This paper discusses Cote d’Ivoire’s Sixth Review Under the Arrangement of the Extended Credit Facility and the Extended Arrangement Under the Extended Fund Facility, and Request for Extension and Augmentation of Access. Côte d’Ivoire has been pursuing a development-oriented policy agenda, and the IMF-supported program in place since 2016 has supported that focus, paving the way for the private sector to become the main driver of growth. The performance under the program has been strong. The medium-term growth prospects remain robust, predicated on continuing prudent macroeconomic policy, furthering financial sector reforms and sustaining structural reforms to bolster private sector-led inclusive growth. Côte d’Ivoire’s reform efforts have resulted in improvements in its business climate in recent years. It will be imperative to continue the reform agenda to further stimulate private sector activity and support inclusive growth, including by improving the energy sector, human capital and financial inclusion, accelerating digitalization, enhancing trade connectivity and governance, expanding the coverage of social safety nets, and reinforcing the statistical apparatus to help better inform economic policy.
This 2019 Article IV Consultation with Ghana highlights discussions focused on strengthening institutions and policies to preserve macroeconomic stability and promote inclusive growth, building on the authorities’ “Ghana beyond Aid” strategy. The government headline deficit is projected to reach 4.7 percent of gross domestic product in 2019, driven by lower-than-expected revenues, spending on flagship programs, and unexpected security outlays due to emerging security challenges in the region. Medium-term prospects are favorable, with robust growth driven mostly by the extractive sector. Election-related spending pressures in 2020 constitute the main risk to the baseline scenario. Fiscal risks in the financial and energy sectors could also impact the government deficit. Government borrowing needs are exposed to rollover risk that should be carefully managed as financing conditions could tighten. The commitment to the new fiscal rules is expected to help maintain fiscal discipline, as reflected in the unchanged policy baseline. A more ambitious fiscal stance is called for to reduce macroeconomic risks, accelerate debt reduction, and strengthen the external balance.
Higher digital connectivity is expected to bring opportunities to leapfrog development in sub-Saharan Africa (SSA). Experience within the region demonstrates that if there is an adequate digital infrastructure and a supportive business environment, new forms of business spring up and create jobs for the educated as well as the less educated. The paper first confirms the global digital divide through the unsupervised machine learning clustering K-means algorithm. Next, it derives a composite digital connectivity index, in the spirit of De Muro-Mazziotta-Pareto, for about 190 economies. Descriptive analysis shows that majority of SSA countries lag in digital connectivity, specifically in infrastructure, internet usage, and knowledge. Finally, using fractional logit regressions we document that better business enabling and regulatory environment, financial access, and urbanization are associated with higher digital connectivity.
This IMF Staff Report highlights that the robust economic growth in Côte d’Ivoire is projected to continue in 2018. The inflation remains subdued. The program aims to achieve a sustainable balance of payments position, foster inclusive growth and poverty reduction, and create fiscal space for investing in priority infrastructure and social projects. Strong economic performance since 2012, with average annual growth of 9 percent, reflected the economic recovery following political normalization, improved business environment, strong program of reforms, and supportive fiscal policy. A key policy challenge is to sustain robust growth and make it more inclusive and private sector-driven. Robust medium-term growth is expected to be supported by domestic demand.
Program performance improved in 2017 and macroeconomic conditions have strengthened considerably. Growth increased on the back of expanded oil production; inflation declined; the fiscal deficit was significantly reduced, leading to a primary surplus for the first time in fifteen years; the exchange rate regained stability; and the external position improved, with a large reserve build-up. Challenges remain, though, as a still elevated (albeit declining) debt burden and the economy’s exposure to risks limit policy space; and progress in meeting structural benchmarks remains mixed. Program discussions focused on policies to lock in recent gains to secure continued stability and progress beyond the Fund-supported program (in line with the authorities' goal of "irreversibility" of sound policies).
This paper discusses Ghana’s Third Review Under the Extended Credit Facility arrangement and Request for Waiver for Nonobservance of Performance Criteria (PCs), and Modifications of PCs. Program implementation in Ghana remains broadly satisfactory, but the economic outlook remains difficult and fiscal challenges are mounting. The growth outlook for 2016 and 2017 has weakened, mainly owing to disruptions in oil production, and non-oil economic activity is expected to remain subdued owing to continued fiscal consolidation and tight monetary policy. There was broad agreement with the authorities on the need to sustain a tight monetary stance given the still high inflation. The IMF staff recommends completion of the third review.
EXECUTIVE SUMMARY Growth remains robust, despite slight downward revisions. Growth estimates for 2013 and projections for 2014 were revised to 6.6 and 6.8 percent, respectively, reflecting weather and weaker terms of trade. Inflation is around zero, partly due to subsidized food prices. The revised 2013 current account deficit rose to 7 percent of GDP, with a drawdown of imputed reserves. The 2013 fiscal deficit increased to 3.5 percent of GDP, reflecting weaker revenues and spending for subsidies, partly offset by higher grants. In line with 2011 Article IV recommendations, the authorities maintained a prudent fiscal stance, despite numerous shocks, and implemented structural reforms that have improved the resilience of agriculture, especially cotton. Social transfers have been bolstered to ensure the benefits of growth are better distributed. An updated external stability analysis shows that the exchange rate is broadly in line with fundamentals, and an updated joint debt sustainability analysis maintains a “moderate” risk of debt distress. Program performance has been satisfactory. The authorities are requesting a waiver for a non-observance in the performance criterion for net domestic financing at end-December 2013, with most other quantitative targets met and all structural benchmarks for end-January and end-March met. Program targets differ mainly due to higher budget support projections. The 3 percent fiscal deficit target for the medium term macroeconomic framework remains unchanged, although with a higher share of current spending. Policy discussions focused on composition and quality of spending, transfers to public enterprises, and natural resource revenues. The authorities recently submitted a supplemental budget that increases the share of current spending for a higher wage bill and more social and public enterprise transfers, but remains within program targets as a result of spending offsets and higher budget support. The authorities are proposing an audit of large public enterprises to estimate needs for the medium term, and inform reforms to reduce transfer needs. The National Assembly did not approve a new mining taxation code by end-2013 as expected, rather, the draft code was sent back to the authorities for further consideration of investors’ concerns.