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La Côte d’Ivoire: A race against time

By Olivier Monnier in Abidjan
Posted on Tuesday, 9 July 2013 10:28

“I hear people saying that the money doesn’t circulate. Be aware, however, that the money is working!” President Alassane Ouattara’s New Year’s Eve address was a call to Ivorians for patience. He promised them that they would see the results from the economic recovery in their daily lives.

Donors gave Côte d’Ivoire more than $4bn in debt relief, and $8.6bn for reconstruction

Ivorians, fond of teasing, were quick to point out how rhetoric and reality do not match up. But irony can hide pain. “The economic situation is the main source of concern for Ivorian people at the moment, coming well before the political divisions or reconciliation,” says Abidjan-based economist Souleymane Ouattara.

Official statistics are still patchy – a legacy of the ‘lost decade’ (2000-2010) under President Laurent Gbagbo. Unemployment, especially among young people, is at least 20 percent, and the cost of living is rising.

In January, the government increased the price of cooking gas and super petrol before backing off in response to popular discontent.

“Transport, daily life, university… everything is getting more expensive,” says Geoffroy, 25, an economics student at Université Félix Houphouët-Boigny. Teachers went on strike several times in the past few months demanding higher wages.

But even if the day-to-day struggle is still wrenchingly difficult for many, the Ivorian economy is slowly turning around. Prime minister Daniel Kablan Duncan said in late March that after contracting 4.7 percent in 2011 as a result of the political stand-off in 2010-2011, economic growth reached 9.8 percent in 2012, beating an earlier estimate of 8.6 percent.

Infrastructure spending is accelerating the catch-up effect. Public investment amounted to 13.7 percent of GDP in 2012. Work on the long-awaited third bridge spanning the Abidjan lagoon is moving forward, contractors have rehabilitated a substantial number of roads and Sino-hydro is building a $650m dam in Soubré.

Growth Spurt

Agriculture in the world’s largest cocoa producer is also driving growth. Reforms are paying off: prices paid to cocoa farmers have risen and quality has improved. While southern farmers are rushing into the rubber sector, production of cotton and cashew nuts is rising in the north.

The post-crisis recovery has also driven the Abidjan-based stock exchange to a five-year high. The market’s capitalisation jumped to 4.7trn CFA francs ($9.4bn) in February 2013, beating an October 2008 record of 4.6trn CFA francs. The bond market exceeded 1trn CFA francs on 18 April, compared to 523m in late 2009.

Sectors that still have a long way to go include hi-tech and telecoms. “Except for the big companies, the situation is complicated and there is still a lot to do,” says Frédéric Tapé, who manages an office for start-up companies in Abidjan. “But activities are on the rise,” he says.

The government needs to focus on the ‘social’ side of the economy by creating employment opportunities, says Souleymane Ouattara. “We have high growth that doesn’t create many jobs. An important step forward would be to adapt the education system to the needs of the market and retrain the generation of young people who were not properly educated during the 10-year political crisis,” he says.

Kablan Duncan said in May that the economy had created more than 1m jobs in the six months from May 2011, 90% of them in the informal sector.

The government predicts 9 percent growth this year and targets double digits from 2014. President Ouattara, a former deputy managing director of the International Monetary Fund (IMF), has made it clear his priority is the economy. He continues to say that he will make Côte d’Ivoire an emerging country by 2020.

The markets and donors seem to trust him. The IMF, World Bank and other donors gave Côte d’Ivoire more than $4bn in debt relief in 2012. Last December, donors pledged about $8.6bn – double the amount sought – to help finance the Plan National de Développement 2012-2015.

Foreign investors have been slow to re- turn, though the French group Bouygues announced a $2m investment in energy projects in early May. Corruption is a real concern, with 40 percent of government contracts awarded without public tenders according to unpublished statistics from the IMF and World Bank.

Businessmen are also worried about the security situation. “We look at what we can do and what we can’t do,” said Jean-Claude Schmidt, president of a French foreign trade advisory group, during an April meeting with French businessmen in Abidjan.

“Concerns over security and roadblocks that appear and disappear” can deter new investors from settling in the country, he said.

The situation has improved in the past two years, but pockets of instability remain. A series of attacks targeting the army occurred last year and led to a crackdown and claims of human rights abuses. The government blamed pro-Gbagbo elements in exile for the attacks, but they denied it.

Abidjan is getting cleaner by the day, and military checkpoints have almost disappeared. “Abidjan is the main focus because this is where public opinion is formed. But investments in other regions are insufficient,” says Rodrigue Koné, a sociologist at non-governmental organisation Freedom House.

The administration is slowly going back to the north, but the west remains volatile, as ethnic rivalries and land disputes are common.

In March, a dozen people died in attacks near the border with Liberia, prompting the government to announce an emergency security plan. These measures are likely to remain insufficient.

“The country is still sitting on a land issue time bomb,” explains a French diplomat. “People don’t trust the army in the west, and the government hasn’t done enough to fix the security issue,” he says.

Former warlords remain influential and ex-Forces de Défense et de Sécurité members – who fought for Gbagbo during the crisis – are still not fully integrated into the police and military.

Justice is also a major concern. The Commission Nationale d’Enquête issued a report last year blaming both sides for the killings. But while Gbagbo is at the International Criminal Court (ICC) in The Hague and 150 pro-Gbagbo supporters have been charged and imprisoned, few Ouattara supporters have been indicted.

This too may be slowly changing. In early May, a military court sentenced to prison two Forces Républicaines de Côte d’Ivoire soldiers for crimes subsequent to the crisis. Others are being tried, especially for extortion at roadblocks.

The ICC is also waiting for more cooperation from Ivorian authorities on the case of Simone Gbagbo, imprisoned in the north of the country. The ICC issued an arrest warrant for the ex-president’s wife in November 2012 for crimes against humanity.

Justice minister Gnénéma Coulibaly says Ivorian courts are capable of giving Simone Gbagbo a fair trial. He said no decision has been made yet about handing her to the ICC.

Dialogue Stalled

“National reconciliation is only virtual for the moment. Grudges are still in people’s hearts,” says a United Nations diplomat. The Commission Dialogue, Vérité et Réconciliation is likely to finish its two-year mandate this September without having taken concrete measures to bring Ivorians together.

Analysts say that its president, Charles Konan Banny, is largely using the position as a springboard for the 2015 presidential elections.

“Ouattara should really focus on reconciliation if he wants to get respected by the population. Many Ivorians still hold him responsible for all their woes,” says Florence, 42, a nurse.

Dialogue that could pave the way to reconciliation between the government and Gbagbo’s Front Populaire Ivoirien (FPI) has stalled, leading the FPI to repeat its 2011 election no-show in April’s municipal and regional elections.

In these elections independent candidates won most of the towns, which may be a setback for Ouattara. According to Christophe Kouamé, head of the Convention de la Société Civile Ivoirienne, “Ouattara made many pledges when he took power, but now he asks the population for time, saying the situation is more complicated. People don’t understand.”

Were Ouattara to deliver on political reconciliation, his economic transformation may have more time to work●

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