The New Ivorian Economic Miracle, Finally?

It has been two years since the Ivorian post-election crisis ended. The country that was a West African economic locomotive in the 70s, representing almost 40% of Gross Domestic Product of the West African Economic and Monetary Union, is now struggling to get back on track after a decade of rebellions, coup d’états and civil war. At that time, there was an “Ivorian economic miracle”, when the country developed quickly benefiting from the high prices of raw materials such as coffee and cocoa. The Ivorian authorities are claiming that a new Ivorian miracle is happening now, that the train is on its way and should not be missed by anyone who wants to take part in the development of the country. But how accurate is this assessment of the country?

President Alassane Ouattara

President Ouattara must address corruption and reconciliation issues if the Ivory Coast is to benefit from its growth prospects (Photo credit: Wikimedia)

If we take a look at the economic situation since the end of the post-election crisis, we must recognise what the Ivorian authorities are claiming: in 2011, when the crisis reached its peak, the Gross Domestic Product of the Ivory Coast was -4,6%, while in 2012, a year after the crisis ended, the growth of the country was estimated at 8.6%. In 2013, the country is said to grow at 9%, and from 2014, the Ivorian government is aiming at double-digit growth for the country. In addition, the inflation of the country is only at 2%, and its debt recently fell to 3% of its GDP. The country qualified for the Heavily Indebted Poor Countries initiative, following several reforms in important sectors of the economy, including agriculture and especially regarding the coffee and cocoa sector, which represents a substantial part of the Ivorian GDP. Moreover, every day in Abidjan, the Ivorian economical capital, you can see roads and public buildings being reconstructed, while huge state investments are made in the field of energy, telecommunications and infrastructures in order to mitigate the deficit created from ten years of political crisis.

Furthermore, the Ivory Coast is regaining its diplomatic leadership. The African Development Bank headquarters are returning to the country after having moved to Tunisia because of the crisis. President Ouattara has been elected as the Head of the Economic Community of West African States for two years in a row; handling the crisis in Mali and receiving world leaders in Abidjan who have not visited Ivory Coast for a very long time, including former Secretary of State Hillary Clinton, Christine Lagarde, head of the International Monetary Fund, and Jim Yong Kim, president of the World Bank Group.

All these indicators could suggest  the Ivory Coast is fully back on track and that the new Ivorian economic miracle is happening. However there are a few noticeable obstacles which darken this seemingly bright picture. The Ivory Coast still has to be cured from several ills, and as Christine Lagarde stated during her visit in the country last January, corruption is one of the biggest. During ten years of political instability, this practice became naturalized in the country and in order to get fully back on track, the government needs to promote good governance, starting with the members of its own cabinet for the state to be working more effectively.

Another major difficulty in the country after ten years of political crisis and civil wars is the peace and reconciliation process which seems to be out of order. The opposition has not been participating in any elections since President Ouattara was elected, and accused of “winners justice” by only prosecuting people from the opposition. Several people from Ouattara’s factions have been deemed responsible for crimes committed during the post-election crisis. In addition, there are almost 65,000 ex-militiamen still waiting to be demobilized and reintegrated in civilian life, with most of them still in possession of the weapons they used during the civil war. As a matter of fact, since August 2012 not a single month has passed without armed attacks occurring against the army’s positions and military camps from unidentified men. Thus, President Ouattara was obliged to take important measures such as the creation of a National Security Council and the creation of a new special forces unit, which protects Abidjan first, and then the rest of the country. The government states that these attacks come from the opposition. Yet regardless of who carries out the attacks, they are a political bomb waiting to blow, if nothing is done to stop them.

So, is the new Ivorian economic miracle coming, finally?

Considering all these elements, the Ivory Coast should be back on economic track soon based on its growth forecast for the coming years and all the natural resources the country possesses. In addition, even with continuing attacks, the Ivorian population in general is still eager for peace and are taking steps towards it. However, the government has little time left to put the reforms in place necessary for economic growth and wealth to benefit the whole population. The administration must address corruption and peace and reconciliation issues in order to reassure investors and avoid a new political crisis.

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Categories: Economics, Sub-Saharan Africa

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7 Comments on “The New Ivorian Economic Miracle, Finally?”

  1. Yemi Kacoutie
    April 16, 2013 at 9:49 pm #

    Really interesting, although I would have loved to see you getting deeper on some points (like what could we get from Laguarde and Clinton’s visit, or what explicitly are the government plan to handdle corruption…). But overall I really liked it it was a nice analysis of the facts!

  2. Franck Kie
    April 16, 2013 at 11:30 pm #

    Thanks for your thoughts Yemi! I’m glad you liked it and will do my best to take your comments into account for my next post

  3. June 12, 2013 at 8:59 am #

    Good article. However growth is good when it benefits not only the elite but also the poor. Poverty alleviation performances have to be assessed in order to plan sustained growth. Indeed given a higher marginal propensity to consume of the poor, a growth policy that benefits only the political elite and the multinationals is not sustainable. Such a growth is not positively auto-correlated. Therefore the impact of current growth on subsequent growth diminishes over time as demand led growth (from the poor) is weaker because of inequality in the distribution of the proceeds of current growth. On the other hand the absence of exchange control (as it is the case in the Ivory Coast) encourages multinationals to transfer much of their profit to their western countries of origin, leaving the Ivorian financial market with a resource gap and thereby undermining domestically financed investment projects for the next period.
    Check this out: http://patrickbeuseize.com/growth-and-inequality-good-growth-and-bad-growth/

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    • June 10, 2014 at 12:46 pm #

      Dear Redanolen, I’m glad you like our articles. You can subscribe to our newsletter by following the link here, which is also available on the front page. Thank you.

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