Studii economice Coface
Cote d'Ivoire

Cote d'Ivoire

Population 24.3 million
GDP 1,466 US$
B
Country risk assessment
B
Business Climate
Change country
Compare countries
You've already selected this country.
0 country selectat
Clear all
Add a country
Add a country
Add a country
Add a country
Compare

Synthesis

major macro economic indicators

 

 

  2016 2017 2018(e) 2019(f)
GDP growth (%) 8.2 7.8 7.4 7.0
Inflation (yearly average, %) 0.7 0.8 0.6 1.4
Budget balance (% GDP) -4.0 -4.2 -3.8 -3.2
Current account balance (% GDP) -1.8 -2.1 -2.7 -3.1
Public debt (% GDP) 47.8 46.8 48.3 47.3

(f): forecast

STRENGTHS

  • Diversity of resources: hydrocarbons, ores (gold, copper, iron, manganese, bauxite) and agricultural wealth (world’s largest producer of cocoa, coffee, sugar, cashew nuts)
  • Infrastructures undergoing modernization
  • Improving the business climate and governance
  • Strengthening political stability

WEAKNESSES

  • Economy dependent on weather-related hazards and cocoa price evolution, main export product
  • Gaps yet to be filled in public financial, infrastructure and the business environment management, despite the progress that has been made
  • Slow progress on national reconciliation

Risk assessment

Robust growth, despite a gradual decline

As the post-political crisis catching-up effect of 2011 fades, growth is expected to continue to decline in 2019. Nevertheless, it will likely remain strong, thanks to investments. The construction, transport, and energy sectors are expected to continue to grow robustly, driven by public investment in major infrastructure works under the Second National Development Plan (PND 2016-2020), such as the expansion of the autonomous port of Abidjan, which will continue. Improvements in the business climate and increased use of PPPs should help support private investment, particularly in transformative industries (notably agro-industry) and services (telecommunications). Growth in the tertiary sector will also be driven by private consumption, which, although declining, is expected to remain vigorous. Despite the likely progress in industrial exports, the contribution of the trade balance is expected to suffer from the difficulties of the cacao sector, whose revenues represent more than 40% of total exports. Indeed, after two difficult seasons in the wake of the fall in cacao prices in 2016-2017 and marked by the judicial liquidation of one of the country's main exporters (SAF-Cacao), the fight against the cacao swollen shoot virus and the policy of cutting down sick cacao trees will likely result in a drop in production during the 2018-2019 cacao season.

 

Further fiscal adjustment, deterioration of the current account deficit

In 2019, continued adjustment efforts to reach the WAEMU convergence criterion level of 3% of GDP in 2019 should allow for a reduction in the budget deficit, which notably widened in 2017 due to difficult socio-economic conditions (lower cacao prices, bonus payments to meet social demands). Achieving this objective will require, in particular, increased mobilisation of tax revenues; the gradual withdrawal of tax exemptions, the reinstatement of the cocoa registration fee, the introduction of a tax on cashew nuts, and increasing VAT revenues are some of the measures undertaken to achieve this. The acceleration of tax and customs administration reforms should also improve tax revenues. These measures would be accompanied by efforts to contain the wage bill and public investment, including the incorporation of PPPs in the public investment programme from 2019. Tax system reforms will continue to be supported by the IMF through the three-year Extended Credit Facility (ECF) and Extended Fund Facility (EFF) programmes in which the country has been engaged since late 2016. The level of public debt remains moderate – below the WAEMU standard of 70% – and sustainability and liquidity indicators point to a moderate risk of over-indebtedness.
The current account deficit is expected to deteriorate in 2019 in the wake of the deterioration in the trade surplus. The latter is expected to suffer mainly from a decline in cacao exports and, above all, from the growth of consumption and investment imports, driven by dynamic domestic demand. Relatively stable deficits in the service, transfer, and income accounts will continue to tip the current account into the red. Despite this deterioration, project loans and FDI should make it possible to finance this deficit.

 

The political scene mobilized by the 2020 presidential elections

While the smooth re-election of President Alassane Ouattara in 2015 showed some normalisation of the political climate after the violence that followed the 2010 election, the country's political stability is showing some signs of fragility as the 2020 elections approach. Ambiguous statements about Mr Ouattara's intentions to run for a third term (which is in principle prohibited by the 2016 Constitution) have provoked strong reactions and are fuelling tensions around the President's succession, despite the subsequent denials. The withdrawal of the Parti démocratique de Côte d'Ivoire and its leader, former President Henri Konan Bédié (1993-1999) from the Rassemblement des houphouëtistes pour la démocratie et la paix, the unified party launched in July 2018 by Alassane Ouattara in view of the presidential elections, notably highlights the intensification of political infighting. In August 2018, the release of Simone Gbagbo, Vice President of the Front Populaire ivoirien and wife of former President Laurent Gbagbo (2000-2010; still in ICC custody at the time of writing), revived her party's ambitions, meaning the 2020 presidential elections will effectively be a battle between the three political forces that have been fighting for power for the past three decades. At the same time, while part of the population considers that they are not receiving the dividends of the country's robust growth since 2012, army mutinies and the numerous civil servants' strikes that broke out in 2017 indicate that the social climate is tense. The events of recent years are reminders that post-2011 national reconciliation is still ongoing.

 

Last update: february 2019

Sus
  • Romanian
  • English