World Bank: Côte d’Ivoire’s Economic Outlook, and Why it’s Time to Produce Cocoa Inclusively and Responsibly

The World Bank ninth economic update for Côte d’Ivoire confirms the positive trends noted in the past year but qualifies this assessment because of several risk factors, in particular the uncertainty linked to the 2020 presidential elections.

The study also proposes approaches to modernize the cocoa sector, which is currently not inclusive or environmentally responsible. Below are the eight takeaways:

1. Overall, the economy is in good shape and is maintaining its lead in the region and on the continent

With a growth rate of 7.4% in 2018 and a projected rate of 7.2% in 2019, placing it slightly behind Ethiopia and ahead of Rwanda and Senegal, Côte d’Ivoire continues to be a leader in economic activity on the continent.

The prudent monetary policy of the Central Bank of West African States is expected to keep inflation in check (at roughly 0.3%). Facilitating this are, in particular, stable food prices, lower telecommunications prices, and a modest increase in fuel prices.

2. The economic landscape has changed, and the private sector is once again the main engine of growth

The private sector regained its momentum following a decline in 2016 and 2017, but did so in a very uneven manner. The agricultural sector slowed significantly, especially cocoa and cashew production, which increased by a mere 4% and 7% respectively in 2018, compared to 24% and 9% in 2017. These figures serve as a reminder of this sector’s vulnerability to climate shocks and terms of trade, which were less favorable in 2018.

Growth was, however, robust in the telecommunications, agribusiness, and construction sectors. Furthermore, enterprise investment was greater in 2018, no doubt as a result of the reforms aimed at improving the business climate and perhaps the desire to make investments ahead of the October 2020 presidential elections.

3. Private sector momentum offset the negative impact of the external sector on growth

Following an exceptionally favorable year in 2017, the current account deficit increased from 2.7% to 4.7% of GDP between 2017 and 2018, with the country’s trade flows, which are relatively undiversified, remaining exposed to price changes in a number of commodities (in particular cocoa and oil).

However, the increase in foreign direct investment (FDI), in particular in agribusiness, and the government issuance in March 2018 of international bonds worth over $2 billion comfortably financed this current account deficit.

4. The government deficit was reduced; the trade-off was major budget cuts and a decline in public investment

Between 2017 and 2018, the government deficit fell from 4.5% to 4% of GDP, a path on which the Government would like to continue in order to bring this figure to 3% in 2019, thus meeting the targets set by the West African Economic and Monetary Union (WAEMU). However, this adjustment was based solely on a reduction in public expenditure, in particular government investment, which has not supported the Ivorian economy as much as it did in the past.

Going forward, the Government intends to be more selective in terms of the quality of the projects in which it invests and to make the development of private sector partnerships a priority. It will also have to ensure that government debt is controlled, in particular commercial borrowing, including borrowing by public enterprises and government agencies.

5. The Government is not increasing its tax revenue

Tax revenue declined by 0.7% of GDP between 2012 and 2018, contrary to the trend seen in other countries of the region such as Senegal and Togo, which have the same taxation system. This decline is a consequence of the slowdown in the extractive sector, a tax policy aimed at counteracting the effect of international price changes in cocoa and oil on the local economy, and low VAT revenue.

Although several tax administration reforms to facilitate tax procedures and tax collection such as the introduction of digital platforms and the streamlining of certain procedures should ultimately boost tax revenue, the Government will have to increase VAT collection, as this revenue from domestic transactions is among the lowest in the world. If the authorities managed to collect as much VAT as Cameroon or Cabo Verde, Côte d’Ivoire would be able to increase its tax revenue by two percentage points of GDP.

6. Côte d’Ivoire is changing but its agricultural sector remains under-productive and insufficiently diversified

While agricultural activity is declining in Côte d’Ivoire, more than half of its residents continue to depend on a primary activity for their livelihood. However, agriculture has contributed a mere 1.2 percentage points of GDP growth (or 14%) since the country’s improved economic situation starting in 2012. While many factors account for this, they are rooted in the low yield of most food and cash crops and the failure to diversify and move toward higher value-added activities.

To address this, the Government has made the modernization of the agricultural sector a priority in its new national development strategy, in particular the cocoa sector, which mobilizes more than five million persons and is by far the country’s biggest foreign exchange earner.

7. The cocoa sector in Côte d’Ivoire faces social and environmental challenges

Côte d’Ivoire supplies 40% of the world’s cocoa but only receives between 5% and 7% of the profit generated by this sector globally. This profit is essentially concentrated in the processing and distribution phases. As a result, although this sector employs close to one million producers and provides income to one-fifth of the Ivorian population, it has not contributed much to the country’s wealth.

It is estimated that 54.9% of Ivorian cocoa producers and their families currently live below the poverty line. Added to this is the fact that in the past two decades, consumers have gained awareness of environmental and social issues and have become more demanding, following numerous investigations that have shed light on the negative role played by cocoa production in terms of deforestation as well as child labor, which is often performed under extremely difficult working conditions on the cocoa plantations.

8. Three approaches to make the cocoa sector in Côte d’Ivoire more inclusive and responsible

To transform its cocoa sector, Côte d’Ivoire would first have to carry out a technological revolution to increase yield in order to promote reforestation and boost producer income. Traceability systems would then have to be instituted to offer consumers a guarantee of responsible cocoa production. Lastly, the sector would have to develop the local cocoa processing industry to meet local demand, design a label of origin that is more attractive to consumers, and take advantage of demand growth in Asia for intermediate products.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email marketing@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: Clem Onojeghuo [1], [2].

From The Hippo’s Ears: Ivory Coast

Facts you may not have know about Ivory Coast:

Ivory Coast, also known as Côte d’Ivoire, officially the Republic of Côte d’Ivoire, is a sovereign state located in West Africa. Ivory Coast’s political capital is Yamoussoukro, and its economic capital and largest city is the port city of Abidjan. Its bordering countries are Guinea and Liberia in the west, Burkina Faso and Mali in the north, and Ghana in the east. The Gulf of Guinea (Atlantic Ocean) is located south of Ivory Coast.

Ivory Coast has a population of approximately 23 million, is a unitary presidential republic under a parliamentary system, and gained independence from France in 1960.

1.  When you first meet someone, how do you greet them?

The basic physical greeting is the handshake. It is common to greet those you pass, for example in an elevator. Once on friendlier terms, people may greet using French-style cheek kisses.

2. What languages are spoken in the country?

French is the only official language in Ivory Coast, and is taught in schools. Vernacular languages include Bété, Dioula, Baoulé, Abron, Agni, Cebaara, Senufo, and others. An estimated 65 languages are spoken in Ivory Coast. One of the most common is the Dyula language, which acts as a trade language, as well as a language commonly spoken by the Muslim population.

3. Do you use a twelve hour clock, or a twenty-four hour clock?

We use a 24-hour system.

4. What side of the road do people drive on? What do we need to know about driving in the country?

We drive on the right side of road. While the main highways are properly tarred and generally free of imperfections, be careful of potholes on less frequented roads, and on dirt roads.

5. How important is punctuality?

Punctuality is not of the utmost importance, and events often start later than scheduled.

6. Which types of music are popular? Who are some of the most popular musicians?

Each of the ethnic groups in Ivory Coast has its own music genres, most showing strong vocal polyphony. Talking drums are also common, especially among the Appolo, and polyrhythms, another African characteristic, are found throughout Ivory Coast and are especially common in the southwest.

Popular music genres from Ivory Coast include zoblazo, zouglou, and Coupé-Décalé. A few Ivorian artists who have known international success are Magic Système, Alpha Blondy, Meiway, Dobet Gnahoré, Tiken Jah Fakoly, and Christina Goh, of Ivorian descent.

For a taste of Senegalese music, listen to Tiken Jah Fakoly’s Plus rien ne m’étonnes, and Meiway’s Miss Lolo.

7. Are there any Traditional Dances?

The Senufo N’Goron dance is a colorful initiation dance where usually young, Senufo girls wear a fan of feathers, grass skirts, shells, and a hat that is made out of sheep skin. The Senufo girls dance to the panther dance, which needs to be courageous, representing their Senufo tribe. Balafon and calabash music, and older female singers are accompanying the dancers. The dance is about the beauty of women.

Zaouli is a popular mask dance created by Gouros in the fifties. Each Gouro village has its local Zaouli dancer, who performs during funerals or parties. A musicians and singers orchestra first call the Zaouli dancer by its music. The dancer wearing the mask covered by a cloth then arrives after a predecessor who unveils the mask. After the beauty of the mask has been shown to the audience, the dancer performs extremely quick and rhythmical steps according to the flutes of the orchestra. Hands and feet follow a common choreography improvised by the dancer according to the music.

8.  What traditional Festivals are celebrated in the country?

Carnival in Bouaké
The Ivoirians version of Mardi Gras, this week-long carnival is one of the most well-attended events in the Ivory Coast. It is held in Bouaké in March each year.

Fête du Dipri
This eccentric April celebration is held in the town of Gomon, where people perform different kinds of rituals in order to exorcise and drive evil spirits out of the village. The event starts at midnight and continues until late afternoon the following day.

Independence Day
Ivory Coast’s Independence Day is celebrated on August 7 each year to commemorate the country’s liberation from France. The event is marked by all kinds of cultural activities, lively performances, parades, and other festivities.

Fêtes des Masques
The most popular of all the Ivory Coast events, Fêtes des Masques, or the Festival of Masks, is an annual event held in November. It is a time to pay homage to the forested spirits embodied by the villagers who wear colorful costumes and masks. The celebration is held in the northern region in the town of Man.

9. What are the seasons like?

The climate of Ivory Coast is generally warm and humid, ranging from equatorial in the southern coasts to tropical in the middle and semiarid in the far north. There are three seasons: warm and dry (November to March), hot and dry (March to May), and hot and wet (June to October). Temperatures average between 25 and 32 °C (77.0 and 89.6 °F) and range from 10 to 40 °C (50 to 104 °F).

10. What are some interesting facts about the President?

President Alassane Dramane Ouattara has been President of Ivory Coast since 2010. An economist by profession, Ouattara worked for the International Monetary Fund (IMF) and the Central Bank of West African States, and he was the Prime Minister of Côte d’Ivoire from November 1990 to December 1993, appointed to that post by President Félix Houphouët-Boigny.

Ouattara has a Master’s in economics from the University of Pennsylvania., and is the President of the Rally of the Republicans (RDR), an Ivorian political party, having been in the position since 1999.

11. What are the country’s major industries?

The Ivory Coast is largely market-based and depends heavily on the agricultural sector. Almost 70% of the Ivorian people are engaged in some form of agricultural activity. Principal exports are cocoa, coffee, and tropical woods. Ivory Coast is among the world’s largest producers and exporters of coffee, cocoa beans, and palm oil. Ivory Coast has made progress in diversifying its economy, and since the 1970s, has steadily expanded the facilities offered to tourists. Resort lodgings in coastal areas have been developed. There are numerous hotels in Abidjan, including international chains.

12. How do people spend their free time?

Locals spend their free time with family and friends, visit one of the local national parks, play sports or watch soccer, and visit one of Ivory Coast’s numerous beaches.

13. What is a popular local drink?

Bangui is a local palm wine. The sap is extracted and collected by a tapper. Typically the sap is collected from the cut flower of the palm tree. A container is fastened to the flower stump to collect the sap. The white liquid that initially collects tends to be very sweet and non-alcoholic before it is fermented. An alternative method is the felling of the entire tree. Where this is practiced, a fire is sometimes lit at the cut end to facilitate the collection of sap.

Palm sap begins fermenting immediately after collection, due to natural yeasts in the air (often spurred by residual yeast left in the collecting container). Within two hours, fermentation yields an aromatic wine of up to 4% alcohol content, mildly intoxicating and sweet. The wine may be allowed to ferment longer, up to a day, to yield a stronger, more sour and acidic taste, which some people prefer. Longer fermentation produces vinegar instead of stronger wine. Palm wine may be distilled to create a stronger drink.

14. What is a popular local dish?

Cassava and plantains are significant parts of Ivorian cuisine. A corn paste called “aitiu” is used to prepare corn balls, and peanuts are widely used in dishes. Attiéké is a popular side dish in Côte d’Ivoire made with grated cassava and is very similar in taste and consistency to couscous. A common street-vended food is alloco, which is ripe plantain banana fried in palm oil, spiced with a spicy sauce made of onions and chili. It can be eaten alone as a snack or often with a hard-boiled egg, as well as a side dish.

Grilled fish and grilled chicken are the most popular non-vegetarian foods. Lean, low-fat Guinea fowl, which is popular in the region, is commonly referred as poulet bicyclette. Seafood includes tuna, sardines, shrimp and bonito.

Maafe is a common dish consisting of meat in a peanut sauce. Slow-simmered stews with various ingredients are another common food staple in Côte d’Ivoire. Kedjenou is a spicy stew consisting of chicken and vegetables that are slow-cooked in a sealed pot with little or no added liquid. This concentrates the flavors of the chicken and vegetables and tenderizes the chicken. It’s usually cooked in a pottery jar called a canary, over a slight fire, or cooked in an oven.

15. What do you pay, on average, for the following? (1 USD = approx. CFA 560)

3 Course meal: CFA 10,000
Domestic beer (500ml): CFA 850
Cup of coffee: CFA 2,060
Coca cola (330ml): CFA 410
Milk (1l): CFA 950
Loaf of white bread: CFA 240
Apples (1 kg): CFA 1,425
Water (1.5l): CFA 465

16. Any general safety tips?

Ivory Coast has a history of violent crime problems, especially in the northern and western areas, and caution is advised. Visitors may encounter police road blocks. Always ensure that your car is locked and no valuables are on display. If possible, travel in a group. Taking photos of military and government institutions is forbidden. Take care at beaches, as the ocean currents can be strong.

17. In conclusion, famous (and sometimes infamous) people from the country include:

  • Didier Drogba, an Ivorian professional footballer who plays as a striker for American club Phoenix Rising. He is best known for his career at Chelsea, for whom he has scored more goals than any other foreign player and is currently the club’s fourth highest goal scorer of all time. He has been named African Footballer of the Year twice, winning the accolade in 2006 and 2009.
  • Félix Houphouët-Boigny, the first President of Ivory Coast (1960 to 1993), serving for more than three decades until his death. A tribal chief, he worked as a medical aide, union leader, and planter before being elected to the French Parliament. He served in several ministerial positions within the French government before leading Côte d’Ivoire following independence in 1960. Throughout his life, he played a significant role in politics and the decolonization of Africa.
  • Marguerite Abouet, an Ivorian writer of bandes dessinées (Franco-Belgian comics), best known for her graphic novel series Aya. Aya emerged from her desire to show an Africa with a focus on issues other than war and famine. It won the 2006 Angoulême International Comics Festival Prize for First Comic Book, and has sold over 200,000 copies in France.
  • Constance Amiot, a writer-composer-performer of songs in French and English in an acoustic pop-folk style. After playing in a band as a pianist, she adopted then the guitar as her instrument of preference, influenced by artists such as Tracy Chapman.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, and Remuneration needs, email marketing@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2], [3], [4], [5]. Image sources: Zenman [1].