Economically, Ivory Coast currently seems to be the land of good news especially in West Africa where Ebola in Liberia, Guinea and Sierra Leone and Boko Haram in Nigeria have dominated the headlines.
But the headlines off Ivory Coast have been tremendously good, bar the report of flooding and landslides that left 39 people dead over last month.
Last week the French speaking West African country announced that its gold output was set to rise 30 percent by 2016 from 17 tonnes to 22 tonnes. This is thanks to the two mines that are currently being built and expected to be operational by 2016. Already Ivory Coast has three large multinationals in its mining sector. British Randgold, Australian Newcrest, and Canada’s Endeavour Mining which opened its Agbaou gold mine earlier this year with annual production expected to reach three tonnes. Also, the Mining minister disclosed that 140 exploration permits have been allocated to help expand future production.
The boom is not restricted to the mining sector.
Abidjan’s port is also booming in traffic, its total tonnage has already surpassed the 21 million tonnes of 2013. In the same week in which the gold output boom was announced, the Director General of Banque Atlantique, a subsidiary of Banque Populaire du Maroc disclosed that his bank (Banque Atlantique), Societe Generale and Afreximbank have raised $273 million for French company Ballore to begin the building of a second container at Abidjan port.
The same week, the government announced a revision of the country’s budget increasing it by nearly 4 percent from 4,248 billion CFA francs initially to 4,407 billion CFA francs ($9.16 billion). The government had been taken unawares by the rapid economic growth, thanks to expectations of higher earnings from cocoa, natural gas and the country’s ports. Ivory Coast’s cocoa production.
The good news does not still end there; Ivory Coast, for the first time, achieved a B1 credit rating with a positive outlook from Moody. The country is also been issued a $500 million Eurobond which has the same credit rating, it ranks the country four notches below investment-grade. Expected to be issued this month, the bond will mark Ivory Coast’s first venture onto the international capital markets since defaulting on a previous Eurobond during a brief post-election civil war three years ago.
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According to Reuters, “The government resumed coupon payments on the defaulted $2.5 billion Eurobond after securing $4 billion in debt relief in June 2012 under an IMF-World Bank scheme. It has since emerged as one of non-oil producing Africa’s best-performing credits”.
In a sub-continent where focus and expectations are often on Nigeria and Ghana, Ivory Coast has crept into world attention this time for positive reasons. The country is the world’s top cocoa grower and largest economy of French-speaking West Africa. It has enjoyed a rapid economic turnaround since the end of its decade of political turmoil in 2011. Its economy, which grew around 9 percent last year, is expected to maintain similar growth this year at 9.1 percent. In May, the Country announced a surprise first-quarter budget surplus after state revenues, resulting largely from improved tax collection, beating expectations by around 31 percent.
All these success’ variables have one constant – stability.
Flash back to 2010/2011, Ivory Coast was a state nearing collapse, in political turmoil and at the brink of been torn apart by a civil war. The crises weighed devastatingly on the economy so much so that the country defaulted on its $2.5 billion Eurobond. But all that is changing now, since the forced removal of former president Laurent Gbagbo, who refused to concede defeat despite losing a presidential runoff vote, the government of the current president Alassane Ouattara has been locally and internationally applauded for stabilizing the security situation in the country, accelerating economic development, and strengthening international and regional cooperation. A further testimony to the recognition of how far Ivory Coast has come is the unanimous agreement of the UN Security Council, in April, to the lift the ban on the importation of Ivory Coast’s rough diamonds.
The ban on the importation had been in place since 2005 following the country’s first civil war of 2002 and the agreement by the diamond industry to avoid conflict-tainted diamonds so that purchasers can be sure that by buying rough diamonds they are not funding violence a la the “blood diamonds” of Sierra Leone and Liberia. However, Ivory Coast’s diamond can now be bought and the proceeds expected to impact the country’s growth.
Thus all is well with Ivory Coast? Well, no
The per capita GDP of the West African Country is still much lower than it was in 2000. As researched by African Economic Outlook, the country has to make growth inclusive and long-lasting “to respond to the pressing needs of a young population looking for jobs”. There also needs to be an improvement in National Competitiveness, perhaps this point is buttressed by the Trade minister who kicked against the award of the Abidjan port expansion contract to Bollore on the grounds that it inhibits competitiveness. A lot of infrastructural development is needed especially better roads.
As the African Economic Outlook reports, the Ivorian workforce is still “not very tuned to business needs, and the financial sector, with excess liquidity, is not very active in funding small and medium enterprises (SMEs)”.
The above issues, amongst several others, added to the unfinished job of national reconciliation and social cohesion, with also the needed strengthening of national security, show that Rebuilding Ivory Coast is still a work in progress. So far, it is a work that is going relatively well and fast, thanks to stability.
Stability, like Ivory Coast’s meteoric growth has proven, is the key driver of economic growth and social development. This is perhaps a lesson for governments in Africa, especially the countries currently in crises to seek stability first and every other growth shall be added onto them. (VENTURES AFRICA)
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