ECONOMY
The Ivoirian economy is largely market-based and depends heavily on the agricultural sector. Between 60% and 70% of the Ivoirian people are engaged in some form of agricultural activity. The economy performed poorly in the 1980s and early 1990s, and high population growth coupled with economic decline resulted in a steady fall in living standards. A majority of the population remains dependent on smallholder cash crop production. Principal exports are petroleum, cocoa, coffee, cotton, pineapples, tuna, and tropical woods. Principal U.S. exports are rice and wheat, plastic materials and resins, kraft paper, agricultural chemicals, telecommunications, and oil and gas equipment. Principal U.S. imports are cocoa and cocoa products, petroleum, rubber, and coffee.
Foreign
Direct Investment Statistics
Direct foreign investment plays a key role in the Ivoirian economy,
accounting for between 40% and 45% of total capital in Ivoirian
firms. France is overwhelmingly the most important foreign investor.
In recent years, French investment has accounted for about one-quarter
of the total capital in Ivoirian enterprises, and between 55%
and 60% of the total stock of foreign investment capital.
Infrastructure
By developing-country standards, Cote d'Ivoire has an outstanding
infrastructure. There is a network of more than 8,000 miles of paved roads; good
telecommunications services, including a public data communications network,
cellular phones, and Internet access. There are two active ports. Abidjan's is
the most modern in West Africa and the largest between Casablanca and Cape Town.
A smaller port is located in San Pedro. There is regular air service between
countries within the region and to and from Europe. Modern real estate
developments exist for commercial, industrial, retail, and residential use.
Abidjan remains one of the most modern and livable cities in the region. Its
school system is good by regional standards and includes several excellent
French-based schools and an international school based on U.S. curriculum.
Recent
political and economic problems have delayed Cote d'Ivoire's planned
public investment program. The government's public investment
plan accords priority to investment in human capital, but it also
will provide for significant spending on economic infrastructure
needed to sustain growth. Continued infrastructure development
has been brought into question because of private sector uncertainty.
In the new environment of government disengagement from productive
activities and in the wake of recent privatization, anticipated
investments in the petroleum, electricity, water, and telecommunications
sectors, and in part in the transportation sector, will be financed
without any direct government intervention. A return to political
and economic stability is critical if Cote d'Ivoire is to realize
its potential in the region.
Major
Trends and Outlooks
Since the colonial period, Cote d'Ivoire's economy has been based on the production and export of tropical products. Agriculture, forestry, and fisheries account for a substantial part of GDP and of exports. Cote d'Ivoire produces 40% of the world's cocoa crop and is a major exporter of bananas, coffee, cotton, palm oil, pineapples, rubber, tropical wood products, and tuna. The 1994 devaluation of the CFA franc and accompanying structural adjustment measures increased the international competitiveness of the agricultural, light industrial, and service sectors. However, reliance on commodity exports exposes the economy to the ups and downs of international price swings. To reduce the economic exposure to price variability, the government encourages export diversification and intermediate processing of cocoa beans. In recent years, petroleum exports have risen significantly, and petroleum is now the country’s largest foreign exchange earner.
The 1994
devaluation of the CFA franc helped return Cote d'Ivoire to rapid
economic growth until the slowdown evident by 1999. Increased
aid flows, rigorous macroeconomic policies, and high international
commodity prices, along with devaluation, yielded 6%-7% annual
GDP growth rates from 1994-98. Cote d'Ivoire also benefited from
Paris Club debt rescheduling in 1994, a London Club agreement
in 1996, and the 1997 G-7 decision to include Cote d'Ivoire in
the IMF-World Bank debt forgiveness initiative for highly indebted
poor countries.
In the past several years, economic decline has resulted in declining living standards. Falling commodity prices along with government corruption and fiscal mismanagement brought the economy to its knees by the end of 1999. At that point, the coup d'etat and the subsequent institution of the military junta government caused the loss of foreign assistance. Private foreign investment declined precipitously. Government internal and external debt ballooned. As a result, the Ivoirian economy contracted 2.3% in 2000. The government signed a Staff Monitoring Program with the IMF in July 2001, but plans for a subsequent Poverty Reduction and Growth Facility were disrupted by the onset of the crisis in September 2002.
The signs of economic and business recovery were encouraging in the mid-year of 2002, but the political and social crisis that began in September 2002 undermined all the efforts to resume cooperation with international donors. Economic growth has been negative or low each year since the outbreak of the armed rebellion in late 2002, with a cutoff of most external assistance (except humanitarian aid), mounting domestic and foreign arrears, and a drastic slowdown in foreign and domestic investment.
The World Bank announced in April 2008 that Cote d'Ivoire had paid fully its
arrears, paving the way for new assistance. GDP growth reached 1.7% in 2007 and
2.3% in 2008, buoyed largely by growing oil and gas revenues. Strong economic
growth is not expected until peace is firmly reestablished.
In March 2009, Cote d’Ivoire reached the decision point for debt relief under the Enhanced Heavily Indebted Poor Countries (HIPC) Initiative. The IMF approved a U.S. $565.7 million Poverty Reduction and Growth Facility. The IMF Board noted Cote d’Ivoire’s satisfactory performance under its two Emergency Post-Conflict Assistance programs and called for continued reforms toward HIPC completion point.
GDP (official exchange rate, 2008 est.): $23.5 billion.
GDP (purchasing power parity, 2008 est.): $35.8 billion.
Annual real growth rate (2008 est.): 2.3%.
Natural resources: Petroleum (offshore) discovered in 1977, production began in 1980. According to Ivorian Government figures, exports of crude oil and refined oil products totaled $2.97 billion (f.o.b.) in 2008. Gold mining began in the early 1990s.
Agriculture (24% of GDP, 2007): Products--cocoa, coffee, timber, rubber, corn, rice, tropical foods.
Industry (25% of GDP, 2007): Types--food processing, textiles.
Services (51% of GDP, 2007).
Trade (2008): Exports ($10.9 billion f.o.b.)--petroleum, cocoa, coffee, timber, cotton, palm oil, pineapples, bananas, fish. Major markets--Germany, Nigeria, Netherlands, France. Total imports ($9.1 billion f.o.b.)--fuel, consumer goods, basic foodstuffs (rice, wheat), capital goods. Major suppliers-- Nigeria, France, China.
