Côte d’Ivoire and the World Bank resumed normal relations at the beginning of March 2008, following the settlement of the country’s debt to the Institution. For Mr. Bernard Harborne, Country Program Coordinator and former World Bank Resident Representative in Côte d’Ivoire, this positive development paves the way for important prospects with the reactivation of suspended projects and the introduction of new projects. In total, Côte d’Ivoire will receive about 636 million dollars for its crisis recovery and reconstruction efforts. How is the World Bank involved in the crisis recovery process, in terms of support for the reconstruction efforts since the signing of the Ouagadougou Political Accord? Since the signing of the Ouagadougou Political Accord in March 2007, the World Bank has recommended a new more aggressive approach, unlike the previous wait-and-see approaches. The new strategy comprises two orientations: (i) supporting the implementation of the Ouagadougou Accord, and (ii) working on the normalization of the cooperation with the country and paying off the debt arrears. Concerning the support for the peace process, following the signing of the Ouagadougou Peace Accord, in accordance with the agreement signed with the Ivorian authorities, the World Bank has approved a pre-arrears settlement loan of 120 million dollars, or CFA 60 billion, under a Post-Conflict Assistance Project. This grant is the highest pre-settlement grant in the history of our Institution. It is more than those granted to the Democratic Republic of Congo (DRC) and Afghanistan. How will the post-conflict grant be used? This grant is intended to finance the following components of the crisis recovery programme: identification (20 million), economic reinsertion of ex-combatants and the youth at risk associated with the conflict (40 million), community rehabilitation (40 million) and redeployment of the administration and implementation of the programme (20 million). We shall grant the country a total amount of about 636 million dollars to support its crisis recovery and reconstruction efforts. Côte d’Ivoire, like the World Bank places great hope on this project, which will give a real boost to the crisis recovery programme. Can you discuss the impact of normalization on the Bank’s relations with Côte d’Ivoire? I am talking about normalization because, as a result of the non-payment of our arrears, the Bank had to suspend its disbursements in 2004. This situation led to the freezing of four investment projects and the suspension of new projects. Côte d’Ivoire had accumulated considerable debt arrears over the past four years, which it owed to its external partners, with the exception of the IMF. At the end of July 2007, the arrears owed to the World Bank amounted to 504 million dollars, or about CFAF 242 billion. After the signing, on 4 March 2007, of the Ouagadougou Peace Accord, and following the discussions held on the sidelines of the Spring Meetings of the World Bank and the International Monetary Fund in 2007, an agreement in principle was obtained with the Ivorian authorities on the settlement of the arrears and resumption of the debt servicing. The agreement stipulated, among others, that Côte d’Ivoire should resume, as from July 2007, payment of the common terms of its debt service to the World Bank and the African Development Bank (AfDB), pursuant of the agreement on equal treatment of the debt owed to these two institutions. After analyzing the capacity of the country to settle its arrears owed to the World Bank, a memorandum was signed with the Ivorian authorities. The memorandum stated that Côte d’Ivoire will only pay 50 percent of its accumulated arrears at the end of July 2007. The agreement provided for the payment, by mid-January 2008 latest, of 50 percent of the accumulated stock at the end of July 2007, or 252 million dollars (about CFAF 112 billion). And what should the World Bank do on its part? The World Bank pledged to do three things after the settlement of 50 percent of the arrears. The first consisted of approving an additional grant of 308 million dollars, an amount comprising 252 million dollars (corresponding to the remaining 50 percent of the arrears due) and 35 million dollars as budget support. The second thing consisted of reactivating our loans portfolio suspended since November 2004 immediately after settling all the arrears . The projects represent an undisbursed amount of 104 million dollars. Finally, the Bank would approve three new projects in the form of a grant for an amount of about 120 million dollars. They are: the Emergency Infrastructure Project at a cost of 90 million dollars, the VIH/SIDA Project in the sum of 20 million dollars and the Governance and Institutional Development Project amounting to 10 million dollars. What is the situation of the debt arrears today? Côte d’Ivoire effectively resumed payment of its current debt service to the World Bank in August 2007; and has just paid off the arrears at the beginning of March 2008. It paid a total of about CFAF 112 billion on 28 February 2008, corresponding to the total of the arrears. Upon receipt of all the payments on the accounts of the Bank in early April 2008, the arrears were declared discharged and a meeting of the Bank’s Board of Directors approved the Economic Governance and Recovery Grant of 308 million dollars. In summary, we can say that the country has jut taken a major step in the normalization of its relations with the World Bank. With the normalization, what are the prospects? These developments have positive repercussions. We can launch our country programme with the reactivation of the portfolio that had been suspended and also approve new investment projects. This progress constitutes a major starting point for the debt relief process under the Heavily Indebted Poor Countries (HIPC) Initiative. Finally, it is a strong signal for investors and the private sector. Interview conducted by Bakary Sanogo, World Bank, Côte d’Ivoire |
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