ONE OF THE MOST PROSPEROUS OF AFRICAN STATES WAS HIT BY AN ECONOMIC DOWNTURN IN 1999 AND 2000 WHICH IT IS NOW OVERCOMING THANKS TO RISING COCOA PRICES AND POLITICAL STABILITY

Diversification into areas such as petroleum is guaranteed to keep foreign investment flowing into the Ivorian economy.

The Ivory Coast has long been a heavyweight among West African nations, wracking up steady real GDP growth of some 7% annually for most of the 1990s. However, a drop in the price of the country’s main commodities coupled with the Christmas Eve 1999 coup led to a 2.4% decline in 2000, and inflation, which had fallen from 14.1% in 1995 to 0.8% in 1999, crept up to 2.5% last year.
Since then the country has returned to the democratic fold. The October 2000 elections returned civilian rule to the country and President Laurent Gbagbo has struggled tenaciously to rebuild the country’s political structure and to continue 1990 reforms that have seen the nation sell off some 44 of the 61 entities the government has scheduled for privatization.

One of the top priorities of the government is to diversify its economy in order to reduce its dependency on agriculture. This means the nation will have to expand its industrial base while further developing its infrastructure and private sector.
Natural gas reserves and excess electricity generating capacity, for example, could help the Ivory Coast become a major regional energy supplier. Recent offshore discoveries in the Gulf of Guinea, including gas finds in the Ivory Coast’s territorial waters, make the country a leading area for hydrocarbon exploration in sub-Saharan Africa.

The Ivory Coast is fast becoming a leading area for hydrocarbon exploration

The government says it wants to go beyond simple self-sufficiency and generate enough electrical power for export, while further developing the Ivory Coast’s oil and gas resources and its mines, which produce diamonds, nickel and other minerals.

Other objectives include the consolidation of the country’s financial viability, the reduction of the debt and the reinforcement of economic integration within the region. To help achieve these goals, this former French colony is encouraging foreign investment from a variety of sources.
At the same time, its own national investment bank, the Caisse Autonome d’Amortissement (CAA), administers funds for infrastructure projects including water and electricity supplies, promotes private enterprise and backs a wide variety of social funds. These funds provide loans for programs ranging from the supply of drinking water to providing jobs for young people and women.

CAA bank officials say the objective is to finance investments that support the development of the country and to encourage people to save so that commercial banks can take up some of the slack in development projects.
Despite the growth prospects in the hydrocarbon industry, the country’s agriculture sector continues to be the mainstay of the national economy. The Ivory Coast is the world’s largest exporter of cacao, controlling about 40% of the market share, and the fifth in coffee production. It is also the top producer of natural rubber among African nations.
Agriculture accounts for nearly a third of the Ivory Coast’s gross domestic product and some 70% of the country’s export earnings.

The current administration has been working to further encourage the cultivation of a greater variety of crops in various regions of the country. At the same time it remains committed to the liberalization of the sector and will keep in place relaxed price controls on its two main commodities.
On the macroeconomic front, the Ivory Coast proposes to restore real GDP growth to at least a rate of 6% to 7% annually, while keeping inflation below the 3% mark and foreign debt to about 2% of GDP.