ABIDJAN, 8 JULY 2011
Further discussions with the IMF have confirmed the severe damage to the economy of Côte d’Ivoire resulting from the post electoral crisis.
First estimates of economic loss by the private sector are close to 2000 billion CFA, or 20% of GDP. GDP is expected to contract by 6.3% in 2011, and inflation is projected to increase to 3% (as compared to 1.8% in 2010).
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At the same time, major uncertainties remain as to the pace of recovery. According to the macroeconomic framework agreed with the IMF, public expenditures are expected to increase to 26.4% of GDP (as opposed to 22% in 2010) while public revenues are expected to decrease to 17.6% of GDP (as opposed to 19.2% of GDP in 2010). The public deficit is expected to reach 8.5% of GDP in 2011 as compared to 1.9% in 2010. The severity of the shock to the economy in 2011 requires a complete reassessment of Côte d’Ivoire’s payment capacity. Consequently, the Republic of Cote d’Ivoire intends to negotiate a new three-year program with the IMF under the Extended Credit Facility that will in turn pave the way for a new interim agreement with the Paris Club under the HIPC framework before the end of this year.
It is now apparent that the Republic of Cote d’Ivoire will be unable to make any of its scheduled payments of external debt due in 2011 to the Paris Club or the holders of its US$ 2 332 149 000 Step-Up Bonds due 2032.
The Government of Côte d’Ivoire undertakes to resume contractual payments to its Bondholders beginning in 2012. The Republic further intends, with the assistance of its financial and legal advisors, Lazard Frères and Cleary Gottlieb Steen & Hamilton, to make a detailed proposal to its Bondholders by the end of the year, immediately following the adoption of a three-year IMF program under the Extended Credit Facility and the negotiation of a new interim agreement with the Paris Club, regarding interest payments due in December 2010 and June and December 2011. It is expected that repayment of these three installments of interest will be made over a period of time beginning in the first half of 2012 and ending as soon as permitted by the payment capacity of the Republic of Côte d’Ivoire, as assessed by the IMF.
All information exchanged with the IMF during their last mission to Abidjan as reflected in the Republic of Côte d’Ivoire Letter of Intent and Memorandum of Economic Policy will be posted on the website of the Ministry of Economy and Finance http://www.finances.gouv.ci/
The Government of Côte d’Ivoire respectfully requests all holders of its US$ 2 332 149 000 US Dollar Denominated Step-Up Bonds due 2032 to continue to demonstrate their understanding of the severe difficulties that the Republic and its people have suffered since December 2010. The Republic, for its part, confirms that it fully recognizes its obligations under these Bonds.
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The Minister of Economy and Finance
Charles Koffi DIBY
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