For many years, foreign investment in Côte d’Ivoire meant agricultural investment. Recently, though, out of a combination of necessity and ambition, that pattern has begun to change.

Historically, Côte d’Ivoire supplied nearly 40% of the world’s cocoa production, as well as substantial exports of coffee and essential oils – an agrarian economic model that was largely encouraged by the policies of president Félix Houphouët-Boigny (1960-1993). Consequently, any outlay of capital was implicitly tied to a substantial reliance on the vagaries of yearly crop forecasts and the inherent resourcefulness of Ivorians to draw rich bounty from their fecund patch of earth.

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Environment of change

Following a slide in coffee and cocoa prices that began in the 1980s, and coming on the heels of a March 2007 peace agreement seeking to bring an end to civil war, other sectors in Côte d’Ivoire are looking to grab the peace bull by the horns and definitively diversify the economy in an effort to remake the country into a multifaceted west African economic phoenix.

While the 2002-04 civil war – pitting soldiers loyal to president Laurent Gbagbo against a triumvirate of rebel groups known as the Forces Nouvelles – disrupted the country’s agricultural exchange, it by no means destroyed it. To this day, the government-controlled south still maintains access to ports at both the financial capital of Abidjan and the western city of San Pedro. Meanwhile, in the rebel-held north, cocoa harvested there is exported (or smuggled) via Togo, Guinea and other neighbouring nations. This continuing linkage with its outside trading partners, many hope, will help the country to diversify its economy if a genuine and lasting peace takes hold.

A free trade zone (FTZ) initiative is credited with helping to bring into existence the Village de Technologies de l’Information et de la biotechnologie (VITIB), a base for biotechnology, information technology and telecoms companies in Abidjan. VITIB was formed with 94% private ownership in November 2006.

Among VITIB’s duties will be the power to accredit public service licences to companies doing business in Côte d’Ivoire, a leeway that is hoped will significantly expedite the process of accreditation for investors, tenants and users of the FTZ. All administrative functions, service provisioning and infrastructure creation for the FTZ will also go through VITIB.

Knowledge-based economy

“We have decided to diversify the economy of Ivory Coast as a knowledge-based economy with the creation of the FTZ for biotechnology and IT,” says Vincent Gadou Kragbé, VITIB’s chairman and CEO, and a special adviser to Mr Gbagbo on economic issues (see interview page 9).

“In the era of globalisation, this is a symbol of our willingness and determination to be a force in the world. VITIB is participating in the reconstruction of the economy by implementing high-end infrastructures and by creating quality human resources for the enterprises on the park, and manpower for outsourcing within the Ivorian and African work force at large.”

It would appear Mr Kragbé’s confidence is not merely an idle boast. Among the number of major international companies that have set up shop in Côte d’Ivoire outside of agriculture in recent years are MTN Côte d’Ivoire (a subsidiary of South Africa’s MTN Group telecommunications concern), Uganda Telecom (UTL), which began operating out of Abidjan in 2006, Abu Dhabi-based Emirates Telecommunications Corporation (also known as Etisalat), and Thai building giant IBC Construction and Development Company.

And Léon Emmanuel Monnet, Côte d’Ivoire’s minister of mining and energy, recently led an economic delegation to the Jordanian capital of Amman to take part in a conference with the president of the Amman Chamber of Commerce, Haydar Murad. During the meeting, a ‘twinning’ agreement was signed between the Amman and Abidjan chambers of commerce. Speaking to reporters after the meeting, Mr Murad seemed confident of increased trade between the two countries.

Investment promotion

Nor is VITIB alone in its drive to promote the country as an attractive option for foreign investors. Other commissions, such as the Centre de Promotion des Investissements en Côte d’Ivoire (CEPICI) and the Association pour la Promotion de l’Exportations en Côte d’Ivoire (APEX-CI) have also sprung up, promoting investment and exports, respectively.

The Ivorian telecoms sector has also blossomed in the past decade (see page 12), helped along in no small part by the regulatory guidance of the Agence des Télécommunications de Côte d’Ivoire (ATCI), which was set up in 1998. The country’s GSM market penetration is about 27% – about five million of Côte d’Ivoire’s estimated 18 million population.

Perceived risks

Investment in the country has its risks, however. Some investors mention among their greatest concerns – aside from a possible return to violence – a strain of corruption that took root in the country during the war years and must be eradicated if Côte d’Ivoire hopes to see substantial economic progress. Suggestively, though, these apprehensions do not focus on the flood of new industries for which the country is priming itself, but rather the old standbys.

The cocoa industry has been a particular area of concern. In addition to the existing regulatory agency, four separate entities have sprung up since 2000, all with the stated aim of regulating the cocoa trade and supporting the country’s cocoa farmers but whose net effect has been a doubling of taxes on the product, with little accountability for how that money is spent.

“It’s more and more difficult to trade in an ethical way,” says an executive at Cargill West Africa (a subsidiary of the Minnesota-based multinational Cargill), one of the country’s largest cocoa exporters, in an interview in Abidjan. “We are lucky to be very big in the country, and very well-known to trade in an ethical way – I would say that we are more or less left alone, so we can more or less do business.”

Mr Gbagbo’s announcement in late October that the government had begun an investigation into possible corruption in the country’s cocoa trade was seen by some as a positive first step.

Free trade negotiations

When it comes to relations with foreign investors, though, the country that under Mr Houphouët-Boigny once proudly supported immigration of skilled and unskilled workers (from neighbouring African countries as well as Europe) to help its economic growth remains a distinctive voice in the debate on free and fair trade between Africa and its partners.

Côte d’Ivoire has carved out something of an iconoclastic position when it comes to negotiations between the 77 African, Caribbean and Pacific countries and the European Union. Currently under way are contentious discussions about the future of economic partnership agreements (EPAs) that relate to market access and development. The EPAs have been put forth as the successor to the Cotonou Agreement, which was signed in Benin in June 2000 and expires at the end of December 2007. Concerned at what they say are the exploitative terms of the EPAs, some African countries have suggested only signing parts of the agreements before the Cotonou Agreement’s expiry.

Close relations

Côte d’Ivoire forged a particularly vigorous and close relationship with its European and North American trading partners during the Houphouët-Boigny era, at a time when many newly-independent nations were shunning Western involvement. Its impetus for blazing its own path seems to have remained intact throughout its own recent turbulence.

Concluding two days of deliberations in Brussels in November, the Ivorian ambassador to the negotiations on EPAs, Agosset Marie, left the meeting early stating that Côte d’Ivoire was fully prepared to sign a comprehensive set of agreements with the EU even if other countries present were refusing to do so.

If good governance and political stability can come to mirror the country’s resource-rich landscape and industrious, entrepreneurial population, and if violence as a political tool can be put to rest, the country’s economy has its best chance for many years to blossom again.