Ivory Coast targets debt relief by H2 2012


Ivory Coast is aiming to secure an IMF-backed accord on debt relief in the second half of 2012, Finance Minister Charles Koffi Diby said after meetings with Fund officials.

Diby said the West African state, which defaulted on its $2.3 billion Eurobond during a four-month post-election crisis which ended in April, also planned talks this month with the Paris Club and London Club of creditors.
“We are not going to wait a year for completion point,” Diby said, referring to the point in the IMF’s Heavily Indebted Poor Countries (HIPC) scheme at which debt relief is granted, Reuters reports.
“There is too much poverty and the poverty of the Ivorians cannot wait. We will do all we can to reach completion point. We will do everything we can to reach it in the second half of 2012,” he told a news briefing.

Ivory Coast qualified in 2009 for possible debt relief under HIPC amounting to $3 billion, equivalent to just under a quarter of its total external debt at the time. It has already received about half of that relief potential through past debt reschedulings and concessional arrears clearance operations.

While President Alassane Ouattara has secured pledges of foreign aid since replacing Laurent Gbagbo, the world’s top cocoa grower has said its finances do not allow it to resume coupon payments on its bond until next year.

Diby said he wanted to agree a new repayment schedule with holders of the bond but also revealed that he would seek help from Paris Club nations in plugging a 242 billion CFA gap in the 2011 budget which it has just discovered.
“We collected less (revenues) than expected because of the post-crisis situation and the fact that companies are only just now beginning to restart activities,” he said.

IMF Resident Representative Wayne Camard said Ivory Coast could reach completion point late next year but that it would depend on how it put in place a landmark reform of its cocoa sector and how it implemented poverty reduction measures.
“I received a copy of the latest version of the (cocoa) reform and I think there is nothing prejudicial in it but we shall continue talks on its implementation,” he said.

The reform turns back a decade of liberalisation, introducing new regulatory arrangements aimed at shielding farmers from fluctuations on the world’s cocoa future markets.

Camard said the cocoa reforms would need to be evaluated over a six-month period, while local government efforts to reduce poverty would be assessed over 12 months.