Ivory Coast, the world’s biggest cocoa producer, will get $5 billion in debt relief when it completes the International Monetary Fund’s program for indebted poor nations, expected next month.
The West African country’s total debt is $12.5 billion, Wayne Camard, a representative for the IMF, told reporters yesterday in Abidjan, the commercial capital. The relief will reduce it to 30 percent of gross domestic product, said Roger Nord, deputy director of the IMF’s Africa department.
The country is recovering from a five-month post-election crisis that led to the economy contracting 4.7 percent in 2011, according to the IMF. The economy is expected to expand by about 8 percent this year, the Washington-based lender said in March.
Debt servicing will probably rise to 200 billion CFA francs ($381 million) in 2013 from 60 billion francs last year, Camard said.
“If the economy is well-run, and if economic growth settles in the country, it won’t have bad consequences on the Ivorian economy,” he said. Completing of the program will be a “strong sign of the end of the crisis,” Camard said.
Last year, President Alassane Ouattara introduced reforms in the cocoa industry, including a plan to pre-sell beans and guarantee farmers at least 60 percent of world prices, as part of the requirements of the relief program. Earlier, the IMF projected the eligible debt relief at around $3 billion.
Ivory Coast’s $2.3 billion of defaulted Eurobonds due 2032 rose for a second day, climbing 0.7 percent to 68.135 cents on the dollar as of 11:49 a.m. in London, the highest since May 10, according to data compiled by Bloomberg.
The country stopped paying interest on its international bonds in January last year during the election stand-off. The government said in a Jan. 23 statement it plans to restart payments in June.
The debt relief will also make it easier for Ivory Coast to access the international market, Camard said.
The country may sell debt abroad within the next two years to help fund investment in development, Aurelien Mali, a sovereign credit analyst at Moody’s Investors Service, said in a May 16 interview in Johannesburg.
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