The government of Cote d’Ivoire is attempting to restore ties with international financial institutions that withdrew support from the war-divided country as it defaulted on loan repayments.
The government on Thursday opened a two-day seminar in the capital, Yamoussoukro, to draft concrete measures to put Cote d’Ivoire’s finances back in good standing and begin paying arrears to its creditors.
“From the seminar in Yamoussoukro, we will outline strict guidelines that we pledge to follow,” Finance Minister Charles Diby Koffi recently told reporters in Abidjan. “We must spend state funds judiciously with real expenses, good expenses and just expenses. Now is the time to act in a way that will make us credible with our financial partners.”
Cote d’Ivoire has suffered an economic crisis since civil war broke out in September 2002. Prior to the war, the country had benefited from relative economic prosperity, reaped mainly from its cocoa production, the largest in the world. But as international prices for cocoa fell and the war progressed, the economy began a rapid decline.
By 2004, the government had defaulted on loan repayments to institutions such as the World Bank, The International Monetary Fund and the African Development Bank. These institutions consequently put a hold on all additional funding until the country could sort itself out economically. Cote d’Ivoire’s arrears to the World Bank total nearly $200 million.
“Our economy is not far from asphyxiation,” said economist Nicolas Agbohou. “It’s true that civil servants receive their salaries, but for the last four years, the country has not made any investments. The outcome is that the standard of living is plummeting. It’s a very dangerous situation.”
According to the World Bank, poverty rose to up to 44 percent during the crisis.
Many NGO’s attribute the country’s financial woes to overspending on arms and the military to fight rebels in the north. With relative peace having returned to the country, with UN peacekeepers patrolling a zone of confidence separating the north and south, the government is seeking to correct its financial mismanagement.
“It is time to renew our ties with external financial partners in order to lift our national economy. A strong sign of confidence will come from balancing our budget and making smart and efficient expenditures by the state,” said Finance Minister Koffi.
In June, government presented a balanced budget of US 3.5 billion, which it hopes to add to by fulfilling the requirements of its main backers and receive additional funding to go towards the reconstruction of the country.
Funds already have begun to be made available. At the beginning of May, the European Commission announced that it would unblock US $50 million to go towards access to potable water, health and hygiene in response to an influx of 1.5 million displaced people into Abidjan.
“We still haven’t received the full figure, but we are continuing to be hopeful,” said a cabinet member, who preferred to remain anonymous.
Last March, Cote d’Ivoire was the first country to receive money from the United Nations Central Emergency Response Fund (CERF). It was given US $950,000 to help provide emergency humanitarian relief to populations in the crisis zone, although this fell short of the initial amount of US $43.7 million that the UN estimated was needed to rebuild the country’s damaged infrastructure.
The World Bank said that once the country’s arrears are cleared, it would be ready to support the country’s Demobilisation, Rehabilitation and Reintegration Support (DDR) programme with an $80 million grant. It also said it would lift a suspension on US $104 million to go towards financing critical social services such as education, HIV/AIDS programmes, road repair and community reconstruction.
But observers say Cote d’Ivoire’s government will have to display a genuine willingness to repair the economy and operate with transparency before international funding begins flowing regularly.
In a July 2004 report, the Brussels-based Crisis Group said although the war might be hurting the country, some individuals are winning financially.
“The political impasse is exceptionally lucrative for almost everyone except ordinary citizens,” the report said. “Major government figures have been accused of using state monies, especially from the … maze of interlinked institutions within the cocoa marketing system, for personal enrichment, purchasing weapons, and hiring mercenaries.”
Crisis group said members of the rebel New Forces “have been accused of monopolising lucrative economic activity, including the trade in cotton and weapons”.
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The government on Thursday opened a two-day seminar in the capital, Yamoussoukro, to draft concrete measures to put Cote d’Ivoire’s finances back in good standing and begin paying arrears to its creditors.
“From the seminar in Yamoussoukro, we will outline strict guidelines that we pledge to follow,” Finance Minister Charles Diby Koffi recently told reporters in Abidjan. “We must spend state funds judiciously with real expenses, good expenses and just expenses. Now is the time to act in a way that will make us credible with our financial partners.”
Cote d’Ivoire has suffered an economic crisis since civil war broke out in September 2002. Prior to the war, the country had benefited from relative economic prosperity, reaped mainly from its cocoa production, the largest in the world. But as international prices for cocoa fell and the war progressed, the economy began a rapid decline.
By 2004, the government had defaulted on loan repayments to institutions such as the World Bank, The International Monetary Fund and the African Development Bank. These institutions consequently put a hold on all additional funding until the country could sort itself out economically. Cote d’Ivoire’s arrears to the World Bank total nearly $200 million.
“Our economy is not far from asphyxiation,” said economist Nicolas Agbohou. “It’s true that civil servants receive their salaries, but for the last four years, the country has not made any investments. The outcome is that the standard of living is plummeting. It’s a very dangerous situation.”
According to the World Bank, poverty rose to up to 44 percent during the crisis.
Many NGO’s attribute the country’s financial woes to overspending on arms and the military to fight rebels in the north. With relative peace having returned to the country, with UN peacekeepers patrolling a zone of confidence separating the north and south, the government is seeking to correct its financial mismanagement.
“It is time to renew our ties with external financial partners in order to lift our national economy. A strong sign of confidence will come from balancing our budget and making smart and efficient expenditures by the state,” said Finance Minister Koffi.
In June, government presented a balanced budget of US 3.5 billion, which it hopes to add to by fulfilling the requirements of its main backers and receive additional funding to go towards the reconstruction of the country.
Funds already have begun to be made available. At the beginning of May, the European Commission announced that it would unblock US $50 million to go towards access to potable water, health and hygiene in response to an influx of 1.5 million displaced people into Abidjan.
“We still haven’t received the full figure, but we are continuing to be hopeful,” said a cabinet member, who preferred to remain anonymous.
Last March, Cote d’Ivoire was the first country to receive money from the United Nations Central Emergency Response Fund (CERF). It was given US $950,000 to help provide emergency humanitarian relief to populations in the crisis zone, although this fell short of the initial amount of US $43.7 million that the UN estimated was needed to rebuild the country’s damaged infrastructure.
The World Bank said that once the country’s arrears are cleared, it would be ready to support the country’s Demobilisation, Rehabilitation and Reintegration Support (DDR) programme with an $80 million grant. It also said it would lift a suspension on US $104 million to go towards financing critical social services such as education, HIV/AIDS programmes, road repair and community reconstruction.
But observers say Cote d’Ivoire’s government will have to display a genuine willingness to repair the economy and operate with transparency before international funding begins flowing regularly.
In a July 2004 report, the Brussels-based Crisis Group said although the war might be hurting the country, some individuals are winning financially.
“The political impasse is exceptionally lucrative for almost everyone except ordinary citizens,” the report said. “Major government figures have been accused of using state monies, especially from the … maze of interlinked institutions within the cocoa marketing system, for personal enrichment, purchasing weapons, and hiring mercenaries.”
Crisis group said members of the rebel New Forces “have been accused of monopolising lucrative economic activity, including the trade in cotton and weapons”.
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This article was produced by IRIN News while it was part of the United Nations Office for the Coordination of Humanitarian Affairs. Please send queries on copyright or liability to the UN. For more information: https://shop.un.org/rights-permissions
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