Authors: Jean Marie Vianney DABIRE et al.
Affiliated organization: African Development Bank Group
Type of publication: Report
Date of publication: June 2021
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Political and Security Context
Recent political developments have been marked by socio-political tensions linked to the organization of the presidential election of 31 October 2020 in which President Alassane Ouattara, who has been in power since 2010, was re-elected for a new five-year term.
The election, which was supposed to be a milestone in consolidating political stability, was marred by episodes of violence following the call by the main opposition political parties for an active boycott of the election and the attempt to establish a National Transition Council. President Ouattara, who was sworn in on 14 December 2020, initiated dialogue with the opposition, thus calming down the political climate.
The immediate outcomes of the dialogue included: (i) the release of some members of the opposition who were arrested in connection with demonstrations related to the organization of the presidential election; and (ii) the effective participation of the major opposition political parties in the 6 March 2021 legislative elections.
Although the overall security situation in the country is stable, it is still characterized by terrorist threats. After the attack at Grand-Bassam in March 2016, Côte d’Ivoire suffered a second and a third terrorist attack in the northernmost part of the country in June 2020 and March 2021, respectively. Terrorist groups active in the Sahel region are reportedly seeking to extend their areas of influence to the coastal nations of West Africa. To contain this threat, the authorities have reinforced security on the border with Burkina Faso and Mali.
Economic Context
Côte d’Ivoire is a lower middle-income country, with a per capita gross national income (GNI) of USD 2 290 at end-2019. The country has embarked on the structural transformation of the economy. This process needs to be accelerated.
The share of the primary sector decreased from 40.5% of GDP on average during the 1960-1969 period to 21.4% of GDP during the 2010-2019 period. The share of the secondary sector, which averaged 15.6% of GDP in 1960-1969, increased to about 22.5% of GDP on average during the 2010-2019 period. The services sector contributed 50% of GDP on average during the 1960-2019 period.
The performance of the Ivorian economy prior to the outbreak of the COVID-19 pandemic was highly promising, with an average annual growth rate of 7% during the 2016-2019 period and an initial growth forecast of 7.2% in 2020
The main constraints on the acceleration of the structural transformation of the Ivorian economy relate to low labour and capital productivity, a business environment in need of improvement (regulation, competition and competitiveness), low public and private investment which does not adequately target growth and jobcreating sectors (manufacturing industries, agricultural sector, etc.) and the expansion of the informal economy.
The performance of the Ivorian economy prior to the outbreak of the COVID-19 pandemic was highly promising, with an average annual growth rate of 7% during the 2016-2019 period and an initial growth forecast of 7.2% in 2020. One of the consequences of the effects of the pandemic is that the economic growth rate dropped to 1.8% in 2020. The sectors most affected by the pandemic include export agriculture (- 2.2%), forestry (-16.5%), mining (-4.8%), oil production (-26.9%), agribusiness (-1.3%) and transport (-1.8%), while telecommunications fared well (+30.3%) driven by the development of online activities.
The Ivorian economy is expected to rebound to 6.2% in 2021 and 6.5% in 2022. This performance would be driven mainly by agriculture (+5%), public works and civil engineering (+20%), petroleum products (+9%), transport (+8%) and trade (+9%) on the supply side and by investment (+10%) and consumption (+6.5%) on the demand side.
Sustained efforts were made during the 2016-2019 period to increase public revenue (+8.7% on average) and control public spending (+4.7% on average), making it possible to contain the budget deficit at 2.9% of GDP on average.
The Ivorian economy is expected to rebound to 6.2% in 2021 and 6.5% in 2022
Although the public debt is still sustainable with a moderate risk of debt distress, vulnerabilities to shocks have increased. The public debt of the central government increased from 31.7% of GDP in 2016 to 47.8% of GDP at end-2020 owing to the financing of the PND 2016-2020 Public Investment Programme.
The BCEAO continued to implement its flexible monetary policy during the 2016-2019 period to preserve the population’s purchasing power. Thus, inflation was contained at 0.7% on average over that period, through measures to combat high living costs, an increase in food production and good market supply.
Sector Context
The lack of transformative infrastructure impedes the development of a competitive economy and the strengthening of trade with countries in the sub-region. Côte d’Ivoire was ranked 21st out of 54 African countries in the Composite Africa Infrastructure Development Index 2020, with a score of 24.177 out of 100.
The development of the agro-industry is an important component of the country’s development strategy. Agriculture is a key sector of Côte d’Ivoire’s economy and the main source of livelihood for two-thirds of households in the country. Although Côte d’Ivoire is the leading world cocoa and cashew producer, it processes only 30% and 10% of these products, respectively, thus only benefitting marginally from the global value chain
Extractive industries are an important pillar of the Ivorian economy. Crude oil production was estimated at 52 845 174 barrels during the 2016-2019 period, that is an average flow rate of 36 171 barrels per day. About 283.026 billion cubic feet of natural gas was sold over the same period, representing an average daily flow rate of 193.721 million cubic feet. Gold and manganese are the main mineral products. In 2019, Côte d’Ivoire produced 32.478 tonnes of gold, as against 25.05 tonnes in 2016, that is an increase of 37.6%. Similarly, manganese production increased from 204 000 tonnes in 2016 to 1 181 803 tonnes in 2019, representing an increase of 479.3%.
The lack of transformative infrastructure impedes the development of a competitive economy and the strengthening of trade with countries in the sub-region
Although the country has made significant efforts to improve the business climate, challenges remain. Côte d’Ivoire is ranked 110th out of 190 countries in the Doing Business Report 2020, with 60.7 points for ease of doing business (a 32-spot gain compared with the 2016 ranking). The improvement of the business climate led to a 74.5% increase in foreign direct investment (FDI) flows into the country.
Social Context and Cross-Cutting Issues
Monetary poverty dropped from 44.4% to 39.4% between 2015 and 2018, resulting in a reduction of inequalities, with the Gini index falling from 0.552 to 0.352 over the same period. In 2018, poverty was more widespread in rural (54.7%) than urban areas (24.7%). However, according to the INS survey (April 2020), COVID-19 could jeopardize these recent achievements in terms of poverty and inequality reduction, plunging about one million people into poverty.
Côte d’Ivoire has a huge potential for promoting a green and low-carbon economy in the areas of renewable energy, agriculture, waste management and forestry
Concerning the promotion of gender equality, significant efforts remain to be made. According to the Gender Index published in 2020 by the AfDB, Côte d’Ivoire is ranked 35th out of 51 countries, with a score of 0.409. This score is affected by aspects of women’s empowerment and participation in decision-making bodies and dialogue on policies and reforms that can foster their empowerment.
Côte d’Ivoire has a huge potential for promoting a green and low-carbon economy in the areas of renewable energy, agriculture, waste management and forestry. The threat posed by climate change is undermining people’s livelihoods. The country ranks among low-emission countries with an average per capita carbon footprint of 0.42 tonnes per annum between 2010-2016.
Côte d’Ivoire is a major player in regional integration in West Africa where the volume of intra-regional trade stands at 17% in 2019. With a Global Index of 0.357 on a scale of 0 to 1, Côte d’Ivoire ranked 17th in Africa among high-performing countries and first in the ECOWAS region in the 2019 Africa Regional Integration Index, particularly in terms of trade integration, productive integration and infrastructure integration.
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