Côte d’Ivoire has experienced, and withstood, many tough periods – including two recent civil wars – and local experts believe the country’s economy should rebound strongly once the Covid-19 crisis passes.
The French-speaking country – with a $48.3bn economy and 26.9 million inhabitants – witnessed economic growth averaging 8.5% a year between 2012 and 2019, according to the IMF. It had forecast growth of 7.3% in 2020 for the country – which has one of the world’s fastest expanding economies – but that figure will now be dramatically revised down.
The government now expects growth of 3.6% this year if the coronavirus emergency ends by June. The last time the economy expanded at less than 7% was during the 2011 civil war, in which an estimated 3000 soldiers and civilians lost their lives.
The country secured inward FDI of $913m during 2018 compared with $973m in 2017 and $577m in 2016, according to the latest figures from Unctad. In 2018, the total stock of inward FDI amounted to $10.2bn, while the number of greenfield investments by foreign investors was 32 in 2018, compared with 21 in 2017.
Abidjan is the country’s most important industrial and financial centre, with an urban population of 5.1 million, while Yamoussoukro is the capital city with 355,000 inhabitants.
On March 23, the Ivorian government announced a state of emergency because of the Covid-19 pandemic and imposed a curfew and travel restrictions on its population. It was not clear how long the partial lockdown would last.
“Since the civil war ended in 2011, the Ivorian economy has been booming,” says Aymeric Villebrun, chief executive officer at Société Générale Côte d’Ivoire, the country’s biggest retail bank. “The agriculture sector has benefited a great deal from foreign investment. In particular, investors have backed the production of cashew nuts, rubber and cocoa in a significant way. There has also been considerable investment in infrastructure, including roads, water systems and energy.
“It is still too early to quantify the impact of Covid-19 on the Ivorian economy this year but undoubtedly it will be pronounced. The country receives many inputs from China, and supply chains would have been broken. The Port of Abidjan is a significant contributor to the city’s economy and it will be suffering as well. We are already seeing our clients in the hospitality sector affected adversely in a very big way.
“However, the country has experienced many difficult periods in the past and I am certain it will be resilient this time around as well.”
Côte d’Ivoire produces 42.5% of the world’s cocoa, with annual production amounting to 2 million tonnes according to International Cocoa Organisation. It has more than 2.5 million hectares of cocoa – occupying much of the southern half of the country – and the industry accounts for 15% of the country's GDP and 40% of exports, according to government data.
It is estimated that Côte d’Ivoire has more than 1 million small, independent cocoa producers. The industry is highly attractive to foreign investors. In 2010, Olam International, the Singapore-based agricultural commodity trader, invested $43.5m in a 60,000-ton cocoa processing plant in Abidjan. In 2012, it announced plans to invest $201m in two cashew factories and another cocoa-processing plant in the country.
In December 2019, US food producer Cargill announced it was expanding by 50% its cocoa processing capacity at Yopougon, a suburb of Abidjan. The $100m investment will create 85 full-time local jobs and hundreds of indirect jobs.
“We aim to shift a greater share of our global grinding activities to the countries of origin, so we can support the establishment of a broader, local agri-food industry,” says Lionel Soulard, managing director Cargill West Africa.
Alassane Ouattara has been president of Côte d’Ivoire since December 2010, but is not standing for a third term in October 2020’s elections. Instead, the 78-year-old president and his Rally of the Republicans party are backing prime minister Amadou Gon Coulibaly as their candidate.
Mr Ouattara is credited with bringing political stability to the country and implementing a series of reforms that have reinforced economic growth. The government has made it easier to pay taxes by creating an electronic filing and payment system. It has also made it simpler to enforce commercial contracts by publishing reports on court performance and progress of cases.
Côte d’Ivoire is a member of the West African Economic and Monetary Union (Waemu), a bloc of eight, mainly French-speaking, countries that share a customs union and currency union, which was established in 1994. The eight countries use the CFA franc as their currency, which is pegged to the euro.
“Côte d’Ivoire has benefited from strong governance and leadership during the past 10 years,” says Joel Toure, chief executive officer at Stanbic Bank in Côte d’Ivoire. “The government has pursued a strong national development plan. Today, Côte d’Ivoire has a steady growth thanks to its diversified economy – mainly driven by the agricultural sector, services and mining, as well as oil and gas.
“I think there are huge opportunities for improved trade and investment in the Waemu region. A trade corridor already exists between Côte d’Ivoire and Mali, Burkina Faso and Niger but this should be further developed as a significant amount of those countries’ commerce passes through the Port of Abidjan.”
In July 2019, the governments of Côte d’Ivoire and Burkina Faso announced a $435m plan to upgrade 1260 kilometres of railway between Abidjan and the Manganese mining area of Kaya in the far north-east of Burkina Faso.
The modernisation is expected to expand freight traffic between the two countries to 5 million tonnes from a current 800,000 tonnes. New passenger trains, purchased from Swiss railway company Appenzeller Bahnen, should increase passenger traffic to 800,000 people a year from the current 200,000.
Côte d’Ivoire’s role as a hub for west African markets is underlined through the presence of several regional head offices. In 2019, Swiss Re installed its regional base in Abidjan, while Nestlé has located its regional R&D centre there since 2009. The city has also been home to the African Development Bank regional headquarters since 2014 and the headquarters of the International Cocoa Organisation since 2017.
Côte d’Ivoire was ranked 110th among 190 economies in the World Bank’s Doing Business survey for 2020, a rise of 12 places on the previous year. Transparency International ranked it 106 out of 180 countries in its Corruption Perceptions Index 2019. Evidently, the good news was coming thick and fast for Côte d’Ivoire. The Covid-19 pandemic, however, has the potential to unravel much of that good work.
This article first appeared in the April-June edition of fDi Magazine. The full digital version of the magazine is available here.