2016 pour progressivement atteindre 3,0% du PIB en 2019.
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L’inflation devrait rester inférieure à 3%, conformément à la norme communautaire.
Le déficit du compte courant extérieur serait maîtrisé entre 1 et 3% du PIB sur la période 2016‐2019, en dépit de la hausse des importations des biens intermédiaires et d’équipement en soutien à l’investissement. Toutefois, le solde global ressortirait excédentaire sur la période, grâce notamment aux investissements directs étrangers.
30. En vue d’atteindre les objectifs du PND 2016‐2019, le Gouvernement a sollicité un nouvel accord de trois ans avec le FMI au titre de la Facilité Elargie de Crédit couplée avec le Mécanisme Elargi de Crédit (FEC et MEDC). Cet accord devrait s’appuyer sur les acquis du précédent programme qui a contribué notamment à : (i) solidifier le cadre macroéconomique après les déséquilibres externe et interne induits par la crise postélectorale, (ii) réduire la pauvreté, (iii) annuler et restructurer la dette, et normaliser les relations avec les créanciers, (iv) améliorer les indicateurs du « doing business », (v) apurer les arriérés intérieurs, (vi) améliorer l’équilibre financier du secteur électricité, (vii) assurer un revenu adéquat aux producteurs de café et de cacao, (viii) renforcer la gestion des finances publiques et de la dette, et (ix) améliorer le suivi et la gouvernance des entreprises publiques.
31. Le nouveau programme économique et financier soutenu par la FEC/MEDC, s’articulera donc autour des piliers suivants : (i) la préservation des marges de manœuvre budgétaire de l’Etat, notamment à travers le maintien de la soutenabilité de la dette, (ii) le renforcement de la gestion des finances publiques et des entreprises publiques, (iii) le développement du secteur privé, (iv) l’assainissement et le développement du secteur financier, et (v) le renforcement de l’appareil statistique.
a‐ Les marges de manœuvre budgétaire et les investissements dans les secteurs prioritaires
32. Dans le contexte mondial du resserrement des financements internationaux et du ralentissement de la croissance mondiale, le Gouvernement entend préserver les marges de manœuvre budgétaire tout en poursuivant les investissements structurants notamment dans les infrastructures de base et les secteurs sociaux conformément au PND 2016‐2020. En effet, les perspectives budgétaires sont exposées à certains aléas négatifs. Au plan extérieur, il s’agit du resserrement à terme des conditions financières internationales et de son impact sur les recettes d’exportation malgré les termes de l’échange positifs et des bons résultats obtenus lors du groupe consultatif pour le financement du PND. Au niveau intérieur, il s’agit de la situation financière de certaines entreprises publiques, des risques liés aux recours accrus aux PPP et de la sécheresse. Parallèlement, la consolidation d’une croissance économique forte et inclusive nécessite la poursuite des efforts du Gouvernement visant à (i) remédier aux goulots d’étranglement en matière d’infrastructures dans les domaines du transport, de la communication, de l’énergie et l’agriculture, (ii) accroître les dépenses sociales pour notamment renforcer le capital humain, réduire la pauvreté et prévenir les pandémies, et (iii) maintenir la situation sécuritaire.
33. Dans ce contexte, le Gouvernement mettra l’accent sur l’accroissement des recettes fiscales à travers la poursuite des efforts d’amélioration de l’efficacité des administrations fiscale et douanière, la rationalisation des exonérations, ainsi que la poursuite de la maîtrise des dépenses courantes. Les principaux objectifs budgétaires à moyen terme, issus du programme triennal signé avec le FMI sont les suivants :
faire passer le taux de pression fiscale de 15,7% du PIB en 2015 à 17,1 % du PIB en 2019 ;
faire passer le taux d’investissement public de 6,6% du PIB en 2015 à 7,4% en 2016 puis 8,7% en 2019 ;
faire passer les dépenses pro‐pauvres de 9,4% du PIB en 2015 à 9,5% en 2016 et 2017 ;
réduire progressivement le niveau de déficit budgétaire de 4,90% du PIB en 2016 à la norme communautaire de 3% du PIB en 2019.
34. Pour 2016, le déficit budgétaire projeté est revu à la hausse, comparativement à 2015, pour prendre en compte les dépenses supplémentaires, notamment en matière de sécurité. Les recettes fiscales s’afficheraient à 3 318,2 milliards de FCFA en hausse de 12,3% par rapport à 2015. Les investissements, en faveur de l’amélioration du cadre de vie des populations et du renforcement des bases de la croissance économique, se chiffreraient à 1 547,1 milliards de FCFA en hausse de 24,0% par rapport à 2015.
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35. Le Gouvernement poursuivra les réformes pour élargir l’assiette fiscale dans un contexte de resserrement des conditions financières internationales. A cet effet, il a initié plusieurs actions, notamment à travers (i) des enquêtes pilotes sur des contribuables potentiels dans les communes de Cocody et de Yopougon ; (ii) une amnistie d’arriérés d’impôts pour toute souscription volontaire de déclaration fiscale avant le 30 avril 2016 et (iii) un réaménagement des dispositions de remboursement des crédits de TVA permettant un remboursement des crédits validés dans un délai de quinze (15) jours.
36. Le Gouvernement prendra des dispositions pour exécuter les dépenses de manière prudente. Pour ce faire, il appliquera de façon stricte la régulation budgétaire. Les réunions du Comité de trésorerie seront poursuivies, afin de procéder, grâce au Système Intégré de Gestion des Finances Publiques (SIGFiP), aux ajustements nécessaires dans le cadre de la gestion budgétaire.
37. Le Gouvernement compte privilégier autant que possible, les dépenses d’investissements publics structurants et les dépenses pro‐pauvres. Ainsi, pour disposer d’une marge budgétaire suffisante, il envisage continuer à rationaliser les dépenses de fonctionnement à travers le renforcement des contrôles sur les abonnements de l’État et la gestion efficiente des effectifs de la fonction publique. Le Gouvernement entend également réviser la stratégie de maîtrise de la masse salariale en tenant compte des orientations et du cadre macroéconomique du PND 2016‐2020, afin de poursuivre la convergence vers la norme communautaire qui se situe à 35 % des recettes fiscales. Il renforcera les actions visant la réhabilitation et la construction des infrastructures de base. Conformément à son objectif de réduire de moitié la pauvreté d’ici 2020, le Gouvernement continuera à privilégier les dépenses pro‐pauvres en augmentant leur part dans le budget, notamment dans les domaines de l’électrification rurale, l’hydraulique villageoise, l’agriculture vivrière et l’emploi. Il est disposé à recevoir dans ce cadre les appuis des partenaires au développement notamment la Banque Mondiale, tant en matière financière que technique dans la définition et le financement desdites dépenses. En outre, le Gouvernement envisage de promouvoir l’agriculture vivrière, à travers la production de masse des cultures vivrières, et l’agro‐industrie pour favoriser la création d’emplois et lutter contre la pauvreté.
38. Le Gouvernement compte poursuivre les réformes et la restructuration des entreprises du secteur public, en vue d’améliorer leur gestion et limiter les subventions et risques éventuels sur le Budget de l’Etat. Dans ce cadre :
Le Gouvernement continuera de présenter en Conseil des Ministres le rapport annuel sur la situation économique et financière des entreprises du portefeuille de l’Etat et de l’annexer au projet de loi de finance portant budget de l’Etat.
Le Gouvernement renforcera le suivi de la dette des entreprises publiques. Il continuera d’enrichir la base de données de la dette des entreprises publiques, en y intégrant les données du service de la dette de 12 entreprises avant fin juin 2017. Les données relatives à l’ensemble des entreprises concernées seront intégrées avant fin décembre 2017. Ce processus fera l’objet d’un suivi régulier, avec la production, à fin mars 2017, d’une note d’étape mettant notamment en exergue les progrès accomplis ainsi que les perspectives pour l’atteinte de l’objectif fixé à fin juin 2017. Conformément à cette progression, le Gouvernement produira, avant la fin de chaque trimestre, un tableau récapitulatif de l’exécution du service de la dette des entreprises publiques du trimestre précédent. Par ailleurs, le Gouvernement continuera de s’assurer de la stricte application de l’arrêté N°399/MPMB/DPP du 1er juin 2015 portant fixation du seuil d’emprunt et de garanties des sociétés d’Etat.
Les Comités d’audits mis en place par le Gouvernement au sein des Conseils d’Administration des entreprises continueront leurs activités pour permettre auxdits Conseils d’être plus efficaces dans leurs missions de contrôle et d’administration. La transmission systématique des procès‐verbaux des réunions des Conseils d’Administration sera renforcée, afin de permettre d’alerter la tutelle financière à bonne date sur d’éventuels dysfonctionnements.
Les entreprises du secteur énergie seront restructurées sur la base notamment des recommandations des audits de la SIR et de PETROCI.
o Concernant PETROCI, la situation financière devrait s’améliorer en 2016 et le résultat net devrait ressortir en équilibre ou excédentaire, grâce au plan de restructuration en cours. Le Gouvernement accordera une attention particulière au suivi dudit plan.
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o S’agissant de la SIR, une amélioration des résultats d’exploitation a été enregistrée, en lien avec l’accroissement de la demande nationale. La mise en œuvre des recommandations de l’audit réalisé en 2016 permettra de proposer un plan de restructuration de la dette, d’un montant de 368 milliards de F CFA, en vue d’atteindre l’équilibre financier à moyen terme. Dans ce cadre, le Gouvernement entend aider à la restructuration de la dette de la SIR qui reste un facteur majeur de dégradation de sa situation financière. En effet, le Gouvernement, à travers notamment l’octroi d’une garantie, apportera son appui à la SIR pour lever les ressources adéquates aux fins de cette restructuration. Ces informations seront entièrement retracées dans le Budget de l’Etat conformément aux procédures de finances publiques.
o Par ailleurs, conformément à la politique d’amélioration de la gouvernance des entreprises publiques, le gouvernement envisage de signer un contrat de performance avec Côte d’Ivoire Energie.
39. Les mesures mises en œuvre dans le secteur électricité devraient permettre un retour à l’équilibre à fin 2017 et contribuer à accroître l’offre d’électricité pour soutenir la dynamique de croissance, en dépit de la suspension de la hausse tarifaire de janvier 2016. Pour ce faire, le Gouvernement a procédé à l’adoption des textes d’application au nombre de seize (16) du Code de l’Electricité. Le gouvernement entend poursuivre sa politique pour assurer la viabilité du secteur.
40. Le Gouvernement poursuivra la restructuration des entreprises publiques du secteur des transports.
o En ce qui concerne Air Côte d’Ivoire, son développement va porter sur le renforcement de sa flotte pour atteindre une taille optimale en vue d’assurer sa rentabilité financière, conformément au nouveau business plan qui sera adopté à fin 2016. A échéance, la mise en œuvre de ce business plan permettra l’atteinte de l’équilibre financier.
o S’agissant de la SOTRA, grâce à la mise en œuvre du plan de restructuration sur la période 2012‐2015, la situation financière a été assainie. Conformément à son plan d’affaire, la société devrait renforcer sa situation financière et dégager des résultats bénéficiaires sur toute la période 2017‐2025, grâce notamment à l’acquisition de nouveaux autobus et à l’exploitation de nouvelles lignes dédiées au transport intra communal (WIBUS).
41. Dans le cadre du programme de privatisation, une liste de quinze (15) entreprises à privatiser a été adoptée par le Gouvernement en décembre 2012. Trois (03) entreprises ont été privatisées et le processus est en cours pour les autres.
En vue d’améliorer la gestion des entreprises publiques, le Gouvernement a décidé le 15 juin 2016 en Conseil des Ministres d’établir les contrats de performance entre l’Etat et lesdites entreprises. Ces contrats permettront de définir, en cohérence avec le projet de chaque société et sur la base des orientations fixées au niveau gouvernemental, des objectifs de performances opérationnelles, techniques, économiques et financières à atteindre par les entreprises à une échéance pluriannuelle, sous la forme d’un programme d’actions de 3 à 5 ans. Cette opération commencera par une phase pilote sur 10 entreprises, qui s’achèvera en décembre 2016, avant un déploiement progressif du dispositif à compter de 2017.
42. Le Gouvernement entend appliquer les recommandations issues des différents audits sur les passifs et les marchés publics.
- Le Gouvernement a procédé à la budgétisation de l’ensemble des besoins depuis 2015. Il sera procédé à
une évaluation de l’exécution desdites dotations, afin de s’assurer qu’aucun passif nouveau n’a été
constitué sur la consommation de carburant. Il règlera également les instances de paiement des carburants
des armées à l’égard de la PETROCI avant la fin de l’année 2016.
- Au titre de l'audit du stock des marchés en souffrance de 1993 à 2012, le Gouvernement exploitera les
résultats en vue de leur traitement.
- Au titre des passifs de la période 2000‐2010 portant sur un montant de 428 milliards de FCFA, le montant préliminaire validé s’élève à 184 milliards. Ce résultat fera l’objet d’une décision du Gouvernement, qui
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permettra de déterminer le montant final à payer. Le Gouvernement élaborera et adoptera un plan d’apurement. Dans l’attente de son adoption, par précaution, un montant a été provisionné dans le budget de l’Etat 2017.
43. Le Gouvernement évaluera tous les projets financés sous forme de Partenariat Public‐Privé (PPP). Il s’agira d’adopter un mécanisme permettant d’inventorier et de surveiller tous les risques budgétaires explicites et implicites provenant des PPPs. De plus, le Gouvernement compte renforcer la capacité des Institutions de gestion de l’investissement public et renforcer le cadre légal relatif aux PPPs. Il entend bénéficier de l’assistance technique du FMI dans ce cadre en 2017. A cet effet, le Gouvernement a :
- produit et publié un rapport préliminaire identifiant les projets de Partenariat Public‐Privé (PPP) qui posent un risque budgétaire pour la Côte d’Ivoire.
- procédé à la mise à disposition du public une fiche d’information sur les contrats de Partenariats Public‐Privé (PPP) signés en Côte d’Ivoire.
44. Le Gouvernement continuera de renforcer la gestion de la dette. Un plan triennal 2016‐2019 de renforcement des capacités de l’ensemble du personnel de la Direction de la Dette Publique, désormais réorganisée en front office, middle office et back office, sera finalisé. Il devrait bénéficier de l’appui technique et financier de la BAD, du FMI et de la BADEA. Ce plan cible les principaux axes de formation que sont l’analyse et la gestion des risques, la programmation financière, la gestion macroéconomique, la stratégie d’endettement à moyen terme, l’analyse de la viabilité de la dette et le cadre des dépenses à moyen terme, l’analyse financière, la gestion de la trésorerie, les aspects juridiques de la dette pour économistes et les aspects économiques de la dette pour juristes. Par ailleurs, les projets de textes relatifs au cadre juridique de la dette et les procédures du Comité National de la Dette Publique (CNDP) sont en cours de finalisation. Ils concernent notamment la saisine et le fonctionnement du CNDP, ainsi que des textes portant sur l’approbation des emprunts et l’émission de garanties publiques.
45. Le Gouvernement continuera d’améliorer la gestion de la dette publique conformément aux exigences internationales et aux normes communautaires de l’UEMOA. Il adoptera un projet de loi portant politique nationale d’endettement et de gestion de la dette publique. Par ailleurs, après l’adoption dudit projet de loi par l’Assemblée Nationale, plusieurs décrets d’application de la loi susmentionnée seront pris, notamment celui relatif à la saisine du Comité National de la Dette Publique (CNDP).
46. Le Gouvernement entend préserver la bonne qualité de sa signature et la bonne perception de la Côte d’Ivoire par les investisseurs. Il compte profiter des acquis réalisés en termes de réorganisation de la Direction de la Dette en front, middle et back office et d’élaboration du manuel de procédures du CNDP. Pour y parvenir, le Gouvernement envisage de:
renforcer les capacités du CNDP et de la Direction de la Dette Publique ;
assurer une gestion active de la trésorerie de l’Etat ;
poursuivre l’amélioration de la communication avec le marché ; et
élargir le suivi de la dette à l’ensemble du secteur public. Dans ce cadre, il complètera la base de données relative à la dette des entités publiques et sociétés à participation financière publique majoritaire en y intégrant le service de la dette. A moyen terme, l’interconnexion entre le Système de Gestion des Entreprises Publiques (SIGEP) et le Système de Gestion et d’Analyse de la Dette (SIGADE) sera réalisée afin de disposer d’informations fiables en temps réel.
b‐ Renforcer la gestion des finances publiques
47. Le Gouvernement continuera la modernisation des modes de pilotage et de gestion des finances publiques. A cet égard, il entend poursuivre (i) la prise des textes d’application de la Loi Organique portant Loi de Finances,(ii) la finalisation de la Charte de gestion des Programmes, (iii) la mise en place du nouveau Système d'Information Budgétaire, (iv) l’amélioration de la pratique du plan d’engagement des dépenses
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budgétaires en cohérence avec les plans de passation des marchés publics et articulé avec le plan de trésorerie tout en poursuivant la réduction du recours aux procédures exceptionnelles de dépenses, (v) la formation des acteurs centraux et déconcentrés de la dépense publique sur le nouveau système de gestion des finances publiques, t les Budgets Programmes, avec le démarrage de la phase pilote sur cinq Ministères, et (vi) le renforcement des capacités des comités sectoriels CDMT à l'élaboration des outils de performance. Par ailleurs, il compte poursuivre l’amélioration de la qualité et la transparence de l’information budgétaire et comptable à travers les communications en Conseil des Ministres sur l’exécution budgétaire et les opérations de passation des marchés publics. Dans cette optique, le Gouvernement poursuivra ses efforts visant à garantir la qualité de la balance générale des comptes et notamment l’apurement des comptes d’imputation provisoire. Suite à la mise en place du nouveau Système d’Information Budgétaire, il poursuivra le projet de mise en œuvre d’un système d’information intégrant de manière optimale les parties budgétaires et comptables de la chaîne de la dépense notamment en procédant à l’interfaçage entre le SIGFIP et ASTER en décembre 2017. Il complètera la documentation budgétaire pour y faire apparaître les risques liés à la situation financière difficile de certaines entreprises publiques et ceux liés aux PPPs et prévoira dans un second temps la publication d’un rapport concernant la performance d’entreprises publiques qui sera annexé à la documentation budgétaire à partir de 2018.
48. Le Gouvernement compte renforcer la Cellule d’Information des Opérateurs Economiques (CELIOPE) pour une meilleure transparence et une bonne gouvernance. Cette cellule a été créée au sein de la Direction Générale du Budget et des Finances (DGBF) afin de faciliter et de renforcer la communication avec le secteur privé. Le Gouvernement reste convaincu qu’une meilleure dissémination de l’information sur le processus d’exécution budgétaire auprès des opérateurs devrait contribuer à éliminer la constitution de passifs, qui sont des dépenses extrabudgétaires. Les actions à mener concerneront :
- l’achèvement et la mise en œuvre effective du progiciel de gestion de la CELIOPE et la formation des
agents et ;
- la poursuite de la stratégie de promotion et de vulgarisation des activités de la CELIOPE.
49. Le Gouvernement continuera l’amélioration du système de passation des marchés publics. A cet effet, il entend poursuivre (i) les actions de réduction des délais de passation des marchés publics, (ii) la mise en place des cellules de passation des marchés publics auprès des ministères techniques et autres structures assujetties au Code des marchés publics et (iii) la transposition des directives relatives à la Maitrise d’Ouvrage Délégués et aux Délégations de Services Publics. Le Gouvernement s’engage par ailleurs à limiter les contrats de préfinancement conformément aux dispositions du code des marchés publics. Cette dynamique a permis au Gouvernement de poursuivre le renforcement du cadre institutionnel des marchés publics avec : (i) la mise en place des cellules de passation des marchés auprès des ministères sectoriels pilotes que sont : le Ministère de la Santé et de l’Hygiène Public, le Ministère de l’Agriculture, le Ministère de l’Education Nationale, le Ministère de l’Enseignement Supérieur et de la Recherche Scientifique et le Ministère auprès du Président de la République chargé de la Défense, conformément aux dispositions du code des marchés publics, (ii) l’opérationnalisation de la cellule de suivi des marchés passés à la Direction des Marchés Publics.
50. Le Gouvernement poursuivra davantage la modernisation et l’optimisation de la gestion de la trésorerie avec la mise en place du Compte Unique du Trésor (CUT). A l’issue de la phase pilote entamée en 2015, dont l’achèvement est prévu en 2017, le programme de clôture des comptes sera accéléré et une mise à jour de l’inventaire des comptes ouverts dans les banques commerciales sera menée. Le CUT sera progressivement opérationnel d’ici à fin 2018. Le CUT permettra de centraliser et d’assurer la traçabilité des opérations de trésorerie de l’administration publique, et contribuera ainsi à assurer une gestion active de la trésorerie de l’Etat.
c‐ Renforcer l’environnement des affaires et développer le secteur privé
51. Le Gouvernement entend accroître de manière significative la contribution du secteur industriel dans la création de richesses et d’emplois. Cette industrialisation nécessite un approfondissement des
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problématiques liées à l’amélioration continue de l’environnement des affaires, au renforcement de la compétitivité et au développement de partenariat. 52. Le Gouvernement continuera de contribuer à améliorer la productivité et la compétitivité du secteur privé par la réduction des coûts des facteurs à travers :
- Le renforcement du réseau d’infrastructures économiques (télécommunication, transport et énergie) se poursuivra pour accompagner la politique d’industrialisation.
- La mise en place de l’Agence de Gestion et de Développement des Infrastructures Industrielles (AGEDI) et du Fonds de Développement des Infrastructures Industrielles (FODI) contribuera à accélérer la réhabilitation de la zone industrielle de Yopougon ainsi que l’aménagement de celle de PK24.
- La construction de nouvelles zones industrielles est prévue dans les différentes régions dans le cadre du développement de pôles économiques compétitifs.
- La promotion du cadre de dialogue Etat‐Secteur privé à travers le renforcement du Comité de Concertation Etat/Secteur Privé (CCESP). 53. Le Gouvernement compte densifier le secteur des PME/ PMI et le rendre plus moderne, afin de créer plus d’emplois pour la jeunesse. L’éclosion de ce tissu de petites et moyennes entreprises passera notamment par la mise en œuvre du programme de développement des PME (programme Phœnix). Par ailleurs, l’accès des PME à la commande publique sera amélioré avec l’application des nouvelles mesures prises par le Gouvernement sur la commande publique, notamment pour l’accès au financement et aux marchés publics.
d‐ Développer le secteur financier et l’inclusion financière 54. Le Gouvernement poursuivra la mise en œuvre de son Programme de Développement du Secteur Financier (PDESFI) pour favoriser l’assainissement et le développement de ce secteur et améliorer l’inclusion financière. Concernant l’assainissement, le Gouvernement accélérera le redimensionnement du secteur bancaire public en vue de créer un pôle performant, capable d’accompagner ses politiques sectorielles, et qui soit conforme à sa volonté de désengagement du secteur productif. Les réformes concerneront également le renforcement de la supervision du secteur des assurances ainsi que la transparence et la disponibilité des informations financières. S’agissant du développement du secteur, les efforts porteront sur le financement des PME et l’approfondissement du marché des capitaux. Enfin, le Gouvernement facilitera la mise en œuvre de la Stratégie Nationale d’Inclusion Financière pour renforcer la bancarisation et l’accès au crédit.
55. Le Gouvernement achèvera la mise en œuvre de sa stratégie de restructuration des banques publiques et continuera d’accompagner le renforcement de la solidité du secteur bancaire. Ainsi, sur les quatre (04) banques publiques du portefeuille, deux (02) seront privatisées et s’agissant des deux (02) autres, l’une sera restructurée et l’autre renforcée. Dans ce cadre, la dette titrisée de la dernière banque sera transformée en titre de marché négociable d’ici à fin mars 2017. Concernant les banques à participation minoritaire de l’Etat, le Gouvernement s’assurera de leur introduction sur le marché de la Bourse Régionale des Valeurs Mobilières (BRVM) pour participer au dynamisme de ce marché et leur favoriser un meilleur financement. Dans le cadre du renforcement de la solvabilité des banques, le Gouvernement veillera à assurer l’application de la décision de la BCEAO sur l’accroissement du minimum réglementaire de fonds propres d’ici à fin juin 2017. Il a transmis à la Commission bancaire pour avis, le plan de restructuration de la CNCE en vue de prendre en compte ses recommandations dans l’opérationnalisation dudit plan.
56. Le Gouvernement renforcera l’assainissement du secteur de la microfinance. Pour ce faire, il a demandé le soutien de la Banque Mondiale à travers les initiatives FIRST (Financial Sector Reform and Strengthening Initiative) et FISF (Financial Inclusion Support Framework) dans la mise en œuvre de la Stratégie Nationale de la Microfinance pour consolider la solidité du secteur des Institutions de Microfinance et renforcer la confiance des petits épargnants. Dans ce cadre, le plan de redressement de l’UNACOOPEC‐CI sera poursuivi. Le Gouvernement continuera également d’encourager l’implantation de nouveaux acteurs et le développement des produits innovants, notamment dans les TIC avec le mobile money, afin de favoriser une meilleure inclusion financière des ménages.
57. Le Gouvernement compte asseoir un cadre réglementaire moderne favorisant une offre plus vaste et diversifiée des services financiers, tout en renforçant la protection des consommateurs. Concernant
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la diversification des services financiers, il veillera, en relation avec la BCEAO et l’ensemble des acteurs du secteur financier, à la pérennisation du Bureau d’Information et de Crédit (BIC). En outre, il continuera à stimuler l’activité du marché boursier régional et accroître sa liquidité, ainsi qu’à renforcer le rôle des assurances dans la mobilisation de l’épargne nationale. S’agissant de la protection des consommateurs, le Gouvernement procédera, d’ici la fin de l’année 2016, à la mise en place d’un Observatoire de la Qualité des Services Financiers pour (i) favoriser la transparence et la comparabilité des services financiers, (ii) assurer une meilleure gestion des plaintes des utilisateurs des services financiers et (iii) renforcer l’éducation financière.
e‐ Emploi et politique sociale
58. Le Gouvernement entend mettre le développement du capital humain et l’amélioration du bien‐être de la population au centre de ses priorités. La croissance inclusive, principal moyen d’amélioration du bien‐être des populations, nécessitera (i) la mise en place des mécanismes favorisant l’emploi des jeunes et un soutien aux petits producteurs ruraux, (ii) un meilleur accès aux services sociaux de base de qualité pour accélérer la réalisation des Objectifs de Développement Durable (ODD) et (iii) un système de protection sociale qui renforce la résilience et la capacité productive des ménages pauvres et vulnérables.
59. Le Gouvernement compte promouvoir la création d’emplois durables. Dans cette dynamique, l’Agence Emploi Jeunes créée en décembre 2015, se chargera d’organiser l’action des différents acteurs et adressera toute la problématique de l’emploi en particulier celui des jeunes. Il compte également adapter les formations aux besoins du marché du travail à travers la mise en œuvre de la réforme de la formation professionnelle. Cette réforme vise à (i) satisfaire la demande de formation technique et professionnelle, (ii) offrir des formations adaptées aux besoins de qualification exprimés par le marché du travail, (iii) renforcer le partenariat école et entreprise,(iv) assurer les conditions d’une insertion durable des demandeurs d’emploi et des personnes en situation de précarité, (v) mettre en place un mécanisme de certification des compétences, en concertation avec les milieux professionnels, et (vi) promouvoir une gouvernance efficace et efficiente du système de Formation Technique et Professionnelle (FTP), en privilégiant l’autonomie et la responsabilité des structures d’enseignement et de formation.
60. Le Gouvernement veillera à la réduction des inégalités entre les couches sociales et à l’amélioration de l’Indice de Développement Humain (IDH). Il continuera le déploiement de sa politique de Couverture Maladie Universelle (CMU). Ainsi, la phase d’enrôlement débutée en 2015, devrait s’étendre sur sept (07) ans. Elle est accompagnée par la mise en œuvre d’un projet pilote en 2017 pour s’assurer de l’efficacité du système. Afin d’en garantir la pérennité et la viabilité, le Gouvernement veillera à la solidité financière du système et à sa gestion rigoureuse. Pour la qualité des prestations médicales, un accent particulier sera porté sur la mise à niveau et l’extension des centres de santé et du plateau technique. Cette couverture devrait participer à l’amélioration de l’espérance de vie à la naissance et à la réduction de la mortalité infantile.
f‐ Renforcer l’efficacité et l’équité dans le secteur de l’éducation
61. Pour renforcer l’efficacité et l’équité dans le premier cycle de l’enseignement secondaire, le Gouvernement a pris l’option de créer des collèges de proximité surtout en milieu rural. Ce faisant, les élèves sont maintenus dans leur milieu social pour garantir les conditions satisfaisantes de vie et d’apprentissage. Au surplus, la réforme des collèges a instauré la formation des professeurs bivalents permettant de couvrir l’ensemble des disciplines enseignées dans un collège de huit (08) classes avec seulement dix (10) professeurs.
62. Sur la base d’un ciblage effectué en 2014, neuf cent quatre‐vingt‐treize (993) sites ont été identifiés pour recevoir ces collèges. Actuellement, un total de cent deux (102) est ouvert : quarante (40) financés par le C2D, sept (07) par le PUAEB (Projet d’Urgence
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MINISTER OF STATE TO THE PRIME MINISTER, WITH SPECIAL RESPONSIBILITY
FOR THE ECONOMY AND FINANCE
The Minister
______
Abidjan, November 15, 2016
No._________/MPMEF/Cab/Coordo-BA
To
Mr. Jim Yong Kim
President of the World Bank Group
WASHINGTON, DC
Re: Development Policy Paper
Mr. President:
63. This Development Policy Paper (DPP) describes the socioeconomic progress made by Côte d'Ivoire in 2015 and presents the outlook for the 2016–2019 period. It reviews all of the public and sector policies implemented and to be implemented by the Government to make Côte d’Ivoire an emerging country by 2020 and substantially reduce poverty.
64. To maintain its program, the Government is asking the World Bank for a first Budget Management, Education and Energy Reform Support Credit in the amount of seventy-five (75) million US dollars.
II. Political and Economic Background 65. The sociopolitical environment continues to improve. The open, free, and transparent presidential elections of October 25, 2015 were held in a becalmed environment. The Government is planning to consolidate this climate by holding legislative elections at the end of 2016. A constitutional referendum took place on October 30, 2016. The new constitution obtained 93.42% of the votes cast and was enacted on November 9, 2016 by the President of the Republic. It seeks to boost social cohesion and political stability.
66. Economically, Côte d’Ivoire has achieved significant progress that has put it on a path of strong, sustainable, and inclusive growth. Execution of the 2012–2015 National Development Plan (NDP) supported by all development partners was a clear success, and according to the international community, the results over the past four years have been impressive. Côte d’Ivoire has joined the worldwide roster of countries experiencing strong growth, with an average rate of growth in real GDP of around 9.0%. More than two million jobs were created in just four years. Incomes went up for the vast majority of Ivoirians in the countryside and in the cities in both the private and public sectors. These economic results were rooted in a stable macroeconomic framework marked by the control of internal and external financial balances, have strengthened the economic and social infrastructure, and have contributed to improving the quality of life among Ivoirians. Macroeconomic stability has been restored, with control over internal balances, particularly in terms of the budget and external balances, with the balance of payments holding strong.
67. In addition, the business environment has improved considerably. According to the 2016 report by the World Economic Forum, Côte d’Ivoire is one of Africa’s most competitive economies. It moved up twenty-five (25) places in the 2015–2016 ranking of the Global Competitiveness Index after advancing eleven (11) places in the previous ranking. In terms of governance, the 2016 report by the Mo Ibrahim Institute puts Côte d’Ivoire among the ten (10) countries having made the most progress in the past five (5) years. Finally, Côte d’Ivoire’s participation in the Millennium Challenge Corporation (MCC)’s Compact Program attests to the progress made in the areas of macroeconomic policy, good governance, and transparency. With major investments being made in the areas of health, nutrition, and education, prospects for the development of human capital are good.
Republic of Côte d’Ivoire Union – Discipline – Labor
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REPUBLIC OF CÔTE D’IVOIRE Union – Discipline – Labor
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68. Efforts are under way to consolidate the path to emergence by 2020 and reduce the poverty rate by half. Thanks to the strong economic recovery since 2012, the poverty rate fell to 46.3% in 2015, a fall of 5 points compared to the estimated peak of 51% during the 2011 post-election crisis, even if this drop still falls short of the Government’s ambitions. In this regard, the main goals of the new 2016–2020 National Development Plan are an accelerated redistribution of the fruits of growth, especially in favor of the most disadvantaged, food self-sufficiency, access to drinking water, electrification of all villages with more than 500 residents, education for all, better access to information through the A Citizen – a Computer – an Internet Connection program, an excellent local-level healthcare system, and universal health coverage.
69. Like emerging countries, Côte d’Ivoire has instituted reforms aimed to improve its business environment and foster the development of a dynamic private sector that is competitive internationally.
The results achieved for the 2012–2015 period show a significant advance in improving the business environment, which has promoted strong economic growth over the same period, with an average annual growth rate in real GDP of 9%. Côte d’Ivoire is ranked among the world’s top fifty (50) countries in terms of business climate, and it is one of the ten (10) most competitive economies in Africa, having been described as the most attractive Sub-Saharan African country for investment. The business environment is a national concern, and this is why Government has made it a priority. Eighteen (18) priority reform measures, including one (1) Community-level measure, were carried out in order to have an impact on Côte d’Ivoire’s performance in the 2016 Doing Business cycle. The country has moved up 35 places in the Doing Business ranking, from 177th out of 185 economies in 2013 to 142nd out of 189 economies in 2016.
III. 2015 Reform Execution Status 70. The Government has continued to implement the comprehensive structural reform program it began in 2011. Substantial advances have been made in key sectors of the economy, pubic finance, the financial sector, the business climate, and the social sectors.
g) Public Finance Reform
71. With support from technical and financial partners, the Government has started implementing the Master Plan for Public Finance Reform and Internal and External Audits. The Master Plan takes into account, systematically and exhaustively, the reform effort under way and to come. It includes a plan for strategic actions in the areas of the budget, taxation, and public procurement to be implemented over the 2014–2016 period. This tool has given Côte d’Ivoire a modern public finance management system that complies with international standards. 72. The Government has continued its efforts to optimize fiscal potential and modernize the customs service. To this end, it monitors: (i) the operations of the Medium-size Enterprise Centers (MEC); (ii) the development of the bases for levying excise duties (tobacco and alcohol) by setting a floor price; (iii) devolution of tax audits; (iv) securing pricing formulas for trading licenses; and (v) modernizing tax management by introducing online filing and simplifying the corporate taxation system. In terms of modernization of the customs service, the Government has acquired mobile scanners to strengthen control over the clearance of merchandise through customs at border crossings. 73. The Government has made certain that measures designed to improve budget execution are applied effectively. It continues its rationalization of expenditures by: (i) limiting recourse to cash advances to emergency cases; (ii) reducing the number of imprest accounts; (iii) effective use of the reference price database; and (iv) reducing the proportion of over-the-counter markets to less than 20% of all direct contracting. The Government oversees application of Interministerial Decree no. 0011 MPMB /MPMEF/CAB of November 29, 2013, setting measures for regulating the use of mandated reserves. 74. In addition, the Government has continued to strengthen the regulatory framework for monitoring and overseeing public procurement deadlines and to improve the basis for the public procurement management system with an audit of procurement inventory.
To this end the Government has set up an information unit for economic operators in the Budget and Finance Office on May 12, 2015. This unit’s role is to provide information on the existence of budget credits to cover operations initiated by those in charge of government institutions. It also explains public funding procedures, including rules for procurement and for executing expenditures;
As part of this dynamic, the Government issued Decree no. 465/MPMB/DGBF/DMP of June 23, 2015, which describes the powers, organization, and operation of the Public Procurement Office, within which a Public Procurement Research, Monitoring, and Evaluation Branch was set up. This includes a Research Office and a unit responsible for monitoring and evaluating public procurement. In terms of procurement
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monitoring and evaluation, this Unit’s mission includes: (i) monitoring the physical and financial execution of contracts and agreements; (ii) maintaining a database of all contracts signed by the State and the Technical and Financial Partners (TFP): (iii) monitoring the quality of the work, services, and supplies according to specifications; and (iv) designing a monitoring and evaluation mechanism.
As part of the setting up of the Integrated Decentralized Community Management System (SIGESCOD), the Budget and Finance Office, with support from the National Computerization Development Agency (SNDI), connected ten (10) communities. This work was completed prior to April 15, 2015. The communities involved are: (i) the Bélier region; (ii) the Sassandra region (San-Pedro); and (iii) Sud Comoé. At the level of municipalities, it concerns Aboisso, Agboville, Bingerville, Dabou, San-Pedro, Toumodi, and Yamoussoukro.
75. The Government has kept up its efforts to strengthen good governance and intensify the fight against corruption. In this context, it supported the activities of the High Authority for Good Governance, which is responsible for combating corruption and monitoring the management of public procurement. Since July 2015, the High Authority issued financial statement forms to those required to submit them, particularly the heads of institutions, members of the Government, and elected officials as part of its mission to prevent and suppress corruption and similar offences. In terms of the management of public enterprises, having set up auditing committees on Boards of Directors, the Government is overseeing the production of annual governance reports by State-owned enterprises and companies in which the State is the majority shareholder.
h) Debt Strategy
76. In keeping with the recommendations of the Debt Management Performance Evaluation (DEMPA) conducted in June 2015, the Government has continued strengthening the management of public debt in keeping with the Medium-Term Debt Management Strategy (SDMT 2015–2019) adopted in 2014. In particular, this strategy defines optimum management of debt instruments in 2015 coupled with a viability analysis in order to ensure that the debt is sustainable. Moreover, work designed to develop a centralized database on public enterprise debt and government guarantees was completed in 2015 and will ensure better monitoring of public enterprise debt. Finally, the Government completed its reorganization of the Office of Public Debt into front, middle, and back offices based on the recommendations of IMF technical assistants to ensure integrated management of public debt as well as its sustainability. 77. The Government took into account a number of measures aimed at developing the subregional financial market with support from IMF and World Bank offices. The Government has also gradually resumed issuing very short-term securities (1, 3, and 6 months) with the option of using floating securities and refinancing share issues. The Government also improved its communication with the market by publishing its Medium-term Debt Management Strategy (SDMT) on its website or using other appropriate means. 78. The Government has pursued diversification of its funding sources in order to carry out its development policy. This is in response to the increasing scarcity of concessional funds to cover the funding needs of major structural projects in 2015 and in keeping with the Government’s debt strategy. In this context, the Government resorted to Islamic finance by issuing sukuks in order to complete certain projects started under the NDP (2012–2015).
i) Financial Sector Reforms
79. The Government oversees the financial sector’s stability and expansion through the implementation of the Financial Sector Development Program (PDESFI). In addition, to improve access to lease financing and to increase its use, a bill was adopted by the Government in 2015. Finally, to enhance the banking sector’s credit-worthiness, the Government is intent on making the banks comply with the measures taken by the BCEAO and the Banking Commission. 80. The Government has pursued its implementation of the restructuring of public banks with the sale of shares in SIB (39% in April 2015), and it has placed CNCE under provisional administration (in June 2015). The decision to privatize Versus Bank and Banque de l’Habitat de Côte d’Ivoire (BHCI) was made in March 2016. In the case of BNI, the Government is in talks with the World Bank over support for strengthening it. As regards UNACOOPEC, the Government has also sought support for the adoption of a reorganization strategy. These banks are being reorganized based on the need to finance the economy, attract savings, and improve the population’s use of banking services.
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81. The Government is continuing to implement measures designed to revive and consolidate the microfinance sector through three (3) main approaches. These are: (i) continued withdrawal of authorization for nonviable institutions and oversight of compliance with the previous authorization to operate; (ii) increased oversight through the effective application of regulatory sanctions; and (iii) support for the sector as part of the national financial inclusion strategy. Efforts are continuing to improve oversight of the sector as well as the managerial and operational capacities of the actors in the Decentralized Financial Systems (DFS). As part of its implementation of the National Financial Inclusion Strategy, the Government is relying on two agreements signed with the French Development Agency (AFD) in order to implement training, technical assistance, studies, and capacity-building efforts in the review of applications for authorization, remote auditing of documents, and on-site monitoring on behalf of the service in charge of overseeing the sector.
d. Energy Sector Reforms
82. The Government is continuing its efforts to ensure a long-term balance in the energy sector. In this context, it has launched a strategic analytical study of the SIR. It also adopted a memorandum of understanding for the processing of HVO deliveries and payments. As part of the monitoring of HVO consumption, a committee including the ministries responsible for oil and energy, the budget, and the economy and finance as well as energy sector actors has been set up. Moreover, the Government has set the terms and conditions for fuel supplies in order to limit budget overruns. 83. The Government has continued to gradually reduced subsidies to the electricity sector by creating major infrastructure designed to develop and diversify energy. Investments totaling CFAF 5,300 billion will continue for the construction of new production facilities or improvements to existing sites by adding production units that use new types of inputs, including biomass, solar and hydropower, as well as improvements to the power transportation and distribution system to improve return. These investments will also help increase the supply of gas and put an end to HVO use. This means that the State’s subsidy to the sector designed to support production costs for national needs will be limited in the future. The rise in electricity rates that took effect on July 1, 2015 is part of the goal to restore the electricity sector’s viability. The implementing provisions of the Electricity Code adopted in 2014 were prepared with support from the European Union.
e. Agricultural Sector Reforms
84. As part of the continued implementation of the National Agricultural Investment Plan (PNIA) designed to strengthen those sectors of the economy with strong growth potential and in collaboration with the World Bank and the French Development Agency (AFD), support has been given to the five (5) main agricultural sectors (cacao, rubber, palm, cotton, and groundnuts) through the Agricultural Sector Support Project (PSAC). This support helped provide sustainable solutions to the maintenance of feeder roads while improving agricultural products, access to markets for small producers, and a strengthened governance structure in the beneficiary sectors. Along the same lines, the National Strategy for the Maintenance and Development of the Feeder Road Network adopted in May 2015 has been implemented. 85. The Rural Investment Fund continued and expanded its investments in rural areas in order to improve living conditions by redesigning feeder roads, rural electrification, and access to drinking water as well as the construction of schools and healthcare centers. The Government has supported initiatives designed to promote the processing of industrial products, particularly by implementing additional measures aimed at promoting cashew processing. In this regard, the Government adopted a draft Storage Receipt Act in the Council of Ministers on April 22, 2015. A dedicated cashew processing office has also been set up through the Industrial Enterprise Reorganization and Upgrade Fund (FREMIN). 86. The Government intends to support professional associations and cooperatives in compliance with agricultural sector standards, particularly the OHADA Uniform Act. Thanks to this dynamic, the Government has implemented its action plan to harmonize cooperative statutes and internal regulations.
f. Business Environment Reforms
87. For the third year in a row, Côte d’Ivoire has continued the process of improving the business environment thanks to a “Doing Business” focus. In 2015, actions were aimed at the following measures:
Enhancing geographically uniform electronic management of the RCCM’s security registries, with a database indexed according to debtors’ names;
Distribution of information from the BCEAO Central Risk Office going back three years; Creation of a legal framework for commercial mediation;
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Revision of articles 31 and 39 of Decision no. 01/PR for the creation, organization, and operation of commercial courts to give authority to the president of the commercial court in executing decisions;
Promotion of dedicated professionals charged with handling insolvency procedures; Guaranteeing construction quality by establishing a mechanism for issuing building permits based on risk
management; Improving the level of security for real estate transactions by finding technological solutions and streamlining
formalities for real estate transfers through online publication: Making credit rating agencies operational in Côte d’Ivoire; Setting up and organizing a body of commercial arbitrators; Improving the system for checking the quality of electrical equipment on the market; and Establishment of a prior outside review of transactions involving conflicts of interest by allowing statutory
auditors to give their opinions before their conclusions.
All these efforts have helped improve Côte d’Ivoire’s ranking in the 2016 Doing Business survey.
88. The Government has pursued its promotion of SMEs and the development of the industrial fabric. This policy takes into account the PHOENIX program in support of the creation and development of a dense and diversified network of SMEs. This program provided an overall strategy of support for SME development. The consistency of this strategy is ensured by the framework law designed to promote and develop SMEs and the establishment of an SME development agency. The role of this agency is to coordinate all policies and actions on behalf of SMEs. In this context, a National Industrial Reorganization and Upgrade Program (PNRMN) for a total of CFAF 152 billion has been adopted to boost management capacities in SMEs and SMIs. The Government also undertook to promote the financing of SMEs by signing agreements with the banks. As part of this dynamic, on July 15, 2015, the Government’s Council of Ministers adopted a statement regarding improved conditions for SME access to public procurement contracts as well as a decree amending Decree no. 2009-259 of August 6, 2009, establishing the Public Procurement Code, amended by Decree no. 2014-306 of May 27, 2014. This adapted procurement procedures to the context of SMEs. The decree also obligates the contracting authorities to reserve a share of the forecast value of the contracts for SMEs. It also introduced into procurement contract procedures a margin of preference for SMEs in the area of subcontracting. In this way, the Government intends to facilitate SME access to public procurement contracts and enable them to contribute further to economic growth and to the creation of wealth and jobs.
IV. 2017–2019 Economic and Financial Program
89. The primary objective of the 2017–2019 economic and financial program supported by the Expanded Credit Facility (ECF) and the Expanded Credit Mechanism (ECM) is to support the Government in implementing far-reaching structural policies needed to achieve the objectives of the 2016–2020 National Development Plan (NDP). The projected average annual growth rate is around 8.8% for the 2016–2019 period under the effect of implementation of a number of large-scale projects in agriculture, mining, energy, infrastructure, and tourism. The Government will also pursue structural reforms designed to consolidate the foundations of good governance put in place from 2012 to 2015, develop the financial sector, and make the business environment more attractive. 90. Internal and external balances will be preserved during implementation the program.
The budget balance deficit should be 4.0% of GDP in 2016 then fall gradually to 3.0% of GDP in 2019; Inflation should remain below 3%, in keeping with the Community norm; and The external current account deficit should be kept to between 1 and 3% of GDP for the 2016–2019 period
despite the rise in imports of semi-finished goods and equipment in support of investment. However, the overall balance should be in surplus over the period, particularly as a result of direct foreign investment.
91. To achieve the goals of the 2016–2019 NDP, the Government has sought a new three-year IMF agreement on the Expanded Credit Facility (ECF) coupled with the Expanded Credit Mechanism (ECM). This agreement will build on the previous program which contributed to: (i) strengthening the macroeconomic framework following the external and internal imbalances caused by the post-election crisis; (ii) reducing poverty; (iii) canceling out and restructuring debt and normalizing relations with creditors; (iv) improving Doing Business indicators; (v) canceling internal arrears; (vi) improving the financial balance of the electricity sector; (vii) ensuring adequate incomes for coffee and cacao producers; (viii) strengthening the management of public finances and debt; and (ix) improving the monitoring and governance of public enterprises.
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92. The new economic and financial program supported by the ECF and ECM will include the following key components: (i) maintenance of the State’s budgetary discretion, particularly by keeping debt sustainable; (ii) improved management of public finances and public enterprises; (iii) development of the private sector; (iv) stabilization and development of the financial sector; and (v) strengthening the statistical system.
a. Budgetary Discretion and Investments in Priority Sectors
93. As international funding is drying up and worldwide growth is slowing, the Government intends to maintain its budgetary discretion while still pursuing structuring investments, notably in basic infrastructure and the social sectors, in keeping with the 2016–2020 NDP. In practice, the budgetary outlook is exposed to a number of negative influences. Externally, this will mean future tightening in international financial conditions and its impact on export revenue despite the positive trade terms and good results obtained by the NDP financing consultative group. Internally, this will involve the financial situation of a number of public enterprises, risks associated with increased use of Public-Private Partnerships (PPP), and drought. At the same time, consolidation of strong and inclusive economic growth requires that the Government continue its efforts to: (i) overcome bottlenecks in infrastructure in the areas of transportation, communications, energy, and agriculture; (ii) increase social expenditure, particularly to boost human capital, reduce poverty, and prevent pandemics; and (iii) maintain security. 94. In this context, the Government will focus on increasing tax revenues by continuing its efforts to improve the effectiveness of the tax and customs administrations, streamline exemptions, and continue to keep a lid on current expenditure. The main medium-term budget objectives of the three year program with IMF are as follows:
Raise the tax burden from 15.7% of GDP in 2015 to 17.1 % in 2019; Raise the public investment rate from 6.6% of GDP in 2015 to 7.4% in 2016 and 8.7% in 2019; Raise expenditures on the poor from 9.4% of GDP in 2015 to 9.5% in 2016 and 2017; and Gradually reduce the budget deficit from 4.9% of GDP in 2016 to the Community standard of 3% of GDP in
2019.
95. For 2016, the projected budget deficit is revised upward compared to 2015 in order to take into account additional expenditures, particularly for security. Tax revenues would reach CFAF 3,318.2 billion, up 12.3% from 2015. Investments designed to improve living conditions and strengthen the basis for economic growth should amount to CFAF 1,547.1 billion, up 24.0% from 2015. 96. The Government will pursue reforms designed to expand the tax base in response to tightening international financial conditions. In this regard, the Government has taken several measures including: (i) pilot surveys of potential taxpayers in the municipalities of Cocody and Yopougon; (ii) an amnesty and back taxes for any voluntary submission of a tax return prior to April 30, 2016; and (iii) an overhaul of provisions on VAT reimbursements making it possible for validated credits to be reimbursed within 15 days. 97. The Government will take steps to execute expenditures cautiously. To this end, it will strictly enforce budget regulations. Meetings of the Treasury Committee will be continued in order to make the necessary adjustments to budget management, using the Integrated Public Finance Management System (SIGFiP). 98. To the extent possible, the Government intends to favor structuring public expenditures and expenditures on behalf of the poor. To maintain an adequate budgetary margin, the Government plans to continue rationalizing current expenditures by strengthening controls on supply agreements and efficiently managing civil service personnel. The Government also intends to revise the strategy for controlling payroll by taking into account the guidelines and macroeconomic framework of the 2016–2020 NDP in order to continue moving toward the Community norm, which is 35% of tax revenues. It will strengthen its efforts to restore and build basic infrastructure. In keeping with its objective of cutting poverty in half by 2020, the Government will continue to favor spending on the poor by increasing its share of the budget, particularly in the areas of rural electrification, rural water supply, food agriculture, and employment. It is willing to receive support from development partners, particularly the World Bank, both financially and technically, in determining and funding these expenditures. In addition, the Government plans to promote food agriculture through the mass production of food crops as well as agro-industry in order to favor job creation and combat poverty. 99. The Government plans to continue reforming and reorganizing public sector enterprises in order to improve their management and limit subsidies along with any risks to the State’s budget. In this context:
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The Government will continue to present to the Council of Ministers an annual report on the economic and financial situation of State-owned enterprises and append it to the State draft budget;
The Government will improve debt monitoring for public enterprises. It will continue to expand the database on public enterprise debt by integrating data on the debt servicing of 12 enterprises before the end of June 2017. Data on all enterprises concerned will be integrated before the end of December 2017. This process will be monitored regularly, and in late March 2017, an assessment will be published to highlight the progress made and the steps to be taken to achieve the objectives set for late June 2017. In keeping with this progression, before the end of each quarter, the Government will provide a summary of public enterprise debt servicing for the previous quarter. Furthermore, the Government will continue to ensure the strict application of Decree No. 399/MPMB/DPP of June 1, 2015, which established a borrowing and guarantee threshold for State-owned enterprises.
The Auditing committees set up by the Government within each company’s Board of Directors will continue their activities so these Boards can carry out their monitoring and administrative duties more effectively. The minutes from Board of Directors meetings will continue to be communicated systematically so that the financial supervisory authority may be alerted to any possible shortcomings in a timely manner.
Energy enterprises will be restructured according to the recommendations of the SIR and PETROCI audits: o Thanks to the current restructuring plan, PETROCI’s financial situation should improve in 2016
and its net results should break even or show a surplus. The Government will monitor the implementation of this plan very closely;
o SIR’s operating results have shown improvement due in part to an increase in nationwide demand. Implementing the recommendations of the 2016 audit will allow for the drafting of a debt restructuration plan in the amount of CFAF 368 billion in order to achieve financial equilibrium in the medium term. In this context, the Government plans to help restructure SIR’s debt, which continues to be a main cause of the deterioration of its financial situation. The Government will help SIR raise the resources needed for this restructuring by means of a guarantee. This information will be recorded in full in the State budget in accordance with public finance procedures.
o In line with its governance improvement policy, the Government intends to sign a performance contract with Côte d’Ivoire Energie.
100. The measures implemented in the electricity sector should bring a return to financial balance by the end of 2017 and help increase the electricity supply in order to sustain the growth momentum despite the suspension of the January 2016 rate increase. To this end, the Government has adopted sixteen (16) provisions to the Electrical Code and intends to pursue its current policy toward sector sustainability. 101. The Government will continue the restructuring of public enterprises in the transportation sector:
Air Côte d’Ivoire’s development will focus on increasing its fleet to the optimal size needed to ensure its profitability in accordance with the new business plan to be adopted in late 2016. By completion of its term, the implementation of this business plan will allow the company to achieve financial equilibrium;
Thanks to the implementation of the 2012–2015 restructuring plan, SOTRA’s financial situation has been stabilized. In accordance with its business plan, the company should improve its financial situation and register positive results for the entire 2017–2025 period thanks primarily to the acquisition of new buses and the introduction of new local routes (WIBUS).
102. In December 2012, as part of its privatization program, the Government approved a list of fifteen (15) enterprises to be privatized. Three (3) companies have been privatized, and the process is ongoing for the others:
To improve the management of public enterprises, the Government decided in the June 15, 2016 Council of Ministers meeting to establish performance contracts between the State and its enterprises. In keeping with each company’s plan and the guidelines set at governmental level, these contracts will define the long-term operational, technical, economic, and financial objectives that must be reached by these companies in the form of a 3- to 5-year action plan. This operation will begin with a pilot phase for 10 companies, which will end in December 2016, before its gradual implementation in 2017.
103. The Government intends to apply the recommendations of the various audits on liabilities and public procurements:
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The Government has budgeted all of its needs since 2015. The implementation of these appropriations will be evaluated to ensure that no new liabilities have resulted from fuel consumption. It will also pay PETROCI for the armed forces’ fuel by the end of 2016;
The Government will make full use of the results of the 1993–2012 audit of the inventory of distressed markets to determine appropriate means of action:
Concerning the CFAF 428 billion of liabilities for the 2000–2010 period, a preliminary amount of CFAF 184 billion has been approved. This decision will be the subject of a Government decision, which will define the final amount to be paid. The Government will draft and adopt a debt repayment plan. Pending its adoption, a precautionary amount has been earmarked in the 2017 State budget.
104. The Government will evaluate all projects financed as Public-Private Partnerships (PPP). This will involve adopting a mechanism designed to itemize and monitor all explicit and implicit budgetary risks resulting from PPPs. Moreover, the Government plans to build the capacities of public investment management institutions and strengthen the legal framework for PPPs. The Government expects to receive technical assistance from the IMF within this framework in 2017. To this end, the Government has:
Produced and published a preliminary report identifying the PPPs that pose a budgetary risk for Côte d’Ivoire; and
Produced a factsheet on the PPP contracts signed in Côte d’Ivoire and made it available to the public.
105. The Government will continue to improve its debt management. A 2016–2019 three-year capacity-building plan for the Office of Public Debt’s entire staff, now reorganized into front, middle, and back offices, will be finalized. It should receive technical and financial support from the AfDB,the IMF, and the BADEA. This plan targets the following key training areas: risk analysis and management, financial programming, macroeconomic management, medium-term debt strategy, analysis of debt sustainability and medium-term expenditure, financial analysis, Treasury management, legal aspects of the debt for economists, and economic aspects of the debt for jurists. Furthermore, drafts of provisions relating to the debt’s legal framework and procedures for the National Public Debt Committee (NPDC) are currently being finalized. These primarily concern the NPDC’s referral and operating procedures as well as provisions on loan approval and the issuing of public guarantees. 106. The Government will continue to improve public debt management, as required by international and WAEMU standards. It will adopt a national debt policy as well as public debt management legislation. Moreover, once this legislation has been adopted by the National Assembly, a number of decrees will be issued to implement the aforementioned law, notably the decree on the National Public Debt Committee’s (NPDC) referral procedure. 107. The Government intends to preserve Côte d’Ivoire’s credit rating and sound reputation among investors. It plans on benefiting from the gains made from the reorganization of the Office of Public Debt into front, middle, and back offices and the drafting of the NPDC’s procedure manual. To do so, the Government plans to:
Build the capacities of the NPDC and the Office of Public Debt; Ensure the active management of the State Treasury; Continue improving communications with the market; and Expand debt monitoring to the entire public sector. In this context, the Government will complete its database
of public bodies and joint-stock companies with publicly owned majority shareholdings by integrating debt servicing. In the medium term, the Public Enterprise Management System (SIGEP) and Debt Management and Analysis System (SIGADE) will be interconnected in order to provide reliable information in real time.
b. Strengthening Public Finance Management
108. The Government will continue to modernize public finance steering and management methods. In this respect, it intends to continue: (i) introducing legislation for the Organic law on the Finance Law; (ii) finalizing the Program Management Charter; (iii) establishing the new Budgetary Information System; (iv) improving the practical implementation of the budget expenditure engagement plan in keeping with the public procurement plans and in relation to the Treasury plan while pursuing the reduced use of exceptional expenditure procedures; (v) training central and decentralized public expenditure stakeholders on the new Public Finance Management System (SIGFIP) and the Program Budgets with the beginning of the pilot phase for five Ministries; and (vi) building the capacities of MTEF sectoral committees to include the development of performance tools. Furthermore, it plans to continue improving the quality and transparency of budget and accounting information by communicating information about budget implementation and public procurement operations in Council of Ministers meetings. In this perspective, the
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Government will pursue its efforts to ensure the quality of the trial balance and notably the clearance of provisional allocation accounts. Once the new Budgetary Information System is set up, the Government will pursue its aim of implementing an information system that best integrates the budgetary and accounting segments of the expenditure chain, notably by establishing an interface between SIGFIP and ASTER in December 2017. It will complete the budgetary documentation aiming to include the risks raised by the difficult financial situation of certain public enterprises and the PPPs, and subsequently to publish a report on the performance of public enterprises, which will be appended to the budget documents beginning in 2018. 109. The Government plans to strengthen the Economic Operators Information Unit (CELIOPE) in order to provide better transparency and good governance. This unit was created within the Budget and Finance Office (DGBF) to facilitate and strengthen communications with the private sector. The Government is clear that sharing more information about the budget implementation process with operators will help reduce liabilities, which result in extra-budgetary expenditure. The actions to be taken involve:
Completing and effectively implementing the CELIOPE management software and agent training; and Pursuing the promotion and outreach strategy for CELIOPE’s activities.
110. The Government will continue improving the public procurement system. To this end, it intends to pursue: (i) actions designed to reduce public procurement timelines; (ii) the setting up of public procurement units in the technical ministries and other bodies subject to the Public Procurement Code; and (iii) the transposition of directives relating to Delegated Work and Public Services. Moreover, the Government is committed to limiting pre-financing contracts in accordance with the provisions of the Public Procurement Code. This dynamic has allowed the Government to continue strengthening the institutional framework for public procurement by: (i) establishing public procurement units in the pilot sectoral ministries, namely the Ministry of Health, Ministry of Agriculture, Ministry of National Education, and Ministry of Higher Education and Scientific Research, and Ministry of the President of the Republic in charge of Defense in accordance with the provisions of the Public Procurement Code; and (ii) bringing the procurement monitoring unit into operation within the Department of Public Procurement. 111. The Government will continue modernizing and optimizing Treasury management by setting up the Single Treasury Account (STA). At the conclusion of the pilot phase initiated in 2015, which is planned for 2017, the account closing program will be accelerated and the inventory of open accounts in commercial banks will be updated. The STA will gradually become operational by the end of 2018. The STA will make it possible to centralize and ensure the traceability of the public administrations’ Treasury operations and will thus contribute to ensuring the active management of the State’s Treasury.
c. Strengthening the Business Environment and Developing the Private Sector
112. The Government intends to significantly increase the industrial sector’s contribution to the creation of wealth and employment. This industrialization requires a deeper understanding of the issues involved in the continued improvement of the business environment, the strengthening of competitiveness, and partnership development. 113. The Government will continue its contributions to improving the private sector’s productivity and competitiveness by reducing input costs. In particular, it will:
Continue strengthening economic infrastructure networks (telecommunications, transportation, and energy) in support of its industrialization policy;
Set up the Industrial Infrastructure Management and Development Agency (AGEDI) and the Industrial Infrastructure Development Fund (FODI) in order to help accelerate the rehabilitation of the Yopougon industrial zone and the development of the PK24 industrial zone;
Build new industrial zones in various regions of the country in order to develop competitive economic centers; and
Continue promoting dialogue between the State and the private sector by strengthening the State-Private Sector Consultation Committee (CCESP).
114. The Government plans to increase the density of the SME/SMI sector and to modernize it in order to create more jobs for young people. Implementing the SME development program (the Phoenix Program) will help this fabric of small- and medium-size businesses flourish. Moreover, applying the Government’s new public procurement measures, notably with regard to access to funding and procurement contracts, will improve SMEs’ access to public procurement.
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d. Developing the Financial Sector and Financial Inclusion
115. The Government will continue implementing its Financial Sector Development Program (PDESFI) in order to foster the stabilization and development of the sector and improve financial inclusion. With regard to stabilization, the Government will accelerate the resizing of the public banking sector in order to create a high-performance center capable of bolstering its sectoral policies and consistent with its desire to withdraw from the productive sector. The reforms will also focus on strengthening oversight of the insurance sector as well as the transparency and availability of financial information. With regard to sector development, the focus will be placed on financing for SMEs and deepening the capital market. Finally, the Government will facilitate the implementation of the National Financial Inclusion Strategy in order to strengthen the use of banking services and facilitate access to credit. 116. The Government will complete the implementation of its restructuring of public banks strategy and continue its support to enhancing the banking sector’s credit-worthiness. Thus, two (2) of the State’s four (4) public banks will be privatized, one will be restructured, and the fourth strengthened. In this context, the last-mentioned bank’s securitized debt will be converted into transferable securities by the end of March 2017. As concerns banks in which the State is a minority shareholder, the Government will ensure that they are quoted on the Regional Securities Exchange (BRVM) in order to contribute to the market’s vitality and provide them with better funding. To enhance the banking sector’s credit-worthiness, the Government is intent on ensuring the application of the BCEAO’s decision to increase the statutory minimum of equity capital by the end of June 2017. It has referred the CNCE restructuring plan to the Banking Commission and will take its recommendations into account when implementing the plan. 117. The Government will strengthen the stabilization of the microfinance sector. The Government has asked requested World Bank support through the Financial Sector Reform and Strengthening Initiative (FIRST () and Financial Inclusion Support Framework (FISF) for the implementation of the National Microfinance Strategy in order to reinforce the credit-worthiness of the Microfinance Institution sector and build confidence among small investors. In this context, the UNACOOPEC-CI recovery plan will be pursued. The Government will also continue to promote the introduction of new actors and the development of innovative products, notably in the ICT sector with mobile money, with a view to fostering better financial inclusion for households. 118. The Government plans to establish a modern regulatory framework to foster a larger and more diverse range of financial services while also strengthening consumer protection. To diversify financial services, the Government, in collaboration with the BCEAO and all actors in the financial sector, will ensure the continuing operation of the Information and Credit Bureau (BIC). Moreover, it will continue boosting regional stock market activity and increasing its liquidity while also strengthening the role played by insurance schemes in mobilizing national savings. Concerning consumer protection, by the end of 2016, the Government will set up a Quality of Financial Services Monitoring Unit in order to: (i) foster the transparency and comparability of financial services; (ii) ensure the better management of user grievances regarding financial services; and (iii) strengthen financial education.
e. Employment and Social Policy
119. The Government intends to make human capital development and improvements in the population’s well-being one of its main priorities. Inclusive growth, which is the main means of improving the population’s well-being, will require: (i) setting up mechanisms that foster youth employment and support small rural producers; (ii) improving access to basic quality social services to accelerate the achievement of the Sustainable Development Goals (SDG); and (iii) building a social protection system that strengthens the resilience and productive capacities of poor and vulnerable households. 120. The Government plans to promote the creation of sustainable jobs. In this perspective, the Youth Employment Agency, created in December 2015, will organize the actions of the various stakeholders and address all job issues, especially youth employment. The Government also plans to adapt training to job market needs by implementing professional training reform. This reform aims to: (i) meet the demand for technical and professional training; (ii) offer training adapted to meeting the job market’s needs for qualified workers; (iii) strengthen the school-enterprise relationship; (iv) ensure conditions for the lasting integration of job-seekers and the disadvantaged; (v) establish a skill certification mechanism in collaboration with the professional community; and (vi) promote the effective and efficient governance of the Technical and Professional Training (TPT) system while fostering the autonomy and responsibility of teaching and training institutions.
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121. The Government will ensure that inequalities between social classes are reduced and improve the country’s rating on the Human Development Index (HDI). It will press ahead with its Universal Health Care Coverage (CMU) scheme. The enrollment phase, which began in 2015, should last seven (7) years. To accompany this development, a pilot project will be implemented in 2017 to ensure the system’s effectiveness. To guarantee its sustainability and viability, the Government will ensure the system’s financial soundness and rigorous management. As regards the quality of medical services, particular attention will be paid to the upgrading and extension of healthcare centers and technical equipment. This health coverage should help improve life expectancy at birth and reduce infant mortality.
f. Strengthen Efficiency and Equity in the Education Sector
122. To strengthen efficiency and equity in lower secondary education, the Government intends to create local secondary schools particularly in rural areas. This will keep students in their social environment and improve living and learning conditions. The lower secondary school reform includes training of multisubject teachers with the result that 10 teachers can teach all subjects taught in an 8-class lower secondary school.
123. On the basis of a 2014 survey, 993 lower secondary school sites have been identified. Currently 102 schools have been created, of which 40 are financed by C2D, 7 by PUAEB (emergency support to basic education project), 2 by USAID and 53 by local governments. Looking forward we expect 152 schools to be financed by C2D-2 and about 100 by the MCC during 2017–2018. The Government, with the support of PUAEB, intends to implement a teacher assignment system based on identified criteria and lessons learned from the current experience.
124. A working group has identified ways to reduce repetition rates in primary education. An ongoing pilot phase should provide further lessons. A letter authorizing transitional measures has been signed for implementation in sub-cycles and repetition criteria. A provisional order has been signed. Circular No 3387 of August 12, 2016 lays down sub-cycles and minimal scores for promotion to a subsequent grade. It also forbids repetition within a sub-cycle.
125. Furthermore, the Government will pursue its Education for All policy. In this perspective, it publishes the budgets allocated to each school and the results of academic assessments on its website. It has adopted legislation designed to regulate student placement at the start of middle and high school, taking into account each student’s social situation and the enrollment capacity of public schools. The Government will also pursue its policy of providing access to adequate housing, clean energy, drinking water, and a safe living environment. In this context, further efforts will be made to strengthen pro-poor expenditure and improve farmers’ incomes by promoting fair prices and optimizing product performance. The ongoing projects designed to increase financial inclusion should also contribute to ensuring more inclusive growth.
IV. Monitoring and Evaluation
126. The Government reiterates its appreciation to the World Bank for its efforts in defining Côte d’Ivoire’s development strategy and will continue working to strengthen this partnership for the implementation and monitoring of this program. 127. The Interministerial Committee for the Monitoring of the Economic and Financial Program, which is chaired by the Prime Minister, will be responsible for monitoring and evaluating the program. 128. Through the abovementioned objectives and commitments, Côte d’Ivoire intends to strengthen its financial cooperation with the World Bank and all of its multilateral and bilateral partners and thus receive the first Budget Management, Education and Energy Reform Support Credit in the amount of seventy-five (75) million US dollars.
Mr. President, please accept the assurance of my highest consideration.
Minister of State to the Prime Minister, with Special Responsibility for the Economy and Finance
Adama KONE
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Annex 3: Fund Relations Note
Press Release: IMF Executive Board Concludes 2016 Article IV Consultation with Côte d’Ivoire May 27, 2016 Press Release No. 16/252 May 27, 2016
On May 25, 2016, the Executive Board of the International Monetary Fund (IMF) concluded the 2016
Article IV consultation1 with Côte d’Ivoire.
Côte d’Ivoire’s economic performance over the past 4 years has been impressive. Nevertheless, challenges
remain. Political normalization, together with supportive fiscal policy and structural reforms to improve
the business climate enabled a strong pickup in economic activity. Growth has been accompanied by a
modest decline in poverty, but other human development indicators have been slow to improve.
Economic activity remained buoyant in 2015. Real GDP grew by an estimated 8.6 percent driven by strong
investment and private consumption. Inflation remained subdued, reflecting ample domestic food
production and imported consumer products. The 2015 fiscal deficit was below the 3.7 percent target at
3 percent, owing to stronger revenues and an under execution of externally‐financed capital spending.
Credit continued to grow at a rapid pace, while banking sector soundness indicators weakened.
The medium‐term outlook is favorable. However, the outlook is subject to downside risks. Economic
activity is projected to remain strong at 8.5 percent in 2016, and 7.4 percent per year on average in 2017–
20. The overall fiscal deficit is projected to widen to close to 4 percent of GDP from 3 percent of GDP in
2015, on the back of higher public investment and security outlays, as well as interest payments. The
external current account deficit is likely to deteriorate to about 3 percent of GDP on average from 1.7
percent of GDP in 2015, driven by strong domestic demand, in particular investment, in support of
structural transformation. Key risks to the outlook include tighter and more volatile global financial
conditions, protracted global sluggishness, a further deterioration in the financial situation of the national
refinery company, further terrorist attacks in the region, as well as macro‐financial risks stemming from
potential contingent liabilities in the public sector and vulnerabilities in the financial sector.
The authorities’ 2016–20 National Development Plan (NDP) aims at achieving strong and inclusive growth.
To support the structural transformation envisaged under the NDP, the private sector would play a large
role, benefitting from strong public infrastructure investment and further structural reforms to improve
the business climate. Success will depend on the pace at which structural bottlenecks are addressed and
productivity‐enhancing reforms are carried out.
Executive Board Assessment2
Executive Directors commended the authorities for the impressive economic performance over the last
four years, underpinned by growth‐friendly fiscal consolidation, productivity enhancing reforms, and a
favorable global and socio‐political environment. However, Directors noted that challenges remain and
poverty is still relatively high despite some progress made. They emphasized the need for continued
commitment to sound macroeconomic policies and ambitious structural reforms to safeguard the
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favorable economic performance and cement the path for sustainable and inclusive growth. Against this
background, Directors welcomed the authorities’ 2016–2020 National Development Plan, which aims at
halving poverty and fostering structural transformation.
Directors stressed that building fiscal buffers is necessary to preserve fiscal sustainability. They called for
a reduction in the overall fiscal deficit consistent with the WAEMU convergence criteria, which would
provide the needed space to cope with fiscal risks while addressing infrastructure investment needs. To
this end, Directors stressed the importance of higher revenue mobilization, including by reducing tax
exemptions, broadening the tax base, improving tax administration, and restraining expenditure growth.
They also recommended a more measured scaling up of public investment in line with implementation
capacity.
Directors underscored the need for continued efforts to strengthen public financial management to better
control and manage contingent liabilities, including those stemming from public private partnerships.
They encouraged further progress toward reducing the recourse to exceptional spending procedures and
implementing a single treasury account.
Directors emphasized the importance of prudent debt policy and management. They highlighted that the
pace of new government borrowing, particularly non‐concessional borrowing, should take into account
the risks associated with the realization of contingent liabilities, and the need to avoid an additional
concentration of maturities in the mid‐2020’s. Directors encouraged continued efforts to diversify and
broaden the financing base.
Directors saw need for further action to strengthen the resilience of the banking sector and foster financial
inclusion. Given the rapid increase in credit and associated decline in bank solvency, they called for a
buildup of bank capital buffers. They advised a rapid resolution of the troubled public banks. Directors
encouraged the authorities to modernize the regulatory framework in order to take advantage of
opportunities to foster financial inclusion through new information and communication technologies.
Directors welcomed the authorities’ commitment to intensify structural reforms. They agreed that priority
should be given to enhancing productivity by addressing gaps in infrastructure and human capital, and
improving the business climate. Directors also called for further efforts to improve the production and
dissemination of quality economic data, and supported technical assistance by the Fund and other
development partners. Directors noted that continued engagement with the Fund would help support
Côte d’Ivoire’s ambitious development agenda and address challenges ahead.
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Annex 4: Environment and Poverty /Social Analysis Table
Prior Actions Significant positive or negative environment effects (yes/no/to be
determined)
Significant poverty, social or
distributional effects positive or
negative (yes/no/to be determined)
Pillar 1 – Enhancing tax revenue collection and public procurement
Prior Action 1. With the objective of broadening the tax base, the Tax Administration has incorporated in its tax database the results of its 2016 survey of potential taxpayers in the two sizeable municipalities of Abidjan (Yopougon and Cocody).
No Yes
Prior Action 2. The Ministry in Charge of Budget has launched a tax amnesty program for all firms and individuals who voluntarily register to the Tax Administration before April 30, 2016 pursuant to Loi No. 2015‐840 dated December 18, 2015 for the state budget of 2016.
No Yes
Prior Action 3. The Government has operationalized (i) public procurement units in four high‐spending sectoral ministries pursuant to Arrêté No. 325 dated May 23, 2014 and Arrêté No. 275 dated April 22, 2015; and (ii) the coordinating unit within the Ministry of Finance to monitor public procurement contracts pursuant to Arrêté No. 465 dated June 23, 2015 from the Ministry of Finance.
No Yes
Pillar 2 – Strengthening the efficiency and equity in the education sector.
Prior Action 4. The Ministry of National Education has introduced transitional measures through Circulaire No. 3387 dated August 12, 2016 to reduce repetition in primary education by (i) creating sub‐cycles in primary education; and (ii) defining conditions of transition between the sub‐cycles.
No Yes
Prior Action 5. The Ministry of National Education has established criteria through Arrêté No. 143 dated October 11, 2016 for school assignment of students in the secondary lower cycle that takes into consideration (i) socio‐economic conditions of the household, including income; (ii) distance to school; and (iii) location of residence (urban/rural).
No Yes
Pillar 3 – Improving the performance of the electricity sector and enabling private participation.
Prior Action 6. The Government has issued a set of decrees which (i) adopts a methodology for the determination of tariff rates that enable recovery of costs of efficient service provision through Décret No. 2016‐783 dated October 12, 2016; and (ii) promotes private sector participation and the use of renewable sources of energy through Décret No. 2016‐786 dated October 12, 2016.
No Yes
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