Back on track and open for business
NEW DIRECTION THE COMMITMENT OF LAURENT GBAGBO'S ADMINISTRATION TO REFORM AND GOOD GOVERNANCE HAS ENDED THE COUNTRY'S ISOLATION BY THE INTERNATIONAL COMMUNITY FOLLOWING THE SOCIO-POLITICAL CRISIS OF A FEW YEARS AGO. NOW THERE IS A DRIVE FOR SUSTAINABLE GROWTH

MARKET MINDED The government wants to create an environment in which private enterprise can flourish

THE WEST AFRICAN nation of Côte d’Ivoire is among the world’s largest producers of coffee and cocoa beans. Exports of these products have made it one of the most prosperous of the tropical African states–with 40 percent of its crop going to the American market.

In the late 1990s, however, the country was plunged into crisis when poor financial management and fraud prompted the international community to withdraw its support. Political and social unrest led to a military coup at the end of 1999–the first in Côte d’Ivoire’s history. Business confidence was eroded, the price of coffee dropped, economic activity contracted and there was a marked decline in private investment.
Today, after a remarkably short period of time, the situation is rapidly returning to normal. Under President Laurent Gbagbo, the nation has a government committed to reform, in cooperation with the international donor organizations, and to fighting poverty.
President Gbagbo, whose election in October 2000 ended 10 months of military rule, says government policy is based on “ruling differently” and “re-foundation.” He is particularly pleased with the progress made in resuming contacts and cooperation with the international community .

LAURENT GBAGBO President of Côte d’Ivoire

PASCAL AFFI N’Guessan Prime Minister

BOHOUN BOUABRE Minister of Economy and Finance

“Our early results have been acknowledged by all foreign partners,” he says. “This is our first victory. All the links that had been cut because of bad governance and the coup d’état are now being re-tied.”
Prime Minister Pascal Affi N’Guessan describes the situation the government took over as one of “total instability.”
“The army, the economy, the social situation and security–the whole situation was catastrophic,” he says. “A lot of people thought we wouldn’t last more than two or three months, but we are still here and we have even engaged in a reconciliation process. As far as the socio-political level is concerned, the situation has improved and we are heading towards complete stability.”

At the end of March, the International Monetary Fund resumed lending to Côte d’Ivoire, approving a $365 million loan under the Poverty Reduction and Growth Facility (PRGF). The IMF said it was “encouraged by the government’s demonstrated discipline in macroeconomic management and its commitment to implement structural reforms in a determined manner.”
Minister of Economy and Finance Bohoun Bouabré adds: “There are no stumbling points in our discussions with our international partners today because we share the same approach on most questions. We have a common vision in the continuation of the liberalization of the economy.”
The government’s economic policy is focused on putting the nation back on the road to sustainable growth, reducing its dependence on external aid and improving the living conditions of its people.

It aims to achieve real GDP (gross domestic product) growth of 3 percent in 2002, increasing this to 5 percent in 2004. The target for inflation is about 3 percent with the external current account deficit narrowing to 1 percent of GDP by 2004. The growth projections are based on investment increasing significantly over the period, from 10 percent of GDP in 2001 to 15 percent.
Fiscal policy is being tightened to improve the government’s financial position. Last year’s “secure budget” is being followed by a “stabilization budget.” All domestic and external debts are to be eliminated and government spending more tightly controlled. Collection of revenue is being improved by strengthening the tax and customs administrations, and by stepping up the fight against fraud and tax evasion.

Côte d’Ivoire was declared eligible for external debt relief under the IMF-World Bank Heavily Indebted Poor Countries (HIPC) Initiative in 1998, but the program was suspended because of the political crisis. The government will seek a rescheduling of all eligible debt from international creditors as soon as the country reaches the decision point under the enhanced HIPC Initiative, which according to the IMF could be in September.
The government is taking steps to withdraw from direct involvement in business–several major privatizations, including the oil refinery, are on the agenda (see article above)–and to create an environment in which private enterprise can flourish. The door is wide open to foreign investors.

“I am not a businessman and I have no intention of interfering with business," says President Gbagbo. “All I am concerned with is to allow businesses to become prosperous so they can create employment for the population.”
He adds, “It is in our interest to have private investors come here. It will help us create employment and thus redistribute incomes. For the investor that has an interest in Africa, there is no better place than Côte d’Ivoire. He who wants to invest and reach all of West Africa will find the ideal place through our country.”
The President wants to see industry play an increasing role in the economy and diversification of exports to reduce dependency on cocoa and coffee.

“Côte d’Ivoire has been famous for its exports of primary agricultural products," he says. "Now we need to reach a new phase, the phase of industrialization, of external trade and services. We need to become a modern economy. When I leave office, I would like exports of industrial products to be exceeding exports of agricultural crops in the trade balance.”
Reserves of natural gas and excess electricity generating capacity mean that Côte d'Ivoire could become a significant regional energy supplier.

High on the government’s agenda is the fight against poverty. A poverty reduction strategy paper (PRSP) is due to be finalized this month, which will focus on education, health, security and basic infrastructure.
Mr. Bouabré says: “Many years ago, the authorities in Côte d’Ivoire didn’t want anyone to mention poverty. But poverty is here and with us everyday. It is our mission to find a solution to this problem.”
A keystone in re-establishing socio-political stability was a national reconciliation conference last year, which successfully promoted dialogue between the main political parties. The government is also committed to decentralization and reform of the civil service.