When the IMF wrapped up its most recent assessment mission to Côte d’Ivoire at the end of March 2019, the economic news to come out of the delegation was mostly breezy.

With growth of 7.4% in 2018 and subdued inflation, the west African country’s prospects appear good. It has, after all, been cited among the fastest growing economies in the world every year for most of the past decade.


However, Côte d’Ivoire’s present is bookended by an unstable past and an uncertain future, both of which percolate below the placid surface presented by its topline economic figures. These could come to a head as the country heads for hotly contested presidential elections in 2020.

Recent political developments are giving investors pause for thought. “I think that for investors, the forthcoming presidential election is the big, hot issue,” says Maja Bovcon, senior African analyst at risk firm Verisk Maplecroft. “You don’t see them holding back investment, but there is a wait-and-see attitude. For companies that are already there, they’ve been there for a long time and they are adapted.” 

However, she adds: “They are certainly more worried than they were a year or two ago”.

On a knife edge

Two recent political developments stand out. First, at the end of 2018 the long-term coalition between the parties of current president Alassane Ouattara and ex-president Henri Konan Bedie fell apart. The alliance, first formed during the 2010 elections, involved an understanding that following Mr Ouattara’s triumph in 2015, he would support a candidate fielded by Mr Bedia in 2020.

Following a win for the alliance in October 2018 local elections, Mr Ouattara now appears to be positioning himself for a third term in office following the split with Mr Bedie. He surprised many observers in 2018 when he claimed a new constitution adopted in 2016 allowed him another term in office. Côte d’Ivoire has a two-term limit for presidents, but the president implied the previous two should not count.

Then, in January, the International Criminal Court in the Hague released former president Laurence Ggagbo. The acquittal took many observers by surprise; Mr Ggagbo was facing charges for crimes against humanity, including murder and gang rape, for his role in the post-election violence that hit the country in 2011.

While Mr Ggagbo has not yet announced any formal political intentions, his release opens up the possibility that he could seek to compete in the 2020 elections. “The Ggagbo acquittal is a very bad omen,” says Ms Bovcon.

Investor questions

“Côte d’Ivoire has had this huge economic and investment boom in the past four to five years; a lot of that predicated on the fact that this is a country that was hugely politically unstable for a decade, then was brought together,” says John Ashbourne, senior emerging markets economist at Capital Economics.

This political shift “underpinned the second Ivorian [economic] miracle. Anything that causes investors to question this, whether the upcoming presidential elections or the acquittal of Mr Ggagbo, will be seen very negatively”, adds Mr Ashbourne.

Some of the momentum could be credited to the solid foundations that had been laid in decades prior to the country’s civil unrest. “Infrastructure was not maintained but it was quite well advanced compared with its neighbours, and the country had traditionally played the role of economic hub for the whole West African Economic and Monetary Union currency union,” says Mr Ashbourne.

Because of this, once order was restored, Côte d’Ivoire was “not like what would happen in the Democratic Republic of Congo, where there is nothing to start from – this was more like getting back up to speed. It was much easier [for the country] to jump back on the path of rapid development that it had been on in the 1970s and 1980s,” adds Mr Ashbourne.

FDI boom

In 2018, according to investment monitor fDi Markets, greenfield FDI into Côte D’Ivoire hit $1.6bn – its highest level since the commodities crash of 2015.

The country remains heavily dependent on the cocoa industry, however. Raw cocoa beans accounted for 37% of all exports in 2017. As a result, fluctuations in the price have an outsized impact on the economy. Cocoa paste and cocoa butter only accounted for 16% of exports in 2017, and processed chocolate just over 1%, despite government efforts to increase domestic processing capacity for the country’s most important commodity.

While over the past 15 years investment in coal, oil and gas has garnered the most investor interest, in 2018 foreign investors focused on warehousing, communications and building materials in line with Côte d’Ivoire’s continued ambitious investment in construction and infrastructure.

The lacklustre showing in energy sector investment points to another potential weakness in the economy. Despite years of drilling, Côte d’Ivoire’s oil concessions have yet to yield a big find. Energy investors are “waiting for a big discovery, because drilling has been disappointing in the past year or two,” says Ms Bovcon.

Oil hopes

Côte d’Ivoire was late to develop its energy sector despite being situated on the oil and gas-rich Gulf of Guinea, preferring to focus instead on developing the country’s agricultural sector. Since 2016, the government has been pushing for more investment into energy. Following the settlement of a maritime border dispute with neighbouring Ghana, Tullow Oil – the biggest operator in Ghana’s vast deepwater Jubilee oil fields – acquired a new block from Côte d’Ivoire to explore.

Of the 48 oil blocks the country has demarcated, 24 are being explored and only four are in production. The country produces some 50,000 barrels per day, a fraction of the 200,000 pumped every day in Ghana.

Despite the fact that there has not yet been a blockbuster find, the government remains undeterred. It plans to license a further six blocks by June 2019, saying it is in talks with French and Italian oil majors keen to expand their operations in west Africa.

Political uncertainty, however, will lean heavily on all of these decisions. “Mr Ouattara has hinted he will run. My assumption is if he runs he will win, but his alliance is fracturing. It really is too soon to tell,” says Mr Ashbourne.