Joe Bavier and Daniel Flynn Abidjan
Ivory Coast is re-emerging as the prime investment destination in French-speaking west Africa after a decade of political turmoil, but President Alassane Ouattara must weed out corruption and maintain stability to keep cash flowing in.
A 1999 coup destroyed the reputation of Ivory Coast, the largest cocoa producer, as an island of stability in a troubled region. A bloody presidential election in 2000 and a rebellion two years later triggered an exodus of capital that undid decades of development, dubbed the Ivorian Miracle.
With peace restored, French construction firm Bouyges and oil companies such as Tullow and Lukoil are among those flocking to invest. Standard Bank plans to open its first west African office in Abidjan.
“We lost half of our companies during that time. The level of poverty increased from 10 percent to almost 50 percent,” Trade Minister Jean-Louis Billon said. “Now we want to move forward.”
A brief civil war in 2011 allowed Ouattara, who won the election that sparked the fighting, to secure the presidency and reunite the nation.
With the former International Monetary Fund (IMF) official at the helm, Ivory Coast’s $40 billion (R442bn) economy began a dramatic revival. It has posted growth of more than 9 percent over the past two years and the government is targeting double digits this year.
“Ivory Coast could become one of the motors of economic growth in Africa again,” IMF managing director Christine Lagarde told a conference in Abidjan last week that drew 4 000 delegates and investment pledges of over $800 million.
Large-scale infrastructure projects are springing back to life. A highway linking Abidjan to the administrative capital of Yamoussoukro opened late last year. Bouyges is pressing ahead with a long-delayed third bridge across Abidjan’s lagoon to unlock congestion. Heavy investment in electricity generation aims to boost output from 1 600 megawatts to 4 000MW by 2020 as Ivory Coast, already an exporter of power, seeks to become a regional energy hub.
The president has pushed through reforms to improve an intimidating business climate. A new business can now be set up in under 48 hours and a commercial court is up and running to arbitrate disputes.
Private investors seem ready to take the plunge.
“Ivory Coast has many advantages, like a high level of education and its location as a gateway to the region,” said Dominique Lafont, the chief executive of Bollore Africa Logistics, which operates port and railway concessions in Ivory Coast. “This government is eager to deliver, not just talk.”
Long-neglected in favour of agricultural commodities, mining is taking off, with production of gold and manganese rising rapidly.
The oil ministry signed 18 production sharing agreements in 18 months in 2012 and 2013, as investors bet Ivory Coast could emulate neighbouring Ghana’s hydrocarbons boom. Companies such as Anadarko , Tullow, Lukoil and Total drilled 10 wells last year – twice the number during the whole of the decade-long political crisis.
But not all the news is good. While Ivory Coast was among the world’s top reformers last year, according to the World Bank’s ease of doing business index, overall it still ranked 167th, behind nations including Afghanistan, Syria and Equatorial Guinea.
In 2012, a total of 40 percent of government procurement was awarded via contracts that were not put out to tender and that figure jumped to 80 percent in the first quarter of last year. Ministries are dogged by rumours of corruption despite a public policy of zero tolerance. – Reuters