IMF reaches US$130 million loan deal with Ivory Coast

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The International Monetary Fund said it reached a US$130 million loan agreement with Ivory Coast following a bloody four-month election standoff in the world’s largest cocoa-growing nation.

 

The IMF said in a statement the agreement under the IMF’s Rapid Credit Facility was subject to approval by the IMF board sometime in July.

The facility is a quick-disbursing fund for poor countries recovering from natural diasters or conflict, Reuters reports.

The country is still reeling from election violence spurred by the refusal of longtime ruler Laurent Gbagbo to step down after a UN-certified November 28 poll showed opposition leader Alassane Ouattara was the winner.

Ouattara was inaugurated as president this month after France and United Nations forces helped to oust Gbagbo.

The IMF said the new government’s forecast of a 6.3 percent economic contraction in 2011 “may be ambitious,” suggesting economic losses from the violence may be much larger.

The fund said the most pressing issue was to “strike a balance between tax relief to support private sector activity and launch the recovery and the need to fund government operations”.

It said the government had for now reduced some taxes and aimed to keep electricity and oil product prices stable through large subsidies and tax expenditures.

“Together with the impact of weaker economic activity, budget revenues between the second and fourth quarters of 2011 are expected to amount to about 17.5 percent of GDP during that period, compared with 19.5 percent of GDP in 2010, notwithstanding strong cocoa and oil revenue,” the fund said.



The IMF projected the country’s budget deficit will rise to 8.5 percent of gross domestic product in 2011, although it said bilateral and donor support should be enough to cover most of the gap.