Until shortly before 2000, Côte d'Ivoire could lay claim to being the most prosperous and stable place in Francophone west Africa. The past 12 years have, however, seen that status eroded thanks to ethnic and political discord on such a scale that the country was even split in two for several years following an attempted coup in 2002.
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Hopes that elections in late 2010 would finally bring an end to Côte d'Ivoire’s troubles were shattered when the president, Laurent Gbagbo, refused to accept defeat. A five-month stand-off ensued that all but led to a civil war, claiming 3000 lives, creating more than 1 million external and internal refugees, and devastating the economy.
The turmoil ended in April 2011 when French-backed forces loyal to Alassane Ouattara, the legitimate winner of the polls, poured into Abidjan, the country's commercial capital, and arrested Mr Gbagbo, who now awaits trial in The Hague for crimes against humanity.
Mr Ouattara, sworn in as president a month later, laments the damage wrought. “It was terrible for the country and it was terrible for the people,” he says.
Progress made
Almost 18 months into his rule, there has been much progress. Gross domestic product (GDP) is forecast to rise 8% this year, having shrunk 5% in 2011. Inflation, which hit 7% during the worst of the fighting, is down to about 2%. “Our expectation is that we should be able to obtain double-digit GDP growth by 2014 or 2015,” says Mr Ouattara, a former senior official at the International Monetary Fund (IMF). “The economy will move very fast in the next few years.”
The government says it will ensure this happens by boosting public investment substantially, from about 5% of GDP today to more than 10% by 2015. And it reckons it will be able to do so while maintaining fiscal discipline. Mr Ouattara intends to cap the budget deficit over the medium term at just 3%.
Crucial to his chances of sticking to these goals have been the debt writes-off negotiated with multilateral and bilateral lenders over the past year. One of his first acts after coming to power was to agree a new $615m extended credit facility with the IMF and secure debt relief. This process led to Côte d'Ivoire being given heavily indebted poor country (HIPC) status in June, which saw its external debt slashed from $13bn to less than $5bn. “It was essential for us to get the cancellations and reductions,” says the president. “Our debt-to-GDP ratio is now less than 20%. It was more than 60% a few months ago.
“We now have more leeway to finance public investments. Our debt service used to be high, at more than $1bn a year. A good part of that will now be devoted to public expenditure. So we’re quite confident about maintaining a 3% deficit.”
Infrastructure boost
A big chunk of funding will be directed towards transport infrastructure. Mr Ouattara wants to improve roads within the country and build better ones linking it to its neighbours. “Côte d'Ivoire used to have the best infrastructure [in west Africa],” he says. “But in the past 12 years no new roads have been built and there’s been no maintenance. We have to rehabilitate the existing network.”
Mr Ouattara says he will also regenerate Côte d'Ivoire’s health and education systems, claiming they have been neglected in the last decade. He plans to establish five or six new universities within four years and construct more than 1000 school classrooms. “We have a vast programme to improve education,” he says.
Moreover, social expenditure will be increased to tackle the rising number of Ivorians unable to afford basic standards of living. “We have to ensure the good macro situation trickles down to the population,” he says. “Because of past policies, the poverty rate has climbed to more than 50%. My objective is to bring it down by half by 2015.”
The Ouattara administration hopes increased public spending and better infrastructure will encourage investment by local and foreign businesses. It wants total direct investment to rise to almost a quarter of GDP by 2015, with about half of that coming from the private sector.
Investors have long been interested in the resource-rich Côte d'Ivoire, which, despite its woes since 2000, remains the largest economy in French-speaking west Africa. It is the world’s biggest grower of cocoa, exporting about 1.3 million tonnes annually, and produces 50,000 barrels of oil a day. It has substantial deposits of iron ore and gold, too.
Plenty of foreign companies are once again considering putting money into the country, according to the president. Over the past few months his ministers have met business delegations from Turkey, Israel, Japan, China and France, while one from the UK is due soon. “People are coming from everywhere,” he says. “The business community knows that Côte d’Ivoire is well-managed and that we have a stable macroeconomic framework.”
Mr Ouattara is trying to reassert Côte d'Ivoire’s ties with the rest of west Africa and its position as an economic hub for the region. He says the last government isolated the country, to its detriment. “As soon as I took office I visited all the neighbouring states and most members of the Ecowas [regional bloc] to tell them that we want to renew our close links with them and that their nationals in Côte d'Ivoire will be protected,” he says. “Our growth has always benefited when we’ve had good relations with our neighbours.”
Security challenge
Mr Ouattara’s attempts to attract investment and attain double-digit growth will likely prove futile if Côte d'Ivoire’s peace does not hold. At the moment, most of the country is calm. Attesting to this, some institutions that left over the last decade because of its instability are returning. Among them is the African Development Bank, which moved its headquarters from Abidjan to Tunis in 2003. Its imminent homecoming is a coup for Mr Ouattara, who has tried to lure the organisation back as part of attempts also to restore Côte d'Ivoire’s diplomatic clout. “[It will] start moving [in] by the end of this year,” he says.
Security problems persist, however. In the cocoa-growing west, an ethnically diverse area that has long been volatile, there have been several recent skirmishes involving supporters of the ruling administration and pro-Gbagbo militias, including an ambush in June that left seven United Nations peacekeepers dead. Abidjan has not been free from violence, either. In August, shortly after The Banker interviewed Mr Ouattara, 10 soldiers were killed in an attack on an army base in the city, which the government blamed on Gbagbo loyalists.
“Security has really got to be reinforced,” says Mr Ouattara. “The western part of the country is clearly a soft spot. There was a lot of confrontation between the two armies [during the post-election strife] for various reasons, including land and nationality. But we’re concentrating on it.”
The situation is likely to remain tense as long as political wrangling between the new regime and the former ruling party of Mr Gbagbo, the Ivorian Popular Front (FPI), continues. Each side blames the other for the recent outbreaks of violence and the FPI boycotted parliamentary elections at the end of last year, which were easily won by Mr Ouattara’s coalition.
Political tensions
Mr Ouattara insists he has tried to build bridges, but that hardcore members of the FPI have rejected his overtures. “I proposed to them to come into the government,” he says. “I offered them several seats. They hesitated and then the extremists in their group said no.
“It was the same problem with the parliamentary elections. What happened was that the leadership of the party, in solidarity with the former president, did not want to participate in them. But individuals in the party participated as independents
“I would have liked the party to come out and say: ‘Yes, we want to get into the reconciliation process.’ But they decided to opt out. That’s their decision. I deplore it because the country has such great opportunities and it would be better for all of us to carry out this recovery, this renaissance, together.”
Mr Ouattara hopes the FPI decides to contest local elections later this year. For that to happen, he might have to be seen to do more to address the crimes of his own supporters during last year’s crisis. Critics lament what they view as victor’s justice, with the government ignoring the worst acts of its own backers and vigorously punishing those committed by followers of Mr Gbagbo.
The president claims that is unfair and that, while it will take time, the justice system will work in an impartial manner. “We won’t protect anyone,” he says. “There will no longer be impunity in Côte d'Ivoire. It’s finished. That had been done for too long and people thought they could take the law into their own hands. We cannot accept that. We want the rule of law.”
