Ivory Coast to Receive IMF Budget Support as Cocoa Slumps

ABIDJAN (Capital Markets in Africa) – Ivory Coast will receive additional assistance from the International Monetary Fund to support its 2017 budget after cocoa prices slumped, hurting the finances of the biggest grower of the crop.

The IMF’s board will meet in June to decide on the amount of support, Dan Ghura, the Washington-based lender’s mission chief, told reporters late Wednesday in the commercial capital, Abidjan.

The assistance will come as the IMF visited the West African nation for a review of the three-year credit facility of about $660 million agreed in 2016. Cocoa futures in London have slumped by about a third since reaching a six-year high in July.

While falling cocoa prices weighed on Ivory Coast’s income, expenses soared as the government tried to defuse military and social unrest by agreeing to pay bonuses to soldiers and making some concessions to civil servants who led a strike earlier this year.

Ivory Coast’s budget deficit is forecast to widen to 4.5 percent of gross domestic product this year and will stabilize at 3 percent in 2019, Ghura said. The economy probably expanded by 8 percent in 2016, he said.

Source: Bloomberg News