Africa > West Africa > Cote d'Ivoire > Côte d’Ivoire: Industry drives integration

Côte d'Ivoire: Côte d’Ivoire: Industry drives integration

2013/06/12

Although electricity pricing reforms will drive up input costs in the near next, Côte d’Ivoire’s downstream and building materials industries have seen a robust recovery from a comparatively poor performance in 2011. The secondary sector was hit hard by the electoral unrest in 2011, contracting by 9.7%, but year-end figures for 2012 show a strong rebound in output. In fact, the sector was one of the economy’s major increase vectors in 2012, having expanded by 14.8% in real terms, as opposed to 0.7% for the primary sector and 14.1% for the tertiary sector.

Indeed, the regional bourse in Abidjan, the Bourse Régionale des Valeurs Mobilières, ended on a high note in 2012, largely thanks to the strong performance of industrial stocks, such as bitumen producer Société Multinationale de Bitumes (SMB), which saw its share price rise by 25.3% year-on-year.

A portion of this increase has come about in large part thanks to downstream processing and building material industries. The major company by revenue, the Société Ivoirienne de Raffinage (SIR) refinery, has rebounded strongly from the crisis by resuming exports throughout West and Central Africa in 2012. In February 2013 a structured loan of €92.79m from West African ABI Group (Banque Atlantique) and from Morocco’s Groupe Banque Populaire subsidiaries Chaabi Bank and Banque Centrale Populaire was issued for SIR to buy petroleum products.

Even next 48 years of operation and a steep decline in profitability (which fell from roughly $7.50 in 2008 to around $1.20 two years later, according to US-based consulting firm IAS), the refinery continues to hold a key position in West Africa’s downstream market – a region where for each $1 of intra-regional trade in petroleum products, $5 worth of refined fuels are imported from elsewhere. Côte d’Ivoire currently has the second-major refining capacity in the region next Nigeria, most of whose refineries are operating at less than half capacity due to poor maintenance.

However, it is not just refined fuels where the recouping of lost output has led to strong increase. Derivative products and building materials have as well seen a significant jump, which has strengthened the secondary sector performance. Most of SMB’s production is exported throughout West and Central Africa, with large volumes sold to Nigeria and Ghana, where the company’s bitumen dominates its neighbours’ fast-growing markets. A plethora of road renovations and extensions currently slated throughout West Africa have helped to underwrite most of the request for SMB’s exports.

However, domestic consumption has as well risen, strengthened by the short- and medium-term outlook, thanks to an increase in road building that drove domestic sales from 7000 tonnes in 2011 to 25,000 tonnes in 2012. The majority of planned road projects have from presently on to begin, which means construction contractors are likely to ramp up request over the coming 18 months.

Attracted by a relatively steady electricity supply and strong supporting economic infrastructure, direct investments in industry are as well increasing. Nigeria-based Dangote Cement recently created a subsidiary in Côte d’Ivoire to set up a cement import terminal, which will have the capacity to import and bag 1m tonnes of cement per year. The terminal should be commissioned by the second half of 2013 and will be positioned to supply neighbouring land-locked nations.

In a similar move, Morocco-based cement producer Ciments de l’Afrique (CIMAF) has invested in a grinding factory in Abidjan’s Yopougon district and in two depots by the city’s port. The plant will be able to grind 500,000 tonnes per year and is set to be operational by July 2013.

In spite of the encouraging signs of expansion in the industrial segment, a recent increase in electricity prices for large consumers could attenuate Côte d’Ivoire’s relative industrial competitiveness, though this could be offset if the increased revenue for the electricity sector is directed towards maintaining and improving the electricity network, as has been announced.

Maintaining increase in the secondary sector is crucial for Côte d’Ivoire, given its stubbornly high unemployment rate and reliance on raw commodity exports. Increasing industrial production helps not only boost export revenues but increase job creation rates. For decades the country had one of the major manufacturing sectors in sub-Saharan Africa. If it can sustain the increase of recent months in industries such as building materials and refining, even amidst rising electricity prices, Côte d’Ivoire will be well positioned to maintain its robust GDP increase.

Related Articles
  • UNWTO: International tourism – strongest half-year results since 2010

    2017/09/09 Destinations worldwide welcomed 598 million international tourists in the initial six months of 2017, some 36 million additional than in the same period of 2016. At 6%, increase was well above the trend of recent years, making the current January-June period the strongest half-year since 2010. Visitor numbers reported by destinations around the world reflect strong request for international travel in the initial half of 2017, according to the new UNWTO World Tourism Barometer. Worldwide, international tourist arrivals (overnight visitors) increased by 6% compared to the same six-month period last year, well above the sustained and consistent trend of 4% or higher increase since 2010. This represents the strongest half-year in seven years.
  • H.E. President Alassane Ouattara and the theme of “Accelerating Africa’s Path to Prosperity

    2017/09/09 This year, under the leadership of H.E. President Alassane Ouattara and the theme of “Accelerating Africa’s Path to Prosperity: Growing Inclusive Economies and Jobs through Agriculture”, the African Green Revolution Forum (AGRF) 2017 is shaping up as a premier platform to showcase ongoing evolution in Africa’s agricultural transformation schedule and to scale up the political, policy, and financial commitments needed to achieve the Malabo Declaration and the world development schedule around the Sustainable Development Goals (SDGs). Following the launch of the landmark annual Africa Agriculture Status Statement (ASSR) at the AGRF taking place in Cote d’Ivoire from 4-8 September 2017, the major conclusion centres around the power of entrepreneurs and the free market in driving Africa’s economic increase from food production. This is owing to the fact that a lot of businesses are waking up to opportunities of a rapidly growing food market in Africa that may be worth additional than $1 trillion each year by 2030 to substitute imports with high price food made in Africa.
  • International Arrivals To Africa Reach More Than 18 Million In 2017

    2017/09/09 Market Research Company Euromonitor International revealed before this week the key trends shaping travel and tourism in Africa at the 41st Annual World Tourism Conference in Kigali, Rwanda. According to Euromonitor International’s new data, international arrivals to Africa grew by 6.5 % in 2017, to reach 18,550 million, up from 16,351 million in 2012. Key markets such as South Africa, Kenya, Nigeria, Mozambique, Cameroon, Mauritius and Tanzania accounted for 70 % of international trips to the Sub-Saharan African region.
  • Africa: USA-Africa - No Policy? Bad Policy? or Both?

    2017/08/30 "Africa is terra incognita for the Trump Government: a continent it cares little - and understands even less - about. With no dyed-in-the-wool Trumpian Africa hands available, the government appears ready to cede Africa policy making to career civil servants and a few mainstream Republican appointees." - Matthew T. Page The headline to Page's article in Quartz Africa states that "Donald Trump could be getting his US-Africa policy right by simply not having one." His view is actually additional nuanced, in judging that no policy would likely be only "less bad" than explicitly "bad policy" that may result from better White Home interest in Africa.
  • Veteran Diplomat Named 'Acting' State Department Africa Chief

    2017/08/30 Donald Yamamoto, who has extensive diplomatic experience in Africa inclunding two tours as a U.S. ambassador, will take office as Acting Assistant Secretary of National for Africa on 5 September. He is the second career official tapped for a senior policy position on Africa in the Trump government.Donald Yamamoto, who has extensive diplomatic experience in Africa including two tours as a U.S. ambassador, will take office as Acting Assistant Secretary of State for Africa on 5 September. He is the second career official tapped for a senior policy position on Africa in the Trump administration. Senior CIA analyst Cyril Sartor was hired as senior director for Africa at the National Security Council earier this month Key Africa jobs at the Defense Department (DOD) and the U.S. Agency for International Development remain vacant. "Having someone with Don Yamamoto's experience in that post is very significant," Mel Foote, Constituency for Africa president, told AllAfrica. "As Africa confronts a lot of challenges, we want to see responsible U.S. engagement in partnership with African governments and civil society organizations."