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Posted on Monday, 23 November 2015 10:00

Cote D'Ivoire Country Profile 2015: Polls test the post-conflict peace

By The Africa Report

altLess than a year before next presidential election – the first one since the 2010 turmoil – Côte d'Ivoire presents a contrasting picture: while the economy is booming, particularly thanks to public investment in infrastructure projects, reconciliation is more rhetoric than reality.

Without major opposition, President Alassane Ouattara is set to win the October 2015 vote. Côte d'Ivoire's economy is bouncing back three years after the end of a decade-long political crisis.

Once West Africa's economic locomotive, Côte d'Ivoire aims to rebuild itself. President Ouattara has pledged $19bn for investment in infrastructure projects. This includes rehabilitation of roads, construction of a third bridge spanning Abidjan's lagoon, a highway linking Abidjan and the political capital Yamoussoukro, expansion of the country's main ports and energy projects.

The state's budget has risen nearly 50% in the past three years to 5.1trn CFA francs ($9.9bn) in 2015 thanks to increased tax collection on the back of a surge in cocoa and cashew-nut production.

Wages get a boost

Many Ivorians complain they are not seeing the fruits of this growth in their daily lives. Some progress has been made for workers though. As part of a vast reform of the cocoa industry, the government has set up a minimum guaranteed price for farmers.

The government raised the farm-gate price for cocoa to 850 CFA francs, up from 750, in October 2014. The minimum wage for workers in the formal sector and civil servants was nearly doubled to 60,000 CFA francs a month in November 2013.

Agriculture is the principal driver of economic growth. The country reported record cocoa production for the 2013/2014 season, which ended in September 2014. While farmers produced 1.7m tonnes of cocoa in that season, early predictions for the 2014/2015 season were in the region of 1.6m tonnes. Growth is set to continue elsewhere.

altThe finance ministry estimates that cotton production will rise to 480,000tn in 2015, up from 417,000tn in 2014. It predicts that cashew production will reach 610,000tn in 2015, up from 555,000tn in 2014.

The agriculture sector has not been affected by the outbreak of Ebola in West Africa, in part due to the weakness of intra-African trade in the region.

Unemployment remains a major issue. According to the International Monetary Fund, employment in the formal sector rose by 5% in 2013, but jobless people still account for at least 20% of the working-age population.

Inflation remains moderate, mostly due to the role of the CFA franc. The single currency for West Africa's eight-country economic and monetary bloc is pegged to the euro.

To tackle unemployment, the Ivorian government launched a $300m programme in 2014 to support small and medium-sized enterprises (SMEs), which account for most of Côte d'Ivoire's formal economy. The programme will help SMEs to access credit and aims to create 70,000 SMEs and 600,000 jobs in six years.

Mixed results

Côte d'Ivoire successfully returned on the international market – after defaulting in 2011 amid the post-election crisis – by is- suing a $750m eurobond in July. The debt was more than six times oversubscribed. It has been less easy to raise money locally, however.

The regional bourse hosted a 120bn CFA franc bond issue in May that was largely undersubscribed, and four of five rounds of treasury bills issued by the regional central bank raised less than expected.

Côte d'Ivoire sought to raise 810bn CFA francs locally in 2014. Despite the country's impressive growth figures, some investors have appeared reluctant to commit. This is changing.

Public investment has supported growth in the past three years, but private investment is on the rise and reached 20% of gross domestic product in 2013, up from 8% in 2011. French retailer Carrefour will open its first store in sub-Saharan Africa in Abidjan in 2015, while Standard Bank, Africa's largest lender, also aims to open a branch and make Côte d'Ivoire its West Africa hub.

One thing preventing some companies from investing in Côte d'Ivoire is the business climate. The authorities have set up commercial courts and revived the competition commission but there is much more that could be done.

An audit reviewing no-bid public contracts granted between 2011 and 2013 revealed abuses in how these contracts were awarded and executed. The audit showed that 95% of them should have been tendered.

The government repeatedly said no-bid contracts were used due to the urgent need to rebuild. Untendered deals surged to 57% of Côte d'Ivoire's public procurement by value in 2013 but dropped to less than 10% in the first half of 2014. Other investors are waiting to see how the next election will unfold.

President Ouattara is seeking re-election, and he is strongly favoured to win. Former head of state Henri Konan Bédié, leader of the Parti Démocratique de Côte d'Ivoire (PDCI), which backed Ouattara's Rassemblement des Républicains in 2010 and is part of the ruling coalition, has called on his supporters to vote for Ouattara in 2015.

That endorsement came earlier than expected and will boost Ouattara's chance of securing victory.

Party divisions

Bédié's support is likely to exacerbate divisions in the PDCI and may lead to some defections, especially from the youth wing, which seems to be willing to present a candidate. Kouadio Konan Bertin, leader of the PDCI's youth wing, insists that the party's goal should be to win the election and exercise power.

Such divisions may be used by the Front Populaire Ivoirien (FPI), former ruling party of ex-president Laurent Gbagbo, now detained at The Hague's International Criminal Court (ICC) on charges of crimes against humanity.

But the FPI is itself facing huge divisions between the hardliners of the Gbagbo-or-nothing camp, who include Laurent Akoun and Alphonse Douati, and the moderates like party president Pascal Affi N'Guessan.

altIn September 2014, the FPI withdrew from the electoral commission, saying the composition is unbalanced and its president Youssouf Bakayoko, whose mandate has been renewed, is illegitimate. The party had agreed to participate in the commission in August 2014 but changed tack.

Although the party has not taken any official position, analysts say the FPI is likely to boycott the 2015 vote. Such conditions may reassure investors, but they are not likely to help bring legitimacy to Ouattara.

The security situation keeps improving and many Gbagbo loyalists have been released from detention in the past year, but the government is regularly accused of pursuing victor's justice. No Ouattara supporters have been charged so far for crimes committed during the fight against Gbagbo.

The ICC insists it is investigating crimes committed by all sides in the conflict. Political dialogue in the country has stalled. The Commission Dialogue, Vérité et Réconciliation started public hearings in September 2014 to general indifference.

N'Guessan's camp might be persuaded to participate in the upcoming election if the government were to facilitate the return of those in exile and unblock frozen money in certain FPI militants' bank accounts.

The government has refused to send Gbagbo's wife Simone to The Hague and postponed her trial and that of 82 others, for threatening state security, in October 2014. N'Guessan argues that the trial is politically motivated and designed to harm the opposition ahead of the upcoming polls.

The government did not announce when the case will proceed, but it is likely to add to tensions between the FPI and the Ouattara government in 2015.

The priority of privatisation

Motivated by President alassane outtara's support of free-market principles, Côte d'ivoire is planning to sell some of the stakes it owns in about a dozen companies for an estimated 32bn CFa francs ($64m).

The targeted companies are in the sectors of finance, agriculture, mining and telecommunications, and have often struggled to turn a profit.

A few banks are part of the privatisation plan, including Banque Internationale pour l'Afrique de l'Ouest en Côte d'Ivoire and Société Ivoirienne de Banque, which is 51% owned by Morroco's Attijariwafa bank and 49% by the ivorian state.

Stakes in Côte d'Ivoire Telecom – 48% owned by the state and 51% by France's orange – and the Ity gold mine – 65% owned by Canadian miner La Mancha Resources and 25% by the government – are part of the plan of privatisations.

In September, the telecoms ministry called for the fusion of Côte d'ivoire Telecom and Orange Côte d'Ivoire.

For the companies majority owned by private operators, the plan is to sell the state's shares to Ivorian investors and the companies' employees through the Abidjan-based regional stock exchange.

These privatisations were scheduled for the first half of 2014 but have been delayed. the plan may soon include other companies, the government says.

 



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