Ivory Coast: West Africa’s Frontier Market Comeback Kid

Ivory Coast, the former “jewel of West Africa” is regaining some of its luster. With an average annual growth rate of 8 percent over the last four years, according to the World Bank, the Ivory Coast is in the midst of a major comeback.

“Now is the is the right time to be in Ivory Coast. The country is really, really stable,” said Amani Ballou, an expert on structured commodity trade finance who is based in Abidjan, the commercial capital of Ivory Coast.

“Impressive” is how the IMF described Ivory Coast’s economic performance over the last four years at the conclusion of a visit in March of this year. The IMF called the macroeconomic outlook for 2016 and the medium term “favorable” and projected that the real GDP growth for this year would be 8.5 percent with low inflation.

A return to political stability after years of turmoil is the major reason why Ivory Coast is one of the fastest growing economies in sub-Saharan Africa.

Alassane Ouattara was re-elected to a second five-year term as president in October 2015. He won in a landslide – with 83.7 % of the vote – in an election that was deemed fair and transparent by international observers.

Ouattara, 74, is an American-educated economist – he earned a Masters and a PhD in Economics at the Ivy League University of Pennsylvania – and worked for many years as a top official at the IMF, as well as the Central Bank of West African States.

Ouattara’s challenge is to maintain the stability and growth that he achieved over the last five years and to continue to mend the divided nation.

Ivory Coast, the world’s largest cocoa producer, was for decades the economic hub of French-speaking West Africa. It was divided by civil war and violence for more than a decade starting in 2000. The divisions came to a head in 2010 when then-President Laurent Gbagbo refused to accept that he was defeated by Ouattara in elections, leading to bloody clashes that left over 3,000 dead.

Gbagbo only relented after an international military intervention forced him out in April 2011. He is currently on trial at the International Criminal Court at The Hague for crimes against humanity and war crimes; he is the first former head of state to be tried by the court.

Since Ouattara assumed power, he is credited with having stabilized the country of 22 million. In another positive sign, the U.N. voted unanimously in April to withdraw the peacekeeping force it had in the country for the last 12 years.

“All we needed was political stability and a man with vision. The great news is, our current president, Mr. Ouattara,” Ballou said, citing the president’s background as an economist at the IMF, “understands international financing.”

“Right now what [Ouattara] is trying to do is expand the infrastructure. Build new roads, electricity, health care services and focus on developing education. This will help create the environment for foreign direct investment to take place here,” said Ballou. “You can see the signs that investment is happening all over the place.”

Foreign direct investment is up – from France, the U.S. and particularly Morocco, another former French colony.

Ballou, who was also educated in the U.S., got his Masters in Accounting and Business/Management at the University of Texas at Dallas and worked as an auditor for PricewaterhouseCoopers (PwC). He is a Certified Public Accountant (CPA) who was formerly a member of the Texas State Board of Public Accountancy. After returning to Ivory Coast in 2003, while the country was divided by war, he spent many years working in Liberia and Sierra Leone providing structured commodities trade finance services as well as commodities trading for various companies, including three Geneva-based corporations. He explained how post-conflict Ivory Coast is different from those countries.

“Our first president, Felix Houphouet-Boigny, focused on education. So our education rates, compared to other countries, are very high,” said Ballou. “Despite all the problems we had, we still didn’t destroy [the infrastructure], like you can see in Liberia or Sierra Leone. So you can see everything is picking up.”

The country has a very commodity-driven economy – its top exports are cocoa, coffee, cashews, palm oil and rubber. So another task for the future is to diversify the economy more.

“Everything is not perfect,” Ballou admitted. “People are still poor. In 2008 – almost 50% of the population was under the level of poverty. In 2015, the level had only dropped to 46%. So socially, there is still work to be done. But economically, I think we are doing well.”

To that end, the government has announced their National Development Plan for 2016-2020 and its goal is to achieve “emerging market” status by 2020, as well as substantially reduce the poverty rate.

Moody’s most recent credit rating for Ivory Coast was “Ba3” with a stable outlook and Finch’s rating was “B+” with a stable outlook as well.

For Ballou, one clear sign of 21 st century development in Abidjan is the introduction of a local Uber-like taxi services in Abidjan, called Africab, which is beginning to replace the notorious orange cabs that have clogged the city’s streets for decades.

“It’s not the dirty orange taxi without the AC that you’re used to,” Ballou said with a laugh. “The country is booming.”

About the OnFrontiers Expert consulted for this article:

Amani Ballou is the CEO of Sirius Management, a financial advisory firm that operates throughout Africa and the Middle East. He has 10+ years of investment consulting experience in commodities trading, with expertise in the coffee and cocoa trades. To speak with Amani or similar experts, contact us at hello@onfroniers.com.

About OnFrontiers

To gain additional insights on policy reform, infrastructure, tourism or other opportunities in frontier markets from top industry professionals, contact OnFrontiers today at hello@onfrontiers.com.

Founded in 2014, OnFrontiers is a global advisory network and research firm that provides rapid access to targeted, high quality insights in hard to reach frontier markets.

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