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Côte d'Ivoire Selected Issues Summary

Core Content

This report, prepared by the International Monetary Fund (IMF) in August 2021, evaluates the governance framework and growth sustainability in Côte d'Ivoire. It outlines the progress made in recent years, the challenges still facing the country, and provides policy recommendations to align Côte d'Ivoire with emerging market (EM) standards.

Main Points

1. Governance Framework and Progress

• Motivation: Côte d'Ivoire aims to achieve emerging market status, which requires a robust governance framework.
• Recent Reforms: Since 2012, the country has implemented various governance reforms, including anti-corruption measures, digitalization of public services, and institutional strengthening.
• Perceptions Improvement: Governance perceptions have improved, particularly in areas like government effectiveness and regulatory framework, as reflected in the Worldwide Governance Indicators (WGI) from 2011 to 2019.
• Remaining Gaps: Despite progress, the country still lags behind EMs in rule of law and voice and accountability indices.

2. Key Governance Milestones (2012–2020)

• Ratified the UN Convention Against Corruption (2012).
• Created the anti-corruption brigade (2012).
• Established the High Authority for Good Governance (HAGG) in 2013 and reformed it in 2015.
• Introduced the National Secretariat of the Fight Against Corruption.
• Adopted the law on transparency in public finances (2016).
• Launched e-government initiatives, including electronic filing and payment systems (2016–2019).
• Installed the Cour des comptes in 2018 and reinforced it in 2019.
• Adopted a law on consumer protection (2016).
• Created a national observatory on financial services quality (2019).
• Published the first citizens' guide to the 2019 budget.

3. Challenges in Governance

• Corruption Perceptions: In 2016, 75% of Ivorian businesses reported corruption as a major constraint, significantly higher than EM countries.
• Digitalization of Tax Administration: While digitalization has improved the business environment, it remains incomplete. A single tax identification number (STIN) system is being implemented, and interconnection of public administration systems is still needed.
• Public Financial Management (PFM): Côte d'Ivoire performs well in procurement and payroll controls but lags in audit practices, transparency, and non-salary expenditure controls.
• Procurement and PPPs: The procurement framework is aligned with international best practices, but implementation is slow. Only 20% of PPP contracts are awarded through competitive tendering.
• Public Banks Governance: Governance of public banks is being strengthened, but they still rely heavily on public social security institutions. The privatization of a bank in 2019 highlighted issues with due diligence.
• Rule of Law and Judicial System: While some institutions have been established, the judicial system remains relatively ineffective and more corrupt than EM counterparts. The High Court of Justice, intended to assess government crimes, is not yet in place.

Key Figures and Indicators

• World Governance Indicators (WGI): Côte d'Ivoire's governance perception ranking improved from 2011 to 2019, but the gap with EMs remains in rule of law and voice and accountability.
• Rule of Law Index: Côte d'Ivoire's ranking is lower than EM countries, indicating ongoing challenges in judicial independence and effectiveness.
• Public Expenditure and Financial Accountability (PEFA): Côte d'Ivoire scores 34 out of 100 in the Open Budget Survey (2019), below Benin and Senegal in the WAEMU region.

Policy Recommendations

1. Strengthen Institutions and Legal Frameworks

• Continue upgrading institutions and legal and regulatory frameworks to address persistent governance weaknesses.
• Ensure a continuous process of institutional reinforcement, policy application, and compliance monitoring with strict sanctions.

2. Accelerate Digitalization of Public Services

• Finalize the implementation of the STIN system and interconnect public administration information systems to enhance transparency and reduce corruption.
• Implement e-invoicing and e-cadaster to improve tax administration efficiency.
• Review tax laws to ensure simplicity, consistency, and minimal room for discretion.

3. Improve Public Financial Management (PFM)

• Accelerate the transition to accrual accounting and program budgeting as per WAEMU directives.
• Enhance transparency by publishing key data on government contracts and state-owned enterprises (SOEs) financial statements.
• Strengthen the framework for monitoring SOEs and ensure that their liabilities are integrated into the central government budget.

4. Enhance Judicial and Legal Frameworks

• Establish the High Court of Justice to assess government crimes and infractions.
• Improve the independence and effectiveness of the judiciary by implementing international best practices, including the establishment of audit, risk oversight, and remuneration committees.
• Ensure proper coordination between anti-corruption agencies and consistent sanctions.

5. Strengthen Anti-Corruption Measures

• Ensure that asset declarations by public officials are published and made public.
• Reduce the number of anti-corruption agencies and improve coordination between them.
• Implement a strong mandate for anti-corruption bodies to enforce compliance and prosecute cases.

6. Improve Access to Land and Minority Shareholder Protection

• Address the legal ambiguities and complexities in land rights procedures to facilitate the conversion of customary land to private property.
• Improve minority shareholder protection by enhancing legal clarity and implementation.

Conclusion

Côte d'Ivoire has made significant strides in governance reforms since 2012, particularly in digitalization, transparency, and institutional strengthening. However, to reach EM standards, the country must continue with more comprehensive and holistic reforms, especially in areas of rule of law, judicial independence, and anti-corruption enforcement. Accelerating the implementation of these reforms will be critical to sustaining growth and supporting inclusive development.