(The Southern African Times) – Ivory Coast’s economy is set to rebound from the impact of the coronavirus pandemic, according to the International Monetary Fund, which expects an expansion close to 6.5% this year.
Such growth levels “will put Ivory Coast exactly where it was before the crisis,” said IMF resident representative Kadima Kalonji in an interview in the economic capital, Abidjan.
The world’s top cocoa producer faces the challenge of supporting its economic recovery while managing its debt. The pandemic was expected to slow growth to an estimated 1.8% in 2020 from an initial forecast of 7.2%, the government said in September.
In the eight years through 2019, Ivory Coast’s GDP expanded by at least 7% per year after more than a decade of civil conflict. The rate is only second behind Ethiopia, the continent’s fastest-growing economy over the same period.
President Alassane Ouattara was more ambitious about the pace of the recovery six months ago, saying he expected the economy to expand 7.9% this year.
“You don’t want to kill the nascent recovery, but at the same time, you don’t want to build up debt that becomes unsustainable over time,” said Kalonji. “So you have to consolidate your fiscal position.”
The West African nation expects its budget deficit to fall to 3% of GDP by 2023, from 5.9% in 2020, he said. The government said it planned to spend 1.7 trillion CFA francs ($2.8 billion), or about 5% of output, to mitigate the social economic impact of the virus last year. Its budget is allocating about 1% of GDP for Covid-19 support this year, according to Kalonji.
Ivory Coast, which ended a four-year IMF program in December, continues to take part in post-program monitoring, he said. Paris Club creditor countries extended debt-service relief due to end on Dec. 31 to June 30. In February, the Ivorian government reopened a sale of Eurobonds to lock in cheaper borrowing costs.
“One of the things that remains a challenge is the mobilization of domestic revenue that is fairly low at around 12% of GDP,” Kalonji said.