INTERNATIONAL DEVELOPMENT ASSOCIATION INTERNATIONAL MONETARY FUND COTE D’IVOIRE Joint World Bank-IMF Debt Sustainability Analysis1 December 2020 Prepared Jointly by the staffs of the International Development Association (IDA) and the International Monetary Fund (IMF) Approved by Marcello Estevão (IDA), Abebe Aemro Selassie and Chad Steinberg (IMF) Côte d’Ivoire: Joint Bank-Fund Debt Sustainability Analysis Risk of external debt distress Moderate Overall risk of debt distress Moderate Granularity in the risk rating Limited space to absorb shocks Application of judgement No Côte d’Ivoire remains at moderate risk of external debt distress. All the projected external debt burden indicators are below their thresholds under the baseline, but the debt service-to-revenue ratio exceeds its threshold in the case of a market financing shock. In addition, the debt service- to-revenue ratio remains below but close to its threshold throughout the medium-term under the baseline scenario. The space to absorb shocks is therefore limited and has further shrunk with the advent of the COVID-19 shock, reinforcing the urgent need to boost domestic revenue mobilization. The overall risk of public debt distress is also moderate, with public debt expected to gradually decrease over the projection horizon. The PV of public debt-to-GDP ratio remains below its prudent benchmark in both the baseline and shock scenarios. 1Under the revised Debt Sustainability Framework for Low-Income Countries, Côte d’Ivoire’s Composite Indicator is 2.97 based on the October 2019 WEO and the 2018 CPIA, corresponding to a medium debt-carrying capacity. PUBLIC DEBT COVERAGE 1. Public debt covers both the debt of the central government, as well as the guarantees provided by the central government, including those guarantees that pertain to state-owned enterprises (SOEs) debt (Text Table 1). The DSA classifies external and domestic debt based on the currency criterion, given data constraints that prevent the use of the residency criterion. On SOE debt, the authorities have made progress in collecting further financial information and improving monitoring in past years. For end-2019, SOE non-guaranteed commercial debt amounted to 0.9 percent of GDP (0.1 external and 0.8 domestic). In the context of the current DSA, the following approach is taken: • All guaranteed SOE debt and on-lent debt is included in the debt stock in the baseline. • Non-guaranteed SOE debt is captured as contingent liability shock − this shock is set at the default 2 percent of GDP. Text Table 1. Côte d'Ivoire: Coverage of Public Sector Debt Subsectors of the public sector Sub-sectors covered 1 Central government X 2 State and local government 3 Other elements in the general government 4 o/w: Social security fund X 5 o/w: Extra budgetary funds (EBFs) 6 Guarantees (to other entities in the public and private sector, including to SOEs) X 7 Central bank (borrowed on behalf of the government) X 8 Non-guaranteed SOE debt 2. Efforts to step up the government’s capacity to record and monitor public debt and contingent liability continue. Further work is needed to enhance data coverage of SOEs in the DSA baseline, including consolidating the general government fiscal accounts with the financial statements of the SOEs (both on the revenue and expenditure sides). The authorities see this consolidation as a prerequisite for incorporating SOE debt into total debt (in the baseline) and have received a technical assistance (TA) mission in February to advance this task. Further IMF TA will continue as needed. 3. The magnitude of the shock of the contingent liability test applied in the context of the sensitivity analysis of this DSA reflects potential additional liabilities. They could emanate from SOE debt not captured in the data coverage, public-private partnership agreements. and the financial sector. Total contingent liabilities for the CL test are estimated at 8.2 percent (Text Table 2 and paragraph 11). 2 Text Table 2. Côte d'Ivoire: Magnitude of the Contingent Liability Stress Test 1 The country's coverage of public debt The central government plus social security, central bank, government-guaranteed debt Used for Reasons for deviations from the Default the analysis default settings 2 Other elements of the general government not captured in 1. 0 percent of GDP 0 3 SoE's debt (guaranteed and not guaranteed by the government) 1/ 2 percent of GDP 2.00 4 PPP 35 percent of PPP stock 1.24 5 Financial market (the default value of 5 percent of GDP is the minimum value) 5 percent of GDP 5 Total (2+3+4+5) (in percent of GDP) 8.2 1/ The default shock of 2% of GDP will be triggered for countries whose government-guaranteed debt is not fully captured under the country's public debt definition (1.). If it is already included in the government debt (1.) and risks associated with SoE's debt not guaranteed by the government is assessed to be negligible, a country team may reduce this to 0%. DEBT BACKGROUND Text Figure 1. Côte d'Ivoire: Evolution 4. Public debt increased by 10 percentage of Public Debt 2015‒19 External Domestic 40 points of GDP over the last 5 years with external 35 debt growing as a share of total debt.2 Public debt 30 stood at 39.1 percent of GDP at end-2019, compared 25 with 29.5 percent in 2015. External debt stood at 20 27.6 percent of GDP, compared to 16.1 in 2015— 15 10 representing 70 percent of total debt in end-2019 as 5 opposed to 55 percent in 2015 (Text Figure 1). All 0 2015 2016 2017 2018 2019 ratios in percent of GDP are nonetheless lower than Sources: Authorities data presented in the December 2019 Debt Sustainability Assessment (DSA), due to a rebasing of National Accounts that resulted in a 34 percent higher nominal GDP in 2018. (Box 1). Text Figure 2. Côte d'Ivoire: Composition of Public Debt 2015‒19 5. Within external debt, commercial Multilateral Official Bilateral Commercial Guaranteed 100 creditors have grown and represent now almost 90 half of external debt stock. Reflecting largely 80 70 Eurobond issuances, commercial credit increased by 60 50 5 percentage points in 2018 to reach 49 percent of 40 external debt. (Text Figure 2). This share remained 30 20 broadly unchanged in 2019 and close to 90 percent of 10 0 commercial debt is in the form of Eurobonds. The 2015 2016 2017 2018 2019 authorities undertook a liability management Sources: IMF with authorities data operation in 2019 to reduce exchange rate risks and lengthen maturity. Multilateral creditors have maintained a fairly constant share over the last 2In this DSA, Public and Publicly Guaranteed external debt excludes claims under Debt Reduction-Development Contract (C2D), which were cancelled in the context of beyond HIPC debt relief. The C2D is a debt restructuring tool under which Côte d'Ivoire continues to service its bilateral debts to France and Spain until repayment, but the amounts are transferred back to the country as grants to finance poverty reduction programs. Flows associated with the C2D process are included by IMF staff in the external and fiscal accounts to capture gross cash flows (debt service and grants). See IMF Country Report no14/358 and Supp.1, 11/21/2014 for a detailed discussion. 3 5 years and represented 22 percent of external debt in 2019. On the other hand, the share of bilateral creditors has decreased, accounting for 23 percent of the external debt stock at end-2019 compared to 35 percent in 2015. 6. The authorities joined the Debt Service Suspension Initiative (DSSI) in 2020 . The authorities sent formal letters to the Paris Club, with an expected reduction in debt service of 0.24 percent of GDP for the May-December 2020 period. Box 1. Implications of GDP Rebasing on Debt and Investments Ratios Côte d’Ivoire updated the base year for the calculation of its national accounts from 1996 to 2015. Rebased series for 2015-2017, as well as preliminary accounts for 2018-19 were reflected into the macroeconomic framework. The rebasing increased 2015 nominal GDP by 38 percent. Downward revisions to real growth rates and lower GDP deflators in 2016-2018, however, brought the overall increase in 2018 to 34 percent. As a result, debt-to-GDP ratios are now lower over the entire 2015–19 period. Regarding investment, historical levels of private (and to a less extent public) investment were revised up in the context of the national account rebasing, as elements such as new processes and new technology are now included in the computation of investment. As a result, the private investment-to-GDP ratio is higher than in the old base, whereas the public investment-to-GDP ratio is slightly lower (as the upward revision to GDP was larger than the one to public investment). Source: Ivoirien Authorities, Institut National de la Statistique. UNDERLYING ASSUMPTIONS 7. The assumptions in the baseline scenario are consistent with the macroeconomic framework outlined in the staff report for the seventh and eighth reviews under the EFF/ECF blended arrangements (Text Table 3). These include lower growth in 2020 than projected at the time of the sixth review and a recovery back to a 6½ percent growth trend from 2021 onward, subdued inflation thanks to the exchange rate peg to the Euro, a gradual improvement in the external position due to higher value-added of exports, gradual fiscal consolidation to the 3 percent of GDP regional fiscal deficit norm by 2023, and lower tax revenue than in the previous DSA, reflecting both the underperformance in 2019 and 2020 relative to program expectations as well as lower incremental increases in the tax-to-GDP ratio over the medium-term. Projections also assume a balanced recourse to domestic and external debt. • Lower GDP growth in 2020 but a rebound to strong growth from 2021 onward . Real GDP is projected to grow by 1.8 percent in 2020 and recover to 6.5 percent over 4 2021‒25 as global conditions improve, and domestic demand recovers to pre-COVID trend.3 • Subdued inflation. Annual average inflation picked up from 0.8 percent at end-2019 to 2.1 percent in September 2020, reflecting the impact of containment measures and border closures. It is expected to remain subdued at around 2 percent in the medium term, reflecting the exchange rate peg to the euro. • Wider budget deficits in the short term. The need for a decisive policy response to counter the pandemic led to a projected widening of the budget deficit to 5.9 percent of GDP in 2020. The authorities committed to a fiscal deficit of 4.6 percent of GDP in 2021 and to a gradual consolidation to return the regional norm of 3 percent of GDP in 2023. • Lower tax revenue projections. Given the weaker performance in terms of tax revenues over 2016–19 compared to projections at the onset of the IMF program, the assumptions on the incremental increase of the tax-to-GDP ratio going forward have been adjusted downward compared to the December 2019 DSA. Tax revenues are now assumed to increase from 12.3 percent of GDP in 2019 to 13.7 percent in 2030. Revenue mobilization still presents downside risks. • A narrowing current account deficit. The external current account deficit is expected to gradually narrow from -3.9 percent of GDP in 2020 to -2.5 percent of GDP in 2025. These assumptions are subject to downside risks including from possible unfavorable terms-of-trade shocks and weaker-than-expected global growth in the pandemic and rising protectionism context. 8. The authorities’ debt management strategy aims to meet gross financing needs while ensuring debt sustainability, based on a balanced mix of external and domestic financing instruments. Consistent with the authorities’ medium-term debt management strategy, Côte d’Ivoire’s financing needs are expected to be met by relying on a mix of sources in domestic and foreign currencies in 2020. The country is expected to continue to increasingly rely on commercial debt as the country transitions toward an emerging market economy. However, in the short term, the government is expected to rely on both concessional and non-concessional lending to meet its financing needs. The authorities also intend to carefully balance the recourse to the international and regional markets given the potential crowding-out effect at the regional level. The authorities are continuing to strengthen processes related to debt management, with World Bank support. 9. The realism of the macroeconomic framework is confirmed by several checks (Figure 6). The projected medium-term debt-creating flows do not deviate significantly from the historical outturns. The projected fiscal adjustment for the next three years is below the top quartile of the distribution of approved Fund-supported programs for LICs since 1990. The difference in 2020 between the expected fiscal impulse and the baseline is explained by necessary response to the unprecedented Covid-19 shock. 3Relative to the DSA from the sixth review, the public and private investment-to-GDP ratios are higher, reflecting the base effect from the rebasing for private investment and higher forecasts for public investment in the years 2020-22. 5 Text Table 3. Côte d'Ivoire: LIC DSA Macroeconomic Assumptions COUNTRY CLASSIFICATION AND DETERMINATION OF SCENARIO STRESS TESTS 10. Côte d’Ivoire is assessed to have medium debt carrying capacity. Based on the October 2019 WEO macroeconomic framework and the World Bank’s 2018 CPIA index, Côte d’Ivoire’s composite indicator is 2.97 (above the lower cut-off of 2.69 but below the strong capacity cut-off value of 3.05) confirming the medium debt carrying capacity assessment used in previous DSA.4 The relevant thresholds are used to assess external debt risk rating. Text Table 4. Côte d'Ivoire: CI Score Components Coefficients (A) 10-year average values CI Score components Contribution of (B) (A*B) = (C) components CPIA 0.385 3.386 1.30 44% Real growth rate (in percent) 2.719 7.562 0.21 7% Import coverage of reserves (in percent) 4.052 39.075 1.58 53% Import coverage of reserves^2 (in percent) -3.990 15.269 -0.61 -21% Remittances (in percent) 2.022 0.446 0.01 0% World economic growth (in percent) 13.520 3.499 0.47 16% CI Score 2.97 100% CI rating Medium 11. Given Côte d’Ivoire’s continuous reliance on global capital markets, a tailored test for international market financing was conducted. Côte d’Ivoire issued sizeable Eurobonds in 2017 and 2018 and tapped international markets for smaller amounts in 2019. Its debt management strategy aims at leveraging global capital markets to finance part of the country’s gross financing needs over the next five years. A tailored test for market financing assumes a temporary increase 4The other variables from the macroeconomic framework consist of five variables: real GDP growth, remittances, import coverage of reserves, the square of import coverage of reserves, and world economic growth. The CI uses ten years of data (5 years of history and 5 years of projections) to smooth out economic cycles. 6 in the cost of new commercial external borrowing by 400 basis points combined with a nominal depreciation of 15 percent of the CFAF vis-à-vis the US$ and a shortening of maturities and of grace periods.5 12. A contingent liability tailored shock was conducted to capture potential fiscal risks arising from SOEs, PPPs, and the financial market. This tailored stress tests include the standardized 2 percent of GDP, a 1¼ percent of GDP shock to accommodate potential fiscal risks on 35 percent of the PPP capital stock, and a financial sector shock of 5 percent of GDP. 13. Standard stress tests on real GDP growth, primary balance, exports, current transfers, foreign exchange (FX) depreciation, and tailored test on commodity price have also been applied. The first four shocks set each of the above variables to its historical average minus one standard deviation, or to its baseline projection minus one standard deviation, whichever is lower, for 2020 and 2021. The FX depreciation considers a nominal depreciation of 30 percent of the CFAF vis-à-vis the US$ in the first year of the projection. The commodity price shock captures the impact of a sudden one standard deviation decline in commodity prices. EXTERNAL DEBT SUSTAINABILITY ANALYSIS 14. External debt indicators have improved relative to the previous DSA on account of the rebased GDP, but vulnerabilities associated with debt service remain significant. The external DSA assessment indicates that all PPG debt indicators are below their corresponding thresholds for the next ten years in the baseline scenario. The PV of external debt-to-GDP is expected to decrease from 29.1 percent in 2020 to 19.9 percent in 2030 (Table 1 and Figure 3), well below the relevant threshold of 40. However, the debt-service-to-revenue ratio is now projected to come just short of its threshold in 2025 and remain just below it throughout the following years. The trajectory of the debt-service-to-revenue ratio underscores the criticality of improving domestic revenue mobilization to provide the authorities with sustainable source of funding for their important development needs and to provide buffers on debt service. 15. Exports and market financing shocks would have a significant negative impact on Côte d’Ivoire’s external debt sustainability. An exports shock would cause the debt service-to- export ratio to breach the threshold starting in 2021 while a market financing shock would cause the debt-service-to-revenue indicator to breach the threshold starting in 2025. These results underscore downside risks for debt sustainability from potential exports shocks or rollover risks that could result from a deterioration in global risk sentiment or from a shortening of maturities of new external commercial borrowing. 5 The share of USD denominated debt is estimated to be decreasing over time. The considered shortening of maturities of commercial external borrowing are as follows: If the original maturity is greater than 5 years, the new maturity is set to 5 years. If the original maturity is less than 5 years, the new maturity is shortened by 2/3. 7 PUBLIC DEBT SUSTAINABILITY ANALYSIS 16. Under the baseline scenario, the PV of public debt-to-GDP ratio is below its threshold of 55 percent (Figure 4). The PV of public debt-to-GDP is expected to remain constant over the projection period, around 40 percent. Meanwhile, the PV of debt-to-revenue ratio would go from 281.1 percent in 2020 to 254.9 percent in 2030. Finally, the debt service-to-revenue ratio, at 36.1 in 2020, is projected to increase and reach 48.8 in 2030. This also underscores the importance of strengthening domestic revenue mobilization. 17. Stress tests highlight that Côte d’Ivoire’s most extreme public debt vulnerabi lity would emerge from a shock to commodity price (Figure 4 and Table 4). Under the standard stress test of commodity price, the PV of public debt-to-GDP would breach its corresponding threshold of 55 percent starting in 2024 and would continue growing afterwards. This shock would lead to an explosive pattern of the three debt and debt service indicators. RISK RATING AND VULNERABILITIES 18. The debt sustainability analysis under the new DSA indicates that Côte d’Ivoire remains at moderate risk of external debt distress as in the December 2019 DSA, but with limited capacity to absorb shocks. While none of the external debt indicators breaches their corresponding threshold under the baseline scenario, standard stress tests show that the PV of external debt-to-exports ratio would cross the threshold in the most extreme shock scenarios. Moreover, the ratio of the external debt service-to-revenue in the baseline would almost reach its threshold in 2025 and remain below but close to it subsequently. This reinforces the need to intensify revenue mobilization and diversify the export base through structural transformation over the medium term. It is also crucial to have a prudent external borrowing strategy aimed at balancing the costs and risks of new loans to preserve Côte d’Ivoire’s borrowing space and medium-term debt sustainability. 19. This DSA also indicates that the overall risk of debt distress remains moderate, but stress tests highlight high vulnerabilities of external and total debt to shocks. While the overall debt sustainability risk is moderate, the PV of public debt-to-GDP breaches its threshold of 55 percent starting in 2021 under the most extreme shock (growth) arising from the standard stress tests. Three out of four external debt indicators would breach their threshold under the most extreme shock (exports and market financing). Risks have been exacerbated by the COVID environment, as the global growth recovery, and hence that of Ivorien exports, could prove more protracted than currently projected. 20. The authorities need to build resilience against shocks to debt sustainability. The DSA results highlight the need to carefully monitor debt indicators, conduct prudent GDP growth projections, implement judicious policies to preserve macroeconomic stability and have full oversight of SOE debt contracting. Within this context, the authorities should work toward fully 8 integrating SOE debt in their debt sustainability assessment. To create fiscal space, the authorities also critically need to accelerate efforts at mobilizing domestic revenue while remaining committed to containing medium-term public expenditure. AUTHORITIES’ VIEWS 21. The authorities agreed that Côte d’Ivoire remains at moderate risk of debt distress with a limited ability to weather shocks. Their own debt sustainability assessment leads to similar conclusions. They concurred with the importance of balancing recourse to international market and to the regional market. They stressed that their medium-term debt strategy aims at reducing the refinancing and exchange rate risks while lengthening maturities and achieving a balanced portfolio structure in terms of external and domestic debt. They acknowledged the potential crowding-out effect of increasing recourse to the regional market at this time but also flagged concerns with the possible increase in the cost of borrowing in the international capital markets in the current uncertain global context. 9 Figure 1. Côte d’Ivoire: Indicators of Public and Publicly Guaranteed External Debt under Alternative Scenarios, 2020–301/ 45 PV of debt-to GDP ratio PV of debt-to-exports ratio 300 40 35 250 30 200 25 20 150 15 100 10 5 50 Most extreme shock: Exports Most extreme shock: Exports 0 0 2020 2022 2024 2026 2028 2030 2020 2022 2024 2026 2028 2030 Debt service-to-exports ratio Debt service-to-revenue ratio 25 30 25 20 20 15 15 10 10 5 5 Most extreme shock: Exports Most extreme shock: Market financing 0 0 2020 2022 2024 2026 2028 2030 2020 2022 2024 2026 2028 2030 Baseline Historical scenario Most extreme shock 1/ Threshold Customization of Default Settings Borrowing assumptions on additional financing needs resulting from the stress tests* Size Interactions Default User defined Shares of marginal debt No No External PPG MLT debt 100% Tailored Stress Terms of marginal debt Combined CL No Avg. nominal interest rate on new borrowing in USD 3.2% 7.0% Natural disaster n.a. n.a. USD Discount rate 5.0% 5.0% Commodity price No No Avg. maturity (incl. grace period) 16 16 Market financing No No Avg. grace period 6 6 Note: "Yes" indicates any change to the size or interactions of * Note: All the additional financing needs generated by the shocks under the stress tests are the default settings for the stress tests. "n.a." indicates that the assumed to be covered by PPG external MLT debt in the external DSA. Default terms of marginal stress test does not apply. debt are based on baseline 10-year projections. Sources: Country authorities; and staff estimates and projections. 1/ The most extreme stress test is the test that yields the highest ratio in or before 2030. The stress test with a one-off breach is also presented (if any), while the one-off breach is deemed away for mechanical signals. When a stress test with a one-off breach happens to be the most exterme shock even after disregarding the one-off breach, only that stress test (with a one-off breach) would be presented. 10 Figure 2. 2. Figure Côte d’Ivoire: Cote d'Ivoire: Indicators Indicators of ofPublic PublicDebt DebtUnder Alternative Under Scenarios, Alternative 2020-2030 Scenarios, 2020–30 PV of Debt-to-GDP Ratio 90 80 70 60 50 40 30 Most extreme shock: Commodity price 20 10 0 2020 2022 2024 2026 2028 2030 PV of Debt-to-Revenue Ratio Debt Service-to-Revenue Ratio 600 90 80 500 70 400 60 50 300 40 200 30 20 100 Most extreme shock: Commodity price Most extreme shock: Commodity price 10 0 0 2020 2022 2024 2026 2028 2030 2020 2022 2024 2026 2028 2030 Baseline Most extreme shock 1/ TOTAL public debt benchmark Historical scenario Borrowing assumptions on additional financing needs resulting from the stress Default User defined tests* Shares of marginal debt External PPG medium and long-term 40% 46% Domestic medium and long-term 54% 42% Domestic short-term 6% 12% Terms of marginal debt External MLT debt Avg. nominal interest rate on new borrowing in USD 3.2% 7.0% Avg. maturity (incl. grace period) 16 16 Avg. grace period 6 6 Domestic MLT debt Avg. real interest rate on new borrowing 4.7% 4.4% Avg. maturity (incl. grace period) 4 4 Avg. grace period 3 3 Domestic short-term debt Avg. real interest rate 4.3% 3.0% * Note: The public DSA allows for domestic financing to cover the additional financing needs generated by the shocks under the stress tests in the public DSA. Default terms of marginal debt are based on baseline 10-year projections. Sources: Country authorities; and staff estimates and projections. 1/ The most extreme stress test is the test that yields the highest ratio in or before 2030. The stress test with a one-off breach is also presented (if any), while the one-off breach is deemed away for mechanical signals. When a stress test with a one-off breach happens to be the most exterme shock even after disregarding the one-off breach, only that stress test (with a one-off breach) would be presented. 11 Figure 3. Côte d’Ivoire: Drivers of Debt Dynamics – Baseline Scenario External debt Gross Nominal PPG External Debt Debt-creating flows Unexpected Changes in Debt 1/ (in percent of GDP; DSA vintages) (percent of GDP) (past 5 years, percent of GDP) 30 Current DSA 80 Residual 20 Previous DSA proj. Interquartile 70 DSA-2015 20 range (25- Price and 15 60 exchange 75) rate 50 10 10 Real GDP Change in growth 40 PPG debt 3/ 0 5 Nominal 30 interest rate 20 0 Median -10 Current 10 account + FDI -5 0 Change in -20 Contribution of 5-year 5-year unexpected 2016 2019 2022 2025 2015 2017 2018 2020 2021 2023 2024 2026 2027 2028 2029 2030 PPG debt Distribution across LICs 2/ 3/ historical projected -10 changes change change Public debt Gross Nominal Public Debt Debt-creating flows Unexpected Changes in Debt 1/ (in percent of GDP; DSA vintages) (percent of GDP) (past 5 years, percent of GDP) Residual Current DSA 40 20 Previous DSA proj. Interquartil 80 DSA-2015 Other debt e range creating flows 15 (25-75) 70 Real Exchange 60 20 10 rate depreciation 50 Real GDP Change in 5 40 growth debt Real interest 0 0 30 rate 20 Primary deficit -5 10 Median -20 -10 Contribution of 0 Change in debt 5-year 5-year unexpected 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Distribution across LICs 2/ historical projected changes -15 change change 1/ Difference between anticipated and actual contributions on debt ratios. 2/ Distribution across LICs for which LIC DSAs were produced. 3/ Given the relatively low private external debt for average low-income countries, a ppt change in PPG external debt should be largely explained by the drivers of the external debt dynamics equation. 12 Figure 4. Côte d’Ivoire: Realism Tools 3-Year Adjustment in Primary Balance Fiscal Adjustment and Possible Growth Paths 1/ (Percentage points of GDP) Distribution 1/ 10 2 14 9 Projected 3-yr 1 12 adjustment 8 3-year PB adjustment greater In percentage points of GDP than 2.5 percentage points of 7 10 0 GDP in approx. top quartile 6 In percent 8 5 -1 6 4 -2 3 4 2 -3 2 1 0 -4 0 2014 2015 2016 2017 2018 2019 2020 2021 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 8.0 -4.5 -4.0 -3.5 -3.0 -2.5 -2.0 -1.5 -1.0 -0.5 more Baseline Multiplier = 0.2 Multiplier = 0.4 Multiplier = 0.6 Multiplier = 0.8 1/ Data cover Fund-supported programs for LICs (excluding emergency 1/ Bars refer to annual projected fiscal adjustment in terms of primary balance financing) approved since 1990. The size of 3-year adjustment from program (right-hand side scale) and lines show possible real GDP growth paths under inception is found on the horizontal axis; the percent of sample is found on different fiscal multipliers (left-hand side scale). the vertical axis. Public and Private Investment Rates Contribution to Real GDP growth (percent of GDP) (percent, 5-year average) 24 8 22 7 20 18 6 16 5 14 12 4 10 3 8 6 2 4 1 2 0 0 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Historical Projected (Prev. DSA) Projected (Curr. DSA) Gov. Invest. - Prev. DSA Gov. Invest. - Curr. DSA Contribution of other factors Priv. Invest. - Prev. DSA Priv. Invest. - Curr. DSA Contribution of government capital 13 Figure 5. Côte d’Ivoire: Qualification of the Moderate Category, 2020-301/ PV of debt-to GDP ratio PV of debt-to-exports ratio 45 200 40 180 Threshold 35 160 140 (1-X)*Threshold 30 120 25 (1-Y)*Threshold 100 20 80 15 60 10 40 5 20 0 0 2020 2022 2024 2026 2028 2030 2020 2022 2024 2026 2028 2030 Debt service-to-exports ratio Debt service-to-revenue ratio 16 20 18 14 16 12 14 10 12 8 10 8 6 6 4 4 2 2 0 0 2020 2022 2024 2026 2028 2030 2020 2022 2024 2026 2028 2030 Threshold Baseline Limited space Some space Substantial space Sources: Country authorities; and staff estimates and projections. 1/ For the PV debt/GDP and PV debt/exports thresholds, x is 20 percent and y is 40 percent. For debt service/Exports and debt service/revenue thresholds, x is 12 percent and y is 35 percent. 14 Figure 6. Côte d’Ivoire: Market-Financing Risk Indicators GFN 1/ EMBI 2/ Benchmarks 14 570 Values 9 447 Breach of benchmark No No Potential heightened liquidity needs Low 1/ Maximum gross financing needs (GFN) over 3-year baseline projection horizon. 2/ EMBI spreads correspond to the latest available data. 45 PV of debt-to GDP ratio PV of debt-to-exports ratio 200 40 180 35 160 30 140 25 120 20 100 15 80 60 10 40 5 20 0 0 2020 2022 2024 2026 2028 2030 2020 2022 2024 2026 2028 2030 Debt service-to-exports ratio Debt service-to-revenue ratio 18 30 16 25 14 12 20 10 15 8 6 10 4 5 2 0 0 2020 2022 2024 2026 2028 2030 2020 2022 2024 2026 2028 2030 Baseline Market financing Threshold Sources: Country authorities; and staff estimates and projections. 15 Table 1. Côte d’Ivoire: External Debt Sustainability Framework, Baseline Scenario, 2017–40 (Percent of GDP; unless otherwise indicated) Actual Projections Average 8/ 2017 2018 2019 2020 2021 2022 2023 2024 2025 2030 2040 Historical Projections External debt (nominal) 1/ 29.4 34.0 35.2 40.2 41.5 39.5 39.5 38.8 37.4 35.2 28.0 40.9 38.3 Definition of external/domestic debt Currency-based of which: public and publicly guaranteed (PPG) 18.8 24.7 27.6 31.6 32.2 32.0 31.5 30.6 29.3 24.3 15.7 25.4 28.9 Is there a material difference between the Yes two criteria? Change in external debt 1.0 4.6 1.2 5.0 1.3 -2.0 -0.1 -0.7 -1.4 -0.9 0.1 Identified net debt-creating flows 0.6 1.1 3.4 3.4 1.9 1.8 1.5 1.2 1.2 -0.6 0.0 -2.2 0.7 Non-interest current account deficit 0.9 2.4 1.4 2.3 2.0 1.7 1.3 1.0 1.1 -1.4 -1.4 -1.5 0.3 Deficit in balance of goods and services -2.0 -0.2 -1.3 0.1 -0.2 -0.7 -1.1 -1.4 -1.5 -3.7 -3.2 -4.4 -2.1 Exports 24.9 22.5 23.3 20.2 20.0 20.3 20.7 21.0 21.0 22.8 21.2 Debt Accumulation Imports 23.0 22.3 22.0 20.3 19.7 19.6 19.5 19.5 19.5 19.1 18.0 4.0 35 Net current transfers (negative = inflow) 1.0 1.0 1.1 0.9 1.1 1.2 1.2 1.2 1.2 1.1 1.1 1.3 1.1 of which: official -0.3 -0.3 -0.5 -0.3 -0.4 -0.4 -0.4 -0.1 0.0 0.0 0.0 3.5 30 Other current account flows (negative = net inflow) 1.8 1.7 1.6 1.3 1.2 1.2 1.2 1.2 1.3 1.2 0.7 1.6 1.2 Net FDI (negative = inflow) 0.6 0.8 1.0 0.1 0.5 1.0 1.0 1.0 1.0 1.3 1.8 1.1 1.0 3.0 25 Endogenous debt dynamics 2/ -0.8 -2.1 1.0 1.0 -0.6 -0.9 -0.8 -0.8 -0.9 -0.5 -0.4 Contribution from nominal interest rate 1.2 1.1 1.3 1.6 1.6 1.6 1.6 1.6 1.4 1.4 1.1 2.5 20 Contribution from real GDP growth -1.9 -1.8 -2.1 -0.6 -2.3 -2.5 -2.4 -2.4 -2.3 -1.9 -1.5 2.0 Contribution from price and exchange rate changes -0.1 -1.5 1.8 … … … … … … … … 15 Residual 3/ 0.3 3.4 -2.2 1.6 -0.6 -3.7 -1.5 -1.9 -2.6 -0.2 0.1 -2.1 -0.7 1.5 of which: exceptional financing 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 10 1.0 Sustainability indicators 0.5 5 PV of PPG external debt-to-GDP ratio ... ... 26.9 29.1 27.6 27.0 26.4 25.4 24.2 19.9 13.0 PV of PPG external debt-to-exports ratio ... ... 115.1 144.5 138.3 133.0 127.8 121.2 115.2 87.3 61.1 0.0 0 PPG debt service-to-exports ratio 5.2 5.9 9.0 9.6 10.6 11.2 11.2 12.3 12.6 10.5 9.7 2020 2022 2024 2026 2028 2030 PPG debt service-to-revenue ratio 9.0 9.5 14.8 14.1 14.6 15.4 15.6 17.1 17.5 15.4 12.7 Gross external financing need (Million of U.S. dollars) 3344.6 4463.7 3783.7 2866.4 4094.6 5070.1 3853.1 4489.7 5241.6 7624.8 17751.9 Debt Accumulation Grant-equivalent financing (% of GDP) Key macroeconomic assumptions Grant element of new borrowing (% right scale) Real GDP growth (in percent) 7.4 6.9 6.2 1.8 6.5 6.5 6.5 6.5 6.5 5.6 5.6 6.3 5.7 GDP deflator in US dollar terms (change in percent) 0.2 5.2 -5.0 2.7 8.4 2.0 1.2 1.4 1.6 1.6 1.6 3.0 2.3 Effective interest rate (percent) 4/ 4.4 4.4 3.9 4.7 4.7 4.2 4.4 4.4 4.0 4.1 4.1 3.8 4.2 External debt (nominal) 1/ Growth of exports of G&S (US dollar terms, in percent) 9.0 1.5 4.7 -9.6 14.4 10.4 9.8 9.5 8.3 6.7 4.7 1.2 8.1 of which: Private Growth of imports of G&S (US dollar terms, in percent) 10.5 9.2 -0.4 -3.7 12.4 7.6 7.6 8.0 8.2 6.8 7.0 3.4 6.8 45 Grant element of new public sector borrowing (in percent) ... ... ... 30.0 17.3 19.5 19.0 20.8 20.2 14.9 14.3 ... 19.3 40 Government revenues (excluding grants, in percent of GDP) 14.2 14.0 14.2 13.7 14.5 14.8 14.9 15.0 15.1 15.5 16.2 15.5 15.0 Aid flows (in Million of US dollars) 5/ 577.8 589.6 580.3 1905.4 1163.2 1009.1 940.7 697.6 539.3 165.3 18.6 35 Grant-equivalent financing (in percent of GDP) 6/ ... ... ... 2.6 1.5 1.2 1.0 0.8 0.6 0.4 0.3 ... 0.9 30 Grant-equivalent financing (in percent of external financing) 6/ ... ... ... 38.4 31.0 31.8 30.4 26.0 21.9 15.1 14.5 ... 24.3 Nominal GDP (Million of US dollars) 51,588 58,011 58,539 61,213 70,660 76,741 82,733 89,341 96,668 138,209 279,326 25 Nominal dollar GDP growth 7.6 12.5 0.9 4.6 15.4 8.6 7.8 8.0 8.2 7.3 7.3 9.5 8.2 20 Memorandum items: 15 PV of external debt 7/ ... ... 34.5 37.8 36.9 34.6 34.4 33.6 32.3 30.9 25.3 10 In percent of exports ... ... 148.0 187.5 184.7 170.2 166.2 160.3 153.8 135.3 119.3 Total external debt service-to-exports ratio 20.2 19.8 17.3 11.4 16.6 19.4 11.6 14.4 15.7 24.8 28.3 5 PV of PPG external debt (in Million of US dollars) 15717.9 17843.5 19533.2 20727.9 21867.5 22704.8 23362.4 27532.0 36177.4 0 (PVt-PVt-1)/GDPt-1 (in percent) 3.6 2.8 1.7 1.5 1.0 0.7 0.7 0.4 2020 2022 2024 2026 2028 2030 Non-interest current account deficit that stabilizes debt ratio -0.1 -2.1 0.1 -2.7 0.7 3.6 1.3 1.6 2.5 -0.6 -1.5 Sources: Country authorities; and staff estimates and projections. 0 1/ Includes both public and private sector external debt. 2/ Derived as [r - g - ρ(1+g)]/(1+g+ρ+gρ) times previous period debt ratio, with r = nominal interest rate; g = real GDP growth rate, and ρ = growth rate of GDP deflator in U.S. dollar terms. 3/ Includes exceptional financing (i.e., changes in arrears and debt relief); changes in gross foreign assets; and valuation adjustments. For projections also includes contribution from price and exchange rate changes. 4/ Current-year interest payments divided by previous period debt stock. 5/ Defined as grants, concessional loans, and debt relief. 6/ Grant-equivalent financing includes grants provided directly to the government and through new borrowing (difference between the face value and the PV of new debt). 7/ Assumes that PV of private sector debt is equivalent to its face value. 8/ Historical averages are generally derived over the past 10 years, subject to data availability, whereas projections averages are over the first year of projection and the next 10 years. 16 Table 2. Côte d’Ivoire: Public Sector Debt Sustainability Framework, Baseline Scenario, 2017‒40 (Percent of GDP; unless otherwise indicated) Actual Projections Average 6/ 2017 2018 2019 2020 2021 2022 2023 2024 2025 2030 2040 Historical Projections Public sector debt 1/ 33.5 37.5 39.1 44.7 45.4 45.6 45.2 44.8 44.3 44.1 48.3 41.0 44.5 Definition of external/domestic of which: external debt 18.8 24.7 27.6 31.6 32.2 32.0 31.5 30.6 29.3 24.3 15.7 25.4 28.9 Currency-based debt of which: local-currency denominated Change in public sector debt 1.8 4.0 1.6 5.6 0.7 0.2 -0.4 -0.4 -0.5 0.2 0.9 Is there a material difference Identified debt-creating flows -0.3 1.4 0.5 3.2 0.4 0.3 -0.1 -0.8 -0.7 -0.6 -0.1 -0.8 -0.1 Yes between the two criteria? Primary deficit 2.1 1.6 0.8 4.0 2.6 1.8 1.3 1.2 1.3 1.4 1.9 1.3 1.7 Revenue and grants 15.1 14.8 15.0 14.5 15.3 15.4 15.4 15.2 15.2 15.5 16.2 16.4 15.3 of which: grants 0.9 0.8 0.8 0.8 0.8 0.6 0.5 0.2 0.1 0.0 0.0 Public sector debt 1/ Primary (noninterest) expenditure 17.2 16.4 15.8 18.5 18.0 17.1 16.6 16.5 16.5 16.9 18.1 17.7 17.0 Automatic debt dynamics -2.3 -0.1 -0.2 -0.8 -1.9 -1.5 -1.4 -2.0 -2.0 -2.0 -2.0 of which: local-currency denominated Contribution from interest rate/growth differential -0.9 -1.3 -1.1 0.9 -1.5 -1.6 -1.1 -2.0 -1.9 -1.5 -1.7 of which: foreign-currency denominated of which: contribution from average real interest rate 1.3 0.8 1.1 1.6 1.2 1.2 1.7 0.8 0.8 0.8 0.8 of which: contribution from real GDP growth -2.2 -2.2 -2.2 -0.7 -2.7 -2.8 -2.8 -2.8 -2.7 -2.3 -2.5 50 Contribution from real exchange rate depreciation -1.4 1.2 0.8 ... ... ... ... ... ... ... ... 45 Other identified debt-creating flows -0.1 0.0 0.0 0.0 -0.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 40 35 Privatization receipts (negative) -0.1 0.0 0.0 0.0 -0.3 0.0 0.0 0.0 0.0 0.0 0.0 30 Recognition of contingent liabilities (e.g., bank recapitalization) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 25 Debt relief (HIPC and other) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 20 Other debt creating or reducing flow (please specify) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 15 Residual 2.1 2.5 1.1 2.4 0.3 -0.1 -0.3 0.3 0.2 1.0 1.1 -1.8 0.6 10 5 Sustainability indicators 0 PV of public debt-to-GDP ratio 2/ ... ... 38.3 40.8 40.6 40.5 40.0 39.5 39.1 39.7 45.5 2020 2022 2024 2026 2028 2030 PV of public debt-to-revenue and grants ratio … … 254.9 281.2 265.2 263.8 260.5 259.3 257.2 255.5 280.3 Debt service-to-revenue and grants ratio 3/ 13.2 29.1 34.0 36.1 29.5 43.8 33.6 43.2 37.4 47.1 63.2 Gross financing need 4/ 4.0 5.9 5.9 9.2 6.8 8.5 6.4 7.8 7.0 8.7 12.1 Key macroeconomic and fiscal assumptions of which: held by residents Real GDP growth (in percent) 7.4 6.9 6.2 1.8 6.5 6.5 6.5 6.5 6.5 5.6 5.6 6.3 5.7 of which: held by non-residents Average nominal interest rate on external debt (in percent) 4.1 3.9 3.9 4.4 4.1 4.1 4.0 4.0 3.6 3.6 3.0 3.1 3.8 1 Average real interest rate on domestic debt (in percent) 7.2 4.3 5.3 7.0 4.8 4.8 4.6 4.5 4.4 4.5 4.5 0.1 4.8 1 Real exchange rate depreciation (in percent, + indicates depreciation) -8.8 6.6 3.5 … ... ... ... ... ... ... ... -0.4 ... Inflation rate (GDP deflator, in percent) -1.8 0.6 0.2 0.6 0.8 1.0 1.2 1.4 1.6 1.6 1.6 5.7 1.3 1 n.a. Growth of real primary spending (deflated by GDP deflator, in percent) 11.9 1.9 2.6 18.8 3.6 1.7 3.4 5.5 6.6 6.7 9.4 5.5 6.4 0 Primary deficit that stabilizes the debt-to-GDP ratio 5/ 0.3 -2.4 -0.9 -1.6 2.0 1.6 1.6 1.7 1.8 1.1 1.0 -1.0 1.2 PV of contingent liabilities (not included in public sector debt) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0 0 2020 2022 2024 2026 2028 2030 Sources: Country authorities; and staff estimates and projections. 1/ Coverage of debt: The central government plus social security, central bank, government-guaranteed debt . Definition of external debt is Currency-based. 2/ The underlying PV of external debt-to-GDP ratio under the public DSA differs from the external DSA with the size of differences depending on exchange rates projections. 3/ Debt service is defined as the sum of interest and amortization of medium and long-term, and short-term debt. 4/ Gross financing need is defined as the primary deficit plus debt service plus the stock of short-term debt at the end of the last period and other debt creating/reducing flows. 5/ Defined as a primary deficit minus a change in the public debt-to-GDP ratio ((-): a primary surplus), which would stabilizes the debt ratio only in the year in question. 6/ Historical averages are generally derived over the past 10 years, subject to data availability, whereas projections averages are over the first year of projection and the next 10 years. 17 Table 3. Côte d’Ivoire: Sensitivity Analysis for Key Indicators of Public and Publicly Guaranteed External Debt, 2020–30 (Percent) Projections 1/ 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 PV of debt-to GDP ratio Baseline 29.1 27.6 27.0 26.4 25.4 24.1 23.1 22.2 21.4 20.6 19.9 A. Alternative Scenarios A1. Key variables at their historical averages in 2020-2030 2/ 29.1 25.9 21.9 18.3 14.6 10.7 9.0 7.7 6.4 5.8 5.2 0 #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A B. Bound Tests B1. Real GDP growth 29.1 29.7 31.2 30.5 29.4 27.9 26.7 25.8 24.7 23.9 23.0 B2. Primary balance 29.1 27.9 27.8 27.2 26.2 25.0 24.0 23.2 22.3 21.6 20.8 B3. Exports 29.1 31.3 36.7 36.0 34.9 33.6 32.4 31.6 30.4 29.1 27.8 B4. Other flows 3/ 29.1 29.1 29.3 28.7 27.7 26.4 25.3 24.5 23.5 22.6 21.8 B5. Depreciation 29.1 34.2 30.5 29.8 28.6 27.1 25.8 24.8 23.7 22.9 22.2 B6. Combination of B1-B5 29.1 34.8 33.6 32.9 31.8 30.3 29.1 28.1 26.9 25.9 24.9 C. Tailored Tests C1. Combined contingent liabilities 29.1 31.9 31.6 31.0 29.9 30.0 29.1 28.3 27.4 27.0 26.4 C2. Natural disaster n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. C3. Commodity price 29.1 28.2 28.5 28.3 27.5 26.5 25.6 24.9 24.2 23.6 23.0 C4. Market Financing 29.1 30.6 30.0 29.5 28.5 27.2 26.1 25.0 23.8 22.8 21.8 Threshold 40 40 40 40 40 40 40 40 40 40 40 PV of debt-to-exports ratio Baseline 144.4 138.2 132.8 127.5 121.0 114.9 101.1 97.2 93.7 89.9 87.2 A. Alternative Scenarios A1. Key variables at their historical averages in 2020-2030 2/ 144.4 129.6 107.9 88.2 69.4 50.8 39.6 33.8 28.3 25.2 22.8 0 144.4 107.0 63.2 18.9 -26.9 -72.5 -111.5 -153.1 -193.8 -229.5 -264.5 B. Bound Tests B1. Real GDP growth 144.4 138.2 132.8 127.5 121.0 114.9 101.1 97.2 93.7 89.9 87.2 B2. Primary balance 144.4 139.6 136.7 131.4 124.7 119.0 105.3 101.3 97.8 94.0 91.4 B3. Exports 144.4 187.3 250.2 241.2 230.6 221.4 196.9 190.9 184.7 175.7 168.7 B4. Other flows 3/ 144.4 145.7 144.3 138.8 132.0 125.8 111.0 107.0 103.1 98.7 95.4 B5. Depreciation 144.4 138.2 121.1 116.1 109.8 103.9 91.1 87.2 83.7 80.6 78.5 B6. Combination of B1-B5 144.4 183.2 143.8 181.9 173.0 165.0 145.6 140.4 134.5 128.8 124.6 C. Tailored Tests C1. Combined contingent liabilities 144.4 159.6 155.7 150.0 142.8 142.7 127.7 123.7 120.1 117.9 115.8 C2. Natural disaster n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. C3. Commodity price 144.4 141.6 140.5 136.8 131.4 126.2 112.3 109.0 106.1 102.8 100.7 C4. Market Financing 144.4 138.2 133.3 128.7 122.8 117.3 103.3 98.6 94.2 89.8 86.5 Threshold 180.0 180.0 180.0 180.0 180.0 180.0 180.0 180.0 180.0 180.0 180.0 Debt service-to-exports ratio Baseline 9.6 10.6 11.2 11.2 12.2 12.6 11.4 10.6 11.1 10.3 10.5 A. Alternative Scenarios A1. Key variables at their historical averages in 2020-2030 2/ 9.6 11.2 10.7 9.6 9.7 9.2 7.4 6.4 5.9 4.3 3.7 0 9.6 11.3 10.1 8.2 7.6 6.1 3.6 0.7 -2.5 -7.0 -10.6 B. Bound Tests B1. Real GDP growth 9.6 10.6 11.2 11.2 12.2 12.6 11.4 10.6 11.1 10.3 10.5 B2. Primary balance 9.6 10.6 11.3 11.5 12.5 12.9 11.6 10.9 11.5 10.7 10.9 B3. Exports 9.6 12.8 17.3 19.8 21.2 21.6 19.5 18.4 20.4 21.3 21.3 B4. Other flows 3/ 9.6 10.6 11.7 11.9 13.0 13.3 12.0 11.2 12.1 11.5 11.7 B5. Depreciation 9.6 10.6 11.2 10.4 11.5 11.9 10.7 9.9 10.5 9.0 9.3 B6. Combination of B1-B5 9.6 12.4 16.3 15.7 17.1 17.5 15.8 14.8 16.7 15.1 15.3 C. Tailored Tests C1. Combined contingent liabilities 9.6 10.6 12.6 12.6 13.7 14.0 13.0 12.3 12.8 12.0 12.3 C2. Natural disaster n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. C3. Commodity price 9.6 10.8 11.6 11.9 13.1 13.6 12.3 11.5 12.2 11.6 11.8 C4. Market Financing 9.6 10.6 11.6 11.8 13.1 16.8 17.1 15.1 13.2 10.3 10.6 Threshold 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 Debt service-to-revenue ratio Baseline 14.1 14.6 15.4 15.5 17.1 17.5 17.0 15.8 16.4 15.3 15.4 A. Alternative Scenarios A1. Key variables at their historical averages in 2020-2030 2/ 14.1 15.4 14.7 13.3 13.5 12.8 11.1 9.6 8.8 6.3 5.5 0 14.1 15.5 13.9 11.4 10.6 8.5 5.3 1.1 -3.7 -10.5 -15.5 B. Bound Tests B1. Real GDP growth 14.1 15.7 17.8 18.0 19.8 20.2 19.7 18.3 19.0 17.7 17.8 B2. Primary balance 14.1 14.6 15.6 15.9 17.5 17.8 17.4 16.2 17.0 15.9 16.0 B3. Exports 14.1 14.7 17.1 19.8 21.3 21.6 21.1 19.9 21.8 22.8 22.6 B4. Other flows 3/ 14.1 14.6 16.0 16.5 18.1 18.4 18.0 16.8 18.0 17.1 17.1 B5. Depreciation 14.1 18.1 19.1 18.0 19.9 20.4 19.9 18.4 19.2 16.6 16.9 B6. Combination of B1-B5 14.1 16.2 19.6 19.1 20.8 21.3 20.7 19.3 21.7 19.6 19.6 C. Tailored Tests C1. Combined contingent liabilities 14.1 14.6 17.2 17.6 19.1 19.4 19.5 18.4 19.0 17.8 18.1 C2. Natural disaster n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. C3. Commodity price 14.1 16.9 18.2 18.8 20.1 20.0 19.0 17.2 18.1 17.2 17.4 C4. Market Financing 14.1 14.6 15.9 16.4 18.3 23.3 25.6 22.5 19.5 15.2 15.5 Threshold 18.0 18.0 18.0 18.0 18.0 18.0 18.0 18.0 18.0 18.0 18.0 Sources: Country authorities; and staff estimates and projections. 1/ A bold value indicates a breach of the threshold. 2/ Variables include real GDP growth, GDP deflator (in U.S. dollar terms), non-interest current account in percent of GDP, and non-debt creating flows. 3/ Includes official and private transfers and FDI. 18 Table 4. Côte d’Ivoire: Sensitivity Analysis for Key Indicators of Public Debt, 2020–30 (Percent) Projections 1/ 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 PV of Debt-to-GDP Ratio Baseline 40.7 40.6 40.5 40.0 39.4 39.0 38.8 38.8 39.0 39.2 39.6 A. Alternative Scenarios A1. Key variables at their historical averages in 2020-2030 2/ 40.7 37.5 35.5 33.8 33.5 33.1 32.9 32.9 33.0 33.1 33.2 0 #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A B. Bound Tests B1. Real GDP growth 40.7 44.9 50.5 52.3 54.7 56.9 59.6 62.7 66.1 69.5 73.1 B2. Primary balance 40.7 41.2 41.9 41.4 41.4 41.3 41.7 42.2 43.1 44.0 45.1 B3. Exports 40.7 44.0 49.6 49.1 48.5 48.0 47.7 47.6 47.6 47.3 47.1 B4. Other flows 3/ 40.7 42.1 42.8 42.3 41.7 41.3 41.1 41.0 41.1 41.2 41.5 B5. Depreciation 40.7 47.1 45.2 43.2 41.7 40.2 39.1 38.4 38.0 37.7 37.6 B6. Combination of B1-B5 40.7 40.1 41.4 41.0 41.2 41.3 41.7 42.4 43.4 44.4 45.6 C. Tailored Tests C1. Combined contingent liabilities 40.7 49.9 49.6 49.0 48.9 48.7 48.9 49.5 50.3 51.2 52.2 C2. Natural disaster n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. C3. Commodity price 40.7 44.3 49.2 53.7 58.1 61.6 65.0 68.0 71.4 74.8 78.4 C4. Market Financing 40.7 40.6 40.6 40.2 39.8 39.5 39.3 39.1 39.1 39.2 39.5 TOTAL public debt benchmark 55.0 55.0 55.0 55.0 55.0 55.0 55.0 55.0 55.0 55.0 55.0 PV of Debt-to-Revenue Ratio Baseline 281.1 265.0 263.4 260.0 258.8 256.7 254.3 252.4 252.8 253.6 254.9 A. Alternative Scenarios A1. Key variables at their historical averages in 2020-2030 2/ 281.1 245.6 231.7 220.8 220.0 218.1 216.0 214.3 214.2 214.1 213.7 0 36.1 21.8 24.7 20.1 28.8 19.0 17.4 16.9 18.9 16.4 15.3 B. Bound Tests B1. Real GDP growth 281.1 291.6 327.1 338.6 358.1 374.2 390.7 408.2 428.5 449.2 470.3 B2. Primary balance 281.1 269.0 272.8 269.2 271.7 271.8 273.0 275.2 279.6 284.6 290.1 B3. Exports 281.1 287.1 323.3 319.4 318.1 315.5 312.5 310.0 308.7 305.5 303.0 B4. Other flows 3/ 281.1 274.7 278.6 275.1 273.9 271.6 269.1 267.0 266.8 266.5 266.9 B5. Depreciation 281.1 309.0 295.2 281.5 273.7 264.3 256.5 250.2 246.5 243.7 241.7 B6. Combination of B1-B5 281.1 262.3 269.6 267.0 270.4 271.4 273.4 276.4 281.6 287.2 293.4 C. Tailored Tests C1. Combined contingent liabilities 281.1 325.7 322.9 318.6 320.8 320.3 320.7 322.3 326.3 330.8 335.9 C2. Natural disaster n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. C3. Commodity price 281.1 328.5 364.0 396.6 418.9 431.5 439.2 443.1 463.1 483.4 504.2 C4. Market Financing 281.1 265.1 264.1 261.6 261.3 259.9 257.4 254.5 253.7 253.4 253.8 Debt Service-to-Revenue Ratio Baseline 36.1 34.5 45.1 39.6 44.5 44.3 45.7 44.4 46.0 47.9 48.8 A. Alternative Scenarios A1. Key variables at their historical averages in 2020-2030 2/ 36.1 33.0 40.0 33.9 37.2 33.6 34.3 33.0 33.1 32.5 32.1 0 36.1 21.8 24.7 20.1 28.8 19.0 17.4 16.9 18.9 16.4 15.3 B. Bound Tests B1. Real GDP growth 36.1 37.0 53.3 48.9 55.9 59.3 65.1 65.5 69.2 74.2 78.2 B2. Primary balance 36.1 34.5 45.8 40.7 45.3 46.3 48.0 45.6 47.1 49.5 50.5 B3. Exports 36.1 34.5 46.5 43.5 48.4 48.1 49.5 48.2 51.1 55.1 55.7 B4. Other flows 3/ 36.1 34.5 45.7 40.6 45.5 45.3 46.7 45.3 47.6 49.7 50.5 B5. Depreciation 36.1 34.9 47.4 42.0 47.3 47.0 47.4 46.4 47.1 48.1 49.1 B6. Combination of B1-B5 36.1 33.9 46.3 40.9 45.7 45.4 47.8 46.0 47.5 49.3 50.7 C. Tailored Tests C1. Combined contingent liabilities 36.1 34.5 55.2 44.2 48.6 67.2 54.9 50.3 51.4 59.1 56.3 C2. Natural disaster n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. C3. Commodity price 36.1 39.7 56.5 54.3 61.0 67.9 73.4 71.9 74.6 80.2 84.2 C4. Market Financing 36.1 34.5 45.5 40.4 45.8 50.1 54.2 51.1 49.1 47.9 48.9 Sources: Country authorities; and staff estimates and projections. 1/ A bold value indicates a breach of the benchmark. 2/ Variables include real GDP growth, GDP deflator and primary deficit in percent of GDP. 3/ Includes official and private transfers and FDI. 19