Country Report Cote d'Ivoire July 2008

Outlook for 2008-09

• The holding of the presidential election, scheduled to take place on November 30th, will continue to be a necessary condition for improving pol-itical stability, as it is intended to bring an end to the country's political crisis.
• Political instability may continue after the poll if there is widespread electoral fraud or if the main political parties do not accept the results.
• As long as the political crisis continues, economic policy will focus on keeping the economy afloat, leaving long-overdue reforms to the next government.
• Assuming that political stability improves, real GDP growth will accelerate to 2.5% in 2008 and 3.8% in 2009, owing to a recovery in the oil sector and the peace dividend.
• Inflation is forecast to rise to an average of 5% in 2008, in line with higher world food and energy prices, before declining to 3% in 2009 as food prices fall.
• The current-account balance is forecast to turn into a surplus equivalent to 4.7% of GDP in 2008 and 4.6% of GDP in 2009 owing to a widening trade surplus.

Monthly review

• Preparations for the presidential election have reached a decisive stage with the start of the final phase of voter identification
• Donors have pledged to provide additional funding to ensure that the poll takes place on November 30th.
• The New Forces troops, Forces armees des forces nouvelles (FAFN), have continued to experience serious unrest over the demobilisation process.
• Some FAFN troops have staged violent protests over the government's failure to pay demobilisation allowances and attempts to reduce the size of the FAFN's military forces.
• The IMF has expressed concern over rising subsidies to the electricity sector and delayed tax payments by the national oil company, Petroci, which could lead to a build-up of additional domestic arrears
• The government and donors have agreed measures to improve project execution, including improved communication channels, harmonisation of reporting requirements and the simplification of some spending procedures.
• The campaign to root out corruption in the cocoa sector has gathered pace with the arrest of numerous high-ranking officials on corruption charges.

Source: Country Report