Côte d’Ivoire is Ready for an Economic Comeback
By Ilana Freedman
According to the latest IMF[1] Survey, Côte d’Ivoire is well positioned for a significant economic comeback this year. Private sector confidence, which had been eroded by international interventions, civil war, rampant corruption, political fractiousness, trade barriers erected by the international community, and sky-rocketing prices, is returning.
The IMF projects growth of Côte d’Ivoire’s GDP by three per cent this year (which will effectively double last year’s growth), and further growth to five or six per cent over the next few years.
Côte d’Ivoire received its independence in 1960, and for the next twenty years the country enjoyed economic
President Laurent Gbagbo
development that made it a driving force in West Africa. GDP growth of seven per cent a year was supported by a major position in the world’s cocoa, coffee, and cotton production. However, in the ensuing climate of mismanagement, fueled by corruption, international greed, disruptive immigration, and political strife, the prosperity and beauty of the country gave way to loss of trade, extensive borrowing, and resulting squalor as the economy began to fail.
While the IMF gives most of the credit for the current renewal to the international community, which has provided significant financial support, it is clear that the problems facing Côte d’Ivoire would never have been solved by money alone. Substantial credit must go to the country’s leadership under the presidency of Laurent Gbagbo, who assumed office in 2000. Although the election was contentious, and continues to be challenged, he has taken courageous steps across dangerous political waters to achieve relative stability and a new environment of economic promise.
After several unsuccessful attempts to end the brutal enmity caused by a failed coup in 2002 and the resulting civil war, Gbagbo broke precedent in 2007 and reached out to the rebel leadership. He brought them to the table in Ouagadougou in a historic meeting that resulted in the Ouagadougou Peace Accord, signed in March 2007. This was the beginning of a new chapter in the country’s history, and the beginning of a period of renewed hope among the people of Côte d’Ivoire. According to government sources, a new sense of nationalism and pride among the population is a phenomenon that speaks volumes about the progress that has been made.
Prime Minister Soro
As part of the Peace Accord, Guillaume Soro, who had been leader of the rebel forces that fought so fiercely against the government, became Prime Minister, and took on the responsibility of disarming the rebels.
On the economic front, the president has attacked the ubiquitous corruption that has made sound economic recovery virtually impossible. Many high level officers in the public sector were arrested for economic crimes, their high positions and political affiliations notwithstanding. Even members of Gbagbo’s own party fell in this massive anti-corruption campaign. It was a risky political move on his part and one that took considerable courage.
In another recent move to improve the economic situation, the government slashed the salaries of senior ministers by half in order to finance a 10 percent cut on fuel prices. Prime Minister Guillaume Soro said they “had decided to cut basic salaries of all members of government” and that the measure would affect managers of state-owned companies as well, in response to what he called “the common man’s cries of distress”.
The restructuring of the government resulted in the development of an economic plan, which placed several imperatives on the table, and produced a list of four key priorities:
- budget as the core of economic policy,
- higher spending in areas that would assist the very poor and help turn crisis into opportunity,
- reforms in government including a strong emphasis on transparency,
- a strong program to encourage business development.
In order to support these initiatives, the IMF provided $128.4 million in emergency funding, and the World Bank pledged a grant of $308 million. The United Nations, and various countries and organizations have also contributed funds.
But funding will not be enough to solve the problems of a nation that has suffered so much. The key to the future of Côte d’Ivoire will lie in the national elections, scheduled for November 30. If continuity in the current process is the prevailing concern of the voters, then the re-election of Laurent Gbagbo to the presidency will give him the opportunity to continue forward with his program of reforms. If he is not successful in the election, then the future of Côte d’Ivoire is less certain.
The strides that have been taken are impressive, but the country’s political issues are complex, fueled by international priorities that are all too frequently in conflict with Côte d’Ivoire’s best interests. A strong effort to move forward with the reform programs now in place will go a long way to easing the people’s concerns about the future of Côte d’Ivoire. It will also provide a strong basis for the conduct of free and fair elections in November.
[1] International Monetary Fund, headquartered in Washington, DC.
Ivory Coast’s Real Estate Sector Is Bouncing Back
After some stagnation due to the economic and socio-political roller-coaster rides of the last decade, the real estate industry in Ivory Coast is starting to make a turn for the better.
By Louis S. Amédé, Abidjan From:Les Afrique
If the recent plethora of litigation in real estate was to be equated with consciousness, then one could safely say that this industry is slowly but surely waking up. Certainly, gone are the days when business was booming during the reign of construction companies like SICOGI, Batim-CI, Iprobat, Interbat, Sipim, and SCI Les Rosiers, when buildings sprouted left and right though major programmes and real estate operations for several hundred homes. “If one should take into account the price hikes on construction materials and the actual cost of land which varies between 10,000 F CFA on Adzope and 60 – 70,000 F CFA at the Riviera Golfe so there is much to be done,” explains an executive at the Ministry of Construction and Urbanism. What is lacking, however, is the widespread application of guidelines implemented.
Unlike the previous trend, this real estate renaissance is essentially due to the building of private residences that are popping up like mushrooms and real estate projects initiated by workers’ associations or mutual insurance companies for their members.
Growing needsIndeed, with the relative normalisation of the socio-political landscape, the need for viable property continues to grow. The imbalance between supply and demand that became more and more apparent with each passing year soon impeded efforts to promote building. To alleviate the problem and counteract the proliferation of illegal squatting and precarious neighbourhoods, the Ministry of Construction and Urbanism recently launched an operation “to improve the supply of a wide range of land in urban areas so as to make them more accessible.” The pilot phase of the production mechanism for land, consisting in improving new spaces concerned 50 hectares in the Cocody commune.
Activity bouncing back In an Ivory Coast where having your own roof has become a priority, the new surge in real estate activity is palpable. Unlike the previous trend, this real estate renaissance is essentially due to the building of private residences that are popping up like mushrooms and real estate projects initiated by workers’ associations or mutual insurance companies for their members. For Jean François Kimbe, an expert in Franco-Ivory Coast real estate, “real estate credit in Ivory Coast and France are both “in”. Both countries are similar as far as access to property goes. The number of home owners has increased significantly.”
Cheaper Loans More and more real estate loans are costing noticeably less and this is no small factor in the recent buzz in Ivory Coast’s recent real estate boom. Banks are eager to study loan applications with the utmost regard for the applicant. The BIAO (Banque Internationale pour l’Afrique Occidentale) requires that one have a checking account where one receives regular influxes of revenue for them to take on their real estate plans. In addition, it guarantees that it will “find the loan that best suits the applicant’s needs and resources to find a bank”. The Ivory Coast’s Banque pour le Financement de l’Agriculture (Bank for the Financing of Agriculture) has basic conditions that are pretty much the same, reinforced by a few complementary guarantees (proof of funds received from one’s employer in that account, a closed mortgage of 1st or 2nd rank in real estate) grants up to 15 million F CFAs in loans, depending on the applicant.
The only drawback of this new real estate boom is that the trend clearly favours high-end properties and not low-income housing. So, in Ivory Coast, the average consumer still has a way to go before having a roof of his own.
