Authors : Olivier Manlan, Idrissa Diagne, Mamadou Sarifou Diao Diallo
In 2016, the end of the Ebola epidemic brought the country out of isolation and broadened its export opportunities. National dialogue in October 2016 resulted in a political agreement, easing the general climate. The 2012 macroeconomic programme supported by the International Monetary Fund (IMF) Extended Credit Facility (ECF) and backed by the country’s other partners reached a satisfactory conclusion. For the first time in its history, the country was able to conclude a programme with the IMF.
The slowdown in activity that had marked the three previous years was reversed. In 2016, growth stood at an estimated 4.9%, up from 0.1% in 2015. The national economic and social development plan (PNDES) 2016-20 is focused on governance, transforming the economy, developing human capital and sustainable management of the country’s resources. The PNDES projects median growth at 6.5% for 2016-20, driven by recovery in the industrial sector (23.6% of gross domestic product [GDP]) through revitalised activity in the mining sub-sector (12.3%).
Reforms were pursued, though at a slower pace due to the human and financial effort needed to fight Ebola. This covered the organic law relating to finance (Loi organique relative aux lois de finances) and the legal frameworks for financial and public sector governance, plus the regulatory framework of public-private partnership (PPP) projects. An audit of public procurement confirmed the existence of poor practices in infrastructure investment expenditure (e.g. on roads, energy, etc.) in 2014 and 2016, showing that less than 14% of public procurement had complied with the rules governing it. Along with the implementation of measures to strengthen public procurement procedures, a more careful and rigorous oversight of expenditure in 2016 has helped to streamline infrastructure spending.
The PNDES has placed infrastructure insufficiency and deterioration, as well as its financing, at the core of policy discussions. The government has asked its partners to increase their concessional funding of infrastructure, but as potential financing is expected to be limited, it has also stressed stepping up reforms aimed at mobilising domestic resources and resorting to more non-concessional loans. As regards the latter, it has been generally agreed that the spiral of over-indebtedness must be avoided. Before an advisory group is set up in the last quarter of 2017 on the funding of the PNDES 2016-20, the government plans to negotiate a new programme backed by the IMF and its other partners, which would include more non-concessional debt to finance the ambitious PNDES infrastructure programme.
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