Docmment of

The World Bank

FOR OFFICLAL USE ONLY

Report No. 13115-Cl

MEMORANDUM

OF THE

INTERNATIONAL DEVELOPMENT ASSOCIATION

TO THE

EXECUTIVE DIRECTORS

ON A

COUNTRY ASSISTANCE STRATEGY

OF THE

WORLD BANK GROUP

FOR

THE REPUBLIC OF COTE D'IVOIRE

JUNE 7, 1994

Country Operations DivisionOccidental and Central Africa DepartmentAMrica Region

Thi document has a restricted distribution and may be used bv recipients only in the performance oftheir ofrcial duties. Its contents may Dot othenrwise be disclos,ed without World Banki authorization.

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

CURRENCY EOUIVALENTS

Currency Unit = CFAF Franc (CFAF)US$1 = CFAF 571 (April 1994)

SYSTEM OF WEIGHTS AND MEASURE

Metric

ABBREVIATIONS AND ACRONYMS

ADB African Development BankCIR Country Implementation ReviewCPPR Country Project Performance ReviewESAF Enhanced Structural Adjustment FacilityEU European UnionMEFP Ministry of Economy, Finance and PlanMTF Medium-Term Economic FrameworkNEAP National Environmental Action PlanPFP Policy Framework PaperPSD Private Sector Development

FISCAL AND PROJECT YEAR

January 1 - December 31

FOR OFFICIAL USE ONLY

REPUBLIC OF COTE D'IVOIRE

COUNTRY ASSISTANCE STRATEGY

Table of Contents

A. Introduction . ................................................. I

B. Economic Developments and Social Performance .......................... 2

Economic Developments in the 1980s ............................ 2Recent Economic Developments ............................... 3Social Performance ............ ........................... 4

C. External Environment ........................................... 5

D. C6te d'Ivoire's Development Objectives and Policies 7

E. Medium-Term Prospects. 9

F. Bank Group's Country Assistance Strategy .12

Portfolio Management and Implementation .12Economic and Sector Work .................................. 14Proposed Lending Program .................................. 15IFC and MIGA . ......................................... 17Relations with the Other Donors ............................... 18

G. Agenda for Board Consideration .................................... 18

Annexes

This document has a restricted distribution and may be used by recipients only in the performance of theirofficial duties. Its contents may not otherwise be disclosed without World Bank authorization.

MIEMORANDUIM OF THE PRESIDENT OF IDATO THIE EXECULTIV'E DIRECTORS ON A

COUNTRY ASSISTANCE STRATEGYOF THE WORLD BANK GROUP

FOR COTE D'IVOIRE

A. Introduction

1. C6te d'Ivoire is one of the principal countries in the CFA zone, with a population of about13 million and a GDP of US$ 9.3 billion in 1993. The country has been in recession since 1986 andfaces a severe external debt problem. High population growth coupled with economic decline hasresulted in a steady fall of living standards. GNP per capita in 1993 was about US$640 and isestimated to fall to about US$515 in 1994 compared to well over US$1000 in the early 1980s. Socialindicators have also been deteriorating, rAfecting, among others, the effects of the economic crisis aswell as neglect of basic social services.

2. During the last four years, the country has gone through important political changes. Thedemocratization process was strengthened by the first multi-party and legislative elections in 1990.President Houphouet-Boigny was re-elected but died in office in December 1993, after having servedas head of state for 33 years. He was succeeded by the President of the National Assembly, Mr.Konan Bedie, who will finish the five-year presidential term which will expire in the fall of 1995.The new Government of C6te d'lvoire has responded decisively to the lingering economic crisis in thecountry itself as well as in the CFA zone. As the internal adjustment strategy pursued under the Banksupported medium-term economic framework (MTF) fell short of expectations, the Governmentdecided, together with the other CFA zone member countries to devalue the CFA franc vis-a-vis theFrench Franc in January 1994.

3. The Bank and the Fund have responded quickly to the parity change by presenting four IDAcredits, totalling US$ 335 million equivalent, and an arrangement under the three-year enhancedstructural adjustment facility (ESAF), totalling about US$ 467 million equivalent, to their respectiveBoards during February and March 1994. At the same time, a Policy Framework'Paper (PFP) forthe 1994-96 period was completed and discussed by the Boards of the two institutions.

4. In view of this momentous change, the Bank has reviewed its Country Assistance Strategy(CAS) in recent months. The CAS presented below aims at supporting reforms that would helpreverse the economic decline and improve social sector development. In this context, the strategyproposes to focus especially on assuring macroeconomic stability through public sector reform,promoting private sector development, and expanding and improving programs targeted at education,health, and poverty alleviation. The Bank would support these efforts through fast-disbursing policy-based lending and a reactivation of its project pipeline. Given C6te d'Ivoire's large IBRD exposure,special emphasis would be given to portfolio management and monitoring country risk. While thevolume of IDA lending will be linked to progress in the adjustment program, the Bank is proposing alending program consistent with C6te d'Ivoire's external financing requirements and its needs toincrease project investments.

-2-

B. Economic Developments and Social Performance

Economic Developments in the 1980s

5. Cte d'lvoire is emerging from 13 years of unsuccessful internal adjustment which failed toreverse the economic decline and reduce the growing social and poverty problems. The economicand social crisis started at the beginning of the 1980s when the country faced a number of seriouseconomic problems. First, the macroeconomic imbalances had grown to unsustainable levels, with abudget deficit of about 10 percent of GDP and a current account deficit of about 17 percent of GDP.Second, Cote d'lvoire started to encounter serious debt servicing problems as a result of the rapidbuild-up of extemal debt during the second half of the 1970s. Third, domestic markets had becomeincreasingly distorted, contributing to an inefficient resource allocation. Finally, there was a seriousdeterioration in public sector management, especially among public enterprises. These problems werein essence an outgrowth of the surge in spending which followed the cocoa and coffee price booms of1975-77.

Table 1: Macroeconomic Indicators, 1980-1993

1980-84 1985-47 - 1988 1989 1990 1991 1992 1993

Real Growth Rates (% p.a.)GDP 1.0 2. I -2.0 -1.0 -2.1 -0.8 0.0 -1.1Per Capita GDP -2.7 -1.6 -5.7 4.7 -5.8 4.5 -3.8 4.9

Central Government (% of GDP)Revenue 28.7 29.2 25.8 22.8 23.4 21.9 22.3 20.2Expenditure 37.6 32.1 40.3 39.9 36.5 36.2 35.1 36.4

of which interest 4.8 6.8 8.5 9.8 10.7 12.0 11.5 13.2

Primary Balance -4.1 4.0 -6.0 -7.3 -2.4 -2.3 -1.4 -3.0Overall Balance -8.9 -2.8 -14.5 -17.1 -13.1 -14.3 -12.9 -16.2

Balance of Payments (% of GDP}Trade Balance (FOB) 7.8 15.7 9.4 9.5 13.1 10.6 9.6 11.5Current Account -13.3 -3.5 -11.4 -10.2 -11.6 -11.9 -12.4 -11.1

External Debt (% of GDP)Debt Stock 1/ 79.7 96.9 99.4 123.6 142.0 157.4 151.2 168.1Arrears 0.0 0.0 9.3 17.2 27.5 36.5 45.3 60.0

PricesAnnual Change of CPI (%) 10.9 5.6 6.9 1.0 -0.7 1.6 4.3 0.8RER Index (1985=100) 112.0 118.0 138.0 130.5 133.0 129.2 135.6 132.8

1/ Excludes private non-guaranteed debt.

6. Prior to 1987, adjustment policies were partially successful in reducing the main internaland external imbalances. The Governnment pursued prudent fiscal and monetary policies, thereby

I

-3-

sharply reducing the budget deficit and inflation. Moreover, the adjustment effort benefitted from thedepreciation of the French franc and, hence, the CFA franc. vis-a-vis the dollar, and from a short-lived recovery of cocoa and coffee prices in the mid-1980s. However, despite the renewed decline ofthose prices on international commodit) markets, the Government delayed a commensurate reductionin producer prices. As a result, the fiscal deficit again increased to unsustainable levels, reaching 17percent of GDP in 1989 (Table 1). This also reflected more fundamental problems, including thedownward rigidity of expenditure, especially of salaries and wages, high debt service obligations, andthe real appreciation of the CFA franc.

7. The country's renewed fiscal and balance of payment crisis at the end of the 1980s revealednot only inadequate macroeconomic policies but also persisting distortions in the economy. The latterinclude (i) a trade regime that was still characterized by relatively high tariffs and dispersion levelsand a plethora of non-tariff barriers; (ii) inadequate levels of domestic savings and the insolvency andliquidity problems of the domestic banking system; (iii) continued public intervention in theagricultural sector, especially with regard to price and marketing policies; (iv) continued dependenceon a few primary commodities; and (v) an inefficient and bloated public sector, with limited capacityto provide basic services to the population.

Recent Economic Developments

8. Faced with an unsustainable economic situation, the Government adopted a new stabilizationand adjustment program in mid-1989. As one of its principal measures, the Government cutguaranteed producer prices for cocoa and coffee in half which helped eliminate the deficit of theAgricultural Stabilization Fund (CAISTAB) and, hence, reduce the overall fiscal deficit. In additionto the fiscal adjustment, the program aimed at eliminating domestic and external arrears andimplementing structural reforms in the agricultural, water supply and sanitation, and energy sectors.These reforms were supported by three Bank sector adjustment operations.

9. While progress was achieved under this program durinrg 1989-90, additional structuralreforms were deemed necessary to more effectively remedy some of the distortions still hampering therecovery of the economy. In response to the Government's request, the Bank collaborated in thedesign of the medium-term economic framework (MTF) for 1991-95, spelling out an internaladjustment strategy for restoring international competitiveness and growth. The MTF which wassupported by the Bank and IDA with three adjustment operations in the areas of finance,competitiveness and regulatory reform, and human resources development, and by a stand-byarrangement of the IMF, failed, however, to produce the expected results.

10. Although the Government initially made progress in cutting the primary deficit in the early1990s, the high outlays for public salaries, averaging 12.5 percent of GDP (or 60 percent of prirnaryexpenditure) during 1990-93, remained a problem. With the deepering of the recession in 1993, theprimary deficit again increased, reaching 3 percent of GDP (Table 1). As the Government did notsucceed in generating the programmed primary surpluses, its efforts to settle all domestic and externalarrears also faltered. A settlement on domestic arrears was reached in 1991, but its effect was partlyeroded in 1992-93 when the difficult financial situation of the Government again triggered the resortto arrears financing as a means of covering the deficit. External arrears accumulated rapidly andreached the equivalent of 60 percent of GDP by end-1993. The continuing fiscal and balance ofpayments problems revealed, in part, the limitations posed by the internal adjustment strategy.

-4-

11. The economic decline observed since 1986 was not halted and investment levels remained ataround 10 percent during the early 1990s. Real GDP contracted by a cumulative 4 percent and, on aper capita basis, by a cumulative 18 percent during 1990-93. Confronted with a deterioratingeconomic situation, the Government decided, together with its partner countries in the CFA zone, tocomplement the on-going internal adjustment efforts with a realignment of the parity of the CFA francto the equivalent of 100 CFA to I FF, with effect from January 12, 1994. The Government expectsthat with this parity change and the implementation of the accompanying fiscal, monetary, andstructural adjustment policies, the Ivorian economy will be able to maintain and strengthen its restoredinternational competitiveness and return to a sustainable growth path.

12. Preliminary results for the first quarter of 1994 are encouraging. The Government'srestrictive wage policy is having a beneficial effect on the budget and has been followed by theprivate sector in its wage negotiations. This augurs well for controlling inflation and enhancing thecountry's competitiveness. After an initial surge in January, monthly inflation rates through April fellinto the 1 to 3 percent range. While the consumer price index for May increased substantially due tothe adjustments in public utility tariffs, inflation is expected to subside during the rest of the year.The fiscal situation also appears to be imprpving as the Government spent less than programmned andrevenue targets were met. Preliminary trade data indicate that export volumes in the first quartergrew by about 7 percent whereas import volumes shrunk by 22 percent compared to the same periodin 1993. As a result, the trade balance surplus was about CFAF 60 billion or US$ 100 million.There are some indications of an early supply response in the wood and textiles sectors but data inother sectors are still too sketchy to make an accurate assessment.

Social Performnance

13. The economic decline observed since 1987 has caused a steady decline of real per capitaGDP on the order of 27 percent and a deterioration of social indicators led to levels that pose aserious challenge to the country's medium- and long-term development. Recent estimates indicate thatmore than 60 percent of the population falls below the poverty line as compared to about 30 percentin the mid-1980s.

14. Although basic services have been protected more in urban areas, the incidence of povertyincreased much more rapidly in urban areas than in rural areas. The share of the urban poor in thetotal number of poor increased from about 20 percent in 1985 to about 30 percent in 1992. This isdue in part to the high urbanization rate, rising levels of unemployment, and a reduction in realwages. Rural areas nonetheless still account for about 70 percent of the poor in C6te d'lvoire. Theextent and trends in rural poverty differ markedly according to regions. The situation deterioratedmost in the West Forest due to falling cocoa and coffee revenues, especially after 1989 whenproducer prices of these crops were cut in half. The Savannah, however, is still the poorest region,containing about one third of all poor.

15. While the share of the Government's budget going to education and health was maintained,the Government was less successful in implementing its policy of reorienting the intrasectoralallocation towards primary education and primary health care, and of reducing the pro-urban bias insocial infrastructure. Moreover, the rising share of salaries within the overall budget left insufficientresources for other inputs such as textbooks and pharmaceuticals, thereby aggravating the existinginternal inefficiencies. As a result of the strained fiscal situation and the difficulties encountered by

-5-

the Government in implementing its social program, the health and education systems havedeteriorated in recent vears.

16. The de,eloprnent of the health sector in C6te d'lvoire has systematically favored high-costcurative care in urban areas at the expense of low-cost. preventive care for the vast majority of low-income households, both in rural and peri-urban areas. As a result, health care coverage reachescurrently about 30 percent of the population. Substantial regional disparities exist with regard toaccess and coverage of health services, with only about 10 percent of the rural population beingwithin an hour's traveling distance of a clinic or dispensary. This is clearly unsatisfactory in the faceof new epidemological challenges such as the rapid spread of AIDS and of high population pressureswhich could diminish the health care cove ge even further. Infant mortality has only slowly fallenover time, affecting 95 out of 1000 live births in the early 1990s. Fewer children are immunizedagainst major diseases than are in other countries in the region or with similar per capita income.

17. The education system continues to suffer from low enrollment, low completion rates, highrepetition, and inefficient resource allocation. Although the Government has made efforts to provideprimary education for its youth, it currently covers only an estimated 50 percent of the school agedchildren. The precarious situation of the education system is also reflected by the high drop out ratesand repetition. The large majority of children who go to primary school, will either drop out in thecourse of the primary cycle or end all formal schooling after primary education, and thereby riskjoining the growing number of functionally illiterates. Moreover, due to restricted access tosecondary education, the absence of any educational alternative for those who can not continuebeyond primary education, and growing unemployment, children tend to repeat several times theirfinal year in primary school. In addition, the lack of programs to maintain school facilities and toprovide affordable textbooks has also adversely affected the education system. As a result, 46 percentof the population above the age of fifteen remains illiterate, while female illiteracy hovers around 60percent.

C. External Environrent

18. Two external factors will play a critical role in determining C6te d'lvoire's economicprospects. First, the country needs to resolve its external debt overhang with its creditors. As ofend-1993, the public external debt reached about US$ 15 billion, including about US$ 5.6 billion inexternal arrears. Following the devaluation, the Government has initiated a process of restructuringand reducing its debt service obligations. In March 1994, C6te d'Ivoire concluded a Paris Clubagreement in which its debt was restructured on enhanced Toronto terms. After a seven yearsuspension of debt service to conmmercial bank creditors, the country is expected to restructure itsLondon Club debt consistent with its debt servicing capacity and its overall macroeconomicframework. Exposure to preferred creditors (World Bank, IMF, ADB) has been increasing overtime. However, the debt to preferred creditors is expected to peak in 1994, reaching the equivalentof 54 percent of GDP and its debt service 8.9 percent of GDP, and fall thereafter as future financingwill be almost exclusively on concessional terms.

19. Given the lack of creditworthiness, the country will depend on financing from multilateraland bilateral official sources at concessional terms to meet its substantial capital requirements whichare programmed to be covered, in large part, by a series of fast-disbursing operations. Availability ofsufficient concessional financing will therefore be key to the success of the Government's program. It

-6-

is imperative that the Government's adjustment program remains on track, as delays in its timelyimplementation would leave large uncovered financing gaps of the balance of payments and increasethe risk of renewed arrears accumulation.

20. The second principal external factor influencing C6te d'lvoire's economic prospects is itsdependence on cocoa and coffee exports. Due to steep declines in their international prices, the cocoaand coffee export revenue share accounted for about a third of total export revenues during 1990-93as compared to 60 percent in the mid-1980s. The significant decline in international prices for thesecommodities imposed an important adjustment burden on the economy through their fiscal andbalance of payments effects and their economic and social effects in the cocoa and coffee growingregions.

Table 2: External Vulnerability

- i:f-iaXgs 199; 0 01 ' 99S f

External Debt (Mil. of USS) 1/ 7,165 14,057 15,637

of which Preferred Creditors 1,871 3,019 3,057

External Arrears (Mil. of US$) ... 2,893 5,360of which London Club ... 2.640 4,292of which Paris Club ... 197 982

Debt Ratios (%) 1I

External Debt / GDP 103 142 168

External Debt / Exports of G & S 224 391 487

Debt to Preferred Creditors / GDP 27 31 33

Debt Service to Pref. Creditors/ GDP 4 5 6External Arrears / GDP ... 28 60

Commodity Dependence

Cocoa + Coffee Exports / GDP (%) 25 11 13

Cocoa Price Index (1985=100) 100 56 50

Coffee Price Index (1985= 100) 100 61 48

1 / Excludes private non-guaranteed debt.

!

-7 -

21. Prospects for both commodities appears to have improved since 1993 but their sustainedrecoverv remains uncertain. The external vulnerability simulation suggests that a 10 percent declineof international commodity prices for cocoa and coffee would widen the current account deficit byUSS 100 million or about 1.5 percent of GDP in 1994. Given that the country's external debt isalready unsustainable and that additional financing from official creditors beyond what has beenenvisaged within the PFP is unlikely, any adverse external shock would need to be absorbed byadditional policy adjustment. Particularly, fiscal policy would need to be modified in the event ofadverse price trends as the reintroduction of temporary export taxes on cocoa and coffee in 1994 hasincreased the budget's vulnerability to external price shocks.

D. C6te d'Ivoire's Development Obiectives and Policies

22. Following the CFA devaluation, the Government has reformulated its economic programand spelled out its new stabilization and structural adjustment program for 1994-96 in a PFP whichwas discussed by the Conmnittee of the Whole in March 1994. The PFP aims at: (i) increasing realGDP growth to an annual rate of approximately 6 percent beginning in 1995-96, (ii) generatingsustained and increasing primary budget surpluses, (iii) further strengthening external competitivenessthrough trade, price, and regulatory reforms, (iv) intensifying human resource development andincreasing efforts to alleviate poverty, and (v) protecting the country's natural resource base.

23. Maintaining macroeconomic stability will be key to attaining these objectives. TheGovernment is exerting strict budgetary discipline so as to generate sustained primary surplusesneeded to cover an increasing portion of the public debt. To this end, the Government introduced aseries of tax measures in January 1994 and complemented them with other fiscal measuresincorporated in the revised 1994 Budget Law approved in April. They included a VAT reform,which eliminated the top rate of 35 percent and reduced the standard VAT rate from 25 to 20 percent,a reduction of petroleum taxation, and the reduction of import tariffs. Moreover, the Government haslimited the civil service base wage increase in 1994 to a nominal 10 percent which translates into asubstantial decline in the real wage bill. After the initial pass-through of the devaluation, monetarypolicy will aim at reducing inflation to traditionally low levels and restoring positive real interestrates. The financial sector liquidity situation will be strengthened not only by the flexible interest ratepolicy but also by the Government efforts to clear its internal arrears to the banking as well as non-banking sector.

24. Deepening public sector reform is a central element of the fiscal reform agenda, involvingthe reduction and streamlining of the civil service, public enterprise sector restructuring, andinstitutional capacity building. In particular, the Government is seeking to increase its public sectorefficiency and promote private sector development through its privatization program. It has identified42 enterprises for privatization during the 1994-97 period, of which 17 are scheduled for privatizationin 1994 alone. Moreover, the Government is implementing various programs designed to strengthenthe institutional capacities of the finance, health, and education ministries. In this context, the Bank isactively supporting the Government's endeavors through its technical assistance programs. Finally,public efficiency gains are expected to be made through the implementation of a decentralizationpolicy, particularly with regard to procurement and disbursement, and an urban investment strategy.

25. Trade liberalization will build on the progress achieved during the last four years. Theaverage weighted tariff on taxable imports declined from 32 percent in 1989 to about 24 percent in

-8-

1993. Concomitantly with the devaluation, the Government announced a new tariff reform which cutimport tariffs, according to preliminary Bank estimates, by an average of 20 percent and created astructure in the range of 0 to 35 percent. Government will examine the possibility of furtherreduction in tariffs and their dispersion levels, while, at the same time, broadening the base throughelimination of exonerations. With a few exceptions, non-tariff barriers will be phased out by end-1995. In addition, the number of products subject to price regulation will be reduced.

26. Stimulating private sector development. C6te d'lvoire's strained budgetarycircumstances create both the need and opportunity for placing greater reliance on the private sectorfor resource mobilization and investment. Two sets of policies are seen as supporting a private sectorled growth strategy. First, supportive macr( .zonomic policies would ensure the stability andcredibility needed for increasing private investment and provide adequate incentives for exports.Second, structural reforms in agriculture, industry, transport, and labor markets are geared towardsthe dismantlement of remaining regulatory barriers and market interventions that continue to hampercompetition and private initiative. Privatization of public enterprises and civil works assumes specialimportance in this context.

27. The agricultural policy of the Government aims at expansion and diversification ofproduction through the creation of an enabling environment which involves the pursuit of a flexibleproducer price policy, improvements in the incentive system, and a retrenchment of publicintervention. To remove the restrictive regulatory practices in the transport sector, the Governmentwill deregulate domestic and maritime transport, privatize the management of the rail system, andincrease private sector participation in road maintenance. In addition, the Government is taking stepsto implement the regulatory and legal framework needed for a dynamic private sector. The ongoinglabor market reforms are advancing with the adoption of the new Labor Code in mid-1994. Labormarket flexibility will be enhanced with the envisaged revision of the collective bargaining agreement.In addition, a reform of the Investment Code will be implemented by end-December 1994. Thereduction of the tax burden and the relaxation of economic regulations are expected to stimulateeconomic activity in the formal sector and the recovery of private investment.

28. Developing the human resource base and intensifying poverty alleviation efforts are partof the Government's agenda. A more effective health, education, and population policy is envisaged.The Government will intensify its attention on preventive and primary health care, cost recovery,increased maternal and health care, and intensifying the battle against AIDS. In an effort to reducethe natural growth rate of the population which is among the highest in Africa, the Government is inthe process of reorganizing and strengthening its famnily planning services program. With regard toits education strategy, the Government aims to increase literacy levels through increasing the grossenrollment rate in basic education. Although the Government has to operate within the confines of atight budget, it intends to increase expenditures for these priority programs mainly through thereallocation of resources. Furthermore, the Government is being supported with technical assistanceprojects to strengthen the currently weak management and institutional capacity of the public healthand education sectors.

29. Reducing poverty will remain a severe challenge to the Government. In the short-term, thedevaluation will have a more favorable effect on the rural than the urban poor. While farmerssuffered greatly from declining incomes prior to January 1994, the devaluation will provide them witha much needed boost in their incomes through increased producer prices which constitute the mostefficient and direct means to alleviate poverty in rural areas in the short term. To counter the real

-9 -

wage declines and rising unemployment in urban areas, the Government is increasing resources tomunicipalities to finance labor-intensive public works and rehabilitation programs that will stimulateemployment generation. In the longer-term, the Government recognizes that rural as well as urbanpoverty needs to be addressed by family planning and the continuing structural reforms in theprovision of health, education, and agricultural services.

30. Protecting the environment and managing the resource base has become a majorobjective for sustainable development in C6te d'lvoire. The Government is confronted with seriousenvironmental problems such as deforestation, loss of biodiversity, soil degradation, water pollution,and management of industrial and domestic waste. The Government is drafting a NationalEnvironment Action Plan (NEAP) which is expected to be adopted by December 1994. Followingthe reconmnendations of the U.N. Conference on Environrnent and Development in 1992, this planwill be among the first in Africa to address the full range of global as well as national environmentalissues. To provide greater focus on environmental policy, the Government intends to draw up anenvironmental code and a general forestry plan. It will also install and manage an environmental database to monitor trends in environmental quality in both urban and rural areas.

E. Medium-Term Prospects

31. With the decision to complement the internal adjustment measures with a devaluation of theCFA franc, the Government is effectively addressing some of the main obstacles for renewed growth,including the lack of international competitiveness and unsustainable fiscal and balance of paymentsdeficits. This historic change in policy direction appears indeed to have improved chances forsuccessfully implementing the reform program in which trade and price policies as well asderegulation and divestiture rank prominently.

32. The implementation of sound macroeconomic policies and structural reforms should lead toa better utilization of the country's existing resources and productivity gains. The impact of thesereforms would be manifested in increases of value added and income in agriculture andmanufacturing, especially agro-industries. The ensuing recovery of the economy is expected tostimulate the demand for labor and, in this way, help reduce poverty, especially in rural areas. Whilevolumes of traditional exports would grow at rates consistent with their international demand, rapidlyexpanding non-traditional exports would provide a source of dynamism over the medium to long run.It is, therefore, assumed under the PFP scenario that the successful stabilization effort coupled withthe envisaged structural measures would be translated into improved efficiency and performance ofthe tradable sector and a marked increase in public and private investment levels. This should resultin sustained growth rates of as much as 5 to 6 percent per annum, beginning in 1995-96.

33. To achieve the saving targets set in the PFP, fiscal reform is critical. Under its prograrn,fiscal revenue would be on the order of 21 percent of GDP while primary expenditure would fallfrom 23 percent of GDP in 1993 to about 18 percent in 1996. As a result, the Government isexpected to generate increasing primary surpluses, reaching 3 percent of GDP in 1996.

- 10 -

Table 3: Key Economic Indicators, 1993-1996

.Pmiections1993 1994 1995 1996

Real Growth Rates (% p.a.)GDP -1.1 0.8 5.7 6.4Per Capita GDP -4.9 -3.0 1.9 2.6

National Accounts (% of GDP)Consumption 83.8 72.3 73.3 73.5Investment 9.3 11.4 12.3 13.3Exports G&NFS 34.3 51.7 49.1 47.6Inports G&NFS 27.4 35.4 34.7 34.4Resource Balance 6.9 16.3 14.4 13.2

Central Government (% of GDP)Revenue 20.2 22.4 21.3 20.6

of which taxes 16.8 18.0 18.4 18.4Expenditure 36.4 30.7 28.6 26.4

of which primary 23.2 20.1 19.0 18.0

Primary Balance -3.0 2.3 2.3 2.6Overall Balance -16.2 -8.3 -7.3 -5.8

Balance of Payments (% p.a.)Export Volume Growth -5.2 0.8 2.4 3.4Import Volume Growth -13.3 -10.0 5.8 6.0

Current Account (% of GDP) -11.1 -5.2 -6.5 -5.9

External Debt (% of GDP)Debt Stock 1/ 168.1 172.8 158.2 147.6Arrears 60.0 ... ...

1/ Excludes private non-guaranteed debt, and includes a comprehensivecommercial bank debt reduction operation.

34. C6te d'Ivoire's large current account deficit is expected to be reduced through theimplementation of tight fiscal and monetary policies and the comprehensive restructuring of itsbilateral and commercial bank debt. In addition, the devaluation coupled with a deepening of the on-going trade reforms would stimulate the expansion of non-traditional exports. The current accountdeficit is, therefore, projected to decline from about 11 percent of GDP in 1993 to an average of 6percent during the 1994-96 period.

35. C6te d'lvoire's rmancing requirements and their likely sources of finance for the 1994-1996 period are based on the PFP and detailed in Table 4. Gross financing requirements for theprogram period amount to US$ 5.3 billion, of which US$ 2.5 billion in 1994 alone. Whileanticipated reschedulings of the country's external debt, excluding arrears, are expected to lead to areduction of debt service obligations from US$ 2.1 billion in 1993 to US$ 1.6 billion in 1994, Cote

- 11 -

d'lvoire still needs about USS 1 billion during 1994 to reduce its external arrears. The earlysettlement of these arrears is therefore a top priority of the Government. First, the Government isexpected to clear remaining multilateral arrears which mainly consist of arrears to the AfricanDevelopment Bank, shortly. Second. the Paris Club convened on March 22, 1994 and decided to (i)grant enhanced Toronto terms for rescheduling Ivorian debt, (ii) require that the Government clear allinterest arrears on post cut-off debt by end-1994, and (iii) reschedule principal arrears on post cut-offdebt over the PFP period. Finally, the Government will seek an agreement with its commercial bankcreditors, whose debt has not been serviced since May 1987, so as to reduce future debt service tolevels consistent with the country's debt servicing capacity. The debt relief from the restructuring ofbilateral and comnercial bank debt as well as from debt forgiveness announced by France, Canada,and Switzerland is expected to cover most of the financing gaps of about US$ 2.5 billion identifiedfor the 1994-96 period. Provided that the debt relief is forthcoming in the anticipated amounts, C6ted'lvoire's debt profile is expected to improve over the next few years. The debt to GDP ratio,expected to reach about 173 percent in 1994, would gradually decline as would the debt service ratioas a result of debt restructurings and limiting new borrowing to that provided on concessional terms.

Table 4: Financing Requirements and Sources, 1993-1996

(In Millions of US Dollar)

1993 1994 1995 1996

Gross financing requirements -1822 -2536 -1449 -1278

Current account -1023 -335 -469 -474of which interest -1276 -833 -840 817

Amortization on public MLT debt -832 -757 -790 -707Arrears reduction ... -1049 ... ...Change in reserves ( - = increase) 33 -395 -189 -98

Sources 1822 1104 915 799

Public MLT disbursements 506 1089 859 852of which balance of payments support 0 900 657 634IMF and IDA ... 600 357 334Bilaterals ... 300 300 300

Other capital flows 1/ 66 14 56 -53Accumulation of arrears 1250 ... ... ...

Financing gaD 0 -1432 -534 -479

Memorandum:Stock of Arrears 2/ 5360 ... ... ...

I/ Includes net short term capital, net private non-guaranteed debt,net foreign direct investment, and errors and omissions.

2/ Valued at end-year exchange rate.

- 12 -

36. Bilateral and multilateral financing programmed for 1994-96 amounts to US$ 2.8 billion, ofwhich USS 1.1 billion in 1994 alone. It is envisaged that multilateral financial assistance would bethe principal source of new external finance. In this context, IDA would play the leading role.accounting for about 55 percent of new multilateral disbursements and 35 percent of total anticipateddisbursements of new operations. Bilateral financing for balance of payments support is projected toremain around US5300 million during 1994-96 and gradually decline thereafter.

F. Bank Group's Country Assistance Strategy

37. C6te d'lvoire's development plans are set forth in the Policy Framework Paper. While theGovernment has undertaken important steps to reform the Ivorian economy since the beginning of1994, the reform agenda remains large and many difficult policy changes have yet to be implemented.The Bank's main objective is to support the Government's efforts to implement the PFP during the1994-96 period.

38. Major priorities in the proposed IDA assistance strategy for FY94-97 would be to help theGovermnent: (i) maintain macroeconomic stability and strengthen public sector finances throughreforms in both revenue and expenditure execution, (ii) promote private sector development throughcontinued liberalization of trade, financial, and labor markets, and through investments in agriculture,industry, and transport, (iii) increase the effectiveness of the human resources development programthrough increased focus on primary health care, AIDS, basic education, and population policy; (iv)strengthen institutional capacity through existing IDA-supported technical assistance programs, and (v)intensify environmental work through projects and the NEAP process.

39. The assistance strategy would be implemented by pursuing (i) active portfolio management,involving enhanced project supervision, (ii) an intensified policy dialogue on macroeconomic, sector-specific, social, and environmental issues through economic and sector work, providing the analyticalunderpinnings for the IDA lending program, (iii) adjustment lending in support of policy reforms thatenhance the country's competitiveness and growth prospects, and (iv) project lending targeted atprojects in the fields of agriculture, infrastructure, energy, and human resources development.

Portfolio Management and Implementation

40. The World Bank Group's operations in Cote d'Ivoire began in 1968. As of end April 1994,IBRD/IDA lending has included 81 loans and credits, in support of 74 operations, totaling US$ 2,980million, of which US$ 2,360 million corresponds to loans that have been closed. Disbursedoutstanding debt to the World Bank currently amounts to US$ 2,022 million, of which US$ 1,540million is owed to the IBRD and US$ 482 million to IDA.

41. Until the early 1980s, Bank lending was project-oriented but has shifted toward structuraladjustment since then. Between 1981 and 1991, three structural adjustment loans and six sectoradjustment loans were approved, totalling about US$ 1.4 billion or about 60 percent of commnitments.This shift reflected the need to address the profound structural and macroeconomic problemsconfronting the country. Due to these problems, public investment has been curtailed and this declinehas been reflected in falling levels of the Bank's investment lending, except for technical assistanceprojects, in recent years. Consequently, project disbursements have declined steadily from an average

- 13 -

of USS 115 million per year during 1986-88 to an average of US$44 million per year during 1991-93.

42. The Ivorian portfolio has been shrinking, falling from 20 projects in FY92 to 15 in FY94.This trend will continue in the short term. While four new projects are expected .o be added to theportfolio, another 8 operations are scheduled to close during 1994. However, as mentioned in thelending section, the Bank is building-up and strengthening its portfolio, and, especially, its investmentpipeline, through the preparation of a series of projects in the areas of agriculture, infrastructure, andhuman resources development. Together with the programmed adjustment operations, it is expectedthat the Ivorian portfolio will steadily increase and consist again of about 20 projects in FY96.

43. Given that C6te d'lvoire is no longer creditworthy to borrow at IBRD terms, the IBRDportfolio is in the process of being restructured. Following the devaluation, the Governmentrequested the cancellation of the undisbursed IBRD balances of three sector adjustment loans, totallingUS$ 250 million. In February 1994, the Board approved three IDA credits, replacing these cancelledamounts. With regard to the investment portfolio, undisbursed IBRD balances for 8 projects amountto US$ 113 million. Two projects account for US$ 91 million of the undisbursed balances and willbe cancelled and replaced with proposed IDA credits. The remainder of undisbursed balancespertains to four loans that will be closed by the end FY94, and to two loans that are scheduled toclose during FY95. It is expected that no new extension of closing dates will be granted. Thus,during FY95 the IBRD portfolio restructuring will be completed and all its undisbursed balanceseliminated.

44. Portfolio implementation issues were addressed by the first Country Implementation Review(CIR) for C6te d'Ivoire which the Bank organized in June 1993. In this context, four principal issueswere identified. First, procurement procedures continue to delay timely project implementation.Project managers estimate that it took on average 30 weeks to complete the procurement of servicesand 41 weeks to arrange civil works, not counting the time for the Bank's review. Secondly,disbursement procedures appear to be cumbersome as well. It frequently takes two months forwithdrawal applications to reach the Bank. Thirdly, lack of counterpart funds has been a centralissue. During the early 1990s, only two-thirds of the Government's planned contribution to projectshas been budgeted, and only about half of this amount has been released. As a result, counterpartfund disbursements averaged only one third of the level originally foreseen. Finally, the recurrentproblem with auditing of Bank projects was associated with insufficient skills and institutionalconstraints that complicate the proper accounting and auditing of projects. To ensure the adequatefollow-up to the CIR, the Government established a monitoring committee which should help imnproveproject implementation, inoluding significantly reducing delays in procurement and processingwithdrawal applications as well as introducing more realistic budgeting of counterpart funds. Whileprogress to date has been slow because of the serious fiscal problems in 1993 and the late approval ofthe 1994 budget, the Bank has intensified its support to Ivorian project managers through seminars onprocurement (June 1993) and disbursements (April 1994) as well as through enhanced supervision. Toaddress remaining concerns, a Country Project Performance Review (CPPR) will be held in FY95.

45. The allocation of staff resources to supervision has sharply increased in the 1990s, with 310staff weeks in FY93 as compared to 237 in FY91 and 161 in FY89. For FY94, 285 staff weeks areprogrammed for supervision. This translates into an average 19 staffweeks spent on supervision perproject which is a marked increase over the previous fiscal years. Moreover, the resident mission isgetting increasingly involved in the supervision effort. The results of the increased focus onsupervision are reflected in the improved ratings in FY94, with overall project performance

14 -

improving from 2.4 in FY93 to 2.0 in FY94. The number of problem projects has decreased from 6in FY92'93 to 3 in FY94. It is expected that all existing problem projects will be either closed orrestructured in 1994.

Economic and Sector WN'ork

46. The assistance strategy is supported by a program of economic and sector work designed toexpand knowledge in priority sectors, strengthen the policy dialogue with the Government, andprovide the underpinning to the proposed lending operations. A Private Sector Assessment has beencompleted and will be discussed with the Government in FY95 and launch the preparation of aproposed Private Sector Development investment project. An Agricultural Sector Report is beingfinalized with close donor and government participation. This report will support the design of theagricultural adjustment credit proposed for FY95 and provide an agenda for addressing some of thepressing issues confronting the agricultural sector, including the incentive system, poverty,environment, and prospects for food and export crops. A recent urban strategy paper, which resultedfrom an extensive participatory process, has sharpened the Bank's focus on urban poverty and urbanenvironmental issues as well as municipal finances and local taxation. The Municipal Developmentproject is now being restructured in line with the paper's recommnendations and will include povertyalleviation and environmental improvement components as well as a labor intensive work componentto deal with the widespread urban unemployment. A Country Economic Memorandum will becompleted in FY95, providing an overall economic assessment of the early 1990s and the initialeffects of the post-devaluation phase.

47. In the area of environment, the Bank is preparing a country environmental strategy paper(CESP) which will be discussed with the Government during the first quarter of FY95. The CESPprocess is tightly linked to the Ivorian national environmental action plan (NEAP) which is expectedto be implemented during the PFP period and beyond. It will also assist task managers to betteraddress environmental problerns in their respective projects and facilitate the preparation of projectswhich would qualify for financing under the Global Environmental Facility.

48. A Poverty Assessment will be initiated in FY95 to identify policy and institutional measuresto strengthen the Government's poverty alleviation programs as well as provide a critical input for theBank's social sector operations. Within the context of the human resources developm,ent program andof the CEM, the Bank has prepared a series of background studies on health, education, andpopulation issues. These areas will continue to be reviewed either in the context of the plannedoperations for health and population (FY96), education (FY96), gender (FY97) and during the annualconsultation on the public investment program as agreed under the PFP.

49. In addition to ESW directly related to specific operations, the Bank has extensively studiedthe Ivorian experience with adjustment, trade, transport, and social sector development. Theseresearch-related activities are continuing in order to provide a strong analytical base for the Bank'soverall assistance.

- 15 -

Proposed Lending Program

50. The size of new IDA lending will be largely dependent on the Government's performance inpolicy reform. The sustained adjustment scenario proposes a lending program for FY95-97 in therange of US$ 700 to 900 million, with about six operations annually. This scenario is predicated on:(i) sustained and sound macroeconomic performance and full implementation of the proposedEconomic Recovery Credit as well as future sector adjustment operations, and (ii) a concerted effortto rebuilding the project pipeline. New investment projects are expected to account for about 40percent of total commitments as compared to about 10 percent during the previous four fiscal years.Adjustment operations, including supplemental credits from the Fifth Dimension, are programmed toaccount for almost 60 percent of total commitments. The supplemental credits would account forabout 20 percent of total commitments. The continued heavy emphasis on fast-disbursing operationsis justified given (i) the large unfinished reform agenda, especially in light of the opportunities createdby the devaluation in January 1994, (ii) retrogression of a high exposure IBRD country into IDA-onlystatus, and (iii) large external financing requirements (paras. 35 and 36).

Table 5: IDA Lending Program, FY91 - FY97

(In Millions of US Dollar and Percent)

FY91 - FY93 It FY94 FY95 - FY9 2fUS$ MU. PerMcens U D$ MU. Pcrcent USS Mil, PeFenz

All Lendine 491 100 376 100 700 - 900 100

Adiustment 3/ 450 92 335 89 60

Proiects 41 8 41 11 40

Agriculture 0 0 24 6 14

Industry, Energy, PSD 0 0 0 0 8

Infrastructure 0 0 0 0 10

Human Resources 2 0 17 5 8

Technical Assistance 39 8 0 0 0

MemorandumIBRD Cancellations ... ... 250 ... 90 ...

1. Includes also IBRD loans. The last IBRD loans were approved in FY92.2. Refers to the sustained adjustment scenario3. Includes supplemental credits from the Fifth Dimension, beginning in FY94.

- 16 -

Table 6: Lending Scenarios and Trigger Points

Scenario Trigger Points Proposed Operations Fiscal Year

Sustained Adiustment 1. Maitenance of an adequate Lendine Range: US$ 700 - 900 mil. FY95-97macroeconomic framework.

Agricultural Adjustment Credit; FY952. Sustained implementation Export Promotion; Land Tenure;

of PFP reform program. Energy; PSD Investment;Road Maintenance; and Two

3. Sustained efforts to improve credits replacing existinghuman resources development IBRD investment loans.

and alleviate poverty.Two Adjustment Operations (PSD, FY96

4. Progress in project preparation and Transport); Rural Infrastructure;and execution. Health; Education; and Urban

Rehabilitation.

Two Adjustment Operations (SAC, FY97Finance); Agricultural Services;Livestock; Gender.

Intermediate Case I. Macroeconomic framework that Lending Ranee: US$ 500 - 700 mil. FY95-97meets only stabilization targets.

Agricultural Adjustment Credit; FY952. Uneven implementation Road Maintenance; Land Tenure;

of PFP reform program. PSD Investment; and Two creditsreplacing existing IBRD investment

3. Slow progress in project loans.preparation and execution.

Health; Education; Urban FY96Rehabilitation.

One Adjustment Operation; Gender FY97

Low Case 1 . Absence of a satisfactory Lending Range: USS 200 - 300 mil. FY95-97macroeconomic framework.

Land Tenure; Road Maintenance; FY952. Delays and policy slippages in Two credits replacing existing

implemenating the PFP reforms. IBRD investment loans.

3. Slow project preparation Health; Education; and Urban FY96and execution. Rehabilitation.

Gender FY97

- 17 -

51. Operations would be expected to include a heavy emphasis on policy reform andinstitutional development, the latter looking toward approaches to better utilize the private sector insupporting public priorities. In addition to the Economic Recovery Credit, IDA would support sectorpolicy reforrms in the areas of agriculture, transport, finance, and private sector development. Theinvestment pipeline will be strengthened through projects that (i) promote private sector development,especially in the areas of agriculture, industry, and energy, (ii) enhance human resources developmentin health, education, and labor-intensive work, (iii) promote non-traditional exports, and (iv) includeenvironmental components.

52. The intermediate scenario is characterized by a successful stabilization effort but unevenprogress in structural adjustment and human resources development program and slow projectexecution. While the overall program is expected to remain on track for much of FY95,implementing the structural reforms would suffer delays, resulting, for example, from theGovernment becoming increasingly focused on the elections to be held end-1995. It is assumed thatthe Government would again strengthen its adjustment efforts beginning FY97. As a result, thelending program would reflect the changing priorities of the Government and include only twoadjustment operations (FY95 and FY97). To reinforce efforts to improve human resourcesdevelopment, IDA would propose to concentrate its investment operations into projects with a highpoverty alleviation content. The intermediate scenario would trigger a lending program in the rangeof US$ 500 to 700 million.

53. The low case scenario posits a lending program that would be triggered by: (i) less thansatisfactory macroeconomic policies, especially, failure to meet the fiscal targets, and (ii) slowimplementation or diversion from the structural reform program spelled out in the PFP. The presenceof one or both factors would not allow IDA to continue with adjustment lending and result insignificant declines of disbursements. Under this scenario, preparation of investment projects wouldalso suffer. IDA would concentrate on projects in agriculture and the social sectors. Moreover, witha deteriorating macroeconomic environment, project execution would slow down and disbursementsfor investment projects would fall accordingly. The low case scenario would be inherently unstable,and raise the possibility of renewed debt servicing problems.

IFC and MIGA

54. IFC has maintained a long-standing relationship with C6te d'Ivoire, and has been involvedin textiles, food processing and agribusiness sectors. In the past, IFC's investments in Cote d'Ivoirehave been geared toward the development of export-oriented and import substitution projects and theexpansion of small and medium-sized companies. The only capital market operation to date has beenthe establishment of the country's first venture capital company. IFC recently undertook aninvestment in the oil and gas area. To date, operations in areas such as mining and petrochemicalshave remained modest largely due to the absence of a suitable regulatory and incentive framework toencourage private investment in these areas. Total commitments held by IFC as of April 30, 1994was about US$ 32 million.

55. In keeping with the economic changes brought about by the recent devaluation, IFC expectsto pursue increasing opportunities in traditional areas such as projects in the export basedmanufacturing and small business sectors. IFC also intends to develop participation in areas where

- 18 -

the countr\ enjoys comparative advantages, including agro-business industries and the financial sector.Possible projects are envisaged in the infrastructure and natural resource areas.

56. Co-ordination of activities between the Bank and IFC has been close. Given the commoninterest to deepen the Bank Group's understanding of the constraints to dynamic private sectordevelopment in Cote d'Ivoire. IFC and the Bank have jointly prepared a Private Sector Assessment(para. 46).

57. C6te d'lvoire has been a member of MIGA since 1988. MIGA has not yet completed anoperation but has received nine preliminary applications for investments in the areas of naturalresources, manufacturing, and financial services.

Relations with Other Donors

58. Major donors in C6te d'lvoire are the French Government, the World Bank, the AfricanDevelopment Bank (ADB), and the European Union, with smaller programs from several Europeancountries, USAID, CIDA, the Japanese Governrnent, and U.N. agencies. Aid coordination has beenreflected in co-financing activities, regular exchanges, and joint missions. In this context, theResident Mission is playing an active role. The Bank is planning to organize a Consultative Groupmeeting in FY95 to coordinate the provision of financial assistance and reduce the potential forduplication and inconsistencies.

59. The process of designing and implementing the adjustment programs as well as dealing withthe country's debt servicing difficulties have involved close coordination with the FrenchGovernment, IMF, ADB, and Paris Club. In particular, Bank staff has worked closely with the IMFin preparing the Policy Framework Paper and in carrying out a policy dialogue with the Governmentduring joint missions. As mentioned above (para. 3), the IMF approved its first year ESAF in March1994. The Fund will undertake a midterm review, to be completed by end-September 1994, to assessprogress in implementing the ESAF program.

G. Aeenda for Board Consideration

60. Sustainability of Reforms Considerable risks attend the proposed IDA assistance strategyto C6te d'lvoire. They largely relate to questions about the country's ability to implement the neededpolicy and institutional changes., In the past, the Bank's effectiveness was handicapped by thelimitations posed by the internal adjustment strategy and, consequently, by a lack of sustainedgovernmental effort to address structural imbalances and social development. With the exchange rateissue resolved; the Government has greatly enhanced its chances for successfully pursuing stabiliza-tion and structural reforn. Moreover, to return to a sustainable growth path, the Government willneed to restructure and reduce its external debt overhang with international creditors and to attractsubstantial amounts of concessional financing from multilateral and bilateral sources. To qualify forthis financial support, the Government has announced its intention to strictly adhere to its economicand social reform program.

61. In the past, even with Government commitment, the poor implementation capacity of thepublic sector has plagued the Government's effectiveness and, ultimately, compromised its credibility.

- 19 -

The experience of the 1980s suggests that the Government did not overcome this problem and policyslippage became especially marked in recent years. In response to this concern, the Bank- supportsthree technical assistance programs to strengthen institutional capacities in the areas of economicmanagement, privatization, external debt management, and human resources development.

62. Potential deterioration in the domestic political situation could jeopardize the IDA assistancestrategy. Failure to defuse potential social tensions in the wake of the devaluation could underminethe Government's efforts to pursue its economic program. Moreover, the Government may faceheightened political uncertainty as presidential and parliamentary elections in late 1995 draw closer.This could divert the Government's attention away from prudent economic management. Counteringthis risk is the historic stability of politic.' life in C6te d'Ivoire. The latest testimony of this politicalstability was the smooth presidential transition following the death of President Houphouet-Boigny andthe quick appointment of a new cabinet, guaranteeing the continuation of the economic reformagenda.

63. The presence of the above mentioned risks, especially the risk of policy slippage, couldresult in a wait-and-see attitude of the international community, with all its adverse consequences forreviving investment, external aid flows, and a permanent solution to the external debt overhang.These risks, in turn, could affect the prospects for economic growth. It is, however, expected thatthe Government will assure a strong implementation performance in order to benefit from substantialfinancial support from IDA and attain its economic and social development objectives.

64. Criteria for Assessing Progress The economic and social performance of C6te d'Ivoire inthe short and medium term will be regularly reviewed in terms of (i) adherence to fiscal and monetarytargets required to maintain macroeconomic stability, (ii) timely and full implementation of the PFPreform program supported by the Economic Recovery Credit and future IDA adjustment operations,(iii) sustained Government actions to improve its human resources development program, and (iv)portfolio management, with particular focus on counterpart funds, procurement, and disbursementissues. The IDA assistance strategy will require close monitoring given the above mentioned risksand uncertainties. The proposed adjustment operations are in themselves the trigger mechanisms forthe sustained adjustment case, intermediate case and low case scenarios. Policy reversals ofimplementation delays of the economic programs would automatically slowdown the furtherpreparation of new adjustment operations and result in declines in disbursements.

65. Summary Assessment The serious deterioration of the economic and social situation overthe last seven years has brought back to the fore the core development issues the country is facing:restoration of sustainable economic growth and the need to improve human resources developmentand alleviate poverty. Resolution of these problems have to take place within the context of acomprehensive work-out of the country's external debt overhang and will neither come easily norquickly. However, the recent parity change and the Government's commitment to a comprehensiveeconomic and social reform agenda are hopeful signs that should put the country back on the road ofeconomic recovery and improved social development.

Lewis T. PrestonPresident

I

STATISTICAL APPENDIX

A nnex IPaee I of ]

COTE D'IVOIRE - SELECTED INDICATORS OFBANK PORTFOLIO PERFORMANCE AND MANAGEMENT

Indicator F7Y91 FY92 FY93 FY94(current)

Portfolio Performance

Number of projects under implementation 18.0 20.0 18.0 15.0Average implementation period (years) a! 4.4 4.7 4 4 4 7Average ratings

I)evelopments objectives b/ 1.7 1.8 2.2 1.9Overall status c; 2.2 2.1 2.4 2.0

Percent of projects rated 3 or 4Developments objectives b/ 11.1 10.0 27.8 23.5Overall status c, 27.8 30.0 33.3 23.5

Cancelled during FY (USS M) .. .. .. 250.0Disbursementratio(c%c) d/ 17.0 23.0 22.0 7.0

Portfolio Management

Supervision resources (total staffweeks) e/ 237.4 292.7 310.2 285.0Average supervision (staffweeks/projects) e/ 12.9 12.5 17.2 19.0Supervision resources by location (in %)

Percent headquarters 98.0 98.7 90.2 80.1Percent resident mission 2.0 1.3 9.8 19.9

Supervision resources by rating category (staffweeks/project)P'rojects rated 1 or 2 76.1 77.7 60.6 76.3Projects rated 3 or 4 23.9 22.3 39.4 23.7

Mr.morandum item:date of last/next CPPR .. .. June 1993

. A ier9age age of projects in the Bank's country portfolio.b Fxtent to which the project will meet its development objectives (see OD 13.05. Annex D2. Preparation of Implementation

Stimmary (Form 590).c A 5cssments of overall performance of the project based on the ra tings given to individual aspects of project implementation

ne. . management. avai;ability offunds. compliance with legalcovenants) and to development objectives (see OD 13.05.t nnex D2. Preparation of Implementation Summary (Form 590). the overall status is not given a better rating than that

pi lven to project development objectives.d. Ratio ol disbursements during the year to the undisbursed balance of the Bank's portfolio at the beginning of the year:

intvcsmrnent projects only.c,.' f';4 refers to programmed figure.

I

Annex IICOTF D'IVOIRE - BANK GROUP FACT SHEET, FY91 - FY97 Page I of 2X

IDA lIending Program

Category Past a! Current b/ Planned clFY91 FY92 FY93 FY94 FY95 -FY97

Commitments (US$ m) 2 465 24 376 700-900Cancellations 250

Sector (9%) dl

Agriculture 6 30

Industry and Finance .. 43 20

Energy

Power

Public Sector Management .. 72

Infrastructure and Urban Development .. 20

Human Resources 100 32 28 54 10

Environment

Mining and Other Extractive

Multisector 25 .. 13 20

TOTAL 100 100 100 100 100

Lending Instrument (X)

Adjustment loans e/ 0 97 0 89 60

Investment Loans 100 3 100 11 40

TOTAL 100 100 100 100 100

Disbursements (USS m) 236 259 45 352 650-850

Adjustment loans c/ 186 204 1 335 500-600of which 5th Dimension 85 185

Investment ILoans 50 55 44 17 150-250

Repayments (US$ m) 141 155 174 179 519

Interest (US$ m) 155 162 161 154 358

a/ Includes IBRD loans. 77Te last IBRD loans were approved in FY92.b/ Includes all operations proposed for Board consideration in June 1994 (labor force training project,

national agricultural services restructuring project. )c/ Ranges that reflect the most likely scenario. The FY95 commitments include the cancellation of 2

investrment projects and their replacement with IDA credits.

d/ For future lending, rounded to nearest 0 or 5 15.e/ Structural adjustment loans and sector adjustment loans, including 5th dimension.

Annex !Page 2 of 2

II'C and MIGA Program, FY9l-FY94

Ca tegory Past CurrentFY91 FY92 FY93 FY94

IFC Approvals (USS m) 2.64 0.11 11.4 1.4

Scctor (%) bh

Agribusiness 100 100 .. 29

Capital Markets

Chemical/ fertilizers

Infrastructure

Manufacturing .. .. .. 71

Oil / Mining .. .. 100

TOTAL 100 100 100 100

Investment Instrument (%)

Loans 93 91 .. 100

Equity 7 9 100

Quasi- Equity a!/

TOTAL 100 100 100 100

MIGA guarentees (USS m)

MIGA commitments (USS m)

a/ Includes quasi-equity types of both loan and equity instruments.

Annex IlPage I of 2

C6te d'lvoire: Resources And Expenditures

mow Same ,qorgroup25-30 15-20 rpcw Szr_ LeOW- A,gh.

Cr', of 7 Salr. m5a ago ago (mre) Afvic ine

HiUNiS N RE.SOURCESPopulation (nmre-199 1 ) thousands 4.500 6,755 12260 4E8.932 773,203 632X7Age dependency ralio raio 0.97 1.00 0.99 097 0.71 043U rblxn sofpop. 23.1 32.1 41.0 2S.7 53.9 72.9Pooulauon growth rt anuA °' 3.7 4.0 3.8 3.0 1.7 Llurban ' 7.1 7.0 5.3 5.0 3.1 2.0

Labor force (15-64) thousands 2,367 3,153 4,719 203.947 302,44E 243,141Agn ulture %oflaborforoe E1 71 ..

5 7 ,, _ _ _

Female- *39 37 34 37 32 30Female per 100 nmies

Urban numnbe . 76 ..

Rural 103

NAT LRAL RESOURCESAre thou sq. km 322 322 322 23,066 23990 3E344Densirv pop. per sq ksn 14.0 21.0 35.0 20.0 31.0 16.0AginolMrallald %oflandarm 49.3 50.0 52.4 51.0 41.3 43.9Change in aVclwral land ann&=u % 0.1 0.3 0.0 0.0 0.0 0.1Agncuhir-l land under uinpio % 0.0 0.2 0.0 5.5 12.6 8.3Fores arndwoodJand thou.sq.kkm 136 111 76 6,651 52396 7,705Deforesa=on (net) annual % -1.3 -2.2 -3.2 -

INCOMEHousebold ucosneShare of top 20 hof bouaeolds % of inoe .. 50 53 _Share of boaom 40% of households - 20 13Share of botom 20% ofbouaeholds ' 9 5

EXPENDTUREFood %of GODP .. .. 24.4

Stapes' .. .. 3.4 .. _

MeiaL fish. slk. �me, ew - .. 6.5 _ - _

Cereal impots tbou. wmec Lonnes 142 S2 502 7,238 44,413 35,976Food ad in aLs ' 4 26 2,677 4,047 366Foodproduzuonpercpita 197981-100 U3 93 93 94 101 108Feiiizarcornmumpuon kg/ha 4.0 13.0 198.0 14.5 94.2 120.0Share of apicutwe in GDP %ofGDP 39.6 28.2 28.9 29.2 - 29

Housing %ofGDP .. .. 3.1 .

Average household sie persoc per household _ _ - _ _ _

Urban .. _ - .. .. .

:xed invesumert housing % of GDP .. .. 2.S ..

ucl snd power % of GDP .. .. 0.8 .. _

Energyconsumpuon perapita kgofoilequiv. 101 200 173 100 1,249 1.701Houscholds with electicty

Urban % of bousebolds .. .. _ .. ..

Rural P .. _ ..

Trsuportandconuninkadon %ofGDP .. 6.1 _ _ _

Fixd investmu= utspo rer' .. 3.2 2.1 ..

Total rod lcnh thouL km .. .. - _

INVESTMENT IN HUMAN CAP1TALHealthAccs to health cre % of pop. .. .. .. .. .. _

Populaion per phyicia peno 20,642 .. 13,99CPopulation permnunc - 2,002 2,040 _Population per hospital bed 1 _60 1,328 509Acess to safe w %o f pop. _ _ - 36.7 - -

Urban - - - 74.3 - -

Rural ' _ - 24.2. - -

Oral rehydyraluon tbmnpy (und.5) % of ca - - 16 35 - -

EdiucadonOro aroLlnaf mrioSeondary %ofscbool-e pop. 6 13 20 I1 56Fermal* 2 7 12 14 - *

?upil -waahe ralio: primAry pupils per te4 47 44 36 39 25 _'upil-teacher raio: seconduy 26 32 - _ _upils redung de 4 %of boert .. U 65 69

1epeater rae: pinury %oftowalenoU - 21 28 - _IliUsacy %ofpop. (age 15+) 95 - 46 51Female %of fa. (ag p15+) - - 60 62 'ecwaper cirulation per thu. pop. 7 5 7 5

.our=7 Worid Bank ruutioal Eo== Dqeprau. April 1993

Anncxr IIIPage2of2

C8te d'Ivoire: Priority Poverty Indicators

25-30 15-20 YUb LUni of YINW mnu Si/wins mid&&- g.M

Thdicar MW, ate ago (ma'w) AAfni utwsa

POVERTYupper poverty line local curr. .. .Headcount index % of pop.

Lower povory line local cur. - -

Hiadoourz± index % of pop

GN?P per capita USS 200 490 690 350 1.610 3,320

SHORT TERM% INCOME INDICATORSUnskilled urban wages. local c:rr. - .. - - -

Unskilled rural wage Rural tens of trde * _

Consumer pnrcindex 19S7-100 1S 33 107Lower iname .. .. .Food .. .. 112UrbanRural ..

SOCLkL INDICATORSPublic expndiuurs aC basic socicl savic % of GDP .

cm ewollsnem rauisPrInmAy % sool age pop. 60 62 75 70 100 _Malt S0 77 SS 76 106 -

Fmalc' 41 47 62 60 93 _MonwuityInfa mortality thou five birtnh 149 122 95 104 40 33Under 5 motuliy .*-- 1S4 177 53 40

IzmnuiuzauonMeales %ageg oup .. _5 40 70 _v$PT * .. .. 33 35 74 _

Child malnutntion (under-5) 1. . 12 ..-Life expecu.ncyTotaul Y 42 47 52 51 67 69Females/males uLio 1.0 1.07 1.06 1.06 1.0S 1.11

Totl ferility rat bsit per vwman 7.4 7.4 6.6 6.4 3.5 2.6Manl mortality rat 100,000 live births .. .. .. .. -

Population growth rate Infant mortality rate Primary enrollment(thou. of livb) (pa)

671 250 120+

5 200 100

4 to

3~~~ 60

mid 60s mid70. mimd 6os mid7oau nitd6Os mjd 7>

a C4tc divouw ~ ~ ~ ~ 102 40wridl n

Annex JV1'ace I of;

CO'T D'IVOIRE - KEY ECONOMIC INDICATORS

Actual- Preliminary _ _ Projected d

1989 1990 1991 1992 1993 1994 1995 1996

National Accounts(% of GDP at current market prices)

(iross domestic product 100 ()C- 100% 100.0% 100.0% 100.07C% 10(0. 0 100.0% 100.0%

Agriculture 324%7 33.8% 32.8% 31. 5,c 32.5 % 35 1 34 4% 33.3%

Industry 20.6% 22.0% 20.1% 20.2% 20.9% 21.8% 22.3 %, 22.7%

Services 32.9% 30.1 %c 32.6%c 34.2% 33.5% 2S.0%° 27.8%e 28.6%

Consumption 8 7.4 % 85 4% 86.5% 83.6% 83.7% 72 4% 73.3 % 73.5%

Gross domestic investment a 8. 4 , 9.3% 10.0% 10.9% 9.3% 11. 4%c 12.3% 13.3%Private investment 4 6C 5.1% 6.0% 7.5%c 6.5%7c 8. 0%/C 8.5% 9.3%Government investment 39°7c 4.2% 3.9% 3.4% 2.8% 3.4% 3.8% 4.0%

Exports GNFS b/ 33. 57c 34.7% 33.0% 33.5% 34.3% 51.7% 49.1% 47.6%

Imports GNFS b/ 29.3 % 29.3% 29.5% 28. 0% 27.4% 35.4% 34.7% 34.4%

Gross domestic savings c/ 12.6%,Y 14.6% 13.5% 16.4% 16.3% 27.6% 26.7% 26.5%

Gross national savings -4 4%/c -4.7% -5.7% -2.2% -2.7% 6.2% 5.8% 7.4%

Memorandum items:

Gross domestic product 9365.0 9898.9 9503.2 10130.0 9297.3 6464.5 7194.2 7961.3(USS million at current prices)

Gross national product per cap 819.1 759.5 699.9 700.0 622.0 517.7 474.1 458.3(USS, Atlas method)

Real annual growth rates(%, calculated from 1987 prices)

Gross domestic product -1I W - 2.1% -0.8% 0.0% - 1. 1% 0.8% 5.7% 6.4%at market prices

Real annual per capita growth rates(%, calculated from 1987 prices)

Gross domestic product -4.6' -5.6% -4.4% -3.6% -4.9% -3.0% 1.9% 2.6%at market prices

Total consumption -5.6% -8.6% -7.2% -4. 7% -4.1% -6.6% 2.0% 2.4%

Private consumption -5.3% -6.9% -7.7% -4. 0% -4.2% -4.3% 5.1% 4.6%

(continued)

Atnnex IV'

COTI. D'IVOIRE - KEY ECONOMIC INI)ICATORS

Actual Preliminary _ _ Projected1989 1990 1991 1992 1993 1994 1995 1996

Balance of Payments (USSm)

Exports (GNFS) b' 3139.7 3431.2 3133.9 3398 1 3192 8 31404 3532.2 3792.0Merchandisc f.o.b. 2612.5 3002.6 2811.2 2840.9 2668 1 2815.7 2986.3 3218.5

Imports (GNFS) bh 27466 2900.5 2799.7 2837.9 2548.4 2291 1 2407.S 2741.7Merchandise f o.b. 1720.6 1705.0 1690.8 1862.1 1598.2 1393.6 1523 4 1675.9

Resource balance 393.1 530.7 334.2 560.2 644.4 1049.3 1034 4 1050.3

Net current transfers -321.6 -409.5 -254.3 -218.7 -220.7 -355.2 -465.4 -504.7(including official current transfers)

Current account balance -954.7 -1294.1 -1340.7 -1163.3 -1023.3 -334.5 -469.2 -473.6

Net foreign direct investment 78.4 47.7 46.1 40.8 40.3 30.0 40 0 70.0

MLTloans (net) 237.4 498.0 381.1 331.8 -326.0 332.0 69.0 145.0

Other e/ -677.4 -761.7 -401.9 -741.9 75.1 -106.0 -71.1 -209.4

Overall balance -1316.3 -1510.1 -1315.4 - 1532.6 - 1234.0 - 78.5 -431.3 - 468.0

Financing 1316.3 1510.1 1315.4 1532.6 1234.0 78.5 431.3 468.0IMF (net) -123.0 30.0 -60.0 -91.9 -49.3 90.6 86.5 86.8Operations account 123.5 115.7 8.9 326.8 33.4 -395.0 -189.4 -98.0Change in arrears 1315.8 1364.4 1366.5 1297.7 1249.9 -1049.0

Financing gap .. .. .. .. .. 1431.9 534.2 479.2

Memorandum items:

Resource balance 4.2% 5.4% 3.5% 5.5% 6.9% 16.2% 14.4% 13.2%(% of GDP at current market prices)

Real annual growth rates (1987 prices)

Merchandise exports (f.o.b) 17.0% 6.4% 1.5% -5.4% -5.2% 0.8% 2.4% 3.4%

Merchandise imports (c.i.f) 1.2% -12.7% - 1.6% -0.5% -13.3% -10.0% 5.8% 6.0%

Public Finance(% of GDP at current market prices) f/

Current revenues 22.8% 23.7% 22.7% 22.3% 20.2% 22.4% 21.3% 20.6%

Primary expenditures 30.1% 25.8% 23.6% 22.8% 23.2% 20.1% 19.0% 18.0%

Interest 9.8% 10.7% 12.1% 11.4% 13.9% 10.6% 9.5% 8.4%

Primary balance -7.3% -2.1% -0.9% -1.1% -3.0% 2.3% 2.3% 2.6%

Overall balance 17.2% - 12.8% - 12.9% - 12.5% - 16.2% -8.3% -7.2% -5.8%

(continued)

Annex IV'Pakc ! 3

COTE D'IVOIRE - KEY ECONOMIC INDICATORS

Actual_ Preliminary _ _ Projectctd-1989 1990 1991 1992 1993 1994 1995 1996

Monetary Indicators

M2/GDP 29.0%( 31 4%; 31.6% 31.2% 30.3% 27.7% 28.1% 28.0%(at current market prices)

Growth of M2 -8.1% -2.6% 0.1% -1.2% -4.6% 30.1% 14.2% 11.7%

Private sector credit growth 67.6% 62.4% 212.4% -421.3% ..

/total credit growth

Price indices (1987= 100)

Merchandise export price 95.9 84.7 84.8 81.1 83.0 86.9 89.9 93.7index

Merchandise import price 109.5 106.9 108.1 103.3 110.1 107.8 111.4 115.6index

Merchandise terms of trade 87.6 79.2 78.5 78.6 75.4 79.6 79.8 80.1index

Real exchange rate 127.8 130.2 126.4 135.7 132.5 91.4 94.3 95.7(USS/CFAF) g/

Real intercst rates 9.9% 11.8% 9.3% 8.0% 9.6% -18.4% 3.9% 4.6%

Consumer price index 1.0% -0.7% 1.6% 4.2% 0.8% 35.4% 6.4% 5.6%(% of growth rate)

GDP deflator - 1.6% -7.9% 0.3% 0.6% -0.7% 41.2% 6.4% 5.4%(% of growth rate)

a! Including changes in stock.b/ 'GNFS' = 'goods and nonfactor services.'c/ Includes net unrequited transfers excluding official capitalgrants.d/ Includes use of IMFresources.e/ Includes net STprivate capital, net priyate non -guaranteed debt, and errors and omisions.fl Central Government.gl An increase in USS/CFA F denotes appreciation.

.4nnex 1':Iage 1 of I

COTE D'IVOIRE - KEY EXPOSURE INDICATORS

Actual Preliminary _ _ Projected -

1989 1990 1991 1992 1993 1994 1995 1996

Total debt outstanding and disbursed 14057.8 16614.5 17557.1 17996.7 18242.2 13761.4 13970.0 14324.3

(TDO) (USSm) a/of which Public Debt 11571.1 14056.9 14953.8 15381.0 15636.5 11165.7 11384.3 11748.6

Net disbursements (USSm) a/ 619.0 474.5 1126 254.0 -267.0 -72.4 - 129.2 59.1

Total debt service (TDS) (USSm) a/ 1508.1 1858.8 1543.3 1661.5 2279.8 1769.6 1810.8 1702.2

Debt and debt service indicatorsTDOfXGS bi 431.6% 461.7% 524.7% 526.6% 568.2% 411.9% 395.4% 377.6%Xc

TDOIGDP 150.1I%c 167.8%c 184.8%' 177.7% 196.2% 212.9% 194.2%co 179.9%c

TDS/XGS 46.3% 51.7% 46.1°.c 48.6% 71.0% 53.0% 51.2% 44.9%c

ConcessionallTDO 8.3% 12.5% 14.6% 16.6% 19.6% 33.2% 37.3%<c 41.2%

IBRD exposure indicators

IBRD DS/public DS 43.4% 40.9% 44.8% 24.7% 18.4% 25.1% 21.2% 21.6%

Preferred creditor/public DS 85.4% 79.0%Tc 77.2% 42.1% 27.8% 42.2% 38.5% 37.9%

IBRD DS/XGS 7.7% 7.4% 9.7% 9.2% 10.4% 10.2% 8.4%c 7.4%

IBRD portfolio share 2.1% 2.1% 2.2% 1.8% 1.6% 1.3% 1.1% 0.9%

IFC (USSm)

Loans 1.1 2.5 2.5 0.1 .. 1.4

Equity and quasi-equity c' ,, 0.5 0.2 0.0 11.4

MIGA

MIGA guarantees (USSm)

a! Includes public and publiclyguaranteed debt. privaie nonguaranteed.use of IMF credits and net short -term capital.

b/ 'XGS' denotes exports of goods and services. includinR workers remittances.c/ Includes equity and quasi- equity types of both loan and equily instruments.

I

Annex V7Page i of 2

STATUS OF BANK GROUP OPERATIONS IN COTE D'IVOIREStatement of IBRD Loans and IDA Credits

(As of April, 30 1994)

Undisbursed

USS millions rela tive to Last ARPP SupervisionLosn or Fiscl (less cancellations) appraisal proj. Dcvelopmcnt Overall

Credit No. Year Borrower Parpose IBRD IDA Undisbnraed (US$ milion) ob ectives Statas

I-n. 2619-0 1986 RCI Health I 22.2 2.5 2.6 2.0 2.0Ln. 2627-0 1986 RCI Palmoil V 13.4 1.1 1.1 3.0 3.0Ln. 2789-0 1987 RCI Third Urban Project 126.0 12.0 12.3 3.0 3.0Ln. 2874-0 1988 RCI Rubber V 11.5 0.3 1.7 2.0 2.0Ln. 3128-0 1990 RCI Municipal Dev. 66.0 29.6 22.3 3.0 3.0Ln. 3155-0 1990 RCI Abidjan Env. Protection 21.9 5.5 5.8 1.0 2.0Ln. 3186-0 1990 RCI Forestry Sector 80.0 60.9 36.5 2.0 2.0Lin. 3251 -0 1991 RCI Pilot Women in Dev. 2.2 1.1 - 1.1 2.0 2.0

Total number of Loans = 8 343.2 113.1

Cr. 2363-0 1992 RCI Privatization Support 15.0 14.0 11.3 2.0 2.0Cr. 2503-0 1993 RCI Economic Manag. TA 17.0 15.4 2.3 1.0 1.0Cr. 2505-0 1993 RCI Human Res. Dev. Mng. 6.7 6.5 -1.5 1.0 1.0

Cr. 2323-1 S 1994 RCI Human Res. Adj. 100.0 51.2 .. 2.0 2.0Cr. 2323-2 S 1994 RCI Human Res. Adj. 1/ 85.0 46.6 2.0 2.0Cr. 2324-1 S 1994 RCI Regulatory Reform 50.0 51.2 .. 2.0 2.0Cr. 2597-0 1994 RCI Rural Savings 2.2 2.1

Total number of Credits = 7 275.9 187.0

Total disbursed (IBRD and IDA) 2/ $2,496.3 $483.4

Of which has been repaid $956.8 $1.0

Total now held by IBRD and IDA S1,539.5 $4824

Amount sold $5.1

Of which repaid $5.1

lotal undisbursed $300.1

1/ Notyet effective.2/ Total approved. repayments. and outstanding balance reprcsent both active and inactive loans and credits..

(S) indicates SAL/SECAL loans and credits.(continued)

,Annex V7'Page 2 of 2

Statement of IFC InvestmentsVAs of April 3(. 1994)

Fiscal Amount in US$ millionYcar Obligor Business Loan Equity Total

1965/78 Banque Ivoirenne de Developpment Development Finance 0.42 0.42 *

Industriel. S.A. (BIDI)

1977 Ets. R. Gonfreville, S.A. T'extiles & Fibres .. 0.88 0.88

1979 Societe Ivoirenne d'Engrais (SIVENG-.) Fertilizers 5.12 1.27 6.39 *

1980 Moulin du Sud-Ouest Food & Food Processing 2.90 0.41 3.31 *

1986 Ets. R. Gonfrevi]le. S.A. Textiles & Fibres 9.28 .. 9.28

1987193 Ornnium Chimique et Cosmetique. Food & Food Processing 6.69 0.18 6.87S.A. (COSMIVOIRE)

1987 Societe des Industries Alimentaires Food & Food Processing 3.14 0.53 3.67et Laitiers (SIALM)

1988 Industrial Promotion Services Capital Markets .. 0.83 0.83

1989/93 Pechazur (AEF) Food & Food Processing 1.07 .. 1.07

1990 Omnium Transformations Alimnentaires Food & Food Processing 0.66 0.17 0.83(OTA) (AEF)

1990 Societe des Industries Alimentaires Food & Food Processing 1.83 0.34 2.17et Laitiers (SIALIM)

1991 Transformation Industrielle de Bois Wood & Wood Processing 0.39 0.19 0.58(TRIBOIS) (AEF)

1991 Plantivoire (AEF) Food & Agribusiness 1.06 .. 1.06

1991 Interagri (AEF) Food & Agribusiness 1.00 .. 1.00

1992 Ivoire - Cafe (AEF) Coffee Manufacturing 0.10 0.01 0.11

1993 Block CI Mining .. 11.40 11.40

1994 Multiproduit (AEF) Grain Mill 0.40 .. 0.40

1994 Filtisac S.A. Manufacturing 1.00 .. 1.00

1994 1/ Fan Milk (AEF) Food 0.3 0.3

Total gross commitments $33.6 $16.6 $50.3

Total commitments now held by IFC $17.7 S14.3 $32.0

Total undisbursed (including participants portion) $1.8 $4.2 $6.0

1/ Approved but not committed.Investments sold or witten off