Washington, DC: A team from the International Monetary Fund (IMF), led by Mr. Edward Gemayel, conducted a mission from August 31 to September 7, 2023, to take stock of recent economic developments and update growth and budget forecasts, and discuss the draft 2024 budget.
At the conclusion of the mission, Mr. Gemayel issued the following statement:
"The tense socio-political situation took a toll on activity in the commerce and services sectors in the first half of this year, leading to a downward revision of GDP growth projection to 4.1 percent. Year-on-year inflation fell to 5.7 percent in July, but new inflationary pressures from some food staples (rice, onion, sugar) have recently emerged, and forecasts for average inflation in 2023 have been revised to 6.1 percent. Budget execution through end-June was broadly in line with program objectives. However, meeting the end-December program targets would require additional efforts in revenue collection.
Despite the delay in the start of hydrocarbon production until the second half of next year, macroeconomic prospects remain favorable. In 2024, real GDP growth is projected to 8.8 percent, boosted by the start of oil and gas production. Non-hydrocarbon growth is expected to pick up to 6 percent. The authorities are committed to pursuing fiscal consolidation efforts to rebuild buffers and rein in rising public debt vulnerabilities. To this end, the 2024 draft budget targets a fiscal deficit of 3.9 percent of GDP. The authorities are encouraged to streamline tax exemptions and implement the medium-term revenue strategy. They also need to take all the necessary measures to ensure the gradual elimination of energy subsidies (1 percent of GDP in 2024), as committed in the roadmap adopted last January.
The mission welcomes progress made in the implementation of reform measures agreed as part of the program supported by the Resilience and Sustainability Facility. Near-term reforms include the adoption of a decree that will help integrate climate considerations into all stages of public investment management and the definition of strategic priorities to move towards greener public transportation. The mission is encouraged by the authorities' commitment to make building resilience to climate change a central pillar of the updated national development strategy (PAP3), which is expected to be finalized by the end the year.
The IMF team wishes to thank the authorities and other counterparts for their excellent cooperation, and candid and constructive discussions during the visit. Discussions for the first review under ECF/EFF/RSF arrangements are planned for October 2023.
During the visit, the IMF team met with his excellency Prime Minister Amadou Ba; Mr. Mamadou Moustapha Ba, Minister of Finance and Budget, the National Director of the BCEAO, Mr. Ahmadou Al Aminou Lo, and senior government officials.
