WASHINGTON, December 18, 2018 - The World Bank Board of Executive Directors approved on December 11, 2018, an International Development Association (IDA)* credit of $100 million to support Government’s efforts to reinforce fiscal management and strengthen the education, energy, and cocoa sectors in Côte d’Ivoire.
Côte d’Ivoire continues to be one the fastest growing economies in Sub-Saharan Africa with GDP growth estimated at 7.7 percent in 2017. However, benefits from this strong outlook have not been equally distributed as spatial inequalities continue to be high, with higher poverty rates in Northern regions, and in rural areas of the country.
The Fiscal Management, Education, Energy and Cocoa reforms operation is the third in a series of three Development Policy Financing (DPF) operations. It aims to (i) enhance tax revenue collection and public procurement; (ii) strengthen the efficiency and equity in the education sector; (iii) improve the performance of the electricity sector by enabling private participation and diversification; and (iv) consolidate transparency in the management of the cocoa sector.
“Prospects remain positive for Côte d’Ivoire in the short to medium term, however the country is exposed to significant external and domestic risks,” said Pierre Laporte, World Bank Country Director for Côte d’Ivoire. “This operation will help Government increase domestic revenue to finance its ambitious program of infrastructure and social spending and maintain public debt at a manageable level.”
While the impact of this operation is expected to fully materialize by 2019, significant achievements have already been noted. With the support of the DPF series, the reform of the primary education system led to a drop of repetition rate in primary schools from 15.6 percent in 2015 to 11.5 percent in 2017, while teachers were assigned to underserved areas. These measures contributed to improving girls’ completion rate, which increased from 35.2 percent in 2015 to 42.7 percent in 2017 and is expected to reach 49.5 percent by 2019.
Other reforms also helped to strengthen the financial viability of the electricity sector, as the collection rate of electricity bills increased from 85 percent in 2016 to more than 95 percent of GDP in 2018 and, during the same period, public sector arrears were reduced from about 0.4 percent of GDP to less than 0.05 percent of GDP.
Reforms in the cocoa sector established new rigorous requirements to grant exporters licences and this is expected to reduce the level of defaulted contracts by exporters. Tax payments were simplified through the introduction of an electronic platform effectively used by 77 percent (up from 0 percent in 2015) of firms with a turnover greater than CFAF 200 million. These measures had a significant impact on the average time needed to complete a public procurement process, which decreased from 159 days in 2015 to 105 days in 2018.
The DPF series is closely aligned with the 2016-2020 National Development Plan and is an integral element of the World Bank Group (WBG) Country Partnership Framework (FY2016-2019). “This operation is fully anchored in the WBG maximizing finance for development approach. In addition to addressing fiscal challenges and helping promote inclusive growth, it contributes to attracting private investment in two strategic sectors - energy and cocoa.” added Andrea Coppola, World Bank Task Team Leader of the project.
* The World Bank’s International Development Association (IDA), established in 1960, helps the world’s poorest countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives. IDA is one of the largest sources of assistance for the world’s 75 poorest countries, 39 of which are in Africa. Resources from IDA bring positive change to the 1.5 billion people who live in IDA countries. Since 1960, IDA has supported development work in 113 countries. Annual commitments have averaged about $18 billion over the last three years, with about 54 percent going to Africa.