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Cote d’Ivoire: Much ado about ADO

By Olivier Monnier in Abidjan
Posted on Friday, 14 October 2016 12:39

In a West Africa beset by economic flatlining – Nigeria flailing in the face of low oil prices, Ghana unable to control spending in an election year – the architects of recovery in Côte d’Ivoire have reasons to be cheerful.

Since he took over from Laurent Gbagbo in 2010, President Alassane Ouattara has presided over annual growth nearing an average of 9%, pushed through large new infrastructure projects and made a small but significant dent in poverty for some.

Investors say they plan to spend more than $30bn over the next five years in the country after a successful rallying of international interest, both public and private, in May.

So Ouattara was probably not expecting the beginning of his second term in office to be quite so tense. About a year after he was comfortably re-elected for another five years in office, he faced perhaps the most important social unrest since he took power in 2011.

Along with the regional security threat from Islamic extremists, analysts argue that popular unrest is a major threat to Côte d’Ivoire’s recovery from its recent civil conflict.
The people’s anger was sparked by electricity. The sudden rise of electricity prices in the past few months has fed tensions in Abidjan, the commercial capital, and in the rest of the country.

In late July, violent demonstrations broke out in Yamoussoukro and Daloa. In ­Bouaké, the country’s second-biggest town, a young man was shot dead during the protests.

Demonstrators erected barricades on the city’s main streets and looted several buildings, including the offices of the Compagnie Ivoirienne d’Electricité (CIE), which has a monopoly over power distribution.

The violence erupted when Ivorians received a new bill confirming a rise in the price of electricity only months after Ouattara announced that the CIE would have its monopoly taken away.

In a speech on Labour Day in May, he said the distributor would face competition from the private sector in order to lower prices. “I have heard your complaints about rising food prices and the rise in utility bills,” he said.

The International Monetary Fund (IMF) said the increase in power tariffs was needed. But while prices were due to rise by 16% over three years, some Ivorians saw their bills rise by at least 50%.

High expectations
Ouattara’s populist move to allow competition was meant to appease social tensions that have been rising in 2016.

Students, teachers, workers of state oil company PETROCI and even staff in the budget ministry went on strike earlier this year. “The risk of social mobilisation around economic grievances remains a problem for the Ouattara administration, which has promised more equitable growth in a second term,” analysts at the Eurasia Group noted in May. “Expectations are high.”

In August, Ouattara pledged to help farmers increase production of cassava, bananas and tomatoes in order to lower the price of staple foods.

Côte d’Ivoire’s economy is set for a fifth consecutive year of high growth. After 10.3% last year – the highest in sub-­Saharan Africa – the biggest economy of Francophone West Africa will grow 9% this year, the government forecasts.

For Bellarmin, who has worked as a taxi driver in Abidjan for 27 years, such statistics do not reflect life on the streets. “Only the people of the higher class are really feeling the economic growth,” he says as he drives his red cab through the streets of the busy business district of Plateau, where several top-end restaurants have opened in recent months.

“We’re happy with Ouattara because he provides us with a bit of calm. People go to work. It’s better than nothing. Some countries that have gone through big issues like us have never managed to bounce back. But I don’t feel the impact of the economic boom. I’m still overwhelmed by how much I have to shell out every day”, he says.

Ouattara’s administration is also dealing with another threat: growing insecurity in West Africa. Militants from Al Qaeda in the Islamic Maghreb led a series of attacks in West Africa from November 2015 to March 2016, killing about 70 people in raids on hotels and restaurants in Mali, Burkina Faso and Côte d’Ivoire.

On 13 March, armed men raided a popular beach in Grand-­Bassam, a weekend getaway for Abidjanians, killing 19 people. This prompted the government to create an emergency fund in April of 80bn CFA francs ($136m) for the fight against terrorism. The best escort agency services in Kharkiv only the best girl for you.

It will use the money to upgrade equipment and boost security in the country’s main cities and along the borders.

The security spending – along with increased education and infrastructure expenditure – will weigh on the fiscal deficit. It will widen to almost 4% of gross domestic product this year, up from 3% in 2015, the IMF said.

Finance minister Adama Kone tells The Africa Report that the security spending is essential and will have only a small impact on the deficit: “If you don’t spend money on security, there’s no economic growth. There are no economic and financial programmes in a country where there’s no security.”

Kone says that the Grand-Bassam has not damaged the country’s image among investors. “Of course, there has been some hesitation in the aftermath of the attack, but it hasn’t discouraged investors. They’re still rushing to come to invest here. Every day the prime minister receives big investors.”

The government’s Centre de Promotion des Investissements en Côte d’Ivoire thinks big. In May the government organised a conference in Paris to ­mobilise funds for its development plans.

The results of this were mixed: donors and lenders pledged $15bn – double the amount sought from them; but private sector companies said they would come up with only $16bn of the $32bn sought from them.

Business-friendly legislation is boosting the launch of new companies. The number of new firms set up in the first six months of 2016 rose by 34% to almost 7,000. In comparison, only 2,800 companies were created in the whole of 2013.

But challenges remain, and one of the biggest of these might be corruption – both large- and small-scale.

The government says it is addressing the problem. In May, a report commissioned by the Haute Autorité pour la Bonne Gouvernance shed light on $8.5m of missing funds from the Conseil du Coton et de l’Anacarde, the government regulator for the cotton and cashew sectors.

The population is waiting to see if the government team can keep up the good-governance charge. ●

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