It would be an understatement to say that Côte d’Ivoire’s recent history has been mixed. The country is turning the corner, however, leaving behind the political turmoil it experienced at the turn of the 21st century. Although the troubles of recent years hit investor confidence, the government is determined to forge ahead with diversifying the economy and attracting investment in industries earmarked as ripe for development, such as telecoms, banking, financial services, minerals, oil and gas, while continuing to build on its traditional role as an exporter of agricultural products.

These are ambitious plans considering the starting point for the country. It is among the world’s largest producers and exporters of coffee, cocoa beans and palm oil, and is estimated to produce 40% of the world’s cocoa. Consequently, the economy is highly sensitive to weather conditions and to fluctuations in international prices for these products. The civil unrest and mob violence of only a few years ago led to the departure or evacuation of several thousand foreign nationals, with many investors fleeing as well.

“In spite of the socio-political problems of the recent past we have been receiving substantial investments from countries such as the US, China, India, South Africa, EU countries and also some neighbouring countries,” says Vincent Gadou Kragbé, chairman and CEO of VITIB SA and special adviser to the president of Côte d’Ivoire. Recent investors include construction firm IBC, telecoms firm UTL and construction company Shapoorji Pallonji from India, UAE telecoms firm Etisalat, South African telecoms firm MTN, and Chinese biotech company Huassen Investment.

There have also been sizeable investments in offshore gas and oil exploration and production, petroleum products distribution, and the cocoa, coffee, shipping and banking sectors. As a result, oil exports are becoming the country’s largest foreign exchange earner.

Competitive edge

Although neighbouring countries have benefited from Côte d’Ivoire’s recent instability, Mr Kragbé says it has managed to maintain its competitive advantage in infrastructure, human resources and administrative processes. And although some companies fled the country during the unrest, a number of major businesses – including France Telecom, Orange, Bouig, Bolloré, Elf, Air France and Cargill – continued their operations. MTN has been present in the country since 1997 and has operated as Loteny Telecom and MTN CI since July 2005. “From 2006 to 2007, we increased our subscriber base from one million to two million,” says Jocelyn Adjoby, head of corporate services at MTN Côte d’Ivoire.

Other companies to enter the market include UTL, which established a presence in the country last year and is operating UTL Africa out of Côte d’Ivoire. Its involvement with the country started when it worked on the design and building of the Mahatma Gandhi IT and Biotech Park for Village de Technologies de l’Information et de la Biotechnologie (VITIB), a free trade zone for biotechnology, IT and telecoms companies.

“We will be looking at telecoms products and service opportunities, broadband, e-governance and transport solutions,” says Srinivas Shinde, CEO of UTL training centre and the company’s vice-president. The firm intends to establish both a market and a fully-fledged execution team at its Côte d’Ivoire office. Mr Shinde anticipates employing a 10-strong market team plus a further 200 employees for each project.

In September, the firm is due to launch a competency training centre for IT and telecoms. “This will create opportunities for local Ivorian students to qualify and meet the requirements of the company, who will be occupying space in the IT park,” says Mr Shinde.

To broaden Côte d’Ivoire’s appeal to international investors, the government is keen to build on the opportunities in knowledge-based sectors, such as IT and life sciences, where it sees the prospect of real growth and prosperity. This could prove to be a win-win approach, as Mr Kragbé explains: “These sectors enable the local population and youth to gain knowledge and participate in the well-being and prosperity of the nation, and can create a good, educated middle class.”

But such attempts to diversify can be achieved only if a sufficiently skilled workforce is in place. Côte d’Ivoire’s literacy rate is about 61% and the country produces an estimated 500,000 graduates each year with qualifications in fields such as arts, sciences and technology. “The education system is quite robust,” says Mr Kragbé. “There are about three public universities and six private universities offering a range of courses. Additionally, there are about four public and 108 private schools for business and vocational studies delivering diplomas at the bachelor level (four years after high school).”

Opportunities are good for investors, says Mr Adjoby. “The country offers the advantage of a skilled workforce with an acceptable average salary level. In addition, it has a very good infrastructure with a good road system, telecoms network and energy supply. And it has a very good position in the African sub-region with a 40% share of its gross domestic product.”

Jean Jos, administrator for Africa at industrial firm Golden Holding, agrees. “We’re convinced that this market is one of the most promising in West Africa. Our research has convinced us that we are in the right place at the right time for a good project,” he says.

Priority sectors

The government has identified certain priority sectors to attract investment into Côte d’Ivoire and boost the economy. For example, the country has traditionally been a leading global supplier of raw material such as cocoa and coffee, which is processed and made into the final product in other parts of the world.

“So that the economy grows and Côte d’Ivoire becomes a supplier as well as a producer of finished commodities certain regulations have been put in place,” says Mr Kragbé. “The regulations are mainly intended to create a favourable business environment for foreign investors in these priority sectors. This includes setting up the right fiscal and regulatory framework for the companies that wish to invest in Côte d’Ivoire. “

The government is keen to promote the private sector and is taking steps to rebuild the economy. The president has set up commissions to examine the various regulations and laws governing each sector. “The commissions are taking into account the concerns of foreign and local investors and are working to create an enabling policy and regulatory environment for each of the sectors,” says Mr Kragbé.

In addition to a general investment code, the government has introduced laws, including the petroleum investment code, the telecommunication investment law and the free trade zone (FTZ) law, specifically aimed at attracting foreign investment.

FTZ law

The FTZ law defined VITIB – the special economic zone that is dedicated to the IT and biotechnology sectors. “This exhaustive document has provided clear guidelines for business operation, tax and regulatory requirements and governing bodies,” says Mr Kragbé.

The Free Trade Zone Authority that controls VITIB was formed with 94% private ownership in November 2006. The government has entrusted it with the authority to enforce public services accreditation, which aims to eliminate bureaucratic delays for investors, tenants and users of the FTZ. According to Mr Kragbé, the authority will act as a “single window clearance and provisioning entity for all administrative functions, service provisioning and infrastructure creation related to the FTZ”. He adds: “We have finished the detailed feasibility study and business plan for the FTZ. Various preliminary activities, such as producing the master plan of the site, road construction and architectural designs, are at various stages of completion.”

Specific commissions have also been created, including the Centre de Promotion des Investissements en Côte d’Ivoire (CEPICI), which promotes investment in the country, and the Association pour la Promotion de l’Exportations en Côte d’Ivoire (APEX-CI), which promotes exports.

Changes have taken place in the telecoms sector, which is considered to be well developed by African standards but operating well below capacity. “Various landmark decisions have been taken. For instance, the first three mobile operator licences were free,” says Mr Kragbé. “One of the major deregulation processes has been the privatisation of the incumbent telecoms operator, Côte d’Ivoire Telecom. It has been partially privatised and is a good example of public-private partnership in the country. However, we have to bear in mind that if the deregulation process is not undertaken in a systematic manner, the situation could be chaotic and lead to unnecessary and fruitless litigation.”

The creation of the Agence des Télécommunications de Côte d’Ivoire (ATCI) has helped to create a suitable regulatory environment for the telecoms sector. Within this industry, the government has had to identify appropriate technologies, such as CDMA or GSM, and determine the number of service providers needed, bearing in mind the reality of business in Côte d’Ivoire. “As a result, the telecoms sector – particularly the mobile business – has seen tremendous growth, with multiple service providers providing services in Côte d’Ivoire,” explains Mr Kragbé. “Currently, we have two private sector players for the fixed lines and five private operators for the mobile services [operators include Côte d’Ivoire Telecom, Orange, MTN, Moov and KOZ]. The healthy competition has resulted in low telecoms tariffs, which have ultimately benefited Ivorians.”

Opportunities

Those that have maintained an interest in Côte d’Ivoire through its turbulent years are quick to point out the country’s many opportunities. “Côte d’Ivoire has a business infrastructure superior to most of the countries in the region, and has been an industrial and transportation hub for the region,” says Mr Kragbé. “The FTZ gives Côte d’Ivoire a locational advantage because it is in a time zone that enables it to cater to the prospective markets of the world.”

Mr Shinde agrees: “There is a great amount of potential in the country, from IT, biotechnology and manufacturing, to telecoms and education. It is on a developing stream and needs to implement strategies that have been successful in other developing countries,” he says.

According to Mr Kragbé: “The huge educated and French-speaking population can be a big opportunity for outsourced work from French-speaking markets, specifically in the call centre and business process outsourcing areas. In addition, Côte d’Ivoire has rich flora and fauna which is an advantage for research and product development in the life sciences sector.”

Progress made in recent years has been staggering. However, as Mr Kragbé is only too aware, the fears and misconceptions that prospective investors might have about investing in Cote d’Ivoire need to be eradicated. But steps are being taken in the right direction.

Mr Jos says: “At the end of the unrest, there are various and varied opportunities for doing business in Côte d’Ivoire. The country has shortages and deficiencies in many areas, including housing, financial products, data processing and industrial equipment, health services, transport and waste processing.

“The country must be rebuilt. The whole of the infrastructure that was damaged by the unrest must be put back together. The population must be housed and helped to rebuild their incomes through microcredits and financing projects. A whole generation must be provided with data processing tools and telecoms facilities.”