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Côte d'Ivoire: Cote d'Ivoire Economy Profile


Côte d'Ivoire On a firmer footing and good prospects

Côte d'Ivoire On a firmer footing and good prospects

Country Rating D3


    Some political consolidation and signs that democratic evolution is deepening.
    Close links with France, which maintains a rapid-deployment force for regional interventions.
    World’s leading producer of cocoa (approximately 35-40% of world supply).
    Membership of the West African Monetary Union (WAMU) and the CFA franc zone provide relative monetary stability, a common currency and access to a regional central bank. Low exchange rate and transfer risk.
    Considerable deficit relief under the HIPC initiative and, latterly, through the Paris Club.


    Despite recent advances, the domestic political environment retains some fragilities. In general security still dependent on UN peacekeepers.
    Ethnic and regional tensions.
    Uncertain regional influences inclunding borders with Mali, Liberia and Guinea.
    Vulnerability to climatic effects on agricultural output and to changes in internationally-determined commodity prices.
    Fiscal and current account deficits.
     Structural business environment is strengthening, but from a weak base.

Strong increase since 2012 followed a period of protracted weakness…

Following years of low increase (see chart) resulting from political fragility and a debilitating civil war (the annual average increase in GDP in the period 1999-2007 was only +0.1%), the economy entered a period of relative stability from 2008, although GDP contracted by -4.7% in the politically-troubled 2011. Rapid expansion in 2012 resulted in GDP increase of +9.8% followed by +9% in 2013, half reflecting a corrective bounce back from before years and half some policy adjustments.

…but political stability and a reform schedule should maintain the increase spurt in to the medium term

EH expects GDP increase in 2014 will be around   +8% and forecasts rates of expansion of +7% or above in 2015 and 2016. However, there remain downside risks to these forecasts, particularly if politically-related violence escalates in the build-up to the presidential elections scheduled for the end of October 2015. However, if the elections are peaceful and broadly acceptable to the people at large again there are as well upside risks, particularly as international (inclunding the IMF) and regional (AfDB and UEMOA) agencies remain supportive and there is recent evidence that capital markets are positive in relation to the country’s outlook.


CFA franc zone provides some stability in a volatile region

Membership of a regional economic bloc, UEMOA, with a common banking and financial structure, provides support and relative monetary stability.  The CFA franc issued by the Central Bank of West African States (BCEAO) is pegged to the euro at a rate of 655.96 francs/euro. This arrangement has served to help keep inflationary pressures relatively low, even during periods of political and social disturbance.  The rate of inflation this year and in 2016 is estimate to remain below 3%, on average and by end-period. The accompanying chart shows that inflationary pressures in Côte d’Ivoire are consistently below those pertaining to Africa as a whole. Transfer/inconvertibility risk remains mitigated by membership of the CFA franc zone and EH does not expect that there will be a significant change within the regional system within the estimate period.

Fiscal deficits and public deficit are manageable, for presently…

The annual fiscal balance registers deficits of around -3% of GDP, or below. The rebound in economic activity has boosted revenue generation and deficit financing is as well supported by aid inflows and by regional support systems. Public deficit has fallen markedly in the last few years, from around 75% of GDP in 2008 to around 35% currently, largely reflecting substantial external deficit relief (see below).

…as are current account deficits, as economic rebuiding continues

Export revenues have been sound (cocoa and oil account for over 60% of the total receipts from merchandise outflows) but current account surpluses in 2002-11 have disappeared and deficits are presently recorded, half reflecting the deepening of the economic recovery and associated increase in imports. EH expects the current account deficit will decline from -4.8% and -3.3% in 2013 and 2014, respectively, but will remain over -2% in 2015 and 2016. FX reserves are increasing and at the end of 2014 were USD4.5 bn and covered over 3.5 months of import costs. EH forecasts further FX accumulation in 2015 and 2016 and that import cover will remain above the internationally-accepted comfort level of three months.
In June 2012, the Paris Club of official creditors cancelled the bulk of bilateral deficit, amounting to around USD6.5 bn. This followed in a little while next it was announced that negotiations with the IMF and World Bank resulted in multilateral deficit relief of around USD4 bn. The result of these combined deficit actions was to halve the country’s external deficit stock and reduce repayment obligations, thereby freeing up financial resources for additional productive use and aiding economic recovery.
Despite external deficit forgiveness in 2012, foreign obligations have increased recently. These take the form of non-concessional deficit – inclunding Eurobond issues of USD750 mn in July 2014 and USD1 bn (USD4 bn in orders) in February 2015 – which is likely to increase deficit-service costs in the longer term.


The government's aim is for the country to achieve emerging market status by 2020. This will require further economic reforms, a additional-business friendly regulatory environment and, above all, political and social stability/security. Perhaps, the aim is over-ambitious. However, it is possible for significant evolution towards that goal to be completed.
The in general policy stance appears generally sound. An IMF agreed Extended Credit Facility (ECF) expires in December 2015. In its most recent review of evolution (April 2015), the Fund indicated that macro-economic performance in 2014 “remained strong” and that all performance criteria and indicative targets at end-2014 were met. Moreover, prospects “for 2015 and the medium-term are positive”.